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EXHIBIT 10
SECURITIES PURCHASE AGREEMENT
THE RESTAURANT HOLDING CORPORATION
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxx 00000
As of December 22, 1999
BancBoston Ventures Inc.
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Ladies and Gentlemen:
The undersigned, The Restaurant Holding Corporation, a Delaware
corporation (the "Company"), hereby agrees with you as follows:
1. DEFINITIONS.
For all purposes of this Agreement, the following terms shall have the
meanings set forth herein or elsewhere in the provisions hereof:
"Affiliate" shall mean any Person directly or indirectly controlling,
controlled by or under direct or indirect common control with the Company (or
other specified Person) and shall include (a) any Person who is an officer or a
member of the Board of Directors or a beneficial holder of at least ten percent
(10%) of the then outstanding capital stock (or other shares of beneficial
interest) of the Company (or other specified Person) and Family Members of any
such Person, (b) any Person of which the Company (or other specified Person) or
any Affiliate (as defined in clause (a) above) of the Company (or other
specified Person) directly or indirectly, either beneficially owns at least ten
percent (10%) of the then outstanding capital stock (or other shares of
beneficial interest) or constitutes at least a ten percent (10%) equity
participant, and (c) in the case of a specified Person who is an individual,
Family Members of such Person; provided, however, that BBV shall not be an
Affiliate of the Company or any of its Subsidiaries for purposes of this
Agreement.
"Balance Sheet Date" shall have the meaning specified in Section
3.7(a)(i) hereof.
"Bank Affiliate" shall have the meaning specified in Section 12.1
hereof.
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"Bank Holding Company Act" shall have the meaning specified in Section
12.1 hereof.
"BBV" shall mean BancBoston Ventures Inc., a Massachusetts
corporation.
"BBV Appraisal" shall have the meaning specified in Section 8.5(b)
hereof.
"BBV Appraiser" shall have the meaning specified in Section 8.5(b)
hereof.
"Call Closing Date" shall have the meaning specified in Section 8.3
hereof.
"Call Notice" shall have the meaning specified in Section 8.3 hereof.
"Capital Transaction" shall mean any of the following: (i) one or more
mergers, consolidations, liquidations, sales of more than 50% of the assets of
the Company or other similar corporate actions pursuant to which the Company or
the holders of Common Stock receive cash, securities or other property; (ii) at
least a majority of the Common Stock of the Company is sold; or (iii) a
registration statement with respect to the Common Stock of the Company shall be
filed under the Securities Act.
"CERCLA" shall have the meaning specified in Section 3.24(b) hereof.
"Change in Control" shall mean any of the following events (a) Xxxxxx
X. Xxxxx shall cease to own at least 51% of the outstanding shares of Common
Stock, calculated on a fully-diluted basis, or (b) any failure of the Board of
Directors of the Company to be elected in compliance with the Stockholders
Agreement.
"Charter" shall include the articles or certificate of incorporation,
statute, constitution, joint venture or partnership agreement or articles or
other charter of any Person other than an individual, each as from time to time
amended and in effect.
"Class A Common Stock" shall have the meaning specified in Section
3.5(a)(ii) hereof.
"Class B Common Stock" shall have the meaning specified in Section
3.5(a)(ii) hereof.
"Class C Common Stock" shall have the meaning specified in Section
3.5(a)(ii) hereof.
"Closing" shall have the meaning specified in Section 2.3 hereof.
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"Closing Date" shall have the meaning specified in Section 2.3 hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended, or
any successor federal statute, and the rules and regulations of the Internal
Revenue Service thereunder, all as the same shall be from time to time in
effect.
"Commission" shall mean the Securities and Exchange Commission.
"Common Shares" shall mean (a) the shares of Class C Common Stock
purchased by BBV pursuant to the DNS Stock Purchase Agreement, (b) all other
shares of Common Stock purchased by or issued to BBV from time to time, (c) all
shares of Common Stock (including shares of Class B Common Stock) issued or
issuable upon conversion of such shares and (d) any capital stock or other
securities into which or for which such Common Stock shall have been converted
or exchanged pursuant to any recapitalization, reorganization or merger of the
Company and any shares of capital stock issued with respect to the foregoing
pursuant to a stock split or stock dividend; provided that no Common Shares
which have been sold pursuant to a Public Sale shall be considered to be
outstanding Common Shares or Securities hereunder.
"Common Stock" shall mean, collectively, the Class A Common Stock, the
Class B Common Stock and the Class C Common Stock, each having the rights and
privileges set forth in Exhibit A hereto, and any capital stock or other
securities into which or for which such Class A Common Stock, Class B Common
Stock or Class C Common Stock shall have been converted or exchanged pursuant
to any recapitalization, reorganization or merger of the Company.
"Company Appraisal" shall have the meaning specified in Section 8.5(b)
hereof.
"Company Appraiser" shall have the meaning specified in Section 8.5(b)
hereof.
"Consolidated" or "consolidated" shall mean, with reference to any
term defined herein, that term as applied to the accounts of the Company and
its Subsidiaries, as consolidated in accordance with GAAP.
"Credit Agreement" shall mean the Revolving Credit Agreement, dated as
of December 22, 1997, by and among Perkins, TRC, Xxxxxxx Management Company,
Inc., Xxxxxxx Finance Corp., BankBoston, N.A. as agent and the lenders party
thereto, as such agreement may be amended, extended, renewed or refinanced from
time to time.
"Default" shall mean an event or condition which with the passage of
time or giving of notice, or both, would be an Event of Default.
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"DNS Stock Purchase Agreement" shall mean the Stock Purchase
Agreement, dated as of the date hereof, by and between Xxxxxx X. Xxxxx and BBV.
"Environmental Laws" shall have the meaning specified in Section
3.24(b) hereof.
"EPA" shall have the meaning specified in Section 3.25(c) hereof.
"ERISA" shall mean the federal Employee Retirement Income Security Act
of 1974, any successor statute of similar import, and the rules and regulations
thereunder, collectively and as from time to time amended and in effect.
"ERISA Affiliate" means any Person that is a member of a group of
which the Company or any Subsidiary is a member and which is treated as a
single employer under Section 414 of the Code.
"Events of Default" shall have the meaning specified in Section 7.1
hereof.
"Fair Market Value" shall have the meaning specified in Section 8.5(b)
hereof.
"Family Members" shall mean, as applied to any individual, any parent,
spouse, child, spouse of a child, brother or sister of such individual, and any
trust created for the benefit of any of such Persons and each custodian of any
property of any of such Persons.
"Fee Letter" shall mean the letter agreement dated as of the date
hereof between the Company and First Capital Corporation of Boston.
"Financing Agreements" shall mean, collectively, the Securities, the
DNS Stock Purchase Agreement, the Stockholders Agreement, the Fee Letter, the
Management Fee Agreement, and all other present or future agreements from time
to time entered into between the Company and you or any other holder of the
Securities which relates to this Agreement or is stated to be a Financing
Agreement, all as from time to time amended and in effect, and all statements,
reports or certificates delivered by or on behalf of the Company to you or any
other holder of the Securities in connection herewith or therewith.
"GAAP" shall mean accounting principles (a) which are consistent with
the principles promulgated or adopted by the Financial Accounting Standards
Board and its predecessors, in effect from time to time, (b) which are applied
in a manner consistent with past financial statements of the Company adopting
the same principles, and (c) for which a certified public accountant would,
insofar as the use of such accounting principles is pertinent, be in a position
to
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deliver an unqualified opinion as to financial statements in which such
principles have been properly applied.
"Hazardous Substances" shall have the meaning specified in Section
3.24(c) hereof.
"Historical Financials" shall have the meaning specified in Section
3.7(a)(i) hereof.
"Indebtedness" shall include all obligations, contingent and
otherwise, which in accordance with GAAP should be classified upon the
obligor's balance sheet as liabilities, or to which reference should be made by
footnotes thereto, including without limitation, in any event and whether or
not so classified: (i) all debt and similar monetary obligations, whether
direct or indirect; (ii) all liabilities secured by any mortgage, pledge,
security interest, lien, charge, or other encumbrance existing on property
owned or acquired subject thereto, whether or not the liability secured thereby
shall have been assumed; (iii) all guaranties, endorsements and other
contingent obligations whether direct or indirect in respect of Indebtedness of
others, including any obligation to supply funds to or in any manner to invest
in, directly or indirectly, the debtor, to purchase Indebtedness, or to assure
the owner of Indebtedness against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the debtor to make payment of
the Indebtedness held by such owner or otherwise, and (iv) obligations to
reimburse issuers of any letters of credit.
"Indebtedness for Borrowed Money" shall mean (a) all Indebtedness of
the Company or any of its Subsidiaries for borrowed money, whether current or
funded, or secured or unsecured, (b) all Indebtedness of the Company or any of
its Subsidiaries for the deferred purchase price of property or services
represented by a note or other security, (c) all Indebtedness of the Company or
any of its Subsidiaries created or arising under any conditional sale or other
title retention agreement with respect to property acquired by the Company or
its Subsidiaries (even if the rights and remedies of the seller or lender under
such agreement in the event of default are limited to repossession or sale of
such property), (d) all Indebtedness of the Company or any of its Subsidiaries
secured by a Lien to secure all or part of the purchase price of the property
subject to such Lien, (e) all obligations under leases which shall have been or
must be, in accordance with GAAP, recorded as capital leases in respect of
which the Company or any of its Subsidiaries are liable as lessee, (f) any
liability of the Company or any of its Subsidiaries in respect of banker's
acceptances or letters of credit, (g) all Interest Charges owed with respect to
the Indebtedness described in the foregoing clauses (a), (b), (c), (d), (e) and
(f) above and (h) all Indebtedness referred to in clauses (a), (b), (c), (d),
(e), (f) and (g) above which is directly or indirectly guaranteed by the
Company or any of its Subsidiaries or which the Company or any of its
Subsidiaries has agreed (contingently or otherwise) to purchase or otherwise
acquire or in respect of which it has otherwise assured a creditor against
loss.
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"Indemnified Party" shall have the meaning specified in Section 9.8
hereof.
"Indemnifying Party" shall have the meaning specified in Section 9.8
hereof.
"Interest Charges" shall mean for any period, the expenses of the
Company and its Subsidiaries for such period for interest on Indebtedness for
Borrowed Money (including the current portion thereof) and for commitment fees,
agency fees, facility fees, balance deficiency fees, and similar expenses in
connection with Indebtedness for Borrowed Money.
"Lien" shall mean (a) any encumbrance, mortgage, pledge, lien, charge
or other security interest of any kind upon any property or assets of any
character, or upon the income or profits therefrom, (b) any acquisition of or
agreement to have an option to acquire any property or assets upon conditional
sale or other title retention agreement, device or arrangement (including a
capitalized lease), or (c) any sale, assignment, pledge or other transfer for
security of any accounts, general intangibles, or chattel paper, with or
without recourse.
"Major Holder" shall mean the holder or holders at the relevant time
of determination (excluding the Company) of (a) in the case of Common Shares,
at least twenty-five percent (25%) of the number of then issued and outstanding
Common Shares or (b) in the case of Preferred Shares, at least twenty-five
percent (25%) of the then outstanding number of Preferred Shares.
"Majority Holders" shall mean the holder or holders at the relevant
time of determination (excluding the Company) of (a) in the case of Common
Shares, fifty-one percent (51%) or more of the number of then issued and
outstanding Common Shares, or (b) in the case of Preferred Shares, fifty-one
percent (51%) or more of the then outstanding number of Preferred Shares.
"Management Fee Agreement" shall mean the Management Fee Agreement
dated as of the date hereof between the Company and First Capital Corporation
of Boston.
"Negotiation Period" shall have the meaning specified in Section
8.5(b) hereof.
"Notes" shall mean (i) the Series A and Series B 11 1/4% Senior
Discount Notes due 2008 issued by TRC pursuant to the TRC Indenture and (ii)
the Series A and Series B 10 1/8% Senior Notes due 2007 issued by Perkins and
Xxxxxxx Finance Corp. pursuant to the Perkins Indenture.
"Perkins" shall mean Xxxxxxx Family Restaurants, L.P., a Delaware
limited partnership and a wholly-owned subsidiary of TRC which shall be merged
with and into TRC pursuant to the Recapitalization.
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"Perkins Indenture" shall mean the Indenture dated as of December 22,
1997 among Perkins, Xxxxxxx Finance Corp. and State Street Bank and Trust
Company, as trustee.
"Permitted Transferee" shall mean any corporate or institutional
Affiliate of any holder of Securities, any commercial bank, insurance company
or other financial institution or corporate or institutional Affiliate thereof,
or any private equity fund with aggregate capital commitments in excess of
$200,000,000 or any registered investment company with aggregate assets under
management in excess of $200,000,000.
"Person" shall mean an individual, partnership, limited liability
company, corporation, association, trust, joint venture, unincorporated
organization, or any government, governmental department or agency or political
subdivision thereof.
"Preferred Shares" shall mean (a) the Series A Preferred Stock issued
to BBV pursuant to this Agreement, (b) any shares of Series A Preferred Stock
issued as a dividend with respect to shares of Series A Preferred Stock that
are Preferred Shares at the time of such dividend, and (c) any capital stock or
other securities into which or for which any such shares of Series A Preferred
Stock shall have been converted or exchanged pursuant to any recapitalization,
reorganization or merger of the Company, provided that the foregoing capital
stock shall be Preferred Shares only so long as such capital stock has not been
sold pursuant to a Public Sale.
"Preferred Stock" shall mean the Preferred Stock of the Company
described in and having the right and privileges set forth on Exhibit A hereto,
including the Series A Preferred Stock, and, in addition, any capital stock or
other securities into which or for which such Preferred Stock shall have been
converted or exchanged pursuant to any recapitalization, reorganization or
merger of the Company.
"Projections" shall have the meaning specified in Section 3.7(a)(iii)
hereof.
"Public Sale" shall mean any sale of Common Stock or Preferred Stock
to the public pursuant to a public offering registered under the Securities
Act, or to the public through a broker or market-maker pursuant to the
provisions of Rule 144 (or any successor rule) adopted under the Securities
Act.
"Purchase Price" shall have the meaning set forth in Section 2.2
hereof.
"Purchased Securities" shall have the meaning set forth in Section 2.1
hereof.
"Put Closing Date" shall have the meaning specified in Section 8.2
hereof.
"Put Notice" shall have the meaning specified in Section 8.1 hereof.
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"RCRA" shall have the meaning specified in Section 3.24(b) hereof.
"Recapitalization" shall mean the following sequential transactions,
viewed as a whole:
(1) the merger of Xxxxxxx Management Company, Inc., a Delaware
corporation ("PMC"), with and into Xxxxxxx Restaurants, Inc., a Minnesota
corporation ("PRI");
(2) the merger of PRI with and into TRC;
(3) the merger of TRC Realty Co., a Vermont corporation, into TRC
Realty Inc., a Delaware corporation ("TRCRI") and the subsequent conversion of
TRCRI into a Delaware limited liability company to be renamed TRC Realty LLC;
(4) the borrowing by TRC of $6,490,000 under the Revolving Credit
Agreement;
(5) the repurchase by TRC of (a) all of the shares of TRC common
stock held by BMA Limited Partnership for $5,033,297, (b) all of the shares of
TRC common stock held by Xxxxx Xxxxx for $2,214,752, and (c) a portion of the
shares of TRC common stock held by the Equitable Life Assurance Society of the
U.S. ("Equitable") for $1,250,000;
(6) the contribution by DNS to the Company of all of the shares
of TRC common stock held by DNS;
(7) the consummation of the transactions contemplated by the DNS
Stock Purchase Agreement;
(8) the consummation of the sale and purchase of the Purchased
Securities contemplated by Section 2 of this Agreement;
(9) the purchase by the Company of additional shares of TRC
common stock for $38,750,000;
(10) the borrowing by Perkins of $6,600,000 under the Credit
Agreement;
(11) the payment by Perkins of a $5,000,000 distribution to TRC;
(12) the merger of Perkins with and into TRC; and
(13) the use by TRC of $38,750,000 of proceeds from the sale of
shares of TRC to the Company to repurchase all of the remaining shares of TRC
held by Equitable and National Baseball Hall of Fame and Museum, Inc.
"Recapitalization Documents" shall mean, collectively:
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(1) the merger documents and the articles of merger for each of
the mergers described in clauses (1), (2), (3) and (12) of the definition of
"Recapitalization";
(2) the Stock Redemption Agreement, dated as of the date hereof,
by and between TRC and BMA Limited Partnership;
(3) the Stock Redemption Agreement, dated as of the date hereof,
by and between TRC and Xxxxx X. Xxxxx;
(4) the Stock Redemption Agreement, dated as of the date hereof,
by and between TRC and the National Baseball Hall of Fame and Museum, Inc.;
(5) the Stock Redemption Agreement, dated as of the date hereof,
by and between TRC and The Equitable Life Assurance Society of the United
States;
(6) the Contribution Instrument, dated as of the date hereof,
executed by DNS with respect to the contribution of shares of TRC to the
Company; and
(7) the Subscription Agreement, dated as of the date hereof,
between the Company and TRC.
"Registration Expenses" shall have the meaning specified in Section
9.7 hereof.
"Rescission Notice" shall have the meaning specified in Section 8.4
hereof.
"Related Agreements" shall mean the Financing Agreements, the
Recapitalization Documents, the Credit Agreement, the Notes, the TRC Indenture,
the Perkins Indenture, and all appendices, schedules and exhibits thereto.
"Repurchase Price" shall have the meaning specified in Section 8.5(a)
hereof.
"XXXX" shall have the meaning specified in Section 3.24(b) hereof.
"Securities" shall mean the Preferred Shares and the Common Shares.
"Securities Act" shall mean the Securities Act of 1933, as amended, or
any successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Series A Preferred Stock" shall mean the Series A Preferred Stock of
the Company, $.01 par value per share, and, in addition, any capital stock or
other securities into which or for which such Series A Preferred Stock shall
have been
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converted or exchanged pursuant to any recapitalization, reorganization or
merger of the Company.
"Small Business Act" shall mean the Small Business Investment Act of
1958, as amended, or any successor federal statute, and the rules and
regulations of the Small Business Administration thereunder, all as the same
shall be in effect from time to time.
"Stockholders Agreement" shall mean, the Stockholders Agreement, dated
as of the date hereof, among the Company, the stockholders of the Company
listed on the signature pages thereto and BBV, in the form of Exhibit B hereto,
as amended, restated, modified or supplemented and in effect from time to time.
"Subsidiary" shall mean any corporation, association, trust, or other
business entity, of which the designated parent shall at any time own or
control directly or indirectly through a Subsidiary or Subsidiaries at least a
majority (by number of votes) of the outstanding shares of capital stock (or
other shares of beneficial interest) entitled ordinarily to vote for the
election of such business entity's directors (or in the case of a business
entity that is not a corporation, for those Persons exercising functions
similar to directors of a corporation), or any partnership in which the
designated parent shall at any time be entitled to fifty percent (50%) or more
of the profits or distributions of such partnership, and, in any event, with
respect to TRC, shall include Perkins (prior to its merger into TRC) and
Xxxxxxx Finance Corp.
"Third Appraiser" shall have the meaning specified in Section 8.5(b)
hereof.
"Transaction Costs" shall have the meaning specified in Section 3.23
hereof.
"Transfer Notice" shall have the meaning specified in Section 13.2
hereof.
"TRC" shall mean The Restaurant Company, a Delaware corporation and
after the Recapitalization a wholly-owned subsidiary of the Company.
"TRC Indenture" shall mean the Indenture dated as of May 18, 1998
between TRC and State Street Bank and Trust Company as trustee.
"Unpurchased Securities" shall have the meaning specified in Section
8.4 hereof.
2. SALE AND PURCHASE OF PURCHASED SECURITIES.
2.1. Sale and Purchase of Purchased Securities. The Company agrees
to issue and sell to you, and, subject to all of the terms and conditions
hereof and in reliance on the representations and warranties set forth or
referred to
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herein, you agree to purchase, 50,000 shares of Preferred Stock (the "Purchased
Securities").
2.2. Purchase Price. The aggregate purchase price for the
Purchased Securities is $40,000,000 (the "Purchase Price").
2.3. Closing. The closing of the purchase and sale of the
Purchased Securities (the "Closing") will take place at the offices of Xxxxxxx
Xxxx LLP on December 22, 1999 or such other date as the parties hereto may
agree upon (the "Closing Date"). At the Closing, the Company will deliver to
you the Purchased Securities against payment by you of the Purchase Price in
immediately available funds. Each of the Purchased Securities will be issued to
you on or before the Closing Date and registered in your name in the Company's
records.
2.4. Use of Proceeds. The Company agrees that it will use the
proceeds from the sale of the Purchased Securities hereunder only to finance
part of the Recapitalization.
3. REPRESENTATIONS AND WARRANTIES.
In order to induce you to enter into this Agreement and to purchase
the Purchased Securities, the Company hereby represents and warrants that, both
before and immediately after giving effect to the Closing and the
Recapitalization:
3.1. Organization and Good Standing. Except as set forth on
Schedule 3.1, each of the Company and each of its Subsidiaries is duly
organized and existing in good standing in its jurisdiction of incorporation,
is duly qualified as a foreign corporation and authorized to do business in all
other jurisdictions in which the nature of its business or property makes such
qualification necessary, and has the corporate power to own its properties and
to carry on its business as now conducted and as proposed to be conducted.
3.2. Authorization. The execution, delivery and performance by the
Company of this Agreement and the execution, delivery and performance by the
Company and each of its Subsidiaries of each Related Agreement to which it is a
party, and the issuance and sale by the Company of the Securities hereunder,
(a) are within the Company's or such Subsidiary's corporate power and
authority, (b) have been duly authorized by all necessary corporate
proceedings, and (c) do not conflict with or result in any breach of any
provision of or the creation of any Lien upon any of the property of the
Company or any of its Subsidiaries or require any consent or approval pursuant
to the Charter or by-laws of the Company or any of its Subsidiaries or any law,
regulation, order, judgment, writ, injunction, license, permit, agreement or
instrument.
3.3. Enforceability. The execution and delivery of this Agreement
by the Company and the execution and delivery by the Company and each of its
Subsidiaries of each Related Agreement to which it is a party, and the issuance
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and sale by the Company of the Securities hereunder, will result in legally
binding obligations of the Company or such Subsidiary, enforceable against it
in accordance with the respective terms and provisions hereof and thereof,
except to the extent that (a) such enforceability is limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights, (b) the availability of the
remedy of specific performance or injunctive or other equitable relief will be
subject to the discretion of the court before which any proceeding therefor may
be brought, and (c) the enforceability of the indemnities contained in Section
9 hereof may be limited under federal securities laws.
3.4. Governmental Approvals. Except as set forth in Schedule
hereto, the execution, delivery and performance by the Company of this
Agreement and the execution and delivery by the Company and each of its
Subsidiaries of each Related Agreement to which it is a party, and the issuance
and sale by the Company of the Securities hereunder, do not require the
approval or consent of, or any filing with, any governmental authority or
agency.
3.5. Capitalization.
(a) Capital Stock.
(i) Immediately prior to the Recapitalization, the
authorized capital stock of the Company consists solely of 100,000
shares of Common Stock, $.01 per value per share of which no shares
are outstanding prior to the Recapitalization. Immediately prior to
the Recapitalization, the authorized capital stock of TRC consists
solely of 100,000 shares of Common Stock, $.01 par value per share, of
which 11,640 shares are outstanding prior to the Recapitalization.
Prior to the Recapitalization, all of TRC's outstanding shares of
capital stock are owned as set forth in Schedule 3.5(a)(i) hereto and
are duly authorized, validly issued, fully paid and non-assessable.
(ii) Immediately following the Recapitalization, the
authorized capital stock of the Company will consist solely of (A)
500,000 shares of Preferred Stock, of which 100,000 shares will be
designated as Series A Preferred Stock, 50,000 shares of which will be
outstanding after the Recapitalization, (B) 5,000 shares of Class A
Common Stock, $.01 par value per share (the "Class A Common Stock", of
which 700 shares will be outstanding after the Recapitalization, (C)
5,000 shares of Class B Common Stock, $.01 par value per share (the
"Class B Common Stock"), of which no shares will be outstanding after
the Recapitalization, and (D) 5,000 shares of Class C Common Stock,
$.01 par value per share (the "Class C Common Stock") of which 300
shares will be outstanding after the Recapitalization. After giving
effect to the Recapitalization, all of the Company's outstanding
shares of capital stock will be owned as set forth in Schedule
3.5(a)(ii) hereto and will be duly authorized, validly issued, fully
paid and non-assessable.
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(b) Options, Etc. The Company has no outstanding rights (either
preemptive or other) or options to subscribe for or purchase from the Company
and no warrants or other agreements providing for or requiring the issuance by
the Company, of any of its capital stock or any securities convertible into or
exchangeable for its capital stock.
(c) Reservation, Etc. Sufficient shares of authorized but
unissued Common Stock have been reserved by appropriate corporate action in
connection with the conversion of shares of Common Stock of one class into
shares of another class as provided in the Company's Charter. The conversion of
shares of Common Stock of one class into shares of another class as provided in
the Company's Charter will not require any further corporate action by the
stockholders or directors of the Company, will not be subject to pre-emptive
rights in any present or future stockholders of the Company and will not
conflict with any provision of any agreement to which the Company is a party or
by which it is bound, and such Common Stock, when issued upon such conversion,
will be duly authorized, validly issued, fully paid and non-assessable.
3.6. Subsidiaries. Except as set forth on Schedule 3.6, the
Company does not have any Subsidiaries and does not own or hold of record
and/or beneficially any shares of any class in the capital of any other
corporation (excepting not more than one percent (1%) stock holdings for
investment purposes in securities of publicly traded companies). Except as set
forth on Schedule 3.6, the Company does not own any legal and/or beneficial
interests in any partnerships, business trusts or joint ventures or in any
other unincorporated trade or business enterprises. All outstanding capital
stock of each such Subsidiary is owned by the Company (directly or indirectly)
as set forth on such Schedule 3.6 free and clear of any Lien, other than Liens
permitted by the Credit Agreement, is validly issued and outstanding, fully
paid and non-assessable, and there are no commitments for the purchase or sale
of, and no options, warrants or other rights to subscribe for or purchase, any
securities of any such Subsidiary.
3.7. Reports and Financial Statements.
(a) You have heretofore been furnished with complete and correct
copies of the following:
(i) (A) the audited consolidated balance sheet of TRC and its
Subsidiaries as at December 31, 1998 (the "Balance Sheet Date"), and
the related audited consolidated statements of operations and cash
flows for the fiscal year of TRC then ended, certified by Xxxxxx
Xxxxxxxx LLP, independent public accountants, and (B) the unaudited
consolidated balance sheet of TRC and its Subsidiaries as at October
31, 1999, and the related unaudited consolidated statements of
operations and cash flows for the portion of the fiscal year then
ended, each of such balance sheets
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and statements of operations and cash flows being attached hereto as
Schedule 3.7(a)(i) (the "Historical Financials");
(ii) the pro forma consolidated balance sheet of the
Company and its Subsidiaries as at the Closing Date, taking into
account the Recapitalization and all transactions contemplated hereby
and by the Related Agreements, such balance sheet being attached
hereto as Schedule 3.7(a)(ii); and
(iii) the projections of the future performance of TRC and
its Subsidiaries on a consolidated basis including income, net profits
and cash flows, dated as of December 14, 1999 and attached hereto as
Schedule 3.7(a)(iii) (the "Projections").
(b) The Historical Financials were prepared in accordance with
GAAP; each of the balance sheets included in the Historical Financials fairly
presents the consolidated financial condition of TRC as at the close of
business on the date thereof; and each of the statements of income and cash
flows included in the Historical Financials fairly presents the results of
operations of TRC for the fiscal period then ended.
(c) The pro forma consolidated balance sheet of the Company and
its Subsidiaries referred to in Section 3.7(a)(ii) has been prepared by
management of the Company on a reasonable basis, taking into consideration the
effect of the Recapitalization and the transactions contemplated hereby and by
the Related Agreements, and the Company is not aware of any fact which casts
doubt on the accuracy or completeness thereof. Immediately after giving effect
to the Recapitalization and the transactions contemplated hereby and by the
Related Agreements, none of the Company or any of its Subsidiaries has any
material liabilities, contingent or otherwise, which are not referred to in
such balance sheet or in the notes thereto.
(d) The Projections constitute a reasonable basis for the
assessment of the future performance of TRC and its Subsidiaries during the
periods indicated therein, and all material assumptions used in the preparation
thereof are set forth in the notes thereto. The Company and you acknowledge
that the Projections are good faith estimates only, and there is no guaranty or
assurance that the future performance of TRC reflected in the Projections will
be achieved.
(e) There has been no material adverse change in the business,
properties, financial condition or prospects of TRC and its Subsidiaries since
the Balance Sheet Date. Prior to and at the Closing, the Company will not have
(i) incurred any liabilities or obligations, (ii) engaged in any business or
activities of any kind whatsoever, (iii) entered into any agreement or
arrangements with any Person or (iv) been subject to or bound by any obligation
or undertaking, except in each case as incurred in connection with the
incorporation, capitalization or negotiation and consummation of the
transactions
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contemplated by this Agreement and the Related Agreements, including, but not
limited to, the Recapitalization and the financing related thereto.
3.8. Solvency. Prior to, upon and immediately after the
consummation of the Recapitalization and transactions contemplated hereby and
by the Related Agreements, each of the Company and each of its Subsidiaries is
solvent, has tangible and intangible assets having a fair value in excess of
the amount required to pay its probable liabilities on its existing debts as
they become absolute and matured, and has access to adequate capital for the
conduct of its business and the ability to pay its debts from time to time
incurred in connection therewith as such debts mature.
3.9. Title to Assets, Etc. Upon the completion of the
Recapitalization, the Company and its Subsidiaries will own all of the assets
reflected in the pro forma consolidated balance sheet of the Company and its
Subsidiaries as at the Closing Date, subject to no Liens other than Liens
permitted by the Credit Agreement. Each of the Company and each of its
Subsidiaries enjoys peaceful and undisturbed possession of all leases of real
property on which facilities operated by it are situated and of all leases of
motor vehicles and other personal property, and all such leases are valid and
in full force and effect.
3.10. Small Business Concern. The Company meets the criteria
established under the Small Business Act for classification as a "small
business concern" within the meaning of the Small Business Act, 15 U.S.C.
ss.662(5).
3.11. Disclosure. No representation, warranty or statement made by
the Company or any of its Subsidiaries in this Agreement, any Related Agreement
or any agreement, certificate, statement or document furnished by or on behalf
of the Company or any of its Subsidiaries in connection herewith or therewith
contains any untrue statement of material fact or omits to state a material
fact necessary in order to make the statements contained herein or therein, in
light of the circumstances in which they were made, not misleading.
3.12. Defaults. No Default or Event of Default exists on the date
hereof. None of the Company or any of its Subsidiaries is in default under any
provision of its Charter or by-laws or under any provision of any material
franchise, contract, agreement, lease or other instrument to which it is a
party or by which it or its property is bound or in violation of any law,
judgment, decree or governmental order, rule or regulation.
3.13. Indebtedness and Liens. None of the Company or any of its
Subsidiaries has any Indebtedness or Liens upon any of its properties, other
than Indebtedness and Liens permitted by the Credit Agreement.
3.14. Representations and Warranties. All representations and
warranties made by the Company or any of its Subsidiaries in any of the Related
Agreements or in the certificates delivered in connection therewith are true
and correct as of the date hereof with the same force and effect as though
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made on and as of the date hereof, and such representations and warranties are
hereby confirmed to you and made representations and warranties of the Company
hereunder as fully as if set forth herein. To the best of the Company's
knowledge, all other representations and warranties made in the Related
Agreements by or on behalf of any party thereto other than the Company or its
Subsidiaries are true and correct in all material respects.
3.15. Potential Conflicts of Interest. Except as set forth on
Schedule 3.15, no officer or director of the Company or any of its Subsidiaries
(a) owns, directly or indirectly, any interest in (excepting not more than one
percent (1%) stock holdings for investment purposes in securities of publicly
held and traded companies) or is an officer, director, employee or consultant
of any Person which is a competitor, lessor, lessee, customer or supplier of
the Company or any of its Subsidiaries; (b) owns, directly or indirectly, in
whole or in part, any tangible or intangible property which the Company or any
of its Subsidiaries is using or the use of which is necessary for the business
of the Company or any of its Subsidiaries; or (c) has any cause of action or
other claim whatsoever against, or owes any amount to, the Company or any of
its Subsidiaries, except for claims in the ordinary course of business, such as
for accrued vacation pay, accrued benefits under employee benefit plans and
similar matters and agreements.
3.16. Related Agreements. You have heretofore or simultaneously
herewith been furnished with complete and correct copies of the Related
Agreements. This Agreement and the Related Agreements are the only material
agreements relating the Recapitalization and the transactions contemplated
hereby to which the Company or any of its Subsidiaries is a party. Neither the
Company nor any of its Subsidiaries is in default on any of its obligations
under this Agreement or any Related Agreement to which such Person is a party
and, to the best of the Company's knowledge, no other party to any Related
Agreement is in default thereunder.
3.17. Licenses, Etc. The Company and its Subsidiaries have all such
franchises, patents, patent applications, patent licenses, patent rights,
trademarks, trademark rights, trade names, trade name rights, copyrights,
licenses, permits, authorizations and other rights as are necessary for the
conduct of the business of the Company and each of its Subsidiaries as
currently conducted or currently proposed to be conducted. All of the foregoing
are in full force and effect, and each of the Company and each of its
Subsidiaries is in compliance with the forgoing without any known conflict with
the valid rights of others which could affect or impair in a material manner
the property, business or financial condition of the Company or any of its
Subsidiaries.
3.18. Litigation. Except as set forth and described on Schedule
3.18, there is no pending or, to the Company's knowledge, threatened litigation
or other proceeding before any court, board or other governmental or
administrative agency or arbitrator, to which the Company or any of its
Subsidiaries is or would be a party that, if adversely determined, might have a
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material adverse effect on the business or financial condition of the Company
or any of its Subsidiaries. No such pending or threatened litigation or other
proceeding, individually or in the aggregate, is reasonably likely to result in
any final judgment or liability which, after giving effect to any applicable
insurance, could result in a material adverse change in the business, assets,
financial condition or prospects of the Company or any of its Subsidiaries. No
judgment, decree or order of any court, board or other governmental or
administrative agency or arbitrator has been issued against or binds the
Company, any of its Subsidiaries, or their respective assets.
3.19. Tax Returns. The Company and each of its Subsidiaries has
filed all tax returns and reports which are required to be filed with any
foreign, federal, state or local governmental authority or agency and has paid,
or made adequate provision for the payment of, all assessments received and all
taxes which have or may become due under applicable foreign, federal, state or
local governmental law or regulations with respect to the periods in respect of
which such returns and reports were filed. The Company knows of no additional
assessments since the date of such returns and reports, and there will be no
additional assessments with respect to the periods for which such returns and
reports were filed for which adequate reserves appearing on the balance sheet
referred to in Section 3.7(a)(i) have not been established. The Company and
each of its Subsidiaries has made adequate provision for all current taxes.
3.20. Material Contracts. The Company has not committed any breach
or default under any material contract to which the Company or any of its
Subsidiaries is a party or by which any of them is bound or to which the
Company or any of its Subsidiaries is subject which would (i) permit the other
party or parties thereto to terminate such contract, (ii) result in the
imposition of any substantial penalty against the Company or (iii) result in
the incurrence by the Company of liability for any substantial damages. None of
the Company or any of its Subsidiaries is party to or bound by any agreement,
deed, lease or other instrument which is so unusual or burdensome as to affect
or impair materially and adversely the business, assets, financial condition or
prospects of the Company or any of its Subsidiaries in the foreseeable future.
3.21. ERISA. Except as set forth on Schedule 3.21, the Company and
its Subsidiaries do not maintain or have any obligation to make contributions
to any employee benefit plan within the meaning of ERISA or any other
retirement, profit sharing, stock option, stock bonus or employee benefit plan.
No employee benefit plan established or maintained by the Company or any of its
Subsidiaries or to which the Company or any of its Subsidiaries has made
contributions, which is subject to Part 3 of Subtitle B or Title I of ERISA or
Section 412 of the Code, had an accumulated funding deficiency (as such term is
defined in Section 302 of ERISA or Section 412 of the Code), whether or not
waived, as of the last day of the most recent fiscal year of such plan
heretofore ended. No liability to the Pension Benefit Guaranty Corporation
(other than required insurance premiums, all of which heretofore due have been
paid) has been incurred with respect to any such plan and there has not been
any
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reportable event within the meaning of ERISA and the regulations promulgated
thereunder, or any other event or condition, which presents a material risk of
termination of any such plan by the Pension Benefit Guaranty Corporation.
Neither any such plan nor any trust created thereunder, nor any trustee or
administrator thereof, has engaged in a prohibited transaction (as such term is
defined in Section 4975 of the Code or Section 406 of ERISA) that could subject
any such plan, trust, trustee or administrator or the Company or any of its
Subsidiaries to any tax or penalty on prohibited transactions imposed under
said Section 4975 or ERISA. No material liability has been incurred with
respect to any multiemployer plan, within the meaning of Section 4001(a)(3) of
ERISA, as a result of the complete or partial withdrawal by the Company or any
of its Subsidiaries from such a multiemployer plan under Section 4201 or 4204
of ERISA; nor has the Company or any of its Subsidiaries been notified by any
such multiemployer plan that such multiemployer plan is in reorganization or
insolvency under and within the meaning of Section 4241 or 4245 of ERISA or
that such multiemployer plan intends to terminate or has been terminated under
Section 4041A of ERISA.
3.22. Governmental Regulations. Neither the Company nor any of its
Subsidiaries is a "holding company", or a "subsidiary company" of a "holding
company" or an "affiliate" of a "holding company", as such terms are defined in
the Public Utility Holding Company Act of 1935; nor is the Company a
"registered investment company", or an "affiliated person" or a "principal
underwriter" of a "registered investment company", as such terms are defined in
the Investment Company Act of 1940, as amended.
3.23. Transaction Costs. Except as set forth on Schedule 3.23,
there are no Transaction Costs, as defined below, that will be payable by the
Company or any of its Subsidiaries with respect to the Recapitalization, the
transactions contemplated hereby and by the Related Agreements, or the offer,
issue and sale of the Purchased Securities. The term "Transaction Costs" shall
mean all of the costs, fees and expenses incurred by the Company or any of its
Subsidiaries in connection with the Recapitalization and the transactions
contemplated hereby and by the Related Agreements, as set forth in Schedule
3.23, including without limitation, broker's, finder's or placement fees or
commissions, attorneys' fees and fees of other professionals.
3.24. Safety, Zoning and Environmental Matters. Schedule 3.24
hereto includes legal descriptions of all real property owned or leased by the
Company and its Subsidiaries. Except as set forth on Schedule 3.24:
(a) Neither the plants, offices or properties in or on which the
Company or any of its Subsidiaries carries on its respective business nor the
activities conducted therein or thereon, are in material violation of any
zoning, health or safety law or regulation, including, without limitation, the
Occupational Safety and Health Act of 1970, as amended;
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(b) None of the Company, any of its Subsidiaries or any operator
of any of the real property presently or formerly owned, leased or operated by
any of them, is in violation, or alleged violation, of any judgment, decree,
order, law, license, rule or regulation pertaining to environmental matters,
including without limitation those arising under the Resource Conservation and
Recovery Act ("RCRA"), the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 ("XXXX"), the Federal Clean Water Act, the Solid
Wastes Disposal Act, as amended, the Federal Clean Air Act, as amended, the
Toxic Substances Control Act, or any state or local statute, regulation,
ordinance, order or decree relating to health, safety or the environment
(hereinafter "Environmental Laws");
(c) None of the Company or any of its Subsidiaries has received
notice from any third party, including without limitation any federal, state or
local governmental authority, (i) that the Company or any of its Subsidiaries
or any predecessor in interest has been identified by the United States
Environmental Protection Agency ("EPA") as a potentially responsible party
under CERCLA with respect to a site listed on the National Priorities List, 40
C.F.R. Part 000 Xxxxxxxx X; (ii) that any "hazardous waste" as defined by 42
U.S.C. ss.6903(5), any "hazardous substances" as defined by 42 U.S.C.
ss.9601(14), any "pollutant" or "contaminant" as defined by 42 U.S.C.
ss.9601(33) or any toxic substance, oil or hazardous materials or other
chemicals or substances regulated by any Environmental Laws ("Hazardous
Substances") which any one of them has generated, transported or disposed of
has been found at any site at which a federal, state or local agency or other
third party has conducted or has ordered that the Company or any of its
Subsidiaries or any predecessor in interest conduct a remedial investigation,
removal or other response action pursuant to any Environmental Law; or (iii)
that any of them is or shall be a named party to any claim, action, cause of
action, complaint (contingent or otherwise) legal or administrative proceeding
arising out of any third party's incurrence of costs, expenses, losses or
damages of any kind whatsoever in connection with the release of Hazardous
Substances;
(d) (i) No portion of any real property presently or formerly
owned, leased or operated by the Company or any of its Subsidiaries has been
used for the handling, manufacturing, processing, storage or disposal of
Hazardous Substances and no underground tank or other underground storage
receptacle for Hazardous Substances is located on such properties; (ii) in the
course of any activities conducted by the Company or any of its Subsidiaries or
operators of any real property presently or formerly owned, leased or operated
by the Company or any of its Subsidiaries, no Hazardous Substances have been
generated or are being used on such properties; (iii) there have been no
releases (i.e., any past or present releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, disposing or
dumping) or threatened releases of Hazardous Substances on, upon, into or from
any real property presently or formerly owned, leased or operated by the
Company or any of its Subsidiaries; (iv) there have been no releases of
Hazardous Substances on,
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upon, from or into any real property in the vicinity of any real property
presently or formerly owned, leased or operated by the Company or any of its
Subsidiaries which, through soil or groundwater contamination, may have come to
be located on any of the properties of the Company or any of its Subsidiaries;
and (v) in addition, any Hazardous Substances that have been generated on any
real property presently or formerly owned, leased or operated by the Company or
any of its Subsidiaries have been transported offsite only by carriers having
an identification number issued by the EPA and treated or disposed of only by
treatment or disposal facilities maintaining valid permits as required under
applicable Environmental Laws, which transporters and facilities have been and
are, to the best knowledge of the Company or any of its Subsidiaries, operating
in compliance with such permits and applicable Environmental Laws; and
(e) No real property presently or formerly owned, leased or
operated by the Company or any of its Subsidiaries is or shall be subject to
any applicable environmental cleanup responsibility law or environmental
restrictive transfer law or regulation by virtue of the transactions set forth
herein and contemplated hereby.
3.25. Withholding, Union Contracts, Labor Relations. Each of the
Company and each of its Subsidiaries has withheld all amounts required by law
or agreement to be withheld by it from the wages, salaries and other payments
to its employees and is not liable for any arrears of wages or any taxes or
penalties for failure to comply with any of the foregoing. Except as set forth
on Schedule 3.25, none of the Company or any of its Subsidiaries is a party to
any employment agreement, arrangement or understanding with any of its officers
or employees pursuant to which the Company or any of its Subsidiaries is
obligated to pay in excess of $100,000 in annual compensation and benefits.
Except as set forth on Schedule 3.25, there are no collective bargaining
agreements covering any of the employees of the Company or any of its
Subsidiaries. None of the Company or any of its Subsidiaries has breached or
otherwise failed to comply with any provision of any collective bargaining
agreement or other labor union contract applicable to any of its employees. No
consent of any union (or any similar group or organization) is required in
connection with the consummation of the transactions contemplated hereby.
Except as disclosed in Schedule 3.25, there are no pending, or to the Company's
knowledge, threatened or anticipated (a) employment discrimination charges or
complaints against or involving the Company or any of its Subsidiaries before
any federal, state, or local board, department, commission or agency, (b)
unfair labor practice charges or complaints, disputes or grievances affecting
the Company or any of its Subsidiaries, (c) union representation petitions
respecting the employees of the Company or any of its Subsidiaries, (d) efforts
being made to organize any of the employees of the Company or any of its
Subsidiaries, or (e) strikes, slow downs, work stoppages, or lockouts or
threats thereof affecting the Company or any of its Subsidiaries.
3.26. Year 2000 Compliance. The Company has (i) reviewed the areas
within its business and operations which could be adversely affected by failure
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to become "Year 2000 Compliant" (that is that computer applications, imbedded
microchips and other systems used by the Company or its vendors, will be able
to properly recognize and perform data sensitive functions involving certain
dates prior to and any date after December 31, 1999) and (ii) completed
implementation of a detailed plan to become Year 2000 Compliant. Based on such
review and implementation, the Company reasonably believes that it is Year 2000
Compliant except to the extent that a failure to do so will not have a material
adverse effect on the Company's business. To the extent that the Company's Year
2000 Compliance depends on the Year 2000 Compliance of its vendors, the Company
has no reason to believe that such vendors are not Year 2000 Compliant.
3.27 SEC Filings. The Form 10-K of each of TRC and Xxxxxxx filed
with the Commission relating to the fiscal year ended December 31, 1998 and the
Form 10-Q of each of TRC and Xxxxxxx filed with the Commission relating to the
fiscal quarter ended September 30, 1999 did not, and as of the date hereof do
not, contain any untrue statements of material fact or omit to state a material
fact necessary in order to make the statements contained therein not
misleading.
4. INVESTMENT REPRESENTATION.
You represent and warrant to the Company that (a) you are an
"accredited investor" as such term is defined in Rule 501 promulgated under the
Securities Act and (b) you are acquiring the Purchased Securities for
investment, and not with a view to selling or otherwise distributing the
Purchased Securities; provided, however, that the disposition of your property
shall at all times be and remain in your control, subject to the provisions of
Section 13 hereof.
5. CONDITIONS TO PURCHASE.
Your obligation to purchase the Purchased Securities to be purchased
by you pursuant to this Agreement is subject to compliance by the Company and
its Subsidiaries with its agreements contained herein, and to the satisfaction,
on or prior to the Closing Date, of the following conditions:
5.1. This Agreement; Related Agreements. This Agreement and each
of the Related Agreements shall have been executed and delivered in a form
reasonably satisfactory to you, shall be in full force and effect and no term
or condition hereof or thereof shall have been amended, modified or waived
except with your prior written consent. All covenants, agreements and
conditions contained herein or in the Related Agreements which are to be
performed or complied with on or prior to the Closing Date shall have been
performed or complied with (or waived with your prior written consent) in all
material respects.
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5.2. Charter Documents; Good Standing Certificates. You shall have
received from the Company and each of its Subsidiaries a copy, certified by a
duly authorized officer of the Company to be true and complete as of the
Closing Date, of the Charter and the bylaws of the Company and each of its
Subsidiaries and a certificate, dated not more than ten (10) days prior to the
Closing Date, of the Secretary of State or other appropriate official of each
state in which the Company or any of its Subsidiaries is incorporated,
organized or qualified to do business, as to such Person's good standing or
qualification to do business in such state.
5.3. Proof of Corporate Action; Approvals. You shall have received
from the Company and each of its Subsidiaries copies, certified by a duly
authorized officer thereof to be true and complete as of the Closing Date, of
the records of all corporate action taken to authorize the execution, delivery
and performance of this Agreement or any of the Related Agreements to which the
Company or such Subsidiary, as applicable, is or is to become a party.
5.4. Incumbency Certificate. You shall have received from the
Company and each of its Subsidiaries an incumbency certificate, dated the
Closing Date, signed by a duly authorized officer of the Company or of such
Subsidiary, as applicable, and giving the name and bearing a specimen signature
of each individual who shall be authorized to sign, in the name and on behalf
of the Company or such Subsidiary, as applicable, this Agreement and each of
the Related Agreements to which the Company or such Subsidiary is or is to
become a party, and to give notices and to take other action on such Person's
behalf under each of such documents.
5.5. Representations and Warranties; Officers' Certificates. The
representations and warranties of the Company or any of its Subsidiaries
contained or incorporated by reference herein shall be true and correct after
completion of the Recapitalization on and as of the Closing Date; no event or
condition shall have occurred or would result from the issuance of any of the
Securities which would be a Default or Event of Default on and as of the
Closing Date, and the Company and each of its Subsidiaries shall have performed
and complied with all conditions and agreements required to be performed or
complied with by them hereunder and under the Related Agreements prior to the
Closing; and you shall have received on the Closing Date a certificate to these
effects signed by the President of the Company.
5.6. Legality; Governmental Authorization. The purchase of the
Purchased Securities shall not be prohibited by any law, governmental order or
regulation, and shall not subject you to any penalty, special tax, or other
onerous condition. All necessary consents, approvals, licenses, permits, orders
and authorizations of, or registrations, declarations and filings with, any
governmental or administrative agency or other Person, with respect to any of
the transactions contemplated by this Agreement or any of the Related
Agreements, shall have been duly obtained or made and shall be in full force
and effect.
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5.7. Completion of Recapitalization. On the Closing Date, the
Recapitalization shall have been completed pursuant to the Recapitalization
Documents.
5.8. SBIC Documentation. The Company shall have executed and
delivered to you all documents required by you in connection with the
investment contemplated hereby under the rules and regulations applicable to
you by virtue of your status as a "small business investment company."
5.9. Stockholders Agreement. The Company and Xxxxxx X. Xxxxx shall
have executed and delivered the Stockholders Agreement, and the Stockholders
Agreement shall be in full force and effect.
5.10. No Material Change. There shall not have been, or threatened
to be after giving effect to the transactions contemplated hereby and by the
Related Agreements, any material damage to or loss or destruction of any
properties or assets owned or leased by the Company or any of its Subsidiaries
(whether or not covered by insurance) or any material adverse change in the
business, financial condition or prospects of the Company or any of its
Subsidiaries or imposition of any laws, rules or regulations which would
materially adversely affect the business, operations, prospects, properties,
assets or condition (financial or otherwise) of the Company or any of its
Subsidiaries.
5.11. Expenses. Xxxxxxx Xxxx LLP, your special counsel, shall have
received from the Company payment in full for all legal fees charged and all
costs and expenses incurred by such counsel through the Closing Date in
connection with the transactions contemplated by this Agreement and the Related
Agreements. All of the other fees, expenses and disbursements incurred by you
or your accountants and other consultants in connection with your due diligence
investigation of the Company and its Subsidiaries shall have been paid in full
by the Company.
5.12. Legal Opinion. You shall have received from Xxxxx, Xxxxx &
Xxxxx, special counsel to the Company, their favorable opinion, substantially
in the form of Exhibit C hereto, and covering such other matters with respect
to the transactions contemplated by this Agreement and the Related Agreements
as you may reasonably request.
5.13. No Litigation. No restraining order or injunction shall
prevent the transactions contemplated by this Agreement or the Related
Agreements and no action, suit or proceeding shall be pending or threatened
before any court or administrative body in which it will be, or is, sought to
restrain or prohibit or to obtain damages or other relief in connection with
this Agreement or the consummation of the transactions contemplated hereby or
thereby.
5.14. Amendment of Charter. The Company shall have amended its
Charter to read as set forth in Exhibit A.
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5.15. Closing Fee. First Capital Corporation of Boston shall have
received from the Company payment in full of the portion of the closing fee
payable on the Closing Date under the Fee Letter.
5.16. Senior Debt Financing. Simultaneously with the purchase and
sale of the Purchased Securities hereunder, the Credit Agreement shall have
been amended to permit the Recapitalization and the transactions contemplated
hereby pursuant to an amendment satisfactory to you.
5.17. DNS Stock Purchase Agreement. The transactions contemplated
by the DNS Stock Purchase Agreement shall have been completed simultaneously
with the purchase and sale of the Purchased Securities hereunder.
5.18. General. All instruments and legal, governmental,
administrative and corporate proceedings in connection with the transactions
contemplated by this Agreement and the Related Agreements shall be satisfactory
in form and substance to you, and you shall have received copies of all
documents, including, without limitation, records of corporate or other
proceedings, opinions of counsel, consents, licenses, approvals, permits and
orders, which you may have requested in connection therewith.
6. INFORMATION AND OTHER COVENANTS.
The Company hereby agrees that so long as any Securities are
outstanding, it will comply and will cause its Subsidiaries to comply with the
following provisions:
6.1. Annual Statements. As soon as available and in any event within
one hundred and five (105) days after the close of each fiscal year of the
Company, the Company will deliver to each Major Holder (a) with respect to the
fiscal year ending December 31, 1999, a consolidated balance sheet of the
Company and its Subsidiaries as of December 31, 1999 and a consolidated balance
sheet and consolidated statements of operations and retained earnings and
consolidated statements of cash flows of TRC and its Subsidiaries for the
fiscal year ending December 31, 1999 and (b) with respect to each fiscal year
ending thereafter, consolidated balance sheets and consolidated statements of
operations and retained earnings and consolidated statements of cash flows of
the Company and its Subsidiaries for such fiscal year, in each case setting
forth in comparative form figures for the previous fiscal year, audited by an
independent public accounting firm selected by the Company and acceptable to
the Majority Holders showing the consolidated financial condition of the
Company (or TRC, as applicable) and its Subsidiaries as of the close of such
fiscal year and the consolidated results of the Company's (or TRC's as
applicable) operations during such fiscal year and certified without
qualification (except any qualifications as the Majority Holders may in their
discretion approve in writing) by such accounting firm to have been prepared in
accordance with GAAP, consistently applied, accompanied by the written
statement of such
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accounting firm that no Default or Event of Default exists, or if such firm
shall have obtained knowledge of any such Default or Event of Default or other
event, setting forth the notice thereof.
6.2. Quarterly Statements. As soon as available and in any event
within fifty (50) days after the close of each fiscal quarter of the Company
commencing with the fiscal quarter ending March 31, 2000, the Company will
deliver to each Major Holder consolidated balance sheets and consolidated
statements of operations and retained earnings and consolidated statements of
cash flows of the Company and its Subsidiaries for such fiscal quarter, setting
forth the comparative form figures for the corresponding fiscal quarter of the
previous fiscal year, certified by the President, Chief Financial Officer or
Controller of the Company to be true and correct and to have been prepared in
accordance with GAAP, consistently applied (subject to normal year-end
adjustments).
6.3. Monthly Statements. As soon as available and in any event
within forty-five (45) days after the end of each month or other accounting
period commencing with the first month ending after the Closing Date, the
Company will deliver to each Major Holder consolidated internal, unaudited
balance sheets of the Company and its Subsidiaries and consolidated statements
of operations and retained earnings and consolidated statements of cash flows
of TRC and its Subsidiaries as of the end of each such month or other
accounting period and for the quarter and year to date, setting forth a
comparison of budget to actual figures for such month or other accounting
period and for the quarter and year to date, and the comparative form figures
for the Company or TRC, as the case may be, for the corresponding month or
other accounting period and for the quarter and year to date of the previous
year, certified by the President, Chief Financial Officer or Controller of the
Company to be true and correct and to have been prepared in accordance with
GAAP, consistently applied (subject to normal year-end adjustments).
6.4. Other Financial Information. The Company will deliver to each
Major Holder, (a) no later than forty-five (45) days after to the commencement
of each fiscal year, an annual budget and projected monthly balance sheets,
statements of income and statements of cash flows for such fiscal year,
prepared on a comparative basis to the Projections, and (b) copies of all other
documents or reports which the Company or its Subsidiaries provides to any
lender to the Company or its Subsidiaries. The Company will deliver to the
Majority Holders as soon as practical after preparation thereof complete and
correct copies of all monthly and quarterly (if any) or annual budgetary
analyses or forecasts of the Company in the form customarily prepared by
management for its own internal use or the use of the board of directors of the
Company. Promptly after the receipt thereof, the Company will provide copies of
any reports as to adequacies in accounting controls submitted by independent
accountants with respect to the Company and its Subsidiaries.
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6.5. Officers' Certificates. Together with delivery of consolidated
financial statements of the Company and its Subsidiaries pursuant to Sections
6.1, 6.2 and 6.3 above, the Company will deliver to each Major Holder a
certificate of the President, Chief Financial Officer or Controller of the
Company (a) stating that such statements have been prepared in accordance with
GAAP, consistently applied, (subject in the case of interim financial
statements only to normal year-end audit adjustments and a lack of footnotes)
and present fairly the consolidated financial position of the Company as of the
dates specified and the results of operations and cash flows with respect to
the periods specified, and (b) stating that such officers have caused the
provisions of this Agreement to be reviewed and have no knowledge of any
Default or Event of Default, or if either such officer has such knowledge,
specifying such Default or Event of Default and the nature thereof, and what
action the Company has taken, is taking or proposes to take with respect
thereto.
6.6. Notices.
(a) Notice of Litigation, Defaults, Etc. The Company will promptly
give notice to each Major Holder of any litigation or any administrative
proceeding to which the Company or any of its Subsidiaries may hereafter become
a party which may result in any material adverse change in the property,
business, financial condition or prospects of the Company or any of its
Subsidiaries. Promptly, upon any officer of the Company obtaining knowledge of
any Default or Event of Default hereunder or any default or event of default
under any Related Agreement or any agreement relating to any Indebtedness for
Borrowed Money, the Company will furnish a notice specifying the nature and
period of existence thereof and in the case of a Default or Event of Default
hereunder, what action the Company or any of its Subsidiaries has taken, is
taking or proposes to take with respect thereto.
(b) Notice of Environmental Events. Without limiting the foregoing
clause (a), the Company will promptly give written notice to each Major Holder,
(i) upon obtaining knowledge thereof, of (A) any violation of any Environmental
Law regarding any real property presently or formerly owned, leased or operated
by the Company or any of its Subsidiaries or regarding the operations of the
Company or any of its Subsidiaries, or (B) any potential or known release or
threat of release of any Hazardous Substances at, from or into any real estate
presently or formerly owned, leased or operated by the Company or any of its
Subsidiaries, that the Company or any of its Subsidiaries reports in writing or
is required to report in writing (or for which any written report supplemental
to any oral report is made) to any federal, state or local environmental agency
and (ii) upon receipt by the Company or any of its Subsidiaries of any notice
of violation of any Environmental Laws or of any release or threatened release
of Hazardous Substances, including a notice or claim of liability or potential
responsibility from any third party (including without limitation any federal,
state or local governmental officials) and including notice of any formal
inquiry, proceeding, demand, investigation or other action with regard to (A)
the Company's or any Person's operation of any real estate presently or
formerly
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owned, leased or operated by the Company or its Subsidiaries, (B) contamination
on, from or into such real estate, or (C) investigation or remediation of
offsite locations at which the Company, its Subsidiaries or any of their
predecessors are alleged to have directly or indirectly disposed of Hazardous
Substances; or (iii) upon the Company's or any of its Subsidiaries' obtaining
knowledge that any expense or loss has been incurred by such governmental
authority in connection with the assessment, containment, removal or
remediation of any Hazardous Substances with respect to which the Company, its
Subsidiaries or any of their predecessors may be liable or for which a lien may
be imposed on the real property owned, leased or operated by the Company or its
Subsidiaries. The Company shall also provide each Major Holder with copies of
any environmental studies, reports, assessments or audits which it provides to
any lender to the Company or to any governmental authority.
6.7. Rights to Attend Meetings.
(a) Board Meetings. The Company will give each Majority Holder at
least five (5) business days' prior written notice of the time, place and
subject matter of any proposed meeting (or action by written consent) of the
board of directors or executive committee of the Company, such notice to
include true and complete copies of all documents furnished to any director in
connection with such meeting or consent. Any one (1) of such Majority Holder's
officers and authorized representatives (in addition to any of such Majority
Holder's officers or representatives who have been elected to the board of
directors) will be entitled to attend as an observer at any such meeting or, if
a meeting is held by telephone conference, to participate therein for the
purpose of listening thereto. The Company will call and hold a meeting of its
board of directors or executive committee at least once each fiscal quarter.
(b) Annual Meetings. Within sixty (60) days after the financial
statements required by Section 6.1 hereof are furnished and on not less than
thirty (30) days' and not more than sixty (60) days' prior written notice, each
of the Company and its Subsidiaries will hold an annual meeting of its
stockholders at which the principal executive, financial and operations
officers of the Company or such Subsidiary, as applicable, will present a
review of, and will discuss with those in attendance, in reasonable detail, the
general affairs, management, financial condition, results of operations and
business prospects of the Company or such Subsidiary, as applicable. The
Company will give each Major Holder at least thirty (30) days' advance written
notice of each such meeting and will allow each Major Holder to attend each
such meeting.
6.8. Other Information. From time to time upon the request of any
representative designated by the Majority Holders, the Company and its
Subsidiaries will furnish to any authorized officer or representative of such
Person such information regarding the business, affairs, prospects and
financial condition of the Company and its Subsidiaries as such officer or
representative may reasonably request. Each such officer or representative
shall have the
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right to visit and inspect any of the properties of the Company or such
Subsidiary, to examine its books of account (and to make copies thereof and
extracts therefrom), and to discuss its affairs, finances and accounts with,
and to be advised as to the same by, its officers, all at such reasonable times
and intervals as you may reasonably request.
6.9. Confidentiality. Each Major Holder and its officers and
representatives will hold, and use its best efforts to require others to hold,
in confidence all proprietary or confidential information of the Company and
its Subsidiaries provided or made available to such Major Holder pursuant to
this Section 6 until such time as such information has been publicly disclosed
other than as a consequence of any breach by a Major Holder of its
confidentiality obligations hereunder.
6.10. Post-Closing Review. Within 90 days following the Closing
Date, the Company shall deliver to BBV a certificate of the Chief Financial
Officer of the Company stating that the proceeds from the sale of the Purchased
Securities were used for the purposes specified in Section 2.4 hereof.
6.11. Further Assurances. Each of the Company and each of its
Subsidiaries will cooperate with you and execute such further instruments and
documents as you shall reasonably request to carry out to your satisfaction the
transactions contemplated by this Agreement and the Related Agreements.
7. EVENTS OF DEFAULT.
7.1. Events of Default. Holders of the Securities will be entitled
to exercise the remedies provided by Section 7.2 hereof in accordance with the
terms thereof if any one or more of the following events ("Events of Default")
shall occur:
(a) the Company shall have failed to pay when due the full
quarterly dividend in cash or in kind with respect to each share of
Preferred Stock required to be paid pursuant to the Company's Charter;
or
(b) the Company shall fail to redeem any shares of Preferred
Stock when required to do so pursuant to the Company's Charter; or
(c) (i) the Company shall fail to perform or observe or shall
fail to cause any of its Subsidiaries to perform or observe, any
covenant, agreement or provision set forth in this Agreement, and such
failure shall not be rectified or cured to your satisfaction within
ten (10) days after notice from you, (ii) the Company shall fail to
perform or observe or shall fail to cause any of its Subsidiaries to
perform or observe, in each case, in any material respect, any
covenant, agreement or provision to be performed or observed by it
under any Financing Agreement and such failure shall not be rectified
or cured to your satisfaction within 10 days
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after notice from you, (iii) the Company shall fail to perform or
observe or shall fail to cause any of its Subsidiaries to perform or
observe, in each case, in any material respect, any covenant,
agreement or provision to be performed or observed by it pursuant to
any Related Agreement and such failure shall continue, without having
been duly cured, waived or consented to, beyond the period of grace,
if any, therein specified and so as to permit the acceleration
thereof, if any acceleration is provided for therein, or (iv) the
Company shall fail to perform or observe or shall fail to cause any of
its Subsidiaries to perform or observe any financial covenant
contained the Credit Agreement, the TRC Indenture or the Xxxxxxx
Indenture and such failure shall continue, without having been duly
cured, waived or consented to, beyond the period of grace, if any,
therein specified and so as to permit the acceleration thereof, if any
acceleration is provided for therein; or
(d) any representation or warranty made by the Company or
any of its Subsidiaries to you in connection with this Agreement or
any Financing Agreement or any amendment to either shall prove to have
been false on the date as of which it was made and which, in the
Majority Holders' reasonable determination, has a material adverse
effect on the business, results of operations or financial condition
of the Company and its Subsidiaries; or
(e) (i) the Company or any of its Subsidiaries shall fail
to make any required payment on any Indebtedness for Borrowed Money in
excess of $500,000 of the Company or any of its Subsidiaries and such
failure shall continue for 120 days or (ii) any Indebtedness for
Borrowed Money in excess of $500,000 of the Company or any of its
Subsidiaries shall be accelerated or, (iii) any security interest in
or other Lien on any property securing any such Indebtedness for
Borrowed Money shall be enforced through judicial proceedings or
foreclosure or repossession of collateral; or
(f) a final judgment which, in the aggregate with other
outstanding final judgments against the Company or any of its
Subsidiaries, exceeds $500,000 shall be rendered against the Company
or any of its Subsidiaries if, within thirty (30) days after entry
thereof, such judgment shall not have been satisfied and discharged or
stayed pending appeal, or within thirty (30) days after expiration of
such stay such judgment shall not have been discharged; or
(g) the Company or any of its Subsidiaries shall
(i) commence a voluntary case under Title 11 of the
United States Code as from time to time in effect, or
authorize, by appropriate proceedings of its board of
directors or other governing body, the commencement of such a
voluntary case;
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(ii) have filed against it a petition commencing an
involuntary case under said Title 11 and such petition shall
not have been dismissed within sixty (60) days;
(iii) seek relief as a debtor under any applicable
law, other than said Title 11, of any jurisdiction relating
to the liquidation or reorganization of debtors or to the
modification or alteration of the rights of creditors, or
consent to or acquiesce in such relief;
(iv) have entered against it an order by a court of
competent jurisdiction (A) finding it to be bankrupt or
insolvent, (B) ordering or approving its liquidation,
reorganization or any modification or alteration of the
rights of its creditors, or (C) assuming custody of, or
appointing a receiver or other custodian for, all or a
substantial part of its property;
(v) make an assignment for the benefit of, or enter
into a composition with, its creditors, or appoint or consent
to the appointment of a receiver or other custodian for all
or a substantial part of its property; or
(h) any Change in Control shall occur; or
(i) the Company or any of its Subsidiaries shall fail to
maintain in full force and effect any federal, state or local license,
permit or operating right, which failure would have a materially
adverse affect on the business, operations, properties, assets,
condition (financial or otherwise) or prospects of the Company its
Subsidiaries; or
(j) the Company shall fail to use the proceeds from the
sale of the Purchased Securities for the purposes specified in Section
2.4; or
(k) the Company shall fail to pay when due the Repurchase
Price for any Common Shares pursuant to Section 8 hereof; or
(l) the Company shall fail to pay when due the amounts
payable under the Fee Letter and the Management Fee Agreement.
7.2. Remedies.
(a) At any time during the continuance of any Event of
Default, in each and every such case, the Majority Holders of the
Preferred Shares may proceed to protect and enforce its or their
rights against the Company by suit in equity, action at law and/or
other appropriate proceeding either for specific performance of any
covenant, provision or condition contained or incorporated by
reference in this Agreement, in any Related Agreement or in the
Company's Charter, or in aid of the
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exercise of any power granted in this Agreement, any Related Agreement
or the Company's Charter.
(b) At any time during the continuance of any Event of
Default, in each and every such case, the Majority Holders of the
Common Shares may proceed to protect and enforce its or their rights
against the Company by suit in equity, action at law and/or other
appropriate proceeding either for specific performance of any
covenant, provision or condition contained or incorporated by
reference in this Agreement, in any Related Agreement or in the
Company's Charter, or in aid of the exercise of any power granted in
this Agreement, any Related Agreement or the Company's Charter, and,
immediately in the case of Section 7.1(g) hereof and at any time after
the giving of a Put Notice to the Company pursuant to Section 8 hereof
in all other cases, the theretofore unexercised "put" rights set forth
in Section 8 hereof shall, to the extent not already exercisable, be
deemed to have become immediately exercisable and the Majority Holders
of Common Shares may in such Put Notice to the Company declare all or
part of such theretofore unexercised "put" rights to be forthwith
exercised and due and payable (unless there shall have occurred an
Event of Default under Section 7.1(g) hereof, in which case such "put"
rights shall be automatically exercised and due and payable, whereupon
the Repurchase Price for the Common Shares subject thereto shall
become so due and payable without presentation, presentment, protest
or further demand or notice of any kind, all of which are expressly
waived), and any such holder or holders may proceed to enforce payment
of such amount or part thereof in such manner as it or they may elect.
7.3. Waivers. The Company hereby waives, to the extent not prohibited
by applicable law, (a) all presentments, demands for performance and notices of
nonperformance (except to the extent specifically required by the provisions
hereof), (b) except to the extent otherwise specifically provided in this
Agreement, the Charter of the Company, or any Financing Agreement, any
requirement of diligence or promptness on the part of any holder of Securities
in the enforcement of its rights under the provisions of this Agreement, the
Charter of the Company, or any Financing Agreement, and (c) any and all notices
of every kind and description which may be required to be given by any statute
or rule of law.
7.4. Course of Dealing. No course of dealing between the Company on
the one hand, and you or any holder of Securities, on the other hand, shall
operate as a waiver of any of your or its rights under this Agreement, the
Charter of the Company, or any Financing Agreement. No delay or omission in
exercising any right under this Agreement, the Charter of the Company, or any
Financing Agreement shall operate as a waiver of such right or any other right.
A waiver on any one occasion shall not be construed as a bar to or waiver of
any right or remedy on any other occasion.
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8. REPURCHASE OF COMMON SHARES.
8.1. Right to Put Common Shares. At any time and from time to time on
or after the fifth anniversary of the Closing Date, or on such earlier date as
may be determined under Section 7.2(b) you may, by notice to the Company (a
"Put Notice"), elect to sell to the Company (and the Company hereby agrees to
repurchase from you), at the Repurchase Price specified in Section 8.5 hereof,
such number of Common Shares as are specified in the Put Notice.
8.2. Put Closing. The put closing shall take place at the offices of
the Company at 10:00 a.m. local time on a date (a) not more than 120 days after
the date a Put Notice is received by the Company as the Company shall specify
by notice to you, or at such later time as Fair Market Value shall have been
determined under Section 8.5(b) hereof, or (b) at such other time and place as
you and the Company may agree upon (a "Put Closing Date"). At the put closing
you will deliver to the Company a certificate or certificates evidencing the
Common Shares then to be purchased by the Company (properly endorsed or
accompanied by stock powers or assignments with signature(s) guaranteed or
similar appropriate documentation of authority to transfer) against payment of
the Repurchase Price to you in the manner specified in Section 8.4 hereof
(together with a certificate or certificates evidencing any Common Shares
presented to the Company but not then being purchased by the Company). Except
to the extent prohibited by applicable law, prior to the Put Closing Date, the
Company will provide you with all available information that may be material to
the exercise of your rights under this Section 8, including any plans or
proposals for any mergers, sales of assets, acquisitions and substantial sales
of stock by its stockholders.
8.3. Right to Call Common Stock; Call Closing. At any time after the
seventh anniversary of the Closing Date, the Company shall, by notice to you
(the "Call Notice"), purchase from you (and you hereby agree to sell to the
Company) out of funds legally available therefor, at the Repurchase Price, all
but not less than all of the Common Shares as are then outstanding on a date
specified in such notice not fewer than 30 nor more than 90 days after the date
of the Call Notice. The closing under this Section 8.3 shall take place at the
offices of the Company at 10:00 a.m. local time on the date so specified or at
such later time as Fair Market Value shall have been determined under Section
8.5(b) hereof, or at such other time and place as the Company and you may agree
upon (the "Call Closing Date"). At the closing, you will deliver to the Company
a certificate or certificates evidencing the Common Shares to be repurchased by
the Company pursuant to such call (properly endorsed or accompanied by stock
powers or assignments with signature(s) guaranteed or similar appropriate
documentation of authority to transfer), and the Company shall pay you the
Repurchase Price for such Common Shares in cash or in immediately available
funds.
8.4. Payment. (a) The Company shall pay the Repurchase Price at any
closing under Section 8.2 or 8.3 hereof out of funds legally available therefor
in
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cash or immediately available funds, provided that in the event that payment of
the Repurchase Price would be prohibited by the terms of the Credit Agreement,
the TRC Indenture or the Xxxxxxx Indenture, no such repurchase shall be made
but the failure to make such repurchase shall be deemed to be an Event of
Default except as otherwise provided in Section 8.4(b) below. In the event that
any portion of the Repurchase Price is not paid in cash as a result of any
insufficiency of legally available funds, any prohibition contained in the
Credit Agreement, the TRC Indenture or the Xxxxxxx Indenture, or otherwise, you
shall retain all your rights hereunder and under and in connection with the
Common Shares, as to that number of Common Shares as such unpaid portion
represents (the "Unrepurchased Securities"), until such time as the unpaid
portion of the Repurchase Price and interest thereon, determined as set forth
below, shall be paid to you in full; and you shall, at any time prior to
payment of the Repurchase Price for any Unrepurchased Securities, be entitled,
by notice to the Company (the "Rescission Notice"), to rescind your put of such
Unrepurchased Securities pursuant to Section 8.1. Unless and until the Company
receives a Rescission Notice, the unpaid portion of the Repurchase Price
allocable to the Unrepurchased Securities shall remain an obligation of the
Company and shall become due and payable, in cash or immediately available
funds, as soon as there are funds legally available therefor. Interest shall
accrue from the date 120 days after the date on which the Company receives the
applicable Put Notice on any unpaid portion of the Repurchase Price at the rate
of 18% per annum, compounded on a monthly basis to the extent permitted by law
and payable on demand. In addition, at the end of each three (3) month period,
commencing on the date on which the applicable Put Closing Date or Call Closing
Date was scheduled to take place, at the end of which any portion of the
Repurchase Price remains unpaid, the holders of Unrepurchased Securities shall
be entitled to receive from the Company an additional number of shares of
Common Stock equal in amount to five percent (5%) of the number of Common
Shares which are then Unrepurchased Securities. Notwithstanding any provision
herein to the contrary, in the event that the holders of Common Shares shall
have delivered a Special Rights Notice (as defined in the Charter) in
accordance with the Company's Charter following exercise of their put rights
hereunder, such holders shall be deemed to have delivered a Rescission Notice
for purposes of this Section 8.4.
(b) Notwithstanding any provision herein to the contrary, in the
event the Company has not paid the Repurchase Price in full 120 days after the
date of the applicable Put Notice, the Company may elect to commence a sale of
the Company in accordance with Section 3.1 of the Stockholders Agreement and
such failure to pay the Repurchase Price shall not constitute an Event of
Default; provided, that, in the event that a sale of the Company in accordance
with Section 3.1 of the Stockholders Agreement is not completed with six (6)
months after such 120 day period, an Event of Default shall be deemed to have
occurred at the end of such six (6) month period under Section 7.1(k) hereof
with respect to such failure to pay the Repurchase Price, and you shall be
entitled to receive interest on the unpaid Repurchase Price and additional
Common Shares
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from the end of the 120 day period following the date of the applicable Put
Notice as provided in paragraph (a) above.
8.5. Repurchase Price for Common Shares.
(a) Repurchase Price. The repurchase price per Common Share (the
"Repurchase Price") shall, except as otherwise provided in Section 8.7, be an
amount equal to the quotient obtained by dividing (i) the Fair Market Value of
the Company's common stock equity (as determined pursuant to Section 8.5(b)
hereof), calculated as of the date of the related Put Notice or Call Notice
under Section 8.1 or 8.3 hereof, respectively, plus, the aggregate
consideration to be paid to the Company upon the exercise of all then
exercisable outstanding warrants, options or convertible securities pursuant to
which the Company is then obligated to issue Common Stock by (ii) the sum of
(A) the number of shares of Common Stock then outstanding plus (B) the number
of shares of Common Stock then issuable upon exercise of then outstanding
warrants, options or convertible securities, in each case to the extent then
exercisable.
(b) Fair Market Value. For a period of 10 days after the date of any
Put Notice or Call Notice (the "Negotiation Period"), each party hereto agrees
to negotiate in good faith to reach agreement upon the fair market value of the
Company's common stock equity (the "Fair Market Value"). In the event that the
parties are unable to agree upon the Fair Market Value by the end of the
Negotiation Period, the Fair Market Value of the Company's common stock equity
shall be determined for purposes of this Section 8.5(b) initially by an
appraiser selected by the Majority Holders (the "BBV Appraiser") and whose
appraisal (the "BBV Appraisal") shall be furnished to the Company within 30
days after the end of the Negotiation Period. If the Company does not object to
such determination within 15 days after receipt of such notice, the fair market
value determined by the BBV Appraiser shall be the Fair Market Value. If the
Company objects to the Fair Market Value determined by the BBV Appraiser, the
Company may select an Appraiser (the "Company Appraiser") who shall review the
determination of the BBV Appraiser and issue a report thereon (the "Company
Appraisal"), within 30 days after delivery to the Company of the BBV Appraisal.
Within 10 days after delivery to the Majority Holders of the Company Appraisal,
the BBV Appraiser and the Company Appraiser shall meet in order to resolve any
questions or differences with respect to the Fair Market Value. If such
Appraisers agree on a Fair Market Value of the Company's common stock equity,
such Fair Market Value shall be the Fair Market Value. If no agreement is
reached, such Appraisers shall select an appraiser (the "Third Appraiser")
within five days after such meeting. Fair Market Value shall then be determined
by the Third Appraiser within 30 days after delivery to BBV of the Company
Appraisal, and the determination of the Third Appraiser shall be conclusive and
binding upon the Company and you. Fair Market Value shall in all cases be
calculated by determining the Fair Market Value of the entire common stock
equity interest of the Company taken as a whole, without premium for control or
discounts for minority interests or restrictions on transfer. All expenses of
the Company Appraisal shall be borne by the
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Company; all expenses of the BBV Appraiser shall be borne by you; and all
expenses of the Third Appraiser shall be borne equally by the Company and you.
8.6. Additional Payments Upon Merger, Etc. If at any time within (i)
nine (9) months after any Call Closing Date or (ii) six (6) months after any
Put Closing Date, with respect to the repurchase or exchange of any Common
Shares, the Company or any of its Subsidiaries shall become party to any
Capital Transaction or the Company or any of its Subsidiaries or their
respective stockholders enter into any agreement or letter of intent
contemplating any Capital Transaction, the Company shall, simultaneously with
the consummation of such Capital Transaction or at such later time as any
payment is received by the Company or any of its stockholders in respect of
such Capital Transaction, make an additional payment to you in an amount per
Common Share repurchased from you pursuant to Section 8.2 or 8.3 hereof equal
to the excess, if any, of the value per share of the cash, securities and other
property that you would have received (or that the Company received in which
you would have had a beneficial interest as a stockholder of the Company) had
your Common Shares not been previously repurchased pursuant to Section 8.2 or
8.3 hereof over the payment received by you with respect to each such share
pursuant to Section 8.2 or 8.3 hereof. Each payment to you pursuant to this
Section 8.6 shall be made either in cash or in the form of consideration
received by the holders of common equity of the Company (or the Company).
9. REGISTRATION RIGHTS.
9.1. Definitions. As used in this Section 9:
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Holder" shall mean you and all Persons to whom any Registrable
Securities are transferred in accordance with the provisions hereof. A Holder
shall, for all purposes of this Section 9, unless the context shall otherwise
require, be deemed to hold, at any particular time, all Common Shares held of
record by such Holder at such time.
"Material Transaction" means any material transaction in which the
Company or any of its Subsidiaries proposes to engage or is engaged, including
a purchase or sale of assets or securities, financing, merger, consolidation or
any other transactions that would require disclosure pursuant to the Exchange
Act and with respect to which the Company's board of directors has reasonably
determined that compliance with this Agreement may be expected to either
materially interfere with the Company's ability to consummate such transaction
or require the Company to disclose material, non-public information prior to
such time as it would otherwise be required to be disclosed.
"registered" and "registration" refer to a registration effected by
preparing and filing a registration statement in compliance with the Securities
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Act and the declaration or ordering by the Commission of effectiveness of such
registration statement.
"Registrable Securities" means, at any particular time, all Common
Shares issued and outstanding at such time.
"Underwriters' Maximum Number" means for any Piggyback Registration,
Demand Registration or other registration which is an underwritten
registration, that number of securities to which such registration should, in
the opinion of the managing underwriters of such registration in the light of
marketing factors, be limited.
9.2. Demand Registration.
(a) Request for Demand Registration.
(i) Subject to the limitations contained in the following
paragraphs of this Section 9.2, the Holders of 51% or more of all
Registrable Securities at any time outstanding may at any time give to
the Company, pursuant to this clause (i), a written request for the
registration by the Company under the Securities Act of all or any
part of the Registrable Securities of such Holders (such registration
being herein called a "Demand Registration"). Within 10 days after the
receipt by the Company of any such written request, the Company will
give written notice of such registration request to all Holders of
Registrable Securities.
(ii) Subject to the limitations contained in the following
paragraphs of this Section 9.2, after the receipt of such written
request for a Demand Registration, (A) the Company will be obligated
and required to include in such Demand Registration all Registrable
Securities with respect to which the Company shall receive from
Holders of Registrable Securities, within 30 days after the date on
which the Company shall have given to all Holders a written notice of
registration request pursuant to Section 9.2(a)(i) hereof, the written
requests of such Holders for inclusion in such Demand Registration,
and (B) the Company will use its best efforts in good faith to effect
promptly the registration of all such Registrable Securities. All
written requests made by Holders of Registrable Securities pursuant to
this clause (ii) will specify the number of shares of Registrable
Securities to be registered and will also specify the intended method
of disposition thereof. Such method of disposition shall, in any case,
be an underwritten offering if an underwritten offering is requested
by Holders of 51% or more of the Registrable Securities to be included
in such Demand Registration.
(iii) The Company shall not be required to file a
registration statement under this Section 9.2(a) unless the Holders
requesting such
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Demand Registration propose to dispose of Registrable Securities
having an aggregate anticipated disposition price (before deduction of
underwriters commission and Registration Expenses) of at least
$5,000,000; provided, however, that if the aggregate number of
Registrable Securities held by such Holders have an aggregate
anticipated disposition price of less than $5,000,000, the Holders of
such Registrable Securities may request registration of such
Registrable Securities so long as all Registrable Securities are
requested to be registered.
(b) Limitations on Demand Registration.
(i) The Holders of Registrable Securities will not be
entitled to require the Company to effect any Demand Registrations
pursuant to Section 9.2(a) hereof (A) prior to the initial public
offering of the Company's Common Stock, or (B) thereafter on more than
three (3) occasions on Form S-1 (or any comparable form adopted by the
Commission), provided, that the foregoing limitation shall not
restrict the Holders of Registrable Securities from requiring the
Company to effect any number of Demand Registrations on Form S-3 (or
any comparable form adopted by the Commission), or (C) more frequently
than once during any twelve-month period.
(ii) Any registration initiated by Holders of Registrable
Securities as a Demand Registration pursuant to Section 9.2(a) hereof
shall not count as a Demand Registration for purposes of Section
9.2(b)(i) hereof unless and until such registration shall have become
effective and 51% or more of the Registrable Securities requested to
be included in such registration shall have been actually sold.
(iii) The Company shall not be obligated or required to
effect the Demand Registration of any Registrable Securities pursuant
to Section 9.2(a) hereof during the period commencing on the date
falling 60 days prior to the Company's estimated date of filing of,
and ending on the date 180 days following the effective date of, any
registration statement pertaining to any underwritten registration
initiated by the Company, for the account of the Company, if the
written request of Holders for such Demand Registration pursuant to
Section 9.2(a)(i) hereof shall have been received by the Company after
the Company shall have given to all Holders of Registrable Securities
a written notice stating that the Company is commencing an
underwritten registration initiated by the Company; provided, however,
that the Company will use its best efforts in good faith to cause any
such registration statement to be filed and to become effective as
expeditiously as shall be reasonably possible.
(iv) Anything contained herein to the contrary
notwithstanding, the Company may delay the filing or effectiveness of
any Registration
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Statement under this Section 9.2 for a period of up to 90 days after
the date of a request for registration pursuant to this Section 9.2 if
a Material Transaction exists at the time of such request, provided,
however, that the Company shall not utilize this right more than twice
during any twelve-month period.
(c) Priority on Demand Registrations. If the managing underwriters
in any Demand Registration shall give written advice to the Company and the
Holders of Registrable Securities to be included in such registration of an
Underwriters' Maximum Number, then: (i) the Company will be obligated and
required to include in such registration that number of Registrable Securities
requested by the Holders thereof to be included in such registration which does
not exceed the Underwriters' Maximum Number, and such number of Registrable
Securities shall be allocated pro rata among the Holders of such Registrable
Securities on the basis of the number of Registrable Securities requested to be
included therein by each such Holder; (ii) if the Underwriters' Maximum Number
exceeds the number of Registrable Securities requested by the Holders thereof
to be included in such registration, then the Company will be entitled to
include in such registration that number of securities which shall have been
requested by the Company to be included in such registration for the account of
the Company and which shall not be greater than such excess; and (iii) if the
Underwriters' Maximum Number exceeds the sum of the number of Registrable
Securities which the Company shall be required to include in such Demand
Registration and the number of securities which the Company proposes to offer
and sell for its own account in such registration, then the Company may include
in such registration that number of other securities which persons (other than
the Holders as such) shall have requested be included in such registration and
which shall not be greater than such excess. Neither the Company nor any of its
securityholders (other than Holders of Registrable Securities) shall be
entitled to include any securities in any underwritten Demand Registration
unless the Company or such securityholders (as the case may be) shall have
agreed in writing to sell such securities on the same terms and conditions as
shall apply to the Registrable Securities to be included in such Demand
Registration.
(d) Selection of Underwriters. The holders of a majority of the
Registrable Securities to be included in any Demand Registration shall
determine whether or not such Demand Registration shall be underwritten and
shall select the investment bankers and managing underwriters to administer
such offering.
9.3. Piggyback Registrations.
(a) Rights to Piggyback.
(i) If (and on each occasion that) the Company proposes to
register any of its securities under the Securities Act either for the
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Company's own account or for the account of any of its securityholders
(each such registration not withdrawn or abandoned prior to the
effective date thereof being herein called a "Piggyback
Registration"), the Company will give written notice to all Holders of
Registrable Securities of such proposal not later than forty-five (45)
days prior to the anticipated filing date of such Piggyback
Registration.
(ii) Subject to the provisions contained in paragraph (b) of
this Section 9.3 and in the last sentence of this clause (ii), (A) the
Company will be obligated and required to include in each Piggyback
Registration all Registrable Securities with respect to which the
Company shall receive from Holders of Registrable Securities, within
15 days after the date on which the Company shall have given written
notice of such Piggyback Registration to all Holders of Registrable
Securities pursuant to Section 9.3(a)(i) hereof, the written requests
of such Holders for inclusion in such Piggyback Registration, and (B)
the Company will use its best efforts in good faith to effect promptly
the registration of all such Registrable Securities. Except as may
otherwise be reasonably agreed with the managing underwriters, the
Holders of Registrable Securities shall be permitted to withdraw all
or any part of the Registrable Securities of such Holders from any
Piggyback Registration at any time prior to the effective date of such
Piggyback Registration. The Company will not be obligated or required
to include any Registrable Securities in any registration effected
solely to implement an employee benefit plan or a transaction to which
Rule 145 of the Commission is applicable.
(b) Priority on Piggyback Registrations. If a Piggyback Registration
is an underwritten registration, and the managing underwriters shall give
written advice to the Company of an Underwriters' Maximum Number, then: (i) the
Company shall be entitled to include in such registration that number of
securities which the Company proposes to offer and sell for its own account in
such registration and which does not exceed the Underwriters' Maximum Number;
(ii) if the Underwriters' Maximum Number exceeds the number of securities which
the Company proposes to offer and sell for its own account in such
registration, then the Company will be obligated and required to include in
such registration that number of Registrable Securities which shall have been
requested by the Holders thereof to be included in such registration and which
does not exceed such excess, and such number of Registrable Securities shall be
allocated pro rata among the Holders of such Registrable Securities on the
basis of the number of Registrable Securities requested to be included therein
by each such Holder; and (iii) if the Underwriters' Maximum Number exceeds the
sum of the number of Registrable Securities which the Company shall be required
to include in such registration and the number of securities which the Company
proposes to offer and sell for its own account in such registration, then the
Company may include in such registration that number of other securities which
persons shall have requested be included in such registration and which shall
not be greater than such excess.
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(c) Selection of Underwriters. In any Piggyback Registration, the
Company shall (unless the Company shall otherwise agree) have the right to
select the investment bankers and managing underwriters in such registration.
9.4. Restrictions on Public Sale by the Company. The Company agrees
not to effect, and to cause each of its shareholders other than the Holders of
Registrable Securities not to effect, any public sale or other distribution of
its equity securities, or any securities convertible into or exchangeable or
exercisable for such equity securities, during the period commencing on the
seventh day prior to, and ending on the one hundred eightieth day following,
the effective date of any underwritten Demand Registration or Piggyback
Registration, except in connection with any such underwritten registration.
9.5. Registration Procedures. If (and on each occasion that) the
Company shall become obligated to effect any registration of any Registrable
Securities hereunder, the Company will use its best efforts in good faith to
effect promptly the registration of such Registrable Securities under the
Securities Act and to permit the public offering and sale of such Registrable
Securities in accordance with the intended method of disposition thereof, and,
in connection therewith, the Company, as expeditiously as shall be reasonably
possible, will:
(a) prepare and file with the Commission a registration
statement with respect to such Registrable Securities and use its best
efforts to cause such registration statement to become effective
(provided, that before filing a registration statement or prospectus
or any amendments or supplements thereto, the Company will furnish to
one counsel, selected by the holders of a majority of the Registrable
Securities covered by such registration statement, copies of all such
documents proposed to be filed, which documents will be subject to the
timely review of such counsel);
(b) prepare and file with the Commission such amendments
and supplements to such registration statement and the prospectus used
in connection therewith as may be necessary to keep such registration
statement effective for not more than six (6) months and, comply with
the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement during such
effective period in accordance with the intended methods of
disposition by the sellers thereof set forth in such registration
statement;
(c) upon request, furnish to each Holder selling
Registrable Securities such number of copies of such registration
statement, each amendment and supplement thereto, the prospectus
included in such registration statement (including each preliminary
prospectus) and such other documents as each such seller may
reasonably request in order to facilitate the disposition of the
Registrable Securities owned by each such Holder;
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(d) use its best efforts to register or qualify such
Registrable Securities under such other securities or blue sky laws of
such jurisdictions as any seller reasonably requests and do any and
all other acts and things which may be reasonably necessary or
advisable to enable such seller to consummate the disposition in such
jurisdictions of the Registrable Securities owned by such seller;
provided that the Company will not be required (i) to qualify
generally to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subparagraph (d), (ii)
to subject itself to taxation in any such jurisdiction or (iii) to
consent to general service of process in any such jurisdiction;
(e) notify each seller of such Registrable Securities, at
any time when a prospectus relating thereto is required to be
delivered under the Securities Act, of the happening of any event as a
result of which the prospectus included in such registration statement
contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading, and, at the
request of any such seller, the Company will promptly prepare (and,
when completed, give notice to each seller of Registrable Securities)
a supplement or amendment to such prospectus so that, as thereafter
delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or
omit to state any fact necessary to make the statements therein not
misleading; provided that upon such notification by the Company, each
seller of such Registrable Securities will not offer or sell such
Registrable Securities until the Company has notified such seller that
it has prepared a supplement or amendment to such prospectus and
delivered copies of such supplement or amendment to such seller;
(f) cause all such Registrable Securities to be listed on
each securities exchange on which similar securities issued by the
Company are then listed and, if not so listed, to be listed with the
National Association of Securities Dealers automated quotation system
("NASDAQ");
(g) provide a transfer agent and registrar for all such
Registrable Securities not later than the effective date of such
registration statement;
(h) enter into such customary agreements (including
underwriting agreements in customary form) and take all such other
actions as the holders of a majority of the Registrable Securities
being sold or the underwriters, if any, reasonably request in order to
expedite or facilitate the disposition of such Registrable Securities
(including, without limitation, effecting a stock split or a
combination of shares);
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(i) make available for inspection on a confidential basis
by any Holder that is a seller of Registrable Securities, any
underwriter participating in any disposition pursuant to such
registration statement, and any attorney, accountant or other agent
retained by any such seller or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company,
and cause the Company's officers, directors, employees and independent
accountants to supply on a confidential basis all information
reasonably requested by any such seller, underwriter, attorney,
accountant or agent in connection with such registration statement;
(j) permit any holder of Registrable Securities which
holder, in its sole and exclusive judgment, might be deemed to be an
underwriter or a controlling person of the Company within the meaning
of Section 15 of the Securities Act, to participate in the preparation
of such registration or comparable statement and to permit the
insertion therein of material, furnished to the Company in writing,
which in the reasonable judgment of such holder and its counsel should
be included, provided that such material shall be furnished under such
circumstances as shall cause it to be subject to the indemnification
provisions provided pursuant to Section 9.8(b) hereof;
(k) in the event of the issuance of any stop order
suspending the effectiveness of a registration statement, or of any
order suspending or preventing the use of any related prospectus or
suspending the qualification of any Registrable Securities included in
such registration statement for sale in any jurisdiction, the Company
will use its best efforts promptly to obtain the withdrawal of such
order; and
(l) furnish to each prospective seller a signed
counterpart, addressed to the prospective sellers, of (i) an opinion
of counsel for the Company, dated the effective date of the
registration statement and (ii) a "comfort" letter signed by the
independent public accountants who have certified the Company's
financial statements included in the registration statement, covering
substantially the same matters with respect to the registration
statement (and the prospectus included therein) and (in the case of
the "comfort" letter) with respect to events subsequent to the date of
the financial statements, as are customarily covered (at the time of
such registration) in opinions of issuer's counsel and in "comfort"
letters delivered to the underwriters in underwritten public offerings
of securities.
9.6. Cooperation by Prospective Sellers, Etc.
(a) Each prospective seller of Registrable Securities will furnish
to the Company in writing such information as the Company may reasonably
require from such seller, and otherwise reasonably cooperate with the Company
in
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connection with any registration statement with respect to such Registrable
Securities.
(b) The failure of any prospective seller of Registrable Securities
to furnish any information or documents in accordance with any provision
contained in this Section 9 shall not affect the obligations of the Company
under this Section 9 to any remaining sellers who furnish such information and
documents unless in the reasonable opinion of counsel to the Company or the
underwriters, such failure impairs or may impair the viability of the offering
or the legality of the registration statement or the underlying offering.
(c) The Holders of Registrable Securities included in any
registration statement will not (until further notice) effect sales thereof
after receipt of telegraphic or written notice from the Company to suspend
sales to permit the Company to correct or update such registration statement or
prospectus; but the obligations of the Company with respect to maintaining any
registration statement current and effective shall be extended by a period of
days equal to the period such suspension is in effect.
(d) At the end of any period during which the Company is obligated
to keep any registration statement current and effective as provided by Section
9.5 hereof (and any extensions thereof required by the preceding paragraph (c)
of this Section 9.6), the Holders of Registrable Securities included in such
registration statement shall discontinue sales of shares pursuant to such
registration statement upon receipt of notice from the Company of its intention
to remove from registration the shares covered by such registration statement
which remain unsold, and such Holders shall notify the Company of the number of
shares registered which remain unsold promptly after receipt of such notice
from the Company.
9.7. Registration Expenses.
(a) All costs and expenses incurred or sustained in connection with
of arising out of each registration pursuant to Sections 9.2 and 9.3 hereof,
including, without limitation, all registration and filing fees, fees and
expenses of compliance with securities or Blue Sky laws (including reasonable
fees and disbursements of counsel for the underwriters in connection with the
Blue Sky qualification of Registrable Securities), printing expenses,
messenger, telephone and delivery expenses, fees and disbursements of counsel
for the Company, reasonable fees and disbursements of one counsel representing
all of the Holders, fees and disbursements of all independent certified public
accountants (including the expenses relating to the preparation and delivery of
any special audit or "cold comfort" letters required by or incident to such
registration), and fees and disbursements of underwriters (excluding discounts
and commissions), the reasonable fees and expenses of any special experts
retained by the Company of its own initiative or at the request of the managing
underwriters in connection with such registration, and fees and expenses of all
(if any) other
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persons retained by the Company (all such costs and expenses being herein
called, collectively, the "Registration Expenses"), will be borne and paid by
the Company; provided, however, that the Company shall not pay nor otherwise be
responsible for any legal fees or disbursements of more than one counsel for
the Holders of Registrable Securities. The Company will, in any case, pay its
internal expenses (including, without limitation, all salaries and expenses of
its officers and employees performing legal or accounting duties), the expense
of any annual audit, and the fees and expenses incurred in connection with the
listing of the securities to be registered on each securities exchange on which
similar securities of the Company are then listed.
(b) The Company will not bear the cost of nor pay for any stock
transfer taxes imposed in respect of the transfer of any Registrable Securities
to any purchaser thereof by any Holder of Registrable Securities in connection
with any registration of Registrable Securities pursuant to this Section 9.
(c) To the extent that Registration Expenses incident to any
registration are, under the terms of this Section 9, not required to be paid by
the Company, each Holder of Registrable Securities included in such
registration will pay all Registration Expenses which are clearly solely
attributable to the registration of such Holder's Registrable Securities so
included in such registration, and all other Registration Expenses not so
attributable to one Holder will be borne and paid by all sellers of securities
included in such registration in proportion to the number of securities so
included by each such seller.
9.8. Indemnification.
(a) Indemnification by the Company. The Company will indemnify each
Holder requesting or joining in a registration and each underwriter of the
securities so registered, the officers, directors and partners of each such
Person and each Person who controls any thereof (within the meaning of the
Securities Act) against any and all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or
alleged untrue statement) of any material fact contained in any prospectus,
offering circular or other document incident to any registration, qualification
or compliance (or in any related registration statement, notification or the
like) or any omission (or alleged omission) to state therein any material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of any rule or regulation
promulgated under the Securities Act applicable to the Company and relating to
any action or inaction required of the Company in connection with any such
registration, qualification or compliance, and the Company will reimburse each
such Holder, underwriter, officer, director, partner and controlling person for
any legal and any other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action;
provided, however, that the Company will not be liable in any such case to the
extent that any such
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claim, loss, damage or liability arises out of or is based on any untrue
statement or omission based upon written information furnished to the Company
in an instrument duly executed by such Holder, underwriter, officer, director,
partner or controlling person and stated to be specifically for use in such
prospectus, offering circular or other document.
(b) Indemnification by Each Holder. Each Holder requesting or
joining in a registration will indemnify each underwriter of the securities so
registered, the Company and its officers and directors and each Person, if any,
who controls any thereof (within the meaning of the Securities Act) and their
respective successors in title and assigns against any and all claims, losses,
damages and liabilities (or actions in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) of any material fact
contained in any prospectus, offering circular or other document incident to
any registration, qualification or compliance (or in any related registration
statement, notification or the like) or any omission (or alleged omission) to
state therein any material fact required to be stated therein or necessary to
make the statement therein not misleading, and such Holder will reimburse each
underwriter, the Company and each other person indemnified pursuant to this
paragraph (b) for any legal and any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action; provided, however, that this paragraph (b) shall apply
only if (and only to the extent that) such statement or omission was made in
reliance upon written information furnished to such underwriter or the Company
in an instrument duly executed by any such Holder and stated to be specifically
for use in such prospectus, offering circular or other document (or related
registration statement, notification or the like) or any amendment or
supplement thereto; and provided further that each Holder's liability hereunder
with respect to any particular registration shall be limited to an amount equal
to the proceeds received by such Holder from the Registrable Securities sold by
such Holder in such registration.
(c) Indemnification Proceedings. Each party entitled to
indemnification pursuant to this Section 9.8 (the "indemnified party") shall
give notice to the party required to provide indemnification pursuant to this
Section 9.8 (the "indemnifying party") promptly after such indemnified party
acquires actual knowledge of any claim as to which indemnity may be sought, and
shall permit the indemnifying party (at its expense) to assume the defense of
any claim or any litigation resulting therefrom; provided that counsel for the
indemnifying party, who shall conduct the defense of such claim or litigation,
shall be acceptable to the indemnified party, and the indemnified party may
participate in such defense at such party's expense; and provided, further,
that the failure by any indemnified party to give notice as provided in this
paragraph (c) shall not relieve the indemnifying party of its obligations under
this Section 9.8 except to the extent that the failure results in a failure of
actual notice to the indemnifying party and such indemnifying party is damaged
solely as a result of the failure to give notice. No indemnifying party, in the
defense of any
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such claim or litigation, shall, except with the consent of each indemnified
party, consent to entry of any judgment or enter into any settlement which does
not include as an unconditional term thereof the giving by the claimant or
plaintiff to such indemnified party of a release from all liability in respect
to such claim or litigation. The reimbursement required by this Section 9.8
shall be made by periodic payments during the course of the investigation or
defense, as and when bills are received or expenses incurred.
9.9. Contribution in Lieu of Indemnification. If the indemnification
provided for in Section 9.8 hereof is unavailable to a party that would have
been an indemnified party under any such section in respect of any losses,
claims, damages or liabilities (or actions in respect thereof) referred to
therein, then each party that would have been an indemnifying party thereunder
shall, in lieu of indemnifying such indemnified party, contribute to the amount
paid or payable by such indemnified party as a result of such losses, claims,
damages or liabilities (or actions in respect thereof) in such proportion as is
appropriate to reflect the relative fault of the indemnifying party on the one
hand and such indemnified party on the other in connection with the statements
or omissions which resulted in such losses, claims, damages or liabilities (or
actions in respect thereof). The relative fault shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the indemnifying party or such
indemnified party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The Company and each Holder of Registrable Securities agree that it would not
be just and equitable if contribution pursuant to this Section 9.9 were
determined by pro rata allocation or by any other method of allocation which
does not take account of the equitable considerations referred to above in this
Section 9.9. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages or liabilities (or actions in respect thereof)
referred to above in this Section 9.9 shall include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
9.10. Rule 144 Requirements; Form S-3. From time to time after the
earlier to occur of (a) the ninetieth day following the date on which there
shall first become effective a registration statement filed by the Company
under the Securities Act, or (b) the date on which the Company shall register a
class of securities under Section 12 of the Exchange Act, the Company will make
every effort in good faith to take all steps necessary to ensure that the
Company will be eligible to register securities on Form S-3 (or any comparable
form adopted by the Commission) as soon thereafter as possible, and to make
publicly available and available to the Holders of Registrable Securities,
pursuant to Rule 144 of the Commission under the Securities Act, such
information as shall
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be necessary to enable the Holders of Registrable Securities to make sales of
Registrable Securities pursuant to that Rule. The Company will furnish to any
Holder of Registrable Securities, upon request made by such Holder at any time
after the undertaking of the Company in the preceding sentence shall have first
become effective, a written statement signed by the Company, addressed to such
Holder, describing briefly the action the Company has taken or proposes to take
to comply with the current public information requirements of Rule 144. The
Company will, at the request of any Holder of Registrable Securities, upon
receipt from such Holder of a certificate certifying (i) that such Holder has
held such Registrable Securities for a period of not less than two (2)
consecutive years, (ii) that such Holder has not been an affiliate (as defined
in Rule 144) of the Company for more than the ninety (90) preceding days, and
(iii) as to such other matters as may be appropriate in accordance with such
Rule, remove from the stock certificates representing such Registrable
Securities that portion of any restrictive legend which relates to the
registration provisions of the Securities Act.
9.11. Participation in Underwritten Registrations. No person may
participate in any underwritten registration pursuant to this Section 9 unless
such person (a) agrees to sell such person's securities on the basis provided
in any underwriting arrangements approved by the persons entitled, under the
provisions hereof, to approve such arrangements, and (b) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements
and other documents reasonably required by the terms of such underwriting
arrangements. Any Holder of Registrable Securities to be included in any
underwritten registration shall be entitled at any time to withdraw such
Registrable Securities from such registration prior to its effective date in
the event that such Holder shall disapprove of any of the terms of the related
underwriting agreement.
9.12. Miscellaneous.
(a) No Inconsistent Agreements. The Company will not, at any time
after the date hereof, enter into any agreement or contract (whether written or
oral) with respect to any of its securities which prevents the Company from
complying in any respect with the registration rights granted by the Company to
Holders of Registrable Securities hereunder.
(b) Amendments and Waivers. The provisions of this Section 9
including the provisions of this paragraph (b), may not be amended, modified or
supplemented, and any waiver or consent to or any departure from any of the
provisions of this Section 9 may not be given and shall not become or be
effective, unless and until (in each case) the Company shall have received the
prior written consent of the Holders of 51% or more of all Registrable
Securities for any such amendment, modification, supplement, waiver or consent.
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(c) Registrable Securities Held by the Company. Whenever the
consent or approval of Holders of Registrable Securities is required pursuant
to this Section 9, Registrable Securities held by the Company shall not be
counted in determining whether such consent or approval was duly and properly
given by such Holders.
(d) Term. The agreements of the Company contained in this Section
9 shall continue in full force and effect so long as any Holder holds any
Registrable Securities.
9.13. Termination of Rights. The rights of any particular Holder to
cause the Company to register securities hereunder shall terminate with respect
to such Holder at such time as all of such Holder's Registrable Securities are
freely transferable at one time pursuant to the provisions of Rule 144 of the
Commission under the Securities Act (without regard to any volume limitations
or other restrictions contained therein).
10. SUBSEQUENT HOLDERS OF SECURITIES.
Whether or not any express assignment has been made in this Agreement,
the provisions of this Agreement and the Financing Agreements that are for your
benefit as the holder of any Securities are also for the benefit of, and
enforceable by, all subsequent holders of Securities, except any holder of
Securities which have been sold pursuant to a Public Sale, and except as
otherwise expressly provided herein. Furthermore, no Securities which have been
sold pursuant to a Public Sale shall be deemed to be outstanding Preferred
Shares or Common Shares, as applicable, or Securities for any purposes of this
Agreement.
11. REGISTRATION AND TRANSFER OF SECURITIES.
11.1. Transfer and Exchange of Common Stock and Preferred Stock. The
Company shall keep at its principal office a register in which shall be entered
the names and addresses of the holders of the Common Stock and the Preferred
Stock and the particulars (including, without limitation, the class thereof) of
the respective shares of Common Stock and the Preferred Stock held by them and
of all transfers or conversions of shares of Common Stock from one class to
another. Upon surrender at such office of any certificate representing shares
of Common Stock or Preferred Stock for registration of exchange or (subject to
compliance with the applicable provisions of this Agreement, including, without
limitation, the conditions set forth in Section 13 hereof or the Stockholders
Agreement) transfer or, in the case of Common Stock, conversion, the Company
shall issue, at its expense, one or more new certificates, in such denomination
or denominations as may be requested, for shares of Preferred Stock or of such
class or series of Common Stock as may be requested, and registered as such
holder may request. Any certificate representing shares of Common Stock or
Preferred Stock surrendered for registration of transfer shall be duly
endorsed, or accompanied by a written instrument of transfer duly
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executed by the holder of such certificate or such holder's attorney duly
authorized in writing. The Company will pay shipping and insurance charges,
from and to each holder's principal office, upon any transfer, exchange or
conversion provided for in this Section 11.1.
11.2. Replacement of Securities. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of
any Security and, in the case of any such loss, theft or destruction, upon
delivery of an indemnity bond in such reasonable amount as the Company may
determine (or, in the case of any Security held by you or another institutional
holder, of an unsecured indemnity agreement from you or such other holder
reasonably satisfactory to the Company), or, in the case of any such
mutilation, upon the surrender of such Security for cancellation to the Company
at its principal office, the Company, at its own expense, will execute and
deliver, in lieu thereof, a new Security of like tenor. Any Security in lieu of
which any such new Security has been so executed and delivered by the Company
shall not be deemed to be outstanding for any purpose of this Agreement.
12. REGULATORY RESTRICTIONS.
12.1. Bank Holding Company Act. No Person which is a bank holding
company or a subsidiary of a bank holding company (a "Bank Affiliate") as
defined in the Bank Holding Company Act of 1956, as amended, or other
applicable banking laws of the United States of America and the rules and
regulations promulgated thereunder (the "Bank Holding Company Act") shall
exercise its rights to convert shares of Class B Common Stock into shares of
Class A Common Stock, or otherwise acquire Class A Common Stock or Class C
Common Stock, if, after giving effect to such conversion, the Bank Affiliate,
together with its Affiliates, would own more than five percent (5%) of the
outstanding voting securities of the Company. Notwithstanding the foregoing,
shares of Class B Common Stock may be converted into shares of Class A Common
Stock or shares of Class A Common Stock or shares of Class C Common Stock may
otherwise be acquired or held by BBV or any other Bank Affiliate which is a
Small Business Investment Company consistent with and subject to the
limitations contained in the Small Business Act and, to the extent not
inconsistent with the Bank Holding Company Act, in the event that:
(a) the Company shall vote to merge or consolidate with or
into any other Person and after giving effect to such merger or
consolidation the Bank Affiliate would not own more than five percent
(5%) of the outstanding voting securities of the surviving
corporation;
(b) said holder desires to sell shares of Class A Common
Stock to be obtained by the conversion of all or part of its shares of
Class B Common Stock in connection with any proposed purchase of Class
A Common Stock by another Person (other than a Bank Affiliate); or
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(c) said holder exercises its registration rights pursuant to
Section 9 hereof and the registration statement resulting therefrom is
effective.
12.2. Small Business Act. No Person which is a Small Business
Investment Company as defined in the Small Business Act shall exercise its
right to cause any shares of Preferred Stock to be redeemed under this
Agreement or exercise "put" rights as a holder of Common Shares if the exercise
thereof shall violate any of the rules or regulations of the Small Business
Act.
12.3. No Conflict. For purposes of this Agreement, a written statement
of BBV or any of its Affiliates converting such shares of Class B Common Stock
into Class A Common Stock or otherwise acquiring Class A Common Stock or Class
C Common Stock, or exercising "put" rights with respect to Common Shares,
delivered to the Company upon surrender of any shares of Common Stock for
conversion, acquisition of any shares of Class A Common Stock or Class C Common
Stock or delivery of any Put Notice, to the effect that BBV or its Affiliate,
as the case may be, is legally entitled to exercise its rights to purchase
securities of the Company and that such exercise will not violate or contravene
any law or regulation or any judgment, decree or order of any governmental
authority then applicable to BBV or such Affiliate, as the case may be, shall
be conclusive and binding upon the Company and shall absolutely obligate and
bind the Company to deliver, in accordance with the other terms and provisions
hereof, certificates or other appropriate instruments representing the
securities so purchased.
13. RESTRICTIONS ON TRANSFER.
13.1. General Restriction. The Securities shall be transferable only
upon satisfaction of the conditions set forth in this Section 13 and any
applicable provisions of the Stockholders Agreement; provided, that, (x) any
transfer of the Securities to any Person other than a corporate or
institutional Affiliate of any holder of Securities shall be in a minimum
amount of $5,000,000, (y) no transfer of the Securities shall be made to a
competitor of the Company or its Subsidiaries and (z) any transfer of a
majority of the Preferred Shares or a majority of the Common Shares shall only
be made to a Permitted Transferee.
13.2. Notice of Transfer. Prior to any transfer of any Securities, the
holder thereof shall be required to give written notice to the Company
describing in reasonable detail the manner and terms of the proposed transfer
and the identity of the proposed transferee (the "Transfer Notice"),
accompanied by (a) an opinion of Xxxxxxx Xxxx LLP addressed to the Company, or
other counsel reasonably acceptable to the Company, that such transfer may be
effected without registration of such Securities under the Securities Act, and
(b) the written agreement of the proposed transferee to be bound by all of the
provisions hereof and, where required by the terms thereof, the Stockholders
Agreement.
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13.3. Restrictive Legends. Except as otherwise permitted by this
Section 13, each Security shall bear the legend specified for such Security in
Schedule 13.3 hereto.
13.4. Termination of Restrictions. The restrictions imposed by this
Section 13 upon the transferability of any Securities shall terminate as to
such Securities upon the sale of such Securities pursuant to a Public Sale.
Whenever any of such restrictions shall terminate as to any Securities, the
holder thereof shall be entitled to receive from the Company, at the Company's
expense, new securities without such legends.
14. EXPENSES; INDEMNITY.
(a) Whether or not the transactions contemplated by this Agreement and
the Related Agreements shall be consummated, the Company hereby agrees to pay
on demand all out-of-pocket expenses incurred by you in connection with the
transactions contemplated by this Agreement and the Related Agreements and in
connection with any amendments or waivers (whether or not the same become
effective) hereof or thereof and all reasonable out-of-pocket expenses incurred
by you or any holder of any Security issued hereunder in connection with the
exercise or enforcement of any rights hereunder or under or with respect to any
Related Agreement (including under the Charter of the Company or with respect
to any Security), including, without limitation, (i) the cost and expenses of
preparing and duplicating this Agreement and each Related Agreement; (ii) the
cost of delivering to your principal office, insured to your satisfaction, the
Securities sold to you hereunder and any Securities delivered to you in
exchange therefor or upon any exercise, conversion or substitution thereof;
(iii) the fees, expenses and disbursements of Xxxxxxx Xxxx LLP in connection
with the transactions contemplated by this Agreement or any Related Agreement
and any amendments, modifications, approvals, consents or waivers hereunder or
thereunder; (iv) the fees, expenses and disbursements of your accountants and
other consultants and representatives in connection with your due diligence
investigation of the Company and its Subsidiaries; (v) all taxes (other than
taxes determined with respect to income), including any recording fees and
filing fees and documentary stamp and similar taxes at any time payable in
respect of this Agreement, any Related Agreement or the issuance of any of the
Securities; (vi) the reasonable fees and disbursements of counsel for any
holder of Securities in connection with all opinions rendered by such counsel
pursuant to Section 13 hereof; and (vii) all reasonable out-of-pocket expenses
(including without limitation reasonable attorneys' fees and costs, whether or
not such attorneys are your employees, all costs associated with any rights of
board or executive committee attendance or observation or inspection and travel
and lodging expenses related thereto, and reasonable consulting, accounting,
appraisal, investment banking and similar professional fees and charges)
incurred by you or your representatives in connection with (A) the exercise,
enforcement or preservation of rights under this Agreement or any of the
Related Agreements against the Company or any of its Subsidiaries or the
administration thereof, whether before or after the occurrence of a Default or
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Event of Default (including engineering, appraisal, environmental, consulting
and investment banking charges), and (B) any litigation, proceeding or dispute
whether arising hereunder or otherwise, in any way related to your relationship
with the Company or its Subsidiaries.
(b) (i) The Company hereby further agrees to indemnify, exonerate
and hold each of you and each of your stockholders, officers, directors,
employees and agents free and harmless from and against any and all actions,
causes of action, suits, losses, liabilities, damages and expenses (including,
without limitation, reasonable attorneys' fees and disbursements) incurred in
any capacity by any of the indemnitees as a result of or relating to (A) any
transaction financed or to be financed in whole or in part directly or
indirectly with proceeds from the sale of any of the Securities by the Company
hereunder, or (B) the execution, delivery, performance or enforcement of this
Agreement (including, without limitation, any failure by the Company to comply
with any of its covenants hereunder), the Related Agreements or any instrument
contemplated hereby or thereby, except for any such indemnified liabilities
arising from any indemnitee's gross negligence or willful misconduct.
(ii) Furthermore, without limiting the foregoing subparagraph
(b)(i), the Company covenants and agrees that it will indemnify and hold you
harmless from and against any and all claims, expenses, damages, loss or
liabilities incurred by you (including all costs of legal representation
incurred) relating to (A) any release or threatened release of Hazardous
Substances on any real estate owned, leased or operated by the Company or its
Subsidiaries, (B) any violation of any Environmental Laws with respect to
conditions at any real estate owned, leased or operated by the Company or its
Subsidiaries, or the operations conducted thereon, or (C) the investigation or
remediation of offsite locations at which the Company, its Subsidiaries or its
predecessors are alleged to have directly or indirectly disposed of Hazardous
Substances.
(c) The Company hereby indemnifies you against and agrees that it
will hold you harmless from any claim, demand or liability for any broker's,
finder's or placement fees or lender's incentive fees alleged to have been
incurred by it in connection with the transactions contemplated by this
Agreement or the Related Agreements.
(d) Except to the extent otherwise expressly provided herein, the
Company shall pay on demand interest at a rate per annum equal to the lesser of
the maximum rate of interest permitted by law or eighteen percent (18%) (in
each case, compounded monthly) on all overdue amounts payable under this
Agreement until such amounts shall be paid in full.
(e) The obligations of the Company under this Section 14 shall
survive payment or transfer of the Securities and the termination of this
Agreement.
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15. NOTICES
Any notice provided for in this Agreement, any other Financing
Agreement or the Securities will be in writing and will be deemed properly
delivered if either personally delivered or sent by telecopier, overnight
courier or mailed certified or registered mail, return receipt requested,
postage prepaid, to the recipient at the address specified below:
If to the Company, then to its address set forth on page 1 hereof, to
the attention of the Chief Financial Officer and the General Counsel
or at such other address as such person shall have specified by notice
actually received by the addressor, with a copy to Xxxxx X. Xxxxxxx,
Esq., Xxxxx, Xxxxx & Xxxxx, 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxx 00000-0000.
If to BBV, then to its address set forth on page 1 hereof, to the
attention of Xxxxxxx X. Xxxx, Director, or at such other address as
BBV shall have specified by notice actually received by the addressor,
with a copy to Xxxxxx X. Xxxx, Esq., Xxxxxxx Xxxx LLP, 000 Xxxxxxx
Xxxxxx, Xxxxxx, XX 00000.
If to any other holder of record of any Security, to it at its address
set forth in the applicable register referred to in Section 13 hereof.
Any such notice shall be effective (a) if delivered personally or by
telecopier, when received, (b) if sent by overnight courier, when receipted
for, and (c) if mailed, five (5) days after being mailed as described above.
16. TERMINATION; SURVIVAL.
All covenants, agreements, representations and warranties made herein
or in any other document referred to herein or delivered to you pursuant hereto
shall be deemed to have been relied on by you, notwithstanding any
investigation made by you or on your behalf, and shall survive the execution
and delivery to you of this Agreement and of the Securities.
17. AMENDMENTS AND WAIVERS.
Any term of this Agreement may be amended and the observance of any
term of this Agreement may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with the written
consent of the Company and the Majority Holders of the Preferred Shares and the
Majority Holders of the Common Shares respectively, with respect to any
provision of this Agreement which by its terms operates for the benefit of such
respective holders; provided, however, that (a) without the prior written
consent of each holder of Preferred Shares and Common Shares with respect to
whom such amendment or waiver is made, no such amendment or waiver shall extend
the scheduled date of any required purchase of such respective securities held
by such holder or reduce the repurchase price payable thereon, (b) without the
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prior written consent of the aforesaid percentage of Securities, reduce the
aforesaid percentage of Securities the holders of which are required to consent
to any such amendment or waiver, or (c) without the written consent of the
percentage of the holders of each Security required to exercise the remedies
provided in Section 7.2 hereof, increase such required percentage. Any
amendment or waiver effected in accordance with this Section 17 shall be
binding upon each holder of any Security sold pursuant to this Agreement and
the Company.
18. CONSENT TO JURISDICTION.
EACH OF THE COMPANY AND BBV HEREBY AGREES TO SUBMIT TO THE
NON-EXCLUSIVE JURISDICTION OF THE COURTS IN AND OF THE COMMONWEALTH OF
MASSACHUSETTS IN CONNECTION WITH ANY PROCEEDING ARISING OUT OF OR OTHERWISE
RELATING TO THIS AGREEMENT, THE SECURITIES OR ANY OF THE OTHER FINANCING
AGREEMENTS, AND CONSENTS THAT SERVICE OF PROCESS WITH RESPECT TO ALL COURTS IN
AND OF THE COMMONWEALTH OF MASSACHUSETTS MAY BE MADE BY REGISTERED MAIL TO IT
AT ITS ADDRESS SET FORTH ON PAGE 1 HEREOF.
19. RIGHT TO PUBLICIZE.
The Company hereby acknowledges that BBV will have the right to
publicize its investment in the Company as contemplated hereby by means of a
tombstone advertisement or other customary advertisement in newspapers and
other periodicals.
20. WAIVER OF JURY TRIAL.
THE COMPANY HEREBY EXPRESSLY WAIVES ANY RIGHT IT MAY HAVE TO A JURY
TRIAL IN ANY SUIT, ACTION OR PROCEEDING EXISTING UNDER OR RELATING TO THIS
AGREEMENT, THE SECURITIES OR ANY OF THE OTHER FINANCING AGREEMENTS.
21. CONSTRUCTION.
The language used in this Agreement will be deemed to be the language
chosen by the parties to express their mutual intent, and no rule of strict
construction will be applied against any party.
22. MISCELLANEOUS.
This Agreement (including Exhibits and Schedules) and the Financing
Agreements set forth the entire understanding of the parties hereto with
respect to the transactions contemplated hereby and supersede any prior written
or oral understandings with respect thereto. The invalidity or unenforceability
of any
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term or provision hereof shall not affect the validity or enforceability of any
other term or provision hereof. The headings in this Agreement are for
convenience of reference only and shall not alter or otherwise affect the
meaning hereof. THIS AGREEMENT IS INTENDED TO TAKE EFFECT AS A SEALED
INSTRUMENT AND MAY BE EXECUTED IN ANY NUMBER OF COUNTERPARTS WHICH TOGETHER
SHALL CONSTITUTE ONE INSTRUMENT, SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE DOMESTIC SUBSTANTIVE LAWS OF THE COMMONWEALTH OF
MASSACHUSETTS WITHOUT GIVING EFFECT TO ANY CHOICE OR CONFLICT OF LAW PROVISION
OR RULE THAT WOULD CAUSE THE APPLICATION OF THE DOMESTIC SUBSTANTIVE LAWS OF
ANY OTHER STATE, AND SHALL BIND AND INURE TO THE BENEFIT OF THE PARTIES HERETO
AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS.
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If the foregoing corresponds with your understanding of our agreement,
kindly sign this letter and the accompanying copies thereof in the appropriate
space below and return one counterpart of the same to the Company at the
address first listed above.
Very truly yours,
THE RESTAURANT HOLDING CORPORATION
By:__________________________________
Name:
Title:
Accepted and agreed to:
BANCBOSTON VENTURES INC.
By:_____________________________
Name: Xxxxxxx X. Xxxx
Title: Director
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List of Schedules
Schedule 3.1 Organization and Good Standing
Schedule 3.4 Governmental Approvals
Schedule 3.5(a)(i) Pre-Recapitalization Stock Ownership
Schedule 3.5(a)(ii) Post-Recapitalization Stock Ownership
Schedule 3.6 Subsidiaries
Schedule 3.7(a)(i) Historical Financials
Schedule 3.7(a)(ii) Pro Forma Balance Sheet
Schedule 3.7(a)(iii) Projections
Schedule 3.15 Potential Conflicts of Interest
Schedule 3.18 Litigation
Schedule 3.21 Employee Benefit Plans
Schedule 3.23 Transaction Costs
Schedule 3.24 Real Property
Schedule 3.25 Labor Relations
Schedule 13.3 Restrictive Legend
List of Exhibits
Exhibit A Charter Amendment
Exhibit B Stockholders' Agreement
Exhibit C Form of Legal Opinion
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