EXHIBIT B
SUPPORT AGREEMENT
This SUPPORT AGREEMENT (this "Agreement"), dated as of June 8, 2001,
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by and between Envirosource, Inc., a Delaware corporation (the "Company"), and
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FS Equity Partners II, L.P. ("Stockholder"). Capitalized terms used but not
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otherwise defined herein shall have the meanings set forth in the Merger
Agreement (defined below).
WHEREAS, concurrently herewith, the Company and ES Acquisition Corp.,
a Delaware corporation ("Merger Sub") and a wholly owned subsidiary of GSC
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Recovery II, L.P., a Delaware limited partnership ("GSC"), are entering into an
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Agreement and Plan of Merger of even date herewith substantially in the form
attached hereto as Exhibit A (the "Merger Agreement"), which agreement forms an
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integral part of an overall restructuring of the Company's outstanding
indebtedness (the "Restructuring");
WHEREAS, the respective Boards of Directors of Merger Sub and the
Company and, through its general partner, GSC, as sole shareholder of Merger
Sub, have approved the merger of Merger Sub with and into the Company (the
"Merger"), upon the terms and subject to the conditions of the Merger Agreement
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and in accordance with the Delaware General Corporation Law ("DGCL"), whereby
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each issued and outstanding share of Company Common Stock not owned by Merger
Sub, the Company or any of its Subsidiaries (and not properly exercising
appraisal rights) will be converted into the right to receive $0.20 in cash,
without interest;
WHEREAS, as of the date hereof, Stockholder beneficially owns directly
and indirectly 2,741,013 shares of Company Common Stock (the "Owned Shares"),
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excluding options, if any beneficially owned, to acquire shares of Company
Common Stock (the "Options");
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WHEREAS, as a condition to its willingness to pursue the Restructuring
and enter into the Merger Agreement, the Company has requested that Stockholder
agree, and Stockholder hereby agrees, (i) to vote the Owned Shares in favor of
adopting the Merger Agreement, together with any shares of Company Common Stock
acquired by Stockholder after the date hereof and prior to the Company
Stockholders Meeting, whether upon the exercise of Options, conversion of
convertible securities or otherwise (collectively, the "Voting Shares") on the
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terms and subject to the conditions provided for in this Agreement and (ii) to
enter into the other agreements set forth herein.
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration given to each party hereto, the receipt of which is
hereby acknowledged, the parties agree as follows:
1. Agreement to Vote.
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1.1. Voting. Stockholder hereby agrees that, during the time the
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Merger Agreement and this Agreement are in effect and until the Effective Time,
at the Company Stockholders Meeting and at any meeting of the stockholders of
the Company, however called, Stockholder shall vote or cause to be voted the
Voting Shares (a) in favor of adopting the Merger Agreement; (b) against any
action or agreement that would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Company
under the Merger Agreement; and (c) against any action or agreement (other than
the Merger Agreement or the transactions contemplated thereby) that would
impede, interfere with, delay, postpone or attempt to discourage the Merger,
including, but not limited to: (i) any extraordinary corporate transaction, such
as a merger, consolidation or other business combination involving the Company
or any of its Subsidiaries with any entity other than an affiliate of GSC; (ii)
a sale or transfer of a material amount of assets of the Company or any of its
Subsidiaries or a reorganization, recapitalization or liquidation of the Company
and its Subsidiaries other than any such transaction that is part of the
Restructuring; or (iii) any transaction entered into pursuant to a Company
Takeover Proposal. Stockholder hereby revokes any proxy previously granted by
Stockholder with respect to the Voting Shares and shall not enter into any
agreement with or grant any proxy to any person or entity, except as permitted
in Section 1.2 hereof, prior to the termination of this Agreement to vote or
give instructions in any manner inconsistent with clauses (i)-(iii) of the
preceding sentence.
1.2. No Inconsistent Arrangements. Stockholder hereby covenants and
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agrees that, except as contemplated by this Agreement and the Merger Agreement,
Stockholder shall not (i) except to members of Stockholder's family or any
trusts or partnerships the beneficiaries or equity owners of which,
respectively, are members of Stockholder's family (and which, prior to a
transfer, shall agree with the Company in writing to be bound by the provisions
of this Agreement), transfer (which term shall include, without limitation, any
sale, gift, pledge or other disposition), or consent to any transfer of, any or
all of the Voting Shares or any interest therein, (ii) except with GSC, enter
into any contract, option or other agreement or understanding with respect to
any transfer of any or all of the Voting Shares or any interest therein, (iii)
grant any proxy, power-of-attorney or other authorization in or with respect to
the Voting Shares, (iv) deposit any Voting Shares into a voting trust or enter
into a voting agreement or arrangement with respect to the Voting Shares or (v)
take any other action that would in any way restrict, limit or interfere with
the performance of Stockholder's obligations hereunder or the transactions
contemplated hereby or by the Merger Agreement or which would make any
representation or warranty of Stockholder hereunder untrue or incorrect.
1.3. Reasonable Best Efforts. Subject to the terms and conditions of
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this Agreement, Stockholder hereby agrees to use Stockholder's reasonable best
efforts to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
Sections 1.1-1.4 of this Agreement.
1.4. Waiver of Appraisal Rights. Stockholder agrees not to exercise
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nor to permit any other Person to exercise any rights (including, without
limitation, under Section 262 of the DGCL) to demand appraisal of any Voting
Shares with respect to the Merger.
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2. Expiration. This Agreement and Stockholder's obligations
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hereunder shall terminate on the earlier of: (i) the Effective Time of the
Merger, (ii) the time the Merger Agreement is terminated in accordance with its
terms; provided that any such termination shall not affect Stockholder's
liability for any breach of Stockholder's obligations hereunder arising prior to
such termination, (iii) upon written notice to the Company given by FS Equity
Partners II, L.P., after the Company Board shall have, by Specified Vote,
withdrawn or modified, in a manner adverse to Merger Sub, its approval or
recommendation of the Merger Agreement or the Merger; provided, that such notice
of termination must be received by the Company prior to adoption of the Merger
Agreement by the Company's stockholders and within five Business Days of the
date the Company Board has taken the Specified Vote (which the Company agrees to
promptly advise Stockholder of upon occurrence) or (iv) the Company Board
approves an amendment to the Merger Agreement that either (a) reduces the
consideration to be received by holders of shares of Company Common Stock to
less than $0.20 per share in cash except as otherwise provided in Section 1.8 of
the Merger Agreement or (b) imposes any liability or obligation on any holder of
shares of Company Common Stock in excess of those specified in the form of
Merger Agreement attached hereto as Exhibit A. Any termination pursuant to
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clause (iii) above, however, shall be conditional upon and become effective only
if Merger Sub or its designated Affiliate shall have received full payment of
the Termination Fee and Expenses contemplated by Section 4.5(b) of the Merger
Agreement if Merger Sub so elects by termination of the Merger Agreement
pursuant to Section 6.1(h) thereof.
3. Representation and Warranties. Stockholder hereby represents and
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warrants to the Company as follows:
(a) Ownership of Shares. On the date hereof, the Owned Shares are
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owned of record or beneficially by Stockholder and, on the date hereof, the
Owned Shares constitute all of the shares of Company Common Stock owned of
record or beneficially by Stockholder. Stockholder has sole voting power and
sole power of disposition with respect to all of the Owned Shares, with no
restrictions, subject to applicable federal securities laws, on Stockholder's
rights of disposition pertaining thereto.
(b) Power; Binding Agreement. Stockholder has the legal capacity,
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power and authority to enter into and perform all of its obligations under this
Agreement. The execution, delivery and performance of this Agreement by
Stockholder will not violate any other agreement to which Stockholder is a party
including, without limitation, any voting agreement, stockholders agreement or
voting trust. This Agreement has been duly and validly executed and delivered by
Stockholder and constitutes a valid and binding agreement of Stockholder,
enforceable against Stockholder in accordance with its terms.
(c) No Conflicts. Other than any disclosure filings required under
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the Exchange Act, no authorization, consent or approval of, or filing with, any
court or any public body or authority is necessary for the performance by
Stockholder of its obligations under this Agreement.
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4. Additional Shares. Stockholder hereby agrees, while this
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Agreement is in effect, to promptly notify the Company of the number of any
additional shares of Company Common Stock acquired by Stockholder, if any, after
the date hereof.
5. Further Assurances. From time to time, at the Company's request
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and without further consideration, Stockholder shall execute and deliver any
written consents, proxies or other instruments reasonably necessary or desirable
to (i) vote or cause to be voted the Voting Shares (A) in favor of the adoption
of the Merger Agreement and the consummation of the Merger, (B) against any
action or agreement that would result in a breach of any covenant,
representation or warranty or any other obligation or agreement of the Company
under the Merger Agreement; and (C) against any action or agreement (other than
the Merger Agreement or the transactions contemplated thereby) that would
impede, interfere with, delay, postpone or attempt to discourage the Merger, and
(ii) revoke any proxy previously granted by Stockholder with respect to the
Voting Shares.
6. Miscellaneous.
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6.1 Entire Agreement; Assignment. This Agreement (i) constitutes the
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entire agreement between the parties with respect to the subject matter hereof
and supersedes all other prior agreements and understandings, both written and
oral, between the parties with respect to the subject matter hereof and (ii)
shall not be assigned by operation of law or otherwise.
6.2 Amendments. This Agreement may not be modified, amended, altered
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or supplemented, except upon the execution and delivery of a written agreement
executed by the parties hereto and consented to by Merger Sub.
6.3 Notices. All notices, requests, claims, demands and other
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communications hereunder shall be in writing and shall be given by hand
delivery, telegram, telex or telecopy or by any courier service, such as Federal
Express, providing proof of delivery. All communications hereunder shall be
delivered to the respective parties at the following addresses:
If to Stockholder:
FS Equity Partners II, L.P.
c/o Xxxxxxx Xxxxxx & Co.
00000 Xxxxx Xxxxxx Xxxx.
Xxxxx 0000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention:
Facsimile:
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with a copy to (which by itself shall not constitute notice):
Xxxxxxx & XxXxxxxx, A Professional Law Corporation
California Plaza, 29/th/ Floor
000 Xxxxx Xxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Facsimile:
If to Company:
Envirosource, Inc.
0000 Xxxxxxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xx. Xxxx X. XxXxxxxx
Facsimile: (000) 000-0000
with a copy to (which by itself shall not constitute notice):
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx, Esq. and Xxxxxxx Xxxx, Esq.
Facsimile: (000) 000-0000
and, in all cases, with a copy to Merger Sub:
x/x Xxxxxxxxx Xxxxxx Capital Partners
000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxx, Xxx Xxxxxx
Attention: Xxxxxx Xxxxxx
Facsimile: 000-000-0000
and a copy to:
Weil, Gotshal & Xxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxx X. Xxxxxxx, Esq. and Xxxxxx X. Xxxxx, Esq.
Facsimile: 000-000-0000
or to such other address as the person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above.
6.4 Governing Law; Jurisdiction. This Agreement shall be governed by
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and construed in accordance with the laws of the State of New York, regardless
of the laws that might otherwise govern under applicable principles of conflicts
of laws thereof. Each of
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Stockholder and the Company irrevocably submits to the exclusive jurisdiction of
any New York state or federal court sitting in New York County in the State of
New York (the "Preferred Courts") in any action arising out of or relating to
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this Agreement, hereby irrevocably agrees that all claims in respect of such
action may be heard and determined in such Preferred Court, hereby irrevocably
waives, to the fullest extent it may effectively do so, the defense of an
inconvenient forum to the maintenance of such action or proceeding, and hereby
irrevocably waives the right to a trial by jury. Nothing in this paragraph will
affect the right of Stockholder or the Company to bring any action arising out
of or relating to this Agreement in any other court if the Preferred Courts will
not take jurisdiction of any such action.
6.5 Specific Performance. Stockholder recognizes and acknowledges
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that a breach by it of any covenants or agreements contained in this Agreement
will cause the Company to sustain damages for which it would not have an
adequate remedy at law, and therefore Stockholder agrees that in the event of
any such breach, the Company shall be entitled to the remedy of specific
performance of such covenants and agreements and injunctive and other equitable
relief in addition to any other remedy to which it may be entitled, at law or in
equity.
6.6 Counterparts. This Agreement may be executed in counterparts,
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each of which shall be deemed to be an original, but all of which shall
constitute one and the same Agreement.
6.7 Descriptive Headings. The descriptive headings used herein are
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inserted for convenience of reference only and are not intended to be part of or
to affect the meaning or interpretation of this Agreement.
6.8 Third Party Beneficiaries. This Agreement shall inure to the
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benefit solely of each party hereto, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any right, benefit
or remedy of any nature whatsoever under or by reason of this Agreement, except
for Merger Sub, GSC and GSCP Recovery, Inc. who are third party beneficiaries
hereof and shall be entitled to enforce the provisions hereof.
6.9 Severability. Whenever possible, each provision or portion of
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any provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or portion of any
provision of this Agreement is held to be invalid, illegal or unenforceable in
any respect under any applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other provision
or portion of any provision in such jurisdiction, and this Agreement will be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision or portion of any provision had never been
contained herein.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company and Stockholder have caused this Agreement
to be duly executed as of the day and year first above written.
ENVIROSOURCE, INC.
By: ________________________
Xxxx X. XxXxxxxx
Chief Executive Officer
FS EQUITY PARTNERS II, L.P.
By: XXXXXXX XXXXXX & CO.,
Its General Partner
By: ________________________
Name:
Title:
