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EXHIBIT 2.13
WARRANT AGREEMENT
This WARRANT AGREEMENT (this "Agreement") is made as of
January 27, 2000, by and among GTCR Capital Partners, L.P., a Delaware limited
partnership (the "Lender"), and Synagro Technologies, Inc., a Delaware
corporation (the "Company"). Capitalized terms used herein and not otherwise
defined shall have the meanings given to such terms in Section 5A hereof.
WHEREAS, the Company and the Lender have entered into a Senior
Subordinated Loan Agreement, dated as of the date hereof (as the same shall be
modified, amended and supplemented from time to time, the "Loan Agreement");
WHEREAS, pursuant to the Loan Agreement, the Lender will make
a loan to the Company on the date hereof in the principal amount of $20,000,000
(the "Initial Loan") and, subject to the terms and conditions of the Loan
Agreement, may make or arrange for loans to the Company from time to time after
the date hereof (each a "Subsequent Loan", and together with the Initial Loan,
the "Loans") up to an aggregate principal amount (excluding the Initial Loan) of
$105,000,000 (the "Aggregate Subsequent Loan Amount");
WHEREAS, as an inducement and partial consideration to the
Lender to enter into the Loan Agreement and to make the Loans, the Company has
agreed to (i) issue to the Lender on the date hereof a warrant (the "Initial
Warrant") representing the right to purchase the Initial Warrant Shares from the
Company and (ii) issue to the Lender on the date of each Subsequent Loan a
warrant (each a "Subsequent Warrant", and together with the Initial Warrant, the
"Warrants") representing the right to purchase Subsequent Warrant Shares from
the Company, in each case pursuant to the terms and conditions of this Agreement
and in the form of Exhibit A attached hereto; and
WHEREAS, the Company has authorized the issuance of the
Warrants to the Lender pursuant to the terms and conditions of this Agreement
and each such Warrant.
NOW, THEREFORE, in consideration of the premises and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
SECTION 1. Issuance of Warrants; Closings.
1.1. Initial Closing. The issuance of the Initial Warrant to
the Lender (the "Initial Closing") shall take place simultaneously with the
closing of the Initial Loan pursuant to the Loan Agreement. The date of the
Initial Closing is hereinafter referred to as the "Initial Closing Date."
SECTION 2. Issuance of Initial Warrant. At the Initial Closing, the
Company shall issue to the Lender the Initial Warrant representing the right to
purchase the Initial Warrant Shares. The Initial Warrant shall be exercisable
immediately upon issuance thereof, and the Lender may exercise all or any
portion of the Initial Warrant at any time and from to time thereafter.
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SECTION 3. Subsequent Closings. The issuance of each Subsequent Warrant
to the Lender (each a "Subsequent Closing") shall take place simultaneously with
the closing of each Subsequent Loan. The date of each Subsequent Closing is
hereinafter referred to as a "Subsequent Closing Date").
SECTION 4. Issuances of Subsequent Warrants. At each Subsequent
Closing, the Company shall issue to the Lender a Subsequent Warrant representing
the right to purchase a number of Subsequent Warrant Shares equal to the product
of (A) the result of a fraction, the numerator of which is the dollar amount of
the subsequent Loans being made at such Subsequent Closing, and the denominator
of which is the dollar amount of the Convertible Preferred Stock being purchased
pursuant to the Preferred Stock Purchase Agreement at such Subsequent Closing,
and (B) the result of (1) the result of (x) the number of shares of Convertible
Preferred Stock being purchased pursuant to the Preferred Stock Purchase
Agreement, divided by (y) 0.875, minus (2) the number of shares of Convertible
Preferred Stock being purchased pursuant to the Preferred Stock Purchase
Agreement at such Subsequent Closing.
SECTION 5. Representations and Warranties of the Company. As of the
Initial Closing, and as of each Subsequent Closing, the Company represents and
warrants to the Lender as follows:
5.1 Good Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
SECTION 6. Authority Relative to this Agreement. The Company has all
requisite corporate power and authority to enter into and perform this Agreement
and to issue and deliver the Warrants to the Lender. The execution, delivery and
performance by the Company of this Agreement, including the issuance and
delivery of the Warrants to the Lender, have been duly authorized by all
necessary corporate action on the part of the Company. This Agreement has been
duly executed and delivered by the Company and is a legal, valid and binding
obligation of the Company and is enforceable against the Company in accordance
with its terms (except as may be limited by bankruptcy, insolvency or other laws
affecting the enforcement of creditors' rights).
SECTION 7. No Conflict or Violation. The execution and delivery of this
Agreement by the Company, the performance by the Company of its obligations
hereunder and the issuance and delivery of the Warrants to the Lender does not
and will not conflict with or result in a violation of (i) the charter or bylaws
of the Company or (ii) any agreement, instrument, law, rule, regulation, order,
writ, judgment or decree to which the Company is a party or is subject, except
for such conflicts and violations which will not, individually or in the
aggregate, have a material adverse effect on the business, operations, assets or
condition (financial or otherwise) or business of the Company and will not
deprive the Lender of any material benefit under this Agreement.
SECTION 8. Validity of Issuance. The Warrants to be issued to the
Lender pursuant to this Agreement and the Warrant Shares issued upon exercise of
the Warrants will, when issued,
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be duly and validly issued, fully paid and non-assessable, and free and clear of
all liens, claims and encumbrances.
SECTION 9. Capital Structure (Initial Closing). The authorized and
issued capital stock of the Company as of the Initial Closing and immediately
thereafter is as set forth on the Capitalization Schedule dated as of the
Initial Closing Date and attached hereto.
SECTION 10. Capital Structure (Subsequent Closings). The authorized and
issued capital stock of the Company as of any Subsequent Closing and immediately
thereafter will be as set forth on the Capitalization Schedule dated as of such
Subsequent Closing Date and provided to the Lender prior to such Subsequent
Closing.
SECTION 11. Investment Representations; Legends.
11.1 Investment Representations. The Lender hereby represents
and warrants to the Company that the Lender is acquiring the Warrants, and to
the extent any such Warrant has been exercised, the Warrant Shares, for its own
account and not with a view to, or for resale in connection with, the
distribution or other disposition thereof. The Lender agrees and acknowledges
that it will not, directly or indirectly, offer, transfer or sell any Warrant or
any Warrant Shares, or solicit any offers to purchase or acquire any Warrant or
any Warrant Shares, unless the transfer or sale is (i) pursuant to an effective
registration statement under the Securities Act of 1933, as amended, and the
rules and regulations thereunder (the "Securities Act") and has been registered
under any applicable state securities or "blue sky" laws or (ii) pursuant to an
exemption from registration under the Securities Act and all applicable state
securities or "blue sky" laws.
SECTION 12. Additional Investment Representations. The Lender hereby
represents and warrants to the Company that (i) it has such knowledge and
experience in financial and business matters so as to be capable of evaluating
the merits and risks of its investment hereunder, (ii) it is able to incur a
complete loss of such investment, (iii) it is able to bear the economic risk of
such investment for an indefinite period of time and (iv) it is an "accredited
investor" as that term is defined in Regulation D under the Securities Act.
SECTION 13. Legend. The Lender hereby acknowledges that the Company
will stamp or otherwise imprint each Warrant with a legend in substantially the
following form:
THIS WARRANT AND ANY SHARES OF STOCK OBTAINABLE UPON ITS
EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE'S
SECURITIES LAWS AND MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE
DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION UNDER
THE SECURITIES ACT OR PURSUANT TO AN EXEMPTION THEREFROM.
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In connection with the transfer of any Warrant or any Warrant
Shares (other than a transfer pursuant to a public offering registered under the
Securities Act, pursuant to Rule 144 or Rule 144A promulgated under the
Securities Act (or any similar rules then in effect) or to an affiliate of the
Lender), the Lender shall deliver, upon the reasonable request of the Company,
an opinion of counsel, which counsel shall be knowledgeable in securities laws
and which opinion shall be reasonably satisfactory to the Company, to the effect
that such transfer may be effected without registration under the Securities
Act. Upon receipt of an opinion of counsel reasonably satisfactory to the
Company to the effect that such legend no longer applies to any particular
Warrant and/or Warrant Shares, the Company shall promptly issue a replacement
Warrant and/or replacement certificate evidencing such Warrant Shares (as
applicable), which does not contain such legend.
SECTION 14. Inspection Rights. The Company shall permit any
representatives designated by the Lender (so long as the Lender or any affiliate
of the Lender holds any Warrant Shares), any holder of at least 50% of the
Warrant Shares that are Common Stock or any holder of at least 50% of the
Warrant Shares that are Convertible Preferred Stock, upon reasonable notice and
during normal business hours and at such other times as any such holder may
reasonably request, to (i) visit and inspect any of the properties of the
Company and its subsidiaries, (ii) examine the corporate and financial records
of the Company and its subsidiaries and make copies thereof or extracts
therefrom and (iii) discuss the affairs, finances and accounts of the Company
and/or any of its subsidiaries with their respective directors, officers, key
employees and independent accountants (it being understood that such
representatives will keep all non-public information confidential to the full
extent permitted by applicable law).
SECTION 15. Miscellaneous
15.1 Definitions. For the purposes of this Agreement, the
following terms shall have the following meanings:
"Convertible Preferred Stock" means the Company's Series D
Convertible Preferred Stock, par value $.002 per share, and each series of the
Company's Convertible Preferred Stock issued, or from time to time issuable,
pursuant to the Preferred Stock Purchase Agreement with substantially the same
rights and preferences as the Company's Series D Convertible Preferred Stock,
par value $.002 per share (except that the number of shares of the Company's
Common Stock into which such securities are convertible shall be determined as
set forth in the Preferred Stock Purchase Agreement).
"Initial Warrant Shares" means 2,857.143 shares of the
Company's Series D Convertible Preferred Stock, par value $.002 per share,
obtained or obtainable upon exercise of the Initial Warrant, as such number of
shares shall be adjusted from time to time in accordance with Section 2 of the
Initial Warrant.
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"Preferred Stock Purchase Agreement" means that certain
Purchase Agreement by and between the Company and GTCR Fund VII, L.P., a
Delaware limited partnership, dated as of the date hereof.
"Subsequent Warrant Shares" means, with respect to a
Subsequent Warrant, the shares issuable upon exercise of such Subsequent Warrant
which shares shall be Convertible Preferred Stock of the same series as the
Convertible Preferred Stock being issued pursuant to the Preferred Stock
Purchase Agreement at such Subsequent Closing.
"Warrant Shares" means, collectively, the Initial Warrant
Shares and any Subsequent Warrant Shares then outstanding.
SECTION 16. Notices. All notices and other communications provided for
herein shall be dated and in writing and shall be deemed to have been duly given
(i) when delivered, if delivered personally, sent by registered or certified
mail, return receipt requested and postage prepaid, or sent via nationally
recognized overnight courier or via facsimile with confirmation of receipt and
(ii) when received if delivered otherwise, to the party to whom it is directed:
If to the Company:
Synagro Technologies, Inc.
0000 Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attention: Chief Financial Officer
Telecopier No.: (000) 000-0000
With a copy to:
Xxxxx Xxxxxxx & Xxxx LLP
3400 Chase Tower
000 Xxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
If to the Lender:
GTCR Capital Partners, L.P.
0000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Telecopier No.: (000) 000-0000
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With a copy to:
Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
Telecopier No.: (000) 000-0000
or to such other address as any party hereto shall have provided in a written
notice to the others.
SECTION 17. Assignment. This Agreement and all the provisions hereof
shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and permitted assigns, except that neither this
Agreement nor any rights or obligations hereunder shall be assigned by the
Company without the prior written consent of the Lender.
SECTION 18. Amendment. This Agreement may be amended only by a written
instrument signed by the Company, the holders of a majority of the Warrant
Shares.
SECTION 19. Waiver. Any party hereto may (a) extend the time for the
performance of any of the obligations or other acts of the other party hereto,
(b) waive any inaccuracies in the representations and warranties contained
herein or in any document delivered pursuant hereto and (c) waive compliance
with any of the agreements or conditions herein. Any agreement on the part of a
party hereto to any such extension or waiver shall only be valid as to such
party if set forth in an instrument in writing signed by such party.
SECTION 20. Severability. In the event that any one or more of the
provisions hereof, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired; it being
intended that all rights, powers and privileges of the parties hereto shall be
enforceable to the fullest extent permitted by law.
SECTION 21. Governing Law. All questions concerning the construction,
validity and interpretation of this Agreement shall be governed by and construed
in accordance with the internal laws of the State of Illinois, without giving
effect to any choice of law or other conflict of law provision or rule (whether
of the State of Illinois or any other jurisdiction) that would cause the
application of the laws of any jurisdiction other than the State of Illinois.
SECTION 22. Counterparts. This Agreement may be executed in two or more
counterparts (including by means of facsimile), each of which when so executed
and delivered shall be deemed to be an original and all of which together shall
be deemed to be one and the same agreement.
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SECTION 23. Descriptive Headings. The headings in this Agreement are
for convenience of reference only and shall not limit or otherwise affect the
meaning of the terms contained herein.
SECTION 24. Survival of Representations and Warranties. All
representations and warranties made in writing by any party in connection
herewith shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby (including each Subsequent
Closing), regardless of any investigation made by the Lender or on its behalf.
SECTION 25. Purchase Prices for Initial Warrant. The Company and the
Lender hereby agree that for purposes of Sections 1271 through 1275 of the
Internal Revenue Code of 1986, as amended (or any successor statute), the
aggregate original purchase price of the Initial Warrant is $2,857,143, which
purchase prices will be used by the Company and the Lender, as appropriate, for
financial reporting and income tax purposes.
SECTION 26. Entire Agreement. Except as otherwise expressly set forth
herein, this Agreement, the Loan Agreement and the Warrants embody the complete
agreement and understanding among the parties hereto with respect to the subject
matter hereof and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related
to the subject matter hereof in any way.
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IN WITNESS WHEREOF, the parties hereto have caused this
Warrant Agreement to be signed by its duly authorized officers as of the date
first written above.
SYNAGRO TECHNOLOGIES, INC.
By: /s/ XXXX X. XXXXXX
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Name: Xxxx X. Xxxxxx
Its: Chairman/CEO
GTCR CAPITAL PARTNERS, L.P.
By: GTCR Mezzanine Partners, L.P.
Its: General Partner
By: GTCR Partners VI, L.P.
Its: General Partner
By: GTCR Xxxxxx Xxxxxx, L.L.C.
Its: General Partner
By: /s/ XXXXX X. XXXXXXX
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Name: Xxxxx X. Xxxxxxx
Its: Principal
