STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement"), is made and entered
into as of this 9th day of October, 2003, by and among First Reserve Fund
VII, Limited Partnership, a Delaware limited partnership ("Fund VII") and
First Reserve Fund VIII, L.P., a Delaware limited partnership ("Fund VIII,"
and with Fund VII, "Sellers"), on the one hand, and LB I Group Inc.
("Buyer"), on the other hand.
WHEREAS, Fund VII is owner of 12,345 shares (the "Fund VII Shares") of
the Series B Convertible Preferred Stock, par value $0.01 per share
("Preferred Stock") of TransMontaigne Inc., a Delaware corporation (the
"Company"), as such Preferred Stock is described in the TransMontaigne Inc.
Certificate of Designations of Series B Convertible Preferred Stock, filed
with the Secretary of State of the State of Delaware on July 15, 2002 (the
"Certificate");
WHEREAS, Fund VIII is the owner of 19,750 shares of Preferred Stock
(the "Fund VIII Shares" and with the Fund VII Shares, the "Shares"); and
WHEREAS, Sellers desire to sell and transfer the Shares to Buyer, and
Buyer desires to purchase the Shares from Sellers;
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants herein contained, Sellers and Buyer agree as follows:
1. PURCHASE AND SALE OF SHARES.
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1.1 CALCULATION OF PURCHASE PRICE. On the terms and conditions set
forth herein, at the Closing, the Sellers will sell the Shares to Buyer,
free and clear of all liens, pledges, encumbrances and claims whatsoever,
and Buyer will purchase the Shares from Sellers. The per share purchase
price for the Shares (the "Per Share Price") shall be equal to (a) $920.00
plus (b) the cash amount of dividends on a Share that are accrued (whether
or not declared) in accordance with the terms of Section 2(a)(i) of the
Certificate but that remain unpaid as of the Closing Date.
1.2 CLOSING; PURCHASE AND SALE OF SHARES. The closing of the
transaction herein contemplated (the "Closing") shall take place at the
offices of First Reserve Corporation, Xxx Xxxxxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxxxxx 00000. The Closing shall take place immediately following
satisfaction or waiver of the conditions set forth in Section 1.3 (the
"Closing Date"). At the Closing, Sellers shall transfer the Shares by
delivering to Buyer certificates representing the Shares, together with
duly executed stock powers. At the Closing, Buyer shall pay to Fund VII the
sum equal to the Per Share Price multiplied by the number of Fund VII
Shares, and shall pay to Fund VIII the sum equal to the Per Share Price
multiplied by the number of Fund VIII Shares (collectively with the amount
paid to Fund VII, the "Purchase Price"). Assuming the Closing Date is on
the date hereof, the Per Share Price will be equal to $921.50, resulting in
total consideration of $11,375,917.50 payable to Fund VII, and
$18,199,625.00 payable to Fund VIII. Payments of the Purchase Price shall
be made in cash by wire transfers to accounts of Sellers specified in
advance of the Closing Date.
1.3 CONDITIONS TO CLOSING.
(a) The obligation of Buyer to consummate the purchase and sale
of the Shares as contemplated hereby is subject to the satisfaction on or
before the Closing Date of the conditions set forth below, any of which may
be waived in writing:
(i) no preliminary or permanent injunction or other order of
any court or other governmental entity shall be in effect or
threatened nor shall there be in effect any statute, rule, regulation
or executive order promulgated or enacted by any governmental entity
that, in any such case, prevents the consummation of the transactions
contemplated by this Agreement; and no suit, action, claim, proceeding
or investigation before any governmental entity shall have been
commenced or threatened by any person or entity seeking to prevent the
sale of the Shares or asserting that the sale of all or a portion of
the Shares would be unlawful;
(ii) the representations and warranties of each Seller
contained in this Agreement shall be true and correct in all respects
on and as of the Closing Date with the same force and effect as though
such representations and warranties had been made or given on and as
of the Closing Date; and each and all of the agreements and covenants
of each Seller to be performed or complied with by it on or before the
Closing Date pursuant to this Agreement shall have been performed or
complied with in all respects;
(iii) the 15-day advance notice provisions of Section 10(a)
of the Certificate (the "Advance Notice") shall have been satisfied by
Sellers, or waived by the Company pursuant to the Letter Agreement
(defined below);
(iv) there shall not have been any event or occurrence that
has or is reasonably likely to have a material adverse effect on the
business, operations, assets, properties, prospects or material
customer relationships of the Company;
(v) Buyer shall have received an executed letter agreement
from the Company, in the form attached hereto as Exhibit A (the
"Letter Agreement"), which Letter Agreement shall contain, among other
things, the Company's agreement and acknowledgement (the
"Recapitalization Agreement") to the effect that for all purposes of
the Preferred Stock Recapitalization Agreements, dated June 27, 2002,
between the Company and each of Fund VII and Fund VIII (the "Preferred
Stock Recapitalization Agreements," together with the Stockholders'
Agreement (defined below) and the Registration Rights Agreement
(defined below), the "Investor Documents") (i) Buyer is the "Investor"
and an "Institutional Investor" (each as defined in the Preferred
Stock Recapitalization Agreements) and (ii) Buyer has all of the
rights of the "Investor" and an "Institutional Investor" under the
Preferred Stock Recapitalization Agreements, including without
limitation such rights provided in Sections 4, 7.1, 7.2, 7.3, 7.4,
7.5, 10, 11 and 13 thereof;
(vi) Seller shall have caused one of its designees ("Seller
Designee") serving as a member of the board of directors of the
Company (the "Board") to resign as a member of the Board;
(vii) A majority of the members of the Board, immediately
after the resignation of Seller Designee, shall have duly elected
Xxxxx Xxxxxxx or such other designee of Buyer as Buyer may determine
to serve as a member of the Board in accordance with the certificate
of incorporation and by-laws of the Company and such election shall be
evidenced by a consent in writing, which consent shall have been
delivered to Buyer;
(viii) Each party to the Stockholders' Agreement, dated June
28, 2002, among the Company, various investors, including Sellers, and
certain employees of the Company (the "Stockholders' Agreement"),
shall have executed and delivered to Buyer a written consent (the
"Stockholders' Consent") in a form satisfactory to Buyer to the effect
that such party agrees and acknowledges that for all purposes of the
Stockholders' Agreement (i) Buyer is an "Investor" and a member of the
"Investor Group" (each as defined in the Stockholders' Agreement"),
(ii) the Shares are "Investor Shares" (as defined in the Stockholders'
Agreement), (iii) for purposes of the calculation required by Section
3 of the Stockholders' Agreement, so long as the Shares are owned
beneficially by Buyer or its affiliates, the Shares shall be treated
as though they continued to be beneficially owned by the original
Investors (as defined in the Stockholders' Agreement) and (iv) Buyer
has all of the rights of the "Investor" and a member of the "Investor
Group" under the Stockholders' Agreement, including without limitation
such rights provided in Sections 2 and 3 thereof; and
(ix) The Company and the holders of two-thirds of the
Registrable Securities (as defined in the Amended and Restated
Preferred Stock Investor Registration Rights Agreement, dated June 28,
2002, among the Company and various investors, including Fund VII and
Fund VIII (the "Registration Rights Agreement")), together with the
requisite parties to the Company's Amended and Restated Institutional
Investor Registration Rights Agreement, dated as of June 27, 2002, and
the requisite parties to the Company's Amended and Restated Louis
Dryfus Corporation Registration Rights Agreement, dated as of June 27,
2002, shall have executed and delivered to Buyer a written consent
(the "Registration Rights Consent") in a form satisfactory to Buyer to
the effect that such party agrees and acknowledges that for all
purposes of the Registration Rights Agreement (i) Buyer is a "Series B
Investor" and a "Preferred Stock Investor" (each as defined in the
Registration Rights Agreement), (ii) the Shares are "Registrable
Securities" and "Series B Investor Shares" (each as defined in the
Registration Rights Agreement) and (iii) Buyer has all of the rights
of a "Series B Investor" and "Preferred Stock Investor" under the
Registration Rights Agreement, including without limitation such
rights provided in Sections 2.1, 2.2, 2.3, 2.4 and 2.5 thereof.
(b) The obligation of Sellers to consummate the purchase and sale
of the Shares as contemplated hereby is subject to the satisfaction on or
before the Closing Date of the conditions set forth below, any of which may
be waived in writing:
(i) no preliminary or permanent injunction or other order of
any court or other governmental entity shall be in effect or
threatened nor shall there be in effect any statute, rule, regulation
or executive order promulgated or enacted by any governmental entity
that, in any such case, prevents the consummation of the transactions
contemplated by this Agreement; and no suit, action, claim, proceeding
or investigation before any governmental entity shall have been
commenced or threatened by any person or entity seeking to prevent the
sale of the Shares or asserting that the sale of all or a portion of
the Shares would be unlawful;
(ii) the representations and warranties of Buyer contained
in this Agreement shall be true and correct in all material respects
on and as of the Closing Date with the same force and effect as though
such representations and warranties had been made or given on and as
of the Closing Date; and each and all of the agreements and covenants
of Buyer to be performed or complied with by it on or before the
Closing Date pursuant to this Agreement shall have been performed or
complied with in all respects; and
(iii) the Advance Notice shall have been satisfied by
Sellers, or waived by the Company.
1.4 TERMINATION. The obligations of the parties to close the
transactions contemplated by this Agreement may be terminated:
(a) at any time, by mutual consent of the Sellers and Buyer;
(b) by Buyer, if it is not in material breach of this Agreement
and any of the conditions set forth in 1.3(a) are incapable of being
satisfied prior to October 31, 2003 (the "Termination Date"); or
(c) by Buyer or Sellers, if the terminating party is not in
material breach of this Agreement and the Closing Date has not occurred by
the Termination Date.
If the obligation to close the transactions contemplated by this
Agreement is terminated pursuant to any provision of this Section 1.4, then
this Agreement shall forthwith become void and there shall not be any
liability or obligation with respect to the terminated provisions of this
Agreement on the part of the Sellers or Buyer except and to the extent such
termination results from the willful breach by a party of any of its
representations, warranties or agreements hereunder.
2. REPRESENTATIONS AND WARRANTIES.
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2.1 BY SELLERS The Sellers represent and warrant to Buyer that:
(a) Power, Authority, Etc. Each Seller has the requisite power
and authority to execute, deliver and perform this Agreement and to
consummate the transactions contemplated herein. Each Seller's execution,
delivery and performance of this Agreement has been duly authorized by all
requisite action. This Agreement will, when executed and delivered by each
Seller, constitute the legal, valid and binding obligation of that Seller,
enforceable in accordance with its terms.
(b) Ownership of Shares. The Shares are validly issued and
outstanding, fully paid and non-assessable, free and clear of all liens,
proxies, taxes, rights (including rights of first offer and tag along
rights) or other encumbrances, and not subject to pre-emptive,
participation or similar rights of the stockholders of the Company or
others. Each Seller is the record and beneficial owner of the Shares
attributed to it in the Recitals to this Agreement and, upon Closing, each
Seller is transferring the Shares attributed to it in the Recitals to Buyer
free and clear of all liens, proxies, taxes, mortgages, pledges, security
interests, restrictions, agreements with respect to voting, prior
assignments, encumbrances, options, rights (including rights of first
refusal and tag-along rights) and claims of any kind or nature whatsoever,
except as set forth in the Certificate, this Agreement, any Investor
Document or the Letter Agreement. Promptly following execution of this
Agreement, Sellers will deliver the Advance Notice to the Company.
(c) Conflicting Agreements and Charter Provisions. Neither the
execution and delivery of this Agreement nor the fulfillment of and
compliance with the terms and provisions hereof will conflict with or
result in a breach of the terms, conditions or provisions of, or give rise
to a right of termination under, or constitute a default under, or result
in any violation of the Certificate, either Seller's certificate of
incorporation or by-laws (or any similar document of corporate governance)
or any mortgage, agreement, instrument, order, judgment, decree, statute,
law, rule or regulation to which either Seller or any of its respective
properties is subject.
(d) Governmental Consents, Etc. Except for any notification that
may be required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, neither Seller is required to obtain any consent,
approval or authorization of, or to make any declaration or filing with,
any governmental authority as a condition to or in connection with the
valid execution, delivery and performance of this Agreement, or the
performance by the Sellers of their obligations in respect thereof.
(e) Form 10-K. To the actual knowledge of the Sellers, the
information contained or incorporated by reference in the Company's Annual
Report on Form 10-K for the fiscal year ending June 30, 2003 (the "10-K"),
as filed with the Securities and Exchange Commission on September 29, 2003,
was true and correct in all material respects as of the date of its filing
and, as of such date, the 10-K did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The "actual
knowledge" of Sellers shall mean the actual conscious knowledge of Xxx
Xxxxx or Xxxx Xxxx, and specifically excludes any facts of which Messrs.
Xxxxx or Hill reasonably should have been aware, whether as the result of
due inquiry or otherwise.
Except as set forth above, Sellers are making no representations
or warranties, express or implied, of any nature regarding the Company, the
Shares or the transactions contemplated hereby.
2.2 BY BUYER.
(a) Buyer represents and warrants to Sellers that Buyer has the
requisite power and authority to execute, deliver and perform this
Agreement and to consummate the transactions contemplated herein, that
Buyer's execution, delivery and performance of this Agreement has been duly
authorized by all requisite action on the part of Buyer and that this
Agreement will, when executed and delivered by Buyer, constitute the legal,
valid and binding obligation of Buyer, enforceable against Buyer in
accordance with its terms.
(b) Buyer represents and warrants to each Seller that Buyer is an
"accredited investor" as defined in the rules promulgated under Securities
Act of 1933, as amended (the "Act"), that the Shares are being acquired for
investment purposes and not with a view to, or in connection with, the sale
or distribution thereof, and that Buyer understands that the sale of the
Shares to Buyer has not been registered under the Act. Buyer acknowledges
that upon consummation of the transactions contemplated by this Agreement,
the Shares will be "restricted securities" within the meaning of Rule
144(a)(3) under the Act. Buyer agrees that it will not sell or otherwise
dispose of any Shares or equity securities received upon the conversion
thereof unless the sale or disposal of such securities has been registered
under the Act or such sale or disposal is made pursuant to an applicable
exemption from such registration requirements. Buyer agrees that the
certificate or certificates representing the Shares shall bear a legend
that such shares have not been registered under the Act or any state
securities laws and any additional legend required under any of the
Investor Documents assigned to Buyer. Buyer agrees that, in order to ensure
compliance with the restrictions referred to herein, the Company may issue
appropriate "stop transfer" instructions to its transfer agent, unless
Buyer's proposed transfer is in compliance with applicable securities laws,
for purposes of the foregoing. Buyer acknowledges that the Company shall
not be required (i) to transfer on its books any Shares that are or have
been sold or otherwise transferred in violation of any of the provisions of
this Agreement or any Investor Document to which Buyer is or becomes a
party or (ii) to treat as owner of such Shares or to accord the right to
vote or pay dividends to any transferee(s) to whom such Shares may have
been so transferred.
(c) Buyer represents that it is a sophisticated investor and has
sufficient knowledge and information available to it with regard to any
investment decision in respect of the Shares.
3. SELLERS' COVENANTS AND AGREEMENTS. Each Seller hereby agrees and
acknowledges (x) that for all purposes of the Stockholders' Agreement (i)
Buyer is an "Investor" and a member of the "Investor Group" (each as
defined in the Stockholders' Agreement"), (ii) the Shares are "Investor
Shares" (as defined in the Stockholders' Agreement), (iii) for purposes of
the calculation required by Section 3 of the Stockholders' Agreement, so
long as the Shares are owned beneficially by Buyer or its affiliates, the
Shares shall be treated as though they continued to be beneficially owned
by the original Investors (as defined in the Stockholders' Agreement) and
(iv) Buyer has all of the rights of the "Investor" and a member of the
"Investor Group" under the Stockholders' Agreement, including without
limitation such rights provided in Sections 2 and 3 thereof and (y) that
for all purposes of the Registration Rights Agreement (i) Buyer is a
"Series B Investor" and a "Preferred Stock Investor" (each as defined in
the Registration Rights Agreement), (ii) the Shares are "Registrable
Securities" and "Series B Investor Shares" (each as defined in the
Registration Rights Agreement) and (iii) Buyer has all of the rights of a
"Series B Investor" and "Preferred Stock Investor" under the Registration
Rights Agreement, including without limitation such rights provided in
Sections 2.1, 2.2, 2.3, 2.4 and 2.5 thereof.
4. MISCELLANEOUS.
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4.1 REASONABLE BEST EFFORTS. Each party shall use its reasonable best
efforts to timely satisfy each of the conditions to be satisfied by it as
provided in Section 1.3.
4.2 AMENDMENT; WAIVER. This Agreement, together and the other
documents specifically contemplated herein to be delivered in connection
herewith constitute the entire agreement of the parties hereto with respect
to the subject matter hereof, and supersede all prior oral and written
agreements and understandings regarding the same. This Agreement may only
be amended by a writing duly executed by all of the parties hereto. No
waiver of any provision of this Agreement shall be binding upon any party
unless the waiver is in writing and signed by the parties hereto. The
waiver by any party of a breach of any provision under this Agreement shall
not operate or be construed as a waiver of any subsequent similar or other
breach hereof.
4.3 GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO BE MADE IN AND IN
ALL RESPECTS SHALL BE INTERPRETED, CONSTRUED AND GOVERNED BY AND IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE
CONFLICT OF LAW PRINCIPLES THEREOF THAT WOULD APPLY THE SUBSTANTIVE LAWS OF
ANY OTHER JURISDICTION.
4.4 ASSIGNMENT. This Agreement shall be binding upon and inure to the
benefit of each of the parties hereto, and their respective successors and
permitted assigns. No party hereto may assign any of its rights hereunder
to another party without the prior written consent of the other party
hereto; provided that, each party hereto may assign its rights hereunder
without such consent if such assignment is made to an affiliate of such
assigning party.
4.5 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original and all of
which together shall be deemed to be one and the same instrument.
4.6 NOTICES. All notices, consents, requests, instructions, approvals
and other communications provided for herein shall be deemed validly given,
made or served if in writing and delivered personally or sent by certified
mail, postage prepaid, or by overnight courier, or by telecopier to the
address set forth opposite the receiving party's signature hereto, or to
such other address as shall be furnished in writing by any party to the
others.
4.7 FURTHER ASSURANCES. The Sellers agree to cooperate with Buyer, and
at Buyer's request, to execute and deliver any further instruments (and to
cause any further instruments to be executed and delivered by any third
party, including without limitation the Company) as Buyer may reasonably
request in order to carry out the intent of the parties hereunder.
4.8 CONFIDENTIALITY. The Buyer shall not disclose any confidential
information provided by Sellers to Buyer in connection with the
transactions contemplated hereby to any party except Buyer's
representatives, employees, affiliates and agents ("Representatives") .
Buyer shall not use the confidential information to purchase or sell any
equity securities of the Company in violation of the Securities Exchange
Act of 1934, as amended. For purposes of this Section 3.8, the term
"confidential information" shall not include any information that (a) is or
becomes public knowledge other than as a result of the disclosure of such
information by Buyer in a manner prohibited hereunder; (b) was received by
the Buyer through a third party (other than the Company or its affiliates)
that, to the knowledge of the Buyer, had the right to disclose the
confidential information to Buyer; (c) was in the Buyer's possession prior
to disclosure hereunder and was not acquired, directly or indirectly, from
any person or entity in a relationship of trust with the Company with
respect to such confidential information; (d) in connection with any
litigation to which Buyer may be a party; or (e) is required by applicable
federal, state, or local law, rule, or regulation or requested by or
demanded of any judicial, regulatory or administrative agency to be
disclosed by the Buyer or its Representatives.
[Remainder of Page Intentionally Blank - Signatures Follow]
IN WITNESS WHEREOF, Sellers and Buyer have executed this Agreement
as of the date first above written.
SELLERS
FIRST RESERVE FUND VII, LIMITED PARTNERSHIP
By: First Reserve GP VII, L.P., its General Partner
By: First Reserve Corporation, its General Partner
By: /s/ Xxxxxx X. Xxxxxxx Address: One Lafayette Place
Name: Xxxxxx X. Xxxxxxx Xxxxxxxxx, XX 00000
Title: Managing Director Fax: 000.000.0000
FIRST RESERVE FUND VIII, L.P.
By: First Reserve GP VIII, L.P., its General Partner
By: First Reserve Corporation, its General Partner
By: /s/ Xxxxxx X. Xxxxxxx Address: One Lafayette Place
Name: Xxxxxx X. Xxxxxxx Xxxxxxxxx, XX 00000
Title: Managing Director Fax: 000.000.0000
BUYER
LB I GROUP INC.
By: /s/ Xxxx Xxxxxxxxx Address: 000 Xxxx Xxxxxx, 0xx Xxxxx
Name: Xxxx Xxxxxxxxx Xxx Xxxx, XX 00000
Title: Vice President Attention: Xxxx Xxxxxxxxx
SIGNATURE PAGE FOR STOCK PURCHASE AGREEMENT
Form of Letter Agreement
[date]
LB I Group Inc.
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Re: Transfer of Series B Convertible Preferred Stock ("Series B Stock")
Ladies and Gentlemen:
This Letter Agreement is being delivered to you as a condition to the
transfer of 32,095 shares (the "Shares") of the Series B Stock of
TransMontaigne, Inc., a Delaware corporation (the "Company), from First
Reserve Fund VII, Limited Partnership, a Delaware limited partnership
("Fund VII") and First Reserve Fund VIII, L.P., a Delaware limited
partnership ("Fund VIII" and with Fund VII, the "Sellers") to LB I Group
Inc. (the "Buyer"), pursuant to the Stock Purchase Agreement, dated October
9, 2003, by and among Buyer and the Sellers (the "Purchase Agreement").
Unless otherwise defined herein, all capitalized terms used herein shall
have the meanings assigned to them in the Purchase Agreement.
The Company and Buyer hereby agree as follows:
(a) The Company agrees and acknowledges that for all purposes of
the Preferred Stock Recapitalization Agreements (i) Buyer is the "Investor"
and an "Institutional Investor" (each as defined in the Preferred Stock
Recapitalization Agreements) and (ii) Buyer has all of the rights as the
"Investor" and an "Institutional Investor" under the Preferred Stock
Recapitalization Agreements, including without limitation such rights
provided in Sections 4, 7.1, 7.2, 7.3, 7.4, 7.5, 10, 11 and 13 thereof.
(b) The Company agrees and acknowledges that for all purposes of
the Stockholders' Agreement (i) Buyer is an "Investor" and a member of the
"Investor Group" (each as defined in the Stockholders' Agreement"), (ii)
the Shares are "Investor Shares" (as defined in the Stockholders'
Agreement"), (iii) for purposes of the calculation required by Section 3 of
the Stockholders' Agreement, so long as the Shares are owned beneficially
by Buyer or its affiliates, the Shares shall be treated as though they
continued to be beneficially owned by the original Investors (as defined in
the Stockholders' Agreement) and (iv) Buyer has all of the rights of an
"Investor" and a member of the "Investor Group" under the Stockholders'
Agreement, including without limitation such rights provided in Sections 2
and 3 thereof.
(c) The Company agrees and acknowledges that for all purposes of
the Registration Rights Agreement (i) Buyer is a "Series B Investor" and a
"Preferred Stock Investor" (each as defined in the Registration Rights
Agreement), (ii) the Shares are "Registrable Securities" and "Series B
Investor Shares" (each as defined in the Registration Rights Agreement) and
(iii) Buyer has all of the rights of a "Series B Investor" and a "Preferred
Stock Investor" under the Registration Rights, including without limitation
such rights provided in Sections 2.1, 2.2, 2.3, 2.4 and 2.5 thereof.
(d) The Company shall use its best efforts to obtain any and all
other consents necessary or advisable to consummate the transactions
contemplated by the Purchase Agreement and the granting of rights to Buyer
contemplated by paragraphs (a) through (c) above (the "Consents"),
including without limitation, (i) recommending that all of the parties (the
"Parties") to the Stockholders' Agreement and the Registration Rights
Agreement promptly execute and deliver to Buyer the Stockholders' Consent
and the Registration Rights Consent, (ii) promptly and diligently
contacting all Parties in order to obtain the Consents and deliver or cause
to be delivered the Consents to Buyer and (iii) proceeding diligently to
obtain the Consents. The Company will execute any and all documents and
instruments and take any and all actions reasonably requested by Buyer to
give effect to the transactions contemplated by the Purchase Agreement.
(e) If any of the Consents are incapable of being delivered to
Buyer, or in any event are not obtained for any reason, by October 9, 2003,
at the request of Buyer, the Company shall grant to Buyer rights with
respect to the Shares that are substantially equivalent to the rights held
by the Sellers immediately prior to the consummation of the transactions
contemplated by the Purchase Agreement, to the extent the grant of such
rights would not breach any material agreement between the Company and any
stockholder of the Company.
(f) The Company hereby agrees that, upon consummation of the
transactions contemplated by the Purchase Agreement, the Company will take
all such actions that are necessary or advisable in order to cause Xxxxx
Xxxxxxx, or such other designee of Buyer as Buyer may determine ("Buyer
Designee") to be elected as a member of the Board, and thereafter will
include Buyer Designee on the slate of directors recommended by the
Company, and will oppose any proposal to remove Buyer Designee, at each
meeting of stockholders at which the election or removal of directors is on
the agenda until such time (the "Board Termination Event") as Buyer no
longer beneficially owns at least ___% of the Company's common stock on a
fully-diluted basis. Upon the occurrence of the Board Termination Event,
Buyer will cause Buyer Designee to resign from the Board.
(g) The Company represents and warrants to Buyer that::
(i) Upon the conversion of any of the Shares into shares of
the Company's common stock, par value $.01 per share ("Common
Shares"), in accordance with Section 5 of the Certificate, such Common
Shares shall be validly issued and outstanding, fully paid and
non-assessable, free and clear of all liens, taxes, proxies, rights
(including rights of first offer and tag along rights) or other
encumbrances, and not subject to pre-emptive, participation or similar
rights of the stockholders of the Company or others. The Common Shares
issuable upon conversion of the Shares have been validly reserved for
issuance.
(ii) At October 9, 2003, the authorized capital stock of the
Company consists of (i) 80,000,000 Common Shares, of which
[40,663,447] shares are validly issued and outstanding, fully paid and
nonassessable, and (ii) 2,000,000 shares of the Company's preferred
stock, par value $.01 per share, of which (A) 250,000 are designated
series A convertible preferred stock, par value $0.01 per share, of
the Company, of which [24,421] shares are validly issued and
outstanding, fully paid and nonassessable and (B) 100,000 are
designated as series B redeemable convertible preferred Stock, of
which [72,890] are validly issued and outstanding, fully paid and
nonassessable. Other than with respect to the Investor Documents or as
disclosed in the 10-K, there are no outstanding options, warrants,
scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into,
shares of any class of capital stock of the Company or any of its
subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its subsidiaries is or may
become bound relating to the issuance, repurchase or transfer of any
shares of capital stock or options, warrants or rights to purchase or
acquire any shares of capital stock of the Company or any of its
subsidiaries or relating to the voting of any shares of capital stock
of the Company or any of its subsidiaries.
(iii) The Company and the Board have taken all necessary
action, if any, in order to render inapplicable any control share
acquisition, business combination, poison pill (including any
distribution under a rights agreement) or other similar anti-takeover
provision under the Company's certificate of incorporation, the laws
of its state of incorporation or the laws of any other state which is
or could become applicable to Buyer, and that would be adverse to
Buyer, as a result of the transactions contemplated by the Purchase
Agreement, including without limitation the Sellers' sale of the
Shares and Buyer's ownership of the Shares.
(h) The Company has received the Advance Notice from Sellers, and
hereby waives any requirement that additional time pass prior to the
consummation of Sellers' sale of the Shares to Buyer.
[Remainder of Page Intentionally Blank - Signatures Follow]
When accepted by you, this Letter Agreement will constitute the
agreement of the Company and Buyer with respect to the foregoing. Please
indicate your acceptance be signing in the space provided below.
Very truly yours,
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[title]
AGREED AND ACCEPTED:
LB I GROUP INC.
By:
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Name:
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Title:
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Date:
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