EXHIBIT 2
SECURITIES PURCHASE AGREEMENT
BY AND AMONG
HI-RISE RECYCLING SYSTEMS, INC.
AND
GENERAL ELECTRIC CAPITAL CORPORATION
NATIONSBANK, NATIONAL ASSOCIATION
KEY CORPORATE CAPITAL INC.
DATED AS OF
October 28, 1998
TABLE OF CONTENTS
ARTICLE I
ISSUANCE AND SALE OF THE SECURITIES.............................................................1
1.1 Securities Purchase....................................................................1
1.2 Closing Transactions...................................................................1
ARTICLE II
CONDITIONS TO CLOSING...........................................................................2
2.1 Conditions to the Purchasers' Obligations..............................................2
2.2 Conditions to the Company's Obligations................................................3
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................................................3
3.1 Authorization of Transactions..........................................................4
3.2 Capitalization.........................................................................4
3.3 Absence of Conflicts...................................................................5
3.4 Exemption from Registration; Restrictions on Offer and Sale of Same or
Similar Securities.....................................................................5
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS................................................6
4.1 Organization and Power.................................................................6
4.2 Authorization..........................................................................6
4.3 Absence of Conflicts...................................................................6
ARTICLE V
ADDITIONAL AGREEMENTS...........................................................................7
5.1 Survival...............................................................................7
5.2 Indemnification........................................................................7
5.4 Press Releases and Announcements.......................................................8
5.5 Further Transfers......................................................................8
5.6 Specific Performance...................................................................8
5.7 Transfer of Securities.................................................................9
(a) General Provisions............................................................9
(b) Opinion Delivery..............................................................9
(c) Rule 144A.....................................................................9
(d) Removal of Legend.............................................................9
ARTICLE VI
DEFINITIONS....................................................................................10
ARTICLE VII
MISCELLANEOUS..................................................................................11
7.1 Amendment and Waiver..................................................................11
7.2 Notices...............................................................................11
7.3 Binding Agreement; Assignment.........................................................12
7.4 Severability..........................................................................12
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7.5 No Strict Construction................................................................12
7.6 Headings; Interpretation..............................................................12
7.7 Entire Agreement......................................................................12
7.8 Counterparts..........................................................................13
7.9 Governing Law.........................................................................13
7.10 Parties in Interest...................................................................13
EXHIBITS
Exhibit A - Form of Warrant
Exhibit B - Form of Registration Rights Agreement
LIST OF ANNEXES AND SCHEDULES
Annex I - Purchasers
Annex II - Purchasers' Warrants
Annex III - Notice
Schedule 3.2 - Capitalization Schedule
Schedule 3.3 - Conflicts Schedule
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SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this "Agreement") is made as of October
28, 1998 by and among Hi-Rise Recycling Systems, Inc., a Florida corporation
(the "Company"), and the Persons set forth on Annex I attached hereto
(collectively, the "Purchasers" and each a "Purchaser"). Except as otherwise
indicated herein, capitalized terms used herein are defined in Article VI
hereof.
Subject to the terms and conditions set forth herein, the Purchasers
desire to purchase from the Company, and the Company desires to issue to each
Purchaser, a warrant to purchase at any time after the Closing Date a number of
shares of the Company's common stock, par value $0.01 per share (the "Common
Stock") as set forth opposite such Purchaser's name on Annex II attached hereto
(each a "Warrant" and collectively, the "Warrants") under the circumstances as
described herein. The Underlying Common Stock and the Warrants are sometimes
referred to herein as the "Securities."
In consideration of the mutual promises, representations, warranties,
covenants and conditions set forth in this Agreement, the parties hereto agree
as follows:
ARTICLE I
ISSUANCE AND SALE OF THE SECURITIES
1.1 SECURITIES PURCHASE. On the terms and subject to the conditions of
this Agreement:
(a) At the Closing, the Company shall issue and sell to each Purchaser
its Warrant, which shall be substantially in the form of EXHIBIT A attached
hereto. The purchase price of each Warrant shall be $10.00.
(b) In the event that during the period commencing on the date hereof
through and including the Commitment Termination Date (Acquisition Loan) (as
defined in the Credit Agreement), the Company engages in any business
combination transaction whether by way of stock purchase, merger, asset purchase
or otherwise (an "Acquisition"), immediately upon the consummation of each
Acquisition, the Company shall issue and sell to each Purchaser a warrant (the
"Additional Warrants") to purchase a number of shares of Common Stock which
together with all of the other Additional Warrants to be issued to the other
Purchasers pursuant to this Section 1.1 (b) equals to 8%of any Common Stock
issued or issuable pursuant to any rights, warrants or options to subscribe or
purchase Common Stock or convertible securities of the Company issued pursuant
to such Acquisition for an exercise price per share equal to the effective per
share value of the, Common Stock so issued or issuable in such Acquisition. The
purchase price for each Additional Warrant shall be $10.00. Any Additional
Warrants granted shall be exercisable in whole or in part at any time from the
date of such issuance through and including the 10th anniversary of the Closing
Date (as hereinafter defined). The Additional Warrants shall be in substantially
the same form as the Warrants, except as otherwise set forth in this Section 1.1
(b) and that Section 2A thereof shall be omitted.
1.2 CLOSING TRANSACTIONS.
(a) CLOSING. The closing of the transactions contemplated by this
Agreement (the "Closing") will take place at the offices of Xxxxxx Xxxxxxxx
Frome & Xxxxxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 at 10:00 a.m.
(so long as all conditions to the obligations of the parties to consummate the
transactions contemplated hereby have been satisfied or waived) on the date of
closing of the Financing (as defined below), or at such other time and location
as is mutually agreed upon by the Company and the Purchasers. The date and time
of the Closing are herein referred to as the "Closing Date."
(b) TRANSFERS. Subject to the conditions set forth in this Agreement,
at the Closing Date, the Company shall issue and deliver to each Purchaser, its
Warrant duly registered in the name of such Purchaser or its nominee against
payment by such Purchaser of $10.00 (the foregoing is collectively referred to
hereinafter as the "Closing Transaction"). Payment of the purchase price for the
Warrants shall be made by check.
ARTICLE II
CONDITIONS TO CLOSING
2.1 CONDITIONS TO THE PURCHASERS' OBLIGATIONS. The obligations of the
Purchasers to consummate the transactions contemplated by this Agreement are
subject to the satisfaction of the following conditions on or before the Closing
Date:
(a) the representations and warranties set forth herein or incorporated
by reference in Article III hereof and in any writing delivered by the Company
pursuant hereto will be true and correct in all material respects at and as of
the Closing Date;
(b) the Company will have performed and complied in all material
respects with each of the covenants and agreements required to be performed by
it under this Agreement and the agreements and documents attached hereto as
Exhibits prior to the Closing;
(c) the Company and the Purchasers shall have entered into a
registration rights agreement with respect to the Underlying Common Stock (the
"Registration Rights Agreement") substantially in the form set forth in EXHIBIT
B attached hereto;
(d) each of the conditions which are required to be satisfied pursuant
to Section 2 of that certain Credit Agreement, dated as of the date hereof (the
"Credit Agreement"), among the Company, the other parties named as Borrowers
thereto, General Electric Capital Corporation ("GE Capital"), NationsBank,
National Association ("NationsBank"), and Key Corporate Capital Inc. ("Key") (GE
Capital, NationsBank and Key, collectively referred to as the "Lenders") and the
other parties which may from time to time be Lenders thereunder, and GE Capital,
as Administrative Agent, and NationsBank, as Revolver Agent);
(e) the Purchasers shall have received an opinion, dated the Closing
Date, of counsel to the Company, which counsel is experienced in transactions of
the type contemplated hereby and in the form and substance reasonably
satisfactory to the Purchasers;
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(f) all proceedings to be taken by the Company in connection with the
consummation of the Closing Transaction and the other transactions contemplated
hereby and all certificates, opinions, instruments and other documents,
including customary representations, warranties, covenants, conditions and
remedies for breach, required to be delivered by the Company in accordance with
the Credit Agreement;
(g) all consents and waivers by third parties that are required for the
consummation of the transactions contemplated hereby and the performance of the
Company's obligations set forth in the Warrant and the Registration Rights
Agreement shall have been obtained other than those the failure of which to be
obtained would not have a Material Adverse Effect on or which would not
adversely affect the performance of such obligations; and
(h) all governmental filings, authorizations and approvals that are
required for the consummation of the transactions contemplated hereby, if any,
will have been duly made and obtained and all waiting periods will have expired
on terms reasonably satisfactory to the Purchasers other than those filings,
authorizations or approvals the absence of which would not, individually or in
the aggregate, have a Material Adverse Effect or adverse effect on the
performance of obligations under the Warrant and the Registration Rights
Agreement.
Any condition to the obligations of the Purchasers specified in this
Section 2.1 may be waived in writing by the Purchasers.
2.2 CONDITIONS TO THE COMPANY'S OBLIGATIONS. The obligation of the
Company to consummate the transactions contemplated by this Agreement is subject
to the satisfaction of the following conditions on or before the Closing Date:
(a) the representations and warranties set forth in Article IV hereof
and in any writing delivered by the Purchasers pursuant hereto will be true and
correct in all material respects at and as of the Closing Date;
(b) each of the Purchasers will have performed and complied in all
material respects with all of the covenants and agreements required to be
performed by it under this Agreement prior to the Closing;
(c) all consents and waivers by third parties that are required for the
consummation of the transactions contemplated hereby and the performance of the
Company's obligations set forth in the Warrant and the Registration Rights
Agreement shall have been obtained other than those the failure of which to be
obtained would not have a Material Adverse Effect on or which would not
adversely affect the performance of such obligations; and
(d) all governmental filings, authorizations and approvals that are
required for the consummation of the transactions contemplated hereby, if any,
will have been duly made and obtained and all waiting periods will have expired
on terms reasonably satisfactory to the Company other than those filings,
authorizations or approvals the absence of which would not, individually or in
the aggregate, have a Material Adverse Effect.
The conditions specified in this Section 2.2 may be waived in writing
by the Company.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As a material inducement to the Purchasers to enter into this
Agreement, the Company hereby makes each and every one of the representations
and warranties of the Company and each of the Borrowers which are set forth in
the Credit Agreement and the other Loan Documents, including without limitation,
Section 3 of the Credit Agreement, all of which are incorporated herein by this
reference and are hereby made a part hereof as though such representations and
warranties were set forth herein in full. In addition, the Company hereby
represents and warrants to the Purchasers that:
3.1 AUTHORIZATION OF TRANSACTIONS. The Company has full corporate power
and authority to execute and deliver this Agreement, the agreements and
documents attached hereto as Exhibits and the other agreements and documents
contemplated hereby. The Board of Directors has duly approved this Agreement and
has duly authorized the execution and delivery of this Agreement, the agreements
and documents attached hereto as Exhibits and the other agreements and documents
contemplated hereby and the consummation of the transactions contemplated hereby
and thereby. No other corporate proceedings on the part of the Company are
necessary, or are required by the rules of the NASDAQ Stock Market to approve
and authorize the execution and delivery of this Agreement, the agreements and
documents attached hereto as Exhibits and the other agreements and documents
contemplated hereby and the consummation of the transactions contemplated hereby
and thereby. This Agreement, the Warrant and the Registration Rights Agreement,
and documents attached hereto as Exhibits and the other agreements and documents
contemplated hereby have been duly executed and delivered by the Company and
constitute valid and binding agreements of the Company, enforceable against the
Company in accordance with their terms.
3.2 CAPITALIZATION. (a) The authorized, issued and outstanding capital
stock of the Company is as set forth on SCHEDULE 3.2. All of the issued and
outstanding shares of capital stock of the Company have been duly authorized,
are validly issued, fully paid and nonassessable, are not subject to, nor were
they issued in violation of, any preemptive rights. Except as set forth on
SCHEDULE 3.2, or as disclosed in the Credit Agreement, there are no outstanding
or authorized securities with profit participating features or profit interests,
or options, warrants, registration rights, rights or other agreements or
commitments to which the Company is a party or which are binding upon the
Company providing for the issuance, disposition, registration or acquisition of
any of its capital stock or any such securities or interests (collectively
"Options")(other than this Agreement). Except as set forth on SCHEDULE 3.2,
there are no outstanding or authorized stock appreciation, phantom stock or
similar rights with respect to the Company. Except as set forth on SCHEDULE 3.2
or as contemplated herein, there are no voting trusts, proxies or any other
agreements or understandings with respect to the voting of the capital stock of
the Company. Except as set forth on SCHEDULE 3.2 or as contemplated herein, the
Company is not subject to any obligation (contingent or otherwise) to repurchase
or otherwise acquire or retire any shares of its capital stock or any Options.
(b) Since June 30, 1998, except as set forth on SCHEDULE 3.2, or as
disclosed in the Credit Agreement, or as contemplated herein, the Company has
not issued, sold or transferred any notes, bonds or other debt securities
(except, in the case of the Company, the issuance of the notes and borrowings
pursuant to the Financing) or any equity securities, securities convertible,
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exchangeable or exercisable into equity securities, or warrants, options or
other rights to acquire equity securities, of the Company or any of the
Subsidiaries.
(c) Upon the issuance and delivery of the Warrants in accordance with
this Agreement, (i) each Warrant will be a valid and binding agreement of the
Company, and enforceable against the Company in accordance with its terms; and
(ii) the Purchasers will acquire, subject to the restrictions of this Agreement
and the federal and state securities laws, good, valid and marketable title to
the Warrants, free and clear of all liens, claims, preemptive rights, options,
warrants, rights, commitments, charges, encumbrances, equities, proxies or
voting or other agreements whatsoever.
(d) Upon the issuance and delivery of the Underlying Common Stock in
accordance with the Warrants, (i) the Underlying Common Stock will be duly
authorized, validly issued, fully paid and nonassessable; and (ii) the
Purchasers will acquire, subject to the restrictions of the Warrants and the
federal and state securities laws, good, valid and marketable title to the
Underlying Common Stock, free and clear of all liens, claims, preemptive rights,
options, warrants, rights, commitments, charges, encumbrances, equities, proxies
or voting or other agreements whatsoever.
(e) The registration rights granted to each of the Purchasers pursuant
to the Registration Rights Agreement are not subordinate to any other
registration rights granted by the Company to any other Person.
3.3 ABSENCE OF CONFLICTS. Except as set forth on SCHEDULE 3.3, the
execution, delivery and performance of this Agreement, the Warrant and the
Registration Rights Agreement, and the consummation of the transactions
contemplated hereby and thereby do not and will not (a) conflict with or result
in a breach of any of the provisions of, (b) constitute a default under, (c)
result in a violation of, (d) give any third party the right to terminate or to
accelerate any obligation under, (e) result in the creation of any lien,
security interest, charge or encumbrance upon the Common Stock or (f) require
any authorization, consent, approval, exemption or other action by or notice to
any court or other governmental body, under the provisions of the articles of
incorporation or bylaws of the Company or any of the Subsidiaries or any
indenture, mortgage, lease, license, loan agreement or other agreement or
instrument to which the Company or any of the Subsidiaries is bound or affected,
or any law, statute, rule or regulation or any judgment, order or decree to
which the Company or any of the Subsidiaries is subject.
3.4 EXEMPTION FROM REGISTRATION; RESTRICTIONS ON OFFER AND SALE OF SAME
OR SIMILAR SECURITIES. The offer and sale of the Securities made pursuant to
this Agreement will be exempt from the registration requirements of the
Securities Act. Neither the Company nor any Person acting on its behalf has, in
connection with the offering of the Securities, engaged in (A) any form of
general solicitation or general advertising (as those terms are used within the
meaning of Rule 502(c) under the Securities Act), (B) any action involving a
public offering within the meaning of Section 4(2) of the Securities Act, or (C)
any action that would require the registration under the Securities Act of the
offering and sale of the Securities pursuant to this Agreement or that would
violate applicable state securities or "blue sky" laws. The Company has not made
and will not prior to the Closing make, directly or indirectly, any offer or
sale of the Securities or of securities of the same or a similar class as the
Securities if as a result the offer and sale of the Securities contemplated
hereby could fail to be entitled to exemption from the registration requirements
of the Securities Act. As used herein, the terms "offer" and "sale" have the
meanings specified in Section 2(c) of the Securities Act.
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3.5 WARRANTS. The Warrants purchased pursuant to this Agreement
collectively equal eight percent (8%) of the Fully Diluted Common Stock of the
Company. For the purpose hereof, "Fully Diluted Common Stock" shall mean the
aggregate of all outstanding Common Stock as of the date hereof, plus all shares
of Common Stock issuable upon the exercise or conversion of securities
exercisable for, or convertible into, shares of Common Stock of the Company
which securities are outstanding or issuable as of the date hereof.
3.6 REPRESENTATIONS AND WARRANTIES. The representations and warranties
contained in this Article III and made by the Company elsewhere in this
agreement are true and correct in all respects on the date of this Agreement
unless waived by the Purchasers.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
As a material inducement to the Company to enter into this Agreement,
each Purchaser hereby represents and warrants for itself to the Company that:
4.1 ORGANIZATION AND POWER. Such Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of incorporation or a national bank duly licensed by the Office of
the Comptroller of the Currency and its charter has not been revoked, as the
case may be, with full corporate or other power, as the case may be, and
authority to enter into this Agreement and perform its obligations hereunder.
4.2 AUTHORIZATION. The execution, delivery and performance of this
Agreement by such Purchaser and the consummation of the transactions
contemplated hereby have been duly and validly authorized by all requisite
corporate or other action, as the case may be, on the part of such Purchaser,
and no other corporate or other proceedings, as the case may be, on its part are
necessary to authorize the execution, delivery or performance of this Agreement.
This Agreement constitutes a valid and binding obligation of such Purchaser,
enforceable against such Purchaser in accordance with its terms.
4.3 ABSENCE OF CONFLICTS. The execution, delivery and performance of
this Agreement and the consummation of the transactions contemplated hereby do
not and will not (a) conflict with or result in a breach of any of the
provisions of, (b) constitute a default under, (c) result in a violation of, or
(d) require any authorization, consent, approval, exemption or other action by
or notice to any court or other governmental body, under the provisions of the
certificate of incorporation, bylaws or articles of association, as the case may
be, of such Purchaser or any agreement or instrument to which such Purchaser is
bound or affected, or any applicable law, statute, rule or regulation or any
judgment, order or decree to which such Purchaser is subject.
4.4 REPRESENTATIONS AND WARRANTIES. The representations and warranties
contained in this Article IV and made by such Purchasers elsewhere in this
Agreement are true and correct in all respects on the date of this Agreement
unless waived by the Company.
ARTICLE V
ADDITIONAL AGREEMENTS
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5.1 SURVIVAL. Notwithstanding any examination made for or on behalf of
the Purchasers, the knowledge of any of their respective officers, directors,
stockholders, employees or agents, or the acceptance of any certificate or
opinion, all representations, warranties, covenants and agreements set forth in
this Agreement or in any writing delivered in connection with this Agreement
shall survive the Closing and, subject to the provisions of the following
sentence, shall be fully effective and enforceable and shall survive until the
later of (i) the full satisfaction of all obligations and liabilities of the
Company and the other Borrowers, and each of them, under the Credit Agreement
and the other Loan Documents and the termination in full of all obligations of
the Lenders to extend credit to the Borrowers, or any of them, and (ii) the
termination of their respective statute of limitations applicable thereto.
5.2 INDEMNIFICATION. (a) The Company agrees to indemnify and hold
harmless each of the Purchasers, including each of their respective Affiliates,
and the directors, officers, agents, employees, accountants and attorneys
thereof (each of the Purchasers and each such other Person, an "Indemnified
Party") from and against any losses, claims, damages, judgments, assessments,
costs and other liabilities (collectively "Liabilities"), and will reimburse
each Indemnified Party for all fees and expenses (including the reasonable fees
and expenses of outside counsel) (collectively, "Expenses") as they are incurred
in investigating, preparing or defending any claim, action, proceeding or
investigation, whether or not in connection with pending or threatened
litigation or arbitration and whether or not any Indemnified Party is a party
thereto (collectively, "Actions"), arising out of (i) any material breach of any
of the representations or warranties made by the Company in this Agreement or
any of the agreements or certificates, documents or other writings contemplated
hereby or delivered in connection herewith, (ii) any breach or violation of or
failure to fully perform any material covenant, agreement or obligation of the
Company in this Agreement or any of the agreements contemplated hereby, or (iii)
any Action by any third party arising out of or in connection with the
transactions contemplated by this Agreement or any Indemnified Party's actions
or inactions in connection with any such transactions, PROVIDED, HOWEVER, that
the Company shall not indemnify any Indemnified Party from Liabilities or
reimburse Expenses incurred by such party to the extent they arise out of the
willful misconduct, gross negligence or bad faith (as finally determined by a
court of competent jurisdiction) of such party. The Company shall not, in
connection with any one such Action or separate but substantially similar or
related Actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and expenses of
more than one separate firm of attorneys (and any appropriate local counsel) for
all of the Indemnified Parties, unless in the reasonable judgment of counsel for
an Indemnified Party a conflict of interest exists between an Indemnified Party
and another Indemnified Party such that it is inappropriate or unadvisable for
both such Indemnified Parties to be represented by one counsel in such matter.
If multiple claims are brought against an Indemnified Party (including in an
arbitration), with respect to at least one of which indemnification is permitted
under applicable law and provided for under this Agreement, the Company agrees
that any award shall be conclusively deemed to be based on claims as to which
indemnification is permitted and provided for, except to the extent the award
expressly states that the award, or any portion thereof, is based solely on a
claim as to which indemnification is not available.
(b) The indemnification provisions of this Section 5.2 are in addition
to, and not in derogation of, any statutory or common law remedy any party may
have for misrepresentation, breach of warranty or breach of covenant.
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5.3 BOARD OF DIRECTORS. The Company agrees that the Purchasers shall
have the right to designate a single representative to attend and observe all
meetings of the Board of Directors. The Purchasers hereby agree that the initial
representative shall be a representative appointed by GE Capital. The Purchasers
shall be entitled by the consent of the Purchaser holding a majority of
Underlying Common Stock to appoint a replacement representative by advising the
Company of such fact in a writing signed by each of the Purchasers. The Company
further agrees that all notices and other documents provided to the Board of
Directors shall be provided to such representative, except for any documents
that may be privileged or confidential.
5.4 PRESS RELEASES AND ANNOUNCEMENTS. Except to the extent otherwise
agreed by the Purchasers, the Company will not disclose the transactions
contemplated hereby, including by making any press release related to this
Agreement or the transactions contemplated herein, or other announcement to the
employees, customers or suppliers of the Company and the Subsidiaries, without
the prior written approval of the Purchasers (which shall not be unreasonably
withheld), and the Company will not disclose the name of any Purchaser
participating therein without the prior written consent of such Purchaser,
except where the Company has been advised by its counsel that such disclosure is
required by law. This Section 5.4 shall not be construed to prohibit the
disclosure of the transactions contemplated hereby in the Company's periodic
reports, proxy statements and registration statements required to be filed from
time to time with the U.S. Securities and Exchange Commission.
5.5 FURTHER TRANSFERS. The Company (at its own expense) will execute
and deliver such further instruments of conveyance and transfer and take such
additional action as the Purchasers may reasonably request to effect,
consummate, confirm or evidence the transfer to the Purchasers of the Securities
and any other transactions contemplated hereby. The Company will execute such
documents as may be necessary to assist the Purchasers in preserving or
perfecting their respective rights in the Securities and will also do such acts
as are necessary to perform its representations, warranties and agreements
herein, including by, after the Closing, making all registrations, filings and
applications, giving all notices and obtaining all governmental, third party or
other consents, transfers, approvals, orders, qualifications and waivers
desirable for the consummation of the transactions contemplated hereby which,
for any reason, had not been made, given or obtained prior to the Closing.
5.6 SPECIFIC PERFORMANCE. The Company acknowledges that the business of
the Company and the Subsidiaries and the Securities are unique and recognize and
affirm that in the event of a breach of this Agreement by the Company, money
damages may be inadequate and the Purchasers may have no adequate remedy at law.
Accordingly, the Company agrees that the Purchasers shall have the right, in
addition to any other rights and remedies existing in their favor at law or in
equity, to enforce their rights and the Company's obligations hereunder not only
by an action or actions for damages but also by an action or actions for
specific performance, injunctive and/or other equitable relief (without posting
of bond or other security).
5.7 TRANSFER OF SECURITIES.
(a) GENERAL PROVISIONS. The Securities are transferable only pursuant
to (i) public offerings registered under the Securities Act, (ii) Rule 144 or
Rule 144A of the Securities Act (or any similar rule or rules then in force) if
such rule is available or (iii) subject to the conditions specified in Section
5.8 below, any other legally available means of transfer.
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(b) OPINION DELIVERY. In connection with the transfer of any Securities
(other than a transfer described in subsection 5.7(a)(i) or (ii) above and other
than a transfer by a Purchaser to an Affiliate of such Purchaser), the holder
thereof shall deliver written notice to the Company describing in reasonable
detail the transfer or proposed transfer, together with an opinion, in form and
substance reasonably satisfactory to the Company and its counsel, to the effect
that such transfer of Securities may be effected without registration of such
Securities under the Securities Act. In addition, if the holder of the
Securities delivers to the Company an opinion, in form and substance reasonably
satisfactory to the Company and its counsel, no subsequent transfer of such
Securities shall require registration under the Securities Act, the Company
shall promptly upon such contemplated transfer deliver new certificates for such
Securities which do not bear the Securities Act legend set forth in Section 5.8.
If the Company is not required to deliver new certificates for such Securities
not bearing such legend, the holder thereof shall not transfer the same until
the prospective transferee has confirmed to the Company in writing its agreement
to be bound by the conditions contained in this Section and Section 5.8.
(c) RULE 144A. Upon the request of any Purchaser, the Company shall
promptly supply to such Purchaser or its prospective transferees all information
regarding the Company required to be delivered in connection with a transfer
pursuant to Rule 144A of the Securities Act.
(d) REMOVAL OF LEGEND. Notwithstanding the foregoing or any legend set
forth on the Warrants or certificates representing Underlying Common Stock, if
any Securities are eligible for sale pursuant to Rule 144(k), the Company shall,
upon the request of the holder of such Securities, remove the legend set forth
in Section 5.8 from the certificates for such Securities. In such event, the
holder of such Security shall furnish a representation letter to the Company
which shall (i) contain such information required pursuant to Rule 144(k) and
(ii) be in a form reasonably satisfactory to the Company's counsel.
5.8 PURCHASERS' REPRESENTATIONS. Each Purchaser represents that it is
an "Accredited Investor" within the meaning of the Securities Act. Each
Purchaser understands that the Securities constitute "restricted securities"
within the meaning of Rule 144 under the Securities Act. Each Purchaser hereby
represents that it is acquiring the restricted securities purchased hereunder or
acquired pursuant hereto for its own account with the present intention of
holding such securities for purposes of investment, and that it has no current
intention of selling such securities in a public distribution in violation of
the federal securities laws or any applicable state securities laws; PROVIDED,
that nothing contained herein shall prevent any of the Purchasers and subsequent
holders of restricted securities from transferring such securities in compliance
with the provisions of Section 5.7. Each Purchaser understands that the
restricted securities are being offered and sold in reliance on exemptions from
the registration requirements of federal and state securities laws and that the
Company is relying upon the truth and accuracy of the Purchasers'
representations, warranties, agreements, acknowledgments and understandings set
forth herein to determine its suitability to acquire the restricted securities.
Each instrument or certificate for the Warrants shall be imprinted with a legend
in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED
ON OCTOBER 28, 1998, AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED. THE TRANSFER OF THE SECURITIES REPRESENTED BY
THIS CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN THE
SECURITIES PURCHASE AGREEMENT, DATED AS OF OCTOBER 28, 1998, BETWEEN
THE ISSUER (THE "COMPANY")
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AND THE PURCHASERS NAMED THEREIN, AND THE COMPANY RESERVES THE RIGHT TO
REFUSE THE TRANSFER OF SUCH SECURITIES UNTIL SUCH CONDITIONS HAVE BEEN
FULFILLED WITH RESPECT TO SUCH TRANSFER. A COPY OF SUCH CONDITIONS
SHALL BE FURNISHED BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN
REQUEST AND WITHOUT CHARGE."
The Underlying Common Stock shall also be subject to certain transfer
restrictions and each certificate representing such shares purchased upon
exercise of this Warrant shall bear a legend substantially in the following
form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED
ON ___________ THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"). THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE
TRANSFERRED EXCEPT (I) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE ACT OR (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
THE ACT IN RESPECT OF WHICH THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY TO SUCH EFFECT OR OTHERWISE IN
ACCORDANCE WITH THE SECURITIES PURCHASE AGREEMENT, DATED AS OF OCTOBER
28, 1998, BETWEEN THE ISSUER (THE "COMPANY") AND THE PURCHASERS NAMED
THEREIN. A COPY OF SUCH CONDITIONS SHALL BE FURNISHED BY THE COMPANY TO
THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE."
ARTICLE VI
DEFINITIONS
"Affiliate"shall have the meaning ascribed to such term in the Credit
Agreement.
"Business Day" shall have the meaning ascribed to such term in the
Credit Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Financing" means the financing provided to the Borrowers pursuant to
the Credit Agreement.
"Loan Documents" shall have the meaning ascribed to such term in the
Credit Agreement.
"Material Adverse Effect"shall have the meaning ascribed to such term
in the Credit Agreement.
"Person" means any individual, sole proprietorship, partnership
(including a limited partnership), joint venture, trust, unincorporated
organization, association, corporation, institution, public benefit corporation,
limited liability company, joint stock company, entity or government (whether
federal, state, county, city, municipal or otherwise, including, without
limitation, any instrumentality, division, agency, body or department thereof)
or other business entity.
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"SEC" means the United States Securities and Exchange Commission and
any successor to the functions thereof.
"Securities Act" means the Securities Act of 1933, as amended.
"Subsidiary"shall have the meaning ascribed to such term in the Credit
Agreement.
"Underlying Common Stock" means (i) the Common Stock issued or issuable
upon exercise of the Warrants, and (ii) any Common Stock issued or issuable with
respect to the securities referred to above by way of stock dividend or stock
split or in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization.
ARTICLE VII
MISCELLANEOUS
7.1 AMENDMENT AND WAIVER. This Agreement may be amended and any
provision of this Agreement may be waived, provided that, subject to the last
sentence of Section 2.1 and the last sentence of Section 2.2, any such amendment
or waiver will be binding upon a party only if such amendment or waiver is set
forth in a writing executed by each of the Company and the Purchasers. No course
of dealing between or among any persons having any interest in this Agreement
will be deemed effective to modify, amend or discharge any part of this
Agreement or any rights or obligations of any party under or by reason of this
Agreement.
7.2 NOTICES. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other parties, or whenever any of the parties desires to give or
serve upon any other parties any communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and shall be deemed to have been validly
served, given or delivered (a) upon the earlier of actual receipt and three (3)
Business Days after deposit in the United States Mail, registered or certified
mail, return receipt requested, with proper postage prepaid, (b), one (1)
Business Day after deposit with a reputable overnight courier with all charges
prepaid or (c) when delivered, if hand-delivered by messenger, all of which
shall be addressed to the party to be notified and sent to the address indicated
on ANNEX III or to such other address (or facsimile number) as may be
substituted by notice given as herein provided. The giving of any notice
required hereunder may be waived in writing by the party entitled to receive
such notice. Failure or delay in delivering copies of any notice, demand,
request, consent, approval, declaration or other communication to any Person
designated on ANNEX III to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration or
other communication.
7.3 BINDING AGREEMENT; ASSIGNMENT.
(a) This Agreement and all of the provisions hereof will be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder may be assigned by the Company
without the prior written consent of the Purchasers.
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(b) The Purchasers may, upon prior written notice to the Company, at
their sole discretion, assign, in whole or in part, their respective rights and
obligations pursuant to this Agreement to one or more of their respective
Affiliates.
7.4 SEVERABILITY. Whenever possible, each provision of this Agreement
will be interpreted in such manner as to be effective and valid under applicable
law, but if any provision of this Agreement is held to be prohibited by or
invalid under applicable law, such provision will be ineffective only to the
extent of such prohibition or invalidity, without invalidating the remainder of
such provisions or the remaining provisions of this Agreement.
7.5 NO STRICT CONSTRUCTION. The language used in this Agreement will be
deemed to be the language chosen by the parties hereto to express their mutual
intent, and no rule of strict construction will be applied against any person.
7.6 HEADINGS; INTERPRETATION. The headings used in this Agreement are
for convenience of reference only and do not constitute a part of this Agreement
and will not be deemed to limit, characterize or in any way affect any provision
of this Agreement, and all provisions of this Agreement will be enforced and
construed as if no caption had been used in this Agreement. Whenever the term
"including" is used in this Agreement (whether or not that term is followed by
the phrase "but not limited to" or "without limitation" or words of similar
effect) in connection with a listing of one or more items or matters, that
listing will be interpreted to be illustrative only and will not be interpreted
as a limitation on, or an exclusive listing of, such items or matters.
7.7 ENTIRE AGREEMENT. This Agreement and the documents referred to
herein contain the entire agreement between the parties and supersede any prior
understandings, agreements or representations by or between the parties, written
or oral, which may have related to the subject matter hereof in any way.
7.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which taken
together will constitute one and the same instrument.
7.9 GOVERNING LAW. THIS AGREEMENT AND THE EXHIBITS AND SCHEDULES HERETO
SHALL BE GOVERNED BY THE INTERNAL LAW OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE
STATE OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF
THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
7.10 PARTIES IN INTEREST. Nothing in this Agreement, express or
implied, is intended to confer on any person other than the parties and their
respective successors and assigns any rights or remedies under or by virtue of
this Agreement.
[Remainder of Page Intentionally Left Blank.
Signatures Follow on Next Page.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
HI-RISE RECYCLING SYSTEMS, INC.
By: /s/ J. Xxxx XxXxxxx
Name: J. Xxxx XxXxxxx
Title: Chief Operating Officer
General Electric Capital Corporation
By: /s/Xxxxxxx X. Xxxxxxx
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
NationsBank, National Association
By: /s/Xxxx Xxxxxxx
Name: Xxxx Xxxxxxx
Title: Vice President
Key Corporate Capital Inc.
By: /s/Xxxxx X. Xxxxxxxx
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
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