EXHIBIT B
SECURITIES PURCHASE AGREEMENT (GECC)
SECURITIES PURCHASE AGREEMENT (GECC) (this "Agreement") is made as of
December 4, 2000 by and among Hi-Rise Recycling Systems, Inc., a Florida
corporation (the "Company"), and General Electric Capital Corporation ("the
Purchaser"). Except as otherwise indicated herein, capitalized terms used herein
are defined in Article 6 hereof.
Subject to the terms and conditions set forth herein, the Purchaser
desires to purchase from the Company, and the Company desires to issue to the
Purchaser, a warrant (the "Warrant") to purchase up to 17,745,689 shares of the
Company's common stock, par value $0.01 per share (the "Common Stock"), under
the circumstances as described herein. The Underlying Common Stock and the
Warrant 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 1
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 the Purchaser
the Warrant, which shall be substantially in the form of Exhibit A attached
hereto. The purchase price of the Warrant shall be $10.00 and the Purchaser
shall surrender its existing warrants issued by the Company.
(b) In the event that during the period commencing on the date hereof
through and including the tenth (10th) anniversary hereof, 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 the
Purchaser a warrant (the "Additional Warrants") to purchase a number of shares
of Common Stock which equals 45% of any Common Stock issued or issuable pursuant
to any rights, warrants or options to subscribe for 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 tenth (10th) anniversary of the Closing Date. 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 Weil, Gotshal &
Xxxxxx LLP, 000 Xxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxx, Xxxxxxx 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
which is ten days following the date of closing of the Fourth Amendment (as
defined below), or at such other time and location as is mutually agreed upon by
the Company and the Purchaser. The date and time of the Closing are herein
referred to as the "Closing Date."
(b) Transfer. Subject to the conditions set forth in this Agreement,
at the Closing, the Company shall issue and deliver to the Purchaser, the
Warrant duly registered in the name of the Purchaser or its nominee against
payment by the Purchaser of $10.00 (the foregoing is collectively referred to
hereinafter as the "Closing Transaction"). Payment of the purchase price for the
Warrant shall be made by check.
ARTICLE 2
CONDITIONS TO CLOSING
2.1 Conditions to the Purchaser's Obligations. The obligation of the
Purchaser 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 of the Company set forth
herein or incorporated by reference in Article 3 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 Purchaser will 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 2.6 of that certain Credit Agreement, dated as of October
28, 1998 (as amended to date, the "Credit Agreement"), among the Company, the
other parties named as Borrowers thereto, General Electric Capital Corporation
("GE Capital"), Bank of America, N.A., successor in interest to NationsBank,
National Association ("BOA"), and Key Corporate Capital Inc. ("Key") (GE
Capital, BOA and Key, collectively referred to as the "Lenders") and the other
2
parties which may from time to time be Lenders thereunder, and GE Capital, as
Administrative Agent, and BOA, as Revolver Agent);
(e) the Purchaser 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 Purchaser;
(f) all proceedings to be taken by the Company in connection with the
consummation of the Fourth Amendment 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 Purchaser 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, but in all cases, the approvals listed on Schedule 3.3 shall be
obtained.
Any condition to the obligations of the Purchaser specified in this
Section 2.1 may be waived in writing by the Purchaser.
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 of the Purchaser set forth in
Article 4 hereof and in any writing delivered by the Purchaser pursuant hereto
will be true and correct in all material respects at and as of the Closing Date;
(b) the Purchaser 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 will have been obtained other than those the failure of which to be
3
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.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As a material inducement to the Purchaser 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 Purchaser 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 of the Company 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. Except as set forth on Schedule
3.1 hereto, no other corporate proceedings on the part of the Company are
necessary 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,
4
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. The Company has sufficient shares of capital stock authorized and
reserved for issuance upon exercise of the Warrant.
(b) Since November 30, 2000, except as set forth on Schedule 3.2, 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 Fourth Amendment) or any
equity securities, securities convertible, 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 Warrant in accordance with
this Agreement, (i) the Warrant will be a valid and binding agreement of the
Company, and enforceable against the Company in accordance with its terms; and
(ii) the Purchaser will acquire, subject to the restrictions of this Agreement
and the federal and state securities laws, good, valid and marketable title to
the Warrant, 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 Warrant, (i) the Underlying Common Stock will be duly
authorized, validly issued, fully paid and nonassessable; and (ii) the Purchaser
will acquire, subject to the restrictions of the Warrant 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 the Purchaser 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
5
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, employment agreement or
other agreement or instrument to which the Company or any of the Subsidiaries is
bound or affected, or any law, statute, rule, 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. Assuming the accuracy of the Purchaser's
representations contained herein, 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.
3.5 Warrant. The Warrant purchased pursuant to this Agreement
represents the right to purchase up to forty five percent (45%) 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 3 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 Purchaser.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
As a material inducement to the Company to enter into this Agreement,
the Purchaser hereby represents and warrants to the Company that:
4.1 Organization and Power. The Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of its
6
jurisdiction of incorporation with full corporate power and authority to enter
into this Agreement and perform its obligations hereunder.
4.2 Authorization. The execution, delivery and performance of this
Agreement by the 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 the 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 the Purchaser, enforceable against
the 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 or bylaws of the Purchaser or any agreement or
instrument to which the Purchaser is bound or affected, or any applicable law,
statute, rule or regulation or any judgment, order or decree to which the
Purchaser is subject.
4.4 Representations and Warranties. The representations and
warranties contained in this Article 4 and made by the Purchaser elsewhere in
this Agreement are true and correct in all respects on the date of this
Agreement unless waived by the Company.
ARTICLE 5
ADDITIONAL AGREEMENTS
5.1 Survival. Notwithstanding any examination made for or on behalf
of the Purchaser, the knowledge of any of its 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
(a) 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 (b) the termination of their
respective statute of limitations applicable thereto, and (c) the exercise or
expiration of the Warrants outstanding pursuant to the Securities Purchase
Agreement dated October 28, 1998 among the Company, Purchaser, BOA and KCCI.
5.2 Indemnification.
(a) The Company agrees to indemnify and hold harmless the Purchaser,
including its Affiliates, and the directors, officers, agents, employees,
accountants and attorneys thereof (the Purchaser 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
7
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 in actions 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
Indemnified 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.
5.3 Board of Directors. The Company agrees that the Purchaser shall
have the right to designate a single representative to attend and observe all
meetings of the Board of Directors. 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 Purchaser, 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 Purchaser (which shall not be unreasonably
8
withheld), and the Company will not disclose the name of the Purchaser
participating therein without the prior written consent of the 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 Purchaser may reasonably request to effect, consummate,
confirm or evidence the transfer to the Purchaser of the Securities and any
other transactions contemplated hereby. The Company will execute such documents
as may be necessary to assist the Purchaser in preserving or perfecting its
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 Purchaser may have no adequate remedy at law.
Accordingly, the Company agrees that the Purchaser shall have the right, in
addition to any other rights and remedies existing in its favor at law or in
equity, to enforce its 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.
(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 the Purchaser to an Affiliate of the
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
9
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 the Purchaser, the Company shall
promptly supply to the 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 Warrant 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.
(e) Purchaser's Representations. The Purchaser represents that it is
an "Accredited Investor" within the meaning of the Securities Act. The Purchaser
understands that the Securities constitute "restricted securities" within the
meaning of Rule 144 under the Securities Act. The Purchaser hereby represents
that it is acquiring or will acquire 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 the Purchaser and
subsequent holders of restricted securities from transferring such securities in
compliance with the provisions of Section 5.7. The 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 Purchaser's
representations, warranties, agreements, acknowledgments and understandings set
forth herein to determine its suitability to acquire the restricted securities.
Each instrument or certificate for the Warrant shall be imprinted with a legend
in substantially the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY
ISSUED ON _________________, 2000, 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 DECEMBER 4, 2000, BETWEEN THE ISSUER (THE "COMPANY") AND GENERAL
ELECTRIC CAPITAL CORPORATION, AND THE COMPANY RESERVES THE RIGHT TO
REFUSE THE TRANSFER OF SUCH SECURITIES UNTIL SUCH CONDITIONS HAVE
10
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."
5.8 CONDITIONS. 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 _______________, 2000. 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 ___________________, 2000,
BETWEEN THE ISSUER (THE "COMPANY") AND GENERAL ELECTRIC
CAPITAL CORPORATION. A COPY OF SUCH CONDITIONS SHALL BE
FURNISHED BY THE COMPANY TO THE HOLDER HEREOF UPON WRITTEN
REQUEST AND WITHOUT CHARGE."
5.9 ALLOCATION. The parties agree that the Term C Note and the
Warrant constitute an investment unit for federal income tax purposes.
Accordingly, the price of the investment unit must be allocated between the Term
C Note and the Warrant based on their relative fair market values. The parties
agree that $5,325,000 shall be allocated to the Note and $175,000 shall be
allocated to the Warrant. The parties shall use such allocation for all purposes
(including tax and accounting purposes) and shall take no position contrary to
such allocation.
ARTICLE 6
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.
"Fourth Amendment" means the Fourth Amendment to Credit Agreement and
Composite Amendment Agreement dated the date hereof which amends the Credit
Agreement.
11
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"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.
"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 Warrant, 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 7
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 Purchaser. 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)
12
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 I 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 to receive copies
shall in no way adversely affect the effectiveness of such notice, 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 Purchaser.
(b) The Purchaser may, upon prior written notice to the Company, at
its sole discretion, assign, in whole or in part, its rights and obligations
pursuant to this Agreement to one or more of its 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.
13
7.8 Counterpart. 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 LEFT BLANK INTENTIONALLY]
[SIGNATURES ON FOLLOWING PAGE]
14
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first written above.
HI-RISE RECYCLING SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: VP, CFO, Treasurer & Secretary
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Xxxxxxx Xxxxx
-------------------------------------
Name: Xxxxxxx Xxxxx
Title: Risk Manager
15
