ADDENDUM B
SIMON TRANSPORTATION SERVICES INC.
(a Nevada corporation)
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this "Agreement") is made as of
September 30, 2001, by and between Interstate Equipment Leasing, Inc.
(the "Subscriber"), and Simon Transportation Services Inc., a Nevada
corporation (the "Company" and together with the Subscriber the "Parties").
RECITALS
WHEREAS, the Company has received certain working capital advances from
the Subscriber and the Parties desire to convert the outstanding amount of such
advances to equity;
WHEREAS, the Company has duly authorized the issuance and sale of an
aggregate of 300,000 shares of the Company's Series II Preferred Shares, $.01
par value (the "Preferred Shares"), with such rights, preferences, and
limitations as are set forth in the Company's Certificate of Designation,
attached hereto as Exhibit A (the "Certificate"), and as otherwise afforded
holders of preferred shares under the Nevada General Corporation Law; and
WHEREAS, the Parties wish to reduce to written form the commitments and
undertakings contained herein.
NOW, THEREFORE, in consideration of the foregoing and the mutual
representations, warranties, covenants, and undertakings set forth in this
Agreement, and subject to the terms and conditions set forth in this Agreement,
the Parties hereby agree as follows:
TERMS
1. Subscriptions.
1.1 Subscriber hereby subscribes for 130,042 Preferred Shares,
representing advances by the Subscriber plus accrued interest thereon
of $2,080,670 divided by a price of $16.00 per share (the
"Subscription").
1.2 Subscriber has tendered to the Company the entire purchase
price of the shares subscribed for herein through prior advances. The
subscription documents shall consist of an executed counterpart of the
signature page of this Agreement.
1.3 The Parties agree that the Subscription shall be effective
as of September 30, 2001, irrespective of the filing date of the
Certificate.
2. Subscriber's Representations and Warranties. Subscriber
represents, warrants, acknowledges, and agrees that:
2.1 Subscriber is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of
its incorporation.
2.2 Subscriber is authorized and qualified to become a
stockholder of the Company and the person signing this Agreement on
behalf of such entity has been duly authorized by such entity to do so.
2.3 Subscriber qualifies as an "accredited investor" (as
defined under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the "Act")).
2.4 Subscriber has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and
risks of an investment in the Company and has obtained sufficient
information from the Company to evaluate the merits and risks of an
investment in the Company.
2.5 Subscriber: (i) is acquiring the shares of the Preferred
Shares subscribed for herein for Subscriber's own account for
investment only and not with a view to the distribution, resale, or
transfer thereof, and as the sole record and beneficial holder thereof;
(ii) is acquiring such Preferred Shares without any intention of
reselling or distributing such Preferred Shares except in accordance
with the provisions of the Act and applicable state securities laws and
regulations; and (iii) agrees that such Preferred Shares shall not be
sold, pledged, hypothecated, donated, or otherwise transferred, whether
or not for consideration, by Subscriber except subject to the terms of
this Agreement and upon the issuance to the Company of a favorable
opinion of its counsel acceptable to the Company and the submission to
the Company of such other evidence as may be satisfactory to the
Company and its counsel, to the effect that any such transfer shall not
be in violation of the Act, applicable state securities laws, or any
rules or regulations promulgated thereunder.
3. Company's Representations and Warranties. The Company represents,
warrants, acknowledges, and agrees that:
3.1 The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the jurisdiction of
its incorporation.
3.2 The Company has full power and authority (including full
corporate power and authority) to execute and deliver this Agreement
and to perform its obligations hereunder. This Agreement constitutes
the valid and legally binding obligation of the Company, enforceable in
accordance with its terms and conditions.
3.3 The Company has filed all forms, reports, schedules,
statements, and documents required to be filed by it with the
Securities and Exchange Commission (collectively, the "Company Public
Reports"). Each of the Company Public Reports was filed on a timely
basis (considering filed extensions) and complied with the Act and the
Securities Exchange Act of 1934, as amended, in all material respects.
None of the Company Public Reports, as of their respective dates, (or
if amended or superseded, at the time of such subsequent filing),
contained any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not
misleading.
3.4 All of the outstanding shares of the Preferred Shares have
been duly authorized, validly issued, fully paid and nonassessable, are
not subject to, and were not issued in violation of, any preemptive (or
similar) rights, and are owned, of record and beneficially, by the
Company, free and clear of all Liens whatsoever.
3.5 The Company will promptly seek any consent, approval,
qualification, or authorization necessary in connection with the
Company's valid performance of this Agreement.
4. Miscellaneous.
4.1 Successors and Assigns. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the
benefit of and be binding upon the respective successors and assigns of
the Parties (including transferees). Nothing in this Agreement, express
or implied, is intended to confer upon any party other than the Parties
hereto, or their respective successors and assigns, any rights,
remedies, obligations, or liabilities under or by reason of this
Agreement, except as expressly provided in this Agreement.
4.2 Counterparts. This Agreement may be executed in two (2) or
more counterparts, each of which when executed and delivered shall be
deemed to be an original, and all of which counterparts taken together
shall constitute but one and the same instrument. This Agreement shall
become binding when one or more counterparts taken together shall have
been executed and delivered by the Parties. It shall not be necessary
in making proof of this Agreement or any counterpart hereof to produce
or account for any other counterparts.
4.3 Severability. In case any one or more of the provisions or
parts of a provision contained in this Agreement shall for any reason
be held to be invalid, illegal, or unenforceable in any respect in any
jurisdiction, such invalidity, illegality, or unenforceability shall
not affect any other provision or part of a provision of this Agreement
or any other jurisdiction, but this Agreement shall be reformed and
construed in any such jurisdiction as if such invalid, illegal, or
unenforceable provision or part of a provision had never been contained
herein and such provision or part shall be reformed so that it would be
valid, legal, and enforceable to the maximum extent permitted in such
jurisdiction.
4.4 Entire Agreement and Amendment. This Agreement and the
Warrant to Purchase Series II Preferred Shares, both effective
September 30, 2001, by and between the Parties, constitute the entire
agreement by and between the Parties with respect to the subject matter
hereof. Any provision of this Agreement may be amended and the
observance thereof may be modified, waived, or terminated in whole or
in part (either generally or in a particular instance and either
retroactively or prospectively), only by the written consent of (i) as
against the Company, only by the Company, and (ii) as against the
Subscriber, only by the Subscriber. Any amendment or waiver effected in
accordance with clauses (i) and (ii) of this paragraph shall be binding
upon the Company and the Subscriber and its or his successors and
assigns.
4.5 Further Action. Each of the Parties hereto agrees
to execute all such further instruments and documents and to take
all such further action necessary to effectuate the terms and
purposes of this Agreement.
4.6 Governing Law. This Agreement and all documents
contemplated hereby, and all remedies in connection therewith, and
all questions or transactions relating thereto, shall be construed
in accordance with and governed by the laws of the State of Nevada.
4.7 Notice. Whenever notice is required to be given by any
party hereunder, such notice shall be deemed sufficient when delivered
personally against receipt or by prepaid, first-class certified mail to
the Company or the Subscriber at their addresses set forth on the
signature page hereto or to such other address as the Company or the
Subscriber shall have furnished to the party sending notice.
4.8 Survival. All representations, warranties, and
covenants herein shall survive the consummation of the transaction
contemplated hereby and the delivery of the shares hereunder.
4.9 Legend. Certificates representing the shares subscribed
for hereunder are subject to stop transfer instructions issued by the
Company to the transfer agent prohibiting transfers thereof without
registration under the Act or unless an exemption from the registration
requirements of the Act is available in the opinion, addressed to the
Company, of counsel acceptable to the Company. Certificates evidencing
ownership of shares subscribed for hereunder shall bear the following
legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED PURSUANT TO THE SECURITIES ACT OF 1933, AS AMENDED,
OR PURSUANT TO ANY STATE SECURITIES LAWS. THESE SHARES MAY NOT
BE SOLD OR OTHERWISE TRANSFERRED UNLESS SUCH ARE FIRST
REGISTERED PURSUANT TO THE APPLICABLE FEDERAL AND STATE
SECURITIES LAWS OR UNLESS THE COPORATION RECEIVES A WRITTEN
OPINION OF COUNSEL WHICH OPINION AND COUNSEL ARE SATISFACTORY
TO THE CORPORATION, THAT SUCH REGISTRATION IS NOT REQUIRED.
4.10 Contingency. The Subscription shall be effective
September 30, 2001, but shall be subject to the approval of the Company's
stockholders at a meeting properly noticed and held.
** REMAINDER OF PAGE INTENTIONALLY LEFT BLANK **
IN WITNESS WHEREOF, each of the undersigned has signed this Agreement
on the date first above written.
THE SUBSCRIBER
INTERSTATE EQUIPMENT LEASING, INC.
By: /s/ Xxxxx Xxxxx
----------------------------------------
Xxxxx Xxxxx, President
Address: 000 X. 00xx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
THE COMPANY
SIMON TRANSPORTATION SERVICES INC.
By: /s/ Xxx Xxxxxxxx
----------------------------------------
Xxx Xxxxxxxx, Chief Executive Officer
Address: 0000 Xxxx 0000 Xxxxx
Xxxx Xxxxxx Xxxx, Xxxx 00000
EXHIBIT A
COMPANY'S CERTIFICATE OF DESIGNATION
