RECAPITALIZATION AGREEMENT
This RECAPITALIZATION AGREEMENT (the "AGREEMENT"), entered into as
of September 27, 1996, by and between HIGHWAYMASTER COMMUNICATIONS, INC., a
Delaware corporation (the "COMPANY"), and each of the entities and persons
listed on EXHIBIT A attached to this Agreement as Carlyle stockholders (the
"CARLYLE STOCKHOLDERS") and each of the entities and persons listed on
Exhibit A attached to this Agreement as Erin Mills Stockholders (the "ERIN
MILLS STOCKHOLDERS").
BACKGROUND
Certain of the Carlyle Stockholders beneficially own approximately
10.3% of the issued and outstanding shares of common stock, par value $.01
per share (the "COMMON STOCK"), of the Company.
Certain of the Erin Mills Stockholders beneficially own
approximately 37.6% of the issued and outstanding shares of Common Stock.
The Erin Mills Investment Corporation ("EMIC") is the holder of
promissory notes dated August 23, 1996 and September 16, 1996 in the
aggregate original principal amount of $5,000,000 (the "BRIDGE NOTES") issued
pursuant to a Note Purchase Agreement dated August 23, 1996 between the
Company and EMIC (the "BRIDGE NOTE AGREEMENT").
The Erin Mills Development Corporation is the holder of 459.6
shares of Series B Preferred Stock, par value $.01 per share (the "SERIES B
PREFERRED STOCK"), of the Company. The Erin Mills Investment Corporation
("EMIC") is the holder of 120.0 shares of Series B Preferred Stock. Erin
Mills International Investment Corporation ("EMIIC") is the holder of 349.505
shares of Series B Preferred Stock. Robert S. Folsom is the holder of 42.85
shares of Series B Preferred Stock. Robert T. Hayes is the holder of
108.0450 shares of Series B Preferred Stock. The holders of shares of
Series B Preferred Stock are collectively referred to as the "SERIES B
PREFERRED STOCKHOLDERS."
Clipper Capital Associates, L.P. is the holder of promissory notes
dated June 28, 1995 in the original aggregate principal amount of $29,871.76
(together, "CARLYLE NOTE NO. 1") issued by the Company pursuant to the Note
Exchange and Amendments Agreement dated May 26, 1995 (the "NOTE EXCHANGE
AGREEMENT"). Clipper/Merban, L.P.
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is the holder of promissory notes dated June 28, 1995 in the original
aggregate principal amount of $1,684,009.32 (together, "CARLYLE NOTE NO. 2")
issued by the Company pursuant to the Note Exchange Agreement.
Clipper/Merchant Partners, L.P. is the holder of promissory notes dated June
28, 1995 in the original aggregate principal amount of $1,662,712.05
(together, "CARLYLE NOTE NO. 3") issued by the Company pursuant to the Note
Exchange Agreement. Carlyle-HighwayMaster Investors, L.P. is the holder of
promissory notes dated June 28, 1995 in the original aggregate principal
amount of $5,187,536.53 (together, "CARLYLE NOTE NO. 4") issued by the
Company pursuant to the Note Exchange Agreement. Carlyle-HighwayMaster
Investors II, L.P. is the holder of promissory notes dated June 28, 1995 in
the original aggregate principal amount of $488,604.30 (together, "CARLYLE
NOTE NO. 5") issued by the Company pursuant to the Note Exchange Agreement.
Chase Manhattan Investment Holdings, Inc. is the holder of promissory notes
dated June 28, 1995 in the original aggregate principal amount of
$1,241,756.43 (together, "CARLYLE NOTE NO. 6") issued by the Company pursuant
to the Note Exchange Agreement. H.M. Rana Investments Limited is the holder
of promissory notes dated June 28, 1995 in the original aggregate principal
amount of $2,110,316 (together, "CARLYLE NOTE NO. 7") issued by the Company
pursuant to the Note Exchange Agreement. Archery Partners is the holder of
promissory notes dated June 28, 1995 in the original aggregate principal
amount of $215,218.08 (together, "CARLYLE NOTE NO. 8") issued by the Company
pursuant to the Note Exchange Agreement. The Carlyle Note No. 1, Carlyle
Note No. 2, Carlyle Note No. 3, Carlyle Note No. 4, Carlyle Note No. 5,
Carlyle Note No. 6, Carlyle Note No. 7 and Carlyle Note No. 8 are
collectively referred to as the "CARLYLE NOTES." The holders of the Carlyle
Notes are hereinafter collectively referred to as the "CARLYLE NOTEHOLDERS."
Concurrently with the execution and delivery of this Agreement, the
Company is entering into certain transactions (the "INVESTMENT TRANSACTIONS")
with Southwestern Bell Wireless Holdings, Inc. (the "INVESTOR"). The
Investment Transactions include, but are not limited to, (i) the issuance and
sale by the Company of 1,000 shares of its Series D Participating Convertible
Preferred Stock, par value $.01 per share, to the Investor pursuant to a
Purchase Agreement (the "PURCHASE AGREEMENT") in exchange for a payment in
the amount of $20,000,000, (ii) the execution and delivery of an Amended and
Restated Stockholders' Agreement (the "STOCKHOLDERS' AGREEMENT") among the
Company, the Carlyle Stockholders, the Erin Mills Stockholders, the Investor
and certain other stockholders of the Company, (iii) the agreement on the
part of the Investor to provide certain services to the Company pursuant to a
Technical Services Agreement (the "TECHNICAL SERVICES AGREEMENT") and (iv)
the issuance by the Company to the Investor of 5,000,000 warrants to purchase
shares of Common Stock evidenced by a Warrant Certificate (the "WARRANT
CERTIFICATE"). The Purchase Agreement, the Stockholders'
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Agreement, the Technical Services Agreement, and the Warrant Certificate are
collectively referred to as the "INVESTMENT DOCUMENTS." Copies of the
Investment Documents have been provided by the Company to each of the other
parties to this Agreement.
In order, among other things, to induce the Investor to enter into
the Investment Transactions, (i) Erin Mills International Investment
Corporation ("EMIIC") and The Erin Mills Development Corporation ("EMD") are
willing to invest $8,000,000 and $2,000,000, respectively, in cash in Common
Stock; (ii) the Series B Preferred Stockholders are willing to exchange the
shares of Series B Preferred Stock owned by them for shares of Common Stock
on the basis described in this Agreement; and (iii) the Carlyle Noteholders
are willing to exchange the Carlyle Notes for shares of Common Stock on the
basis described in this Agreement, in each case upon the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
respective representations, warranties, covenants, and agreements set forth
in this Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement
agree as follows:
SECTION 1. RECAPITALIZATION.
(a) Concurrently with the execution and delivery of this
Agreement, the Company will repay in full the principal amount of, and all
interest accrued on, the Bridge Notes and EMIC will surrender the Bridge
Notes to the Company for cancellation.
(b) Concurrently with the execution and delivery of this
Agreement, the Company will issue, sell, and deliver (against payment of the
A Purchase Price (as defined below)) to EMIIC and EMD, and EMIIC and EMD will
purchase, accept, and receive from the Company, 640,000 and 160,000 shares,
respectively, of Common Stock, free and clear of all liens, claims and
encumbrances. The purchase price (the "A PURCHASE PRICE") for such shares of
Common Stock to be paid by EMIIC and EMD will be $8,000,000 and $2,000,000,
respectively, which will be paid to the Company in immediately available
funds on the date of this Agreement.
(c) Concurrently with the execution and delivery of this
Agreement, the Company will issue, sell and deliver (against payment of the B
Purchase Price (as defined below)) to the several Erin Mills Stockholders set
forth on EXHIBIT B attached to this Agreement, and such Erin Mills
Stockholders severally will purchase, accept and receive from the Company,
the number of shares of Common Stock set forth opposite their names
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on such exhibit (the "B STOCK"), free and clear of all liens, claims and
encumbrances. The purchase price (the "B PURCHASE PRICE") for the B Stock
will be paid by the several Erin Mills Stockholders on the date of this
Agreement by surrender to the Company of the number of shares of Series B
Preferred Stock set forth on EXHIBIT B attached to this Agreement, duly
endorsed in blank or accompanied by duly executed blank stock powers, which
shares will be free and clear of all liens, claims, and encumbrances.
(d) Concurrently with the execution and delivery of this
Agreement, the Company will issue, sell, and deliver (against payment of the
C Purchase Price (as defined below)) to the Carlyle Noteholders, and the
Carlyle Noteholders severally will purchase, accept and receive from the
Company, the number of shares of Common Stock determined by dividing (i) the
sum of the principal amount of the Carlyle Notes held by each Carlyle
Noteholder as set forth in the recitals to this Agreement and the amount of
interest accrued and unpaid on each Carlyle Note set forth on EXHIBIT C
hereto (the "EXCLUDED INTEREST") by (ii) $12.50 (the "C SHARES"), free and
clear of all liens, claims, and encumbrances. The purchase price (the "C
PURCHASE PRICE") for the C Shares will be paid by the several Carlyle
Stockholders on the date of this Agreement by surrender to the Company of
each of the Carlyle Notes for cancellation, which notes will be free and
clear of all liens, claims, and encumbrances. No fractional shares or scrip
representing fractional shares will be issued upon the exchange of the
Carlyle Notes for the C Shares in accordance with this SECTION 1(d). If any
such exchange would require the issuance of a fractional share, an amount
equal to such fraction multiplied by the Closing Price (as defined below) of
the Common Stock on the trading day immediately preceding the date of this
Agreement will be paid to the holder in cash by the Company. In addition,
concurrently with the execution and delivery of this Agreement, the Company
will pay to the Carlyle Noteholders in cash on the date hereof all accrued
and unpaid interest on the Carlyle Notes, other than the Excluded Interest.
As used herein, the term "Closing Price" shall mean on any day the reported
last sale price per share of Common Stock regular way on such day or, in case
no such sale takes place on such day, the average of the reported closing bid
and asked prices regular way, in each case on the New York Stock Exchange,
or, if the shares of Common Stock are not listed or admitted to trading on
such Exchange, the principal national securities exchange on which the shares
of Common Stock are listed or admitted to trading, or, if the Common Stock is
not listed or admitted to trading on any national securities exchange, the
last quoted sale price or, if not so quoted, the average of the closing bid
and asked prices quoted on the Nasdaq National Market, or, if not so quoted,
the average of the closing bid and asked prices as furnished by any member of
the National Association of Securities Dealers, Inc. selected from time to
time by the corporation for that purpose.
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(e) The closing of the transactions provided for in this SECTION 1
(the "CLOSING") will take place at the offices of the Company (or at such
other place as is specified by the Company) on the date of this Agreement.
SECTION 2. TERMINATED DOCUMENTS. Effective upon the execution
and delivery of this Agreement and without any other action, each of the
Carlyle Stockholders and the Erin Mills Stockholders, severally and not
jointly, hereby (a) agrees that the Terminated Documents (as defined below)
will terminate and be of no further force and effect and that it will have no
further rights thereunder; and (b) represents and warrants with respect to
itself that it has not transferred any of its rights or interests under or in
respect of the Terminated Documents and that such party has the sole right,
capacity, and exclusive authority to terminate its rights under the
Terminated Documents. As used in this Agreement, the term "TERMINATED
DOCUMENTS" means (i) the Subscription Agreement dated as of February 4, 1994
by and among the Company (formerly known as HM Holding Corporation) and the
other parties named in such agreement, as amended to the date of this
Agreement; (ii) the Bridge Note and the Bridge Note Agreement; and (iii) the
Carlyle Notes.
SECTION 3. INVESTMENT INTENT. Each of the Carlyle Stockholders
and the Erin Mills Stockholders hereby severally and not jointly represents
and warrants to the Company that the shares of Common Stock to be acquired by
such party pursuant to this Agreement are to be acquired for the such party's
own account for investment and not with a view to, or for resale in
connection with, any distribution of such shares within the meaning of the
Securities Act of 1933, as amended (the "SECURITIES ACT").
SECTION 4. INVESTOR STATUS. In connection with the purchase of
the shares of Common Stock, each of the Erin Mills Stockholders and the
Carlyle Stockholders hereby severally and not jointly represents and warrants
to the Company with respect to itself as follows:
(a) Such party acknowledges that the shares of Common Stock are
not registered under the Securities Act or any applicable state securities
law, and that such shares may not be transferred or sold except pursuant to
the registration provisions of the Securities Act or pursuant to an
applicable exemption therefrom and pursuant to such state securities laws and
regulations as may be applicable.
(b) Such party is knowledgeable, sophisticated, and experienced in
business and financial matters of the type contemplated by this Agreement and
is able to bear the economic risks associated with its investment in the
Company. Such party has
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been afforded access to information regarding the Company and its
subsidiaries and their respective financial condition, operating results,
properties, liabilities, operations, and management sufficient to enable it
to evaluate the risks and merits of its investment in the Company.
SECTION 5. OTHER REPRESENTATIONS OF THE ERIN MILLS
STOCKHOLDERS. Each of the Erin Mills Stockholders hereby further severally
and not jointly represents and warrants to the Company with respect to itself
as follows:
(a) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated by this Agreement have been
duly authorized by such Erin Mills Stockholder. This Agreement has been duly
executed by such Erin Mills Stockholder and constitutes a valid and binding
obligation of such Erin Mills Stockholder, enforceable in accordance with its
terms.
(b) The execution, delivery, and performance by such Erin Mills
Stockholder of this Agreement and the consummation of the transactions
contemplated by this Agreement: (i) is within such Erin Mills Stockholder's
corporate or partnership power and authority and has been duly authorized by
all necessary corporate or partnership action on the part of such Erin Mill
Stockholder, as appropriate; (ii) does not and will not conflict with or
contravene the terms of or require any consent, authorization, or approval
pursuant to such Erin Mills Stockholder's certificate of incorporation or
bylaws, partnership agreement or similar organizational document; (iii) does
not and will not violate, conflict with, or result in any breach or
contravention of or require any consent, authorization, approval, exemption,
or other action by or notice or declaration to, or filing with, any court or
administrative or governmental body or agency or other person pursuant to (A)
any material agreement, lease, or contract of such Erin Mills Stockholder, or
(B) any applicable statute or any rule or regulation of any governmental
authority or any order or decree applicable to such Erin Mills Stockholder.
SECTION 6. OTHER REPRESENTATIONS OF THE CARLYLE STOCKHOLDERS.
Each of the Carlyle Stockholders hereby further severally and not jointly
represents and warrants to the Company with respect to itself as follows:
(a) The execution, delivery and performance of this Agreement and
the consummation of the transactions contemplated by this Agreement have been
duly authorized by such Carlyle Stockholder. This Agreement has been duly
executed by such Carlyle Stockholder and constitutes a valid and binding
obligation of such Carlyle Stockholder, enforceable in accordance with its
terms.
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(b) The execution, delivery, and performance by such Carlyle
Stockholder of this Agreement and the consummation of the transactions
contemplated by this Agreement: (i) is within such Carlyle Stockholder's
corporate or partnership power and authority and has been duly authorized by
all necessary corporate or partnership action on the part of such Carlyle
Stockholder, as appropriate; (ii) does not and will not conflict with or
contravene the terms of or require any consent, authorization, or approval
pursuant to such Carlyle Stockholder's certificate of incorporation or
bylaws, partnership agreement or similar organizational document; (iii) does
not and will not violate, conflict with, or result in any breach or
contravention of or require any consent, authorization, approval, exemption,
or other action by or notice or declaration to, or filing with, any court or
administrative or governmental body or agency or other person pursuant to (A)
any material agreement, lease, or contract of such Carlyle Stockholder, or
(B) any applicable statute or any rule or regulation of any governmental
authority or any order or decree applicable to such Carlyle Stockholder.
SECTION 7. REPRESENTATIONS OF THE COMPANY. The Company hereby
represents and warrants to each of the Carlyle Stockholders and the Erin
Mills Stockholders as follows:
(a) The execution, delivery, and performance of this Agreement and
the consummation of the transactions contemplated by this Agreement have been
duly authorized by the Company. This Agreement has been duly executed by the
Company and constitutes a valid and binding obligation of the Company,
enforceable in accordance with its terms. All outstanding shares of the
Company's capital stock are, and the shares of Common Stock to be issued to
the several Carlyle Stockholders and Erin Mills Stockholders will be upon
such issuance and receipt by the Company of payment therefor, duly
authorized, fully paid, and nonassessable. The offer, sale, and issuance of
the Common Stock to the several Carlyle Stockholders and the Erin Mills
Stockholders under this Agreement do not require registration under the
Securities Act or any applicable state securities laws or blue sky laws,
assuming that all representations made by the Carlyle Stockholders and the
Erin Mills Stockholders in SECTIONS 3 and 4 are true.
(b) Each of the representations made by the Company in Section 3
of the Purchase Agreement is true and correct and is incorporated by this
reference into this Agreement, except that (i) the Company makes no
representation to the Erin Mills Stockholders or the Carlyle Stockholders as
to the matters set forth in the first two sentences of Section 3(b)(iii) or
in Section 3(b)(iv) of the Purchase Agreement; and (ii) each reference to
"prejudice in any material respect the rights of the Investor under any of
the Transaction Documents" will be deemed to read as "prejudice in any
material respect
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the rights of the Carlyle Stockholders or the Erin Mills Stockholders under
this Agreement."
SECTION 8. SURVIVAL AND INDEMNIFICATION.
(a) SURVIVAL OF REPRESENTATIONS, WARRANTIES, COVENANTS, AND
AGREEMENTS; KNOWLEDGE OF BREACH. Notwithstanding any otherwise applicable
statute of limitation, the representations and warranties of the Company
included or provided for in this Agreement will survive the execution and
delivery of this Agreement until the expiration of nine months after the
receipt by the Erin Mills Stockholders and the Carlyle Stockholders of
audited consolidated financial statements for the Company, as of and for the
year ending December 31, 1996, together with a report thereon by the
Company's independent public accountants; PROVIDED, HOWEVER, that any
representation, warranty, covenant, or agreement contained in Sections 3(j)
and 3(n) of the Purchase Agreement and incorporated by reference in this
Agreement will survive the execution and delivery of this Agreement until the
expiration of the applicable statute of limitations (including any waivers or
extensions thereof) with respect to such matters; PROVIDED, FURTHER, that the
provisions of this SECTION 8 will constitute the exclusive remedy on the part
of the Erin Mills Stockholders and the Carlyle Stockholders in respect of a
breach of the representations and warranties of the Company contained in this
Agreement. The covenants and other agreements contained in this Agreement
will survive the execution and delivery of this Agreement until the date or
dates specified in such covenant or agreement or the expiration of the
applicable statute of limitations (including any waivers or extensions
thereof) with respect to such matters, whichever is later. In no event will
the Company be liable (i) to the Carlyle Stockholders for any breach of the
representations, warranties, covenants, and agreements included or provided
for in this Agreement or other document delivered pursuant to this Agreement,
unless and until all claims for which aggregate damages are recoverable under
this Agreement by the Carlyle Stockholders exceed the product of (x)
$250,000 and (y) a fraction the numerator of which is the total numbers of
shares of Common Stock issued to the Carlyle Stockholders pursuant to this
Agreement and the denominator is the total number of shares issued by the
Company pursuant to this Agreement (the "CARLYLE STOCKHOLDER DEDUCTIBLE") or
(ii) to the Erin Mills Stockholders for any breach of the representations,
warranties, covenants, and agreements included or provided for in this
Agreement or other document delivered pursuant to this Agreement, unless and
until all claims for which aggregate damages are recoverable under this
Agreement by the Erin Mills Stockholders exceed the product of (x) $250,000
and (y) a fraction the numerator of which is the total numbers of shares of
Common Stock issued to the Erin Mills Stockholders pursuant to this Agreement
and the denominator is the total number of shares issued by the Company
pursuant to this Agreement (the "ERIN MILLS
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STOCKHOLDER DEDUCTIBLE"), in which case such party will be entitled to
damages equal to such excess, but, in the case of the Carlyle Stockholders
and the Erin Mills Stockholders, not more than the purchase price paid by
such party for the Common Stock acquired under this Agreement by such party
plus the charges and expenses (including reasonable attorneys' fees and
expenses) incurred by such party sustaining such damages in connection with
this Agreement and the transactions contemplated hereby;
(b) INDEMNIFICATION. For a period commencing on the date of this
Agreement and ending, as the case may be, upon the expiration of the periods
specified in SECTION 8(a), the Company, on the one hand, and each Erin Mills
Stockholder or Carlyle Stockholder, as applicable, on the other, (the
"INDEMNIFYING PARTY"), will, subject to the limitations set forth in SECTION
8(a), indemnify the Erin Mills Stockholders or the Carlyle Stockholders, on
the one hand, or the Company on the other, as the case may be (the
"INDEMNIFIED PARTY"), against and in respect of all losses, damages,
liabilities, costs, and expenses (including reasonable attorneys' fees and
expenses) incurred in investigating, preparing or defending any claims
covered by this SECTION 8(b) sustained or incurred arising out of any
breaches by such Indemnifying Party of its representations, warranties,
covenants, and agreements set forth in this Agreement (it being understood
and agreed that no Carlyle Stockholder or Erin Mills Stockholder shall be
obligated to indemnify the Company pursuant to this SECTION 8(b) as a result
of a breach of any representation, warranty, covenant, or agreement on the
part of any other party hereto). The indemnification provided for by this
SECTION 8(b) will apply notwithstanding any investigation made by or on
behalf of any party. Any payments pursuant to this SECTION 8(b) will be
treated as an adjustment to the purchase price for all tax purposes.
(c) METHOD OF ASSERTING CLAIMS. In the event that an Indemnified
Party shall assert a claim for indemnity under this SECTION 8, (i) the
Indemnified Party will promptly after the receipt of notice of the
commencement of any action, investigation, claim, demand or other proceeding
by a third party against such Indemnified Party in respect of which indemnity
may be sought from any Indemnifying Party under this Section 8, notify the
Indemnifying Party in writing of the commencement thereof or (ii) if the
claim is other than such a third party claim, the Indemnified Party will
notify the Indemnifying Party promptly following its discovery of the facts
or circumstances giving rise thereto; PROVIDED, that in either case (i) or
(ii), no such notice need be provided by the Company to an Indemnifying Party
who is a Carlyle Stockholder or an Erin Mills Stockholder if the Carlyle
Stockholder Deductible or Erin Mills Stockholder Deductible, as applicable,
has not been exceeded and will not be exceeded by such claim or demand and
the omission of the Indemnified Party to so notify such Indemnifying Party of
any such action will not relieve such Indemnifying Party from any liability
that it may have to such Indemnified
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Party under this SECTION 8(c) unless, and only to the extent that, such
omission prejudices the ability of the Indemnifying Party to defend such
action, investigation, claim, demand, or other proceeding or to reduce or
mitigate its liability under this SECTION 8, whether as a result of the
forfeiture of substantive rights or defenses or otherwise. In case any such
action, claim, or other proceeding is brought against the Indemnified Party
such Indemnified Party will notify the applicable Indemnifying Party of the
commencement thereof, the Indemnifying Party will be entitled to assume the
defense thereof at its own expense, with counsel satisfactory to such
Indemnified Party in its reasonable judgment, PROVIDED that the Deductible
has been or will be exceeded; PROVIDED, FURTHER, that the Indemnified Party
may, at its own expense, retain separate counsel to participate in such
defense. Notwithstanding the foregoing, in any action, claim or proceeding in
which both the Indemnifying Party, on the one hand, and an Indemnified Party,
on the other hand, is, or is reasonably likely to become, a party, such
Indemnified Party shall have the right to employ separate counsel at the
Indemnifying Party's expense and to control its own defense of such action,
claim or proceeding if, in the reasonable opinion of counsel to such
Indemnified Party, a conflict or potential conflict exists between the
Indemnifying Party, on the one hand, and such Indemnified Party, on the other
hand, that would prevent the representation of the Indemnified Party by
counsel selected by and subject to the control of the Indemnifying Party
under applicable law or codes of professional responsibility. Each of the
Company, the Erin Mills Stockholders, and the Carlyle Stockholders agrees
that it will not, without the prior written consent of the Indemnified Party,
settle, compromise, or consent to the entry of any judgment in any pending or
threatened claim, action, or proceeding relating to the matters contemplated
by this SECTION 8 (if the Indemnified Party is a party thereto or has been
actually threatened to be made a party thereto) unless such settlement,
compromise, or consent includes an unconditional release of the Indemnified
Party from all liability arising or that may arise out of such claim, action
or proceeding.
SECTION 9. COVENANTS.
(a) INSPECTION RIGHTS. The Company will permit, and cause its
subsidiaries to permit, the representatives designated by the Erin Mills
Stockholders and the Carlyle Stockholders so long as (i) the Erin Mills
Stockholders and the Carlyle Stockholders and their affiliates together
beneficially own 1,600,000 shares of Common Stock or (ii) the representation
and warranties of the Company set forth in this Agreement survive, upon
reasonable notice and during normal business hours, to (x) visit and inspect
any of the properties of the Company and its subsidiaries, (y) examine the
corporate and financial records of the Company and its subsidiaries and to
make copies thereof, and (z) discuss the affairs, finances and accounts of
any such entities with the directors, officers,
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key employees, and (with the prior consent of the Company, which will not be
unreasonably withheld) independent accountants of the Company and its
subsidiaries.
(b) CONFIDENTIALITY. Each of the Erin Mills Stockholders and
the Carlyle Stockholders will hold in confidence all information and data
obtained by it from the Company or its subsidiaries (whether in connection
with the negotiation of the transactions contemplated by this Agreement,
pursuant to SECTION 9(a) or otherwise) and will not disclose such information
to any person or entity without the prior written consent of the Company
(except that the Erin Mills Stockholders and the Carlyle Stockholders may
disclose such information to their affiliates, directors, officers, and other
representatives who require access to such information in order to enable
them to exercise their rights under this Agreement or for any other proper
purpose contemplated thereby and who agree to be subject to the restrictions
set forth in this SECTION 9(b)); PROVIDED, HOWEVER, that the provisions of
this SECTION 9(b) will not apply to any information or data that can be shown
(i) to be generally available to the public through no fault of such party or
its affiliates, directors, officers, and other representatives or (ii) to
have been lawfully obtained by the Erin Mills Stockholders or the Carlyle
Stockholders from other sources not subject to a confidentiality obligation
to the Company.
SECTION 10. APPLICABLE LAW. THIS AGREEMENT WILL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT
REGARD TO ANY CONFLICTS OF LAW PRINCIPLES THAT WOULD REQUIRE THE APPLICATION
OF THE LAWS OF ANY OTHER JURISDICTION.
SECTION 11. PARTIES IN INTEREST; ASSIGNMENT. This Agreement
will be binding on and will inure to the benefit of the parties to this
Agreement and their respective successors and permitted assigns. No party
may assign this Agreement or its rights and benefits under this Agreement or
delegate and duties under this Agreement to any other person or entity
without the prior written consent of the other parties.
SECTION 12. AMENDMENT; WAIVER. The provisions of this Agreement
may be amended only by a written instrument executed by each of parties to
this Agreement, and compliance with the provisions of this Agreement may be
waived only by a written instrument executed by each party entitled to the
benefits of such provision. No failure on the part of any party to exercise
any right, power, or privilege granted under this Agreement will operate as a
waiver of such right, power, or privilege, nor will any single or partial
exercise of such right, power, or privilege preclude any other or further
exercise of such right, power, or privilege or the exercise of any other
right, power or privilege granted under this Agreement.
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SECTION 13. FURTHER ASSURANCES. Each party agrees to do, or
cause to be done, such further acts and to execute and deliver, or to cause
to be executed and delivered, such further agreements, instruments,
certificates, and other documents as may be necessary or appropriate to
effectuate and carry out the purposes of this Agreement.
SECTION 14. NOTICES AND OTHER COMMUNICATIONS. All notices and
other communications under this Agreement will be in writing and will be
given by delivery in person, by registered or certified mail (return receipt
requested and with postage prepaid thereon) or by cable, telex or facsimile
transmission to the parties at the following addresses (or at such other
address as either party will have furnished to the other in accordance with
the terms of this SECTION 14):
if to the Company, to:
HighwayMaster Communications, Inc.
16479 Dallas Parkway
Suite 710
Dallas, Texas 75248
Attention: William C. Kennedy, Jr.
if to any of the Erin Mills Stockholders, to:
Erin Mills International Investment Corporation
Trident House, Suite 204(a)
Broad Street
Bridgetown, Barbados
West Indies
Attention: Stephen Greaves
if to any of the Carlyle Stockholders (except for the Carlyle Stockholders
that are Clipper Stockholders (as defined in the Stockholders' Agreement)),
to:
The Carlyle Group, L.P.
1001 Pennsylvania Avenue
Suite 220 South
Washington, D.C. 20004-2505
Attention: Mark D. Ein
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if to any Clipper Stockholders, to:
The Clipper Group, L.P.
12 East 49th Street
New York, New York 10017
Attention: Daniel V. Cahillane
All notices and other communications under this Agreement that are addressed
as provided in or pursuant to this SECTION 14 will be deemed duly and validly
given (a) if delivered in person, upon delivery, (b) if delivered by
registered or certified mail (return receipt requested and with postage paid
thereon), 72 hours after being placed in a depository of the United States
mails; and (c) if delivered by cable, telex, or facsimile transmission, upon
transmission thereof and receipt of the appropriate answer back.
SECTION 15. ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement and understanding of the parties to this Agreement with
respect to the subject matter of this Agreement and supersedes any prior or
contemporaneous oral and prior written agreements or understandings between
the parties with respect to the subject matter of this Agreement.
SECTION 16. HEADINGS. The section headings contained in this
Agreement are inserted for the convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of this
Agreement.
SECTION 17. COUNTERPARTS. This Agreement may be executed in one
or more counterparts, each of which will be deemed an original and all of
which together will constitute one and the same instrument.
SECTION 18. NO GROUP OR BENEFICIAL OWNERSHIP. Nothing in this
Agreement will be deemed to constitute any party to this Agreement as member
of a "group" for the purposes of the Securities Exchange Act of 1934, as
amended, or to be an admission that any party to this Agreement beneficially
owns any of the securities of any other party to this Agreement.
SECTION 19. EXPENSES. The Company will (i) reimburse each of the
Carlyle Stockholders and the Erin Mills Stockholders for stamp and other
stock issuance or similar taxes that may be payable in respect of the
execution and delivery of this Agreement or the issuance, delivery, or
acquisition of any shares of Common Stock to be issued under this Agreement
(but excluding any income or similar state of federal taxes).
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Except as otherwise expressly provided in this Agreement, the parties will
bear their own respective expenses (including, but not limited to, all
compensation and expenses of counsel, financial advisors, consultants,
actuaries, and independent accountants) incurred in connection with this
Agreement and the transactions contemplated by this Agreement or the
Investment Documents.
SECTION 20. LIMITATION ON COMPANY REPRESENTATIONS.
Notwithstanding any provision of this Agreement to the contrary, the Company
makes no representation or warranty, and will have no obligation to indemnify
or liability for damages for, any matter to the extent that the material
facts with respect to such matter are known to any Carlyle Stockholders or
Erin Mills Stockholders as of the date of this Agreement.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be duly executed as of the date first above written.
HIGHWAYMASTER COMMUNICATIONS, INC.
By: /s/ William C. Saunders
------------------------------------------
Name: William C. Saunders
------------------------------------------
Title: President
------------------------------------------
CLIPPER CAPITAL ASSOCIATES, L.P.
By: CLIPPER CAPITAL ASSOCIATES, INC.
Its: General Partner
By: /s/ Daniel V. Cahillane
-------------------------------------
Name: Daniel V. Cahillane
-------------------------------------
Title: Treasurer & Secretary
-------------------------------------
CLIPPER/MERBAN, L.P.
By: CLIPPER CAPITAL ASSOCIATES, L.P.
Its: General Partner
By: CLIPPER CAPITAL ASSOCIATES, INC.
Its: General Partner
By: /s/ Daniel V. Cahillane
-------------------------------------
Name: Daniel V. Cahillane
-------------------------------------
Title: Treasurer & Secretary
-------------------------------------
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CLIPPER/MERCHANT PARTNERS, L.P.
By: CLIPPER CAPITAL ASSOCIATES, L.P.
Its: General Partner
By: CLIPPER CAPITAL ASSOCIATES, INC.
Its: General Partner
By: /s/ Daniel V. Cahillane
--------------------------------------------
Name: Daniel V. Cahillane
--------------------------------------------
Title: Treasurer & Secretary
--------------------------------------------
CARLYLE-HIGHWAYMASTER INVESTORS, L.P.
By: T.C. GROUP, L.L.C.
Its: General Partner
By: /s/ Mark D. Ein
---------------------------------------------
Name: Mark D. Ein
---------------------------------------------
Title: Vice-President of Managing Member of TC Group
---------------------------------------------
CARLYLE-HIGHWAYMASTER INVESTORS II, L.P.
By: T.C. GROUP, L.L.C.
Its: General Partner
By: /s/ Mark D. Ein
---------------------------------------------
Name: Mark D. Ein
---------------------------------------------
Title: Vice-President of Managing Member of TC Group
---------------------------------------------
CHASE MANHATTAN INVESTMENT HOLDINGS,
INC.
By: /s/ Jeffrey C. Walker
---------------------------------------------
Name: Jeffrey C. Walker
---------------------------------------------
Title: Chief Executive Officer
---------------------------------------------
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H.M. RANA INVESTMENTS LIMITED
By: --------------------------------------
By: /s/ Fahad A. Almubarak
-------------------------------------
Name: Fahad A. Almubarak
-------------------------------------
Title: President
-------------------------------------
ARCHERY PARTNERS
By: --------------------------------------
Its: General Partner
By: /s/ Jeffrey C. Walker
-------------------------------------
Name: Jeffrey C. Walker
-------------------------------------
Title: Managing Partner
THE ERIN MILLS INVESTMENT CORPORATION
By: /s/ G. C. Quinn
-----------------------------------------
Name: G. C. Quinn
-----------------------------------------
Title: President
-----------------------------------------
THE ERIN MILLS DEVELOPMENT CORPORATION
By: /s/ G. C. Quinn
-----------------------------------------
Name: G. C. Quinn
-----------------------------------------
Title: Executive Vice-President
-----------------------------------------
ERIN MILLS INTERNATIONAL INVESTMENT
CORPORATION
By: /s/ S. L. Greaves
-----------------------------------------
Name: Stephen L. Greaves
-----------------------------------------
Title: General Manager
-----------------------------------------
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/s/ Robert T. Hayes by Douglas Dunlap Attorney-in-fact
----------------------------------------------------------
Robert T. Hayes
/s/ Robert S. Folsom by Haddon O. Winkler Attorney-in fact
----------------------------------------------------------
Robert S. Folsom
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EXHIBIT A
1. CARLYLE STOCKHOLDERS.
Clipper Capital Associates, L.P.
Clipper/Merban, L.P.
Clipper/Merchant Partners, L.P.
Carlyle-HighwayMaster Investors, L.P.
Carlyle-HighwayMaster Investors II, L.P.
Chase Manhattan Investment Holdings, Inc.
H.M. Rana Investments Limited
Archery Partners
2. ERIN MILLS STOCKHOLDERS.
The Erin Mills Investment Corporation
The Erin Mills Development Corporation
Erin Mills International Investment Corporation
Robert T. Hayes
Robert S. Folsom
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EXHIBIT B
NAME NUMBER OF SHARES OF B NUMBER OF SHARES OF SERIES
STOCK TO BE RECEIVED B PREFERRED STOCK TO BE
SURRENDERED
The Erin Mills Development 367,680 459.6
Corporation
The Erin Mills Investment 96,000 120.0
Corporation
Erin Mills International 279,604 349.505
Investment Corporation
Robert T. Hayes 86,436 108.0450
Robert S. Folsom 34,280 42.85
------- ----------
TOTALS 864,000 1,080
------- ----------
------- ----------
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EXHIBIT C
NAME EXCLUDED INTEREST
Clipper Capital Associates, L.P. $ 148.96
Clipper/Merban, L.P. 8,396.97
Clipper/Merchant Partners, L.P. 8,290.78
Carlyle-HighwayMaster Investors, L.P. 25,866.62
Carlyle-HighwayMaster Investors II, L.P. 2,436.33
Chase Manhattan Investment Holdings, Inc. 6,191.77
H.M. Rana Investments Limited 10,522.67
Archery Partners 1,282.93
----------
$63,137.03
----------
----------
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