Exhibit 4.14
________________________________________________________________________________
SHAREHOLDERS' AGREEMENT
among
BT CAPITAL INVESTORS, L.P.,
PACER INTERNATIONAL EQUITY INVESTORS, LLC.,
COYOTE ACQUISITION LLC,
COYOTE ACQUISITION II LLC
AND
PACER INTERNATIONAL, INC.
Dated as of May 28, 1999
________________________________________________________________________________
TABLE OF CONTENTS
ARTICLE I................................................................. 2
1.1. Restrictions on Transfer....................................... 2
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ARTICLE II................................................................ 2
ARTICLE III............................................................... 3
ARTICLE IV................................................................ 4
ARTICLE V................................................................. 6
5.1. Definitions.................................................... 9
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5.2. Designated Actions and Irrevocable Proxy....................... 9
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5.3. Termination.................................................... 10
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ARTICLE VI................................................................ 12
6.1. Assignment..................................................... 12
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6.2. Entire Agreement............................................... 12
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6.3. Notices........................................................ 12
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6.4. Waivers; Amendments............................................ 14
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6.5. Counterparts................................................... 14
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6.6. Expenses....................................................... 14
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6.7. Remedies....................................................... 14
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6.8. Applicable Law; Submission to Jurisdiction..................... 15
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6.9. Severability................................................... 15
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6.10. Certain Definitions............................................ 15
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6.11. Termination.................................................... 16
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SHAREHOLDERS' AGREEMENT
Agreement (this "Agreement") dated as of this 28th day of May, 1999,
among BT Capital Investors, L.P., a Delaware limited partnership ("BT "), Pacer
International Equity Investors, LLC., a Delaware limited liability company
("CSFB") (BT and CSFB, together, the "Assignee Purchasers"), Coyote Acquisition
LLC ("Coyote I"), Coyote Acquisition II LLC, ("Coyote II" and, Coyote I and
Coyote II, collectively, the "Coyote Entities") and Pacer International, Inc., a
Tennessee corporation (the "Company").
WHEREAS, Coyote I and APL Limited, a Delaware corporation, have
entered into a Stock Purchase Agreement, dated as of March 15, 1999 (the "Stock
Purchase Agreement"), whereby Coyote I will purchase common shares, no par
value, of the Company (the "Common Stock").
WHEREAS, pursuant to the Assignment Agreement, dated as of May 28,
1999, between Coyote II and Coyote I, Coyote I has assigned its right to
purchase 478,000 shares of Common Stock (on a post-split basis) under the Stock
Purchase Agreement to Coyote II and Coyote II has agreed to acquire such shares;
WHEREAS, pursuant to the Assignment Agreement, dated as of May 28,
1999, between BT and Coyote I, Coyote I has assigned its right to purchase
200,000 shares of Common Stock (on a post-split basis) under the Stock Purchase
Agreement to BT and BT has agreed to acquire such shares (such acquired shares,
the "BT Shares");
WHEREAS, pursuant to the Assignment Agreement, dated as of May 28,
1999, between CSFB and Coyote I, Coyote I has assigned its right to purchase
100,000 shares of Common Stock (on a post-split basis) under the Stock Purchase
Agreement to CSFB and CSFB has agreed to acquire such shares (such acquired
shares, the "CSFB Shares" and the BT Shares and CSFB Shares, together, the
"Restricted Shares"); and
WHEREAS, BT, CSFB and the Coyote Entities desire to impose certain
restrictions on the disposition and transfer of the Restricted Shares, to create
certain purchase and sale rights, to create certain registration rights and to
agree with respect to certain matters relating to the voting of the Restricted
Shares.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein, the parties hereto agree as follows:
ARTICLE I
1.1. Restrictions on Transfer
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Whether or not permitted under the Securities Act, no Restricted
Shares may be pledged, hypothecated, sold, transferred or otherwise disposed of,
except as expressly provided in this Agreement, by will or by the laws of
descent and distribution. Each Assignee Purchaser agrees not to distribute the
Restricted Shares to its members or shareholders, as the case may be, except as
may be required by law. In case of a transfer of any of the Restricted Shares
pursuant to the foregoing, the transferee must execute an agreement to be bound
by provisions of this Agreement as if such transferee were an original party
hereto. The foregoing restrictions shall not prohibit sales by any Assignee
Purchaser (a "Permitted Transfer") to the Company or the Coyote Entities or an
affiliate thereof (the Coyote Entities or any affiliate thereof, collectively,
"Coyote") or an affiliate of the Assignee Purchaser.
ARTICLE II
DRAG-ALONG RIGHT
(a) If Coyote transfers to any Person or Persons (other than an
affiliate thereof) (such Person, the "Article II Transferee"), pursuant to a
stock sale, merger or otherwise, shares of Common Stock then held by Coyote,
Coyote shall be entitled, at its option, to require each Assignee Purchaser to
sell an Article II Equivalent Portion (as defined below) of all Common Stock
held by such Assignee Purchaser, by providing each Assignee Purchaser with
written notice ("Drag-Along Notice") at least fifteen days prior to consummation
of the proposed transaction, setting forth in reasonable detail the material
terms and conditions of the proposed transaction or offering, and the price per
share at which each Assignee Purchaser shall be required to sell its shares of
Common Stock (which price per share shall be equal to the same price per share
Coyote shall receive pursuant to the proposed transaction). An "Article II
Equivalent Portion" shall mean with respect to each Assignee Purchaser that
portion of all shares of Common Stock then held by such Assignee Purchaser
expressed as a fraction where the numerator equals the number of shares of
Common Stock proposed to be sold by Coyote pursuant to the Drag-Along Notice and
the denominator equals all shares of Common Stock held by Apollo.
(b) At the closing of the proposed transaction (notice of the date,
place and time of which shall be designated by Coyote and provided to each
Assignee Purchaser in writing at least five business days prior thereto), each
Assignee Purchaser shall deliver certificates evidencing the shares of Common
Stock to be sold by such Assignee Purchaser, duly endorsed for transfer to the
proposed transferee, against the purchase price therefor. Such shares of Common
Stock shall be delivered free and clear of all liens, charges, encumbrances and
other security interests. Coyote shall have no
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liability or obligation to deliver the purchase price payable pursuant to this
Article II, except to the extent that Coyote receives the consideration thereof
from the proposed purchaser. All consideration payable pursuant to this Section
shall be payable in the same form as the consideration received from the Article
II Transferee; provided, that each Assignee Purchaser shall not be required,
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pursuant to the terms of such sale, to accept any consideration that would cause
such Assignee Purchaser to have a Regulatory Problem (as defined below). In case
of a potential Regulatory Problem, Coyote may, at its option, elect to pay or
cause to be paid to such Assignee Purchaser the cash equivalent of the
consideration payable pursuant to this Article II, as determined in good faith
by Coyote, in lieu of the consideration offered by the offeree. For purposes
hereof, a "Regulatory Problem" shall mean, with respect to any Person, any set
of facts, events or circumstances the existence of which would cause such Person
to believe that there is a substantial risk of assertion by a governmental
entity (which belief shall be based on an opinion of counsel) that such Person
is or would be in violation of the Bank Holding Company Act of 1956, as amended
by Regulation Y promulgated thereunder.
(c) Coyote may assign its rights pursuant to this Article II to the
Company or any affiliate or successor of the Company.
ARTICLE III
TAG-ALONG RIGHT
(a) From and after the time the Threshold (as defined in Section 7.10
hereof) has been reached, and to the extent in excess thereof, if Coyote
transfers to any Person or Persons (other than an affiliate thereof) shares of
Common Stock (the "Article III Transferee"), then (i) at least fifteen business
days prior to the consummation of the proposed transaction Coyote shall give
written notice ("Tag-Along Notice") to each Assignee Purchaser setting forth in
reasonable detail the material terms and conditions of the proposed transfer,
the number of shares of Common Stock to be sold and the price per share at which
Coyote is selling and (ii) each Assignee Purchaser shall have the right to
include an Article III Equivalent Portion (as defined) of all Common Stock held
by such Assignee Purchaser in the proposed transaction by providing a written
notice of exercise to Coyote at any time on or before ten business days
following delivery of the Tag-Along Notice to such Assignee Purchaser. An
"Article III Equivalent Portion" shall mean with respect to each Assignee
Purchaser that portion of all shares of Common Stock then held by such Assignee
Purchaser expressed as a fraction where the numerator equals the number of
shares of Common Stock proposed to be sold by Coyote, as set forth in the Tag-
Along Notice, and the denominator equals all shares of Common Stock then held by
Coyote.
(b) At the closing of the proposed transaction (notice of the date,
place and time of which shall be designated by Coyote and provided to each
Assignee Purchaser in writing at least five business days prior thereto), each
Assignee Purchaser shall deliver certificates evidencing the shares of Common
Stock owned by such
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Assignee Purchaser, duly endorsed for transfer to the proposed purchaser,
against delivery of the purchase price therefor. Such shares of Common Stock
shall be delivered free and clear of all liens, charges, encumbrances and other
security interests. Coyote shall not have any liability or obligation to deliver
the purchase price payable pursuant to this Section, except to the extent that
Coyote receives the consideration thereof from the Article III Transferee. All
consideration payable to the Assignee Purchasers pursuant to this Section shall
be payable in the same form as the consideration received from the Article III
Transferee.
ARTICLE IV
INCIDENTAL REGISTRATION
(a) From and after the time the Threshold has been reached, and to the
extent in excess thereof, if the Company at any time proposes to register any
Common Stock in a Public Offering for the account of Coyote (except with respect
to registration statements on a form which is not available for registering
Common Stock for sale to the public), each such time it will give at least ten
days prior written notice to each Assignee Purchaser of its intention so to do
including the number of shares of Common Stock proposed to be registered by
Coyote. Upon the written request of any such Assignee Purchaser, received by the
Company within ten days after the giving of any such notice by the Company, to
register up to its Article IV Equivalent Portion (as defined below) of all
Common Stock held by such Assignee Purchaser (which request shall state the
intended method of disposition thereof), the Company will use all commercially
reasonable efforts to cause the shares of Common Stock as to which registration
shall have been so requested to be included in the securities to be covered by
the registration statement proposed to be filed by the Company, all to the
extent requisite to permit the sale by such Assignee Purchaser (in accordance
with its written request) of such shares of Common Stock so registered.
Alternatively, the Company may in its sole discretion include such shares of
Common Stock in a separate registration statement to be filed concurrently with
the registration statement for the account of Coyote to be filed by the Company.
In the event that any registration pursuant to this Article IV shall be, in
whole or in part, an underwritten Public Offering of shares of Common Stock, the
number of shares of Common Stock to be included in such an underwriting may be
reduced (pro rata among the requesting Assignee Purchasers and Coyote based upon
the number of shares of Common Stock owned by such Assignee Purchasers and
Coyote) due to (i) the provisions of any registration rights or similar
agreement between the Company and any Coyote Entity or between the Company and
any management shareholders (it being understood that the Coyote Entities and
certain management shareholders shall have pro rata rights with respect to
incidental registration rights pursuant to (x) the registration rights agreement
by and among the Company and the Coyote Entities, dated as of the date hereof,
and (y) that certain shareholders agreement, dated as of the date hereof, among
the Company, APL Limited and the Coyote Entities and (z) that certain
shareholders agreement, dated as of the date hereof, among the Company, the
Coyote Entities and certain management shareholders), or (ii) if applicable,
underwriter market
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limitations if, and to the extent, that the managing underwriter advises the
Company that in its opinion such inclusion would adversely affect the marketing
of the securities to be sold by the Company therein. In addition, if the
managing underwriter so advises, for any reason, against the inclusion of all or
any portion of shares or Common Stock owned by the Assignee Purchasers in the
Public Offering, then the Assignee Purchasers shall only have the right to
register shares of Common Stock therein as so advised by the managing
underwriter. An "Article IV Equivalent Portion" shall mean with respect to each
Assignee Purchaser that portion of all shares of Common Stock then held by such
Assignee Purchaser expressed as a fraction where the numerator equals the number
of shares of Common Stock proposed to be registered by Coyote pursuant to the
notice contemplated by this paragraph (a) and the denominator equals all shares
of Common Stock then held by Coyote.
(b) In connection with each registration pursuant to paragraph (a)
covering a Public Offering, each Assignee Purchaser selling Common Stock
pursuant thereto agrees to (i) enter into a written agreement with the managing
underwriter under the same terms and conditions as apply to the Company or the
selling shareholders, as applicable, or as is otherwise customary in offerings
of this type and (ii) furnish to the Company in writing such information with
respect to themselves and the proposed distribution by them as reasonably shall
be necessary and shall be requested by the Company in order to comply with
federal and applicable state securities laws.
(c) If, at any time after giving notice of its intention to register
any stock pursuant to this Article IV and prior to the effective date of the
registration statement filed in connection with such registration, the Company
and/or Coyote shall determine for any reason not to register any such stock, the
Company shall give written notice to the Assignee Purchasers and, thereupon,
shall be relieved of its obligation to register any shares of Common Stock in
connection with such registration. If the number of shares to be registered by
Coyote is changed, the Article IV Equivalent Proportion shall be appropriately
adjusted.
(d) All expenses incurred by the Company in complying with this
Article IV, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel and independent public
accountants for the Company, fees and expenses (including counsel fees) incurred
in connection with complying with state securities or "blue sky" laws, fees of
the National Association of Securities Dealers, Inc., transfer taxes, fees of
transfer agents and registrars and costs of insurance, but excluding any Selling
Expenses, are herein referred to as "Registration Expenses." "Selling Expenses"
as used herein mean all underwriting discounts and selling commissions
applicable to the sale of Common Stock.
The Company will pay all Registration Expenses in connection with each
registration statement under this Article IV. All Selling Expenses in
connection with each registration statement under this Article IV shall be borne
by the participating sellers of shares of Common Stock in proportion to the
number of shares sold by each, or by
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such participating sellers of shares of Common Stock other than the Company
(except to the extent the Company shall be a seller of shares of Common Stock)
as they may agree. In addition, the participating Assignee Purchasers shall be
responsible for fees and disbursements of their counsel.
(e) In the event of a registration of any Common Stock under the Act
pursuant to this Article IV, the Company will indemnify and hold harmless, to
the full extent permitted by law, each selling Assignee Purchaser, each
underwriter of such Common Stock thereunder and each other person, if any, who
controls a selling Assignee Purchaser or such underwriter within the meaning of
the Act or the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
against any losses, claims, damages, liabilities and expenses, joint or several,
to which a selling Assignee Purchaser, such underwriter or controlling person
may become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any registration statement under which Common Stock was registered
under the Act pursuant to this Article IV, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereof, or arise
out of or are based upon the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will pay or reimburse each selling Assignee
Purchaser, each such underwriter and each such controlling person for any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, liability or action; provided,
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however, that the Company (i) will not be liable in any such case if and to the
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extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission so made in conformity with information pertaining to a selling Assignee
Purchaser, underwriter or controlling person and furnished by such Assignee
Purchaser, any such underwriter or any such controlling person, as the case may
be, in writing specifically for use in such registration statement, prospectus,
amendment or supplement and (ii) will not be liable for amounts paid in
settlement of any such loss, claim, damage, liability or action if such
settlement is effected without the consent of the Company, such consent not to
be unreasonably withheld or delayed.
(f) In the event of a registration of any Common Shares under the Act
pursuant to this Article IV, each selling Assignee Purchaser will indemnify and
hold harmless the Company, each person, if any, who controls the Company within
the meaning of the Act, each officer of the Company who signs the registration
statement, each director of the Company, each underwriter and each person who
controls any underwriter within the meaning of the Act, against all losses,
claims, damages or liabilities, joint or several, to which the Company or such
officer, director, underwriter or controlling person may become subject under
the Act or otherwise, but only insofar as such losses, claims, damages or
liabilities (or actions in respect thereof), arise out of or are based upon an
untrue statement or alleged untrue statement or omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, made in reliance upon and in conformity
with
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information pertaining to such selling Assignee Purchaser, furnished in
writing to the Company by such Assignee Purchaser specifically for use in such
registration statement under which Common Stock was registered under the Act
pursuant to this Article IV, any preliminary prospectus or final prospectus
contained therein, or any amendment or supplement thereof, and will pay or
reimburse the Company and each such officer, director, underwriter and
controlling person for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that (i) the liability of each selling
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Assignee Purchaser hereunder shall be limited to the proportion of any such
loss, claim, damage, liability or expense which is equal to the proportion that
the public offering price of the Common Stock sold by such Assignee Purchaser
under such registration statement bears to the total public offering price of
all securities sold thereunder, but not in any event to exceed the net proceeds
received by such Assignee Purchaser from the sale of Common Stock covered by
such registration statements and (ii) an Assignee Purchaser shall not be liable
for amounts paid in settlement of any such loss, claim, damage, liability or
action if such settlement is effected without the consent of such Assignee
Purchaser, such consent not to be unreasonably withheld or delayed.
(g) Promptly after receipt by an indemnified party hereunder of
written notice of any claim or the commencement of any action or proceeding,
such indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party hereunder, notify the indemnifying party in
writing thereof, but the omission so to notify the indemnifying party shall not
relieve it from any liability which it may have to such indemnified party other
than under this Article IV and shall only relieve it from any liability which it
may have to such indemnified party under this Article IV if and to the extent
the indemnifying party is materially prejudiced by such omission. In case any
such action shall be brought against any indemnified party and the indemnified
party shall notify the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate in and, to the extent it
shall wish, to assume and undertake the defense thereof with counsel reasonably
satisfactory to such indemnified party, and, after notice from the indemnifying
party to such indemnified party of its election so to assume and undertake the
defense thereof, the indemnifying party shall not be liable to such indemnified
party under this Article IV for any legal or other professional expenses
subsequently incurred by such indemnified party in connection with the defense
thereof other than reasonable costs of investigation and of liaison with counsel
so selected; provided, however, that if the defendants in any such action
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include both the indemnified party and the indemnifying party, and the
indemnified party shall have reasonably concluded that there may be reasonable
defenses available to it which are different from or additional to those
available to the indemnifying party or if the interests of the indemnified party
reasonably may be deemed to conflict with the interests of the indemnifying
party, the indemnified party shall have the right to select a separate counsel
and to assume such legal defenses and otherwise to participate in the defense of
such action, with the reasonable fees and expenses of such separate counsel and
other expenses related to such participation to be reimbursed by the
indemnifying party as incurred. No indemnifying party, in the defense of any
such claim or litigation against an indemnified party, shall consent to entry of
any judgment or enter into any settlement which does not
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include as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified party of a release from all liability in respect of such
claim or litigation, unless such indemnified party shall otherwise consent in
writing. An indemnifying party who is not entitled to, or elects not to, assume
the defense of a claim shall not be obligated to pay the fees and expenses of
more than one counsel for all parties indemnified by such indemnifying party
with respect to such claim.
(h) In order to provide for just and equitable contribution in any
case in which either (i) an Assignee Purchaser exercises incidental registration
rights under this Article IV, or any controlling person of such Assignee
Purchaser makes a claim for indemnification pursuant to this Article IV but it
is judicially determined (by the entry of a final judgment or decree by a court
of competent jurisdiction and following the expiration of time to appeal or the
denial of the last right of appeal) that such indemnification may not be
enforced in such case, notwithstanding the fact that this Article IV provides
for indemnification in such case, or (ii) contribution under the Act may be
required on the part of such Assignee Purchaser or any such controlling person
in circumstances for which indemnification is provided under this Article IV;
then, and in each such case, the Company and such Assignee Purchaser shall
contribute to the aggregate losses, claims, damages or liabilities to which they
may be subject (after contribution from others) in such proportion as is
appropriate to reflect both the relative benefit received by such Assignee
Purchaser and the Company and the relative fault of the Company and such
Assignee Purchaser; provided, however, that, in any such case, (A) such Assignee
Purchaser shall not be required to contribute any amount in excess of the public
offering price of all Common Stock offered by it pursuant to such registration
statement; and (B) no person or entity guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Act) will be entitled to
contribution from any person or entity who was not guilty of such fraudulent
misrepresentation. For purposes of the preceding sentence, the relative benefit
received by such Assignee Purchaser or the Company shall be deemed to be in the
same proportion as the public offering price of Common Stock offered by such
Assignee Purchaser or the Company bears to the public offering price of all
securities offered by such registration statement; and the relative fault of the
Company and such Assignee Purchaser shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission of a material fact relates to information supplied by the Company or
by such Assignee Purchaser and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
ARTICLE V
VOTING PROXY
5.1. Definitions
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(a) "Designated Actions" means (i) the voting of any Common Stock and
any action to be taken with respect to a matter properly brought before the
stockholders
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of the Company holding shares of Common Stock, including without limitation the
election of members of the Board of Directors of the Company, (ii) any action to
be taken by any holder of Common Stock in its capacity as a stockholder of the
Company under this Agreement, including without limitation any consent or waiver
relating to this Agreement and (iii) all actions taken in connection with any of
the actions referred to in clauses (i) and (ii) above.
(b) "Designated Shareholders" means each Assignee Purchaser and each
Person to whom the Common Stock of such Assignee Purchaser are sold or
transferred pursuant to the first two sentences of Section 1.5 above.
(c) "Proxyholder" means Joshua J. Harris or any additional or
successor Proxyholder as may be appointed by the Coyote Entities by written
notice to the Assignee Purchasers and the Company.
5.2. Designated Actions and Irrevocable Proxy
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(a) Each Designated Shareholder, so long as he, she or it owns any
Common Stock, hereby agrees to take all Designated Actions in the manner that
the Proxyholder, in his sole and absolute discretion, shall direct, at any
annual or special meeting of stockholders of the Company, at any and all
adjournments thereof, and on any other occasion in respect of which the consent
of such Designated Shareholder with respect to his, her or its shares of Common
Stock may be given or may be requested or solicited by the Company or any other
Person, whether at a meeting, pursuant to the execution of a written consent,
under the Stock Purchase Agreement or otherwise, for all purposes in connection
with any Designated Action, and such Designated Shareholder hereby ratifies and
confirms all that such Proxyholder may do by virtue hereof.
(b) For purposes of effecting any Designated Action, each Designated
Shareholder does hereby irrevocably constitute and appoint the Proxyholder, his,
her or its true and lawful attorney, agent and proxy for and in his, her or its
name, place and stead, with the exclusive right to take all Designated Actions,
in such Proxyholder's sole and absolute discretion, at any annual or special
meeting of stockholders of the Company, at any and all adjournments thereof, and
on any other occasion in respect of which the consent of such Designated
Shareholder may be given or may be requested or solicited by the Company or any
other Person, whether at a meeting, pursuant to the execution of a written
consent, under the Stock Purchase Agreement or otherwise, for all purposes in
connection with any Designated Action, and such Designated Shareholder hereby
ratifies and confirms all that the Proxyholder may do by virtue hereof. Each
Designated Shareholder agrees with the Proxyholder that, without the prior
written consent of the Proxyholder, he, she or it will not, so long as this
Agreement shall be in effect with respect to any such Designated Shareholder,
take any Designated Action, appoint any Person other than the Proxyholder as
his, her or its attorney, agent or proxy with respect to such shares of Common
Stock, or take any action inconsistent with the appointment of
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the Proxyholder as his, her or its lawful attorney, agent and proxy, or the
exercise by the Proxyholder of the powers granted to him, hereunder.
(c) The parties hereto agree that, in taking or giving directions for
the taking of any Designated Action or in otherwise acting hereunder, the
Proxyholder shall have no responsibility in respect of the management of the
Company by directors for whom he shall have voted or for any action taken by any
such directors or for any action taken pursuant to any consent given or vote
cast by him or other action taken by him, and the Proxyholder's powers herein
shall be discretionary and any of them may be exercised from time to time when
he sees fit and without leave of any court or any other Person and the
Proxyholder may refrain from exercising any powers or rights from time to time
as he sees fit in each case irrespective of any relationship that the
Proxyholder or any of his Affiliates may have with any of the parties hereto
otherwise than pursuant to this Agreement.
(d) The powers granted pursuant to this Section 5.2, and the proxy
granted pursuant hereto, are coupled with an interest and shall be irrevocable
during the term of this Article V.
5.3. Termination
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The agreements contained in this Article V shall terminate and be of
no further force and effect as of the earlier of (i) tenth anniversary of the
date hereof and (ii) the termination of this Agreement as contemplated by
Section 7.11 below.
ARTICLE VI
PREEMPTIVE RIGHTS
(a) In the event that the Company proposes to issue (a "Proposed
Issuance") any Common Stock to Coyote, other than pursuant to the exceptions
specified in paragraph (b) below, the Company shall deliver a notice, with
respect to such Proposed Issuance (the "Preemptive Notice"), to each Assignee
Purchaser setting forth the period of time within which the Preemptive Right
must be exercised (the "Acceptance Period") and the price, terms and conditions
of the Proposed Issuance. Each Assignee Purchaser shall have the right (the
"Preemptive Right"), exercisable as hereinafter provided, to participate in such
issuance of Common Stock ("Offered Securities") on a pro rata basis in
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accordance with the respective aggregate number of shares of Common Stock held
by such Assignee Purchaser on the date of such notice from the Company by
purchasing an amount of such Common Stock to be sold to Coyote pursuant to the
Proposed Issuance multiplied by a fraction, the numerator of which shall be the
aggregate number of shares of Common Stock owned by such Assignee Purchaser on
the date of such notice and the denominator of which shall be the total number
of shares of Common Stock outstanding on such date, such purchase to be at the
same price and on the same terms and conditions
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as the Proposed Issuance. The number of shares of Common Stock to be sold to
Coyote pursuant to the Proposed Issuance shall be calculated after first taking
into account the effect of the preemptive rights granted by the Company to
certain management shareholders pursuant to that certain Management
Shareholders' Agreement, dated as of May 28, 1999, by and among Coyote I, Coyote
II, the Company and certain management shareholders named therein.
(b) Anything to the contrary notwithstanding, the Preemptive Rights
provided for herein shall not be applicable to: (i) any Proposed Issuance of
Common Stock to Coyote, in an amount equal to (A) 100,000 (as appropriately
adjusted for splits, rollups, etc.) or fewer shares, in the aggregate or (B)(1)
the number of shares of Common Stock previously sold or otherwise transferred by
Coyote to members of management of the Company less (2) the number of shares of
Common Stock previously purchased by Coyote pursuant to the provisions of this
clause (i)(B); provided that in no event shall Coyote be entitled to repurchase
Common Stock with an aggregate purchase price in excess of $5,000,000 pursuant
to the provisions of this clause (i)(B); (ii) any stock split or Proposed
Issuance of Common Stock as a dividend.
(c) The Preemptive Rights shall be exercisable by delivery of notice
(the "Purchase Notice") to the Company given within the Acceptance Period set
forth in the Preemptive Notice. If an Assignee Purchaser shall fail to respond
to the Company within the Acceptance Period, such failure shall be regarded as a
rejection of such Assignee Purchaser's right to exercise such Assignee
Purchaser's Preemptive Right. The closing of any purchase by the Assignee
Purchasers under this Article VI shall be held at such time and place upon which
the parties to the transaction may agree. At such closing, the Assignee
Purchasers participating in the purchase shall deliver by certified bank check,
payment in full for such Common Stock and all parties to the transaction shall
execute such additional documents as are otherwise deemed necessary or
appropriate by the Company. At such closing, the Company may issue and sell to
Coyote such portion of the Common Stock which has not been purchased by Assignee
Purchasers pursuant to the exercise of their Preemptive Rights at the same price
and on the same terms and conditions as the Common Stock sold or proposed to be
sold to the Assignee Purchasers.
(d) In the event of a Proposed Issuance of Common Stock, which
Proposed Issuance is subject to the Preemptive Rights under this Article VI and
which is offered only in combination with the purchase of debt or debt
securities, then the Preemptive Rights shall apply to the combination and an
Assignee Purchaser exercising his Preemptive Right shall be entitled and
required to purchase his pro rata share of both the debt and equity components
--- ----
of such combination on the basis set forth above.
11
ARTICLE VII
MISCELLANEOUS
7.1. Assignment
----------
This Agreement shall bind and inure to the benefit of the parties
hereto and their respective successors, assigns, heirs and personal
representatives. Unless otherwise expressly provided in this Agreement, neither
this Agreement nor any right or obligation hereunder of any party may be
assigned or delegated without the prior written consent of the other parties
hereto, provided, that any of the Coyote Entities may assign this Agreement to
an affiliate.
7.2. Entire Agreement
----------------
This Agreement and the other writings referred to herein or delivered
pursuant hereto which form a part hereof contain the entire agreement among the
parties with respect to the subject matter hereof and supersede all prior and
contemporaneous arrangements or understandings with respect thereto.
7.3. Notices
-------
All notices, demands or other communications to be given or delivered
under or by reason of the provisions of this Agreement shall be in writing and
shall be deemed to have been given (a) when delivered personally to the
recipient, (b) one business day after being sent by reputable overnight courier
(charges prepaid) (regardless of whether the recipient refuses to accept
delivery), (c) five business days after being sent to the recipient by certified
or registered mail, return receipt requested and postage prepaid (regardless of
whether the recipient refuses to accept delivery) or (d) when sent to the
recipient by facsimile (followed promptly by courier or certified or registered
mail delivery). Deliveries should be directed as follows:
If to the Company or the Coyote Entities, to:
c/o Apollo Management, L.P.
1301 Avenue of the Americas, 38th Floor
New York, NY 10019
Telephone: 212-515-3200
Telecopy: 212-515-3232
Attention: Joshua J. Harris
12
with a copy to:
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, NY 10019
Telephone: 212-259-8000
Telecopy: 212-259-6333
Attention: Morton A. Pierce, Esq.
Douglas L. Getter, Esq.
If to the Assignee Purchasers, to:
BT Capital Investors, L.P.
130 Liberty Street
New York, NY 10006
Telephone: 212-250-3709
Telecopy: 212-250-7651
Attention: Ethan Falcove
with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, NY 10005
Telephone: 212-701-3000
Telecopy: 212-269-5420
Attention: John A. Tripodoro, Esq.
and
Pacer International Equity Investors, LLC.
Eleven Madison Avenue
New York, NY 10010
Telephone: 212-325-2625
Telecopy: 212-325-8018
Attention: Mark Kennelley
with a copy to:
Cahill Gordon & Reindel
80 Pine Street
New York, NY 10005
Telephone: 212-701-3000
Telecopy: 212-269-5420
Attention: John A. Tripodoro, Esq.
13
7.4. Waivers; Amendments
-------------------
(a) No failure or delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege.
(b) Any provision of this Agreement may be waived if, but only if,
such waiver is in writing and is signed, by the party or parties against whom
the waiver is to be effective. No provision of this Agreement may be amended or
otherwise modified except by an instrument in writing executed by the parties
hereto.
7.5. Counterparts
------------
This Agreement may be executed in any number of counterparts, and each
such counterpart hereof shall be deemed to be an original instrument, but all
such counterparts together shall constitute but one agreement.
7.6. Expenses
--------
All costs and expenses incurred in connection with this Agreement
shall be paid by the party incurring such cost or expense.
7.7. Remedies
--------
Each party hereto acknowledges that the remedies at law of the other
parties for a breach or threatened breach of this Agreement would be inadequate
and, in recognition of this fact, any party to this Agreement, without posting
any bond, and in addition to all other remedies which may be available, shall be
entitled to obtain equitable relief in the form of specific performance, a
temporary restraining order, a temporary or permanent injunction or any other
equitable remedy which may then be available. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
7.8. Applicable Law; Submission to Jurisdiction
------------------------------------------
This Agreement (other than the provisions of Article V which shall be
construed in accordance with and governed by the laws of the State of Delaware)
shall be construed in accordance with and governed by the laws of the State of
New York, without regard to the conflicts of law rules of such state. Each of
the parties hereto hereby consents to the non-exclusive jurisdiction of the
United States District Court for the Southern District of New York, or any other
New York State court sitting in New York, New York (and of the appropriate
appellate courts therefrom) over any suit, action
14
or proceeding arising out of or relating to this Agreement. Each party hereto
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of venue in any such court or that
any such proceeding which is brought in accordance with this Section has been
brought in an inconvenient forum. Subject to applicable law, process in any such
proceeding may be served on any party anywhere in the world, whether within or
without the jurisdiction of any such court. Without limiting the foregoing and
subject to applicable law, each party agrees that service of process on such
party as provided in Section 7.3 shall be deemed effective service of process on
such party. Nothing herein shall affect the right of any party to serve legal
process in any other manner permitted by law or at equity or to enforce in any
lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.
WITH RESPECT TO A PROCEEDING IN ANY SUCH COURT, EACH OF THE PARTIES IRREVOCABLY
WAIVES AND RELEASES TO THE OTHER ITS RIGHT TO A TRIAL BY JURY, AND AGREES THAT
IT WILL NOT SEEK A TRIAL BY JURY IN ANY SUCH PROCEEDING.
7.9. Severability
------------
The invalidity or unenforceability of any provisions of this Agreement
in any jurisdiction shall not affect the validity, legality or enforceability of
the remainder of this Agreement in such jurisdiction or the validity, legality
or enforceability of this Agreement, including any such provision, in any other
jurisdiction, it being intended that all rights and obligations of the parties
hereunder shall be enforceable to the fullest extent permitted by law.
7.10. Certain Definitions
-------------------
(a) For purposes of this Agreement, a "Public Offering" means any
underwritten public offering of equity securities of the Company pursuant to an
effective registration statement under the Securities Act of 1933, as amended
(the "Act") other than pursuant to a registration statement on Form S-4 or S-8
or any successor or similar form.
(b) For purposes of this Agreement, the "Threshold" means the public
or private sale by Coyote in any one or more transactions of $16 million, in the
aggregate, of Common Stock.
(c) For purposes of this Agreement, a "Person" shall mean an
individual, a partnership, a joint venture, a corporation, a limited liability
company, a trust, an unincorporated organization, a governmental entity or any
other entity.
7.11. Termination
-----------
This Agreement shall terminate at such time that Coyote shall own less
than 10% of the outstanding Common Stock on a fully diluted basis.
15
IN WITNESS WHEREOF, the parties hereto have caused this Common Stock
Purchase Agreement to be executed as of the date first above written.
PACER INTERNATIONAL, INC.
By: /s/ Donald C. Orris
________________________________________
Donald C. Orris
President and Chief Executive Officer
BT CAPITAL INVESTORS, L.P.
By: /s/ Joseph E. Wood
________________________________________
Name: Joseph E. Wood
Title: Managing Director
PACER INTERNATIONAL EQUITY INVESTORS, LLC.
By: /s/ Mark Patterson
________________________________________
Name: Mark Patterson
Title: Vice President
COYOTE ACQUISITION LLC
By: /s/ Marc Becker
________________________________________
Marc Becker
Vice President
COYOTE ACQUISITION II LLC
By: /s/ Marc Becker
________________________________________
Marc Becker
Vice President
16
INDEX OF TERMS
Acceptance Period 10
Act 15
Agreement 1
Article II Equivalent Portion 2
Article II Transferee 2
Article III Transferee 3
Article IV Equivalent Portion 5
Assignee Purchasers 1
BT 1
BT Shares 1
Common Stock 1
Company 1
Coyote 2
Coyote Entities 1
Coyote I 1
Coyote II 1
CSFB Shares 1
Drag-Along Notice 2
Offered Securities 10
Permitted Transfer 2
Person 15
Preemptive Notice 10
Preemptive Right 10
Proposed Issuance 10
Public Offering 15
Purchase Notice 11
Regulatory Problem 3
Restricted Shares 1
Stock Purchase Agreement 1
Tag-Along Notice 3
Threshold 15
17