EXHIBIT 99.2
STOCK REPURCHASE OPTION AGREEMENT
THIS STOCK REPURCHASE OPTION AGREEMENT (this "Agreement"), made as of
the 15th day of August, 2003 (the "Date of Grant"), between Minorplanet Systems
USA, Inc., a Delaware corporation (the "Company"), and The Erin Mills Investment
Corporation, a Canadian corporation ("Erin Mills").
Pursuant to that certain Stock Purchase and Sale Agreement by and
between Erin Mills and Minorplanet Systems, PLC, a United Kingdom public limited
company, dated the date hereof, Erin Mills acquired 20,378,517 shares ("Shares")
of the Company's Common Stock, par value $0.01 per share ("Common Stock"). Erin
Mills desires to grant the Company an option to repurchase 19,378,517 of its
Shares on the terms and conditions set forth herein. Capitalized terms not
otherwise defined herein shall have the meanings set forth in Section 19.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises, covenants and agreements hereinafter set forth and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to become legally bound, agree as
follows:
1. Grant of the Stock Option. Erin Mills hereby grants to the Company the
right and option to repurchase, on the terms and conditions hereinafter
set forth, 19,378,517 of the Shares (subject to adjustment as provided
in Section 9 hereof, the "Stock Option"). The purchase price for the
Shares shall be equal to $0.01 for every 1,000 Shares acquired by the
Company (the "Exercise Price"), for an aggregate Exercise Price of
$193.79.
2. Stock Option Term. The term of the Stock Option shall commence on the
date hereof and continue until August 15, 2013.
3. Exercisability and Vesting of the Stock Option. All Shares included in
the Stock Option shall be 100% vested upon grant. Notwithstanding the
foregoing or any other provision to the contrary contained herein, the
Company may not exercise all or any part of the Stock Option at any
time in which the Company (by virtue of the knowledge of its executive
officers and directors) is in possession of material non-public
information with regarding or respect to itself.
4. Exercise of the Stock Option. Subject to Section 12 of this Agreement,
the Stock Option may be exercised in whole, or in part from time to
time by the Company; provided that the minimum number of Shares for
which the Stock Option may be exercised is 1,000 Shares (subject to
adjustment as provided in Section 9 hereof) or such lesser number as
may remain subject to the Stock Option. The exercise of the Stock
Option or any part thereof shall be evidenced by a notice in writing by
the Company to Erin Mills, and shall state the number of Shares desired
to be repurchased by the Company in that particular exercise. The
Exercise Price of the Shares as to which the Stock Option shall be
exercised shall be paid in full at the time of exercise, and shall be
paid to Erin Mills in cash (including check, wire transfer, bank draft,
or money order).
5. Representations and Warranties of Erin Mills. Erin Mills hereby
represents and warrants to the Company as follows:
(a) Title to Shares. Erin Mills is the sole holder of record and
beneficial owner of all 19,378,517 Shares of Common Stock.
There are no outstanding warrants, options, rights of refusal
or otherwise, agreements, calls or other commitments or
similar agreements (in each case, to which Erin Mills is a
party) relating to, providing for or prohibiting the sale,
conveyance, transfer, gift, pledge, mortgage or other
disposition or encumbrance or the granting or permitting any
person, corporation, partnership, limited liability company,
trust or other entity to acquire the Shares, or any part
thereof, except as provided by this Agreement. Upon valid
exercise of the Stock Option in full as herein provided and
delivery of the duly executed and endorsed certificates
representing the Shares to the Company, the Company shall
acquire full legal and beneficial ownership of 19,378,517
Shares (subject to adjustment as provided in Section 9 hereof)
free and clear of any and all Liens.
(b) Capacity of Erin Mills; Execution of Agreement. Erin Mills has
the absolute and unrestricted right, power, authority and
capacity to enter into this Agreement and to perform the
obligations required to be performed by Erin Mills hereunder.
This Agreement has been duly executed and delivered by, and
constitutes the valid and legally binding obligation of Erin
Mills, enforceable against Erin Mills in accordance with its
terms, except as may be limited by applicable bankruptcy,
insolvency or similar proceedings and general principles of
equity.
(c) No Brokers. Erin Mills has not employed any person who could
claim a brokerage commission or other fee in connection with
either the negotiation or execution of this Agreement or the
consummation of the transactions effected hereby.
(d) Sophisticated Seller. Erin Mills is a sophisticated seller
with respect to the Shares, has adequate information
concerning the business and financial condition of the Company
and its properties to make an informed decision regarding this
Agreement and has independently, based upon such information
as it deemed appropriate, made its own analysis and decision
to enter into and consummate this Agreement, after it has had
opportunities to ask questions of the Company and receive
answers to its satisfaction. Erin Mills has voluntarily
entered into this Agreement for valuable consideration and not
by reason of duress (financial or otherwise), fraud, undue
influence or mistake, and it is not in a significantly
disparate bargaining position.
(e) No Knowledge of Information. As of the date hereof, Erin Mills
is not in possession of any material, non-public information
regarding or with respect to the Company.
6. Representations and Warranties of the Company. The Company represents
and warrants to Erin Mills as follows:
(a) Authority of the Company; Execution of the Agreement. The
Company has the absolute and unrestricted right, power,
authority and capacity to enter into this Agreement and to
perform the obligations required to be performed by the
Company hereunder. This Agreement has been duly executed and
delivered by, and constitutes the valid and legally binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except as may be limited by
applicable bankruptcy, insolvency or similar proceedings and
general principles of equity.
(b) No Knowledge of Information. On the date of any exercise of
the Stock Option by the Company, the Company will not be in
possession of any material, non-public information regarding
or with respect to itself.
7. Certain Matters with Respect to the Shares. Erin Mills hereby covenants
and agrees at all time during the term of this Agreement (i) to
maintain ownership, beneficially and of record, of a number of Shares
equal to the number of Shares necessary to satisfy the exercise in full
of the Stock Option by the Company, (ii) to continuously own such
Shares free and clear of any and all Liens (as defined below), and
(iii) to not enter into (or agree to enter into) any Agreement granting
to any other person or entity a warrant, option, right of first
refusal, call, right, or similar rights with respect to any of the
Shares that are subject to the Stock Option, or granting any right to
purchase, transfer, or otherwise acquire any of the Shares that are
subject to the Stock Option.
8. Rights as Stockholder. The Company will have none of the rights or
privileges of a stockholder of the Company (as treasury stock) in
respect of any of the Shares of Common Stock subject to the Stock
Option unless and until the third Business Day following the valid
exercise of the Stock Option, and the Company will not be deemed to
hold or own, beneficially or otherwise, such Shares (subject that
exercise) until that time.
9. Adjustments upon Changes in Capitalization or Reorganization. The
number of Shares included in the Stock Option shall be adjusted from
time to time as follows:
(a) Subject to any required action by stockholders, the number of
Shares covered by the Stock Option, and the Exercise Price,
shall be proportionately adjusted for any increase or decrease
in the number of issued Shares resulting from a subdivision or
consolidation of Shares or the payment of a stock dividend
thereon.
(b) Subject to any required action by stockholders, if the Company
shall not be the surviving corporation in any merger or
consolidation, the Stock Option shall pertain to and apply to
the securities to which a holder of the number of Shares
subject to the Stock Option would have been entitled in
connection with the merger or consolidation, and if a plan or
agreement reflecting any such event is in effect that
specifically provides for the change, conversion, or exchange
of
Common Stock, then any adjustment to Shares relating to the
Stock Option hereunder shall be consistent with the terms of
any such plan or agreement.
(c) In the event of a change in the Common Stock as presently
constituted, which is limited to a change of par value into
the same number of shares of Common Stock with a different par
value or without par value, the Common Stock resulting from
any such change shall be deemed to be the Shares within the
meaning of this Agreement.
(d) In the event of an equity restructuring transaction, such as a
spinoff or recapitalization through a special, large, and
nonrecurring dividend, the exercise price and number of Shares
purchased on the exercise of this Stock Option may be adjusted
in order to maintain the participant in the same economic
position as before the equity restructuring transaction,
provided that:
(i) The aggregate intrinsic value (difference between the
market value per Share and the Exercise Price) of the
Stock Option immediately after the change is not
greater that the aggregate intrinsic value of the
Stock Option immediately before the change; and
(ii) The ratio of the Exercise Price to the market value
per Share is not reduced.
To the extent that the foregoing adjustments relate to stock
or securities of the Company, such adjustments shall be made
by the Board (as defined below) and the Company shall deliver
notice to Erin Mills of such adjustment made by the Board
within 10 Business Days thereafter.
(e) The grant of the Stock Option shall not affect in any way the
right or power of the Company to make adjustments,
reclassifications, or changes of its capital or business
structure or to merge or to consolidate or to dissolve,
liquidate, or sell or transfer all or any part of its business
or assets.
10. Non-Transferability of the Stock Option. Any attempted assignment,
transfer, pledge, hypothecation, or other disposition of the Stock
Option, or the levy of any execution, attachment, or similar process
upon the Stock Option shall be null and void and without effect.
11. Transfer of Shares. Upon the valid exercise of the Stock Option as to
any of the Shares subject to the Stock Option, Erin Mills shall
surrender to the Company all certificates representing Shares that are
being acquired by the Company by the present exercise thereof, duly
endorsed by Erin Mills to the Company or in blank, at the Company's
principal executive offices, within three (3) Business Days of receipt
of a notice of exercise from the Company. All certificates surrendered
by Erin Mills shall be accompanied by such other instruments of
transfer as may be reasonably required by the Company. Upon valid
exercise of the Stock Option, the Board shall cause the Secretary of
the Company to reflect such shares as treasury shares until further
directed.
12. Restrictions on Exercise. Notwithstanding any provision to the contrary
contained herein, the Stock Option shall not be exercisable unless and
until the occurrence of the closing of the transactions contemplated by
that certain Binding Letter Agreement, dated the date hereof, among
Minorplanet Systems USA, Inc., Minorplanet Systems PLC, and Minorplanet
Limited.
13. Notices. Any notice, demand, claim, request, waiver or consent or other
communication required or permitted to be given under the provisions of
this Agreement shall be in writing and shall be deemed to have been
duly delivered if delivered by any of the following means of delivery,
and shall be deemed to have been duly delivered and received on the
date (or the next Business Day if delivery is not made on a Business
Day) of personal delivery or facsimile transmission or on the date (or
the next Business Day if delivery is not made on a Business Day) of
receipt, if mailed by registered or certified mail, postage prepaid and
return receipt requested, or on the date (or the next Business Day if
delivery is not made on a Business Day) of a stamped receipt, if sent
by an overnight delivery service, and sent to the following addresses
(or to such other address as any party may request, in the case of the
Company, by notifying Erin Mills, and in the case of Erin Mills, by
notifying the Company in each case in accordance with this Section):
(a) If to the Company:
Minorplanet Systems USA, Inc.
1155 Kas Drive
Suite 100
Richardson, TX 75081
Attn: J. Raymond Bilbao
Telephone: (972) 301-2733
Facsimile: (972) 301-2263
with a copy to:
Locke Liddell & Sapp LLP
2200 Ross Avenue
Suite 2200
Dallas, TX 75201
Attn: Stephen L. Sapp
Telephone: (214) 740-8570
Facsimile: (214) 740-8800
(b) If to Erin Mills:
The Erin Mills Investment Corporation
7501 Keele St., Suite 500
Concord, ONTARIO L4K 1Y2
Attn: Gerry Quinn
Telephone: (416) 736-1809
Facsimile: (416) 736-8373
with a copy to:
David H. Oden
Haynes and Boone, LLP
2505 N. Plano Road, Suite 4000
Richardson, Texas 75080
Telephone: (972) 739-6929
Facsimile: (972) 692-9029
14. Governing Law; Arbitration. The corporate laws of the State of Delaware
shall govern all issues concerning the relative rights of the Company
and its stockholders. All other questions concerning the construction,
validity, enforcement and interpretation of this Agreement shall be
governed by and construed and enforced in accordance with the laws of
the State of Texas, without regard to the principles of conflicts of
law thereof.
15. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto concerning the subject matter hereof, and
from and after the date of this Agreement, shall supersede any other
prior agreement or understanding, both written and oral, between the
parties with respect to such subject matter.
16. Amendment of Agreement; Waiver. This Agreement may not be modified or
amended in any respect except by an instrument in writing signed by the
party against whom such modification or amendment is sought to be
enforced. Any term or condition of this Agreement may be waived at any
time by the party hereto which is entitled to have the benefit thereof,
but such waiver shall only be effective if evidenced by a writing
signed by such party, and a waiver on one occasion shall not be deemed
to be a waiver of the same or any other type of breach on a future
occasion. No failure or delay by a party hereto in exercising any right
or power 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 or power.
17. Captions. The captions herein are inserted for convenience of reference
only, do not constitute a part of this Agreement, and shall not affect
in any manner the meaning or interpretation of this Agreement.
18. References. All references in this Agreement to Sections, subsections,
and other subdivisions refer to the Sections, subsections, and other
subdivisions of this Agreement unless expressly provided otherwise. The
words "this Agreement," "herein," "hereof," "hereunder," and words of
similar import refer to this Agreement as a whole and not to any
particular subdivision unless expressly so limited. Whenever the words
"include," "includes," and "including" are used in this Agreement, such
words shall be deemed to be
followed by the words "without limitation." Words in the singular form
shall be construed to include the plural and vice versa, unless the
context otherwise requires.
19. Defined Terms. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings
indicated:
(a) "Board" means the Board of Directors of the Company.
(b) "Business Day" shall mean any day other than a Saturday,
Sunday, U.S. national legal holiday, or a legal holiday under
the laws of the State of Texas.
(c) "Lien" shall mean any mortgage, pledge, hypothecation, right
of first refusal, security interest, assignment, charges,
encumbrance, claim, easement, transfer restriction, lien
(statutory or otherwise) or security agreement of any kind or
nature whatsoever.
[The next page is the signature page.]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
COMPANY:
MINORPLANET SYSTEMS USA, INC.
By: /s/ W. Michael Smith
----------------------------------------
Name: W. Michael Smith
Title: Chief Operating Officer
ERIN MILLS:
THE ERIN MILLS INVESTMENT
CORPORATION
By: /s/ Gerry Quinn
---------------------------------------
Name: Gerry Quinn
Title: President