Exhibit 4.5
AMENDMENT NO. 1 TO STOCKHOLDERS' AGREEMENT
This Amendment No. 1, dated as of February 28, 2001 (this "Amendment"), to
the Stockholders' Agreement (the "Original Agreement"), dated as of March 9,
2000, by and among Caravelle Investment Fund, L.L.C., a Delaware limited
liability company ("Caravelle"), CIBC WMC Inc., a Delaware corporation
("CIBCWMC"), Albion Alliance Mezzanine Fund, L.P., a Delaware limited
partnership ("Albion"), Albion Alliance Mezzanine Fund II, L.P., a Delaware
limited partnership ("Albion II" and, together with Caravelle, CIBCWMC and
Albion I, the "Preferred Investors" and, in their capacity as holders of shares
of Common Stock (and together with any of their Affiliates or Associated
Entities or Managed Funds (including Trimaran Fund II, L.L.C., the Trimaran
Co-Investors and TIP (as defined in the second and first recitals hereto)) that
have or may become transferees of any Common Stock held by them), the "Preferred
Investor Common Stockholders"), Transportation Technologies Industries, Inc., a
Delaware corporation and the surviving corporation in the Merger (the
"Company"), and the persons listed on Exhibit A attached hereto who are
signatories to such agreement (the "Individual Investors" and, together with the
Preferred Investor Common Stockholders, the "Stockholders"), is entered into by
and among the Preferred Investor Common Stockholders (other than CIBCWMC,
Trimaran and the Trimaran Co-Investors) and the Individual Investors. Unless
otherwise defined herein, capitalized terms used herein shall have the meanings
ascribed thereto in the Original Agreement.
RECITALS
WHEREAS, Transportation Investment Partners L.L.C. ("TIP"), Caravelle and
certain of the Individual Investors have purchased an aggregate of 465,116
shares of Common Stock, warrants (the "Warrants") to purchase an aggregate of
100,000 shares of Common Stock, contingent warrants (the "New Equity Contingent
Warrants") to purchase an aggregate of 465,116 shares of Common Stock, a
conversion option (the "Conversion Option") pursuant to which, upon exercise
thereof, the Company has agreed to issue to such Persons up to an aggregate of
697,674 shares of Common Stock and contingent warrants (the "Conversion
Contingent Warrants" and, together with the New Equity Contingent Warrants, the
"Contingent Warrants") to purchase up to an aggregate of 697,674 shares of
Common Stock;
WHEREAS, pursuant to the Assignment and Assumption Agreement, dated as of
June 30, 2000, Caravelle has assigned a portion of the Common Stock and
Preferred Stock acquired thereby to Trimaran Fund II, L.L.C. ("Trimaran"), and
the other Trimaran Co-Investors (as defined in the aforesaid Assignment and
Assumption Agreement), CIBC WMC, Inc. ("CIBCWMC"), pursuant to an Assignment and
Assumption Agreement, dated as of June 30, 2000, has assigned all the Common
Stock and Preferred Stock acquired thereby to Trimaran and the Trimaran
Co-Investors and Trimaran and the Trimaran Co-Investors, pursuant to an
Assignment and Assumption Agreement, dated as of February 27, 2001, have
assigned all the Common Stock and Preferred Stock acquired by Trimaran and the
Trimaran Co-Investors pursuant to the aforesaid assignment and assumption
agreement to TIP;
WHEREAS, pursuant to the aforesaid assignment and assumption agreements:
(a) CIBCWMC is no longer a party to the Original Agreement nor to the
other Ancillary Agreements (as defined in the aforesaid assignment and
assumption agreements) and has assigned its rights under the Ancillary
Agreements to Trimaran and the Trimaran Co-Investors and they have assumed
all CIBCWMC's liabilities thereunder; and
(b) Caravelle has assigned certain of its rights under the Ancillary
Agreements to Trimaran and the Trimaran Co-Investors and they have assumed
certain of Caravelle's liabilities thereunder; and
(c) Trimaran and the Trimaran Co-Investors are no longer a party to
the Original Agreement nor to the other Ancillary Agreements (as defined in
the aforesaid assignment and assumption agreements) and have assigned their
rights under the Ancillary Agreements to TIP and TIP has assumed all
Trimaran's and the Trimaran Co-Investor's liabilities thereunder; and
(d) by virtue of the aforesaid and Section 5(i) of the Original
Agreement, TIP became party to the Original Agreement;
WHEREAS, the parties hereto wish to amend the Original Agreement to
provide, among other things, for the election of new directors.
AGREEMENTS
NOW, THEREFORE, in consideration of the mutual covenants and obligations
set forth in this Amendment, the receipt and sufficiency of which are
acknowledged by each of the parties hereto, effective as of the date hereof
(except as provided herein), the parties hereto, intending to be legally bound,
hereby agree as follows:
1. Representations and Warranties. Each party hereto represents and
warrants that (a) this Amendment has been duly authorized, executed and
delivered by such party and constitutes the valid and binding obligation of such
party, enforceable against such party in accordance with its terms, and (b) such
party has not granted and is not a party to any proxy, voting trust or other
agreement which conflicts with or violates any provision of the Original
Agreement, as amended by this Amendment. No party to this Amendment shall grant
any proxy or become party to any voting trust or other agreement which conflicts
with or violates any provision of the Original Agreement, as amended by this
Amendment.
2. Amendments to Original Agreement.
(a) The number of directors specified in Section 2(a)(i) of the
Original Agreement is hereby changed to nine. The Stockholders shall take
all action to cause the Company's Certificate of Incorporation and By-Laws
so to provide as of the date hereof.
(b) The number of directors specified in Section 2(a)(ii) of the
Original Agreement is hereby changed to five. TIP, and, at its election,
any of its Affiliates or Associated Entities that may become transferees of
Common Stock, shall designate four of such directors and Caravelle, and, at
its election, any of its Affiliates or Associated Enti-
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ties that may become transferees of Common Stock, shall designate the
remaining such director. In addition to the directors already designated
thereby, TIP hereby designates Steven Flyer and Anthony Pui to serve as
directors.
(c) Section 2(a)(vi), and the last sentence of Section 2(b), of the
Original Agreement (and all references thereto in such agreement) are
hereby deleted.
(d) The amount in Section 3(d)(ii) of the Original Agreement is hereby
changed to $15.0 million and the amount in Section 3(d)(iii) thereof is
hereby changed to $20.0 million.
(e) Section 5(i)(ii) of the Original Agreement is hereby amended by
inserting immediately after the word, "above", therein: "or the transfers
described in the recitals to Amendment No. 1 to this Agreement, dated as of
February 28, 2001".
(f) Sections 8(a), (b) and (c) of the Original Agreement are hereby
restated in their entirety as follows:
(a) Until such time as a Qualified Public Offering shall have
been consummated (subject to the voting rights of directors elected by
the holders of Preferred Stock in accordance with the terms of the
Certificate of Designation), if Preferred Investor Common Stockholders
(such holders being the "Initiators") holding at least 75% of the
fully-diluted shares of Common Stock held by all Preferred Investor
Common Stockholders, assuming full conversion of the Preferred Stock,
propose a sale, merger or other Transfer involving all or
substantially all of the shares or assets of the Company on an arm's
length basis to a third party or an affiliated group of third parties
who is not (i) a Stockholder or (ii) an Affiliate of a Stockholder,
then the remaining Stockholders and their Permitted Transferees (the
"Remaining Stockholders") shall (subject to the voting rights of
directors elected by the holders of Preferred Stock in accordance with
the terms of the Certificate of Designation) consent to and raise no
objection with respect to (and will not exercise statutory appraisal
rights in connection with) such transaction and, if such transaction
is structured as a sale of shares (including a sale structured as a
merger, whether a forward, reverse or other merger), the Remaining
Stockholders will, at the option of the Initiators (subject to the
voting rights of the directors elected by the holders of Preferred
Stock in accordance with the terms of the Certificate of Designation),
agree to sell their shares on the terms and conditions approved by the
Board and the Initiators; provided, however, that (x) subject to the
first proviso to Section 8(c), any options as to the type of
consideration offered to any Initiator must be offered to the
Remaining Stockholders, (y) the consideration offered for any proposed
Transfer must be at least 80% cash or marketable securities and (iii)
there shall be no adverse tax consequences which relate or impact only
the Remaining Stockholders (as distinguished from all Stockholders)
arising from such transaction.
(b) To exercise the drag-along rights provided in this Section 8,
the Company shall first give to the Remaining Stockholders a written
notice (a
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"Drag-Along Notice") containing (i) the name and address of the
proposed transferee and (ii) the proposed purchase price, terms of
payment and other material terms and conditions of the proposed
transferee's offer. The Remaining Stockholders shall, at the option of
the Initiators, thereafter be obligated, subject to the terms and
conditions of this Section 8, to sell to the proposed transferee,
simultaneously with the other Stockholders' sales, its shares.
(c) At the closing of any Transfer of shares pursuant to this
Section 8, the Remaining Stockholders shall enter into agreements with
the purchaser of the shares containing terms substantially similar to
the terms on which the Initiators are Transferring their shares;
provided, however, that the consideration to be received in respect of
the Common Stock and Preferred Stock (i) in the case of a merger or
consolidation of the Company or a transfer of shares, shall be
determined on the basis of the Company's having distributed the
aggregate proceeds to be received by all holders of its capital stock
in such transaction in a liquidation thereof and (ii) in the case of a
sale of assets of the Company, shall be determined on the basis of the
Company having discharged all its remaining liabilities (or having
duly created reserves therefor) and then liquidating; and provided
further that (x) all claims in respect of breaches of representation
and warranties by the Stockholders or the Company (or claims for
indemnification in respect thereof) not described in the immediately
succeeding clause (y)(A) of this proviso (as if such clause applied to
the Initiators as well) shall first be paid by holders of Common Stock
(based on the number of shares of Common Stock Transferred thereby in
such transaction), and, to the extent such claims exceed such
aggregate consideration, by the holders of the Preferred Stock (based
on the number of shares of Preferred Stock Transferred thereby in such
transaction); and (y) notwithstanding anything contained in this
Agreement to the contrary, neither the Remaining Stockholders nor any
of their respective Permitted Transferees shall be required to (A)
make any representations or warranties, or provide indemnification, to
any person (other than representations and related indemnification
regarding the due authorization to enter and to perform the agreement
of sale, the validity and enforceability of the agreement of Transfer,
good title to the shares Transferred, regarding the absence of liens
or encumbrances on the shares so Transferred and as provided in the
immediately succeeding clause (B) of this proviso), and (B) each of
the Remaining Stockholders' liability for breach of any
representations and warranties in respect of the Company will be
several and not joint, will be proportionate to the percentage of the
shares it Transfers, and will be limited to any proceeds received or
receivable by it arising from such Transfer.
(g) (i) Section 17(a) of the Original Agreement (and all references
thereto in such agreement) are hereby deleted. Each Individual Investor
hereby agrees to such amendments, as may be reasonably requested by the
Company, to his employment agreement so as to reflect such deletion.
(ii) The first and second sentences of Section 17(b)(ii) of the
Original Agreement are hereby replaced with the following:
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"If the call right provided for in Section 17(b)(i) is not fully
exercised during the First Call Period, the Stockholders (other than
the terminated Individual Investor and any Affiliated Transferee)
shall have the right and option for 30 days after the First Call
Period (the "Second Call Period") to purchase any or all shares then
held by the terminated Individual Investor and any Affiliated
Transferee not purchased pursuant to Section 17(b)(i), and the
Individual Investor (and any Affiliated Transferee) shall be required
to offer to such Stockholders any or all such shares at a price per
share equal to the applicable purchase price determined to pursuant to
Section 17(b)(iv). Each Stockholder having an option to acquire shares
pursuant to the immediately preceding sentence may elect to acquire up
to all the shares so offered. If the aggregate number of shares
elected to be purchased by the Stockholders exceeds the number of
shares so offered, each Stockholder may first purchase up to his pro
rata portion of the shares so offered (which shall be the percentage
of the shares so offered that is equal to the percentage of
fully-diluted shares held by such Stockholder divided by the
percentage of fully-diluted shares held by all Stockholders electing
to purchase portions of the shares so offered), and the balance of any
shares to be so purchased shall be allocated among Stockholders who
elected to purchase more than such pro rata share in the proportion in
which such pro rata share of each such Stockholder bears to the
others."
(iii) (x) The phrase, "Preferred Investor Common", in the last
sentence of Section 17(b)(ii) of the Original Agreement is hereby deleted,
(y) the reference in such sentence to "the preceding sentence" is hereby
changed to "the first sentence" and (z) the reference in such sentence and
in Section 17(b)(iii) of the Original Agreement to "Third Call Period" and
"Fourth Call Period" is hereby changed to "Second Call Period" and "Third
Call Period", respectively.
(iv) (x) The second sentence of Section 17(b)(iii) of the Original
Agreement (and all references thereto in such agreement) are hereby
deleted; and (y) the phrase, "Preferred Investor Common", in the last
sentence of Section 17(b)(iii) of the Original Agreement is hereby deleted
in each instance.
(h) The following is hereby added as a new Section 3A to the Original
Agreement:
"Without the affirmative vote (or written consent) of (A) Individual
Investors (and their Permitted Transferees) holding a majority of
shares of Common Stock held by all Individual investors (and their
Permitted Transferee) or (B) all members of the Board, the Company
shall not:
(a) (nor shall it permit any of its Subsidiaries to) engage in
any transaction with any Affiliate of the Company that is a Preferred
Investor Common Stockholder (or an Affiliate thereof) (i) that is not
fair from a financial point of view to the Company and its
Subsidiaries or (ii) which, either alone or together with a series of
related transactions involving such Persons, involves amounts having a
fair market value in excess of $5 mil-
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lion without having obtained an opinion of an Independent Financial
Expert (as defined in the Contingent Warrant Agreement) that the terms
of such transaction are fair to the Company and its Subsidiaries from
a financial point of view;
(b) amend its Certificate of Incorporation or By-Laws in a manner
that is designed to affect an Individual Investor in a materially
different manner from the manner in which such amendment affects other
holders of Common Stock who are not Individual Investors or their
Permitted Transferees; provided that this Section 3A shall not apply
to any transaction or amendment made in connection with a transaction
subject to Section 8."
(i) The following is hereby added as new Section 3B to the Original
Agreement:
(a) "(a) Without the prior consent of the Company (which consent
may be given or withheld for any reason, whether reasonable or
unreasonable), no Individual Investor, while employed by the Company
or any Subsidiary of the Company, shall (nor shall he permit any of
his Related Persons or any Affiliates of him or of such Related
Persons to) enter into any agreement or understanding with respect to
the acquisition or other purchase of any direct or indirect ownership
interest (other than less than 1% of a class of publicly traded
securities) in any business that is competitive with the Company or
any of its Subsidiaries (i) until 20 business days after the date on
which the Company and the Board received the written request
contemplated by Section 3B(b) in respect of any such acquisition or
purchase; and (ii) at any time after the Board rejects such request
(as evidenced by a notice given to the Individual Investor making such
request (as contemplated by Section 3B(b)) from the Company to such
effect no later than the end of such 20 business day period.
(b) (b) Any Individual Investor may bring to the attention of the
Board any transaction described in Section 3B(a) of the immediately
preceding sentence. If the Board elects not to pursue such
transaction, such Individual Investor may request in writing that the
Board permit him to pursue the same, in which event the Board shall
consider such request; provided that the Board shall be under no
obligation to grant such request and may deny the same for any reason,
whether reasonable or unreasonable."
(j) The following proviso is hereby added to the definition of "fully
diluted" in Section 20 of the Original Agreement:
"provided that Contingent Warrants shall only be included to the extent
they are exercisable at the time of determination".
(k) The following definitions are hereby added to Section 20 of the
Original Agreement:
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""Contingent Warrants" shall have the meaning ascribed to such term in the
second recital to Amendment No. 1 to this Agreement, dated as of February 28,
2001.
"Conversion Contingent Warrants" shall have the meaning ascribed to such
term in the second recital to Amendment No. 1 to this Agreement, dated as of
February 28, 2001.
"Initiators" shall have the meaning ascribed to such term in Section 8(a)
of this Agreement, as amended by Amendment No. 1 to this Agreement, dated as of
February 28, 2001.
"New Equity Contingent Warrants" shall have the meaning ascribed to such
term in the first recital to Amendment No. 1 to this Agreement, dated as of
February 28, 2001.
"Santomero" shall have the meaning ascribed to such term in the second
recital to Amendment No. 1 to this Agreement, dated as of February 28, 2001.
"TIP" shall have the meaning ascribed to such term in the first recital to
Amendment No. 1 to this Agreement, dated as of February 28, 2001.
"Warrants" shall have the meaning ascribed to such term in the first
recital to Amendment No. 1 to this Agreement, dated as of February 28, 2001."
(l) The following is hereby added to the end of Section 21 (a) of the
Original Agreement:
"Notwithstanding the foregoing, the Company shall enter into such
amendments to this Agreement such that each Person acquiring shares of
Common Stock upon exercise of the Conversion Option, the Warrants or
the Contingent Warrants shall become a party to this Agreement and
that such Person shall, for purposes of this Agreement (in respect of
such shares), be (x) a Preferred Investor Common Stockholder, if the
initial holder of the portion of the Conversion Option or the initial
holder of the Warrants or Contingent Warrants, as the case may be, in
respect of the exercise of which such shares were acquired by such
Person was a Preferred Investor Common Stockholder, or (y) an
Individual Investor, if the initial holder of the portion of the
Conversion Option or the initial holder of the Warrants or Contingent
Warrants, as the case may be, in respect of the exercise of which such
shares were acquired by such Person was an Individual Investor."
3. (a) Each Individual Investor agrees to such amendments, as may be
reasonably requested by the Company, to his employment agreement so as to
provide that this Amendment and the transactions contemplated hereby do not
constitute a Change of Control.
(b) The parties hereto hereby agree to use their respective reasonable
commercial efforts to make such amendments to all other agreements and
documentation in respect of the Company to effectuate the amendments to the
Original Agreement herein contemplated.
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4. At the Closing Time (as defined in the Purchase Agreement, dated as of
February 20, 2001, by and among the Company and the purchasers named therein),
the Company, Thomas M. Begel, Timothy A. Masek, Kenneth M. Tallering, John
Wilkinson and Andrew M. Weller shall execute and deliver to each other a letter
substantially in the form attached as Exhibit A hereto.
5. Except as provided in Section 2 of this Amendment, the Original
Agreement shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on the
day and year first above written.
PREFERRED INVESTORS
CARAVELLE INVESTMENT FUND L L C
By: Caravelle Advisors, L.L.C.,
its investment manager and attorney-in-fact
By: /s/ Jason Block
---------------------------------------------
Name:
Title:
TRANSPORTATION INVESTMENT PARTNERS L.L.C.
By: /s/ Dean C. Kehler
-------------------------------------------
Name:
Title:
ALBION-ALLIANCE MEZZANINE FUND. L P
By: Albion Alliance LLC, its general partner
By: /s/ Alastair Tedford
-------------------------------------------
Name:
Title:
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ALBION-ALLIANCE MEZZANINE FUND II L.P
By- AA MEZZ II GP, LLC, its general partner
By: Albion Alliance LLC, its sole member
By: /s/ Alastair Tedford
-------------------------------------------
Name:
Title:
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INDIVIDUAL INVESTORS
/s/ Thomas M. Begel
---------------------------------
Thomas M. Begel
/s/ Timothy A. Masek
---------------------------------
Timothy A. Masek
/s/ Kenneth M. Tallering
---------------------------------
Kenneth M. Tallering
/s/ Andrew M. Weller
---------------------------------
Andrew M. Weller
/s/ James D. Cirar
---------------------------------
James D. Cirar
/s/ Camillo M. Santomero III
---------------------------------
Camillo M. Santomero III
/s/ John Wilkinson
---------------------------------
John Wilkinson
/s/ Robert L. Jackson
---------------------------------
Robert L. Jackson
/s/ Donald C. Mueller
---------------------------------
Donald C. Mueller
/s/ Lee Swafford
---------------------------------
Lee Swafford
/s/ Kelly Bodway
---------------------------------
Kelly Bodway
/s/ David W. Riesmeyer
---------------------------------
David W. Riesmeyer
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/s/ Brent Williams
---------------------------------
Brent Williams
/s/ Jeffrey Elmer
---------------------------------
Jeffrey Elmer
/s/ Adam Gottlieb
---------------------------------
Adam Gottlieb
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C+H ENTERPRISES GROUP, INC.
By: /s/ Fred Culbreath
-----------------------------------------
Name: Fred Culbreath
Title: Partner
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TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC.
By: /s/ Donald C. Mueller
-----------------------------------------
Name: Donald C. Mueller
Title: Chief Financial Officer,
Treasurer and Vice President
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