Exhibit 4.6
AMENDMENT NO.2 TO STOCKHOLDERS' AGREEMENT
This Amendment No. 2, dated as of December 19, 2003 (this "Amendment"), to
the Stockholders' Agreement (the "Original Agreement"), dated as of March 9,
2000, as amended by Amendment No. 1 thereto ("Amendment No. 1," collectively,
the "Stockholders' Agreement"), dated as of February 28, 2001, by and among
Transportation Investment Partners, LLC ("TIP"), a Delaware limited liability
company, Caravelle Investment Fund, L.L.C., a Delaware limited liability company
("Caravelle"), 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 TIP, Caravelle, and Albion
I, the "Preferred Investors" and, solely in their capacity as holders of shares
of Common Stock (and together with any of their Affiliates or Associated
Entities or Managed Funds 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 and the Individual Investors. Unless otherwise defined herein,
capitalized terms used herein shall have the meanings ascribed thereto in the
Original Agreement.
RECITALS
WHEREAS, the Company is undertaking the following actions: (i) the filing
of certificates of designation to create the Series C Preferred Stock, par value
$0.01 per share, of the Company (the "Series C Preferred Stock"), Series D
Preferred Stock, par value $0.01 per share, of the Company (the "Series D
Preferred Stock"), and Series E Senior Preferred Stock, par value $0.01 per
share, of the Company (the "Series E Preferred Stock"), (ii) the exchange
between certain Individual Investors, the Company and certain Stockholders of
80,233 shares of common stock of the Company for 14,000 shares of Series C
Preferred Stock, (iii) the issuance of 42,000 shares of Series D Preferred Stock
to the holders of the Company's common stock (other than certain Individual
Investors) for a purchase price of $4,200, (iv) the issuance of up to 40,575
shares of Series E Preferred Stock in exchange for $40,000,000 in principal
amount of subordinated debt and up to $575,000 in accrued PIK interest thereon,
(v) the issuance of up to 1,000 shares of Series E Preferred Stock for a
purchase price of $1,000,000, the proceeds of which shall prepay up to
$1,000,000 in accrued and unpaid cash interest on the subordinated debt and the
remainder, if any, shall pay a portion of the fees and expenses incurred in
connection with the transactions described in clauses (i), (ii), (iii) and (iv)
above and this clause (v), (vi) the payment of up to $2,250,000 in cash in
respect of the portion of the transaction costs not paid with the proceeds of
the Series E Preferred Stock described in clause (v) above, and (vii) the
Company shall have the option to issue additional shares of Series E Preferred
Stock in connection with the other transactions described in clauses (i) through
(vi) above resulting in additional proceeds not to exceed $4,000,000
(collectively, the "Transactions");
WHEREAS, in connection with the Transactions, the Stockholders and the
Company wish to amend the Stockholders' Agreement to provide, among other
things, for the application of certain provisions of the Stockholders' Agreement
to shares issued in the Transactions
and for the joinder of certain individuals acquiring shares issued in the
Transactions as parties to the Stockholders' Agreement;
WHEREAS, the Stockholders and the Company wish to amend the Stockholders'
Agreement to provide, among other things, for the treatment of the Series A
Preferred Stock, the Series C Preferred Stock, the Series D Preferred Stock and
the Common Stock in a Total Sale and Series A Total Sale (each as defined
herein);
WHEREAS, pursuant to Section 18(b) of the Stockholders' Agreement, if at
any time the Company proposes to sell shares, subject to certain exceptions, in
a private or a similar non-public placement, the Company shall offer to sell
such shares to the Stockholders, who shall have the right to purchase a certain
amount of such shares, such rights comprising the "Preemptive Rights"; and
WHEREAS, the Stockholders wish to (i) waive the Preemptive Rights with
respect to the issuance of shares pursuant to the Transactions, (ii) waive the
provisions of Section 5 (Transfer of Common Stock), Section 6 (Right of First
Offer) and Section 7 (Tag-Along Rights) of the Stockholders' Agreement with
respect to the transactions contemplated by the Transactions (the "Transfer
Restrictions") and (iii) consent to the Transactions.
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 Stockholders'
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 Stockholders' Agreement, as amended by
this Amendment.
2. Amendments to Stockholders' Agreement. The Stockholders' Agreement is
hereby amended as follows:
(a) The heading to Section 5 and the entirety of Sections 5(a) and (b)
are hereby replaced with the following:
"5. Transfer of Common Stock, Series C Preferred Stock, Series E
Preferred Stock and Special Warrants held by Individual Investors.
(a) None of the shares of Common Stock, Series C Preferred
Stock, Series E Preferred Stock or Special Warrants held by any
Individual Investor or his Permitted Transferees may be
Transferred except in ac-
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cordance with this Agreement. Any attempted Transfer of shares of
Common Stock, Series C Preferred Stock, Series E Preferred Stock
or Special Warrants other than in accordance with the terms of
this Agreement shall be null and void and the Company shall
refuse to recognize any such Transfer and shall not reflect on
its records any change in record ownership of such securities.
Notwithstanding anything contained in this Section 5(a) or
Section 5(b) to the contrary, but subject to the other provisions
of this Section 5, each Individual Investor (and the Permitted
Transferees thereof) shall be permitted to Transfer its shares of
Common Stock (and, in the case of Section 17, its Series C
Preferred Stock, Series E Preferred Stock and Special Warrants)
in accordance with the applicable provisions of Section 6 (Right
of First Offer), Section 7 (Tag-Along Rights), Section 8
(Drag-Along Rights), Section 8A (Total Sale Event), Section 8B
(Total Sale of Series A Preferred Stock) and Section 17 (Call
Rights).
(b) The shares of Common Stock, Series C Preferred Stock,
Series E Preferred and Special Warrants, in each case held by the
Individual Investors from and after the date of this Agreement,
shall not be Transferable until the earlier to occur of (i) the
fifth anniversary of the Effective Time (or, with respect to the
Series E Preferred Stock, a proportionate number of shares of
Series E Preferred Stock, based on amounts owned on the date
hereof, to that sold in earlier sales of Series E Preferred Stock
by Preferred Investor Common Stockholders or their respective
Affiliates, other than sales from them to their Affiliates or
from their Affiliates to them or their other Affiliates) or (ii)
the consummation of a Qualified Public Offering, in each case
held by the Individual Investors from and after the date of this
Agreement shall not be Transferable, except as follows:
(1) each of Camillo M. Santomero II, Begel, Andrew M.
Weller and James D. Cirar (collectively, the "Named
Investors") may Transfer such securities among themselves;
(2) each of the Named Investors may Transfer, in one or
a series of transactions, in the aggregate up to 5% of the
fully-diluted shares of Common Stock (either through the
Transfer of Common Stock or Special Warrants) and up to 5%
of the Series C Preferred Stock and up to 5% of the Series E
Preferred Stock, in each case held by such Named Investor on
the date of Amendment No. 2 to this Agreement to other
Individual Investors or to new persons who become members of
management of the Company after the Effective Time ("New
Management");
(3) each Individual Investor as of the date of
Amendment No. 2 to this Agreement (other than the Named
Investors) may Transfer such securities to any other
Individual Investor or to New Management;
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(4) each Individual investor which is not an individual
may Transfer such securities to an Affiliate that is wholly
owned by one or more of such Individual Investors and its
Related Persons; and
(5) each Individual Investor may Transfer such
securities to a Related Person of such Individual Investor,
or a trust or similar entity which is controlled by such
Individual Investor and is established entirely for the
benefit of such Individual Investor or his Related Persons,
or an individual retirement account or pension plan for the
Individual Investor's benefit (each Individual Investor
agrees to provide the Company and each other Stockholder,
upon request, with evidence reasonably acceptable to it that
each such Transfer complies with this clause (5)).
The transferee in each of the Transfers described in clauses (1) through
(5) above (to the extent such Transfer is made pursuant to one of such clauses)
is herein referred to as a "Permitted Transferee."
(b) Sections 5(e) and (f) are hereby replaced with:
"(e) Prior to the earlier to occur of (i) the fifth anniversary
of the Effective Time and (ii) the consummation of a Qualified Public
Offering, each certificate representing shares of Common Stock, Series
C Preferred Stock, Series E Preferred Stock or Special Warrants held
by an Individual Investor shall contain upon its face or upon the
reverse side thereof the following legend:
This certificate represents securities which are restricted and
which are subject to the terms and conditions of a Stockholders'
Agreement, dated as of March 9, 2000, as amended on February 28,
2001 and December 19, 2003, by and among the stockholders and
certain security holders of Transportation Technologies
Industries, Inc. (a copy of which is on file at the principal
office of Transportation Technologies Industries, Inc.). No sale,
transfer, assignment, pledge, hypothecation or other disposition
of this certificate or any of the interests or securities
represented hereby shall be made except in compliance with the
terms and conditions of said Agreement.
(f) Each certificate representing shares of Common Stock, Series
C Preferred Stock, Series E Preferred Stock and Special Warrants held
by a Stockholder shall contain upon its face or upon the reverse side
thereof the following additional legend:
The Securities evidenced by this certificate have not been
registered under the Securities Act of 1933, as amended, and must
be held indefinitely unless they are transferred pursuant to an
effective registration statement under the Act, or after receipt
of an opinion of counsel satisfactory to
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Transportation Technologies Industries, Inc. that registration is
not required or an appropriate no-action letter is received from
the Securities and Exchange Commission."
(c) The first paragraph of Section 5(h) is hereby replaced with:
"(h) Each Stockholder agrees that, prior to any proposed Transfer
of any shares of Common Stock, and each Individual Investor agrees
that, prior to any proposed Transfer of any shares of Series C
Preferred Stock, Series E Preferred Stock or Special Warrants (other
than, in each case, a Transfer not involving a change in beneficial
ownership), unless there is in effect a registration statement under
the Securities Act covering the proposed Transfer, the Stockholder
shall give written notice to the Company of such holder's intention to
effect such Transfer. Each such notice shall describe the manner and
circumstances of the proposed Transfer in reasonable detail, and, if
requested by the Company, shall be accompanied, at such Stockholder's
expense, by either (i) a written opinion of legal counsel who shall
be, and whose legal opinion shall be, reasonably satisfactory to the
Company, addressed to the Company, to the effect that the proposed
Transfer of such securities may be effected without registration under
the Securities Act, or (ii) a "no action" letter from the Securities
and Exchange Commission (the "Commission") to the effect that the
Transfer of such securities without registration will not result in a
recommendation by the staff of the Commission that action be taken
with respect thereto, whereupon the holder of such securities shall be
entitled to transfer such securities in accordance with the terms of
the notice delivered by such Stockholder to the Company, and in
accordance with the other provisions of this Agreement. Each
certificate evidencing such securities transferred as above shall
bear, except if such Transfer is made pursuant to an effective
registration statement under the Securities Act covering such shares,
or under Rule 144 under the Securities Act, the appropriate
restrictive legends set forth in this Section 5 except that such
certificate shall not bear such restrictive legends if, in the opinion
of counsel for such Stockholder and the Company, such legend is not
required in order to establish compliance with any provision of the
Securities Act. Notwithstanding the foregoing, each Stockholder agrees
that it will not request that a Transfer of such securities be made
(or that the appropriate restrictive legends set forth in this Section
5 be removed from the certificate evidencing shares of Capital Stock)
solely in reliance on Rule 144K under the Securities Act, if as a
result of such proposed transfer the Company would be rendered subject
to the reporting requirements of the Exchange Act.
(d) The following is hereby added as a new Section 5(k): "(k)
References in this Section 5 to Common Stock, Series C Preferred Stock,
Series E Preferred Stock and Special Warrants shall include any acquired
after the Effective Date."
(e) The phrase, "of Common Stock" is hereby inserted immediately after
the word, "share", in the twelfth line of Section 7(a).
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(f) The following is hereby added as a new Section 8(e): "(e) All
references to shares herein shall include all shares of Common Stock
acquired after the Effective Date and Special Warrants."
(g) The following is hereby added as a new Section 8A:
"Section 8A. Total Sale Event.
(a) Until such time as a Valuation Event (as defined in the
Series C Certificate of Designation) occurs or an IPO (as defined in
the Series C Certificate of Designation) is consummated, if the
Preferred Investor Common Stockholders (the "Consenting Stockholders")
approve a sale, merger or other Transfer involving (i) at least 50% of
the outstanding series A Preferred Stock and at least 50% of the then
outstanding Common Stock (including shares of Common Stock issuable
upon the exercise of all options, warrants and other rights to acquire
such shares then exercisable or which become exercisable in connection
with such event) and in which, if applicable, the Company complies
with its obligations pursuant to paragraph (g) of the Series A
Certificate of Designation, or (ii) all or substantially all of the
assets of the Company to be followed by a liquidation, dissolution or
winding up of the Company, to a person or affiliated group of persons
who is not (A) a Stockholder or (B) an Affiliate of a Stockholder
(such an event, a "Total Sale"), then all other Stockholders (the
"Remaining Stockholders") shall consent to and raise no objection with
respect to (and 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
agree to sell all of their Series C Preferred Stock and Series D
Preferred Stock and an equivalent percentage of their Common Stock to
that being transferred by the Consenting Stockholders on the terms and
conditions approved by the Board and the Consenting Stockholders
consistent with the provisions of this Section 8A. The Company,
instead of the purchaser, may acquire the Series C Preferred Stock and
Series D Preferred Stock otherwise to be transferred in a Total Sale
for the same consideration as the purchaser would have paid therefor
after applying the provisions of this Section 8A, and the holders of
such securities shall sell them to the Company in such event. If a
purchaser other than the Company (or its Subsidiaries) acquires such
shares in a Total Sale, the Company shall, promptly after the Total
Sale, redeem such shares (subject to compliance with Section 10 of the
Series C Certificate of Designation). The provisions of Section 6
(Right of First Offer), Section 7 (Tag-Along Rights), Section 8
(Drag-Along Rights) and Section 8B (Total Sale of Series A Preferred
Stock) shall not apply to Transfers in. connection with a Total Sale.
(b) The aggregate consideration (including, without duplication,
any Redemption Proceeds payable in connection with such transaction)
received in the Total Sale in respect of the aforementioned securities
shall be allocated among and be receivable by the Stockholders
transferring shares in the Total Sale (in-
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cluding any Stockholder from whom shares of Series A Preferred Stock
are to be redeemed in connection with such transaction) in the
following order and priority:
(i) first, the holders of shares of Series A Preferred Stock and
Series C Preferred Stock shall be entitled to receive, pro rata,
out of such aggregate consideration an amount equal to the Series
A Preferred Accreted Value in respect of the Series A Preferred
Stock to be sold or transferred in connection with such
transaction (including, without duplication, shares of Series A
Preferred Stock to be redeemed in connection with such
transaction) and the Maximum Series C Liquidation Value,
respectively, before any payment shall be made to the holders of
securities ranking on liquidation junior to the Series A
Preferred Stock and Series C Preferred Stock; provided, that if
the aggregate consideration (which shall be valued, at such time,
by the Board) is less than the sum of the Series A Preferred
Accreted Value in respect of the Series A Preferred Stock to be
transferred in connection with such transaction (including,
without duplication, shares of Series A Preferred Stock to be
redeemed in connection with such transaction) and the Maximum
Series C Liquidation Value, the holders of Series A Preferred
Stock to be sold shall be entitled to receive, pro rata, based on
the amount of shares to be so transferred, an amount equal to
such aggregate consideration less the Adjusted Series C
Liquidation Value, and such Adjusted Series C Liquidation Value
shall be distributed, pro rata, to the holders of Series C
Preferred Stock;
(ii) second, after and subject to the payment of all preferential
amounts required to be paid to the holders of Series A Preferred
Stock and Series C Preferred Stock pursuant to clause (i), the
holders of the Series D Preferred Stock shall be entitled to
receive, pro rata, out of such consideration (which shall be
valued, at such time, by the Board) an amount equal to the
Maximum Series D Liquidation Value (or, if less, all remaining
consideration); and
(iii) third, after and subject to the payment of all preferential
amounts required to be paid to the holders of Series A Preferred
Stock, Series C Preferred Stock and Series D Preferred Stock
pursuant to clauses (i) and (ii), the holders of Common Stock
shall be entitled to receive, pro rata, the remaining
consideration.
(c) At the closing of any sale, merger or other Transfer of
shares pursuant to this Section 8A, the Remaining Stockholders shall
enter into agreements with the purchaser of the shares containing
terms substantially similar to the terms on which the Consenting
Stockholders are Transferring their shares; provided, that no
Stockholder shall be required to enter into any non-competition or
non-solicitation provisions (although any existing non-competition and
non-solicitation provisions shall not be affected by this proviso);
provided, further, however, that (x) all claims in respect of breaches
of representation and warranties by the Stockholders or the Company
(or claims for indemnification in respect
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thereof) not described in the parenthetical clause in the immediately
succeeding clause (y)(A) of this proviso (as if such clause applied to
the Consenting Stockholders 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 (valued as determined in
agreements with the acquiror) received by the holders of Common Stock,
by the holders of the Series D Preferred Stock (based on the number of
shares of Series D Preferred Stock Transferred thereby in such
transaction), and, to the extent such claims exceed such aggregate
consideration (valued as determined in agreements with the acquiror)
received by the holders of Series D Preferred Stock, by the holders of
the Series A Preferred Stock and Series C Preferred Stock (based on
the amount by which such holder's consideration would be reduced after
recalculating amounts to be distributed pursuant to Section 8A(b)(i)
in light of required indemnification payments); and (y)
notwithstanding anything contained in this Agreement to the contrary,
except clause (y)(B) of this proviso, 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
(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 with respect to each class or series of Capital
Stock's liability as set forth in clause (x) of this proviso and will
be proportionate to the percentage of such shares it Transfers in such
class or series, and will be limited to any proceeds received by it
arising from such Transfer.
(d) The types of consideration received in the Total Sale shall
be distributed as follows:
(i) to the extent the consideration received in respect of the Total
Sale consists of cash, (A) the holders of Series A Preferred
Stock transferring shares in the Total Sale and the holders of
the Series C Preferred Stock shall be entitled to receive the
amounts such holders are entitled to receive pursuant to Section
8A(b)(i) in cash (allocated among such holders such that an
amount of cash equal to the excess of $70 million over the
Redemption Proceeds as of the time of such event is first paid in
respect of the shares of Series A Preferred Stock being so
transferred and then the balance of such cash is paid in respect
of such shares of Series A Preferred Stock and the Series C
Preferred Stock so that, to the nearest extent possible, the
aggregate of cash so allocated pursuant to this clause (A) is in
proportion to the respective amounts the holders of such shares
are to receive pursuant to Section 8A(b)(i)), (B) the holders of
Series D Preferred Stock shall be entitled to receive the amounts
such holders are entitled to receive pursuant to Section
8A(b)(ii), pro rata, in cash to the extent of any cash remaining
after payments of cash to the holders of Series A Preferred
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Stock and Series C Preferred Stock, and (C) the holders of Common
Stock transferring shares in such Total Sale shall be entitled to
receive, pro rata, the remaining cash consideration after
payments of cash to the holders of Series A Preferred Stock,
Series C Preferred Stock and Series D Preferred Stock;
(ii) to the extent the consideration received in respect of the Total
Sale consists of Publicly Traded Securities (which Publicly
Traded Securities, for all purposes of this Section 8A, shall be
valued at the time of the Total Sale by the Board), (A) the
holders of Series A Preferred Stock transferring shares in such
Total Sale and the holders of the Series C Preferred Stock shall
be entitled to receive the remaining amounts such holders are
entitled to receive pursuant to Section 8A(b)(i) (taking into
account the aggregate of cash allocated thereto pursuant to
Section 8A(d)(i)(A)) in Publicly Traded Securities (allocated
among such holders such that an amount of such Publicly Traded
Securities equal to the excess of $70 million over the sum of
aggregate Redemption Proceeds as of such time and the amount of
cash allocated to the holders of Series A Preferred Stock
pursuant to Section 8A(d)(i)(A) is delivered in respect of the
shares of Series A Preferred Stock being so transferred and then
the balance of such Publicly Traded Securities is delivered in
respect of such Series A Preferred Stock and the Series C
Preferred Stock so that, to the nearest extent possible, the
aggregate of cash allocated thereto pursuant to Section
8A(d)(i)(A) and Publicly Traded Securities allocated pursuant to
this Section 8A(d)(ii)(A) is in proportion to the respective
amounts the holders of such shares are to receive pursuant to
Section 8A(b)(i)), (B) the holders of Series D Preferred Stock
shall be entitled to receive the remaining amounts such holders
are entitled to receive pursuant to Section 8A(b)(ii) (taking
into account the aggregate of cash allocated thereto pursuant to
Section 8A(d)(i)(B)) in Publicly Traded Securities, pro rata, to
the extent of any Publicly Traded Securities remaining after
payments of Publicly Traded Securities to the holders of Series A
Preferred Stock and Series C Preferred Stock, and (C) the holders
of Common Stock transferring shares in such Total Sale shall be
entitled to receive, pro rata, the remaining Publicly Traded
Securities after payments of cash to the holders of Series A
Preferred Stock, Series C Preferred Stock and Series D Preferred
Stock; and
(iii) to the extent the consideration received in respect of the Total
Sale consists of anything other than cash or Publicly Traded
Securities (which other consideration, for all purposes of this
Section 8A, shall be valued at the time of the Total Sale by the
Board), (A) the holders of Series A Preferred Stock transferring
shares in such sale and the holders of the Series C Preferred
Stock shall be entitled to receive the remaining amounts such
holders are entitled to receive pursuant to Section 8A(b)(i)
(taking into account the aggregate of cash and Publicly Traded
Securities allocated thereto pursuant to Section 8A(d)(i)(A) and
(ii)(A)) in such other consid-
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eration received in the Total Sale (allocated among such holders
pro rata based upon the amounts such holders are entitled to
receive pursuant to Section 8A(b)(i) (after giving effect to
Section 8A(d)(i)(A) and (ii)(A)), (B) the holders of Series D
Preferred Stock shall be entitled to receive, pro rata, the
remaining amounts such holders are entitled to receive pursuant
to Section 8A(b)(ii) (after giving effect to Section 8A(d)(i)(B)
and (ii)(B)) in such other consideration to the extent of any
such other consideration remaining after payments of such other
consideration to the holders of Series A Preferred Stock and
Series C Preferred Stock, and (C) the holders of Common Stock
transferring shares in such sale shall be entitled to receive,
pro rata, the remaining other consideration after payments of
cash to the holders of Series A Preferred Stock, Series C
Preferred Stock and Series D Preferred Stock;
provided, however, that the types of consideration shall be
reallocated among the Stockholders in accordance with the foregoing to
reflect any change in the amount or types of consideration as a result
of consideration held in escrow, released from escrow or paid in
respect of breaches of representations or warranties or
indemnification to the extent necessary to give full effect to the
foregoing; provided further, that the Board may elect to pay cash
instead of any non-cash consideration (based on the value of such
non-cash consideration as so determined by the Board of Directors)
otherwise so payable in respect of any share of the Capital Stock, if
it concludes that paying such non-cash consideration to such holder
may create regulatory or compliance burdens on the part of the Company
or any other participant in the transaction giving rise to such
redemption event or is otherwise unable to pay such non-cash
consideration."
(h) The following is hereby added as a new Section 8B:
"Section 8B. Total Sale of Series A Preferred Stock.
(a) Until such time as a Valuation Event (as defined in the
Series C Certificate of Designation) occurs or an IPO (as defined
in the Series C Certificate of Designation) is consummated, if
the Preferred Investor Common Stockholders (the "Consenting
Stockholders") approve a sale, merger or other Transfer involving
at least 100% of the outstanding Series A Preferred Stock to a
person or affiliated group of persons who is not (A) a
Stockholder or (B) an Affiliate of a Stockholder, and in which
TIP transfers to such person or group the right to elect at least
3 of the 5 directors that TIP is entitled to elect as of the date
hereof (such an event, a "Series A Total Sale"), then all other
Stockholders (the "Remaining Stockholders") shall consent to and
raise no objection with respect to (and not exercise statutory
appraisal rights in connection with) such transaction and, the
Remaining Stockholders will have the right to, and, to the extent
so elected by the holders of a majority of the Series C Preferred
pursuant to the following sentence, shall agree to, sell all of
their Series C Preferred Stock on the terms and conditions
approved by the Board and the Consenting Stockholders consistent
with the provisions of this Section 8B. If the Remaining
Stockholders holding a majority of the shares of Series C
Preferred Stock wish to sell such shares in the Series A
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Total Sale, such Remaining Stockholders must provide notice
thereof to the Consenting Stockholders within 10 days after
notice of such an event from the Consenting Stockholders. The
Company, instead of the purchaser, may acquire the Series C
Preferred Stock otherwise to be transferred in a Series A Total
Sale for the same consideration as the purchaser would have paid
therefor after applying the provisions of this Section 8B, and
the holders of such securities shall sell them to the Company in
such event. If a purchaser other than the Company (or its
Subsidiaries) acquires such shares in a Series A Total Sale, the
Company shall, promptly after such Series A Total Sale, redeem
such shares (subject to compliance with Section 10 of the Series
C Certificate of Designation). The provisions of Section 6 (Right
of First Offer), Section 7 (Tag-Along Rights) and Section 8
(Drag-Along Rights) shall not apply to Transfers in connection
with a Series A Total Sale.
(b) The aggregate consideration (including, without
duplication, any Redemption Proceeds payable in connection with
such transaction) received in the Series A Total Sale in respect
of the aforementioned securities shall be allocated among and be
receivable by the Stockholders transferring shares in the Series
A Total Sale (including any Stockholder from whom shares of
Series A Preferred Stock are to be redeemed in connection with
such transaction) in the following order and priority:
(i) first, the holders of shares of Series A Preferred Stock and
Series C Preferred Stock shall be entitled to receive, pro
rata, out of such consideration an amount equal to the
Series A Preferred Accreted Value in respect of the Series A
Preferred Stock to be sold or transferred in connection with
such transaction (including, without duplication, shares of
Series A Preferred Stock to be redeemed in connection with
such transaction) and the Maximum Series C Liquidation
Value, respectively, before any payment shall be made to the
holders of securities ranking on liquidation junior to the
Series A Preferred Stock and Series C Preferred Stock;
provided, that if the aggregate consideration (which shall
be valued, at such time, by the Board) is less than the sum
of the Series A Preferred Accreted Value in respect of the
Series A Preferred Stock to be transferred in connection
with such transaction (including, without duplication,
shares of Series A Preferred Stock to be redeemed in
connection with such transaction) and the Maximum Series C
Liquidation Value, the holders of Series A Preferred Stock
to be sold shall be entitled to receive, pro rata, based on
the amount of shares to be so transferred, an amount equal
to such aggregate consideration less the Adjusted Series C
Liquidation Value, and such Adjusted Series C Liquidation
Value shall be distributed, pro rata, to the holders of
Series C Preferred Stock;
(ii) second, after and subject to the payment of all preferential
amounts required to be paid to the holders of Series A
Preferred Stock and Series C Preferred Stock pursuant to
clause (i), the holders of the Series A Preferred Stock
shall be entitled to receive the remaining consideration.
-11-
(c) At the closing of any sale, merger or other Transfer of
shares pursuant to this Section 8B, the Remaining Stockholders
shall enter into agreements with the purchaser of the shares
containing terms substantially similar to the terms on which the
Consenting Stockholders are Transferring their shares; provided,
that no Stockholder shall be required to enter into any
non-competition or non-solicitation provisions (although any
existing non-competition and non-solicitation provisions shall
not be affected by this proviso); provided, further, however,
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
parenthetical clause in the immediately succeeding clause (y)(A)
of this proviso (as if such clause applied to the Consenting
Stockholders as well) shall first be paid by the holders of the
Series A Preferred Stock and Series C Preferred Stock (based on
the amount by which such holder's consideration would be reduced
after recalculating amounts to be distributed pursuant to Section
8B(b)(i) or (ii) in light of required indemnification payments);
and (y) notwithstanding anything contained in this Agreement to
the contrary, except clause (y)(B) of this proviso, 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 (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, and will be limited to any proceeds
received or receivable by it arising from such Transfer.
(d) The types of consideration received in the Series A
Total Sale shall be distributed as follows:
(i) to the extent the consideration received in respect of the
Series A Total Sale consists of cash, (A) the holders of
Series A Preferred Stock and the holders of the Series C
Preferred Stock shall be entitled to receive the amounts
such holders are entitled to receive pursuant to Section
8B(b)(i) in cash (allocated among such holders such that an
amount of cash equal to the excess of $70 million over the
Redemption Proceeds as of the time of such event is first
paid in respect of the shares of Series A Preferred Stock
being so transferred and then the balance of such cash is
paid in respect of such shares of Series A Preferred Stock
and the Series C Preferred Stock so that, to the nearest
extent possible, the aggregate of cash so allocated pursuant
to this clause (A) is in proportion to the respective
amounts the holders of such shares are to receive pursuant
to Section 8B(b)(i)), and (B) the holders of such shares of
Series A Preferred Stock shall be entitled to receive, pro
rata, any cash remaining after payments of cash to the
holders of Series A Preferred Stock and Series C Preferred
Stock pursuant to Section 8B(d)(i)(A);
-12-
(ii) to the extent the consideration received in respect of the
Series A Total Sale consists of Publicly Traded Securities
(which Publicly Traded Securities, for all purposes of this
Section 8B, shall be valued at the time of the Series A
Total Sale by the Board), (A) the holders of Series A
Preferred Stock and the holders of the Series C Preferred
Stock shall be entitled to receive the remaining amounts
such holders are entitled to receive pursuant to Section
8B(b)(i) (taking into account the aggregate of cash
allocated thereto pursuant to Section 8B(d)(i)(A)) in
Publicly Traded Securities (allocated among such holders
such that an amount of such Publicly Traded Securities equal
to the excess of $70 million over the sum of aggregate
Redemption Proceeds as of such time and the amount of cash
allocated to the holders of Series A Preferred Stock
pursuant to Section 8B(d)(i)(A) is delivered in respect of
the shares of Series A Preferred Stock being so transferred
and then the balance of such Publicly Traded Securities is
delivered in respect of such Series A Preferred Stock and
the Series C Preferred Stock so that, to the nearest extent
possible, the aggregate of cash allocated thereto pursuant
to Section 8B(d)(i)(A) and Publicly Traded Securities
allocated pursuant to this Section 8B(d)(ii)(A) is in
proportion to the respective amounts the holders of such
shares are to receive pursuant to Section 8B(b)(i)), and (B)
the holders of such shares of Series A Preferred Stock shall
be entitled to receive, pro rata, any Publicly Traded
Securities remaining after payments of Publicly Traded
Securities to the holders of Series A Preferred Stock and
Series C Preferred Stock pursuant to Section 8B(d)(ii)(A);
and
(iii) to the extent the consideration received in respect of the
Series A Total Sale consists of anything other than cash or
Publicly Traded Securities (which other consideration, for
all purposes of this Section 8B, shall be valued at the time
of the Series A Total Sale by the Board), (A) the holders of
Series A Preferred Stock transferring shares in such sale
and the holders of the Series C Preferred Stock shall be
entitled to receive such other consideration received in the
Series A Total Sale (allocated among such holders pro rata
based upon the amounts such holders are entitled to receive
pursuant to Section 8B(b)(i) (after giving effect to Section
8B(d)(i)(A) and (ii)(A)), and (B) the holders of such shares
of Series A Preferred Stock shall be entitled to receive,
pro rata, any other consideration remaining after payments
of such other consideration to the holders of Series A
Preferred Stock and Series C Preferred Stock pursuant to
Section 8B(d)(iii)(A);
provided, however, that the types of consideration shall be reallocated
among the Stockholders in accordance with the foregoing to reflect any
change in the amount or types of consideration as a result of consideration
held in escrow, released from escrow or paid in respect of breaches of
representations or warranties or indemnification to the extent necessary to
give full effect to the foregoing; provided further, that the Board may
elect to pay cash instead of any non-cash consideration (based on the value
of such non-cash consideration as so determined by the Board of Directors)
otherwise so payable in respect of
-13-
any share of the Capital Stock, if it concludes that paying such non-cash
consideration to such holder may create regulatory or compliance burdens on
the part of the Company or any other participant in the transaction giving
rise to such redemption event or is otherwise unable to pay such non-cash
consideration."
(i) The phrase, "or any Series C Preferred Stock, Series E Preferred
Stock or Special Warrants", is hereby inserted immediately after the word,
"Stockholder", in the third line of Section 9.
(j) The following phrase is hereby inserted at the end of Section 9:
"Any transferee (including a Permitted Transferee) who shall
acquire (either voluntarily or involuntarily, by operation of law or
otherwise) any shares of Series A Preferred Stock from a Preferred
Investor Common Stockholder, shall be bound by all provisions of this
Agreement, to the same extent as the parties hereto and, prior to
registration of the Transfer of any such shares on the books of the
Company, any transferee shall execute an agreement with the parties
hereto agreeing to be bound by such provisions, and shall thereupon be
deemed a Preferred Investor Common Stockholder."
(k) The phrase, "(including the Special Warrants)", is hereby inserted
immediately after the word, "shares", in each case in Section 17(b)(i).
(l) The phrase, "Preferred Investor Common", is hereby deleted from
Section 17(b)(iv).
(m) The following definitions are hereby added to Section 20 of the
Original Agreement:
(i) "Special Warrants" means the warrants to purchase shares of
Common Stock acquired from Wachovia or CIBC by certain Individual
Investors on the date hereof.
(ii) "Adjusted Series C Liquidation Value" means
1. in respect of a Total Sale, in an amount equal to the lesser
of (i) the excess, if any, of the sum of Redemption Proceeds
immediately prior to the Total Sale and the aggregate
consideration payable with respect to the Series A Preferred
Stock and Series C Preferred Stock in connection with the
Total Sale (including, without duplication, any Redemption
-14-
Proceeds payable in connection with such transaction), over
$70 million, or (ii) the product of (x) the Maximum Series C
Liquidation Value immediately before the time of such Total
Sale and (y) a fraction, the numerator of which is the sum
of the Redemption Proceeds immediately prior to the Total
Sale, the aggregate consideration paid with respect to the
Series A Preferred Stock and Series C Preferred Stock in
connection with the Total Sale (including, without
duplication, any Redemption Proceeds payable in connection
with such transaction) and the Series A Accreted Value in
respect of shares of Series A Preferred Stock which are not
sold or redeemed in the Total Sale, and the denominator of
which is the sum of the Redeemed Series A Preferred Accreted
Value, the Series A Preferred Accreted Value and the Maximum
Series C Liquidation Value; and
2. in respect of a Series A Total Sale, in an amount equal to
the lesser of (i) the excess, if any, of the sum of
Redemption Proceeds immediately prior to the Series A Total
Sale and the aggregate consideration payable with respect to
the Series A Preferred Stock and Series C Preferred Stock in
connection with the Series A Total Sale (including, without
duplication, any Redemption Proceeds payable in connection
with such transaction), over $70 million, or (ii) the
product of (x) the Maximum Series C Liquidation Value
immediately before the time of such Series A Total Sale and
(y) a fraction, the numerator of which is the sum of the
Redemption Proceeds immediately prior to the Series A Total
Sale and the aggregate consideration paid with respect to
the Series A Preferred Stock and Series C Preferred Stock in
connection with the Total Sale (including, without
duplication, any Redemption Proceeds payable in connection
with such transaction) and the Series A Accreted Value in
respect of shares of Series A Preferred Stock which are not
sold or redeemed in the Series A Total Sale, and the
denominator of which is the sum of the Redeemed Series A
Preferred Accreted Value, the Series A Preferred Accreted
Value and the Maximum Series C Liquidation Value.
(iii) "Maximum Series C Liquidation Value" means $14,000,000 if a
Total Sale occurs on or prior to December 31, 2004, and
$16,500,000 if a Total Sale occurs after December 31, 2004.
(iv) "Maximum Series D Liquidation Value" means $42,000,000 if a Total
Sale occurs on or prior to December 31, 2004, and $49,500,000 if
a Total Sale occurs after December 31, 2004.
(v) "Publicly Traded Securities" means, in respect of a Total Sale or
Series A Total Sale, securities (A) of a class that is listed on
the New York Stock Exchange, NASDAQ National Market, or other
nationally recognized stock exchange, (B) which are tradeable on
such exchange without legal or contractual restraint (other than
prohibitions on the use of material non-public information), and
(C) which, in the reasonable judgment of the Board of Directors,
may be transferred in their entirety to the public within 30 days
of receipt thereof without discount to the average market price
thereof for the 30 days immediately prior to the date of such
event.
-15-
(vi) "Redeemed Series A Preferred Accreted Value" means, as of any
time, in respect of shares of Series A Preferred Stock redeemed
by the Company or a Subsidiary thereof prior to such time, the
sum of (A) the product of $1,000 and the number of such shares,
(B) the aggregate premium paid payable in respect of such shares
payable pursuant to paragraph (e)(i) of the Series A Certificate
of Designation on the date such shares were redeemed (whether or
not such premium was actually paid by Company or such shares were
actually redeemed by the Company at such time) and (C) an amount
equal to all accumulated and unpaid dividends on such shares as
of the time such shares were so redeemed.
(vii) "Redemption Proceeds" means an amount, as of any time, equal to
the aggregate value of the cash and Publicly Traded Securities
(which shall be valued, as of the time of receipt, by the Board
of Directors) received by holders of Series A Preferred Stock in
respect of redemptions of such shares by the Corporation or a
Subsidiary thereof prior to such time.
(viii) "Series A Preferred Stock" means the 14 1/2% Senior Redeemable
Preferred Stock, Series A, of the Company, with a stated value of
$1,000 per share.
(ix) "Series C Certificate of Designation" means the Certificate of
Designations, Number, Voting Powers, Preferences and Rights of
the Series C Preferred Stock of the Company.
(x) "Series C Preferred Stock" shall have the meaning ascribed to
such term in the first recital to Amendment No. 2 to this
Agreement, dated as of December 19, 2003."
(xi) "Series E Preferred Stock" shall have the meaning ascribed to
such term in the first recital to Amendment No. 2 to this
Agreement, dated as of December 19, 2003."
(xii) "Series A Preferred Accreted Value" means, as of the date of the
Total Sale or Series A Total Sale, the sum of (A) the product of
$1,000 and the number of shares of Series A Preferred Stock
outstanding immediately prior to such time, (B) the aggregate
premium payable in respect of such shares of Series A Preferred
Stock, had the Company redeemed all such shares pursuant to
paragraph (e)(i) of the Series A Certificate of Designation at
such time (whether or not actually redeemed by the Company
pursuant to such paragraph) and (C) an amount equal to all
accumulated and unpaid dividends immediately prior to such time
on such shares of Series A Preferred Stock.
(n) The following sentence is hereby added to the definition of Fair
Market Value: "For purposes of Section 17(b)(iv), the Fair Market Value of
the Series C Preferred Stock shall be zero."
-16-
3. Consent to Transactions; Waiver of Preemptive Rights; Waiver of Transfer
Restrictions.
(a) Each Preferred Investor Common Stockholder and each Individual Investor
hereby consents to the Transactions and waives its Preemptive Rights with
respect to the issuance of shares contemplated by the Transactions.
(b) Each Preferred Investor Common Stockholder, each Individual Investor
and the Company hereby waives the Transfer Restrictions with respect to the
transfers of shares contemplated by the Transactions; provided, that such rights
are not waived with respect to any subsequent or other Transfer.
4. Joinder. Each Preferred Investor Common Stockholder, each Individual
Investor and the Company hereby acknowledge and agree that any Person executing
this Amendment not previously as party to the Stockholders' Agreement will, and
hereby does, become a party to the Stockholders' Agreement as an "Individual
Investor," (or a "Stockholder" in the case of CIBC Inc.) and each such Person
agrees to be bound by all of the terms, provisions and conditions thereof (as
modified hereby).
5. Further Assurances.
(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 the Transactions 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
Stockholders' Agreement herein contemplated.
6. Scope of Amendment. Except as provided in Section 2 of this Amendment,
the Stockholders' Agreement shall remain in full force and effect.
-17-
IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 2
to the Stockholders' Agreement on the day and year first above written.
PREFERRED INVESTORS
CARAVELLE INVESTMENT FUND, L.L.C.
By: Trimaran Advisors, L.L.C.,
its investment manager and
attorney-in-fact
By: /s/ David M. Millison
------------------------------------
Name: David M. Millison
Title:
TRANSPORTATION INVESTMENT PARTNERS L.L.C.
By: /s/ Steven A. Flyer
------------------------------------
Name: Steven A. Flyer
Title: Attorney-in-Fact
ALBION-ALLIANCE MEZZANINE FUND, L.P.
By: Albion Alliance LLC., its general partner
By: /s/ Charles A. Gonzalez
------------------------------------
Name: Charles A. Gonzalez
Title: Managing Director
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/ Charles A. Gonzalez
------------------------------------
Name: Charles A. Gonzalez
Title: Managing Director
-18-
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
-19-
/s/ Brent Williams
------------------------------------
Brent Williams
/s/ Jeffrey Elmer
------------------------------------
Jeffrey Elmer
/s/ Adam Gottlieb
------------------------------------
Adam Gottlieb
/s/ Fred Culbreath
------------------------------------
Fred Culbreath
/s/ Joe Hicks
------------------------------------
Joe Hicks
/s/ Allen Sunderland
------------------------------------
Allen Sunderland
/s/ Marty Drennen
------------------------------------
Marty Drennen
/s/ William Faut
------------------------------------
William Faut
-20-
CIBC INC.
By: /s/ Gary W. Brown
------------------------------------
Name: Gary W. Brown
Title: Managing Director
-21-
TRANSPORTATION TECHNOLOGIES INDUSTRIES, INC.
By: /s/ Donald C. Mueller
------------------------------------
Name: Donald C. Mueller
Title: Chief Financial Officer, Treasurer and
Vice President
TMB INDUSTRIES
By: /s/ Andrew M. Weller
------------------------------------
Name: Andrew M. Weller
Title: Managing Director
-22-