As filed with the Securities and Exchange Commission on June 30, 1999
Registration No. 333-81235
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------------------------
AMENDMENT No. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
----------------------------------------------------
Royster-Clark, Inc.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<CAPTION>
Delaware 2875 76-0329525
--------------------------------- ---------------------------- -------------------
<S> <C> <C>
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification No.)
</TABLE>
---------------------------------------
10 Rockefeller Plaza - Suite 1120
New York, New York 10020
(212) 332-2965
-------------------------------------------------------------
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
-----------------------------------------
See Table of Additional Registrants below
-----------------------------------------
Francis P. Jenkins, Jr.
Chairman of the Board and Chief Executive Officer
Royster-Clark, Inc.
10 Rockefeller Plaza - Suite 1120
New York, New York 10020
(212) 332-2965
---------------------------------------------------------
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------------------------------
With Copies to:
Craig L. Godshall, Esq.
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, Pennsylvania 19103
(215) 994-4000
---------------------------------------
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. | |
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. | |
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. | |
---------------------------------------
The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Securities and Exchange Commission, acting
pursuant to said Section 8(a), may determine.
Royster-Clark, Inc.
Table of Additional Registrants
<TABLE>
<CAPTION>
IRS
Primary Standard Employer
State of Industrial Classification Identification
Name Incorporation Code Number No.
- ---- ------------- ------------------------- --------------
<S> <C> <C> <C>
Royster-Clark Group, Inc....................... Delaware 2875 13-4055347
Royster-Clark AgriBusiness, Inc................ Delaware 5191 58-1599501
Royster-Clark Nitrogen, Inc.................... Delaware 2873 36-3536929
Royster-Clark Hutson, Inc...................... Kentucky 5191 61-0895190
Royster-Clark Resources LLC.................... Delaware 5191 22-3652274
Royster-Clark Realty LLC....................... Delaware 6512 22-3648552
Royster-Clark AgriBusiness Realty LLC.......... Delaware 6512 22-3648546
Royster-Clark Hutson's Realty LLC.............. Delaware 6512 22-3648548
Royster-Clark Nitrogen Realty LLC.............. Delaware 6512 22-3648549
</TABLE>
The address, including zip code, and telephone number, including area code,
of the principal offices of the additional registrants listed above (the
"Additional Registrants") is: 10 Rockefeller Plaza-Suite 1120, New York, New
York 10020; the telephone number at that address is (212) 332-2965.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law provides in relevant
part that a corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation) by reason of the
fact that such person is or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in connection with such action, suit or proceeding if
such person acted in good faith and in a manner such person reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
such person's conduct was unlawful. The certificate of incorporation of IMC
AgriBusiness, Inc. and the bylaws of IMC AgriBusiness, Inc., IMC Nitrogen
Company and Hutson's Ag Service, Inc. contain indemnification provisions
permitted by Section 145 of the Delaware General Corporation Law.
In addition, Section 145 provides that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a director, officer,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against expenses
(including attorneys' fees) actually and reasonably incurred by such person in
connection with the defense or settlement of such action or suit if such person
acted in good faith and in a manner such person reasonably believed to be in or
not opposed to the best interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the corporation
unless and only to the extent that the Delaware Court of Chancery or the court
in which such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity for such
expenses which the Delaware Court of Chancery or such other court shall deem
proper. Each of the Bylaws of IMC AgriBusiness, Inc. and IMC Nitrogen Company
contain indemnification provisions permitted by Section 145 of the Delaware
General Corporation Law.
Section 145 also provides that to the extent a director, officer, employee
or agent of a corporation has been successful on the merits or otherwise in
defense of any action, suit or proceeding referred to above, or defense of any
claim issue or matter therein, he shall be indemnified against expenses
(including attorney's fees) actually and reasonably incurred by him in
connection therewith. The Bylaws of Hutson's Ag Service, Inc. expressly include
such a provision.
Furthermore, Section 145 provides that nothing in the above-described
provisions shall be deemed exclusive of any other rights to indemnification or
advancement of expenses to which any person may be entitled under any bylaw,
agreement, vote of stockholders or disinterested directors or otherwise.
The Bylaws of the Company provide for the indemnification of any person
entitled to indemnity under law, to the fullest extent permitted by law.
The Bylaws of Royster-Clark Group provide for the indemnification of any
person who was or is party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that such
person is or was a director or officer of the company or a constituent
corporation absorbed in a consolidation or merger, or is or was serving at the
request of the company or a constituent corporation absorbed in a consolidation
or merger, as a director or officer of another corporation, partnership, joint
venture, trust or other enterprise, or is or was a director or officer of the
company serving at its request as an administrator, trustee or other fiduciary
of one or more of the employee benefit plans of the company or other enterprise,
against expenses (including attorneys' fees), liability and loss actually and
reasonably incurred or suffered by such person in connection with such
proceeding, whether or not the indemnified liability arises or arose from any
threatened, pending or completed proceeding by or in the right of the company,
except to the extent that such indemnification is prohibited by applicable law.
Section 102(b)(7) of the Delaware General Corporation Law provides that a
corporation may in its certificate of incorporation eliminate or limit the
personal liability of a director to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director except for
liability: for any breach of the director's duty of loyalty to the corporation
or its stockholders; for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; under Section 174 of the
Delaware General Corporation Law (pertaining to certain prohibited acts
including unlawful payment of dividends or unlawful purchase or redemption of
the corporation's capital stock); or for any transaction from which the director
derived an improper personal benefit. The Certificate of Incorporation of each
of the Company, Royster-Clark Group, IMC Nitrogen Company and IMC AgriBusiness,
Inc., contains a provision so limiting the personal liability of directors.
II-1
<PAGE>
Item 21. Exhibits and Financial Statement Schedules
(a) Exhibits:
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
2.01 Stock Purchase Agreement dated January 21, 1999 by and among
IMC Global Inc., The Vigoro Corporation and R-C Delaware
Acquisition Inc.*
2.02 First Amendment to the Stock Purchase Agreement dated as of April 13, 1999 among IMC Global Inc.,
The Vigoro Corporation and R-C Delaware Acquisition Inc.
3.01 Restated Certificate of Incorporation of the Company.
3.02 Certificate of Amendment of Restated Certificate of Incorporation of the Company.
3.03 Amended and Restated Bylaws of the Company.
3.04 Amended and Restated Certificate of Incorporation of Royster-Clark Group, Inc.
3.05 Bylaws of Royster-Clark Group, Inc.
3.06 Certificate of Incorporation of IMC AgriBusiness Inc.
3.07 Certificate of Amendment to Certificate of Incorporation of IMC AgriBusiness Inc.
3.08 Bylaws of IMC AgriBusiness Inc.+
3.09 Certificate of Incorporation of IMC Nitrogen Company.
3.10 Certificate of Amendment to Certificate of Incorporation of IMC Nitrogen Company.
3.11 Bylaws of IMC Nitrogen Company.
3.12 Articles of Incorporation of Hutson's Ag Service, Inc.
3.13 Certificate of Amendment to Certificate of Incorporation of Hutson's Ag Service, Inc.
3.14 Bylaws of Hutson's Ag Service, Inc.
3.15 Certificate of Formation of Royster-Clark Resources LLC.
3.16 Limited Liability Company Agreement of Royster-Clark Resources LLC.
3.17 Certificate of Formation of Royster-Clark Realty LLC.
3.18 Limited Liability Company Agreement of Royster-Clark Realty LLC.
3.19 Certificate of Formation of Royster-Clark AgriBusiness Realty LLC.
3.20 Limited Liability Company Agreement of Royster-Clark AgriBusiness Realty LLC.
3.21 Certificate of Formation of Royster-Clark Hutson's Realty LLC.
3.22 Limited Liability Company Agreement of Royster-Clark Hutson's Realty LLC.
3.23 Certificate of Formation of Royster-Clark Nitrogen Realty LLC.
3.24 Limited Liability Company Agreement of Royster-Clark Nitrogen Realty LLC.
4.01 Indenture dated as of April 22, 1999 by and among the Company,
the Guarantors, and the United States Trust Company of New
York, as Trustee.
4.02 Form of 10-1/4% First Mortgage Note Due 2009 (included in Exhibit 4.01).
</TABLE>
II-2
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
4.03 Registration Rights Agreement dated as of April 22, 1999 by and among the Company, the Guarantors,
and Donaldson, Lufkin & Jenrette Securities Corporation and J.P. Morgan Securities Inc. (each an
"Initial Purchaser").
4.04 Exchange Agreement dated as of April 22, 1999 among 399 Venture Partners, Inc., Francis P. Jenkins,
Jr., Royster-Clark, Inc. and Royster-Clark Group, Inc.
4.05 Registration Rights Agreement dated as of April 22, 1999 by and among Royster-Clark Group, Inc.,
399 Venture Partners, Inc., and other stockholders of Royster-Clark Group, Inc.
4.06 Securities Purchase and Holders Agreement dated as of April 22, 1999 by and among Francis P.
Jenkins, Jr., 399 Ventures, and certain management stockholders.+
4.07 Preferred Stockholders' Agreement dated as of April 22, 1999 by and among 399 Venture Partners,
Inc. and certain management Stockholders.
5.01 Opinion of Dechert Price & Rhoads.
10.01 Credit Agreement dated as of April 22, 1999 by and among the Company, the Guarantors, various
lenders, DLJ Capital Funding, as arranger and syndication agent, J.P. Morgan Securities Inc.,
as documentation agent and U.S. Bancorp Ag Credit, Inc., as administrative agent.
10.02 Purchase Agreement dated April 15, 1999 among the Company, the Guarantors and the Initial
Purchasers.
10.03 Supply Agreement dated as of April 22, 1999 among IMC Kalium Ltd., IMC-Agrico Company and the
Company. Portions of this exhibit have been omitted pursuant to a request for confidential treatment.**
10.04 Company Employee Savings and Investment Plan.
10.05 Royster-Clark Group, Inc. 1999 Restricted Stock Purchase and Option Plan.
10.06 Employment Agreement dated as of April 22, 1999 by and among Francis P. Jenkins, Jr., Royster-Clark
Group, Inc. and Royster-Clark, Inc.
10.07 Master Conveyance Agreement dated as of April 22, 1999 by and among IMC Global Inc., The Vigoro
Corporation, the Company and United States Trust Company of New York
12.01 Statement of Computation of Ratio of Earnings to Fixed Charges.***
21.01 Subsidiaries of the Company and the Additional Registrants.***
23.01 Consent of Dechert Price & Rhoads (included in the opinion filed as Exhibit 5.01).
23.02 Consent of KPMG LLP.
23.03 Consent of Ernst & Young LLP.
24.01 Power of Attorney (included on each of the signature pages).
25.01 Statement of Eligibility and Qualification of United States Trust Company of New York on Form T-1.
27.1 Financial Data Schedule - Royster-Clark, Inc.
27.2 Financial Data Schedule - AgriBusiness.
99.01 Form of Letter of Transmittal.***
99.02 Notice of Guaranteed Delivery.***
99.03 Schedule 1 - Allowance for Doubtful Accounts-Royster-Clark, Inc.
99.04 Schedule 1 - Allowance for Doubtful Accounts-AgriBusiness.
</TABLE>
- ---------------
* Pursuant to Item 601(b)(2) of Regulation S-K, the schedules to this
Agreement are omitted. The Exhibit contains a list identifying the contents
of all schedules and the Registrants agree to furnish supplementally copies
of such schedules to the Commission upon request.
** Portions of this exhibit have been omitted pursuant to a request for
confidential treatment.
*** Filed herewith.
+ Was previously filed. Re-filed herewith. Redline tags indicate changes.
- ---------------
(b) Financial Statement Schedules. Included as Exhibits 99.03 and 99.04 of
Item 21(a).
II-3
<PAGE>
Item 22. Undertakings
(a) Each of the undersigned registrants hereby undertakes:
(1) to file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
(2) that, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof; and
(3) to remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
each registrant pursuant to the foregoing provisions, or otherwise, each
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrants of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, each registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
(c) Each of the undersigned registrants hereby undertakes to respond to
requests for information that is incorporated by reference into the prospectus
pursuant to Item 4, 10(b), 11 or 13 of this Form, within one business day of
receipt of such request, and to send the incorporated documents by first class
mail or other equally prompt means. This includes information contained in
documents filed subsequent to the effective date of the registration statement
through the date of responding to the request.
(d) Each of the undersigned registrants hereby undertakes to supply by
means of a post-effective amendment all information concerning a transaction,
and the corporation being acquired involved therein, that was not the subject of
and included in the registration statement when it became effective.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
below-named Registrant has duly caused this Amendment to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of New York, State of
New York, on the 30th day of June 1999.
ROYSTER-CLARK, INC.
By: /s/ Francis P. Jenkins, Jr.
----------------------------------
Francis P. Jenkins, Jr.
Chairman of the Board of Directors
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment has been signed below by the following persons in
the capacities at the above-named Registrant on June 30, 1999.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Francis P. Jenkins, Jr. Chairman of the Board of Directors and Chief Executive
- --------------------------- Officer (principal executive officer)
Francis P. Jenkins, Jr.
* Managing Director, Finance (principal financial officer
- --------------------------- and principal accounting officer)
Walter R. Vance
/s/ Thomas F. McWilliams Director
- ---------------------------
Thomas F. McWilliams
/s/ Randolph G. Abood Director
- ---------------------------
Randolph G. Abood
*By: /s/ Randolph G. Abood
-----------------------
Randolph G. Abood
Attorney-in-fact
</TABLE>
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
below-named Registrant has duly caused this Amendment to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of New York, State of
New York, on the 30th day of June 1999.
ROYSTER-CLARK GROUP, INC.
By: /s/ Francis P. Jenkins, Jr.
----------------------------------
Francis P. Jenkins, Jr.
Chairman of the Board of Directors
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment has been signed below by the following persons in
the capacities at the above-named Registrant on June 30, 1999.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Francis P. Jenkins, Jr. Chairman of the Board of Directors and Chief Executive
- --------------------------- Officer (principal executive officer)
Francis P. Jenkins, Jr.
* Managing Director, Finance (principal financial officer
- --------------------------- and principal accounting officer)
Walter R. Vance
/s/ Thomas F. McWilliams Director
- ---------------------------
Thomas F. McWilliams
/s/ Randolph G. Abood Director
- ---------------------------
Randolph G. Abood
*By: /s/ Randolph G. Abood
-----------------------
Randolph G. Abood
Attorney-in-fact
</TABLE>
II-6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
below-named Registrant has duly caused this Amendment to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of New York, State of
New York, on the 30th day of June 1999.
ROYSTER-CLARK AGRIBUSINESS, INC.
By: /s/ Francis P. Jenkins, Jr.
----------------------------------
Francis P. Jenkins, Jr.
Chairman of the Board of Directors
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment has been signed below by the following persons in
the capacities at the above-named Registrant on June 30, 1999.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Francis P. Jenkins, Jr. Chairman of the Board of Directors and Chief Executive
- --------------------------- Officer (principal executive officer)
Francis P. Jenkins, Jr.
* Treasurer (principal financial officer and principal
- --------------------------- accounting officer)
Walter R. Vance
/s/ G. Kenneth Moshenek Director
- ---------------------------
G. Kenneth Moshenek
/s/ Randolph G. Abood Director
- ---------------------------
Randolph G. Abood
*By: /s/ Randolph G. Abood
-----------------------
Randolph G. Abood
Attorney-in-fact
</TABLE>
II-7
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
below-named Registrant has duly caused this Amendment to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of New York, State of
New York, on the 30th day of June 1999.
ROYSTER-CLARK NITROGEN, INC.
By: /s/ Francis P. Jenkins, Jr.
----------------------------------
Francis P. Jenkins, Jr.
Chairman of the Board of Directors
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment has been signed below by the following persons in
the capacities at the above-named Registrant on June 30, 1999.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Francis P. Jenkins, Jr. Chairman of the Board of Directors and Chief Executive
- --------------------------- Officer (principal executive officer)
Francis P. Jenkins, Jr.
* Treasurer (principal financial officer and principal
- --------------------------- accounting officer)
Walter R. Vance
/s/ G. Kenneth Moshenek Director
- ---------------------------
G. Kenneth Moshenek
/s/ Randolph G. Abood Director
- ---------------------------
Randolph G. Abood
*By: /s/ Randolph G. Abood
-----------------------
Randolph G. Abood
Attorney-in-fact
</TABLE>
II-8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
below-named Registrant has duly caused this Amendment to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of New York, State of
New York, on the 30th day of June 1999.
ROYSTER-CLARK HUTSON, INC.
By: /s/ Francis P. Jenkins, Jr.
----------------------------------
Francis P. Jenkins, Jr.
Chairman of the Board of Directors
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment has been signed below by the following persons in
the capacities at the above-named Registrant on June 30, 1999.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Francis P. Jenkins, Jr. Chairman of the Board of Directors and Chief Executive
- --------------------------- Officer (principal executive officer)
Francis P. Jenkins, Jr.
* Treasurer (principal financial officer and principal
- --------------------------- accounting officer)
Walter R. Vance
/s/ G. Kenneth Moshenek Director
- ---------------------------
G. Kenneth Moshenek
/s/ Randolph G. Abood Director
- ---------------------------
Randolph G. Abood
*By: /s/ Randolph G. Abood
-----------------------
Randolph G. Abood
Attorney-in-fact
</TABLE>
II-9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
below-named Registrant has duly caused this Amendment to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of New York, State of
New York, on the 30th day of June 1999.
ROYSTER-CLARK RESOURCES LLC
By: /s/ Francis P. Jenkins, Jr.
-----------------------------
Francis P. Jenkins, Jr.
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment has been signed below by the following persons in
the capacities at the above-named Registrant on June 30, 1999.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Francis P. Jenkins, Jr. Chief Executive Officer (principal executive officer)
- --------------------------------
Francis P. Jenkins, Jr.
* Vice President (principal financial officer and
- -------------------------------- principal accounting officer)
Walter R. Vance
Royster-Clark AgriBusiness, Inc., sole member
By: /s/ Francis P. Jenkins, Jr. Chief Executive Officer
---------------------------
Francis P. Jenkins, Jr.
/s/ G. Kenneth Moshenek Director of Royster-Clark AgriBusiness, Inc., sole
- ------------------------------- member
G. Kenneth Moshenek
/s/ Randolph G. Abood Director of Royster-Clark AgriBusiness, Inc., sole
- ------------------------------- member
Randolph G. Abood
*By: /s/ Randolph G. Abood
-----------------------
Randolph G. Abood
Attorney-in-fact
</TABLE>
II-10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
below-named Registrant has duly caused this Amendment to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of New York, State of
New York, on the 30th day of June 1999.
ROYSTER-CLARK REALTY LLC
By: /s/ Francis P. Jenkins, Jr.
---------------------------
Francis P. Jenkins, Jr.
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment has been signed below by the following persons in
the capacities at the above-named Registrant on June 30, 1999.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Francis P. Jenkins, Jr. Chief Executive Officer (principal executive officer)
- --------------------------------
Francis P. Jenkins, Jr.
* Vice President (principal financial officer and
- -------------------------------- principal accounting officer)
Walter R. Vance
Royster-Clark, Inc., sole member
By: /s/ Francis P. Jenkins, Jr. Chief Executive Officer
---------------------------
Francis P. Jenkins, Jr.
/s/ Thomas F. McWilliams Director of Royster-Clark, Inc., sole member
- -------------------------------
Thomas F. McWilliams
/s/ Randolph G. Abood Director of Royster-Clark, Inc., sole member
- -------------------------------
Randolph G. Abood
*By: /s/ Randolph G. Abood
-----------------------
Randolph G. Abood
Attorney-in-fact
</TABLE>
II-11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
below-named Registrant has duly caused this Amendment to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of New York, State of
New York, on the 30th day of June 1999.
ROYSTER-CLARK AGRIBUSINESS REALTY LLC
By: /s/ Francis P. Jenkins, Jr.
-------------------------------
Francis P. Jenkins, Jr.
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment has been signed below by the following persons in
the capacities at the above-named Registrant on June 30, 1999.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Francis P. Jenkins, Jr. Chief Executive Officer (principal executive officer)
- -------------------------------------
Francis P. Jenkins, Jr.
* Vice President (principal financial officer and
- ------------------------------------- principal accounting officer)
Walter R. Vance
Royster-Clark AgriBusiness, Inc., sole member
By: /s/ Francis P. Jenkins, Jr. Chief Executive Officer
--------------------------------
Francis P. Jenkins, Jr.
/s/ G. Kenneth Moshenek Director of Royster-Clark AgriBusiness, Inc., sole
- ------------------------------------ member
G. Kenneth Moshenek
/s/ Randolph G. Abood Director of Royster-Clark AgriBusiness, Inc., sole
- ------------------------------------ member
Randolph G. Abood
*By: /s/ Randolph G. Abood
-----------------------
Randolph G. Abood
Attorney-in-fact
</TABLE>
II-12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
below-named Registrant has duly caused this Amendment to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of New York, State of
New York, on the 30th day of June 1999.
ROYSTER-CLARK HUTSON'S REALTY LLC
By: /s/ Francis P. Jenkins, Jr.
--------------------------------
Francis P. Jenkins, Jr.
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment has been signed below by the following persons in
the capacities at the above-named Registrant on June 30, 1999.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Francis P. Jenkins, Jr. Chief Executive Officer (principal executive officer)
- ---------------------------------
Francis P. Jenkins, Jr.
* Vice President (principal financial officer and
- --------------------------------- principal accounting officer)
Walter R. Vance
Royster-Clark Hutson, Inc., sole member
By: /s/ Francis P. Jenkins, Jr. Chief Executive Officer
---------------------------------
Francis P. Jenkins, Jr.
/s/ G. Kenneth Moshenek Director of Royster-Clark Hutson, Inc., sole member
- -------------------------------------
G. Kenneth Moshenek
/s/ Randolph G. Abood Director of Royster-Clark Hutson, Inc., sole member
- -------------------------------------
Randolph G. Abood
*By: /s/ Randolph G. Abood
-----------------------
Randolph G. Abood
Attorney-in-fact
</TABLE>
II-13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
below-named Registrant has duly caused this Amendment to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of New York, State of
New York, on the 30th day of June 1999.
ROYSTER-CLARK NITROGEN REALTY LLC
By: /s/ Francis P. Jenkins, Jr.
-------------------------------
Francis P. Jenkins, Jr.
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment has been signed below by the following persons in
the capacities at the above-named Registrant on June 30, 1999.
<TABLE>
<CAPTION>
Signature Title
--------- -----
<S> <C>
/s/ Francis P. Jenkins, Jr. Chief Executive Officer (principal executive officer)
- ---------------------------------
Francis P. Jenkins, Jr.
* Vice President (principal financial officer and
- --------------------------------- principal accounting officer)
Walter R. Vance
Royster-Clark Nitrogen, Inc.,
sole member
By: /s/ Francis P. Jenkins, Jr. Chief Executive Officer
-----------------------------
Francis P. Jenkins, Jr.
/s/ G. Kenneth Moshenek Director of Royster-Clark Nitrogen, Inc., sole member
- ---------------------------------
G. Kenneth Moshenek
/s/ Randolph G. Abood Director of Royster-Clark Nitrogen, Inc., sole member
- ---------------------------------
Randolph G. Abood
*By: /s/ Randolph G. Abood
-----------------------
Randolph G. Abood
Attorney-in-fact
</TABLE>
II-14
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Page
- ----------- ----------- ----
<S> <C> <C>
2.01 Stock Purchase Agreement dated January 21, 1999 by and among IMC Global Inc., The Vigoro
Corporation and R-C Delaware Acquisition Inc.*
2.02 First Amendment to the Stock Purchase Agreement dated as of April 13, 1999 among IMC Global
Inc., The Vigoro Corporation and R-C Delaware Acquisition Inc.
3.01 Restated Certificate of Incorporation of the Company.
3.02 Certificate of Amendment of Restated Certificate of Incorporation of the Company.
3.03 Amended and Restated Bylaws of the Company.
3.04 Amended and Restated Certificate of Incorporation of Royster-Clark Group, Inc.
3.05 Bylaws of Royster-Clark Group, Inc.
3.06 Certificate of Incorporation of IMC AgriBusiness Inc.
3.07 Certificate of Amendment to Certificate of Incorporation of IMC AgriBusiness Inc.
3.08 Bylaws of IMC AgriBusiness Inc.+
3.09 Certificate of Incorporation of IMC Nitrogen Company.
3.10 Certificate of Amendment to Certificate of Incorporation of IMC Nitrogen Company.
3.11 Bylaws of IMC Nitrogen Company.
3.12 Articles of Incorporation of Hutson's Ag Service, Inc.
3.13 Certificate of Amendment to Certificate of Incorporation of Hutson's Ag Service, Inc.
3.14 Bylaws of Hutson's Ag Service, Inc.
3.15 Certificate of Formation of Royster-Clark Resources LLC.
3.16 Limited Liability Company Agreement of Royster-Clark Resources LLC.
3.17 Certificate of Formation of Royster-Clark Realty LLC.
3.18 Limited Liability Company Agreement of Royster-Clark Realty LLC.
3.19 Certificate of Formation of Royster-Clark AgriBusiness Realty LLC.
3.20 Limited Liability Company Agreement of Royster-Clark AgriBusiness Realty LLC.
3.21 Certificate of Formation of Royster-Clark Hutson's Realty LLC.
3.22 Limited Liability Company Agreement of Royster-Clark Hutson's Realty LLC.
3.23 Certificate of Formation of Royster-Clark Nitrogen Realty LLC.
3.24 Limited Liability Company Agreement of Royster-Clark Nitrogen Realty LLC.
4.01 Indenture dated as of April 22, 1999 by and among the Company, the Guarantors, and the
United States Trust Company of New York, as Trustee.
4.02 Form of 10-1/4% First Mortgage Note Due 2009 (Included in Exhibit 4.01).
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit No. Description Page
- ----------- ----------- ----
<S> <C> <C>
4.03 Registration Rights Agreement dated as of April 22, 1999 by and among the Company, the
Guarantors, and Donaldson, Lufkin & Jenrette Securities Corporation and J.P. Morgan
Securities Inc. (each an "Initial Purchaser").
4.04 Exchange Agreement dated as of April 22, 1999 among 399 Venture Partners, Inc., Francis P.
Jenkins, Jr., Royster-Clark, Inc. and Royster-Clark Group, Inc.
4.05 Registration Rights Agreement dated as of April 22, 1999 by and among Royster-Clark Group,
Inc., 399 Ventures Partners, Inc., and other stockholders of Royster-Clark Group, Inc.
4.06 Securities Purchase and Holders Agreement dated as of April 22, 1999 by and among 399
Venture Partners, Inc. and certain management stockholders.+
4.07 Preferred Stockholders' Agreement dated as of April 22, 1999 by and among 399 Venture
Partners, Inc. and certain management stockholders.
5.01 Opinion of Dechert Price & Rhoads.
10.01 Credit Agreement dated as of April 22, 1999 by and among the Company, the Guarantors,
various lenders, DLJ Capital Funding, as arranger and syndication agent, J.P. Morgan
Securities Inc., as documentation agent and U.S. Bancorp Ag Credit, Inc., as
administrative agent.
10.02 Purchase Agreement dated April 15, 1999 among the Company, the Guarantors and the Initial
Purchasers.
10.03 Supply Agreement dated as of April 22, 1999 among IMC Kalium Ltd., IMC-Agrico Company and
the Company. Portions of this exhibit have been omitted pursuant to a request for
confidential treatment.**
10.04 Company Employee Savings and Investment Plan.
10.05 Royster-Clark Group, Inc. 1999 Restricted Stock Purchase and Option Plan.
10.06 Employment Agreement dated as of April 22, 1999 by and among Francis P. Jenkins, Jr.,
Royster-Clark Group, Inc. and Royster-Clark, Inc.
10.07 Master Conveyance Agreement dated as of April 22, 1999 by and among IMC Global Inc., the
Vigoro Corporation, the Company and the United States Trust Company of New York
12.01 Statement of Computation of Ratio of Earnings to Fixed Charges.***
21.01 Subsidiaries of the Company and the Additional Registrants.***
23.01 Consent of Dechert Price & Rhoads (included in the opinion filed as Exhibit 5.01).
23.02 Consent of KPMG LLP.
23.03 Consent of Ernst & Young LLP.
24.01 Power of Attorney (included on each of the signature pages).
25.01 Statement of Eligibility and Qualification of United States Trust Company of New York on
Form T-1.
27.1 Financial Data Schedule - Royster-Clark, Inc.
27.2 Financial Data Schedule - AgriBusiness.
99.01 Form of Letter of Transmittal.***
99.02 Notice of Guaranteed Delivery.***
99.03 Schedule 1 - Allowance for Doubtful Accounts-Royster-Clark, Inc.
99.04 Schedule 1 - Allowance for Doubtful Accounts-AgriBusiness.
</TABLE>
- ---------------
* Pursuant to Item 601(b)(2) of Regulation S-K, the schedules to this
Agreement are omitted. The Exhibit contains a list identifying the contents
of all schedules and the Registrants agree to furnish supplementally copies
of such schedules to the Commission upon request.
** Portions of this exhibit have been omitted pursuant to a request for
confidential treatment.
*** Filed herewith.
+ Was previously filed. Re-filed herewith. Redline tags indicate changes.
BY-LAWS OF
IMC AgriBusiness Inc.
ARTICLE I
Offices
Section 1. The registered office shall be in the City of Dover, County of
Kent, State of Delaware.
Section 2. The corporation may also have offices at such other places both
within and without the State of Delaware as the board of directors may from time
to time determine or the business of the corporation may require.
ARTICLE II
Meetings of Stockholders
Section 1. All meetings of the stockholders shall be held at such place as
may be fixed from time to time by the board of directors and stated in the
notice of the meeting or in a duly executed waiver of notice thereof.
Section 2. An annual meeting of the stockholders for the purpose of
electing directors and for the transaction of such other business as may come
before the meeting shall be held on a day to coincide with the annual meeting of
stockholders of IMC Global Inc., unless the board of directors, not less than
ten (10) days prior to such fixed meeting date, designates another date for such
annual meeting, in which event the annual meeting of the stockholders shall be
held on the date so designated.
-1-
<PAGE>
Section 3. Written notice of the annual meeting stating the place, date and
hour of the meeting shall be given to each stockholder entitled to vote at such
meeting not less than ten (10) nor more than sixty (60) days before the date of
the meeting.
Section 4. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten (10) days before every meeting
of stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.
Section 5. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the certificate of
incorporation, may be called by the chairman of the board or president, and
shall be called by the chairman of the board or president or secretary at the
request in writing of a majority of the board of directors, or at the request in
writing of stockholders owning a majority in amount of the entire capital stock
of the corporation issued and outstanding and entitled to vote. Such request
shall state the purpose or purposes of the proposed meeting.
-2-
<PAGE>
Section 6. Written notice of a special meeting stating the place, date and
hour of the meeting and the purpose or purposes for which the meeting is called,
shall be given not less than ten (10) nor more than sixty (60) days before the
date of the meeting, to each stockholder entitled to vote at such meeting.
Section 7. Business transacted at any special meeting of stockholders shall
be limited to the purposes stated in the notice.
Section 8. The holders of a majority of the stock issued and outstanding
and entitled to vote thereat, present in person or represented by proxy, shall
constitute a quorum at all meetings of the stockholders for the transaction of
business except as otherwise provided by statute or by the certificate of
incorporation. If, however, such quorum shall not be present or represented at
any meeting of the stockholders, the stockholders entitled to vote thereat,
present in person or represented by proxy, shall have power to adjourn the
meeting from time to time, without notice other than announcement at the
meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted which might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty (30) days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.
Section 9. When a quorum is present at any meeting, the vote of the holders
of a majority of the stock having voting power present in person or represented
by proxy shall
-3-
<PAGE>
decide any question brought before such meeting, unless the question is one upon
which by express provision of statute or of the certificate of incorporation, a
different vote is required, in which case such express provision shall govern
and control the decision of such question.
Section 10. Each stockholder shall at every meeting of the stockholders be
entitled to one vote in person or by proxy for each share of the capital stock
having voting power held by such stockholder, but no proxy shall be voted on
after three years from its date, unless the proxy provides for a longer period.
Section 11. Any action required to be taken at any annual or special
meeting of stockholders of the corporation, or any action which may be taken at
any annual or special meeting of such stockholders, may be taken without a
meeting, without prior notice and without a vote, if a consent in writing,
setting forth the action so taken, shall be signed by the holders of outstanding
stock having not less than the minimum number of votes that would be necessary
to authorize or take such action at a meeting at which all shares entitled to
vote thereon were present and voted. Prompt notice of the taking of the
corporate action without a meeting by less than unanimous written consent shall
be given to those stockholders who have not consented in writing.
ARTICLE III
Directors
Section 1. The number of directors of the corporation shall be one or more
directors, as set by resolution of the board of directors. The directors shall
be elected at the annual meeting of the stockholders, except as provided in
Section 2 of this Article, and each
-4-
<PAGE>
director elected shall hold office until his successor is elected and qualified.
Directors need not be stockholders.
Section 2. Vacancies and newly created directorships resulting from any
increase in the authorized number of directors may be filled by a majority of
the directors then in office, though less than a quorum, or by the sole
remaining director, and the directors so chosen shall hold office until the next
annual election and until their successors are duly elected and shall have
qualified, or their earlier resignation or removal. If there are no directors in
office, then an election of directors may be held in the manner provided by
statute.
Section 3. The business of the corporation shall be managed by or under the
direction of the board of directors which may exercise all such powers of the
corporation and do all such lawful acts as are not by statute or by the
certificate of incorporation or by these by-laws directed or required to be
exercised or done by the stockholders.
Meetings of the Board of Directors
Section 4. The board of directors of the corporation may hold meetings,
both regular and special, either within or without the State of Delaware.
Section 5. The first meeting of each newly elected board of directors shall
be held at such time and place as shall be fixed by the vote of the stockholders
at the annual meeting, and no notice of such meeting shall be necessary to the
newly elected directors in order legally to constitute the meeting, provided a
quorum shall be present. In the event of the failure of the stockholders to fix
the time or place of such first meeting of the newly elected board of directors,
-5-
<PAGE>
or in the event such meeting is not held at the time and place so fixed by the
stockholders, the meeting may be held at such time and place as shall be
specified in a notice given as hereinafter provided for special meetings of the
board of directors, or as shall be specified in a written waiver of notice
signed by all of the directors.
Section 6. Regular meetings of the board of directors may be held without
notice at such time and at such place as shall from time to time be determined
by the board.
Section 7. Special meetings of the board may be called by the chairman of
the board or the president on two (2) days' notice to each director, either
personally or by mail or by telegram; special meetings shall be called by the
chairman of the board or the president in like manner and on like notice on the
written request of two or more directors.
Section 8. At all meetings of the board a majority of the total number of
directors shall constitute a quorum for the transaction of business, and the act
of majority of the directors present at any meeting at which there is a quorum
shall be the act of the board of directors, except as may be otherwise
specifically provided by statute or by the certificate of incorporation. If a
quorum shall not be present at any meeting of the board of directors, the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Section 9. Unless otherwise restricted by the certificate of incorporation
or these by-laws, any action required or permitted to be taken at any meeting of
the board of directors or of any committee thereof may be taken without a
meeting, if all members of the board
-6-
<PAGE>
or committee, as the case may be, consent thereto in writing, and the writing or
writings are filed with the minutes of proceedings of the board or committee.
Compensation of Directors
Section 10. The directors may be paid their expenses, if any, of attendance
at each meeting of the board of directors and may be paid a fixed sum for
attendance at each meeting of the board of directors or a stated salary as
director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.
ARTICLE IV
Notices
Section 1. Whenever, under the provisions of the statutes or of the
certificate of incorporation or of these by-laws, notice is required to be given
to any director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also be given by telegram.
Section 2. Whenever any notice is required to be given under the provisions
of the statutes or of the certificate of incorporation or of these by-laws, a
waiver thereof in writing,
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<PAGE>
signed by the person or persons entitled to said notice, whether before or after
the time stated therein, shall be deemed equivalent thereto.
ARTICLE V
Officers
Section 1. The officers of the corporation shall be chosen by the board of
directors and shall be a chairman of the board, a president, one or more
executive vice presidents, one or more vice presidents, a secretary and a
treasurer. The board of directors may also choose one or more assistant
secretaries and assistant treasurers. Any number of offices may be held by the
same person, unless the certificate of incorporation or these by-laws otherwise
provide.
Section 2. Deleted
Section 3. Deleted
Section 4. Deleted
Section 5. Deleted
Section 6. The Chairman of the Board. The chairman of the board shall be
the chief executive officer of the corporation and shall have the general
direction of the affairs of the corporation, except as otherwise prescribed by
the board of directors. He shall preside at all meetings of the stockholders, of
the board of directors and of the executive committee, if any, and shall
designate the acting secretary for such meetings to take the minutes thereof for
delivery to the secretary. He may execute contracts in the name of the
corporation and appoint and discharge agents and employees of the corporation.
The chairman of the board shall be ex-officio a member of all committees.
Section 7. The President. The president shall be the chief operating
officer of the corporation, and as such shall direct the operations of the
corporation. He shall assume such other duties as the board of directors may
assign to him from time to time. In the absence or
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<PAGE>
incapacity of the chairman of the board, he shall perform all duties and
functions of the chairman of the board. He may sign, with the secretary,
assistant secretary, treasurer or assistant treasurer, certificates for shares
of the corporation, and may sign any policies, deeds, mortgages, bonds,
contracts, or other instruments which the board of directors have authorized to
be executed except in cases where the signing and execution thereof shall be
expressly delegated by the board of directors or by these by-laws to some other
officer or agent of the corporation, or shall be required by law to be otherwise
signed or executed; appoint and discharge agents and employees of the
corporation, and in general, shall perform all duties incident to the office of
president. The president shall be ex-officio a member of all committees.
The Executive Vice-Presidents
Section 8. In the absence of the president or in the event of his inability
or refusal to act, the executive vice president (or in the event there be more
than one executive vice-president, the executive vice-presidents in the order
designated, or in the absence of any designation, then in the order of their
election) shall perform the duties of the president and when so acting, shall
have all the powers of and be subject to all the restrictions upon the
president. The executive vice-presidents shall perform such other duties and
have such other powers as the board of directors may from time to time
prescribe.
The Vice-Presidents
Section 9. In the absence of the executive vice presidents or in the event
of their inability or refusal to act, the vice-president (or in the event there
be more than one vice-president, the vice-presidents in the order designated, or
in the absence of any designation, then in
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<PAGE>
the order of their election) shall perform the duties of the executive
vice-presidents, and when so acting, shall have all the powers of and be subject
to all the restrictions upon the executive vice-presidents. The vice-presidents
shall perform such other duties and have such other powers as the board of
directors may from time to time prescribe.
The Secretary and Assistant Secretary
Section 10. The secretary shall attend all meetings of the board of
directors and all meetings of the stockholders and record all the proceedings of
the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the board of directors, and shall
perform such other duties as may be prescribed by the board of directors or the
chairman or executive vice presidents, under whose supervision he shall be. He
shall have custody of the corporate seal of the corporation and he, or an
assistant secretary, shall have authority to affix the same to any instrument
requiring it and when so affixed, it may be attested by his signature or by the
signature of such assistant secretary. The board of directors may give general
authority to any other officer to affix the seal of the corporation and to
attest the affixing by his signature.
Section 11. The assistant secretary, or if there be more than one, the
assistant secretaries in the order determined by the board of directors (or if
there be no such determination, then in the order of their election) shall, in
the absence of the secretary or in the event of his inability or refusal to act,
perform the duties and exercise the powers of the secretary and shall
-10-
<PAGE>
perform such other duties and have such other powers as the board of directors
may from time to time prescribe.
The Treasurer and Assistant Treasurers
Section 12. The treasurer shall have the custody of the corporate funds and
securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all monies
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the board of directors.
Section 13. He shall disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the president and the board of directors, at
its regular meetings, or when the board of directors so requires, an account of
all his transactions as treasurer and of the financial condition of the
corporation.
Section 14. If required by the board of directors, he shall give the
corporation a bond (which shall be renewed as required from time to time) in
such sum and with such surety or sureties as shall be satisfactory to the board
of directors for the faithful performance of the duties of his office and for
the restoration to the corporation, in case of his death, resignation,
retirement or removal from office, of all books, papers, vouchers, money and
other property of whatever kind in his possession or under his control belonging
to the corporation.
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<PAGE>
Section 15. The assistant treasurer, or if there shall be more than one,
the assistant treasurers in the order determined by the board of directors (or
if there be no such determination, then in the order of their election), shall,
in the absence of the treasurer or in the event of his inability or refusal to
act, perform the duties and exercise the powers of the treasurer and shall
perform such other duties and have such other powers as the board of directors
may from time to time prescribe.
ARTICLE VI
Certificate of Stock
Section 1. Every holder of stock in the corporation shall be entitled to
have a certificate, signed by, or in the name of the corporation by, the
chairman of the board or the president or a vice-president and the treasurer or
an assistant treasurer, or the secretary or an assistant secretary of the
corporation, certifying the number of shares owned by him in the corporation.
If the corporation shall be authorized to issue more than one class of
stock or more than one series of any class, the designations, preferences and
relative, participating, optional or other special rights of each class of stock
or series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights shall be set forth in full or summarized on the face
or back of the certificate which the corporation shall issue to represent such
class or series of stock, provided that, except as otherwise provided in Section
202 of the General Corporation Law of Delaware, in lieu of the foregoing
requirements, there may be set forth on the face or back of the certificate
which the corporation shall issue to represent such class or series of
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<PAGE>
stock, a statement that the corporation will furnish without charge to each
stockholder who so requests the designations, preferences and relative,
participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such preferences
and/or rights.
Section 2. Where a certificate is countersigned (i) by a transfer agent
other than the corporation or its employee, or (ii) by a registrar other than
the corporation or its employee, any of or all the signatures of the officers of
the corporation may be a facsimile. In case any officer who has signed or whose
facsimile signature has been placed upon a certificate shall have ceased to be
an officer before such certificate is issued, it may be issued by the
corporation with the same effect as if he were such officer at the date of
issue.
Lost Certificates
Section 3. The board of directors may direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of the fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the board of directors may, in its
discretion and as a condition precedent to the issuance thereof, require the
owner of such lost, stolen or destroyed certificate or certificates, or his
legal representative, to advertise the same in such manner as it shall require
and/or to give the corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the corporation with respect to the
certificate alleged to have been lost, stolen or destroyed.
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<PAGE>
Transfers of Stock
Section 4. Upon surrender to the corporation or the transfer agent of the
corporation of a certificate for shares duly endorsed or accompanied by proper
evidence of succession, assignation or authority to transfer, it shall be the
duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Fixing Record Date
Section 5. In order that the corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the board of directors may fix, in advance, a record date,
which shall not be more than sixty (60) nor less than ten (10) days before the
date of such meeting, nor more than sixty (60) days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the board of directors may fix a new record date for the adjourned
meeting.
Registered Stockholders
Section 6. The corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner
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<PAGE>
of shares, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, except as otherwise provided
by the laws of Delaware.
ARTICLE VII
Indemnification
Section 1. Power to Indemnify in Actions, Suits or Proceedings Other Than
Those by or in the Right of the Corporation. Subject to Section 3 of this
Article VII, the Corporation shall indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigate
(other than an action by or in the right of the corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with such action, suit or proceeding if he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any action, suit or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent, shall not, of
itself, create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
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<PAGE>
Section 2. Power to Indemnify in Actions, Suits or Proceedings by or in the
Right of the Corporation. Subject to Section 3 of this Article VII, the
corporation shall indemnify any person who was or is party or is threatened to
be made a party to any threatened, pending or completed action or suit by or in
the right of the corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation; except that no indemnification shall be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable to the corporation unless and only to the extent that the Court of
Chancery or the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled to
indemnify for such expenses which the Court of Chancery or such other court
shall deem proper.
Section 3. Authorization of Indemnification. Any indemnification under this
Article VII (unless ordered by a court) shall be made by the corporation only as
authorized in the specific case upon a determination that indemnification of the
director, officer, employee or agent is proper in the circumstances because he
has met the applicable standard of conduct set forth in Section 1 or Section 2,
of this Article VII, as the case may be. Such determination shall be made
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<PAGE>
(i) by the Board of Directors by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding, or (ii) if
such a quorum is not obtainable, or, even if obtainable a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion, or (iii) by the stockholders. To the extent, however, that a director,
officer, employee or agent of the corporation has been successful on the merits
or otherwise in defense of any action, suit or proceeding described above, or in
defense of any claim, issue or matter therein, he shall be indemnified against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection therewith, without the necessity of authorization in the specific
case.
Section 4. Good Faith Defined. For purposes of any determination under
Section 3 of this Article VII, a person shall be deemed to have been acted in
good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the corporation, or, with respect to any criminal action or
proceeding, to have had no reasonable cause to believe his conduct was unlawful,
if his action is based on the records or books of account of the corporation or
another enterprise, or on information supplied to him by the officers of the
corporation or another enterprise, in the course of their duties, or on the
advice of legal counsel for the corporation or another enterprise or on
information or records given or reports made to the corporation or another
enterprise by an independent certified public accountant or by an appraiser or
other expert selected with reasonable care by the corporation or another
enterprise. The term "another enterprise" as used in this Section 4 shall mean
any other corporation of any partnership, joint venture, trust or other
enterprise of which such person is or was serving at the request of the
corporation as a director, officer, employee or agent. The provisions of this
Section 4 shall not be
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deemed to be exclusive or to limit in any way the circumstances in which a
person may be deemed to have met the applicable standard of conduct set forth in
Sections 1 or 2 of this Article VII, as the case may be.
Section 5. Indemnification by a Court. Notwithstanding any contrary
determination in the specific case under Section 3 of this Article VII, and
notwithstanding the absence of any determination thereunder, any director,
officer, employee or agent may apply to any court of competent jurisdiction in
the State of Delaware for indemnification to the extent otherwise permissible
under Sections 1 and 2 of this Article VII. The basis of such indemnification by
a court shall be a determination by such court that indemnification of the
director, officer, employee or agent is proper in the circumstances because he
has met the applicable standards of conduct set forth in Sections 1 and 2 of
this Article VII, as the case may be. Notice of any application for
indemnification pursuant to this Section 5 shall be given to the corporation
promptly upon the filing of such application.
Section 6. Expenses Payable in Advance. Expenses incurred in defending or
investigating a threatened or pending action, suit or proceeding may be paid by
the corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the director,
officer, employee or agent to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the corporation as
authorized in this Article VII.
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<PAGE>
Section 7. Non-exclusivity of Indemnification and Advancement of Expenses.
The indemnification and advancement of expenses provided by or granted pursuant
to this Article VII shall not be deemed exclusive of any other rights to which
those seeking indemnification or advancement of expenses may be entitled under
any by-law, agreement, contract, vote of stockholders or disinterested directors
or pursuant to the direction (howsoever embodied) of any court of competent
jurisdiction or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, it being the policy of the
corporation that indemnification of the persons specified in Sections 1 and 2 of
this Article VII shall be made to the fullest extent permitted by law. The
provisions of this Article VII shall not be deemed to preclude the
indemnification of any person who is not specified in Section 1 or 2 of this
Article VII but whom the corporation has the power of obligation to indemnify
under the provisions of the General Corporation Law of the State of Delaware, or
otherwise.
Section 8. Insurance. The corporation may purchase and maintain insurance
on behalf of any person who is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against him
and incurred by him in any such capacity, or arising out of his status as such,
whether or not the corporation would have the power or the obligation to
indemnify him against such liability under the provisions of this Article VII.
Section 9. Meaning of "Corporation" for Purposes of Article VII. For
purposes of this Article VII, references to "the corporation" shall include, in
addition to the
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resulting corporation, any constituent corporation (including any constituent of
a constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had the power and authority to indemnify its
directors, officers, and employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is or
was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under the provisions
of this Article VII with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its separate
existence had continued.
Section 10. Survival of Indemnification and Advancement of Expenses. The
indemnification and advancement of expenses provided by, or granted pursuant to,
this section shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director, officer, employee or
agent and shall inure to the benefit of the heirs, executors and administrators
of such a person.
ARTICLE VIII
The stockholders shall have the sole power to adopt, alter, amend or
rescind these by-laws. The affirmative vote of the holders of not less than 86%
of the outstanding common stock of the corporation shall be required in order to
authorize any such adoption, alteration, amendment or rescission of these
by-laws.
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SECURITIES PURCHASE AND HOLDERS AGREEMENT
dated as of
April 22, 1999
by and among
Royster-Clark Group, Inc.,
399 Venture Partners, Inc.,
and
The Additional Investors Signatory Hereto
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS..................................................... 2
ARTICLE II ISSUANCE OF SHARES TO 399 VENTURE AND CONTINUING MANAGEMENT
INVESTORS; REDEMPTION OF CERTAIN STOCK.............................. 7
2.1. Securities.................................................... 7
2.2. Closing....................................................... 8
2.3. Conditions to 399 Venture's and Management Investor's
Obligations................................................... 8
2.4. Conditions to the Company's Obligations....................... 9
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY................. 10
3.1. Representations and Warranties of the Company................. 10
ARTICLE IV REPRESENTATIONS, WARRANTIES AND COVENANTS OF EACH INVESTOR..... 11
4.1. Representations, Warranties and Covenants of Each Investor.... 11
4.2. Legends....................................................... 12
4.3. Management Investor Representations and Warranties............ 12
4.4. Representations and Warranties of 399 Venture................. 13
4.5. Restrictions on Transfers of Securities....................... 13
4.6. Certain Sales by Jenkins...................................... 15
4.7. Termination of Restrictions................................... 16
4.8. Notation...................................................... 17
4.9. Limitation on Repurchase of Company Stock..................... 17
4.10. Future Sales.................................................. 17
4.11. Reliance...................................................... 17
ARTICLE V OTHER COVENANTS AND REPRESENTATIONS............................. 18
5.1. Observers' Rights............................................. 18
5.2. Financial Statements and Other Information.................... 18
5.3. Regulatory Compliance Cooperation............................. 19
5.4. Small Business Administration Forms........................... 19
5.5. Economic Impact............................................... 19
5.6. SBA Access.................................................... 19
5.7. Sale of the Company........................................... 20
5.8. Tag-Along Rights.............................................. 20
5.9. Covenant Not To Compete or Solicit............................ 23
5.10. Preemptive Rights............................................. 24
5.11. Right to Join in Purchase..................................... 25
ARTICLE VI CORPORATE ACTIONS.............................................. 26
6.1. Certificate of Incorporation and Bylaws....................... 26
6.2. Directors and Voting Agreements............................... 27
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6.3. Right to Remove Designated Directors.......................... 27
6.4. Right to Fill Certain Vacancies in Company's Board............ 27
6.5. Rights upon Disability or Death of Jenkins.................... 28
6.6. Committee Members; Directors of Company Subsidiaries.......... 28
6.7. Amendment of Certificate and Bylaws........................... 28
6.8. Termination of Designation Rights............................. 28
6.9. Future Sales of Securities.................................... 29
ARTICLE VII ADDITIONAL RESTRICTIONS ON TRANSFERS OF SECURITIES HELD BY
MANAGEMENT INVESTORS................................................ 29
7.1. Restrictions on Transfer...................................... 29
7.2. Purchase Option............................................... 30
7.3. Company's Right of First Refusal.............................. 32
7.4. Involuntary Transfers......................................... 32
7.5. Lapse......................................................... 33
ARTICLE VIII REGISTRATION RIGHTS; PREFERRED STOCKHOLDERS AGREEMENT;
INDEMNIFICATION..................................................... 33
8.1. Registration Rights........................................... 33
8.2. Preferred Stockholders Agreement.............................. 34
8.3. Indemnification for Certain Liabilities....................... 34
ARTICLE IX MISCELLANEOUS.................................................. 34
9.1. Purchaser Representative...................................... 34
9.2. Section 83(b) Elections....................................... 35
9.3. Amendment and Modification.................................... 35
9.4. Waiver of Fiduciary Duties and Corporate Opportunity;
Acknowledgment................................................ 35
9.5. Survival...................................................... 36
9.6. Successors and Assigns; Entire Agreement...................... 36
9.7. Separability.................................................. 36
9.8. Notices....................................................... 36
9.9. Governing Law................................................. 37
9.10. Waiver of Jury Trial.......................................... 38
9.11. Acknowledgment Of Management Investors........................ 38
9.12. No Effect on Employment....................................... 38
9.13. Headings...................................................... 38
9.14. Counterparts.................................................. 38
9.15. Further Assurances............................................ 38
9.16. Termination................................................... 39
9.17. Remedies...................................................... 39
9.18. Party No Longer Owning Securities............................. 39
9.19. Pronouns...................................................... 39
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SECURITIES PURCHASE AND HOLDERS AGREEMENT
SECURITIES PURCHASE AND HOLDERS AGREEMENT, dated as of April 22, 1999 (the
"Agreement"), by and among Royster-Clark Group, Inc., a Delaware corporation
(the "Company"), 399 Venture Partners, Inc., a Delaware corporation ("399
Venture"), the individuals, including Francis P. Jenkins, Jr. ("Jenkins"),
signatory hereto who are designated on Schedule 1-A(A) hereto as Continuing
Management Investors (the "Continuing Management Investors"), and the
individuals, designated on Schedule 1-B hereto as Purchasing Management
Investors who are signatory to this Agreement or who following the date hereof
execute a joinder to this Agreement (the "Purchasing Management Investors"). The
Purchasing Management Investors and Continuing Management Investors are
sometimes referred to hereinafter individually as a "Management Investor" and
collectively as the "Management Investors." 399 Venture and the Management
Investors and each other person who becomes a party to this Agreement by
executing a joinder hereto are sometimes referred to hereinafter individually as
an "Investor" and collectively as the "Investors."
Background
A. The Company, 399 Venture, and Jenkins are the parties to an Exchange
Agreement dated as of April 22, 1999 (the "Exchange Agreement"). At the closing
of the several transactions contemplated by the Exchange Agreement and this
Agreement (the "Exchange Closing"), certain of the outstanding stock of
Royster-Clark, Inc. a Delaware corporation ("Royster-Clark"), owned by Jenkins
and his Affiliates will have been redeemed by Royster-Clark for cash and the
balance of such shares will have been acquired by the Company in exchange for a
combination of Shares (as hereinafter defined). In addition, the Continuing
Management Investors shall have submitted to the Company for redemption the
number and kinds of securities set forth on Schedule 1-A(B) in return for the
respective amounts set forth opposite such Continuing Management Investor's name
on Schedule 1-A(B).
B. As of the Exchange Closing, the authorized capital stock of the Company
will consist of shares of (i) Class A Common Stock, par value $.01 per share
("Class A Common Stock"), (ii) Class B Common Stock, par value $.01 per share
("Class B Common Stock" and, collectively with the Class A Common Stock, the
"Common Stock"), (iii) 12% Series A Senior Cumulative Compounding Preferred
Stock, par value $.01 per share ("Series A Preferred Stock"), and (iv) Series B
Junior Preferred Stock, par value $.01 per share ("Series B Preferred Stock",
collectively with the Series A Preferred Stock, the "Preferred Stock"). The
Common Stock and Preferred Stock are sometimes referred to hereinafter
individually and collectively as the "Shares."
C. Pursuant to this Agreement each Continuing Management Investor will
exchange the securities of Royster-Clark held by such Continuing Management
Investor set forth opposite such Continuing Management Investor's name on
Schedule 1-A(A) and described as Rollover Securities in exchange for the number
and kind of Shares set forth opposite such Continuing Management Investor's name
on Schedule 1-A(A) and described as Exchanged Shares.
<PAGE>
D. On the date hereof, the Company has adopted the 1999 Restricted Stock
Purchase Plan, the form of which is attached hereto as Exhibit A (the
"Restricted Stock Plan"). On the date hereof, certain Continuing Management
Investors are exchanging the options set forth opposite their respective names
on Schedule 1-C hereto (collectively, the "Rollover Options") for the number of
options to purchase the number and kinds of securities of RCGI as are set forth
on Schedule 1-C hereto and designated as "Exchanged Options" (the "Exchanged
Options"). In addition, following the date hereof and from time to time, each of
the Purchasing Management Investors will purchase from the Company Class A
Common Stock pursuant to the Restricted Stock Plan (such Shares being the
"Incentive Shares") in the amounts set forth opposite such Purchasing Management
Investor's name on Schedule 1-B, to be appended hereto at the time of such
purchase and thereafter amended from time to time to reflect additional
Purchasing Management Investors. No Purchasing Management Investor shall
purchase Incentive Shares unless such Purchasing Management Investor is or
becomes a party to this Agreement.
E. As used herein, the term "Securities" shall mean (i) the shares of
Common Stock (including any Incentive Shares) held by any party hereto, (ii) all
other securities of the Company (or a successor to the Company) received on
account of ownership of Common Stock, including all securities issued in
connection with any merger, consolidation, stock dividend, stock distribution,
stock split, reverse stock split, stock combination, recapitalization,
reclassification, subdivision, conversion or similar transaction in respect
thereof and (iii) all other equity securities (other than Preferred Stock) of
the Company or a successor to the Company owned at any time hereafter by such
party, whether acquired from the Company, an Investor or otherwise.
F. The Investors and the Company wish to set forth certain agreements
regarding their future relationships and their rights and obligations with
respect to the Securities.
Terms
In consideration of the mutual covenants contained herein and intending to
be legally bound hereby, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1. As used in this Agreement, the following capitalized terms shall have
the following meanings:
"Adjusted Book Value Price" has the meaning set forth in Section
7.2(a)(ii)(C)(2) of this Agreement.
"Adjusted Book Value Price Percentage" has the meaning set forth in Section
7.3(a)(iii) of this Agreement.
"Adjusted Cost Price" has the meaning set forth in Section 7.2(a)(ii)(B)(1)
of this Agreement.
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"Affiliate" has the meaning set forth in Rule 12b-2 of the Rules
promulgated under the Exchange Act.
"Agreement" has the meaning set forth in the Preamble of this Agreement.
"Approved Sale" has the meaning set forth in Section 5.7(b) of this
Agreement.
"Assurance of Compliance" has the meaning set forth in Section 5.4 of this
Agreement.
"Called Shares" has the meaning set forth in Section 7.2(a)(iii) of this
Agreement.
"Cash Redemption Amount" has the meaning set forth in Section 2.1 of this
Agreement.
"Cause," when used in connection with the termination of a Management
Investor's employment with the Company or any of its Subsidiaries, means such
Management Investor's (A) willful and continued failure to perform such
Management Investor's duties, after written notice of such failure, which
failure has not been corrected within the 30-day period after written notice has
been given; (B) the willful commission by such Management Investor of acts that
are dishonest and demonstrably and materially injurious to the Company or any of
its Subsidiaries, monetarily or otherwise; (C) conviction of a felony; (D)
failure to perform such Management Investor's duties at a satisfactory level as
determined by a majority of the members of the Board of Directors in good faith,
which failure has not been corrected within the 90-day period after written
notice has been given; or (E) material breach of any of the covenants of this
Agreement.
"Class A Common Stock" has the meaning set forth in Background Section B of
this Agreement.
"Class B Common Stock" has the meaning set forth in Background Section B of
this Agreement.
"Closing" has the meaning set forth in Section 2.2 of this Agreement.
"Combination Offering" has the meaning set forth in Section 5.10(d) of this
Agreement.
"Common Stock" has the meaning set forth in Background Section B of this
Agreement.
"Company" means Royster-Clark Group, Inc., a Delaware corporation, except
that when used in Article VII, "Company" means the Company and all other
entities of which the Company from time to time owns, directly or indirectly,
50% or more of the stock or assets.
"Continuing Management Investors" has the meaning set forth in the Preamble
of this Agreement.
"399 Venture" has the meaning set forth in the Preamble of this Agreement.
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"399 Venture Co-Investor" has the meaning set forth in Section 4.5(d)(iv)
of this Agreement.
"399 Venture Designees" has the meaning set forth in Section 6.2(a)(ii).
"399 Venture Securities" has the meaning set forth in Section 2.1(c) of
this Agreement.
"ESOP" has the meaning assigned to such term in Section 8.3 of this
Agreement.
"Escrow Amount" has the meaning set forth in Section 5.6(d)(i) of this
Agreement.
"Escrow Notice" has the meaning set forth in Section 5.6(d)(ii) of this
Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Exchange Agreement" has the meaning set forth in Background Section A of
this Agreement.
"Exchanged Shares" has the meaning set forth in Section 2.1 of this
Agreement.
"Good Reason" means the failure of the Company or Royster-Clark to pay a
Management Investor the compensation provided by the Company on the date hereof
or, in the case of Jenkins, pursuant to his employment agreement with the
Company and Royster-Clark, as it may be amended from time to time.
"Incentive Shares" means the shares of Common Stock owned by each
Purchasing Management Investor designated as Incentive Shares on Schedule 1-B to
be appended hereto, as it may be amended from time to time, and all other
securities of the Company (or a successor to the Company) (i) received on
account of ownership of such shares, including any and all incentive securities
issued in connection with any merger, consolidation, stock dividend, stock
distribution, stock split, reverse stock split, stock combination,
recapitalization, reclassification, subdivision, conversion or similar
transaction in respect thereof or (ii) acquired pursuant to the Restricted Stock
Plan; provided that in no event shall Incentive Shares include any Securities
issuable upon the exercise of an Exchanged Option.
"Investor" and "Investors" have the meanings set forth in the Preamble of
this Agreement.
"Jenkins" has the meaning set forth in the Preamble of this Agreement.
"Jenkins Designees" has the meaning set forth in Section 6.2(a)(i).
"Management Investor" and "Management Investors" have the meanings set
forth in the Preamble of this Agreement.
"Observers" has the meaning set forth in Section 5.1 of this Agreement.
"Offer Notice" has the meaning set forth in Section 4.6 of this Agreement.
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"Offered Securities" has the meaning set forth in Section 4.6 of this
Agreement.
"Option Purchase Price" has the meaning set forth in Section 7.2(a)(ii)(A)
of this Agreement.
"Permitted Transferee" has the meaning set forth in Section 4.5(d) of this
Agreement.
"Person" means any individual, corporation, limited liability company,
partnership, firm, association, joint venture, joint stock company, trust or
other entity, or any government or regulatory administrative or political
subdivision or agency, department or instrumentality thereof.
"Preferred Stock" has the meaning set forth in Background Section B of this
Agreement.
"Preferred Stockholders Agreement" has the meaning set forth in Section 8.2
of this Agreement.
"Public Offering" means a successfully completed firm-commitment
underwritten public offering (other than a Unit Offering, as hereinafter
defined) pursuant to an effective registration statement under the Securities
Act in respect of the offer and sale of shares of Common Stock for the account
of the Company and any stockholder selling shares of Common Stock resulting in
aggregate net proceeds to the Company in such offering of not less than $20
million.
"Purchase Number" has the meaning set forth in Section 7.2(a)(ii) of this
Agreement.
"Purchase Option" has the meaning set forth in Section 7.2(a) of this
Agreement.
"Purchasing Management Investors" has the meaning set forth in the Preamble
of this Agreement.
"Redemption Shares" has the meaning set forth in Section 2.1 of this
Agreement.
"Registration Rights Agreement" has the meaning set forth in Article VIII
of this Agreement.
"Regulatory Problem" has the meaning set forth in Section 5.3 of this
Agreement.
"Regulatory Sale" has the meaning set forth in Section 5.8(f) of this
Agreement.
"Restricted Investor" has the meaning set forth in Section 4.5 of this
Agreement.
"Restricted Stock Plan" has the meaning set forth in Background Section D
of this Agreement.
"Reverse Stock Split" has the meaning assigned to such term in Section 8.3
of this Agreement.
"Rights Holder" has the meaning set forth in Section 5.10 of this
Agreement.
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"Rollover Securities" has the meaning set forth in Background Section C of
this Agreement.
"Royster-Clark" has the meaning set forth in set forth in Background
Section A of this Agreement.
"Royster-Clark Shares" means the shares of common stock, par value $.01 per
share, of Royster-Clark outstanding as of the Closing and all such shares
issuable upon the exercise of options outstanding on the Closing Date.
"Sale Notice" has the meaning set forth in Section 7.3 of this Agreement.
"SBA" has the meaning set forth in Section 3.1(g) of this Agreement.
"SEC" has the meaning set forth in Section 3.1(h) of this Agreement.
"Securities" has the meaning set forth in Background Section E of this
Agreement.
"Securities Act" means the Securities Act of 1933, as amended.
"Series A Preferred Stock" has the meaning set forth in Background Section
B of this Agreement.
"Series B Preferred Stock" has the meaning set forth in Background Section
B of this Agreement.
"Shares" has the meaning set forth in Background Section B of this
Agreement.
"Size Status Declaration" has the meaning set forth in Section 5.4 of this
Agreement.
"Subordinated Note" has the meaning set forth in Section 4.10(b) of this
Agreement.
"Subsequent Offering" has the meaning set forth in Section 7.2(a)(iii)(A)
of this Agreement.
"Subsidiary" means, as to any Person, any corporation or other entity more
than 50% of whose stock of any class or classes or other rights having by the
terms thereof ordinary voting power to elect a majority of the directors (or
persons exercising similar functions) of such corporation or other entity
(irrespective of whether or not at the time stock of any class or classes of
such corporation or other entity shall have or might have voting power by reason
of the happening of any contingency) is at the time owned by such Person and/or
one or more Subsidiaries of such Person.
"Tag-Along Acceptance Notice" has the meaning set forth in Section 5.8(b)
of this Agreement.
"Tag-Along Right" has the meaning set forth in Section 5.8 (a) of this
Agreement.
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"Tag-Along Rights Holders" has the meaning set forth in Section 5.8(a) of
this Agreement.
"Tag-Along Sale Notice" has the meaning set forth in Section 5.8(b) of this
Agreement.
"Tag-Along Seller" has the meaning set forth in Section 5.8(b) of this
Agreement.
"Termination Date" has the meaning set forth in Section 7.2(a) of this
Agreement.
"Transfer" has the meaning set forth in Section 4.5(b) of this Agreement.
"Transfer Date" has the meaning set forth in Section 7.4 of this Agreement.
"Transfer Notice" has the meaning set forth in Section 4.6 of this
Agreement.
"Unit Offering" means an underwritten public offering of a combination of
debt securities and equity securities of the Company (or warrants or exchange
rights to purchase equity securities) in which not more than 15% of the gross
proceeds received for the sale of such securities is attributed to such equity
securities.
"83(b) Election" has the meaning set forth in Section 9.2 of this
Agreement.
ARTICLE II
ISSUANCE OF SHARES TO 399 VENTURE AND CONTINUING MANAGEMENT INVESTORS;
REDEMPTION OF CERTAIN STOCK
2.1. Exchange and Redemption of Royster-Clark Securities. (a) At the
Closing, each Continuing Management Investor (other than Jenkins and his Family
Members) shall exchange the Royster-Clark Shares set forth opposite such
Person's name on Schedule 1-A(A) and described as Rollover Securities (the
"Rollover Securities") for the number of shares of Class A Common Stock and of
Series A and Series B Preferred Stock set forth opposite such Continuing
Management Investor's name on Schedule 1-A(A) (collectively, the "Exchanged
Shares").
(b) At the Closing, each Continuing Management Investor (other than
Jenkins) shall submit for redemption to Royster-Clark the number and kind
of securities set forth opposite such Person's name on Schedule 1-A(B) (the
"Redemption Shares") and shall receive an amount in cash as specified on
Schedule 1-A(B) (the "Cash Redemption Amounts").
(c) At the Closing, 399 Venture shall purchase from the Company,
400,000 shares of Class A Common Stock, 1,191,600 shares of Class B Common
Stock, and 474,504 shares of Series A Preferred Stock (collectively, the
"399 Venture Securities"). The purchase price for the Securities purchased
pursuant to this Section 2.1(b) shall be $1.00 per share of Common Stock
and $100 per share of Preferred Stock.
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2.2. Closing. The closing of the transfer of the Shares purchased by 399
Venture and exchanged by the Continuing Investors hereunder (the "Closing") will
take place at the same location and on the same date as the Exchange Closing. At
the Closing, (a) the Company shall deliver to 399 Venture certificates
evidencing the number of shares of Securities to be purchased by 399 Venture
against payment of the purchase price of $26,771,525 by wire transfer of
immediately available funds or by certified check, (b) Royster-Clark shall
deliver to the Continuing Management Investors the Cash Redemption Amounts and
the Continuing Management Investors shall deliver to Royster-Clark certificates
evidencing such redeemed shares, in appropriate form for cancellation by
Royster-Clark, and (c) the Company shall deliver to the Continuing Management
Investors the certificates evidencing the Exchanged Shares, and the Continuing
Management Investors shall deliver to the Company certificates evidencing such
Investor's Rollover Securities, duly executed for transfer in blank or
accompanied by Stock Powers duly executed in blank. The Cash Redemption Amounts
shall be delivered by wire transfer of immediately available funds or by
certified or cashier's check.
2.3. Conditions to 399 Venture's and Management Investor's Obligations. The
obligation of 399 Venture to purchase and pay for the 399 Venture Securities and
of each Management Investor to exchange his Rollover Securities for the
Exchanged Shares at the Closing is subject to the satisfaction on or prior to
the Closing of the following conditions:
(a) The representations and warranties of the Company set forth in
Article III shall be true and correct in all material respects on and as of
the Closing as though then made, and all covenants of the Company required
to be performed on or prior to the Closing shall have been performed in all
material respects.
(b) The Company's Certificate of Incorporation and Bylaws shall be
substantially in the forms of Exhibits B and C, respectively.
(c) The Company shall have delivered to each of 399 Venture and the
Continuing Management Investors certificates for the Exchanged Shares
issued pursuant to Section 2.2 and Royster-Clark shall have delivered the
Cash Redemption Amounts to the Continuing Management Investors.
(d) No preliminary or permanent injunction or order, decree or ruling
of any nature issued by any court or governmental agency of competent
jurisdiction, nor any statute, rule, regulation or executive order
promulgated or enacted by any federal, state or local governmental
authority, shall be in effect, that would prevent the consummation of the
transactions contemplated by this Agreement or the Exchange Agreement.
(e) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby will not violate the Company's
Certificate of Incorporation or Bylaws, any applicable laws or orders,
regulations, rules or requirements of a court, public body or authority by
which the Company is bound.
(f) All corporate and other proceedings, if any, taken or to be taken
by the Company in connection with the transactions contemplated hereby to
be consummated at the Closing and all documents incident thereto shall be
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reasonably satisfactory in form and substance to 399 Venture and the
Continuing Management Investors and 399 Venture and the Continuing
Management Investors shall have received from the Company all such
counterpart originals or certified or other copies of such documents as
they may reasonably request.
(g) All conditions to the closing under the Stock Purchase Agreement
dated as of January 21, 1999 among IMC Global Inc., a Delaware corporation,
The Vigoro Corporation, a Delaware corporation, and the Company, as amended
on April 13, 1999, shall have been satisfied or waived.
2.4. Conditions to the Company's Obligations. The obligations of the
Company to issue the 399 Venture Securities to 399 Venture and the Exchanged
Shares to each Continuing Management Investor as set forth herein at the Closing
are subject to the satisfaction on or prior to the Closing of the following
conditions:
(a) The representations and warranties of 399 Venture and each
Continuing Management Investor set forth in Article IV shall be true and
correct in all material respects at and as of the Closing as though then
made, and all covenants of each Investor required to be performed at or
prior to the Closing shall have been performed in all material respects.
(b) No preliminary or permanent injunction or order, decree or ruling
of any nature issued by any court or governmental agency of competent
jurisdiction, nor any statute, rule, regulation or executive order
promulgated or enacted by any federal, state or local governmental
authority, shall be in effect, that would prevent the consummation of the
transactions contemplated by this Agreement or the Exchange Agreement.
(c) All corporate and other proceedings, if any, taken or to be taken
by 399 Venture and the Continuing Management Investors in connection with
the transactions contemplated hereby to be consummated at the Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to the Company, and the Company shall have received from 399
Venture and each Continuing Management Investor all such counterpart
originals or certified or other copies of such documents as it may
reasonably request.
(d) The execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby will not violate any applicable
laws or orders, regulations, rules or requirements of a court, public body
or authority by which 399 Venture or any Continuing Management Investor is
bound.
(e) 399 Venture shall have paid or shall pay concurrently the purchase
price required of it pursuant to this Article II, and 399 Venture shall
have purchased or shall simultaneously purchase the 399 Venture Securities
pursuant to this Article II and each Continuing Management Investor shall
have delivered or shall deliver simultaneously the certificates
representing such Management Investor's Rollover Securities in the form
required by Section 2.2.
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ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.1. Representations and Warranties of the Company. The Company represents
and warrants to each of the Investors as follows:
(a) The Company is a corporation validly existing and in good standing
under the laws of the State of Delaware.
(b) The Company has full corporate power and corporate authority to
make, execute, deliver and perform this Agreement and to carry out all of
the transactions provided for herein.
(c) The Company has taken such corporate action as is necessary or
appropriate to enable it to perform its obligations hereunder, and this
Agreement constitutes the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with the terms
hereof.
(d) The Shares, when issued in accordance with the terms of this
Agreement and the Exchange Agreement, will be validly issued, fully paid
and non-assessable.
(e) Upon consummation of the Closing, the authorized capital stock of
the Company will consist of (i) 2,200,000 shares of Class A Common Stock,
of which 768,426 will be issued and outstanding, (ii) 2,000,000 shares of
Class B Common Stock, of which 1,191,600 will be issued and outstanding,
(iii) 675,000 shares of Series A Preferred Stock, of which 607,140 will be
issued and outstanding, and (iv) 100,000 shares of Series B Preferred
Stock, of which 74,874 will be issued and outstanding. Except as set forth
in Section 3.1(f) and as otherwise set forth herein, as of the Closing
there will be no rights, subscriptions, warrants, options, conversion
rights or agreements of any kind outstanding to purchase from the Company,
or otherwise require the Company to issue, any shares of capital stock of
the Company or securities or obligations of any kind convertible into or
exchangeable for any shares of capital stock of the Company; the Company
will not be subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its capital stock;
and the Shares will constitute all of the outstanding shares of the
Company's capital stock.
(f) The Company has reserved for issuance pursuant to the Restricted
Stock Plan 239,980 shares of Class A Common Stock, 14,795 shares of Series
A Preferred Stock and 8,320 shares of Series B Preferred Stock. Any current
or future employee purchasing Class A Common Stock pursuant to the
Restricted Stock Plan who is not a party to this Agreement shall be
required, as a condition of such purchase, to execute an agreement pursuant
to which such employee agrees to be bound by the terms and provisions of
this Agreement applicable to such employee, and any shares purchased
pursuant to the Restricted Stock Plan shall be deemed to be Incentive
Shares hereunder.
(g) The Company is a "small business concern," as that term is defined
in the Small Business Investment Act of 1958, as amended, and in the
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regulations of the Small Business Administration ("SBA") promulgated
thereunder. The information set forth in the SBA Forms 480, 652 and Part A
of Form 1031 regarding the Company and its Affiliates, when delivered to
the Investors, will be accurate and complete.
(h) Neither the Company nor any person acting on its behalf has
offered to sell or sold any of the shares by any form of general
solicitation such as would violate Rule 502(c) promulgated by the
Securities and Exchange Commission (the "SEC") under the Securities Act.
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF EACH INVESTOR
4.1. Representations, Warranties and Covenants of Each Investor. Each of
the Investors severally represents and warrants to, and covenants and agrees
with, the Company that:
(a) Such Investor has full legal right, power and authority (including
the due authorization by all necessary corporate action in the case of
corporate Investors) to enter into this Agreement and to perform such
Investor's obligations hereunder without the need for the consent of any
other Person; and this Agreement has been duly authorized, executed and
delivered and constitutes the legal, valid and binding obligation of such
Investor enforceable against such Investor in accordance with the terms
hereof.
(b) The Securities are being received by such Investor for investment
for his or its own account and not with a view to any distribution thereof
that would violate the Securities Act, or the applicable securities laws of
any state; and such Investor will not distribute the Securities in
violation of the Securities Act or the applicable securities laws of any
state.
(c) Such Investor understands that the Securities have not been
registered under the Securities Act or the securities laws of any state and
may not be reoffered or sold unless subsequently registered under the
Securities Act and any applicable state securities laws or unless an
exemption from such registration becomes or is available.
(d) Such Investor is financially able to hold the Securities for
long-term investment, believes that the nature and amount of the Securities
being purchased are consistent with such Investor's overall investment
program and financial position, and recognizes that there are substantial
risks involved in the purchase of the Securities.
(e) Such Investor confirms that (i) such Investor is familiar with the
business of the Company, (ii) such Investor has had the opportunity to ask
questions of officers and directors of the Company and to obtain (and that
such Investor has received to such Investor's satisfaction) such
information about the business and financial condition of the Company as
such Investor has reasonably requested, and (iii) such Investor, is an
"accredited investor" within the meaning of Rule 501(a) promulgated under
the Securities Act.
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4.2. Legends. (a) All certificates representing Securities shall bear the
following legends in addition to any other legend required under applicable law:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR ANY
STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS A REGISTRATION STATEMENT UNDER THE ACT AND ANY
APPLICABLE STATE SECURITIES LAWS WITH RESPECT TO SUCH SHARES IS
EFFECTIVE OR UNLESS THE COMPANY IS IN RECEIPT OF AN OPINION OF
COUNSEL SATISFACTORY TO IT TO THE EFFECT THAT SUCH SHARES MAY BE
SOLD WITHOUT REGISTRATION UNDER THE ACT AND SUCH LAWS.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT TO
THE TERMS AND CONDITIONS OF A SECURITIES PURCHASE AND HOLDERS
AGREEMENT BY AND AMONG THE COMPANY AND THE HOLDERS SPECIFIED
THEREIN, A COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL
OFFICE OF THE COMPANY. THE SALE, TRANSFER OR OTHER DISPOSITION OF
THE SECURITIES IS SUBJECT TO THE TERMS OF SUCH AGREEMENT AND THE
SECURITIES ARE TRANSFERABLE ONLY UPON PROOF OF COMPLIANCE THEREWITH.
(b) In addition to the legends required by Section 4.2(a) above, the
following legend shall appear on certificates representing Incentive
Shares, provided, that the Company's failure to cause certificates
representing Incentive Shares to bear such legend shall not affect the
Company's Purchase Option described in Section 7.2 herein:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE ALSO SUBJECT FOR A
PERIOD OF TIME TO A PURCHASE OPTION OF THE COMPANY APPLICABLE TO
"INCENTIVE SHARES" AS DESCRIBED IN THE SECURITIES PURCHASE AND HOLDERS
AGREEMENT BY AND AMONG THE COMPANY AND THE HOLDERS SPECIFIED THEREIN, A
COPY OF WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.
4.3. Management Investor Representations and Warranties. Each Management
Investor severally represents and warrants to the Company that:
(a) such Management Investor's residence, business address, business
and residence telephone numbers and social security number are as set forth
below such Management Investor's signature to this Agreement; and
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(b) in formulating the decision to (i) exchange such Management
Investor's Rollover Securities for the Exchanged Shares, (ii) submit the
Redemption Shares set forth opposite such Management Investor's name on
Schedule 1-A(B) for the Cash Redemption Amounts specified thereon, and
(iii) enter into this Agreement, such Management Investor has relied solely
upon the independent investigation of the Company's business and upon
consultations with such Management Investor's legal and financial advisers
with respect to this Agreement and the nature of such Management Investor's
investment; and that in entering into this Agreement no reliance was placed
upon any representations or warranties other than those contained in this
Agreement. Each Management Investor acknowledges having received and read
the Confidential Offering Memorandum of RCGI dated April 16, 1999 relating
to its $200,000,000 10.25% First Mortgage Notes due 2009.
(c) The Management Investor has good and valid title to the Rollover
Securities being exchanged by such Management Investor and Redemption
Shares being submitted for redemption by such Management Investor, free and
clear of all liens, claims, mortgages, securities interests, options,
charges, restrictions (including, without limitation, rights of first
refusal and similar rights) and other encumbrances (collectively,
"Encumbrances") of any kind. The certificates representing the Rollover
Securities are duly endorsed in blank or accompanied by stock powers duly
endorsed in blank in proper form for transfer, passing good and valid title
to the Rollover Securities to RCGI, free and clear of all Encumbrances,
other than those arising from acts of RCGI. The Rollover Securities and the
Redemption Shares are not subject to any voting trust agreement or other
contract, agreement, arrangement, commitment or understanding restricting
or otherwise relating to voting or disposition of the Rollover Securities
and the Redemption Shares.
(d) Each Continuing Management Investor acknowledges and agrees that
such Management Investor's Rollover Options shall be irrevocably
surrendered and exchanged for such Investor's Exchanged Options and that
the Exchanged Options shall have the terms and conditions contained in the
stock option agreement between the Company and such Continuing Management
Investor entered into as of the Closing Date, the form of which is appended
to this Agreement as Exhibit F. Each Continuing Management Investor forever
releases and discharges the Company and Royster-Clark forever from any
claims in respect of Common Stock of Royster-Clark or any other claims or
liabilities arising with respect to such Investor's Rollover Options.
4.4. Representations and Warranties of 399 Venture. 399 Venture represents
and warrants to, and covenants and agrees with the Company that, 399 Venture
qualifies as an "accredited investor" within the meaning of Rule 501(a) of
Regulation D under the Securities Act, and has such knowledge and experience in
financial and business matters that 399 Venture is capable of evaluating the
merits and risks of its purchase of the Securities.
4.5. Restrictions on Transfers of Securities. The following restrictions on
Transfer shall apply to all Securities owned by any Restricted Investor until
the completion of a Public Offering. As used herein, "Restricted Investor" shall
mean any Investor or Permitted Transferee except a Permitted Transferee by
virtue of Section 4.5(d)(iii) hereof:
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(a) No Restricted Investor shall Transfer (other than in connection
with a redemption or purchase by the Company) any Securities unless (i)
such Transfer is to a Permitted Transferee and (ii) such Transfer complies
with the provisions, if applicable, of Sections 5.7 and 5.8, this Section
4.5 and, in addition, in the case of Securities held by Management
Investors, the applicable provisions of Article VII of this Agreement.
(b) No Restricted Investor may effect any Transfer of Securities
unless the transferee (other than a Permitted Transferee under Section
4.5(d)(iii)) executes an agreement pursuant to which such transferee agrees
to be bound by the terms and provisions of this Agreement applicable to the
transferor (except as otherwise specifically provided herein). Any
purported Transfer in violation of this Agreement shall be null and void
and of no force and effect and the purported transferee shall have no
rights or privileges in or with respect to the Company. As used herein,
"Transfer" means the making of any sale, exchange, assignment,
hypothecation, gift, security interest, pledge or other encumbrance, or any
contract therefor, any voting trust or other agreement or arrangement with
respect to the transfer of voting rights or any other beneficial interest
in any of the Securities, the creation of any other claim thereto or any
other transfer or disposition whatsoever, whether voluntary or involuntary,
affecting the right, title, interest or possession in or to such
Securities.
(c) Prior to any proposed Transfer of any Securities, the holder
thereof shall give written notice to the Company describing the manner and
circumstances of the proposed Transfer accompanied by a written opinion of
legal counsel, addressed to the Company and the transfer agent, if other
than the Company, and reasonably satisfactory in form and substance to each
addressee, to the effect that the proposed Transfer of the Securities may
be effected without registration under the Securities Act and applicable
state securities laws. Each certificate evidencing the Securities
transferred shall bear the legends set forth in Section 4.2(a) and, if
applicable, the legend set forth in Section 4.2(b), except that such
certificate shall not bear the legends set forth in Section 4.2(a) if the
opinion of counsel referred to above is to the further effect that such
legend is not required in order to establish compliance with any provision
of the Securities Act or applicable state securities laws.
(d) As used herein, "Permitted Transferee" shall mean:
(i) in the case of any Investor or Permitted Transferee who is a
natural person, (x) such person's spouse or children or grandchildren
(in each case, natural or adopted), any trust for the sole benefit of
such person and such person's spouse or children or grandchildren (in
each case, natural or adopted), any charitable trust the grantor of
which is an Investor or Permitted Transferee, or any corporation or
partnership in which the direct and beneficial owner of all of the
equity interests is such individual person or such person's spouse or
children or grandchildren (in each case, natural or adopted) (or any
trust solely for the benefit of such persons), collectively "Family
Members" or (y) any organization exempt from federal income taxation
under Section 501(c)(3) of the Internal Revenue Code of 1986, as
amended;
(ii) in the case of any Investor or Permitted Transferee who is,
in each case, a natural person, the heirs, executors, administrators
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or personal representatives upon the death of such person or upon the
incompetency or disability of such person for purposes of the
protection and management of such person's assets;
(iii) any Person if such Person takes such Securities pursuant to
a sale in connection with a Public Offering or following a Public
Offering in open market transactions or under Rule 144 under the
Securities Act;
(iv) in the case of 399 Venture or any Permitted Transferee of
399 Venture, (A) Citibank N.A., Citicorp or CitiGroup or any Affiliate
of any of the foregoing entities; (B) any employee or director of any
of the foregoing entities, or any trust, partnership or other entity
established for the benefit of such officers, employees or directors
(each, a "399 Venture Co-Investor"); or (C) any qualified
institutional buyer (as such term is defined in Rule 144A under the
Securities Act) organized under the laws of the United States or any
State thereof, provided that the Transfer to such qualified
institutional buyer shall be subject to the provisions of Section 5.8
hereof;
(v) in the case of 399 Venture or any Permitted Transferee of 399
Venture, any Person if such Person takes such Securities pursuant to a
Transfer required in connection with any Regulatory Problem, as
provided in Section 5.3 below, provided, however, that the transfer to
such Person shall be subject to the provisions of Section 5.8 hereof;
or
(vi) in the case of any Investor or Permitted Transferee, any
Person approved by the Company as evidenced by a resolution duly
adopted by at least a majority of the Board of Directors or the
holders of a majority of the outstanding Common Stock then held by the
Investors (including shares held by the transferor), provided,
however, that the transfer to such Person shall be subject to the
provisions of Section 5.8 hereof.
(e) As long as this Agreement is in effect and except in the case of
an Approved Sale or a Public Offering, (i) Jenkins and his direct or
indirect transferees shall not transfer any shares of Common Stock unless
such transferee agrees in writing to vote all of the Securities transferred
to comply with all of the provisions of Sections 6.1 through 6.7 below, and
(ii) 399 Venture and its direct or indirect transferees shall not transfer
any shares of Common Stock unless such transferee agrees in writing to
comply with all of the provisions of Sections 6.2 through 6.8 below;
provided, however, that if 399 Venture and its Co-Investors transfer, in
one or more related transactions, 50% or more of the Common Stock held by
399 Venture and its Co-Investors as of the Closing Date, the transferee or
transferees thereof shall be required to agree in writing to vote all of
the Securities transferred to such Persons for the Jenkins Designees
pursuant to Sections 6.2(a)(i), 6.3, 6.4(a) and the proviso to Section 6.7
(and any designee pursuant to Section 6.5) and with the covenants set forth
in Section 5.7(a), but shall not be subject to any additional restrictions
or requirements with respect to voting.
4.6. Certain Sales by Jenkins. (a) Notwithstanding any other provision of
this Agreement, at such time as Jenkins is no longer the chief executive officer
of the Company, Jenkins, and his Family Members shall be free, at any time and
from time to time, to sell up to 50%, in the aggregate, of the Common Stock
collectively owned by them as of the time he is no longer the chief executive
officer of the Company, subject to the provisions of this Section 4.6. If
Jenkins, no longer being the chief executive officer of the Company, decides to
make such a sale, he shall give written
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notice (the "Transfer Notice") to the Company of the number of shares of Common
Stock he wishes to sell (the "Offered Securities"). The Company may offer to
purchase all (but not less than all) of the Offered Securities by delivering a
written notice (the "Offer Notice") of such offer (the "Offer") to Jenkins
within 60 days after receipt of the Transfer Notice. The Offer Notice will set
forth the terms and conditions on which the Company will purchase the Offered
Securities. Jenkins shall give the Company written notice of his acceptance or
rejection of the Offer within 30 days of receipt of the Offer Notice.
(b) If the Company offers to purchase the Offered Securities and
Jenkins accepts the Offer, the closing of the purchase and sale of the
Offered Securities shall be held at the place and the date to be
established by the Company, which in no event shall be less than ten or
more than 15 days from the date on which Jenkins delivers his acceptance of
the Offer. At such closing, Jenkins shall deliver the certificates
evidencing the number of shares of Offered Securities to be purchased by
the Company, accompanied by stock powers duly endorsed in blank or duly
executed instruments of transfer, and any other documents that are
necessary to transfer to the Company good title to such of the securities
to be transferred, free and clear of all pledges, security interests,
liens, charges, encumbrances, equities, claims and options of whatever
nature other than those imposed under this Agreement, and concurrently with
such delivery, the Company shall deliver to Jenkins the full amount of the
purchase price for the Offered Securities in cash or certified or bank
cashier's check.
(c) If the Company makes no offer (for any reason including without
limitation those set forth in Section 4.9), or does not make a timely offer
to purchase all of the Offered Securities or Jenkins elects not to accept
the Offer, Jenkins may sell the Offered Securities to a third party;
provided, however, that (i) if the Company shall have made timely delivery
of the Offer Notice pursuant to Section 4.6(a) above, such sale shall be at
a price no less than the price specified in the Offer Notice and on other
terms no more favorable to such third party than those specified in the
Offer Notice and (ii) such sale shall take place during the 120-day period
immediately following the last date on which Jenkins could have accepted
the Offer. Any shares of the Offered Securities not transferred within such
120-day period will be subject to the provisions of this Section 4.6 upon
subsequent transfer.
(d) The provisions of Section 5.8 shall apply to any sale pursuant to
this Section 4.6, provided, however, that for the purposes of this Section
4.6 only, the Tag-Along Rights of those Investors who elect to exercise
such rights shall, if necessary, be reduced pro rata in proportion to such
Investors' relative investments in the then outstanding Common Stock to
ensure that the Common Stock sold by the Tag-Along Rights Holders
constitute not more than 50% of the Common Stock being sold.
4.7. Termination of Restrictions. The restrictions on transfers of Common
Stock contained in Sections 4.5 and 4.6 above shall terminate on the
consummation of a Public Offering.
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4.8. Notation. A notation will be made in the appropriate transfer records
of the Company with respect to the restrictions on transfer of the Securities
referred to in this Agreement.
4.9. Limitation on Repurchase of Company Stock. Each Investor understands
that concurrently with the issuance of the Shares, the Company is entering into
certain financing agreements which will contain prohibitions, restrictions and
limitations on the ability of the Company to purchase any of the Securities and
to pay dividends on the Securities.
4.10. Future Sales. (a) Each Management Investor understands and agrees
that 399 Venture may in the future transfer, subject to the terms and conditions
of this Agreement, shares of Common Stock to a third party. In addition, future
investors in the Company may receive debt securities or preferred stock senior
in liquidation preference and dividend payment rights, with a higher dividend
rate or other terms more favorable than those of the Securities.
(b) Each Management Investor understands and agrees that 399 Venture
may elect to transfer, in whole or in part, the $10,000,000 subordinated
note issued to 399 Venture on the Closing Date (the "Subordinated Note"),
and 399 Venture shall have the right to transfer the Subordinated Note, in
whole or in part, to any Person. In connection with such transfer, 399
Venture may elect to have the Company repurchase part or all of the
Subordinated Note and reissue the aggregate amount so repurchased to such
Person designated by 399 Venture, either as shares of Series A Preferred
Stock or as an additional Subordinated Note, as 399 Venture may designate
in writing. No Tag-Along Rights of any Investors shall apply to the
transactions described in this Section 4.10(b) with respect to transaction
with Affiliates of 399 Venture.
(c) Each Management Investor understands and agrees that in the
future, in addition to the provisions of Section 4.10(b), 399 Venture may
elect to transfer, in whole or in part, the equity or debt securities held
by 399 Venture, and 399 Venture may elect to so transfer such securities by
requiring the Company (i) to repurchase or redeem the securities designated
by 399 Venture to be repurchased or redeemed and (ii) to reissue to such
Person or Persons designated by 399 Venture in writing the aggregate amount
so repurchased or redeemed by the Company from 399 Venture. No Tag-Along
Rights of any Investors pursuant to Section 5.8 shall apply to the
foregoing transfers; however, to the extent that the Persons designated by
399 Venture in the foregoing clause (ii) are not an Affiliate of 399
Venture or any fund organized by an Affiliate of 399 Venture, each Investor
who would have been a Tag-Along Rights Holder had Section 5.8 applied to
the foregoing transactions shall have the right to require 399 Venture to
purchase that number of shares of Common Stock from such Investor as 399
Venture would have been required to include in the transfer had the
transfer been subject to Section 5.8.
4.11. Reliance. Each Investor acknowledges that the Company and each of the
other Investors is entering into this Agreement in reliance upon such Investor's
representations and warranties and other covenants and agreements contained
herein.
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ARTICLE V
OTHER COVENANTS AND REPRESENTATIONS
5.1. Observers' Rights. So long as 399 Venture or its Affiliates own at
least 5% of the Common Stock outstanding, if no employee of 399 Venture or its
Affiliates is a member of the Company's Board of Directors, 399 Venture shall
have the right to designate two observers (the "Observers") to attend meetings
of the Company's Board of Directors and committees thereof. If at least one
employee of 399 Venture or its Affiliates is a member of the Company's Board of
Directors, 399 Venture shall have the right to designate one Observer to attend
meetings of the Company's Board of Directors and committees thereof. The
Observers shall not have the right to vote on any matter presented to the Board
of Directors or any committee thereof. The Company shall give each Observer
written notice of each meeting of the Board of Directors and committees thereof
at the same time and in the same manner as the members of the Board of Directors
or such committee receive notice of such meetings, and the Company shall permit
each Observer to attend as an observer all meetings of its Board of Directors
and committees thereof. Each Observer shall be entitled to receive all written
materials and other information given to the directors in connection with such
meetings at the same time such materials and information are given to the
directors, and each Observer shall keep confidential such materials and
information and any other confidential information discussed at any meeting of
the Board of Directors. If the Company proposes to take any action by written
consent in lieu of a meeting of its Board of Directors or a committee thereof,
the Company shall give written notice thereof to each Observer prior to the
effective date of such consent. The Company shall provide to each Observer all
written materials and other information given to the directors in connection
with such action by written consent at the same time such materials and
information are given to the directors, and each Observer shall keep such
materials and information confidential. The Company shall pay the reasonable
out-of-pocket expenses of each Observer incurred in connection with attending
such meetings.
5.2. Financial Statements and Other Information. So long as 399 Venture
owns any of the Securities, the Company shall deliver to 399 Venture:
(a) as soon as available and in any event within 45 days after the end
of each of the first three quarters of each fiscal year of the Company,
consolidated balance sheets of the Company and its subsidiaries as of the
end of such period, and consolidated statements of income and cash flows of
the Company and its subsidiaries for the period then ended prepared in
conformity with generally accepted accounting principles applied on a
consistent basis, except as otherwise noted therein, and subject to the
absence of footnotes and to year-end adjustments;
(b) as soon as available and in any event within 90 days after the end
of each fiscal year of the Company, a consolidated and consolidating
balance sheet of the Company and its subsidiaries as of the end of such
year, and consolidated and consolidating statements of income and cash
flows of the Company and its subsidiaries for the year then ended prepared
in conformity with generally accepted accounting principles applied on a
consistent basis, except as otherwise noted therein, together with an
auditor's report thereon of a firm of established national reputation; and
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(c) copies of any other reports, financial statements, certificates or
other documents required to be delivered to the agent for the Company's
bank group pursuant to the terms of any credit agreement then in effect.
5.3. Regulatory Compliance Cooperation. So long as 399 Venture or its
Affiliates beneficially own any of the Securities, before the Company redeems,
purchases or otherwise acquires, directly or indirectly, or converts or takes
any action with respect to the voting rights of, any shares of any class of its
capital stock or any securities convertible into or exchangeable for any shares
of any class of its capital stock, the Company shall give 399 Venture at least
30 days prior written notice of such pending action. Upon the written request of
399 Venture made within 20 days after its receipt of any such notice, stating
that after giving effect to such action 399 Venture would have a Regulatory
Problem (as described below), the Company will defer taking such action for such
period (not to extend beyond 90 days after 399 Venture's receipt of the
Company's original notice) as 399 Venture requests to permit it and its
Affiliates to reduce the quantity of Securities held by it and its Affiliates in
order to avoid the Regulatory Problem. In addition, the Company will not be a
party to any merger, consolidation, recapitalization or other transaction
pursuant to which 399 Venture would be required to take any voting securities,
or any securities convertible into voting securities, which would reasonably be
expected to cause 399 Venture to have a Regulatory Problem. For purposes of this
paragraph, a Person will be deemed to have a "Regulatory Problem" when such
Person and such person's Affiliates own, control or have power over (or such
Person believes that there is a substantial risk of an assertion that such
Person and such Person's Affiliates own, control or have power over) a greater
quantity of securities of any kind issued by the Company than are permitted to
be owned by such Person under any requirement of any governmental authority
applicable to such Person.
5.4. Small Business Administration Forms.
Prior to and after the Closing, the Company shall, if requested by 399
Venture or any Permitted Transferee of 399 Venture, execute Forms 480 ("Size
Status Declaration") and 652-D ("Assurance of Compliance") of the Small Business
Administration and any other documents that may be required by the Small
Business Administration or any other governmental agency having jurisdiction
over the activities of 399 Venture, or which 399 Venture or such Permitted
Transferee may reasonably require in connection therewith.
5.5. Economic Impact. Promptly after the end of each fiscal year (but in
any event prior to February 28 of each year), the Company shall provide to 399
Venture a written assessment, in form and substance satisfactory to 399 Venture,
of the economic impact of 399 Venture's financing hereunder, specifying the
full-time equivalent jobs created and retained, and the impact of the financing
on the revenues and profits of the Company's business and on taxes paid by the
Company and its employees.
5.6. SBA Access. The Company agrees that 399 Venture and any SBA examiner
shall have the rights of access and information specified in 13 C.F.R. 107.620
(1996) (and any successor provision).
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5.7. Sale of the Company.
(a) For a period of three years following the Closing, so long as the
Company has not consummated a Public Offering, 399 Venture and its
Permitted Transferees (other than any Permitted Transferees pursuant to
Section 4.5(d)(iii)) will not vote in favor of (at a duly called and duly
held meeting of stockholders or the Board of Directors, as the case may be,
of the Company) or consent in writing to the merger, consolidation or sale
(by any means) of all or substantially all of the assets of the Company or
any similar transaction, in any one transaction or series of related
transactions, without the prior written consent of Jenkins.
(b) Subject to Section 5.7(a), so long as the Company has not
consummated a Public Offering, if holders of at least a majority of the
Common Stock (including voting and non-voting shares voting as a single
class) then outstanding and the Board of Directors vote in favor of (at a
duly called and duly held meeting of stockholders or the Board of
Directors, as the case may be, of the Company) or consent in writing to the
merger or consolidation of the Company or the sale of all or substantially
all of its assets or sale of all of the outstanding capital stock or any
other similar transaction (provided such holders include Jenkins if Jenkins
and his Family Members collectively own at least 50% of the outstanding
Common Stock held by them as of the Closing) (any of the foregoing, an
"Approved Sale"), (i) each Restricted Investor will consent to, vote for,
and raise no objections against, and waive dissenters and appraisal rights
(if any) with respect to, the Approved Sale, and (ii) if the Approved Sale
includes a sale of Securities, each Restricted Investor will agree to sell
and will be permitted to sell all of such Restricted Investor's Securities
on the same terms and conditions as are offered to and approved by the
holders of a majority of the Common Stock then outstanding. Each Restricted
Investor will take all necessary and desirable actions in connection with
the consummation of an Approved Sale, including, without limitation, the
execution of any stock purchase, escrow or other similar agreement which
may be required.
(c) The obligations of each of the Investors with respect to an
Approved Sale are subject to the satisfaction of the conditions that upon
the consummation of the Approved Sale all of the Investors and Permitted
Transferees will receive the same form and amount of consideration per
share of Common Stock, or if any holder of Common Stock is given an option
as to the form and amount of consideration to be received, all Investors
and Permitted Transferees will be given the same option.
5.8. Tag-Along Rights.
(a) Except in the case of a Public Offering or a Transfer to a
Permitted Transferee (excluding a Transfer pursuant to Section
4.5(d)(iv)(C), Section 4.5(d)(v) or Section 4.5(d)(vi)), no Restricted
Investor will effect a Transfer of shares of Common Stock unless all other
Investors and their Permitted Transferees and assigns (collectively, the
"Tag-Along Rights Holders") are offered an equal opportunity (the
"Tag-Along Right") to participate in such transaction or transactions on a
pro rata basis as set forth in Section 5.8(b) (subject to the provisions of
Section 5.8(f)) and on identical terms.
(b) Prior to any sale of Common Stock subject to these provisions, the
seller (the "Tag-Along Seller") shall notify the Company in writing of the
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proposed sale. Such notice (the "Tag-Along Sale Notice") shall set forth
(i) the number of shares of Common Stock (the "Tag-Along Shares") subject
to the proposed sale; (ii) the name and address of the proposed purchaser;
and (iii) the proposed amount of consideration and terms and conditions of
payment offered by such proposed purchaser. Each Tag-Along Rights Holder
shall have the right to sell a percentage of the Tag-Along Shares equal to
the percentage of the outstanding shares of Common Stock then held by such
Tag-Along Rights Holder. The Company shall promptly, and in any event
within ten days, deliver or caused to be delivered (by guaranteed overnight
courier service, if available) the Tag-Along Sale Notice to the Tag-Along
Rights Holders. Each Tag-Along Rights Holder may exercise the Tag-Along
Right by delivery of a written notice (the "Tag-Along Acceptance Notice")
to the Tag-Along Seller within ten days of the date the Tag-Along Sale
Notice was delivered to such courier service or the United States Postal
Service, as the case may be. The Tag-Along Acceptance Notice shall state
the number of shares of Common Stock that the Tag-Along Rights Holder
proposes to include in the proposed sale, and the number of Tag-Along
Shares to be sold by the Tag-Along Seller shall be reduced by such amount.
If no Tag-Along Acceptance Notice is received during the ten-day period
referred to above, Tag-Along Seller shall have the right for a 120-day
period to effect the proposed sale of the Tag-Along Shares on terms and
conditions no more favorable to the transferee than those stated in the
Tag-Along Sale Notice.
(c) Each Tag-Along Rights Holder acknowledges and agrees that 399
Venture or a Permitted Transferee of 399 Venture may grant similar
"tag-along" rights to other Persons and, in such event, such other Persons
shall be offered an equal opportunity to participate in such transaction or
transactions to the same extent as such Tag-Along Rights Holders hereunder
and shall be included in the calculation of the pro rata basis upon which
such Tag-Along Rights Holders may participate in such transaction or
transactions.
(d) (i) Notwithstanding the requirements of this Section 5.8, a
Tag-Along Seller may sell Common Stock at any time without complying with
the requirements of Section 5.8(b) so long as the Tag-Along Seller deposits
into escrow with an independent third party at the time of sale that amount
of consideration received in the sale equal to the "Escrow Amount." As used
herein, the "Escrow Amount" shall equal that amount of consideration as all
Tag-Along Rights Holders would have been entitled to receive if they had
the opportunity to participate in the sale on a pro rata basis, determined
as if each Tag-Along Rights Holder (A) delivered a Tag-Along Notice to the
Tag-Along Seller in the time period set forth in Section 5.8(b) and (B)
proposed to include all of such Tag-Along Rights Holder's shares of Common
Stock in such sale.
(ii) The Tag-Along Seller shall notify the Company in writing of
the proposed sale pursuant to this Section 5.8(d) no later than the
date of such sale. Such notice (the "Escrow Notice") shall set forth
the information required in the Tag-Along Sale Notice, and in
addition, such notice shall state the name of the escrow agent and, if
the consideration (in whole or in part) for the sale was cash, then
the account number of the escrow account. The Company shall promptly,
and in any event within ten days, deliver or caused to be delivered
(by guaranteed overnight courier service, if available) the Escrow
Notice to each Tag-Along Rights Holder. Such Tag-Along Rights Holder
may exercise the tag-along right by delivery to the Tag-Along Seller,
within ten days of the date (the "Escrow Notice Delivery Date") the
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Escrow Notice was delivered to such courier service or the United
States Postal Service, as the case may be, of (A) a written notice
specifying the number of shares of Common Stock it proposes to sell;
and (B) the certificates for such Common Stock, with stock powers duly
endorsed in blank and with signatures guaranteed.
(iii) Promptly after the expiration of the tenth day after the
Escrow Notice Delivery Date, (A) the Tag-Along Seller shall purchase
that number of shares of Common Stock as the Tag-Along Seller would
have been required to include in the sale had the Tag-Along Seller
complied with the provisions of Section 5.8(b), (B) all shares of
Common Stock not required to be purchased by the Tag-Along Seller
shall be returned to the Tag-Along Rights Holders thereof and (C) all
funds and other consideration held in escrow shall be released to the
Tag-Along Seller. If the Tag-Along Seller received consideration other
than cash in such Tag-Along Seller's sale, the Tag-Along Seller shall
purchase the shares of Common Stock tendered by paying to the
Tag-Along Rights Holders non-cash consideration and cash in the same
proportion as received by the Tag-Along Seller in the sale.
(e) Notwithstanding anything herein to the contrary, a Tag-Along
Seller may make any of the following sales without offering the Tag-Along
Rights Holders the opportunity to participate: (i) sales to a Permitted
Transferee (except pursuant to Section 4.5(d)(iv)(C), 4.5(d)(v) or
4.5(d)(vi)); (ii) sales to officers and directors of the Company which in
the aggregate do not exceed 5% of the outstanding shares of Common Stock;
(iii) sales pursuant to an effective registration statement under the
Securities Act; (iv) sales pursuant to an Approved Sale; (v) sales pursuant
to Section 5.8(h) below; and (f) sales other than those specified in the
foregoing (i) through (v) which in the aggregate do not exceed 5% of the
Common Stock outstanding held by the Tag-Along Seller as of the date
hereof. In addition, any repurchase of Common Stock by the Company pursuant
to Section 4.10(b) and (c) shall not be subject to this Section 5.8.
(f) Notwithstanding any other provision of this Agreement if any
Transfer is a Transfer (a "Regulatory Sale") made to cure a Regulatory
Problem, as set forth in Section 5.3, each Tag-Along Rights Holder shall
have the right to sell to the proposed transferee the same percentage of
the total number of shares of Common Stock outstanding then owned by such
Tag-Along Rights Holder as the percentage of the total number of shares of
Common Stock outstanding then owned by the Tag-Along Seller. If the total
number of shares of Common Stock proposed to be Transferred in a Regulatory
Sale by the Tag-Along Seller and those Tag-Along Rights Holders exercising
their Tag-Along Rights exceeds the maximum number of shares of Common Stock
that the proposed transferee is willing to purchase or otherwise acquire,
then the number of shares of Common Stock to be Transferred shall be
allocated among the Tag-Along Seller and such Tag-Along Rights Holders
(with rounding to avoid fractional shares) in proportion to the number of
outstanding shares of Common Stock that each of them then owns; provided,
however, that in no event shall the number of shares of Common Stock to be
Transferred by 399 Venture or its Affiliates be reduced below that number
necessary to cure the Regulatory Problem in question.
(g) The Tag-Along Rights provided pursuant to this Section 5.8 shall
terminate upon the earlier of (i) a Public Offering or sale of the Company;
and (ii) the day after the date on which 399 Venture and its Permitted
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Transferees that are not natural persons own less than 5% of the Common
Stock owned by 399 Venture on the Closing Date.
(h) Notwithstanding anything to the contrary herein, if any Restricted
Investor receives a Tag-Along Sale Notice and does not elect to exercise
his Tag-Along Right with respect to the Transfer contemplated by such
notice, such Restricted Investor may sell those shares of Common Stock
which such Restricted Investor could have sold pursuant to such Tag-Along
Right to a third party without compliance with Sections 4.5(a), 5.8 or 7.1.
5.9. Covenant Not To Compete or Solicit.
(a) In consideration of the opportunity to participate in the equity
of the Company, each Management Investor (other than Jenkins, Randolph
Abood and James Shirley) covenants and agrees that:
(i) for one (1) year after termination of such Management
Investor's employment with the Company or any of its Subsidiaries,
neither such Management Investor nor any of such Management Investor's
Affiliates shall engage, directly or indirectly, in lines of business
similar to the business of the Company or any of its Subsidiaries
anywhere in the United States. Each Management Investor and the
Company agree that the foregoing covenant is intended to prohibit each
Management Investor from engaging in such activities, as the case may
be, as owner, creditor (except as a trade creditor in the ordinary
course of business), partner, stockholder, lender, officer, director,
manager, employee, contractor or agent for any person, firm or
corporation (except (x) with respect to the Company or (y) as a holder
of equity or debt securities in a corporation which has a class of
securities that is publicly traded on a stock exchange or the
recognized over-the-counter market, and then only to the extent of
owning not more than two percent (2%) of the issued and outstanding
debt or equity securities of such corporation); and
(ii) no Management Investor or any of such Management Investor's
Affiliates shall (x) solicit, employ, retain as a consultant,
interfere with or attempt to entice away from the Company or any of
its Subsidiaries or any successor to any of them any individual who is
employed or retained by the Company or any Subsidiary or any successor
to any of them or (y) engage in or participate in any effort or act to
induce any customers, suppliers, associates or independent contractors
of the Company or any Subsidiary or any successor to any of them to
cease doing business or their association with the Company or any
Subsidiary or any successor to any of them.
(b) Each Management Investor acknowledges and agrees that the remedy
at law for any breach, or threatened breach, of any of the provisions of
this Section 5.9 will be inadequate and, accordingly, each Management
Investor covenants and agrees that the Company shall, in addition to any
other rights and remedies which the Company may have, be entitled to
equitable relief, including injunctive relief, and to the remedy of
specific performance with respect to any breach or threatened breach of
such covenant, as may be available from any court of competent
jurisdiction. Such right to obtain equitable relief may be exercised, at
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the option of the Company, concurrently with, prior to, after, or in lieu
of, the exercise of any other rights or remedies which the Company may have
as a result of any such breach or threatened breach.
(c) In the event that the provisions of this Section 5.9 shall be
determined by a court of competent jurisdiction to be unenforceable under
applicable law as to that jurisdiction (the parties agreeing that such
decision shall not be binding, res judicata or collateral estoppel in any
other jurisdiction) for any reason whatsoever, then any such provision or
provisions shall not be deemed void, but the parties hereto agree that such
limits may be modified by the court and that such covenant contained in
this Section 5.9 shall be amended in accordance with such modifications, it
being specifically agreed by each Management Investor and the Company that
it is their continuing desire that this covenant be enforced to the full
extent of its terms and conditions or if a court finds the scope of the
covenant unenforceable, the court should redefine the covenant so as to
comply with applicable law.
5.10. Preemptive Rights. (a) Subject to the terms of this Section 5.10, if
the Company proposes to issue any equity securities, other than in a Public
Offering or transaction described in Section 5.10(d) or (e) below, the Company
shall first offer in writing to sell to each Investor who (i) is then a
stockholder of the Company and (ii) holds one percent or more of the outstanding
shares of Common Stock, calculated on a fully diluted basis (collectively, the
"Rights Holders"), such Rights Holder's pro rata share of the proposed issue of
such equity securities, at the same price and on the same terms at which the
Company proposes to sell such issue to others. For purposes hereof, a Rights
Holder's "pro rata share" of an issue of equity securities shall be that number
which is equal to the product of (i) the number of equity securities proposed to
be issued, times (ii) a fraction, the numerator of which is the number of
outstanding shares of Common Stock held by the Rights Holder, calculated on a
fully-diluted basis, and the denominator of which is the aggregate number of
outstanding shares of Common Stock, calculated on a fully-diluted basis. As used
in this Section 5.10, "equity security" means any capital stock of the Company,
any security convertible or exchangeable (with or without consideration) into or
for any capital stock of the Company, any security carrying any warrant, option
or right to subscribe to or to purchase any capital stock of the Company, or any
warrant, option or right to purchase any capital stock of the Company. As used
in this Section 5.10, "calculated on a fully-diluted basis" means calculated on
a pro forma basis assuming the exercise of all options, warrants or other rights
for Common Stock (or securities convertible into or exchangeable for Common
Stock) and the conversion or exchange of all securities convertible into or
exchangeable for Common Stock.
(b) The Company's offer shall describe the equity security proposed to
be issued by the Company, specifying the quantity, the price and payment
terms. Each Rights Holder shall have 15 days from receipt of such offer to
accept the offer in writing, which acceptance may be as to all or any part
of the Rights Holder's pro rata share of such issue. The closing of the
sale of the portion of the equity securities subscribed for under this
Section 5.10(b) shall be held on a date acceptable to the Company and the
applicable Rights Holder, but in no case more than 45 days after the date
of the Company's offer to the Rights Holder.
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(c) In the event any Rights Holder does not subscribe for all of the
issue of equity securities offered to such Rights Holder pursuant to this
Section 5.10, the Company may sell the portion of the securities not
subscribed for at a price no less favorable to the Company than that
specified in such offer and on payment terms no less favorable to the
Company than those specified in such offer. However, if such sale is not
consummated within 120 days after the date the offer pursuant to Section
5.10(a) was made, the Company shall not sell such securities without again
complying with this Section 5.10.
(d) Notwithstanding the foregoing, the provisions of this Section 5.10
shall not be applicable to the issuance of shares of Common Stock (i) upon
the conversion of shares of one class of Common Stock into shares of
another class; (ii) as a dividend on all the outstanding shares of Common
Stock; (iii) in any transaction in respect of a Security that is available
to all holders of such Security on a pro rata basis, provided that for
purposes of this clause (iii), all classes of Common Stock shall be treated
as a single security; (iv) in connection with grants of stock or options to
employees, consultants or directors of the Company; (v) to an Affiliate of
399 Venture in connection with the repurchase by the Company of equity or
debt securities of the Company held by 399 Venture in accordance with
Section 4.10; (vi) in an offering or sale of securities pursuant to a
registration statement filed with, and declared effective by, the
Securities and Exchange Commission pursuant to the Securities Act; (vii) in
an offering or sale of securities pursuant to Rule 144A promulgated under
the Securities Act; or (viii) to the sellers of an acquired business; or
(ix) in an offering or sale of securities pursuant to a Unit Offering or
other offering of a combination of Common Stock and other equity or debt
securities of the Company (each such Unit or other offering, a "Combination
Offering"), provided, however, that a Rights Holder may participate in a
Combination Offering pursuant to this Section 5.10 if such Rights Holder
purchases his or its "proportionate share" of each security offered in such
offering. For purposes hereof, "proportionate share" shall mean that the
purchase price paid by such Rights Holder is allocated to each class of
such offered securities in the same proportion as the aggregate purchase
price for such class bears to the aggregate price of all securities
constituting such Combination Offering.
(e) The preemptive rights granted by this Section 5.10 shall expire
upon the consummation of a Public Offering.
5.11. Right to Join in Purchase.
(a) Subject to the terms of this Section 5.11, if any of Jenkins or
his Affiliates or 399 Venture or any Person controlled by 399 Venture (each
of the foregoing a "Purchase Rights Holder"), is offered the opportunity to
purchase equity securities of the Company held by any other stockholder of
the Company (the "Offeror"), the Purchase Rights Holder receiving such
offer (the "Offeree") shall give the other Purchase Rights Holder (the
"Participant") the opportunity to participate in such sale by promptly
submitting a written notice to the Participant setting forth the number of
equity securities offered by the Offeror and the terms and conditions for
the purchase and sale thereof (the "Offer Notice"). The Participant shall
have the right, exercisable within the shorter of 15 days after receipt of
the Offer Notice or the date (if any) on which the offer described in the
Offer Notice expires by its terms, to purchase all or a portion of the
Participant's pro rata share of the proposed issue of such equity
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securities, at the same price and on the same terms specified in the Offer
Notice and on the date specified for purchase therein.
(b) For purposes hereof, a Participant's "pro rata share" of equity
securities being sold by an Offeror shall be that number which is equal to
the product of (i) the number of equity securities being sold by an
Offeror, times (ii) a fraction, the numerator of which is the number of
outstanding shares of Common Stock held by the Purchase Rights Holder,
calculated on a fully-diluted, as converted basis, and the denominator of
which is the aggregate number of outstanding shares of Common Stock,
calculated on a fully-diluted, as converted basis. As used in this Section
5.11, "equity security" means any capital stock of the Company, any
security convertible or exchangeable (with or without consideration) into
or for any capital stock of the Company, any security carrying any warrant,
option or right to subscribe to or to purchase any capital stock of the
Company, or any warrant, option or right to purchase any capital stock of
the Company. As used in this Section 5.11, "calculated on a fully-diluted
basis" means calculated on a pro forma basis assuming the exercise of all
options, warrants or other rights for Common Stock (or securities
convertible into or exchangeable for Common Stock) and the conversion or
exchange of all securities convertible into or exchangeable for Common
Stock.
(c) To the extent that a Participant does not exercise its right to
purchase the equity securities being sold by the Offeror, the other
Purchase Rights Holder may purchase the portion of the equity securities
not so purchased at the same price and on the same terms specified in the
Offer Notice and on the date specified for purchase therein.
(d) To the extent that the sale of equity securities by the Offeror is
not consummated for any reason within 120 days after the date of the Offer
Notice, the provisions of this Section 5.11 shall again apply with respect
to any further sales by the Offeror of the equity securities not so
purchased.
(e) Notwithstanding any contrary provision of this Agreement, the
provisions of this Section 5.11 shall not be applicable to the purchase of
any equity securities (i) by a Purchase Rights Holder pursuant to the terms
of any equity security of the Company or any other security, put or call
option, pledge, right, warrant, convertible or exchangeable security or
other similar instrument, agreement or arrangement in effect on the date of
this Agreement which is set forth on the Disclosure Schedules, or (ii) by
399 Venture from any of its Affiliates.
(f) The rights and obligations set forth in this Section 5.11 shall
terminate upon the consummation of a Public Offering.
ARTICLE VI
CORPORATE ACTIONS
6.1. Certificate of Incorporation and Bylaws. Each Investor has reviewed
the Certificate of Incorporation of the Company and the Bylaws of the Company in
the forms attached hereto as Exhibits A and B, respectively, and hereby approves
and ratifies the same.
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6.2. Directors and Voting Agreements. (a) Each Investor shall take, at any
time and from time to time, all action necessary (including, without limitation,
voting the Class A Common Stock owned by such Investor, calling special meetings
of stockholders and executing and delivering written consents) to ensure that
the Board of Directors of the Company is composed at all times of up to five
persons, determined as follows: (i) two individuals designated by Jenkins (the
"Jenkins Designees"); (ii) two individuals designated by 399 Venture (the "399
Venture Designees"); and (iii) one individual (the "Independent Director")
designated by the vote of a majority of the other four directors. The initial
directors named pursuant to this Section 6.2 shall be:
Designator Director
Jenkins Jenkins
Randolph G. Abood
399 Venture Thomas F. McWilliams
(b) The Board of Directors shall consist of five members, provided,
however, that if the Board of Directors determines in good faith that it is in
the best interests of the Company to increase the number of directors, and
Jenkins and 399 Venture agree to such increase in writing, then the number of
directors shall be increased to such number as the Board of Directors shall
determine.
6.3. Right to Remove Designated Directors. If (i) 399 Venture shall request
the removal of any 399 Venture Designee, (ii) Jenkins shall request the removal
of any Jenkins Designee, or (iii) either of 399 Venture or Jenkins request the
removal of the Independent Director, in each case (either with or without cause)
by written notice to the other, the other party shall promptly consent in
writing or vote or cause to be voted all Securities entitled to vote thereon now
or hereafter owned or controlled by him or it, as the case may be, for the
removal of such person as a director. In the event any person ceases to be a
director, such person shall also cease to be a member of any committee of the
Board of Directors of the Company.
6.4. Right to Fill Certain Vacancies in Company's Board.
(a) In the event that a vacancy is created on the Company's Board of
Directors at any time by the death, disability, retirement, resignation or
removal (with or without cause) of a 399 Venture Designee or a Jenkins
Designee, or if otherwise there shall exist or occur any vacancy on the
Company's Board of Directors in a directorship subject to designation by
399 Venture or Jenkins, such vacancy shall not be filled by the remaining
members of the Company's Board of Directors but each Investor hereby agrees
promptly to consent in writing or vote or cause to be voted all shares of
Common Stock entitled to vote thereon now or hereafter owned or controlled
by it to elect that individual designated to fill such vacancy and serve as
a 399 Venture Designee or a Jenkins Designee, as the case may be.
(b) In the event that such vacancy is created by the death,
disability, retirement, resignation or removal (with inherent cause) of an
Independent Director, such vacancy shall be filled by a majority vote of
the remaining four directors.
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6.5. Rights upon Disability or Death of Jenkins. In the event of the
disability or death of Jenkins, (a) Jenkins rights under Section 6.2(a)(i) shall
terminate, (b) the Board of Directors shall thereafter be composed of four
persons (plus any increases in the number of directors pursuant to Section
6.2(b)), (c) the executor of Jenkins' estate or his attorney-in-fact, as the
case may be, shall have the right to appoint one director to the Board of
Directors following the execution and delivery by such executor or
attorney-in-fact of a joinder to this Agreement which binds such person to the
obligations imposed upon Jenkins under this Agreement, and (d) upon execution
and delivery of such joinder, the executor or attorney-in-fact shall be entitled
to exercise Jenkins' rights under this Article VI excluding those set forth in
Section 6.2(a)(i). Each Investor hereby agrees to consent in writing or vote or
cause to be voted all shares of Common Stock entitled to vote thereon now or
hereafter owned or controlled by it to elect that individual appointed by such
executor or attorney-in-fact in accordance with the foregoing provisions.
6.6. Committee Members; Directors of Company Subsidiaries. The Company
shall take, and each of the Investors agrees that such Investor shall cause the
Company to take, at any time and from time to time, all action necessary
(including voting all shares of common stock of any Subsidiary of the Company,
calling special meetings of stockholders and executing and delivering written
consents) to ensure that all committees of the Board of Directors of the
Company, the Boards of Directors of all Subsidiaries of the Company and any
committees of such Boards are identical to the Board of Directors of the
Company.
6.7. Amendment of Certificate and Bylaws. Each Investor agrees that it
shall not consent in writing or vote or cause to be voted any shares of Common
Stock now or hereafter owned or controlled by it in favor of any amendment,
repeal, modification, alteration or rescission of, or the adoption of any
provision in, the Company's Certificate of Incorporation or Bylaws inconsistent
with this Agreement unless 399 Venture consents in writing to such action or
votes or causes to be voted all of the shares of Common Stock held by 399
Venture in favor of such action; provided that, 399 Venture shall not consent to
any amendment which would adversely affect Jenkins' right to designate a
director to the Company's Board of Directors or remove or fill any vacancy
created with respect to, any director designated by Jenkins' as set forth in
Article VI of this Agreement.
6.8. Termination of Designation Rights.
(a) The rights and obligations of 399 Venture, as set forth in Section
6.2 through 6.7 above, shall terminate upon the earlier of (i) the date the
Company consummates a Public Offering or (ii) the date when 399 Venture and
its Permitted Transferees (other than Permitted Transferees pursuant to
Section 4.5(d)(iii)), and their respective Affiliates no longer own at
least 50% of (x) the Common Stock owned by 399 Venture as of the Closing,
minus (y) the Common Stock transferred by 399 Venture to 399 Venture
Co-Investors (which sales shall be made consistent with 399 Venture's
customary policies with respect to sales to 399 Venture Co-Investors).
(b) The rights and obligations of Jenkins, as set forth in Section 6.2
through 6.7 above, shall terminate upon the earlier of (i) the date the
Company consummates a Public Offering or (ii) the date when Jenkins and his
Permitted Transferees (other than Permitted Transferees pursuant to Section
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4.5 (d)(iii) no longer own at least 50% of the Common Stock owned by
Jenkins as of the Closing.
(c) The rights and obligations set forth in Section 6.2 through 6.7
above of any executor or attorney-in-fact under Section 6.5 above shall
terminate upon the earlier of (i) the date the Company consummates a Public
Offering or (ii) the date when Jenkins (or his estate) and his or its
Permitted Transferees (other than Permitted Transferees pursuant to Section
4.5(d)(iii)) no longer own in the aggregate at least 50% of the Securities
owned by Jenkins as of the Closing.
(d) It is hereby acknowledged and agreed that the rights to designate
directors as set forth in Section 6.2 through 6.7 above have been granted
to 399 Venture and Jenkins, respectively, pursuant to this Agreement, and
such rights may not be transferred by either of them to any transferee
(other than pursuant to Section 6.5, or in the case of 399 Venture, to a
corporate Affiliate), including any Permitted Transferee, but shall be
exercised only by 399 Venture and Jenkins, respectively, until terminated
pursuant to this Section 6.8.
6.9. Future Sales of Securities. If 399 Venture shall propose the sale of
additional debt or equity securities by the Company to any Person and the Board
of Directors should fail to approve such sale, such sale, the terms and issuance
of such securities, and the use of proceeds may be approved by the vote of the
holders of a majority of the outstanding Class A Common Stock, such vote to be
taken upon ten days' written notice to the holders of the Class A Common Stock.
To the extent that the Company uses the proceeds of such sale to repurchase any
of its equity securities, each holder of such securities may, with respect to
such repurchase, exercise the Tag-Along Right set forth in Section 5.8, pursuant
to the procedures set forth in Section 5.8(b), and any additional tag-along
rights which such holder may have. If any such holder does not exercise his or
its Tag-Along Right in full, 399 Venture shall have right to assume such right
with respect to the number of unpurchased shares.
ARTICLE VII
ADDITIONAL RESTRICTIONS ON TRANSFERS OF
SECURITIES HELD BY MANAGEMENT INVESTORS
7.1. Restrictions on Transfer. In addition to any restrictions on Transfer
-------------------------
imposed by Section 4.5, no Management Investor shall effect a Transfer of any
-----------
Securities (other than a Transfer to a Permitted Transferee pursuant to Sections
--------
4.5(d)(i) or 4.5(d)(ii), 4.5(d)(iii) or 4.5(d)(vi) and other than pursuant to
- --------- ---------- ----------- ----------
Section 5.7 or 5.8). In the event of such a Transfer to a Permitted Transferee,
for purposes of determining the applicability of the Purchase Option of the
Company described in Section 7.2 herein and, if applicable, the amount of the
-----------
Option Purchase Price for Incentive Shares purchased under such Purchase Option,
reference shall be made to the Termination Date of the Management Investor who
first owned the Incentive Shares transferred in such Transfer. In exercising the
consent and approval described in the first sentence of this Section 7.1, the
-----------
Company may employ its sole discretion in evaluating the nature of the proposed
transferee and the Company may impose such conditions on Transfer as it deems
appropriate in its sole discretion, including, but not limited to, requirements
that the transferee be an employee of the Company and that the transferee
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purchase the Management Investor's Securities as a "Management Investor" subject
to the restrictions of this Article VII. Any purported Transfer in violation of
this Agreement shall be null and void and of no force and effect and the
purported transferees shall have no rights or privileges in or with respect to
the Company.
7.2. Purchase Option.
----------------
(a) General Terms. In the event that on or prior to the fifth
-------------
anniversary of the Closing, any Management Investor shall cease to be
employed by the Company (whether as a consultant, director or employee) for
any reason (including, but not limited to, death, temporary or permanent
disability, retirement at age 65 or more under the Company's normal
retirement policies, resignation or termination by the Company with or
without Cause), such Management Investor (or such Management Investor's
heirs, executors, administrators, transferees, successors or assigns) shall
give prompt notice to the Company of such termination (except in the case
of termination by the Company with or without Cause), and the Company, or
one or more designee(s) selected by a two-thirds majority of the members of
the Board of Directors, shall have the right and option at any time within
90 days after the later of the effective date of such termination of
employment (the "Termination Date") or the date of the Company's receipt of
------------------
the aforesaid notice, to purchase from such Management Investor, or such
Management Investor's heirs, executors, administrators, transferees,
successors or assigns, as the case may be, any or all of the Incentive
Shares then owned by such Management Investor and such Management
Investor's Permitted Transferees (pursuant to Section 4.5(d)(i) or
---------
4.5(d)(ii)) at a purchase price equal to the Option Purchase Price. The
-----------
Company or its designee(s) shall give notice to the terminated Management
Investor (or such Management Investor's heirs, executors, administrators,
transferees, successors or assigns) of its intention to purchase Incentive
Shares at any time not later than 90 days after the Termination Date. (The
right of the Company and its designee(s) set forth in this Section 7.2 to
purchase a terminated Management Investor's Incentive Shares is hereinafter
referred to as the "Purchase Option").
(i) Exercise of Purchase Option. The Purchase Option shall be
exercised by written notice to the terminated Management Investor (or
such Management Investor's heirs, executors, administrators,
transferees, successors or assigns) signed by an officer of the
Company (whether as a consultant, director or employee) on behalf of
the Company or by its designee(s), as the case may be. Such notice
shall set forth the number of Incentive Shares desired to be purchased
and shall set forth a time and place of closing which shall be no
earlier than ten days and no later than 60 days after the date such
notice is sent. At such closing, the seller shall deliver the
certificates evidencing the number of Incentive Shares to be purchased
by the Company and/or its designee(s), accompanied by stock powers
duly endorsed in blank or duly executed instruments of transfer, and
any other documents that are necessary to transfer to the Company
and/or its designee(s) good title to such of the Incentive Shares to
be transferred, free and clear of all pledges, security interests,
liens, charges, encumbrances, equities, claims and options of whatever
nature other than those imposed under this Agreement, and concurrently
with such delivery, the Company and/or its designee(s) shall deliver
to the seller the full amount of the Option Purchase Price for such
Incentive Shares in cash or by certified or bank cashier's check.
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(ii) Option Purchase Price. (A) If the Management Investor shall
be terminated by the Company without Cause, resign with Good Reason or
shall cease to be employed by the Company by reason of death, normal
retirement at age 65 or more under the Company's normal retirement
policies, or temporary or permanent disability, the "Option Purchase
Price" for the Incentive Shares to be purchased from such Management
Investor or such Management Investor's Permitted Transferees pursuant
to the Purchase Option (such number of Incentive Shares being the
"Purchase Number") shall equal the price calculated as set forth in
the table below opposite the applicable Termination Date of such
Management Investor:
If the Termination Date Occurs: Option Purchase Price
On or prior to the first anniversary of Adjusted Cost Price multiplied by
the Closing the Purchase Number
After the first anniversary of the Adjusted Cost Price multiplied by
Closing, and on or prior to the second 80% of the Purchase Number, plus
anniversary of the Closing Adjusted Book Value Price
multiplied by 20% of the Purchase
Number
After the second anniversary of the Adjusted Cost Price multiplied by
Closing, and on or prior to the third 60% of the Purchase Number, plus
anniversary of the Closing Adjusted Book Value Price
multiplied by 40% of the Purchase
Number
After the third anniversary of the Adjusted Cost Price multiplied by
Closing, and on or prior to the fourth 40% of the Purchase Number, plus
anniversary of the Closing Adjusted Book Value Price
multiplied by 60% of the Purchase
Number
After the fourth anniversary of the Adjusted Cost Price multiplied by
Closing, and on or prior to the fifth 20% of the Purchase Number, plus
anniversary of the Closing Adjusted Book Value Price
multiplied by 80% of the Purchase
Number
(B) If the Management Investor shall cease to be employed by the
Company (whether as a consultant, director or employee) for any reason
other than those set forth in clause (A) of this Section 7.2(a)(ii)
(including, but not limited to, as the result of voluntary resignation
(other than for Good Reason) or termination for Cause), the Option
Purchase Price for all Incentive Shares to be purchased from the
Management Investor (and such Management Investor's Permitted
Transferees) pursuant to the Purchase Option shall equal the Adjusted
Cost Price multiplied by the Purchase Number.
(C) As used herein:
(1) "Adjusted Cost Price" for each Incentive Share means the
price paid by such Management Investor per share (adjusted for
any stock dividend payable upon, or subdivision or combination
of, the Common Stock); and
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(2) "Adjusted Book Value Price" for each Incentive Share
means the greater of (i) the Adjusted Cost Price or (ii) the fair
market value of such Incentive Share, as determined in good
faith, without regard to any discount applicable to a minority
holding or due to lack of liquidity, by the Board of Directors of
the Company and provided, however, that if any of the Common
Stock is traded on a national securities exchange or reported on
the National Association of Securities Dealers, Inc. Automated
Quotation System, then the "Adjusted Book Value Price" shall
equal for each Incentive Share the closing price per share of
Common Stock on such exchange or as so reported on the Management
Investor's Termination Date.
7.3. Company's Right of First Refusal. If a Management Investor or such
Management Investor's Permitted Transferees proposes to sell any or all of such
Management Investor's or Permitted Transferee's Incentive Shares to a third
party in a bona fide transaction (except for sales pursuant to Sections 5.7 or
5.8), and provided such transaction is permitted under any applicable
restrictions set forth in Sections 4.5 and 7.1 herein, the Management Investor,
or such Management Investor's Permitted Transferees, may not Transfer such
Incentive Shares without first offering to sell such Incentive Shares to the
Company pursuant to this Section 7.3.
The Management Investor, or such Management Investor's Permitted
Transferees, shall deliver a written notice (a "Sale Notice") to the Company
describing in reasonable detail the Incentive Shares being offered, the name of
the offeree, the purchase price requested and all other material terms of the
proposed Transfer. Upon receipt of the Sale Notice, the Company, or a designee
selected by a two-thirds majority of the members of the Board of Directors of
the Company, shall have the right and option to purchase all (but not less than
all) of the Incentive Shares being offered at the price and on the terms of the
proposed Transfer set forth in the Sale Notice. Within 10 days after receipt of
the Sale Notice, the Company shall notify such Management Investor, or such
Management Investor's Permitted Transferees, whether or not it or its designee
wishes to purchase any or all of the offered Incentive Shares.
If the Company or its designee elects to purchase the offered Incentive
Shares, the closing of the purchase and sale of such Incentive Shares shall be
held at the place and on the date established by the Company in its notice to
the Management Investor, or such Management Investor's Permitted Transferees, in
response to the Sale Notice, which in no event shall be less than ten or more
than 30 days from the date of such notice. In the event that the Company or its
designee does not elect to purchase all the offered Incentive Shares, the
Management Investor, or such Management Investor's Permitted Transferees, may,
subject to the other provisions of this Agreement, Transfer the offered
Incentive Shares to the offeree specified in the Sale Notice at a price no less
than the price specified in the Sale Notice and on other terms no more favorable
to the transferee(s) thereof than specified in the Sale Notice during the
180-day period immediately following the last date on which the Company could
have elected to purchase the offered Incentive Shares. Any such Incentive Shares
not transferred within such 180-day period will be subject to the provisions of
this Section 7.3 upon subsequent Transfer.
7.4. Involuntary Transfers. In the event that Incentive Shares owned by any
Management Investor, or such Management Investor's Permitted Transferees, shall
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<PAGE>
be subject to sale or other Transfer (the date of such sale or Transfer shall
hereinafter be referred to as the "Transfer Date") by reason of (i) bankruptcy
or insolvency proceedings, whether voluntary or involuntary, or (ii) distraint,
levy, execution or other involuntary Transfer, then such Management Investor, or
such Management Investor's Permitted Transferees, shall give the Company written
notice thereof promptly upon the occurrence of such event stating the terms of
such proposed Transfer, the identity of the proposed transferee, the price or
other consideration, if readily determinable, for which the Incentive Shares are
proposed to be transferred, and the number of shares of Common Stock to be
transferred. After its receipt of such notice or, failing such receipt, after
the Company otherwise obtains actual knowledge of such a proposed Transfer, the
Company, or a designee selected by a majority of the members of the Board of
Directors of the Company excluding the affected Management Investor or Permitted
Transferee and any director designated by such Investor, shall have the right
and option to purchase all, but, not less than all of such Incentive Shares
which right shall be exercised by written notice given by the Company to such
proposed transferor within 60 days following the Company's receipt of such
notice or, failing such receipt, the Company's obtaining actual knowledge of
such proposed Transfer. Any purchase pursuant to this Section 7.4 shall be at
the price and on the terms applicable to such proposed transfer. If the nature
of the event giving rise to such involuntary Transfer is such that no readily
determinable consideration is to be paid for the Transfer of the Incentive
Shares, the price to be paid by the Company shall be the Option Purchase Price
that would have been applicable hereunder pursuant to Section 7.2(a)(ii)(A) had
the date of such proposed Transfer of the Incentive Shares been the Management
Investor's Termination Date. The closing of the purchase and sale of such
Incentive Shares shall be held at the place and the date to be established by
the Company, which in no event shall be less than ten or more than 60 days from
the date on which the Company gives notice of its election to purchase the
Incentive Shares. At such closing, the Management Investor, or such Management
Investor's Permitted Transferees, shall deliver the certificates evidencing the
number of shares of Common Stock to be purchased by the Company, accompanied by
stock powers duly endorsed in blank or duly executed instruments of transfer,
and any other documents that are necessary to transfer to the Company good title
to such of the securities to be transferred, free and clear of all pledges,
security interests, liens, charges, encumbrances, equities, claims and options
of whatever nature other than those imposed under this Agreement, and
concurrently with such delivery, the Company shall deliver to the Management
Investor, or such Management Investor's Permitted Transferees, the full amount
of the purchase price for such Incentive Shares in cash by certified or bank
cashier's check.
7.5. Lapse. The provisions of Sections 7.1, 7.3 and Section 7.4 shall
terminate immediately after consummation of an Approved Sale.
ARTICLE VIII
REGISTRATION RIGHTS; PREFERRED STOCKHOLDERS AGREEMENT;
INDEMNIFICATION
8.1. Registration Rights. The Investors shall have registration rights with
respect to the Shares as set forth in the Registration Rights Agreement among
the parties hereto and dated as of the date hereof, the form of which is
attached hereto as Exhibit D (the "Registration Rights Agreement"). Each of the
33
<PAGE>
Investors and their Permitted Transferees agrees not to effect any public sale
or distribution of any securities of the Company during the periods specified in
the Registration Rights Agreement, except as permitted by the Registration
Rights Agreement, and each such Investor agrees to be bound by the rights of
priority to participate in offerings as set forth therein.
8.2. Preferred Stockholders Agreement. The Investors shall have the rights
with respect to the Preferred Stock set forth in the Preferred Stockholders
Agreement, dated of even date herewith, by and among the Investors who hold
Preferred Stock and attached hereto as Exhibit E (the "Preferred Stockholders
Agreement"). Each Investor party to the Preferred Stockholders Agreement
acknowledges and agrees that a breach by such Investor of the covenants and
obligations applicable to such Investor under the Preferred Stockholders
Agreement shall constitute a breach of such Investor's covenants and obligations
under this Agreement.
8.3. Indemnification for Certain Liabilities. Each Continuing Management
Investor acknowledges that, on the Closing Date and in connection with the
Closing of the transactions contemplated by this Agreement, Royster-Clark
effected a reverse stock split (the "Reverse Stock Split") pursuant to which the
10,097.732 outstanding shares of Common Stock held of record by the
Royster-Clark Employee Savings and Investment Plan (the "ESOP") were converted
into the right to receive $2,877,853.62 as cash in lieu of fractional shares.
Each Continuing Management Investor other than Jenkins and his Family Members,
severally and not jointly and in proportion to such Management Investor's
relative Common Stock ownership percentage, shall indemnify and hold harmless
the Company, 399 Venture and Royster-Clark, and their respective officers,
directors, shareholders, employees and Affiliates from and against any claims by
the ESOP, the trust of the ESOP or any ESOP participant or beneficiary of any
such participant, for any payments following the Closing Date in connection with
the Reverse Stock Split, provided, that the Continuing Management Investors
(other than Jenkins and his Family Members) aggregate liability pursuant to this
Section 8.3 shall not exceed the $184,658.00 contributed by the Continuing
Management Investors to an escrow account established for such purpose as of the
Closing Date (together with any interest accrued thereon). A Continuing
Management Investor's relative Common Stock ownership percentage shall be a
fraction, the numerator of which is the number of shares of Common Stock issued
by the Company to such Continuing Management Investor at the Closing and the
denominator of which is the number of shares of Common Stock issued by the
Company to all of the Continuing Management Investors at the Closing.
ARTICLE IX
MISCELLANEOUS
9.1. Purchaser Representative. If the Company or any Investor enters into
any negotiation or transaction, including an Approved Sale, for which Rule 506
(or any similar rule then in effect) promulgated by the SEC under the Securities
Act may be available with respect to such negotiation or transaction (including
a merger, consolidation or other reorganization), each Management Investor will,
at the request of the Company, appoint a purchaser representative (as such term
is defined in Rule 501(h) promulgated by the SEC under the Securities Act)
reasonably acceptable to the Company. If any Management Investor appoints the
34
<PAGE>
purchaser representative designated by the Company, the Company will pay the
fees of such purchaser representative, but if any Management Investor declines
to appoint the purchaser representative designated by the Company such
Management Investor will appoint another purchaser representative (reasonably
acceptable to the Company), and such Management Investor will be responsible for
the fees of the purchaser representative so appointed.
9.2. Section 83(b) Elections. Each Management Investor shall make the
election (the "83(b) Election") to include in such Management Investor's income,
in the year such Management Investor receives the Incentive Shares, the excess,
if any, of the fair market value of the Incentive Shares on the date such shares
are acquired (determined without regard to restrictions which lapse) over the
price paid per Incentive Share, pursuant to Section 83(b) of the Internal
Revenue Code of 1986, as amended, in the manner and within the time period
specified by the regulations promulgated thereunder. EACH MANAGEMENT INVESTOR
ACKNOWLEDGES THAT (1) SUCH MANAGEMENT INVESTOR ALONE IS RESPONSIBLE FOR FILING
WITH THE INTERNAL REVENUE SERVICE, BY THE APPLICABLE DEADLINE, ALL APPLICABLE
FORMS REQUIRED TO EFFECT THE 83(B) ELECTION, (2) NO EXTENSION OF THE 83(B)
ELECTION DEADLINE WILL BE AVAILABLE UNDER LAW AND (3) ADVERSE TAX CONSEQUENCES
MAY RESULT TO SUCH MANAGEMENT INVESTOR IF THE 83(B) ELECTION IS NOT TIMELY MADE.
9.3. Amendment and Modification. This Agreement may be amended or modified,
or any provision hereof may be waived, provided that such amendment,
modification or waiver is set forth in a writing executed by (i) the Company,
(ii) 399 Venture (so long as 399 Venture and its Permitted Transferees (other
than Permitted Transferees pursuant to Section 4.5 (d)(iii)) own in the
aggregate at least 5% of the outstanding Common Stock on a fully diluted basis),
(iii) Jenkins (so long as Jenkins and his Permitted Transferees (other than
Permitted Transferees pursuant to Section 4.5 (d)(iii)) own in the aggregate at
least 5% of the outstanding Common Stock on a fully diluted basis) and (iv) the
holders of a majority of the outstanding Common Stock on a fully diluted basis
(including Shares owned by 399 Venture and its Affiliates) held by the
Investors; provided, however, that without the approval of the holders of a
majority of the outstanding Common Stock then held by Management Investors, (A)
the provisions of this Agreement cannot be amended to treat Management Investors
differently than the other Investors and (B) the provisions of Sections 5.6, 9.3
and Article VII of this Agreement may not be amended or modified to the
detriment of Management Investors. No course of dealing between or among any
Persons having any interest in this Agreement will be deemed effective to
modify, amend or discharge any part of this Agreement or any rights or
obligations of any Person under or by reason of this Agreement.
9.4. Waiver of Fiduciary Duties and Corporate Opportunity; Acknowledgment.
(a) Nothing in this Agreement shall be construed so as to limit the
ability of 399 Venture, Citicorp Venture Capital Ltd. or any of their
respective Affiliates to make investments in any other business entity
(including without limitation a business entity that competes with the
Company) in the ordinary course of their respective businesses.
(b) Without limiting the generality of the above, to the fullest
extent permitted by any applicable law, the doctrine of corporate
opportunity, or any other analogous doctrine, shall not apply with respect
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to 399 Venture or any of its respective affiliates. In particular, (i) 399
Venture and its Affiliates shall have the right to engage in business
activities, whether or not in competition with the Company or the Company's
business activities, without consulting any Investor or any other
stockholder and (ii) 399 Venture shall have no obligation to any Investor
or any other stockholder with respect to any opportunity to acquire
property or make investments at any time.
(c) Each party to this Agreement expressly acknowledges and agrees
that 399 Venture's representations, covenants and other agreements
contained herein apply only to 399 Venture and Citicorp Venture Capital
Ltd., and not to any of their respective affiliates or shareholders,
including, without limitation, Citibank N.A., Citicorp or CitiGroup.
9.5. Survival. All representations, warranties, covenants and agreements
set forth in this Agreement will survive the execution and delivery of this
Agreement, the Closing, and the consummation of the transactions contemplated
hereby and by the Exchange Agreement, regardless of any investigation made by an
Investor or on its behalf.
9.6. Successors and Assigns; Entire Agreement. This Agreement and all of
the provisions hereof shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and permitted assigns and
executors, administrators and heirs. This Agreement, together with the
Registration Rights Agreement and the Preferred Stockholders Agreement, and each
other agreement referenced herein which contains terms incorporated by reference
into this Agreement, sets forth the entire agreement and understanding among the
parties as to the subject matter hereof and merges and supersedes all prior
discussions, agreements and understandings of any and every nature among them.
9.7. Separability. In the event that any provision of this Agreement or the
application of any provision hereof is declared to be illegal, invalid or
otherwise unenforceable by a court of competent jurisdiction, the remainder of
this Agreement shall not be affected except to the extent necessary to delete
such illegal, invalid or unenforceable provision unless that provision held
invalid shall substantially impair the benefits of the remaining portions of
this Agreement.
9.8. Notices. All notices provided for or permitted hereunder shall be made
(except as otherwise provided herein) in writing by hand delivery, registered or
certified first-class mail, facsimile (with confirmation of receipt) or air
courier guaranteeing overnight delivery to the other party at the following
addresses (or at such other address as shall be given in writing by any party to
the others):
If to the Company, to:
Royster-Clark Group, Inc.
Royster-Clark, Inc.
10 Rockefeller Plaza Suite 1120
New York, NY 10020
Attention: Francis P. Jenkins, Jr.
Fax (212) 332-2999
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with required copies to:
399 Venture Partners, Inc.
399 Park Avenue
14th Floor
New York, New York 10043
Telecopy number: (212) 888-2940
Attention: Thomas F. McWilliams
Royster-Clark Group, Inc.
Royster-Clark, Inc.
10 Rockefeller Plaza Suite 1120
New York, NY 10020
Attention: Randolph G. Abood, Esq.
Fax (212) 332-2999
If to 399 Venture, to:
399 Venture Partners, Inc.
399 Park Avenue
14th Floor
New York, New York 10043
Telecopy number: (212) 888-2940
Attention: Thomas F. McWilliams
with a required copy to:
Dechert Price & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, Pennsylvania 19103
Telecopy number: (215) 994-2222
Attention: Craig L. Godshall
If to the Management Investors or any of them, to the business addresses
(or residence address if no business address is indicated) listed on the
signature page of this Agreement or joinder to this Agreement.
All such notices shall be deemed to have been duly given: when delivered by
hand, if personally delivered; five business days after being deposited in the
mail, postage prepaid, if mailed; when receipt acknowledged, if sent by
facsimile; and on the next business day, if timely delivered to an air courier
guaranteeing overnight delivery.
9.9. Governing Law. The validity, performance, construction and effect of
this Agreement shall be governed by and construed in accordance with the
internal law of Delaware, without giving effect to principles of conflicts of
law.
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9.10. Waiver of Jury Trial. Each of the parties to this Agreement waives,
to the fullest extent permitted by law, any right to trial by jury of any claim,
demand, action or cause of action (i) arising under this Agreement or (ii) in
any way connected with or related or incidental to the dealings of the parties
hereto in respect of this Agreement or any of the transactions related hereto,
in each case whether now existing or hereafter arising, and whether in contract,
tort, equity or otherwise. Each of the parties to this Agreement agrees and
consents that any such claim, demand, action or cause of action shall be decided
by court trial without a jury and that the parties to this Agreement may file an
original counterpart of a copy of this Agreement with any court as written
evidence of the consent of the parties hereto to the waiver of the right to
trial by jury.
9.11. ACKNOWLEDGMENT OF MANAGEMENT INVESTORS. EACH MANAGEMENT INVESTOR
ACKNOWLEDGES THAT SUCH MANAGEMENT INVESTOR IS A SOPHISTICATED BUSINESSPERSON WHO
WAS ADEQUATELY REPRESENTED BY COUNSEL DURING NEGOTIATIONS REGARDING THE
PROVISIONS OF THIS AGREEMENT, INCLUDING, WITHOUT LIMITATION, THE PROVISIONS
RESTRICTING THE TRANSFER OF SECURITIES BY MANAGEMENT INVESTORS SET FORTH IN
SECTION 4.5 AND ARTICLE VII, AND SPECIFICALLY SECTION 7.2, WHICH SETS FORTH THE
COMPANY'S PURCHASE OPTION WITH RESPECT TO INCENTIVE SHARES. EACH MANAGEMENT
INVESTOR ACKNOWLEDGES THAT ANY PROPERTY RIGHT THAT SUCH MANAGEMENT INVESTOR HAS
IN INCENTIVE SHARES IS SUBJECT IN ALL RESPECTS TO THE COMPANY'S PRIOR RIGHT TO
REPURCHASE SUCH INCENTIVE SHARES AS PROVIDED IN ARTICLE VII. EACH MANAGEMENT
INVESTOR FURTHER ACKNOWLEDGES THAT IF THE COMPANY EXERCISES ITS PURCHASE OPTION
SUCH MANAGEMENT INVESTOR'S INCENTIVE SHARES COULD BE PURCHASED BY THE COMPANY AT
A PRICE THAT IS LESS THAN THE FAIR MARKET VALUE OF SUCH SECURITIES AT THE TIME
OF SUCH EXERCISE.
9.12. No Effect on Employment. Nothing herein contained shall confer on any
Management Investor the right to remain in the employ of the Company or any of
its subsidiaries or Affiliates.
9.13. Headings. The headings in this Agreement are for convenience of
reference only and shall not constitute a part of this Agreement, nor shall they
affect its meaning, construction or effect.
9.14. Counterparts. This Agreement may be executed in two or more
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original, and all of which taken
together shall constitute one and the same instrument. Jenkins is signing this
Agreement in his own capacity and for his Family Members who hold shares of
Royster-Clark Inc.
9.15. Further Assurances. Each party shall cooperate and take such action
as may be reasonably requested by another party in order to carry out the
provisions and purposes of this Agreement and the transactions contemplated
hereby.
38
<PAGE>
9.16. Termination. Unless sooner terminated in accordance with its terms,
this Agreement shall terminate on April 22, 2009.
9.17. Remedies. In the event of a breach or a threatened breach by any
party to this Agreement of its obligations under this Agreement, any party
injured or to be injured by such breach, in addition to being entitled to
exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement. The parties
agree that the provisions of this Agreement shall be specifically enforceable,
it being agreed by the parties that the remedy at law, including monetary
damages, for breach of such provision will be inadequate compensation for any
loss and that any defense in any action for specific performance that a remedy
at law would be adequate is waived.
9.18. Party No Longer Owning Securities. If a party hereto ceases to own
any Securities, such party will no longer be deemed to be an Investor or
Management Investor for purposes of this Agreement.
9.19. Pronouns. Whenever the context may require, any pronouns used herein
shall be deemed also to include the corresponding neuter, masculine or feminine
forms.
39
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Securities
Purchase and Holders Agreement as of the day and year first above written.
ROYSTER-CLARK GROUP, INC.
By: /s/ Francis P. Jenkins, Jr.
---------------------------------------
Name: Francis P. Jenkins, Jr.
Title: Chief Executive Officer
399 VENTURE PARTNERS, INC.
By: /s/ Thomas F. McWilliams
---------------------------------------
Name: Thomas F. McWilliams
Title: Vice President
MANAGEMENT INVESTORS:
/s/ Francis P. Jenkins, Jr.
------------------------------------
Name: Francis P. Jenkins, Jr.
Social Security Number:
Residence Address:
Residence Telephone:
Business Address:
Business Telephone:
/s/ Randolph G. Abood
------------------------------------
Name: Randolph G. Abood
Social Security Number:
Residence Address:
Residence Telephone:
Business Address:
Business Telephone:
40
<PAGE>
/s/ G. Kenneth Moshenek
------------------------------------
Name: G. Kenneth Moshenek
Social Security Number:
Residence Address:
Residence Telephone:
Business Address:
Business Telephone:
/s/ Walter Vance
------------------------------------
Name: Walter Vance
Social Security Number:
Residence Address:
Residence Telephone:
Business Address:
Business Telephone:
/s/ Max Baer
------------------------------------
Name: Max Baer
Social Security Number:
Residence Address:
Residence Telephone:
Business Address:
Business Telephone:
/s/ Alan S. Fitter
------------------------------------
Name: Alan S. Fitter
Social Security Number:
Residence Address:
Residence Telephone:
Business Address:
Business Telephone:
41
<PAGE>
/s/ Martha B. Shirley
------------------------------------
Name: Martha B. Shirley
Social Security Number:
Residence Address:
Residence Telephone:
Business Address:
Business Telephone:
/s/ Martha B. Shirley
------------------------------------
Name: Martha B. Shirley as Trustee of the
Shirley Irrevocable Trust for Martha
/s/ Mary Shirley Swiney
------------------------------------
/s/ James A. Shirley
------------------------------------
Name: Mary Shirley Swiney and James A. Shirley
as Co-Trustees of the Shirley
Irrevocable Sprinkle Trust
42
<PAGE>
/s/ Steven A. Sheline
------------------------------------
Name: Steven Sheline
Social Security Number:
Residence Address:
Residence Telephone:
Business Address:
Business Telephone:
/s/ Jane Sheline
------------------------------------
Name: Jane Sheline
Social Security Number:
Residence Address:
Residence Telephone:
Business Address:
Business Telephone:
43
EXHIBIT 12.01
STATEMENT re COMPUTATION OF RATIOS
Page 10: Pro forma ratio of earnings to fixed charges for the year ended
December 31, 1998
<TABLE>
<CAPTION>
<S> <C>
Earnings
Income from continuing operations before taxes 17,265
Loss from equity investees 1,857
Fixed charges 36,190
-------
55,312
Fixed charges:
Interest expensed 33,475
Interest capitalized --
Amortized premiums, discounts, capital expenses
related to indebtedness 1,921
Estimated interest within rental expense 794
-------
36,190
------
1.5x
</TABLE>
Page 10: Pro forma ratio of earnings (loss) to fixed charges for the three
months ended March 31, 1999
<TABLE>
<S> <C>
Earnings (loss):
Pre-tax loss from continuing operations (17,731)
Loss from equity investees 100
Fixed charges 8,557
-------
(9,074)
Fixed charges:
Interest expensed 7,782
Interest capitalized --
Amortized premiums, discounts, capital expenses
related to indebtedness 477
Estimated interest within rental expense 298
-------
8,557
-------
(1.1)x
Deficiency in earnings to fixed charges [(9,074)-8,557] (17,631)
Page 10: Adjusted EBITDA to interest expense for the year ended December 31,
1998
Adjusted EBITDA:
Pre-tax income from continuing operations 17,265
Loss from equity investees 1,857
Interest expense 33,475
Depreciation and amortization 23,489
Additional pro forma adjustments 2,528
-------
78,614
Interest expense 33,475
-------
2.3x
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
STATEMENT RE COMPUTATION OF RATIOS--(CONTINUED)
<S> <C>
Page 10: Adjusted EBITDA to interest expense for the three months ended March 31, 1999
Adjusted EBITDA:
Pre-tax income (loss) from continuing operations (17,731)
Loss from equity investees 100
Interest expense 7,782
Depreciation and amortization 6,004
Additional pro forma adjustments --
-------
(3,845)
Interest expense 7,782
------
(0.5)x
Deficiency in Adjusted EBITDA to interest expense (11,627)
Page 10: Net debt to Adjusted EBITDA for the year ended December 31, 1998
Net debt:
Pro forma Senior Secured Credit Facility 90,655
Pro forma other long-term debt, including current portion 7,302
First Mortgage Notes 200,000
Less cash and cash equivalents (82)
-------
297,875
Adjusted EBITDA, as above 78,614
-------
3.8x
Page 10: Net debt to Adjusted EBITDA for the three months ended March 31, 1999
Net debt:
Pro forma Senior Secured Credit Facility 114,879
Pro forma other long-term debt, including current portion 7,276
First Mortgage Notes 200,000
Less cash and cash equivalents (82)
-------
322,073
Adjusted EBITDA, as above (3,845)
-------
(83.8)x
</TABLE>
<PAGE>
Page 23: Ratio of earnings to fixed charges for Royster-Clark, Inc.
<TABLE>
<CAPTION>
Three Months
Year Ending December 31, Ending March 31
----------------------------------------- ---------------
1994 1995 1996 1997 1998 1998 1999
----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Eearnings
Income from continuing
operations before taxes 386 4,265 6,440 7,110 3,054 860 631
Income (loss) from equity
investees -- -- -- -- -- -- --
Fixed charges 5,179 5,916 5,596 5,330 6,509 1,408 1,921
----- ----- ----- ----- ----- ----- -----
5,565 10,181 12,036 12,440 9,563 2,268 2,552
----- ----- ----- ----- ----- ----- -----
Interest expensed 4,370 5,306 5,004 4,672 5,489 1,219 1,607
Interest capitalized -- -- -- -- -- -- --
Amortized premiums,
discounts, capital expenses
related to indebtedness 230 62 61 62 226 8 16
Estimated interest within
rental expense 579 548 531 596 794 181 298
----- ----- ----- ----- ----- ----- -----
5,179 5,916 5,596 5,330 6,509 1,408 1,921
----- ----- ----- ----- ----- ----- -----
1.07x 1.72x 2.15x 2.33x 1.47x 1.61x 1.33x
===== ====== ====== ====== ===== ===== =====
</TABLE>
Page 24: Ratio of earnings to fixed charges for IMC Agribusiness
<TABLE>
<CAPTION>
Three Months
Year Ending December 31, Ending March 31
----------------------------------------- ---------------
1994 1995 1996 1997 1998 1998 1999
----- ----- ----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Earnings
Income from continuing
operations before taxes 20,772 40,600 22,600 31,001 9,408 (10,142) (18,100)
Income (loss) from equity
investees 1,200 500 200 661 (1,897) 295 (100)
Fixed charges 9,269 14,099 15,343 16,117 16,467 3,650 3,837
------ ------ ------ ------ ------ ------ -------
31,241 55,199 38,143 47,779 23,978 (6,197) (14,363)
------ ------ ------ ------ ------ ------ -------
Interest expensed 7,331 11,900 13,100 13,327 13,245 2,917 3,134
Interest capitalized -- -- -- -- -- -- --
Amortized premiums,
discounts, capital expenses
related to indebtedness -- -- -- -- -- -- --
Estimated interest within
rental expense 1,938 2,199 2,243 2,790 3,222 733 703
------ ------ ------ ------ ------ ------ -------
9,269 14,099 15,343 16,117 16,467 3,650 3,837
------ ------ ------ ------ ------ ------ -------
3.37x 3.92x 2.49x 2.96x 1.46x (1.70)x (3.74)x
====== ====== ====== ====== ====== ====== =======
</TABLE>
EXHIBIT 21.01
Subsidiaries of the Company and the Additional Registrants
Registrant State of Incorporation
- ---------- ----------------------
1. Royster-Clark Group, Inc. Delaware
Subsidiaries:
Royster-Clark, Inc. Delaware
2. Royster-Clark, Inc. Delaware
Subsidiaries:
Royster-Clark AgriBusiness, Inc. Delaware
Royster-Clark Nitrogen, Inc. Delaware
Royster-Clark Hutson, Inc. Kentucky
Royster-Clark Realty LLC Delaware
3. Royster-Clark AgriBusiness, Inc. Delaware
Subsidiaries:
Royster-Clark Resources LLC Delaware
Royster-Clark AgriBusiness Realty LLC Delaware
4. Royster-Clark Nitrogen, Inc. Delaware
Subsidiaries:
Royster-Clark Nitrogen Realty LLC Delaware
5. Royster-Clark Hutson, Inc. Kentucky
Subsidiaries:
Royster-Clark Hutson's Realty LLC Delaware
EXHIBIT 99.01
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
_________, 1999, UNLESS EXTENDED (THE "EXPIRATION DATE"). TENDERS OF EXISTING
NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO 5:00 P.M. ON THE EXPIRATION DATE
ROYSTER-CLARK, INC.
LETTER OF TRANSMITTAL
10 1/4% FIRST MORTGAGE NOTES DUE 2009
TO: UNITED STATES TRUST COMPANY OF NEW YORK
THE EXCHANGE AGENT
<TABLE>
<S> <C>
By Mail: By Hand before 4:30 p.m.:
United States Trust Company of New York United States Trust Company of New York
P.O. Box 844 Cooper Station 111 Broadway
New York, New York 10276-0844 Lower Level
Attention: Corporate Trust Services New York, New York 10006
Attention: Corporate Trust Services
By Overnight Courier and on the Expiration
Date only by Hand after 4:30 p.m.: By Facsimile:
United States Trust Company of New York (212) 420-6211
770 Broadway, 13th Floor
New York, New York 10003 Confirm by Telephone:
Attention: Corporate Trust Services (800) 548-6565
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH ABOVE OR
TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE
LISTED ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS
ACCOMPANYING THIS LETTER OF TRANSMITTAL SHOULD BE READ CARE-
FULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.
HOLDERS WHO WISH TO BE ELIGIBLE TO RECEIVE NEW NOTES FOR THEIR EXISTING NOTES
PURSUANT TO THE EXCHANGE OFFER MUST VALIDLY TENDER (AND NOT WITHDRAW)
THEIR EXISTING NOTES TO THE EXCHANGE AGENT PRIOR TO THE EXPIRATION DATE.
The undersigned acknowledges receipt of the Prospectus dated ______________,
1999 (the "Prospectus") of Royster-Clark, Inc. (the "Company") and this Letter
of Transmittal (the "Letter of Transmittal"), which together constitute the
Company's Offer to Exchange (the "Exchange Offer") $200,000,000 principal amount
of its 10 1/4% First Mortgage Notes due 2009 (the "Exchange First Mortgage
Notes"), which have been registered under the Securities Act of 1933, as amended
(the "Securities Act"), pursuant to a Registration Statement of which the
Prospectus is a part, for each $1,000 principal amount of its outstanding
10 1/4% First Mortgage Notes due 2009 (the "Existing First Mortgage Notes"), of
which $200,000,000 principal amount is outstanding, upon the terms and
conditions set forth in the Prospectus and this Letter of Transmittal. Other
capitalized terms used but not defined herein have the meaning given to them in
the Prospectus.
For each Existing First Mortgage Note accepted for exchange, the holder of
such Existing First Mortgage Note will receive an Exchange First Mortgage Note
having a principal amount equal to that of the surrendered Existing First
Mortgage Note. Interest on the Exchange First Mortgage Notes will accrue from
the last interest payment date on which interest was paid on the Existing First
Mortgage Notes surrendered in exchange therefor. Holders of Existing First
Mortgage Notes accepted for exchange will be deemed to have waived the right to
receive any other payments or accrued interest on the Existing First Mortgage
Notes. The Company reserves the right, at any time or from time to time, to
extend the Exchange Offer at its discretion, in which event the term "Expiration
Date" shall mean the latest time and date to which the Exchange Offer is
extended. The Company shall notify holders of the Existing First Mortgage Notes
of any extension by means of a press release or other public announcement prior
to 9:00 A.M., New York City time, on the next business day after the previously
scheduled Expiration Date.
<PAGE>
This Letter of Transmittal is to be used by Holders if: (i) certificates
representing Existing First Mortgage Notes are to be physically delivered to the
Exchange Agent herewith by Holders; (ii) tender of Existing First Mortgage Notes
is to be made by book-entry transfer to the Exchange Agent's account at The
Depository Trust Company ("DTC"), pursuant to the procedures set forth in the
Prospectus under "The Exchange Offer - Procedures for Tendering Existing First
Mortgage Notes" by any financial institution that is a participant in DTC and
whose name appears on a security position listing as the owner of Existing First
Mortgage Notes or (iii) tender of Existing First Mortgage Notes is to be made
according to the guaranteed delivery procedures set forth in the Prospectus
under "The Exchange Offer -- Guaranteed Delivery Procedures." DELIVERY OF
DOCUMENTS TO DTC DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.
The term "Holder" with respect to the Exchange Offer means any person: (i)
in whose name Existing First Mortgage Notes are registered on the books of the
Company or any other person who has obtained a properly completed bond power
from the registered Holder; or (ii) whose Existing First Mortgage Notes are held
of record by DTC (or its nominee) who desires to deliver such Existing First
Mortgage Notes by book-entry transfer at DTC. The undersigned has completed,
executed and delivered this Letter of Transmittal to indicate the action the
undersigned desires to take with respect to the Exchange Offer.
Holders of Existing First Mortgage Notes that are tendering by book-entry
transfer to the Exchange Agent's account at DTC can execute the tender through
the DTC Automated Tender Offer Program ("ATOP"), for which the transaction will
be eligible. DTC participants that are accepting the Exchange Offer must
transmit their acceptance to DTC, which will verify the acceptance and execute a
book-entry delivery to the Exchange Agent's DTC account. DTC will then send an
Agent's Message to the Exchange Agent for its acceptance. DTC participants may
also accept the Exchange Offer prior to the Expiration Date by submitting a
Notice of Guaranteed Delivery or Agent's Message relating thereto as described
herein under Instruction 1, "Guaranteed Delivery Procedures."
The instructions included with this Letter of Transmittal must be followed.
Questions and requests for assistance or for additional copies of the
Prospectus, this Letter of Transmittal or the Notice of Guaranteed Delivery may
be directed to the Exchange Agent. See Instruction 11 herein.
<PAGE>
HOLDERS WHO WISH TO ACCEPT THE EXCHANGE OFFER AND TENDER THEIR
EXISTING FIRST MORTGAGE NOTES MUST COMPLETE THIS LETTER OF TRANSMITTAL IN ITS
ENTIRETY. PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE CHECKING ANY BOX BELOW
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
DESCRIPTION OF 10 1/4% FIRST MORTGAGE NOTES DUE 2009 (EXISTING FIRST MORTGAGE NOTES)
- -----------------------------------------------------------------------------------------------------------------------------
Principal Amount
Name(s) and Address(es) of Registered Holder(s) Certificate Aggregate Principal Amount Tendered (If Less
(Please fill in, if blank) Number(s)* Represented by Certificate(s) Than All)**
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
--------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------------
* Need not be completed by Holders tendering by book-entry transfer.
** Unless indicated in the column labeled "Principal Amount Tendered," any
tendering Holder of Existing First Mortgage Notes will be deemed to have
tendered the entire aggregate principal amount represented by the column
labeled "Aggregate Principal Amount Represented by Certificate(s)." If the
space provided above is inadequate, list the certificate numbers and
principal amounts on a separate signed schedule and affix the list to this
Letter of Transmittal.
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
The minimum permitted tender is $1,000 in principal amount of Existing
First Mortgage Notes. All other tenders must be integral multiples of $1,000.
<PAGE>
- ------------------------------------- -----------------------------------
SPECIAL ISSUANCE INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 4, 5, AND 6) (SEE INSTRUCTIONS 1, 5, 6 AND 7)
To be completed ONLY if To be completed ONLY if
certificates for Exchange First certificates for Existing First
Mortgage Notes issued in exchange Mortgage Notes in a principal amount
for Existing First Mortgage Notes not tendered or not accepted for
accepted for exchange, or Existing exchange, are to be sent to someone
First Mortgage Notes not tendered other than the undersigned, or to
or not accepted for exchange, are the undersigned at an address other
to be issued in the name of someone than that shown above.
than the undersigned or, if such
other Existing First Mortgage Notes
are being tendered by book-entry
transfer, to someone other than DTC
or to another account maintained by DTC.
Issue certificate(s) to: Mail certificate(s) to:
Name: Name:
------------------------------- -----------------------------
Address: Address:
---------------------------- --------------------------
- ------------------------------------- -----------------------------------
(Include Zip Code) (Include Zip Code)
- --------------------------------------- -----------------------------------
(Taxpayer Identification (Taxpayer Identification
or Social Security No.) or Social Security No.)
DTC Acct. No.
--------------------------
CHECK HERE IF TENDERED EXISTING FIRST MORTGAGE NOTES ARE BEING DELIVERED BY
BOOK-ENTRY TRANSFER TO THE EXCHANGE AGENT'S ACCOUNT AT DTC AND COMPLETE THE
FOLLOWING:
Name of Tendering Institution:
------------------------------------------------
DTC Book-Entry Account No.:
----------------------------------------------------
Transaction Code No.:
----------------------------------------------------------
CHECK HERE IF TENDERED EXISTING FIRST MORTGAGE NOTES ARE BEING DELIVERED
PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE
AGENT AND COMPLETE THE FOLLOWING:
Name(s) of Registered Holder(s):
-----------------------------------------------
Window Ticket Number (if any):
------------------------------------------------
Date of Execution of Notice of Guaranteed Delivery:
---------------------------
IF DELIVERED BY BOOK-ENTRY TRANSFER, PLEASE COMPLETE THE FOLLOWING:
Account Number: Transaction Code Number:
----------------- ------------------
CHECK HERE IF YOU ARE A BROKER-DEALER AND ARE RECEIVING NEW FIRST MORTGAGE NOTES
FOR YOUR OWN ACCOUNT IN EXCHANGE FOR EXISTING FIRST MORTGAGE NOTES THAT WERE
ACQUIRED AS A RESULT OF MARKET-MAKING ACTIVITIES OR OTHER TRADING ACTIVITIES.
Name:
--------------------------------------------
Address:
-----------------------------------------
<PAGE>
Ladies and Gentlemen:
Subject to the terms and conditions of the Exchange Offer, the undersigned
hereby tenders to the Company the principal amount of Existing First Mortgage
Notes indicated above. Subject to and effective upon the acceptance for exchange
of the principal amount of Existing First Mortgage Notes tendered in accordance
with this Letter of Transmittal, the undersigned sells, assigns and transfers
to, or upon the order of, the Company all right, title and interest in and to
the Existing First Mortgage Notes tendered hereby. The undersigned hereby
irrevocably constitutes and appoints the Exchange Agent its agent and
attorney-in-fact (with full knowledge that the Exchange Agent also acts as the
agent of the Company and as Trustee under the Indenture for the Existing First
Mortgage Notes and Exchange First Mortgage Notes) with respect to the tendered
Existing First Mortgage Notes with full power of substitution to (i) deliver
certificates for such Existing First Mortgage Notes to the Company, or transfer
ownership of such Existing First Mortgage Notes on the account books maintained
by DTC and deliver all accompanying evidence of transfer and authenticity to, or
upon the order of, the Company and (ii) present such Existing First Mortgage
Notes for transfer on the books of the Company and receive all benefits and
otherwise exercise all rights of beneficial ownership of such Existing First
Mortgage Notes, all in accordance with the terms and subject to the conditions
of the Exchange Offer. The power of attorney granted in this paragraph shall be
deemed irrevocable and coupled with an interest.
The undersigned hereby represents and warrants that the undersigned has
full power and authority to tender, sell, assign and transfer the Existing First
Mortgage Notes tendered hereby and that the Company will acquire good and
unencumbered title thereto, free and clear of all liens, restrictions, charges
and encumbrances and not subject to any adverse claim, when the same are
acquired by the Company. The undersigned hereby further represents that any
Exchange First Mortgage Notes acquired in exchange for Existing First Mortgage
Notes tendered hereby will have been acquired in the ordinary course of business
of the Holder receiving such Exchange First Mortgage Notes, whether or not such
person is the Holder, that neither the Holder nor any such other person has any
arrangement or understanding with any person to participate in the distribution
of such Exchange First Mortgage Notes and that neither the Holder nor any such
other person is an "affiliate," as defined in Rule 405 under the Securities Act,
of the Company or any of its subsidiaries.
The undersigned also acknowledges that this Exchange Offer is being made in
reliance on an interpretation by the staff of the Securities and Exchange
Commission (the "SEC") that the Exchange First Mortgage Notes issued in exchange
for the Existing First Mortgage Notes pursuant to the Exchange Offer may be
offered for resale, resold and otherwise transferred by holders thereof (other
than any such holder that is an "affiliate" of the Company within the meaning of
Rule 405 under the Securities Act), without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that such
Exchange First Mortgage Notes are acquired in the ordinary course of such
holders' business and such holders have no arrangements or understandings with
any person to participate in the distribution of such Exchange First Mortgage
Notes. If the undersigned is not a broker-dealer, the undersigned represents
that it is not engaged in, and does not intend to engage in, a distribution of
Exchange First Mortgage Notes. If the undersigned is a broker-dealer that will
receive Exchange First Mortgage Notes for its own account in exchange for
Existing First Mortgage Notes that were acquired as a result of market-making
activities or other trading activities, it acknowledges that it will deliver a
prospectus in connection with any resale of such Exchange First Mortgage Notes;
however, by so acknowledging and by delivering a prospectus, the undersigned
will not be deemed to admit that it is an "underwriter" within the meaning of
the Securities Act.
The undersigned will, upon request, execute and deliver any additional
documents deemed by the Exchange Agent or the Company to be necessary or
desirable to complete the assignment, transfer and purchase of the Existing
First Mortgage Notes tendered hereby. All authority conferred or agreed to be
conferred by this Letter of Transmittal shall survive the death, incapacity or
dissolution of the undersigned and every obligation of the undersigned under
this Letter of Transmittal shall be binding upon the undersigned's heirs,
personal representatives, successors and assigns, trustees in bankruptcy or
other legal representatives of the undersigned. This tender may be withdrawn
only in accordance with the procedures set forth in "The Exchange Offer -
Withdrawal Rights" section of the Prospectus.
For purposes of the Exchange Offer, the Company shall be deemed to have
accepted validly tendered Existing First Mortgage Notes when, as and if the
Company has given oral or written notice thereof to the Exchange Agent.
If any tendered Existing First Mortgage Notes are not accepted for exchange
pursuant to the Exchange Offer for any reason, certificates for any such
unaccepted Existing First Mortgage Notes will be returned (except as noted below
with respect to tenders
<PAGE>
through DTC), without expense, to the undersigned at the address shown
below or at such different address as may be indicated under "Special Delivery
Instructions" as promptly as practicable after the Expiration Date.
The undersigned understands that tenders of Existing First Mortgage Notes
pursuant to the procedures described under the caption "The Exchange Offer -
Procedures for Tendering Existing First Mortgage Notes" in the Prospectus and in
the instructions hereto will constitute a binding agreement between the
undersigned and the Company upon the terms and subject to the conditions of the
Exchange Offer.
Unless otherwise indicated under "Special Issuance Instructions," please
issue the certificates representing the Exchange First Mortgage Notes issued in
exchange for the Existing First Mortgage Notes accepted for exchange and return
any Existing First Mortgage Notes not tendered or not accepted for exchange in
the name(s) of the undersigned (or in either such event in the case of the
Existing First Mortgage Notes tendered through DTC, by credit to the
undersigned's account at DTC). Similarly, unless otherwise indicated under
"Special Delivery Instructions," please send the certificates representing the
Exchange First Mortgage Notes issued in exchange for the Existing First Mortgage
Notes accepted for exchange and any certificates for Existing First Mortgage
Notes not tendered or not accepted for exchange (and accompanying documents, as
appropriate) to the undersigned at the address shown below the undersigned's
signature(s), unless, in either event, tender is being made through DTC. In the
event that both "Special Issuance Instructions" and "Special Delivery
Instructions" are completed, please issue the certificates representing the
Exchange First Mortgage Notes issued in exchange for the Existing First Mortgage
Notes accepted for exchange and return any Existing First Mortgage Notes not
tendered or not accepted for exchange in the name(s) of, and send said
certificates to, the person(s) so indicated. The undersigned recognizes that the
Company has no obligation pursuant to the "Special Issuance Instructions" and
"Special Delivery Instructions" to transfer any Existing First Mortgage Notes
from the name of the registered Holder(s) thereof if the Company does not accept
for exchange any of the Existing First Mortgage Notes so tendered.
Holders of Existing First Mortgage Notes who wish to tender their Existing
First Mortgage Notes and (i) whose Existing First Mortgage Notes are not
immediately available or (ii) who cannot deliver their Existing First Mortgage
Notes, this Letter of Transmittal or any other documents required hereby to the
Exchange Agent, or cannot complete the procedure for book-entry transfer, prior
to the Expiration Date, may tender their Existing First Mortgage Notes according
to the guaranteed delivery procedures set forth in the Prospectus under the
caption "The Exchange Offer - Guaranteed Delivery Procedures." See Instruction 1
regarding the completion of the Letter of Transmittal printed
below.
<PAGE>
SIGNATURE PAGE
PLEASE SIGN HERE WHETHER OR NOT
EXISTING FIRST MORTGAGE NOTES ARE BEING PHYSICALLY TENDERED HEREBY
X , 1999
------------------------------------------------------- -------------
Date
X , 1999
------------------------------------------------------- -------------
Signature(s) of Registered Holder(s) Date
or Authorized Signatory
Area Code and Telephone Number:
------------------
The above lines must be signed by the registered Holder(s) of Existing
First Mortgage Notes as their name(s) appear(s) on the Existing First Mortgage
Notes or, if the Existing First Mortgage Notes are tendered by a participant in
DTC, as such participant's name appears on a security position listing as the
owner of Existing First Mortgage Notes, or by a person or persons authorized to
become registered Holder(s) by a properly completed bond power from the
registered Holder(s), a copy of which must be transmitted with this Letter of
Transmittal. If Existing First Mortgage Notes to which this Letter of
Transmittal relates are held of record by two or more joint Holders, then all
such holders must sign this Letter of Transmittal. If signature is by a trustee,
executor, administrator, guardian, attorney-in-fact, officer of a corporation or
other person acting in a fiduciary or representative capacity, such person must
(i) set forth his or her full title below and (ii) unless waived by the Company,
submit evidence satisfactory to the Company of such person's authority to act.
See Instruction 4 regarding the completion of this Letter of Transmittal printed
below.
Name(s):
----------------------------------------------------------------------
(Please Print)
Capacity:
----------------------------------------------------------------------
(Title)
Address:
----------------------------------------------------------------------
(Include Zip Code)
Signature(s) Guaranteed by an Eligible Institution (if required by Instruction
4):
------------------------------------------------------------
(Authorized Signature)
-------------------------------------------------------------
(Title)
-------------------------------------------------------------
(Name of Firm)
Dated: , 1999
-------------------------
<PAGE>
INSTRUCTIONS
Forming Part of the Terms and Conditions
of the Exchange Offer
1. Delivery of this Letter of Transmittal and Existing First Mortgage
Notes; Guaranteed Delivery Procedures. This Letter of Transmittal is to be
completed by Holders, either if certificates are to be forwarded herewith or if
tenders are to be made pursuant to the procedures for delivery by book-entry
transfer set forth in "The Exchange Offer - Book-Entry Transfer" section of the
Prospectus. Certificates for all physically tendered Existing First Mortgage
Notes, or Book-Entry Confirmation, as the case may be, as well as a properly
completed and duly executed Letter of Transmittal (or manually signed facsimile
hereof) and any other documents required by this Letter of Transmittal, must be
received by the Exchange Agent at one of the addresses set forth herein on or
prior to the Expiration Date, or the tendering Holder must comply with the
guaranteed delivery procedures set forth below. Existing First Mortgage Notes
tendered hereby must be in denominations of principal amount of $1,000 and any
integral multiple thereof.
Holders whose certificates for Existing First Mortgage Notes are not
immediately available or who cannot deliver their certificates and all other
required documents to the Exchange Agent on or prior to the Expiration Date, or
who cannot complete the procedure for book-entry transfer on a timely basis, may
tender their Existing First Mortgage Notes pursuant to the guaranteed delivery
procedures set forth in "The Exchange Offer - Guaranteed Delivery Procedures"
section of the Prospectus. Pursuant to such procedures, (i) such tender must be
made through an Eligible Institution (as defined in Instruction 4 below), (ii)
prior to the Expiration Date, the Exchange Agent must receive from such Eligible
Institution a properly completed and duly executed Letter of Transmittal (or
facsimile thereof) and Notice of Guaranteed Delivery (by facsimile transmission,
mail or hand delivery), substantially in the form provided by the Company,
setting forth the name and address of the Holder of Existing First Mortgage
Notes and the amount of Existing First Mortgage Notes tendered, stating that the
tender is being made thereby and guaranteeing that, within five New York Stock
Exchange ("NYSE") trading days after the date of execution of the Notice of
Guaranteed Delivery, the certificates for all physically tendered Existing First
Mortgage Notes, or a Book-Entry Confirmation, and any other documents required
by this Letter of Transmittal will be deposited by the Eligible Institution with
the Exchange Agent, and (iii) the certificates for all physically tendered
Existing First Mortgage Notes, in proper form for transfer, or a Book-Entry
Confirmation, as the case may be, and all other documents required by this
Letter of Transmittal, are received by the Exchange Agent within five NYSE
trading days after the date of execution of the Notice of Guaranteed Delivery.
THE METHOD OF DELIVERY OF THIS LETTER OF TRANSMITTAL, THE EXISTING FIRST
MORTGAGE NOTES AND ALL OTHER REQUIRED DOCUMENTS IS AT THE ELECTION AND RISK OF
THE TENDERING HOLDERS, BUT THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY
RECEIVED OR CONFIRMED BY THE EXCHANGE AGENT. IF EXISTING FIRST MORTGAGE NOTES
ARE SENT BY MAIL, IT IS SUGGESTED THAT THE MAILING BE MADE SUFFICIENTLY IN
ADVANCE OF THE EXPIRATION DATE TO PERMIT THE DELIVERY TO THE EXCHANGE AGENT
PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.
See "The Exchange Offer" section in the Prospectus.
2. Tender by Holder. Only a Holder of Existing First Mortgage Notes may
tender such Existing First Mortgage Notes in the Exchange Offer. Any beneficial
holder of Existing First Mortgage Notes who is not the registered Holder and who
wishes to tender should arrange with the registered Holder to execute and
deliver this Letter of Transmittal on his or her behalf or must, prior to
completing and executing this Letter of Transmittal and delivering his or her
Existing First Mortgage Notes, either make appropriate arrangements to register
ownership of the Existing First Mortgage Notes in such holder's name or obtain a
properly completed bond power from the registered Holder.
3. Partial Tenders. Tenders of Existing First Mortgage Notes will be
accepted only in integral multiples of $1,000. If less than the entire principal
amount of any Existing First Mortgage Notes is tendered, the tendering Holder
should fill in the principal amount tendered in the fourth column of the box
entitled "Description of 10 1/4% First Mortgage Notes due 2009 (Existing First
Mortgage Notes)" above. The entire principal amount of Existing First Mortgage
Notes delivered to the Exchange Agent will be deemed to have been tendered
unless otherwise indicated. If the entire principal amount of a Holder's
Existing First Mortgage Notes is
<PAGE>
not tendered, then Existing First Mortgage Notes for the principal amount of
Existing First Mortgage Notes not tendered and a certificate or certificates
representing Exchange First Mortgage Notes issued in exchange for any Existing
First Mortgage Notes accepted for exchange will be sent to the Holder at his or
her registered address (unless a different address is provided in the
appropriate box on this Letter of Transmittal) promptly after the Existing First
Mortgage Notes are accepted for exchange.
4. Signatures on this Letter of Transmittal; Endorsements and Powers of
Attorney; Guarantee of Signatures. If this Letter of Transmittal is signed by
the registered Holder of the Existing First Mortgage Notes tendered hereby, the
signature must correspond exactly with the name as written on the face of the
certificates without any change whatsoever.
If any tendered Existing First Mortgage Notes are owned of record by two or
more joint owners, all such owners must sign this Letter of Transmittal.
If any tendered Existing First Mortgage Notes are registered in different
names on several certificates, it will be necessary to complete, sign and submit
as many separate copies of this Letter of Transmittal as there are different
registrations of certificates.
When this Letter of Transmittal is signed by the registered Holder(s) of
the Existing First Mortgage Notes specified herein and tendered hereby, no
endorsements of certificates or separate bond powers are required. If, however,
the Exchange First Mortgage Notes are to be issued, or any Existing First
Mortgage Notes not tendered or not accepted for exchange are to be reissued, to
a person or persons other than the registered Holder(s), then endorsements of
any certificate(s) transmitted hereby or separate bond powers are required.
Signatures on such certificate(s) or power(s) must be guaranteed by an Eligible
Institution.
If this Letter of Transmittal is signed by a person other than the
registered Holder(s) of any certificate(s) specified herein, such certificate(s)
must be endorsed or accompanied by appropriate bond powers or powers of
attorney, in each case signed exactly as the name or names on the registered
Holder(s) appear(s) on the certificate(s) and signatures on such certificate(s)
or power(s) must be guaranteed by an Eligible Institution.
If this Letter of Transmittal or any certificates, bond powers or powers of
attorney are signed by trustees, executors, administrators, guardians,
attorneys-in-fact, officers of corporations or others acting in a fiduciary or
representative capacity, such persons should so indicate when signing and,
unless waived by the Company, proper evidence satisfactory to the Company of
their authority to so act must be submitted.
Endorsements on certificates for Existing First Mortgage Notes or
signatures on bond powers or powers of attorney required by this Instruction 4
must be guaranteed by a member of one of the following recognized signature
guarantee programs (an "Eligible Institution"); (1) The Securities Transfer
Agents Medallion Program (STAMP), (2) The New York Stock Exchange Medallion
Signature Program (MSF), or (3) The Stock Exchange Medallion Program (SEMP).
Signatures on this Letter of Transmittal must be guaranteed by an Eligible
Institution unless the Existing First Mortgage Notes are tendered (i) by a
registered Holder of Existing First Mortgage Notes (which term, for purposes of
the Exchange Offer, includes any DTC participant whose name appears on a
security position listing as the Holder of such Existing First Mortgage Notes)
who has not completed the box entitled "Special Issuance Instructions" or
"Special Delivery Instructions" on this Letter of Transmittal, or (ii) for the
account of an Eligible Institution.
5. Special Issuance and Delivery Instructions. Tendering Holders should
indicate, in the applicable box or boxes, the name and address to which Exchange
First Mortgage Notes or substitute Existing First Mortgage Notes not tendered or
not accepted for exchange are to be issued or sent, if different from the name
and address of the person signing this Letter of Transmittal (or in the case of
a tender of Existing First Mortgage Notes through DTC, if different from DTC).
In the case of issuance in a different name, the taxpayer identification or
social security number of the person named must also be indicated. Holders
tendering Existing First Mortgage Notes by book-entry transfer may request that
Exchange First Mortgage Notes issued in exchange for Existing First Mortgage
Notes accepted for exchange or Existing First Mortgage Notes not tendered or
accepted for exchange be credited to such account maintained at DTC as such
Holder may designate hereon. If no such instructions are given, such Exchange
First Mortgage Notes or Existing First Mortgage Notes not exchanged will be
returned to the name and address of the person signing this Letter of
Transmittal.
<PAGE>
6. Tax Identification Number. Federal income tax law requires that a Holder
whose Existing First Mortgage Notes are accepted for exchange must provide the
Company (as payer ) with his, her or its correct Taxpayer Identification Number
("TIN"), which, in the case of an exchanging Holder who is an individual, is his
or her social security number. If the Company is not provided with the correct
TIN or an adequate basis for exemption, such Holder may be subject to a $50
penalty imposed by the Internal Revenue Service (the "IRS"), and payments made
with respect to the Exchange First Mortgage Notes or Exchange Offer may be
subject to backup withholding at a 31% rate. If withholding results in an
overpayment of taxes, a refund may be obtained. Exempt Holders (including, among
others, all corporations and certain foreign individuals) are not subject to
these backup withholding and reporting requirements. See the enclosed
"Guidelines for Certification of Taxpayer Identification Number on Substitute
Form W-9."
To prevent backup withholding, each exchanging Holder must provide his, her
or its correct TIN by completing the Substitute Form W-9 included below in this
Letter of Transmittal, certifying that the TIN provided is correct (or that such
Holder is awaiting a TIN) and that the Holder is exempt from backup withholding
because (i) the Holder has not been notified by the IRS that he, she or it is
subject to backup withholding as a result of a failure to report all interest or
dividends, or (ii) the IRS has notified the Holder that he, she or it is no
longer subject to backup withholding. In order to satisfy the Company that a
foreign individual qualifies as an exempt recipient, such Holder must submit a
statement signed under penalty of perjury attesting to such exempt status. Such
statements may be obtained from the Exchange Agent. If the Existing First
Mortgage Notes are in more than one name or are not in the name of the actual
owner, consult the substitute Form W-9 for information on which TIN to report.
If you do not provide your TIN to the Company within 60 days, backup withholding
may begin and continue until you furnish your TIN to the Company.
7. Transfer Taxes. The Company will pay all transfer taxes, if any,
applicable to the exchange of Existing First Mortgage Notes pursuant to the
Exchange Offer. If, however, certificates representing Exchange First Mortgage
Notes or Existing First Mortgage Notes not tendered or accepted for exchange are
to be delivered to, or are to be registered or issued in the name of, any
person(s) other than the registered Holder(s) of the Existing First Mortgage
Notes tendered hereby, or if tendered Existing First Mortgage Notes are
registered in the name of any person other than the person signing this Letter
of Transmittal, or if a transfer tax is imposed for any reason other than the
exchange of Existing First Mortgage Notes pursuant to the Exchange Offer, then
the amount of any such transfer taxes (whether imposed on the registered
Holder(s) or on any other person(s)) will be payable by the tendering Holder(s).
If satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted herewith, the amount of such transfer taxes will be billed directly to
such tendering Holder(s).
Except as provided in this Instruction 7, it will not be necessary for
transfer tax stamps to be affixed to the Existing First Mortgage Notes listed in
this Letter of Transmittal.
8. Waiver of Conditions. The Company reserves the absolute right to amend,
waive or modify conditions to the Exchange Offer in the case of any Existing
First Mortgage Notes tendered (and to refuse to do so).
9. No Conditional Transfers. No alternative, conditional, irregular or
contingent tenders will be accepted. All tendering Holders of Existing First
Mortgage Notes, by execution of this Letter of Transmittal, shall waive any
right to receive notice of the acceptance of their Existing First Mortgage Notes
for exchange.
Neither the Company, the Exchange Agent nor any other person is obligated
to give notice of any defect or irregularity with respect to any tender of
Existing First Mortgage Notes, nor shall any of them incur any liability for
failure to give any such notice.
10. Mutilated, Lost, Stolen or Destroyed Existing Notes. Any tendering
Holder whose Existing First Mortgage Notes have been mutilated, lost, stolen or
destroyed should contact the Exchange Agent at one of the addresses indicated
herein for further instructions.
11. Requests for Assistance or Additional Copies. Questions and requests
for assistance for additional copies of the Prospectus, this Letter of
Transmittal, the Notice of Guaranteed Delivery or the "Guidelines for
Certification of Taxpayer Identification Number on Substitute Form W-9 may be
directed to the Exchange Agent at one of the addresses specified in the
Prospectus.
<PAGE>
(DO NOT WRITE IN THE SPACE BELOW)
Account Number: Transaction Code Number:
----------------- ----------------
Certificate Existing First Mortgage Existing First Mortgage
Surrendered Notes Tendered Notes Accepted
- ------------------------ ------------------------ ----------------------
- ------------------------ ------------------------ ----------------------
- ------------------------ ------------------------ ----------------------
- ------------------------ ------------------------ ----------------------
Delivery Prepared by:
----------------------------------------
Checked by:
--------------------------------------------------
Date:
--------------------------------------------------
<PAGE>
PAYER'S NAME: ROYSTER-CLARK, INC.
- --------------------------------------------------------------------------------
Name (if joint names, list first and circle the name
of the person or entity whose number you enter in Part
1 below. See instructions if your name has changed.)
SUBSTITUTE
FORM W-9
Department of the
Treasury
Internal Revenue
Service
Payer's Request for
TIN
------------------------------------------------------
Address
----------------------------------------------
City, state and ZIP code
-----------------------------
List account number(s) here (optional)
------------------------------------------------------
Part 1 PLEASE PROVIDE YOUR TAXPAYER
IDENTIFICATION NUMBER ("TIN") IN THE Social Security
BOX AT RIGHT AND CERTIFY BY SIGNING number or TIN
AND DATING BELOW.
------------------------------------------------------
Part 2 Check the box if you are not subject to
backup withholding under the provisions of section
3408(a)(1)(c) of the Internal Revenue Code because
(1) you have not been notified that you are
subject to backup withholding as a result of
failure to report all interest or dividends or (2)
the Internal Revenue Service has notified you that
you are no longer subject to backup withholding .
------------------------------------------------------
CERTIFICATION - UNDER THE PENALTIES OF Part 3
PERJURY, I CERTIFY THAT THE INFORMATION
PROVIDED ON THIS FORM IS TRUE, CORRECT
AND COMPLETE. AWAITING TIN
Signature Date
- --------------------------------------------------------------------------------
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP
WITHHOLDING OF 31% OF ANY PAYMENTS MADE TO YOU PURSUANT TO THE EXCHANGE
OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF
TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL
DETAILS.
EXHIBIT 99.02
NOTICE OF GUARANTEED DELIVERY
FOR
10 1/4% FIRST MORTGAGE NOTES DUE 2009
OF
ROYSTER-CLARK, INC.
As set forth in the Prospectus dated _____________, 1999 (the "Prospectus")
of Royster-Clark, Inc. (the "Company") and in the accompanying Letter of
Transmittal (the "Letter of Transmittal"), this form or one substantially
equivalent hereto must be used to accept the Company's offer to exchange (the
"Exchange Offer") all of its outstanding 10 1/4% First Mortgage Notes due 2009
(the "Existing First Mortgage Notes") for its 10 1/4% First Mortgage Notes due
2009 which have been registered under the Securities Act of 1933, as amended, if
certificates for the Existing First Mortgage Notes are not immediately available
or if the Existing First Mortgage Notes, the Letter of Transmittal or any other
documents required thereby cannot be delivered to the Exchange Agent, or the
procedure for book-entry transfer cannot be completed, prior to 5:00 P.M., New
York City time, on the Expiration Date (as defined below). This form may be
delivered by an Eligible Institution by hand or transmitted by facsimile
transmission, overnight courier or mail to the Exchange Agent as set forth
below. Capitalized terms used but not defined herein have the meaning given to
them in the Prospectus.
THE EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON
_____________, 1999, UNLESS THE OFFER IS EXTENDED (THE "EXPIRATION DATE").
TENDERS OF EXISTING FIRST MORTGAGE NOTES MAY BE WITHDRAWN AT ANY TIME PRIOR TO
5:00 P.M. ON THE EXPIRATION DATE.
To: United States Trust Company of New York
The Exchange Agent
<TABLE>
<S> <C>
By Mail: By Hand before 4:30 p.m.:
United States Trust Company of New York United States Trust Company of New York
P.O. Box 844 Cooper Station 111 Broadway
New York, New York 10276-0844 Lower Level
Attention: Corporate Trust Services New York, New York 10006
By Overnight Courier and by Hand after 4:30 p.m.: By Facsimile:
United States Trust Company (212) 420-6211
of New York
770 Broadway, 13th Floor Confirm by Telephone:
New York, New York 10003 (800) 548-6565
Attention: Corporate Trust Services
</TABLE>
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS, OR TRANSMISSION OF INSTRUCTIONS
VIA FACSIMILE, OTHER THAN AS SET FORTH ABOVE DOES NOT CONSTITUTE A VALID
DELIVERY.
This form is not to be used to guarantee signatures. If a signature on the
Letter of Transmittal to be used to tender Existing First Mortgage Notes is
required to be guaranteed by an "Eligible Institution" under the instructions
thereto, such signature guarantee must appear in the space provided therefor in
the Letter of Transmittal.
<PAGE>
Ladies and Gentlemen:
The undersigned hereby tenders to the Company, upon the terms and subject
to the conditions set forth in the Prospectus and the Letter of Transmittal
(which together constitute the "Exchange Offer"), receipt of which are hereby
acknowledged, (fill in number of Existing First Mortgage Notes) Existing First
Mortgage Notes pursuant to the guaranteed delivery procedures set forth in the
Prospectus and Instruction 1 of the Letter of Transmittal.
The undersigned understands that tenders of Existing First Mortgage Notes
will be accepted only in principal amounts equal to $1,000 or integral multiples
thereof. The undersigned understands that tenders of Existing First Mortgage
Notes pursuant to the Exchange Offer may not be withdrawn after 5:00 p.m., New
York City time, on the Expiration Date.
All authority herein conferred or agreed to be conferred by this Notice of
Guaranteed Delivery shall survive the death, incapacity or dissolution of the
undersigned and every obligation of the undersigned under this Notice of
Guaranteed Delivery shall be binding upon the heirs, personal representatives,
executors, administrators, successors, assigns, trustees in bankruptcy and other
legal representatives of the undersigned.
NOTE: SIGNATURES MUST BE PROVIDED WHERE INDICATED BELOW.
Certificate No(s). for Existing First Name(s) of Record Holder(s):
Mortgage Notes (if available):
- --------------------------------------- -----------------------------------
- --------------------------------------- -----------------------------------
PLEASE PRINT OR TYPE
Principal Amount of Existing First
Mortgage Notes:
Address:
- --------------------------------------- -----------------------------------
-----------------------------------
If Existing First Mortgage Notes will Area code and Tel. No.
be delivered by book-entry transfer -------------
at the Depository Trust Company,
Depository Account No.:
Signature(s):
Dated: , 1999
---------------------
2
<PAGE>
This Notice of Guaranteed Delivery must be signed by the registered
holder(s) of Existing First Mortgage Notes exactly as its (their) name(s)
appear(s) on the certificate(s) for Existing First Mortgage Notes covered hereby
or on a DTC security position listing naming it (them) as the owner of such
Existing First Mortgage Notes, or by person(s) authorized to become registered
holder(s) by endorsements and documents transmitted with this Notice of
Guaranteed Delivery. If signature is by a trustee, executor, administrator,
guardian, attorney-in-fact, officer or other person acting in a fiduciary or
representative capacity, such person(s) must provide the following information:
Please print name(s), title(s) and address(es)
Name(s):
----------------------------------------------------------------------
Capacity(ies):
----------------------------------------------------------------
Address(es):
------------------------------------------------------------------
3
<PAGE>
GUARANTEE
(NOT TO BE USED FOR SIGNATURE GUARANTEE)
The undersigned, a member of one of the following recognized signature
guarantee programs (an "Eligible Institution"); (1) The Securities Transfer
Agents Medallion Program (STAMP), (2) The New York Stock Exchange Medallion
Signature Program (MSF), or (3) The Stock Exchange Medallion Program (SEMP),
hereby (a) represents that the tender of Existing First Mortgage Notes effected
hereby complies with Rule 14e-4 under the Exchange Act and (b) guarantees to
deliver to the Exchange Agent a certificate or certificates representing the
Existing First Mortgage Notes tendered hereby, in proper form for transfer (or a
confirmation of the book-entry transfer of such Existing First Mortgage Notes
into the Exchange Agent's account at DTC, pursuant to the procedures for
book-entry transfer set forth in the Prospectus), and a properly completed and
duly executed Letter of Transmittal (or manually signed facsimile thereof)
together with any required signatures and any other required documents, at one
of the Exchange Agent's addresses set forth above, within five New York Stock
Exchange trading days after the date of execution of this Notice of Guaranteed
Delivery.
THE UNDERSIGNED ACKNOWLEDGES THAT IT MUST DELIVER THE LETTER OF TRANSMITTAL
AND EXISTING FIRST MORTGAGE NOTES TENDERED HEREBY TO THE EXCHANGE AGENT WITHIN
THE TIME PERIOD SPECIFIED FORTH ABOVE AND THAT ANY FAILURE TO DO SO COULD RESULT
IN FINANCIAL LOSS TO THE UNDERSIGNED.
Name of Firm: -----------------------------------
- ----------------------------------- Authorized Signature
Address: Name:
-----------------------------
Please Print or Type
- ----------------------------------- Title:
Zip Code ----------------------------
Area Code
and Tel. No.: Date: , 1998
--------------------- -----------------------
NOTE: DO NOT SEND EXISTING FIRST MORTGAGE NOTES WITH THIS FORM; EXISTING FIRST
MORTGAGE NOTES SHOULD BE SENT WITH YOUR LETTER OF TRANSMITTAL SO THAT
THEY ARE RECEIVED BY THE EXCHANGE AGENT WITHIN THE TIME PERIOD SET FORTH
ABOVE.
