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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
SCHEDULE 13D
(AMENDMENT NO. 1)
Under the Securities Exchange Act of 1934
TransAmerican Waste Industries, Inc.
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(Name of Issuer)
Common Stock, par value $.001 per share
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(Title of Class of Securities)
89351V109
-----------------------------------
(CUSIP Number)
Robert K. Moses, Jr.
P.O. Box 27888
Houston, Texas 77227
(713) 621-6191
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
August 15, 1997
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1 (b)(3) or (4), check the following box [ ].
Page 1 of 6 Pages
Exhibit Index on Page 6
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SCHEDULE 13D
CUSIP NO. 89351V109 PAGE 2 OF 6 PAGES
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Robert K. Moses, Jr.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [ ]
(b) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
PF, OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) [ ]
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
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7 SOLE VOTING POWER
NUMBER OF
6,500,000
SHARES -------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
6,500,000
PERSON ------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
6,500,000
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [ ]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.9%
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14 TYPE OF REPORTING PERSON*
IN
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CUSIP NO. 89351V109 13D PAGE 3 OF 6 PAGES
ITEM 1. SECURITY AND ISSUER.
This Amendment No. 1 to statement on Schedule 13D (the "Amendment")
relates to the common stock, par value $.001 per share (the "Common Stock") of
TransAmerican Waste Industries, Inc., a Delaware corporation (the "Issuer").
The address of the principal executive offices of the Issuer is 10554 Tanner
Road, Houston, Texas 77041.
ITEM 2. IDENTITY AND BACKGROUND.
This Amendment is filed by Robert K. Moses, Jr., who is a natural
person and a citizen of the United States of America. The principal occupation
of Mr. Moses is serving as a business consultant; his business address is P.O.
Box 27888, Houston, Texas 77227.
During the past five years, Mr. Moses has not been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors).
Mr. Moses is not currently, and during the last five years has not been, party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction, resulting in a judgement, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws, or finding any violations with respect to such law.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
Since the filing of the statement on Schedule 13D, Mr. Moses has
purchased an additional 35,000 shares of Common Stock with personal funds in
the amount of $52,500 and has received 1,500,000 warrants to purchase Common
Stock (the "Warrants") in consideration of the guarantee of a loan to the
Issuer, as described below.
ITEM 4. PURPOSE OF TRANSACTION.
Since the filing of the statement on Schedule 13D, Mr. Moses has
acquired an additional 35,000 shares of Common Stock in the open market through
brokerage transactions. Mr. Moses purchases his shares of Common Stock for
investment purposes. Mr. Moses intends to review his investment in the Issuer
on a continuing basis and, depending upon the price of the Common Stock,
subsequent developments affecting the Issuer, the Issuer's business and
prospects, general stock market and economic conditions, tax considerations and
other factors deemed relevant, may decide to increase or decrease his current
investment in the Common Stock.
In consideration of a guaranty agreement entered into by Mr. Moses on
August 15, 1997, guaranteeing a loan in the original principal amount of
$5,000,000 from Southwest Bank of Texas, N.A. to the Issuer (the "Guaranty
Agreement"), Mr. Moses was granted the Warrants covering 1,500,000 shares of
Common Stock. The Warrant have an initial exercise price of $1.63 per share
and are exercisable on or before August 15, 1997.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
Based upon information set forth in the Issuer's Quarterly Report on
Form 10-Q for the quarterly period ended June 30, 1997, as filed with the
Securities and Exchange Commission, 43,627,50 shares of the Issuer's Common
Stock were considered issued and outstanding as of June 30, 1997.
Mr. Moses is deemed to be the beneficial owner of 6,500,000 shares of
Common Stock; this number includes 3,000,000 Warrants for shares of Common
Stock exercisable on or before January 31, 2002 and 1,500,000 Warrants for
shares of Common Stock exercisable on or before August 15, 2004. The shares of
Common Stock beneficially owned by Mr. Moses constitute approximately 14.9% of
the total issued and outstanding shares of Common Stock at September 9, 1997,
taking into account the shares acquirable upon exercise of the 4,500,00
Warrants.
Mr. Moses has sole power to vote or direct the vote and the sole power
to dispose or to direct the disposition of all shares of Common Stock he is
deemed to beneficially own. Mr. Moses is the only person who has the right to
receive or the power to direct the receipt of dividends from his shares of
Common Stock or the right to receive or the power to direct the proceeds from
the sale of his shares of Common Stock.
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CUSIP NO. 89351V109 13D PAGE 4 OF 6 PAGES
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
In consideration of the Guaranty Agreement entered into by Mr. Moses on
August 15, 1997, guaranteeing a loan to the Issuer from Southwest Bank of
Texas, N.A. in the original principal amount of $5,000,000, the Issuer granted
Mr. Moses 1,500,000 Warrants covering shares of Common Stock. The Guaranty
Agreement is incorporated herein by reference to Exhibit 1.
The 1,500,000 Warrants for shares of Common Stock granted to Mr. Moses
in consideration of his entering into the Guaranty Agreement have an initial
exercise price of $1.63 per share and are exercisable on or before August 15,
2004. The Warrant representing these shares of Common Stock is incorporated
herein by reference to Exhibit 2.
Mr. Moses entered into a Registration Rights Agreement dated August 15,
1997 with the Issuer (the "Registration Rights Agreement"). The Registration
Rights Agreement provides that at any time after August 15, 2000, Mr. Moses may
request in writing that the Company effect the registration under the Securities
Act of 1933, as amended, of the resale of all or a part of the shares of Common
Stock acquirable upon exercise of the Warrants. The Registration Rights
Agreement also grants Mr. Moses piggy-back registration rights, subject to
certain terms and conditions. The Registration Rights Agreement is
incorporated herein by reference to Exhibit 3.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
1. Guaranty Agreement made as of August 15, 1997 by Robert K. Moses,
Jr. to Southwest Bank of Texas, N.A.
2. Warrant to Purchase Common Stock of TransAmerican Waste Industries,
Inc. expiring on August 15, 2004.
3. Registration Rights Agreement, dated August 15, 1997, entered into
by and between TransAmerican Waste Industries, Inc. and Robert K. Moses, Jr.
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CUSIP NO. 89351V109 13D PAGE 5 OF 6 PAGES
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete
and correct.
September 10, 1997 By: /s/ Robert K. Moses, Jr.
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Date Name: Robert K. Moses, Jr.
The original statement shall be signed by each person on whose behalf
the statement is filed or his authorized representative. If the statement is
signed on behalf of a person by his authorized representative (other than an
executive officer or general partner of this filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statement, provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name and any title of each person who signs the statement shall be typed or
printed beneath his signature.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL
CRIMINAL VIOLATIONS
(SEE 18 U.S.C. 1001)
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CUSIP NO. 89351V109 13D PAGE 6 OF 6 PAGES
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
<S> <C>
1. Guaranty Agreement made as of August 15, 1997 by Robert K.
Moses, Jr. to Southwest Bank of Texas, N.A.
2. Warrant to Purchase Common Stock of TransAmerican Waste
Industries, Inc. expiring on August 15, 2004.
3. Registration Rights Agreement, dated August 15, 1997, entered
into by and between TransAmerican Waste Industries, Inc. and
Robert K. Moses, Jr.
</TABLE>
<PAGE> 1
EXHIBIT 1
GUARANTY AGREEMENT
WHEREAS, the execution of this Guaranty Agreement is a condition to
SOUTHWEST BANK OF TEXAS, N.A., a national banking association ("Lender"),
making certain loans to TRANSAMERICAN WASTE INDUSTRIES, INC., a Delaware
corporation ("Borrower"), pursuant to that certain Loan Agreement dated as of
August 15, 1997, between Borrower and Lender (such Loan Agreement, as it may
hereafter be amended or modified from time to time, is hereinafter referred to
as the Loan Agreement");
NOW, THEREFORE, for valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the undersigned, ROBERT K. MOSES, JR., an
individual (the "Guarantor"), hereby irrevocably and unconditionally guarantees
to Lender the full and prompt payment and performance of the Guaranteed
Indebtedness (hereinafter defined). This Guaranty Agreement shall be upon the
following terms:
1. The term "Guaranteed Indebtedness", as used herein means the
indebtedness and obligations of Borrower to Lender evidenced by that certain
promissory note in the original principal amount of $5,000,000.00 dated as of
August 15, 1997, executed by Borrower and payable to the order of Lender, and
all renewals, extensions and modifications, but not increases or reborrowings,
thereof and thereunder. The term "Guaranteed Indebtedness" shall include any
and all post-petition interest and expenses (including attorneys' fees incurred
in connection with the enforcement of this Guaranty Agreement) whether or not
allowed under any bankruptcy, insolvency, or other similar law.
2. This instrument shall be an absolute, irrevocable, and
unconditional guaranty of payment and performance, and not a guaranty of
collection, and Guarantor shall remain liable on its obligations hereunder
until the payment and performance in full of the Guaranteed Indebtedness. No
setoff, counterclaim, recoupment, reduction, or diminution of any obligation,
or any defense of any kind or nature which Borrower may have against Lender or
any other party, or which Guarantor may have against Borrower, Lender, or any
other party, shall be available to, or shall be asserted by, Guarantor against
Lender or any subsequent holder of the Guaranteed Indebtedness or any part
thereof or against payment of the Guaranteed Indebtedness or any part thereof.
3. If Guarantor becomes liable for any indebtedness owing by
Borrower to Lender by endorsement or otherwise, other than under this Guaranty
Agreement, such liability shall not be in any manner impaired or affected
hereby, and the rights of Lender hereunder shall be cumulative of any and all
other rights. that Lender may ever have against Guarantor. The exercise by
Lender of any right
<PAGE> 2
or remedy hereunder or under any other instrument, or at law or in equity,
shall not preclude the concurrent or subsequent exercise of any other right or
remedy.
4. In the event of default by Borrower in payment or performance of
the Guaranteed indebtedness, or any part thereof, when such Guaranteed
Indebtedness becomes due, whether by its terms, by acceleration, or otherwise,
Guarantor shall promptly pay the amount due thereon to Lender without notice or
demand in lawful money of the United States of America and it shall not be
necessary for Lender, in order to enforce such payment by Guarantor, first to
institute suit or exhaust its remedies against Borrower or others liable on
such Guaranteed Indebtedness, or to enforce any rights against any collateral
which shall ever have been given to secure such Guaranteed Indebtedness.
Notwithstanding anything to the contrary contained in this Guaranty Agreement,
Guarantor hereby irrevocably waives any and all rights it may now or hereafter
have under any agreement or at law or in equity (including, without limitation,
any law subrogating the Guarantor to the rights of Lender) to assert any claim
against or seek contribution, indemnification or any other form of
reimbursement from Borrower or any other party liable for payment of any or all
of the Guaranteed Indebtedness for any payment made by Guarantor under or in
connection with this Guaranty Agreement or otherwise.
5. If acceleration of the time for payment of any amount payable by
Borrower under the Guaranteed Indebtedness is stayed upon the insolvency,
bankruptcy, or reorganization of Borrower, all such amounts otherwise subject
to acceleration under the terms of the Guaranteed Indebtedness shall
nonetheless be payable by Guarantor hereunder forthwith on demand by Lender.
6. Guarantor hereby agrees that its obligations under this Guaranty
Agreement shall not be released, discharged, diminished, impaired, reduced, or
affected for any reason or by the occurrence of any event, including, without
limitation, one or more of the following events, whether or not with notice to
or the consent of Guarantor: (a) the taking or accepting of collateral as
security for any or all of the Guaranteed Indebtedness or the release,
surrender, exchange, or subordination of any collateral now or hereafter
securing any or all of the Guaranteed Indebtedness; (b) any partial release of
the liability of Guarantor hereunder, or the full or partial release of any
other guarantor or obligor from liability for any or all of the Guaranteed
Indebtedness; (c) any disability of Borrower, or the dissolution, insolvency,
or bankruptcy of Borrower, Guarantor, or any other party at any time liable for
the payment of any or all of the Guaranteed Indebtedness; (d) any renewal,
extension, modification, waiver, amendment, or rearrangement of any or all of
the Guaranteed Indebtedness or any instrument, document, or agreement
evidencing, securing, or otherwise relating to any or all of the Guaranteed
Indebtedness; (e) any adjustment, indulgence, forbearance, waiver,
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or compromise that may be granted or given by Lender to Borrower, Guarantor, or
any other party ever liable for any or all of the Guaranteed Indebtedness; (f)
any neglect, delay, omission, failure, or refusal of Lender to take or
prosecute any action for the collection of any of the Guaranteed Indebtedness
or to foreclose or take or prosecute any action in connection with any
instrument, document, or agreement evidencing, securing, or otherwise relating
to any or all of the Guaranteed Indebtedness; (g) the unenforceability or
invalidity of any or all of the Guaranteed Indebtedness or of any instrument,
document, or agreement evidencing, securing, or otherwise relating to any or
all of the Guaranteed Indebtedness; (h) any payment by Borrower or any other
party to Lender is held to constitute a preference under applicable bankruptcy
or insolvency law or if for any other reason Lender is required to refund any
payment or pay the amount thereof to someone else; (i) the settlement or
compromise of any of the Guaranteed Indebtedness; (j) the non-perfection of any
security interest or lien securing any or all of the Guaranteed Indebtedness;
(k) any impairment of any collateral securing any or all of the Guaranteed
Indebtedness; (1) the failure of Lender to sell any collateral securing any or
all of the Guaranteed Indebtedness in a commercially reasonable manner or as
otherwise required by law; (m) any change in the corporate existence,
structure, or ownership of Borrower; or (n) any other circumstance which might
otherwise constitute a defense available to, or discharge of, Borrower or
Guarantor.
7. Guarantor represents and warrants to Lender as follows:
(a) Guarantor has the power and authority and legal right to
execute, deliver, and perform its obligations under this Guaranty
Agreement and this Guaranty Agreement constitutes the legal, valid, and
binding obligation of Guarantor, enforceable against Guarantor in
accordance with its terms, except as limited by bankruptcy, insolvency,
or other laws of general application relating to the enforcement of
creditor's rights.
(b) The execution, delivery, and performance by Guarantor of
this Guaranty Agreement do not and will not violate or conflict with any
law, rule, or regulation or any order, writ, injunction, or decree of
any court, governmental authority or agency, or arbitrator and do not
and will not conflict with, result in a breach of, or constitute a
default under, or result in the imposition of any lien upon any assets
of Guarantor pursuant to the provisions of any indenture, mortgage, deed
of trust, security agreement, franchise, permit, license, or other
instrument or agreement to which Guarantor or its properties is bound.
(c) No authorization, approval, or consent of, and no filing
or registration with, any court, governmental
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authority, or third party is necessary for the execution, delivery, or
performance by Guarantor of this Guaranty Agreement or the validity or
enforceability thereof.
(d) The value of the consideration received and to be received
by Guarantor as a result of Borrower and Lender entering into the Loan
Agreement and Guarantor executing and delivering this Guaranty Agreement
is reasonably worth at least as much as the liability and obligation of
Guarantor hereunder, and such liability and obligation and the Loan
Agreement have benefited and may reasonably be expected to benefit
Guarantor directly and indirectly.
8. Guarantor covenants and agrees that, as long as the Guaranteed
Indebtedness or any part thereof is outstanding or Lender has any commitment
under the Loan Agreement:
(a) Guarantor will deliver to Lender his personal financial
statement, consisting of at least a balance sheet, a statement of income
and expenses, a list of liabilities (including contingent liabilities
and any security therefor and detailing amounts, lenders and repayment
terms), and a statement of cash flows on or before each February 28 as of
the preceding December 31.
(b) Guarantor will furnish promptly to Lender written notice
of the occurrence of any default under this Guaranty Agreement or an
Event of Default under the Loan Agreement of which Guarantor has
knowledge.
(c) Guarantor will furnish promptly to Lender such additional
information concerning Guarantor as Lender may request.
9. Guarantor hereby agrees that the Subordinated Indebtedness (as
hereinafter defined) shall be subordinate and junior in right of payment to the
prior payment in full of all Guaranteed Indebtedness, and Guarantor hereby
assigns the Subordinated Indebtedness to Lender as security for the Guaranteed
Indebtedness, effective upon the occurrence of an Event of Default. If any sums
shall be paid to Guarantor by Borrower or any other person or entity on account
of the Subordinated Indebtedness after the occurrence and during the
continuance of an Event of Default, such sums shall be held in trust by
Guarantor for the benefit of Lender and shall forthwith be paid to Lender
without affecting the liability of Guarantor under this Guaranty Agreement. For
purposes of this Guaranty Agreement, the term "Subordinated Indebtedness" means
all indebtedness, liabilities, and obligations of Borrower to Guarantor,
including obligations under leases, whether such indebtedness, liabilities, and
obligations now exist or are hereafter incurred or arise, or whether the
obligations of Borrower thereon are direct, indirect, contingent, primary,
secondary,
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several, joint and several, or otherwise, and irrespective of the person or
persons in whose favor such indebtedness, obligations, or liabilities may, at
their inception, have been, or may hereafter be created, or the manner in which
they have been or may hereafter be acquired by Guarantor.
10. No amendment or waiver of any provision of this Guaranty
Agreement nor consent to any departure by the Guarantor therefrom shall in any
event be effective unless the same shall be in writing and signed by Lender.
No failure on the part of Lender to exercise, and no delay in exercising, any
right, power, or privilege hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power, or privilege
hereunder preclude any other or further exercise thereof or the exercise of any
other right, power, or privilege. The remedies herein provided are cumulative
and not exclusive of any remedies provided by law.
11. This Guaranty Agreement is for the benefit of Lender. This
Guaranty Agreement is binding not only on Guarantor, but on Guarantor's heirs
and personal representatives.
12. Guarantor recognizes that Lender is relying upon this Guaranty
Agreement and the undertakings of Guarantor hereunder in making extensions of
credit to Borrower under the Loan Agreement and further recognizes that the
execution and delivery of this Guaranty Agreement is a material inducement to
Lender in entering into the Loan Agreement. Guarantor hereby acknowledges that
there are no conditions to the full effectiveness of this Guaranty Agreement.
13. This Guaranty Agreement is executed and delivered as an incident
to a lending transaction negotiated, consummated, and performable in Harris
County, Texas, and shall be governed by and construed in accordance with the
laws of the State of Texas. Except as provided in the Arbitration Agreement (as
defined in the Loan Agreement), any action or proceeding against Guarantor
under or in connection with this Guaranty Agreement may be brought in any state
or federal court in Harris County, Texas, and Guarantor hereby irrevocably
submits to the nonexclusive jurisdiction of such courts, and waives any
objection it may now or hereafter have as to the venue of any such action or
proceeding brought in such court. Guarantor agrees that service of process upon
it may be made by certified or registered mail, return receipt requested, at
its address specified in the Loan Agreement. Except as provided in the
Arbitration Agreement, nothing herein shall limit the right of Lender to bring
any action or proceeding against Guarantor or with respect to any of
Guarantor's property in courts in other jurisdictions. Except as provided in
the Arbitration Agreement, any action or proceeding by Guarantor against Lender
shall be brought only in a court located in Harris County, Texas.
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14. Guarantor shall pay on demand all reasonable attorneys' fees and
all other costs and expenses incurred by Lender in connection with the
administration, enforcement, or collection of this Guaranty Agreement.
15. Guarantor hereby waives promptness, diligence, notice of any
default under the Guaranteed Indebtedness, demand for payment, notice of
acceptance of this Guaranty Agreement, presentment, notice of protest, notice
of dishonor, notice of the incurring by Borrower of additional indebtedness,
and all other notices and demands with respect to the Guaranteed Indebtedness
and this Guaranty Agreement.
16. The Loan Agreement, and all of the terms thereof, are
incorporated herein by reference, the same as if stated verbatim herein, and
Guarantor agrees that Lender may exercise any and all rights granted to it
under the Loan Agreement and the other Loan Documents (as defined in the Loan
Agreement) without affecting the validity or enforceability of this Guaranty
Agreement. Any notices given hereunder shall be given in the manner provided by
and to the addresses set forth in the Loan Agreement.
17. Guarantor hereby represents and warrants to Lender that Guarantor
has adequate means to obtain from Borrower on a continuing basis information
concerning the financial condition and assets of Borrower and that Guarantor is
not relying upon Lender to provide (and Lender shall have no duty to provide)
any such information to Guarantor either now or in the future.
18. THIS GUARANTY AGREEMENT EMBODIES THE FINAL, ENTIRE AGREEMENT OF
GUARANTOR AND LENDER WITH RESPECT TO GUARANTOR'S GUARANTY OF THE GUARANTEED
INDEBTEDNESS AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF AND MAY NOT BE CONTRADICTED OR VARIED BY EVIDENCE OF
PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OR DISCUSSIONS OR OTHER
EXTRINSIC EVIDENCE OF ANY NATURE. THERE ARE NO ORAL AGREEMENTS BETWEEN
GUARANTOR AND LENDER. THIS GUARANTY AGREEMENT MAY NOT BE AMENDED EXCEPT IN
WRITING BY GUARANTOR AND LENDER.
DATED AND EXECUTED as of August 15, 1997.
GUARANTOR:
/s/ ROBERT K. MOSES, JR.
------------------------------
ROBERT K. MOSES, JR.
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EXHIBIT 2
THE SECURITIES REPRESENTED BY THIS WARRANT AND THE COMMON STOCK ISSUABLE
THEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "SECURITIES ACT"), OR ANY OTHER APPLICABLE SECURITIES LAW AND,
ACCORDINGLY, THE SECURITIES REPRESENTED BY THIS WARRANT MAY NOT BE RESOLD,
PLEDGED, OR OTHERWISE TRANSFERRED, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER, OR IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER, THE
SECURITIES ACT AND IN ACCORDANCE WITH ANY OTHER APPLICABLE SECURITIES LAWS.
WARRANT
to Purchase Common Stock of
TRANSAMERICAN WASTE INDUSTRIES, INC.
Expiring on August 15, 2004
This Common Stock Purchase Warrant (the "Warrant") certifies that for
value received, Robert K. Moses, Jr. (the "Holder") or its assigns, is entitled
to subscribe for and purchase from the Company (as hereinafter defined), in
whole or in part, 1,500,000 shares of duly authorized, validly issued, fully
paid and nonassessable shares of Common Stock (as hereinafter defined) at an
initial Exercise Price (as hereinafter defined) per share of $1.63, subject,
however, to the provisions and upon the terms and conditions hereinafter set
forth. The number of Warrants (as hereinafter defined), the number of shares of
Common Stock purchasable hereunder, and the Exercise Price therefor are subject
to adjustment as hereinafter set forth. This Warrant and all rights hereunder
shall expire at 5:00 p.m., Houston, Texas time, on August 15, 2004.
As used herein, the following terms shall have the meanings set forth
below:
"Company" shall mean TransAmerican Waste Industries, Inc., a Delaware
corporation, and shall also include any successor thereto with respect to the
obligations hereunder, by merger, consolidation or otherwise.
"Common Stock" shall mean and include the Company's Common Stock, par
value $0.001 per share, authorized on the date of the original issue of this
Warrant and shall also include (i) in case of any reorganization,
reclassification, consolidation, merger, share exchange or sale, transfer or
other disposition of assets of the character referred to in Section 3.5 hereof,
the stock, securities provided for in such Section 3.5 and (ii) any other
shares of common stock of the Company into which such shares of Common Stock
may be converted.
<PAGE> 2
"Exercise Price" shall mean the initial purchase price of $1.63 per
share of Common Stock payable upon exercise of the Warrants, as adjusted from
time to time pursuant to the provisions hereof.
"Market Price" for any day, when used with reference to Common Stock,
shall mean the price of said Common Stock determined as follows: (x) the last
reported sale price for the Common Stock on such day on the principal
securities exchange on which the Common Stock is listed or admitted to trading
or if no such sale takes place on such date, the average of the closing bid and
asked prices thereof as officially reported, or, if not so listed or admitted
to trading on any securities exchange, the last sale price for the Common Stock
on the National Association of Securities Dealers SmallCap Market on such date,
or, if there shall have been no trading on such date or if the Common Stock
shall not be listed on such system, the average of the closing bid and asked
prices in the over-the-counter market as furnished by any NASD member firm
selected from time to time by the Company for such purpose, in each such case,
unless otherwise provided herein, averaged over a period of ten (10)
consecutive Trading Days prior to the date as of which the determination is to
be made; or (y) if the Common Stock shall not be listed or admitted to trading
as provided in clause (x) above, the fair market value of the Common Stock as
determined in good faith by the Board of Directors of the Company.
"Outstanding," when used with reference to Common Stock, shall mean
(except as otherwise expressly provided herein) at any date as of which the
number of shares thereof is to be determined, all issued shares of Common
Stock, except shares then owned or held by or for the account of the Company.
"Trading Days" shall mean any days during the course of which the
principal securities exchange on which the Common Stock is listed or admitted
to trading is open for the exchange of securities.
"Warrant" shall mean the right upon exercise to purchase one Warrant
Share.
"Warrant Shares" shall mean the shares of Common Stock purchased or
purchasable by the holder hereof upon the exercise of the Warrants.
ARTICLE I
Exercise of Warrants
1.1 Method of Exercise. The Warrants represented hereby may be
exercised by the holder hereof, in whole or in part, at any time and from time
to time on or after the date hereof until 5:00 p.m., Houston, Texas time, on
August 15, 2004. To exercise the Warrants, the holder hereof shall deliver to
the Company, at the Warrant Office designated in Section 2.1 hereof, (i) a
written notice in the form of the Subscription Notice attached as an exhibit
hereto, stating therein the election of such holder to exercise the Warrants in
the manner provided in the Subscription Notice; (ii) payment in full of the
Exercise Price (A) in cash or by bank check
2
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for all Warrant Shares purchased hereunder, or (B) through a "cashless of or
"net-issue" exercise of each such Warrant ("Cashless Exercise"); the holder
shall exchange each Warrant subject to a Cashless Exercise for that number of
Warrant Shares determined by multiplying the number of Warrant Shares issuable
hereunder by a fraction, the numerator of which shall be the difference between
(x) the Market Price and (y) the Exercise Price for each such Warrant, and the
denominator of which shall be the Market Price; the Subscription Notice shall
set forth the calculation upon which the Cashless Exercise is based, or (C) a
combination of (A) and (B) above; and (iii) this Warrant. The Warrants shall be
deemed to be exercised on the date of receipt by the Company of the Subscription
Notice, accompanied by payment for the Warrant Shares and surrender of this
Warrant, as aforesaid, and such date is referred to herein as the "Exercise
Date". Upon such exercise, the Company shall, as promptly as practicable and
in any event within ten (10) business days, issue and deliver to such holder a
certificate or certificates for the full number of the Warrant Shares purchased
by such holder hereunder, and shall, unless the Warrants have expired, deliver
to the holder hereof a new Warrant representing the number of Warrants, if any,
that shall not have been exercised, in all other respects identical to this
Warrant. As permitted by applicable law, the Person in whose name the
certificates for Common Stock are to be issued shall be deemed to have become a
holder of record of such Common Stock on the Exercise Date and shall be entitled
to all of the benefits of such holder on the Exercise Date, including without
limitation the right to receive dividends and other distributions for which the
record date falls on or after the Exercise Date and to exercise voting rights.
1.2 Expenses and Taxes. The Company shall pay all expenses, and
taxes (including, without limitation, all documentary, stamp, transfer or other
transactional taxes) other than income taxes attributable to the preparation,
issuance or delivery of the Warrants and of the shares of Common Stock issuable
upon exercise of the Warrants.
1.3 Reservation of Shares. The Company shall reserve at all times
so long as the Warrants remain outstanding, free from preemptive rights, out of
its treasury Common Stock or its authorized but unissued shares of Common Stock,
or both, solely for the purpose of effecting the exercise of the Warrants, a
sufficient number of shares of Common Stock to provide for the exercise of the
Warrants.
1.4 Valid Issuance. All shares of Common Stock that may be issued
upon exercise of the Warrants will, upon issuance by the Company, be duly and
validly issued, fully paid and nonassessable and free from all taxes, liens and
charges with respect to the issuance thereof and, without limiting the
generality of the foregoing, the Company shall take no action or fail to take
any action which will cause a contrary result (including, without limitation,
any action that would cause the Exercise Price to be less than the par value, if
any, of the Common Stock).
1.5 Acknowledgment of Rights. At the time of the exercise of the
Warrants in accordance with the terms hereof and upon the written request of
the holder hereof, the Company will acknowledge in writing its continuing
obligation to afford to such holder any rights (including, without limitation,
any right to registration of the Warrant Shares) to which
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such holder shall continue to be entitled after such exercise in accordance
with the provisions of this Warrant; provided, however, that if the holder
hereof shall fail to make any such request, such failure shall not affect the
continuing obligation of the Company to afford to such holder any such rights.
1.6 No Fractional Shares. The Company shall not be required to
issue fractional shares of Common Stock on the exercise of this Warrant. If
more than one Warrant shall be presented for exercise at the same time by the
same holder, the number of full shares of Common Stock which shall be issuable
upon such exercise shall be computed on the basis of the aggregate number of
whole shares of Common Stock purchasable on exercise of the Warrants so
presented. If any fraction of a share of Common Stock would, except for the
provisions of this Section 1.6, be issuable on the exercise of this Warrant,
the Company shall pay an amount in cash calculated by it to be equal to the
Market Price of one share of Common Stock at the time of such exercise
multiplied by such fraction computed to the nearest whole cent.
ARTICLE II
Transfer
2.1 Warrant Office. The Company shall maintain an office for
certain purposes specified herein (the "Warrant Office"), which office shall
initially be the Company's offices at 10554 Tanner Road, Houston Texas 77041,
and may subsequently be such other office of the Company or of any transfer
agent of the Common Stock in the continental United States as to which written
notice has previously been given to the holder hereof. The Company shall
maintain, at the Warrant Office, a register for the Warrants in which the
Company shall record the name and address of the Person in whose name this
Warrant has been issued, as well as the name and address of each permitted
assignee of the rights of the registered owner hereof.
2.2 Ownership of Warrants. The Company may deem and treat the
Person in whose name the Warrants are registered as the holder and owner hereof
(notwithstanding any notations of ownership or writing hereon made by anyone
other than the Company) for all purposes and shall not be affected by any
notice to the contrary until presentation of this Warrant for registration of
transfer as provided in this Article II. Notwithstanding the foregoing, the
Warrants represented hereby, if properly assigned in compliance with this
Article II, may be exercised by an assignee for the purchase of Warrant Shares
without having a new Warrant issued.
2.3 Restrictions on Transfer of Warrants. The Company agrees to
maintain at the Warrant Office books for the registration and transfer of the
Warrants. Subject to the restrictions on transfer of the Warrants in this
Section 2.3, the Company, from time to time, shall register the transfer of the
Warrants in such books upon surrender of this Warrant at the Warrant Office
properly endorsed or accompanied by appropriate instruments of transfer and
written instructions for transfer satisfactory to the Company. Upon any such
transfer and upon payment by the holder or its transferee of any applicable
transfer taxes, new Warrants shall be
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issued to the transferee and the transferor (as their respective interests may
appear) and the surrendered Warrants shall be cancelled by the Company. The
Company shall pay all taxes (other than securities transfer taxes or income
taxes) and all other expenses and charges payable in connection with the
transfer of the Warrants pursuant to this Section 2.3.
2.3.1 The holder of the Warrants agrees that it will neither
(i) transfer the Warrants prior to delivery to the Company of written notice of
such transfer, nor (ii) transfer such Warrant Shares prior to delivery to the
Company of written notice of such transfer, or until registration of such
Warrant Shares under the Securities Act and any applicable state securities or
blue sky laws has become effective.
2.4 Compliance with Securities Laws. Subject to the terms of the
Registration Rights Agreement between the Holder and the Company dated as of the
date hereof and notwithstanding any other provisions contained in this Warrant,
the holder hereof understands and agrees that the following restrictions and
limitations shall be applicable to all Warrant Shares and to all resales or
other transfers thereof pursuant to the Securities Act:
2.4.1 The holder hereof agrees that the Warrant Shares shall
not be sold or otherwise transferred unless the Warrant Shares are registered
under the Securities Act and applicable state securities or blue sky laws or are
exempt therefrom.
2.4.2 A legend in substantially the following form will be
placed on the certificate(s) evidencing the Warrant Shares:
"THE SECURITIES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY APPLICABLE SECURITIES LAW AND,
ACCORDINGLY, THE SECURITIES REPRESENTED BY THIS
CERTIFICATE MAY NOT BE RESOLD, PLEDGED, OR OTHERWISE
TRANSFERRED, EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER, OR IN A TRANSACTION
EXEMPT FROM REGISTRATION UNDER, THE SECURITIES ACT
AND IN ACCORDANCE WITH ANY OTHER APPLICABLE
SECURITIES LAWS."
2.4.3 Stop transfer instructions will be imposed with
respect to the Warrant Shares so as to restrict resale or other transfer
thereof, subject to this Section 2.4.
ARTICLE III
Anti-Dilution
3.1 Anti-Dilution Provisions. The Exercise Price shall be subject
to adjustment from time to time as hereinafter provided. Upon each adjustment
of the Exercise Price, the holder
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of this Warrant shall thereafter be entitled to purchase, at the Exercise Price
resulting from such adjustment, the number of shares of Common Stock obtained
by multiplying the Exercise Price in effect immediately prior to such
adjustment by the number of shares purchasable pursuant hereto immediately
prior to such adjustment and dividing the product thereof by the Exercise Price
resulting from such adjustment.
3.2 Adjustment of Exercise Price Upon Issuance of Common Stock.
3.2.1 (A) If and whenever after the date hereof the Company
shall issue or sell any Common Stock for no consideration or for a
consideration per share less than the Exercise Price, then, forthwith upon such
issue or sale, the Exercise Price shall be reduced (but not increased, except
as otherwise specifically provided in Section 3.2.2(C) hereof), to the price
(calculated to the nearest one-ten thousandth of a cent) determined by dividing
(x) an amount equal to the sum of (i) the aggregate number of shares of Common
Stock outstanding immediately prior to such issue or sale multiplied by then
existing Exercise Price plus (ii) the consideration received by the Company
upon such issue or sale by (y) the aggregate number of shares of Common Stock
outstanding immediately after such issue or sale.
(B) Notwithstanding the provisions of this
Section 3.2, no adjustment shall be made in the Exercise Price in the event
that the Company issues, in one or more transactions, (i) Common Stock or
convertible securities upon exercise of any options issued to officers,
directors or employees of the Company pursuant to a stock option plan or an
employment, severance or consulting agreement as now or hereafter in effect, in
each case approved by the Board of Directors (provided that the aggregate
number of shares of Common Stock which may be issuable, including options
issued prior to the date hereof, under all such employee plans and agreements
shall at no time exceed the number of such shares of Common Stock that are
issuable under currently effective employee plans and agreements); (ii) Common
Stock upon exercise of any stock purchase warrant or option (other than the
options referred to in clause (i) above) or other convertible security
outstanding on the date hereof; or (iii) Common Stock issued as consideration
in, or in connection with, acquisitions by the Company. In addition, for
purposes of calculating any adjustment of the Exercise Price as provided in
this Section 3.2, all of the shares of Common Stock issuable pursuant to any of
the foregoing shall be assumed to be outstanding prior to the event causing
such adjustment to be made.
3.2.2 For purposes of this Section 3.2, the following
Sections 3.2.2(A) to 3.2.2(E) inclusive, shall be applicable:
(A) Issuance of Rights or Options. In case at any time
after the date hereof the Company shall in any manner grant (whether
directly or by assumption in a merger or otherwise) any rights to
subscribe for or to purchase, or any options for the purchase of,
Common Stock or any stock or securities convertible into or
exchangeable for Common Stock (such convertible or exchangeable stock
or securities being herein called "Convertible Securities"), whether
or not such rights or options or the right to convert or exchange any
such Convertible Securities are immediately exercisable, and the price
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per share for which shares of Common Stock are issuable upon the exercise of
such rights or options or upon conversion or exchange of such Convertible
Securities (determined by dividing (i) the total amount, if any, received or
receivable by the Company as consideration for the granting of such rights or
options, plus the minimum aggregate amount of additional consideration, if any,
payable to the Company upon the exercise of such rights or options, or plus, in
the case of such rights or options that relate to Convertible Securities, the
minimum aggregate amount of additional consideration, if any, payable upon the
issue or sale of such Convertible Securities and upon the conversion or exchange
thereof, by (ii) the total maximum number of shares of Common Stock issuable
upon the exercise of such rights or options or upon the conversion or exchange
of all such Convertible Securities issuable upon the exercise of such rights
or options) shall be less than the Exercise Price in effect as of the date of
granting such rights or options, then the total maximum number of shares of
Common Stock issuable upon the exercise of such rights or options or upon
conversion or exchange of all such Convertible Securities issuable upon the
exercise of such rights or options shall be deemed to be outstanding as of the
date of the granting of such rights or options and to have been issued for such
price per share, with the effect on the Exercise Price specified in Section
3.2.1 hereof. Except as provided in Section 3.2.2 hereof, no further adjustment
of the Exercise Price shall be made upon the actual issuance of such Common
Stock or of such Convertible Securities upon exercise of such rights or options
or upon the actual issuance of such Common Stock upon conversion or exchange of
such Convertible Securities.
(B) Change in Option Price or Conversion Rate. Upon the happening of any
of the following events, namely, if the purchase price provided for in any
right or option referred to in Section 3.2.2, the additional consideration, if
any, payable upon the conversion or exchange of any Convertible Securities
referred to in Section 3.2.2, or the rate at which any Convertible Securities
referred to in Section 3.2.2, are convertible into or exchangeable for Common
Stock shall change (other than under or by reason of provisions designed to
protect against dilution), the Exercise Price then in effect hereunder shall
forthwith be readjusted (increased or decreased, as the case may be) to the
Exercise Price that would have been in effect at such time had such rights,
options or Convertible Securities still outstanding provided for such changed
purchase price, additional consideration or conversion rate, as the case may be,
at the time initially granted, issued or sold. On the expiration of any such
option or right referred to in Section 3.2.2, or on the termination of any such
right to convert or exchange any such Convertible Securities referred to in
Section 3.2.2, the Exercise Price then in effect hereunder shall forthwith be
readjusted (increased or decreased, as the case may be) to the Exercise Price
that would have been in effect at the time of such expiration or termination
had such right, option or Convertible Securities, to the extent outstanding
immediately prior to such expiration or termination, never been granted, issued
or sold, and the Common Stock issuable thereunder shall no longer be deemed to
be outstanding. If the purchase price provided for in Section 3.2.2 or the rate
at which any Convertible Securities referred to in Section 3.2.2 reduced at any
time under or by reason of
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provisions with respect thereto designed to protect against dilution,
then in case of the delivery of Common Stock upon the exercise of any
such right or option or upon conversion or exchange of any such
Convertible Securities, the Exercise Price then in effect hereunder
shall, if not already adjusted, forthwith be adjusted to such amount
as would have obtained had such right, option or Convertible
Securities never been issued as to such Common Stock and had
adjustments been made upon the issuance of the Common Stock delivered
as aforesaid, but only if as a result of such adjustment the Exercise
Price then in effect hereunder is thereby reduced.
(C) Consideration for Stock. In case at any time Common
Stock or Convertible Securities or any rights or options to purchase
any such Common Stock or Convertible Securities shall be issued or
sold for cash, the consideration therefor shall be deemed to be the
amount received by the Company therefor. In case at any time any
Common Stock, Convertible Securities or any rights or options to
purchase any such Common Stock or Convertible Securities shall be
issued or sold for consideration other than cash, the amount of the
consideration other than cash received by the Company shall be deemed
to be the fair value of such consideration, as determined reasonably
and in good faith by the Board of Directors of the Company. In case at
any time any Common Stock, Convertible Securities or any rights or
options to purchase any Common Stock or Convertible Securities shall
be issued in connection with any merger or consolidation in which the
Company is the surviving corporation, the amount of consideration
received therefor shall be deemed to be the fair value, as determined
reasonably and in good faith by the Board of Directors of the Company,
of such portion of the assets and business of the nonsurviving
corporation as such Board of Directors may determine to be
attributable to such Common Stock, Convertible Securities, rights or
options as the case may be. In case at any time any rights or options
to purchase any shares of Common Stock or Convertible Securities shall
be issued in connection with the issuance and sale of other securities
of the Company, together consisting of one integral transaction in
which no consideration is allocated to such rights or options by the
parties, such rights or options shall be deemed to have been issued
with consideration.
(D) Record Date. In the case the Company shall take a
record of the holders of its Common Stock for the purpose of entitling
them (i) to receive a dividend or other distribution payable in Common
Stock or Convertible Securities, or (ii) to subscribe for or purchase
Common Stock or Convertible Securities, then such record date shall be
deemed to be the date of the issuance or sale of the Common Stock or
Convertible Securities deemed to have been issued or sold as a result
of the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription
or purchase, as the case may be.
(E) Treasury Shares. The number of shares of Common Stock
outstanding at any given time shall not include shares owned directly
by the Company in treasury, and the disposition of any such shares
shall be considered an issuance or sale of Common Stock for the
purpose of this Section 3.2.
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3.3 Stock Dividends. In case the Company shall declare a dividend
or make any other distribution upon any shares of the Company, payable in
Common Stock or Convertible Securities, any Common Stock or Convertible
Securities, as the case may be, issuable in payment of such dividend or
distribution shall be deemed to have been issued or sold without consideration.
3.4 Stock Splits and Reverse Splits. In the event that the Company
shall at any time subdivide its outstanding shares of Common Stock into a
greater number of shares, the Exercise Price in effect immediately prior to
such subdivision shall be proportionately reduced and the number of Warrant
Shares purchasable pursuant to this Warrant immediately prior to such
subdivision shall be proportionately increased, and conversely, in the event
that the outstanding shares of Common stock shall at any time be combined into
a smaller number of shares, the Exercise Price in effect immediately prior to
such combination shall be proportionately increased and the number of Warrant
Shares purchasable upon the exercise of this Warrant immediately prior to such
combination shall be proportionately reduced. Except as provided in this
Section 3.4, no adjustment in the Exercise Price and no change in the number of
Warrant Shares purchasable shall be made under this Article III as a result of
or by reason of any such subdivision or combination.
3.5 Reorganizations and Asset Sales. If any capital reorganization
or reclassification of the capital stock of the Company, or any consolidation,
merger or share exchange of the Company with another Person, or the sale,
transfer or other disposition of all or substantially all of its assets to
another Person shall be effected in such a way that a holder of Common Stock of
the Company shall be entitled to receive capital stock, securities or assets
with respect to or in exchange for their shares, then the following provisions
shall apply:
3.5.1 As a condition of such reorganization,
reclassification, consolidation, merger, share exchange, sale, transfer or
other disposition (except as otherwise provided below in this Section 3.5),
lawful and adequate provisions shall be made whereby the holder of Warrants
shall thereafter have the right to purchase and receive upon the terms and
conditions specified in this Warrant and in lieu of the Warrant Shares
immediately theretofore receivable upon the exercise of the rights represented
hereby, such shares of capital stock, securities or assets as may be issued or
payable with respect to or in exchange for a number of outstanding shares of
such Common Stock equal to the number of Warrant Shares immediately theretofore
so receivable had such reorganization, reclassification, consolidation, merger,
share exchange or sale not taken place, and in any such case appropriate
provision reasonably satisfactory to such holder shall be made with respect to
the rights and interests of such holder to the end that the provisions hereof
(including, without limitation, provisions for adjustments of the Exercise
Price and of the number of Warrant Shares receivable upon the exercise) shall
thereafter be applicable, as nearly as possible, in relation to any shares of
capital stock, securities or assets thereafter deliverable upon the exercise of
Warrants.
3.5.2 In the event of a merger, share exchange or
consolidation of the Company with or into another Person as a result of which a
number of shares of common stock or its
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equivalent of the successor Person greater or lesser than the number of shares
of Common Stock outstanding immediately prior to such merger, share exchange or
consolidation are issuable to holders of Common Stock, then the Exercise Price
in effect immediately prior to such merger, share exchange or consolidation
shall be adjusted in the same manner as though there were a subdivision or
combination of the outstanding shares of Common Stock.
3.5.3 The Company shall not effect any such consolidation,
merger, share exchange, sale, transfer or other disposition unless prior to or
simultaneously with the consumation thereof the successor Person (if other than
the Company) resulting from such consolidation, share exchange or merger or the
Person purchasing or otherwise acquiring such assets shall have assumed by
written instrument executed and mailed or delivered to the holder hereof at the
last address of such holder appearing on the books of the Company the obligation
to deliver to such holder such shares of capital stock, securities or assets as,
in accordance with the foregoing provisions, such holder may be entitled to
receive, and all other liabilities and obligations of the Company hereunder.
Upon written request by the holder hereof, such successor Person will issue a
new Warrant revised to reflect the modifications in this Warrant effected
pursuant to this Section 3.5.
3.5.4 If a purchase, tender or exchange offer is made to
and accepted by the holders of 50% or more of the outstanding shares of Common
Stock, the Company shall not effect, any consolidation, merger, share exchange
or sale, transfer or other disposition of all or substantially all of the
Company's assets with the Person having made such offer or with any affiliate
of such Person, unless prior to the consumation of such consolidation, merger,
share exchange, sale, transfer or other disposition the holder hereof shall have
been given a reasonable opportunity to then elect to receive upon the exercise
of the Warrants either the capital stock, securities or assets then issuable
with respect to the Common Stock or the capital stock, securities or assets,
or the equivalent, issued to previous holders of the Common Stock in accordance
with such offer.
3.6 Adjustment for Asset Distribution. If the Company declares a
dividend or other distribution payable to all holders of shares of Common Stock
in evidences of indebtedness of the Company or other assets of the Company
(including, cash (other than regular cash dividends declared by the Board of
Directors), capital stock (other than Common Stock, Convertible Securities or
options or rights thereto) or other property), the Exercise Price in effect
immediately prior to such declaration of such dividend or other distribution
shall be reduced by an amount equal to the amount of such dividend or
distribution payable per share of Common Stock, in the case of a cash dividend
or distribution, or by the fair value of such dividend or distribution per share
of Common Stock (as reasonably determined in good faith by the Board of
Directors of the Company), in the case of any other dividend or distribution.
Such reduction shall be made whenever any such dividend or distribution is made
and shall be effective as of the date as of which a record is taken for purpose
of such dividend or distribution or, if a record is not taken, the date as of
which holders of record of Common Stock entitled to such dividend or
distribution are determined.
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3.7 De Minimis Adjustments. No adjustment in the number of shares
of Common Stock purchasable hereunder shall be required unless such adjustment
would require an increase or decrease of at least one share of Common Stock
purchasable upon an exercise of each Warrant and no adjustment in the Exercise
Price shall be required unless such adjustment would require an increase or
decrease of at least $0.01 in the Exercise Price; provided, however, that any
adjustments which by reason of this Section 3.7 are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations shall be made to the nearest full share or nearest one
hundredth of a dollar, as applicable.
3.8 Notice of Adjustment. Whenever the Exercise Price or the
number of Warrant Shares issuable upon the exercise of the Warrants shall be
adjusted as herein provided, or the rights of the holder hereof shall change by
reason of other events specified herein, the Company shall compute the adjusted
Exercise Price and the adjusted number of Warrant Shares in accordance with the
provisions hereof and shall prepare an Officer's Certificate setting forth the
adjusted Exercise Price and the adjusted number of Warrant Shares issuable upon
the exercise of the Warrants or specifying the other shares of stock,
securities or assets receivable as a result of such change in rights, and
showing in reasonable detail the facts and calculations upon which such
adjustments or other changes are based. The Company shall cause to be mailed to
the holder hereof copies of such Officer's Certificate together with a notice
stating that the Exercise Price and the number of Warrant Shares purchasable
upon exercise of the Warrants have been adjusted and setting forth the adjusted
Exercise Price and the adjusted number of Warrant Shares purchasable upon the
exercise of the Warrants.
3.9 Notifications to Holders. In case at any time the Company
proposes:
(i) to declare any dividend upon its Common Stock payable
in capital stock or make any special dividend or other distribution
(other than cash dividends) to the holders of its Common Stock;
(ii) to offer for subscription pro rata to all of the
holders of its Common Stock any additional shares of capital stock of
any class or other rights;
(iii) to effect any capital reorganization, or
reclassification of the capital stock of the Company, or
consolidation, merger or share exchange of the Company with another
Person, or sale, transfer or other disposition of all or substantially
all of its assets; or
(iv) to effect a voluntary or involuntary dissolution,
liquidation or winding up of the Company,
then, in any one or more of such cases, the Company shall give the holder
hereof (a) at least 10 days' (but not more than 90 days') prior written notice
of the date of which the books of the Company shall close or a record shall be
taken for such dividend, distribution or subscription rights or for determining
rights to vote in respect of such issuance, reorganization,
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reclassification, consolidation, merger, share exchange, sale, transfer,
disposition, dissolution, liquidation or winding up, and (b) in the case of any
such issuance, reorganization, reclassification, consolidation, merger, share
exchange, sale, transfer, disposition, dissolution, liquidation or winding up,
at least 10 days' (but not more than 90 days') prior written notice of the date
when the same shall take place. Such notice in accordance with the foregoing
clause (a) shall also specify, in the case of any such dividend, distribution
or subscription rights, the date on which the holders of Common Stock shall be
entitled thereto, and such notice in accordance with the foregoing clause (b)
shall also specify the date on which the holders of Common Stock shall be
entitled to exchange their Common Stock, as the case may be, for securities or
other property deliverable upon such reorganization, reclassification,
consolidation, merger, share exchange, sale, transfer, disposition, dissolution,
liquidation or winding up, as the case may be.
3.10 Company to Prevent Dilution. If any event or condition occurs
as to which other provisions of this Article III are not strictly applicable or
if strictly applicable would not fairly protect the exercise or purchase rights
of the Warrants evidenced hereby in accordance with the essential intent and
principles of such provisions, or that might materially and adversely affect the
exercise or purchase rights of the holder hereof under any provisions of this
Warrant, then the Company shall make such adjustments in the application of such
provisions, in accordance with such essential intent and principles, so
as to protect such exercise and purchase rights as aforesaid, and any
adjustments necessary with respect to the Exercise Price and the number of
Warrant Shares purchasable hereunder so as to preserve the rights of the holder
hereunder. In no event shall any such adjustment have the effect of increasing
the Exercise Price as otherwise determined pursuant to this Article III except
in the event of a combination of shares of the type contemplated in Section 3.4
hereof, and then in no event to an amount greater than the Exercise Price as
adjusted pursuant to Section 3.4 hereof.
ARTICLE IV
Miscellaneous
4.1 Entire Agreement. This Warrant contains the entire agreement
between the holder hereof and the Company with respect to the Warrant Shares
purchasable upon exercise hereof and the related transactions and supersedes
all prior arrangements or understandings with respect thereto.
4.2 Governing Law. This warrant shall be governed by and construed
in accordance with the laws of the State of Delaware.
4.3 Waiver and Amendment. Any term or provision of this Warrant
may be waived at any time by the party which is entitled to the benefits
thereof and any term or provision of this Warrant may be amended or supplemented
at any time by agreement of the holder hereof and the Company, except that any
waiver of any term or condition, or any amendment or
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supplementation, of this Warrant shall be in writing. A waiver of any breach
or failure to enforce any of the terms or conditions of this Warrant shall not
in any way effect, limit or waive a party's rights hereunder at any time to
enforce strict compliance thereafter with every term or condition of this
Warrant.
4.4 Illegality. In the event that any one or more of the
provisions contained in this Warrant shall be determined to be invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in any other respect and the remaining
provisions of this Warrant shall not, at the election of the party for whom the
benefit of the provision exists, be in any way impaired.
4.5 Copy of Warrant. A copy of this Warrant shall be filed among
the records of the Company.
4.6 Notice. Any notice or other document required or permitted to
be given or delivered to the holder hereof shall be in writing and delivered
at, or sent by certified or registered mail to such holder at, the last address
shown on the books of the Company maintained at the Warrant Office for the
registration of this Warrant or at any more recent address of which the holder
hereof shall have notified the Company in writing. Any notice or other document
required or permitted to be given or delivered to the Company, other than such
notice or documents required to be delivered to the Warrant Office, shall be
delivered at, or sent by certified or registered mail to, the offices of the
Company at 10554 Tanner Road, Houston, Texas 77041 or such other address within
the continental United States of America as shall have been furnished by the
Company to the holder of this Warrant.
4.7 Limitation of Liability; Not Stockholders. No provision of
this Warrant shall be construed as conferring upon the holder hereof the right
to vote, consent, receive dividends or receive notices (other than as herein
expressly provided) in respect of meetings of stockholders for the election of
directors of the Company or any other matter whatsoever as a stockholder of the
Company. No provision hereof, in the absence of affirmative action by the
holder hereof to purchase shares of Common Stock, and no mere enumeration
herein of the rights or privileges of the holder hereof, shall give rise to any
liability of such holder for the purchase price of any shares of Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.
4.8 Exchange, Loss, Destruction, etc. of Warrant. Upon receipt of
evidence satisfactory to the Company of the loss, theft, mutilation or
destruction of this Warrant, and in the case of any such loss, theft or
destruction upon delivery of a bond of indemnity or such other security in such
form and amount as shall be reasonably satisfactory to the Company, or in the
event of such mutilation upon surrender and cancellation of this Warrant, the
Company will make and deliver a new Warrant of like tenor, in lieu of such
lost, stolen, destroyed or mutilated Warrant. Any Warrant issued under the
provisions of this Section 4.8 in lieu of any Warrant alleged to be lost,
destroyed or stolen, or in lieu of any mutilated Warrant, shall constitute an
original contractual obligation on the part of the Company. This Warrant shall
be promptly
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canceled by the Company upon the surrender hereof in connection with any
exchange or replacement. The Company shall pay all taxes (other than securities
transfer taxes or income taxes) and all other expenses and charges payable in
connection with the preparation, execution and delivery of Warrants pursuant to
this Section 4.8.
4.9 Registration Rights. The Warrant Shares shall be entitled to
such registration rights under the Securities Act and under applicable state
securities laws as are specified in the Registration Rights Agreement.
4.10 Headings. The Article and Section and other headings herein
are for convenience only and are not a part of this Warrant and shall not
affect the interpretation thereof.
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
in its name.
Dated: August 15, 1997
TRANSAMERICAN WASTE INDUSTRIES, INC.
By: /s/ J. DAVID GREEN
---------------------------
J. David Green, Senior Vice
President, Secretary and
General Counsel
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<PAGE> 15
SUBSCRIPTION NOTICE
The undersigned, the holder of the foregoing Warrant, hereby elects to
exercise purchase rights represented thereby and to purchase thereunder _______
shares of the Common Stock covered by such Warrant, and herewith makes payment
in full for such shares pursuant to Section 1.1 of such Warrant, and requests
(a) that certificates for such shares (and any other securities or other
property issuable upon such exercise) be issued in the name of, and delivered
to ___________________ and (b), if such shares shall not include all of the
shares issuable as provided in such Warrant, that a new Warrant of like tenor
and date for the balance of the shares issuable thereunder be delivered to the
undersigned.
---------------------------
Date:
---------------------------
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ASSIGNMENT
For value received, ___________________, hereby sells, assigns, and
transfers unto _______________________ the within Warrant, together with all
right, title and interest therein, and does hereby irrevocably constitute and
appoint __________________ attorney, to transfer such Warrant on the books of
the Company, with full power of substitution.
---------------------------
Date:
---------------------------
16
<PAGE> 1
EXHIBIT 3
REGISTRATION RIGHTS AGREEMENT
This Registration Rights Agreement ("Agreement") dated August
15, 1997, is entered into by and between TransAmerican Waste Industries, Inc.,
a Delaware corporation (the "Company") and Robert K. Moses, Jr. (the "Holder").
This Agreement evidences that for good and valuable consideration, the receipt
and sufficiency of which is acknowledged, the Company and the Holder agree as
follows:
ARTICLE 1. INTRODUCTION
Section 1.1 Recitals. In connection with the receipt by the Company of
a loan from Southwest Bank of Texas, N.A. (the "Loan"), Holder personally
guaranteed the Loan. As consideration for such guarantee, the Company issued to
Holder a Warrant to purchase 1,500,000 shares of the Company's Common Stock for
$1.63 per share (the "Warrants"). The 1,500,000 shares of the Company's Common
Stock purchasable upon the exercise of the Warrant are referred to herein as
the "Warrant Shares".
Section 1.2 Definitions. Certain capitalized terms used in this
Agreement are defined in Article 6 hereof; references to sections shall be to
sections of this Agreement.
ARTICLE 2. DEMAND REGISTRATION
Section 2.1 Demand Registration.
(a) At any time after August 15, 2000, the Holder may
request in writing that the Company effect the registration under the
Securities Act the resale of all or part of the Holder's Warrant
Shares. Such request shall specify the intended method of disposition
thereof and whether or not such requested registration is to be an
underwritten offering. Promptly after receiving such request, the
Company will use its best efforts to effect the registration under
the Securities Act of the Warrant Shares which the Company has been so
requested to register by the Holder. Notwithstanding the foregoing,
if at the time of any request to register Warrant Shares pursuant to
this Section 2.1 the Company is engaged in, or has definitive plans to
engage in, within 90 days of the time of such request, a registered
public offering, or is otherwise engaged in any other activity which,
in the good faith determination of the Board of Directors of the
Company, would be materially adversely affected by the requested
registration to the material detriment of the Company, then the
Company may at its option direct that such request be delayed for a
reasonable period not in excess of (x) 120 days from the effective
date or termination of such offering or (y) 80 days from the date of
completion or termination of such other material activity, as the case
may be, such right to delay a request to be exercised by the Company
not more than once in any one-year period; provided, however, that if
the Company does not file or abandons its plan for a registered
offering or material transaction, then such request shall promptly
proceed.
<PAGE> 2
Holder shall have no further rights pursuant to this Section 2.1, and
this Section shall be null and void and of no further effect, in the
event that (i) the Company has filed a registration statement and
notified Holder pursuant to Article 3 of this Agreement and Holder
has, through action or inaction, chosen not to include the Warrant
Shares in such registration statement or (ii) the Warrant Shares may
be sold pursuant to Rule 144(K) under the Securities Act.
(b) The Company shall keep the Registration Statement current
and effective until the earlier of (i) four years from the date it
becomes effective or (ii) the Warrant Shares may be resold under Rule
144(k) promulgated under the Securities Act. The Company shall
supplement or make amendments to the Registration Statement, if
required by the registration form used by the Company, the
instructions thereto, the Securities Act or the rules and regulations
of the Commission. The Company will furnish the Holder a copy of all
such supplements or amendments at least one business day prior to
filing such supplement or amendment.
(c) The Company shall be entitled to require that the Holder
refrain from effecting any purchases or public sales or distributions
of the Warrant Shares pursuant to a Registration Statement that has
been declared effective by the Commission, if the board of directors
of the Company reasonably determines that such public sales or
distributions would interfere in any material with any transaction
involving the Company that the board of directors reasonably
determined to be material to the Company. The Company will notify the
Holder of such an event pursuant to Section 4.1(g). In the event of a
request by the board of directors of the Company that the Holder
refrain from effecting any purchases or public sales or distributions
of the Warrant Shares or offering any Warrant Shares pursuant to the
Registrant Statement, the Company shall be required (i) to lift such
restrictions regarding effecting public purchases or sales or
distributions of the Warrant Shares, as the case may be, as soon as
reasonably practicable after the board of directors shall reasonably
determine public sales or distributions by the Holder of the Warrant
Shares shall not interfere with such transaction and (ii) to deliver
an amended prospectus disclosing the material event, if necessary;
provided, that in no event shall any requirement that the Holder
refrain from effecting public sales or distributions in the Warrant
Shares extend for more than 90 days.
Section 2.2 Effective Registration Statement. A registration of
Warrant Shares pursuant to this Article 2 shall not be deemed to have been
effective (i) unless a Registration Statement with respect to the Warrant
Shares has become effective, provided that a Registration Statement which does
not become effective after the Company has filed such Registration Statement
solely by reason of the refusal to proceed by the Holder (other than a refusal
to proceed based upon the advice of counsel relating to a matter related solely
to the Company) shall be deemed to have been effected by the Company unless the
Holder shall have elected to pay all Registration Expenses in connection with
such registration; or (ii) if, after it has become effective, such registration
is withdrawn by the Company (other than at the request of the Holder),
interfered with by any stop order, injunction or other order or requirement of
the Commission or other governmental agency or court for any reason prior to the
expiration of a
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<PAGE> 3
ninety-day period following the effectiveness of such Registration Statement,
or (iii) if the conditions to closing specified in any purchase agreement or
underwriting agreement entered into in connection with such registration are
not satisfied due to some act or omission by the Company.
Section 2.3 Underwriting. If the Registration Statement required by
this Article 2 is filed pursuant to an underwritten offering, the right of the
Holder to registration pursuant to Section 2.1 shall be conditioned upon such
Holder's participation in such reasonable underwriting arrangements as the
Company shall make regarding the offering, and the inclusion of Warrant Shares
in the underwriting shall be limited to the extent provided herein. The Holder
shall (together with the Company and the other holders distributing their
securities through such underwriting) enter into an underwriting agreement in a
customary form with the managing underwriter selected for such underwriting by
the Company. If the managing underwriter concludes in its reasonable judgment
that the number of shares to be registered for selling stockholders (including
the Holder) would materially adversely effect such offering and exceeds the
number of shares which can be sold in such offering within a price range
reasonably acceptable to the underwriter, the Company and the Holder, then the
Holder shall be given written notice thereof stating the basis for such belief
and the number of Shares to be registered. The shares, together with the number
of shares of Common Stock or other securities subject to a contractual right to
participate in the offering, held by Persons that have notified the Company of
their intent to be included and registered in such offering, shall be reduced
on a pro rata basis based on the number of Warrant Shares proposed to be sold
by the Holder as compared to the number of shares proposed to be sold by all
stockholders. If the Holder disapproves of the terms of any such underwriting,
it may elect to withdraw therefrom by written notice to the Company and the
managing underwriter, delivered not less than ten days before the effective
date. Any securities excluded or withdrawn from such underwriting shall be
withdrawn from such registration, and shall not be transferred in a public
distribution prior to 90 days after the effective date of the registration
statement relating thereto, or such other shorter period of time as the
underwriters may require. If Holder effect the sale of less than all his
Warrant Shares in such underwritten offering, the Company shall have the
continuing obligation to effect the registration of the remaining Warrant
Shares pursuant to Section 2.1 hereof.
ARTICLE 3. "PIGGY-BACK" REGISTRATION
Section 3.1 Right to Include Registrable Securities. Except as set
forth below, if the Company at any time proposes to file a Registration
Statement under the Act covering any of its securities other than (i) a
registration on Form S-4, Form S-8, or any successor or similar forms, or (ii)
a shelf registration under Rule 415 under the Act for the sole purpose of
registering shares to be issued in connection with the acquisition of assets,
whether or not for sale for its own account, it will each such time give prompt
written notice to the Holder of its intention to do so and of the Holder's
rights under this Article 3. Upon the written request of the Holder made within
30 days after the receipt of any such notice (which request shall specify the
Warrant Shares intended to be disposed of by the Holder and the intended method
of disposition thereof), the Company will use its best efforts to effect the
registration under the Act of all Warrant Shares which the Company has been so
requested to register by the Holder, to
3
<PAGE> 4
the extent required to permit the disposition in accordance with the intended
methods of disposition, by inclusion of such Warrant Shares in the Registration
Statement which covers the securities that the Company proposes register
("Piggy-Back Right"); provided, that if, at any time after giving written
notice of its intention to register any securities and prior to the effective
date of the Registration Statement filed in connection with such registration,
the Company shall determine for any reason either not to register or to delay
registration of such securities, the Company may, at its election, give written
notice of such determination to the Holder and, thereupon, (i) in the case of a
determination not to register, shall be relieved of its obligation to register
any Warrant Shares in connection with such registration (but not from its
obligation to pay the Registration Expenses in connection therewith), without
prejudice, subject to the rights of the Holder under Article 2 and (ii) in the
case of a determination to delay registering, shall be permitted to delay
registering any Warrant Shares, for the same period as the delay in registering
such other securities. The Company shall have no further obligation, and the
Holder shall have no rights, pursuant to any provision of this Article 3 after
the earlier of (a) five years from the date hereof or (b) the Warrant Shares
may be sold under Rule 144(k) promulgated under the Act. No registration
effected under this Article 3 shall relieve the Company of its obligation to
effect any registration under Article 2 unless all the Warrant Shares are
included in such registration.
Section 3.2 Priority in Piggy-Back Registrations. If (i) a
registration pursuant to Article 3 involves an underwritten offering of the
securities being registered, whether or not for sale for the account of the
Company, to be distributed by or through one or more underwriters under
underwriting terms appropriate for such a transaction, and (ii) the managing
underwriter of such underwritten offering shall inform the Company and the
Holder by letter of its belief that the distribution of all or a specified
number of such Warrant Shares concurrently with the securities being
distributed by such underwriters would interfere with the successful marketing
of the securities being distributed by such underwriters (such writing to state
the basis of such belief and the approximate number of such Warrant Shares
which may be distributed without such effect), then the Company may, upon
written notice to the Holder, reduce pro rata (if and to the extent stated by
such managing underwriter to be necessary to eliminate such effect) the number
of such Warrant Shares and securities proposed to be sold by any Person other
than the Company the registration of which shall have been requested by the
Holder and each security holder so that the resultant aggregate number of such
securities so included in such registration shall be equal to the number of
shares stated in such managing underwriter's letter.
ARTICLE 4. REGISTRATION PROCEDURES
Section 4.1 Preparation of Filings. If and whenever the Company is
required to use its best efforts to effect the registration of any Warrant
Shares under the Act as provided in Articles 2 or 3 the following shall apply:
(a) Registration Statement. The Company shall promptly
prepare and file with the Commission the requisite Registration
Statement to effect such registration (including such audited
financial statements as may be required by the Act or the rules and
regulations promulgated thereunder) and thereafter use its reasonable
best efforts to cause
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<PAGE> 5
such Registration Statement to become and remain effective; provided,
however, that the Company may withdraw any registration of its
securities at any time prior to the effective date of the Registration
Statement relating thereto; provided further, that before filing to
such Registration Statement or any amendments thereto, the Company
will furnish to the Holder and its counsel copies of all such
documents proposed to be filed.
(b) Amendments. The Company shall prepare and file with the
Commission such amendments, post-effective amendments and supplements
to such Registration Statement and the prospectus used in connection
therewith as may be necessary to keep such Registration Statement
effective and to comply with the provisions of the Act with respect to
the disposition of all securities covered by such Registration
Statement for the time periods specified in Section 2.1(b).
(c) Copies of Documents. The Company shall furnish to the
Holder and each underwriter, if any, of the securities being sold by
the Holder such number of conformed copies of such Registration
Statement and of each amendment and supplement thereto (in each case
including all exhibits to such Registration Statement), such number of
copies of the prospectus contained in such Registration Statement
(including each preliminary prospectus and any summary prospectus) and
any other prospectus filed pursuant to Rule 424 under the Act and such
other documents, as the Holder and underwriter, if any, may reasonably
request in order to facilitate the public sale or other disposition of
the securities owned by the Holder (it being understood that the
Company consents to the use of the prospectus and any amendments or
supplement thereto by the Holder and the underwriter or underwriters,
if any, in connection with the offering and sale of securities covered
by the prospectus or any amendment or supplement thereto).
(d) Blue-Sky. The Company will use its reasonable best
efforts to register or qualify all Warrant Shares under the securities
laws or blue sky laws of the jurisdictions as the Holder and any
underwriter of the securities being sold by the Holder shall
reasonably request, to keep such registrations or qualifications in
effect for so long as such Registration Statement remains in effect,
and take any other action which may be reasonably necessary or
advisable to enable the Holder and underwriter to consummate the
disposition in such jurisdictions of the securities owned by the
Holder, except that the Company shall not for any such purpose be
required to qualify generally to do business as a foreign corporation
in any jurisdiction wherein it would not but for the requirements of
this subsection (d) be obligated to be so qualified, or to consent to
general service of process in any such jurisdiction.
(e) Expenses. The Company will pay all Registration Expenses
in connection with any registration effected pursuant to Article 2 or
Article 3.
(f) Other Approvals. The Company will use its reasonable best
efforts to cause all Warrant Shares covered by such Registration
Statement to be registered with or approved by such other governmental
agencies or authorities as may be necessary to enable the Holder to
consummate the intended disposition of such securities.
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<PAGE> 6
(g) Notice of Events. The Company will notify the Holder at
any time when a prospectus relating to such Holder is required to be
delivered under the Act, upon the Company's discovery that, or upon
the happening of any event as a result of which, the prospectus
included in such Registration Statement, as then in effect, includes
an untrue statement of a material fact or omits to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which
they were made. At the request of the Holder, the Company will
promptly prepare and furnish to the Holder and each underwriter, if
any, a reasonable number of copies of a supplement to or an amendment
of such prospectus as may be necessary so that, as thereafter delivered
to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances
under which they were made.
(h) Listing. The Company will cause all Warrant Shares
covered by the Registration Statement to be listed on each securities
exchange or traded or quoted on each market on which the same class of
securities issued by the Company are then listed, traded or quoted.
(i) Transfer Agent. The Company will provide a transfer
agent, registrar and a CUSIP number for all Warrant Shares no later
than the effective date of such Registration Statement.
Section 4.2 Data from the Shareholders. The Company may require the
Holder to furnish the Company, and Holder agrees to provide to the Company,
such information regarding the Holder and the distribution of such securities
as the Company may from time to time reasonably request in writing.
Section 4.3 Discontinuance of Use of Prospectus. The Holder agrees by
acquisition of such Warrant Shares that, upon receipt of any written notice
from the Company of the occurrence of any event of the kind described in
Section 4.1(g), the Holder will forthwith discontinue the Holder's offer of
Warrant Shares pursuant to the Registration Statement relating to such Warrant
Shares until the Holder's receipt of the copies of the supplemented or amended
prospectus contemplated by Section 4.1(g) and, if so directed by the Company,
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, then in the Holder's possession of the prospectus
relating to such Warrant Shares at the time of receipt of such notice.
Section 4.4 Underwritten Offerings. If requested by the underwriters
for any underwritten offering by the Holder pursuant to a registration under
Article 2 or Article 3, the Company will enter into an underwriting agreement
with such underwriters for such offering, such agreement to be reasonably
satisfactory in form and substance to the Company, the Holder and the
underwriters, and to contain such representations and warranties by the Company
and such other terms as are generally prevailing in agreements of this type.
The Holder will cooperate with the Company in the negotiation of the
underwriting agreement. The Holder shall be a party to such underwriting
agreement.
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<PAGE> 7
Section 4.5 Preparation: Reasonable Investigation. In connection with
the preparation and filing of each Registration Statement under the Act
pursuant to this Agreement, the Company will give the Holder, and its counsel
and accountants, the opportunity to participate in the preparation of such
Registration Statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto.
ARTICLE 5. INDEMNIFICATION
Section 5.1 Indemnification by the Purchaser. In the event of any
registration of any securities of the Company under the Act, the Company will,
and hereby does, severally indemnify and hold harmless in the case of any
registration statement filed pursuant to Article 2 or 3, the Holder and each
underwriter, if any, of the Holder's securities, and each person who controls
the Holder or the underwriter within the meaning of Section 15 of the Act,
against any losses, claims, damages or liabilities, joint or several, to which
the Holder may become subject under the Act or otherwise, insofar as such
losses, claims, damages or liabilities (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
any Registration Statement under which such securities were registered under the
Act, any preliminary prospectus, final prospectus or summary prospectus
contained therein, or any amendment or supplement thereto, or any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and the Company will
reimburse the Holder for any legal or any other expenses reasonably incurred by
him in connection with investigating or defending any such loss, claim,
liability, action or proceeding; provided that the Company shall not be liable
in any such case to the extent that any such loss, claim, damage, liability (or
action or proceeding in respect thereof) or expense arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in such Registration Statement, any such preliminary prospectus,
final prospectus, summary prospectus, amendment or supplement in reliance upon
and in conformity with written information furnished to the Company through an
instrument duly executed by the Holder, specifically stating that it is for use
in the preparation thereof and, provided further that the Company shall not be
liable to any Person who participates as an underwriter, in the offering or
sale of Warrant Shares or to any other Person, if any, who controls such
underwriter within the meaning of the Act, in any such case to the extent that
any such loss, claim, damage, liability (or action or proceeding in respect
thereof) or expense arises out of such Person's failure to send or give a copy
of the final prospectus, as the same may be then supplemented or amended,
within the time required by the Act to the Person asserting an untrue statement
or alleged untrue statement or omission or alleged omission at or prior to the
written confirmation of the sale of Warrant Shares to such Person if such
statement or omission was corrected in such final prospectus. Such indemnity
shall remain in full force and effect regardless of any investigation made by or
on behalf of the Holder of any such director, officer, and shall survive the
transfer of such securities by such holder.
Section 5.2 Indemnification by the Seller. To the extent permitted by
law, the Holder will indemnify the Company, each of its directors and officers,
each underwriter, if any, of the Company's securities covered by such a
Registration Statement, each person who controls
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<PAGE> 8
the Company or such underwriter within the meaning of Section 15 of the Act, and
each other person selling the Company's securities, covered by such Registration
Statement, each of such person's officers and directors and each person
controlling such persons within the meaning of Section 15 of the Act, against
all claims, losses, damages and liabilities (or actions in respect thereof)
arising out of or based on any untrue statement (or alleged untrue statement) of
a material fact contained in any such Registration Statement, prospectus,
offering circular or other document, or any omission (or alleged omission) to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, or any violation by the Holder of any
rule or regulation promulgated under the Act applicable to the Holder and
relating to action or inaction required of the Holder in connection with any
such registration, qualification or compliance, and will reimburse the Company,
such other persons, such directors, officers, persons, underwriters or control
persons for any legal or other expenses reasonably incurred in connection with
investigating or defending any such claim, loss, damage, liability or action, in
each case to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in such
Registration Statement, prospectus, offering circular or other document in
reliance upon and in conformity with written information furnished to the
Company by the Holder specifically for use therein. In addition, insofar as the
foregoing indemnity relates to any such untrue statement (or alleged untrue
statement) or omission (or alleged omission) made in the preliminary prospectus
but eliminated or remedied in the amended prospectus on file with the Commission
at the time the Registration Statement becomes effective or in the final
prospectus filed pursuant to applicable rules of the Commission or in any
supplement or addendum thereto, the indemnity agreement herein shall not inure
to the benefit of the Company, any underwriter if a copy of the final prospectus
filed pursuant to such rules, together with all supplements and addenda thereto,
was not furnished to the person or entity asserting the loss, liability, claim
or damage at or prior to the time such furnishing is required by the Act.
Section 5.3 Notices of Claims, etc. Promptly after receipt by an
indemnified party of notice of the commencement of any action or proceeding
involving a claim referred to in Sections 5.1 or 5.2 such indemnified party
will, if a claim in thereof is to be made against an indemnifying party, give
written notice to the latter of the commencement of such action, provided that
the failure of any indemnified party to give notice as provided herein shall not
relieve the indemnifying party of its obligations under Sections 5.1 or 5.2,
except to the extent that the indemnifying party is actually prejudiced by such
failure to give notice. In case any such action is brought against an
indemnified party, unless in such indemnified party's reasonable judgment a
conflict of interest between such indemnified and indemnifying parties may
exist in respect of such claim, the indemnifying party shall be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified, to the extent that the indemnifying
party may wish, with counsel reasonably satisfactory to such indemnified party,
and after notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party shall not be
liable to such indemnified party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
consent of the indemnified party, consent to entry of any judgment or enter
into any settlement of any such action which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of
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a release from all liability, or a covenant not to sue, in respect to such
claim or litigation. No indemnified party shall consent to entry of any
judgment or enter into any settlement of any such action the defense of which
has been assumed by an indemnifying party without the consent of such
indemnifying party.
Section 5.4 Indemnification Payments. The indemnification required by
this Article 5 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received or
expense, loss, damage or liability is incurred.
ARTICLE 6. DEFINITIONS
As used herein, unless the context otherwise requires, the following
terms have the following respective meanings:
Act: means the Securities Act of 1933, or any similar Federal
statute, and the rules and regulations of the Commission thereunder,
all as of the same shall be in effect at the time. References to a
particular section of the Securities Act of 1933 shall include a
reference to the comparable section, if any, of any such similar
Federal statute.
Commission: means the Securities and Exchange Commission or
any other Federal agency at the time administering the Securities Act.
Exchange Act: means the Exchange Act of 1934, or any
federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time. Reference
to a particular section of the Securities Exchange Act of 1934 shall
include a reference to the comparable section, if any, of any such
similar federal statute.
Person: means a corporation, as association, a partnership, an
organization, business, an individual, a governmental or political
subdivision thereof or a governmental agency.
Registration Expenses: means all expenses incident to the
Company's performance of or compliance with Article 2 or 3, including,
without limitation, all registration, filing, listing, and NASD fees,
all fees and expenses of complying with securities or blue sky laws,
all word processing, duplicating, printing and engraving expenses,
messenger and delivery expenses, the fees and disbursements of counsel
for the Company and of its independent public accountants, including
the expenses of any special audits or "cold comfort" letters required
by or incident to such performance and compliance, premiums and other
costs of policies of insurance against liabilities arising out of the
public offering of the Warrant Shares being registered and any fees
and disbursements of underwriters customarily paid by issuers or
sellers of securities, but excluding underwriting discounts and
commissions and transfer taxes, if any.
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Warrant Shares: means the 1,500,000 shares of the Company's
Common Stock purchased or purchasable by the holder of the Warrant issued to
the Holder dated as of the date hereof upon the exercise of such Warrant.
ARTICLE 7. MISCELLANEOUS
Section 7.1 Remedies. The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach hereof
and hereby agrees to waive the defense in any action for specific performance
of such an obligation that a remedy at law would be adequate.
Section 7.2 Assignment. This Agreement shall not be assignable by
either party hereto without the written consent of the other party.
Section 7.3 Descriptive Headings. The descriptive headings of the
several sections and paragraphs of this Agreement are inserted for reference
only and shall not limit or otherwise affect the meaning hereof.
Section 7.4 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED
BY, THE LAWS OF THE STATE OF TEXAS WITHOUT PREJUDICE TO THE PRINCIPLES OF
CONFLICTS OF LAW.
Section 7.5 Counterparts. This Agreement may be executed
simultaneously in any number of counterparts, each of which shall be deemed an
original, but all such counterparts together constitute one and the same
instrument.
Section 7.6 Entire Agreement. This Agreement embodies the entire
agreement and understanding between the Company and the Holder and supersedes
all prior agreements and understandings relating to the subject matter hereof.
Section 7.7 Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained not be affected or impaired thereby.
Section 7.8 Amendments and Waivers. This Agreement may be amended and
the Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company shall have obtained
the written consent of the Holder.
Section 7.9 Notices. Except as otherwise provided in this Agreement,
all communications provided for hereunder shall be in writing and sent by
first-class mail, postage prepaid, and (a) if addressed to the Holder, at P.O.
Box 27888, Houston, Texas 77227 or (b) if addressed to the Company, 10554
Tanner Road, Houston, Texas 77024 to the attention of its President.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective officers thereunto duly authorized
as of the date first above written.
TRANSAMERICAN WASTE INDUSTRIES, INC.
By: /s/ J. DAVID GREEN
----------------------------------
Name: J. David Green
--------------------------------
Title: Sr. Vice President
-------------------------------
/s/ ROBERT K. MOSES, JR.
-------------------------------------
Robert K. Moses, Jr.
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