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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
METROTRANS CORPORATION
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(Name of Issuer)
Common Stock, par value $0.01 per share
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(Title of Class of Securities)
59266510
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(CUSIP Number)
The Mayflower Corporation plc Gibson, Dunn & Crutcher LLP
Mayflower House 200 Park Avenue, 48th Floor
London Road, Loudwater, High Wycombe New York, New York 10166
Bucks HP10 9RF Tel: (212) 351-4000
Tel: 011-44-1494450145 Attn: Steven P. Buffone
Attn: Robin Lamb
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
September 15, 1998
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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 [ ].
Note: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
Page 1 of 8
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SCHEDULE 13D
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CUSIP NO. 59266510 PAGE 2 OF 8 PAGES
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
THE MAYFLOWER CORPORATION PLC
THE CORPORATE TAX IDENTIFICATION NUMBER IN THE UNITED KINGDOM IS:
326/10025.
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)[ ]
(b)[x]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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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 KINGDOM
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY 0
OWNED BY
EACH ------------------------------------------------------------------
REPORTING
PERSON WITH 8 SHARED VOTING POWER
1,650,400 shares
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9 SOLE DISPOSITIVE POWER
1,650,400 shares
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10 SHARED DISPOSITIVE POWER
0
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,650,450
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES [x]
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
40.4%
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14 TYPE OF REPORTING PERSON
CO
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ITEM 1. SECURITY AND ISSUER
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This statement on Schedule 13D (this "Statement") relates to Common Stock, par
value $0.01 per share (the "Metrotrans Common Stock"), of Metrotrans
Corporation, a Georgia corporation ("Metrotrans"). The address of the principal
executive offices of Metrotrans is 200 Westpark Drive, Suite 220, Peachtree
City, Georgia 30269.
ITEM 2. IDENTITY AND BACKGROUND
-----------------------
This Statement is being filed by The Mayflower Corporation plc ("Mayflower"), a
corporation organized and existing under the laws of the United Kingdom. The
principal business of Mayflower is the design, engineering and manufacturing of
automotive bodies for major vehicle manufacturers and the design, manufacture
and assembly of urban transit buses. Mayflower's principal place of business
and principal office is located at Mayflower House, London Road, Loudwater, High
Wycombe, Bucks, HP109RF.
The directors and Executive Officers of Mayflower are:
Rupert Nicholas Hambro Non-Executive Chairman; Chairman of J.O.
Hambro & Co. Ltd.
John William Peter Simpson Chief Executive
David Thomas Donnelly Managing Director of Finance and Strategy
John Joseph Fleming Managing Director of Business Development
Terence Victor Whitmore Managing Director of Operations
David William Romanis Harland Non-Executive Director; Deputy Chief
Executive of Lynton Group Inc.
All directors and Executive Officers (collectively, "Related Persons") of
Mayflower are citizens of the United Kingdom and (except as provided below) have
their principal place of business at Mayflower House, London Road, Loudwater,
High Wycombe, Bucks, HP109RF. Mr. Hambro's business address is J.O. Hambro & Co
Ltd, 10 Park Place, London SW1A1LP and Mr. Harland's business address is The
Lynton Group Inc., Denham Airport, Hangar Road, Uxbridge, Middlesex UB95DF.
Neither Mayflower nor any of the Related Persons has during the last 5 years (i)
been convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
become subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, Federal or
State securities laws or finding any violation with respect to such laws.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
-------------------------------------------------
Mayflower acquired 1,650,400 shares of Metrotrans Common Stock (the "Purchased
Shares") (40.4%) pursuant to an Agreement, dated August 21, 1998 (the
"Agreement"), between Mayflower, Mayflower (U.S. Holdings), Inc., Metrotrans, D.
Michael Walden ("Mr. Walden"), Terri B. Hobbs ("Ms. Hobbs"), Randolph B. Stanley
and M. Earl Meck. Mr. Walden is Chairman and Chief Executive Officer of
Metrotrans. Ms. Hobbs is Deputy Chief Executive Officer
Page 3 of 8
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of Metrotrans. Mr. Meck and Mr. Stanley were, prior to the Closing Date (as
defined below), shareholders of Metrotrans, each owning 825,200 shares of
Metrotrans Common Stock. A copy of the Agreement is attached hereto as
Exhibit 1. The consideration paid for each Purchased Share was $15.00, for an
aggregate purchase price of $24,756,000. The source of funds used to purchase
the Purchased Shares was available working capital of Mayflower.
ITEM 4. PURPOSE OF TRANSACTION
----------------------
Mayflower acquired the Purchased Shares reported hereby pursuant to the
Agreement for the purpose of expanding and complementing its interests and
capabilities in the global shuttle and touring bus industry.
Except as set forth above and as contemplated by the Agreement and the Loan
Agreement (as defined below), each of which is described in Item 6 of this
Statement, Mayflower has no present plans or proposals which relate to or would
result in (i) the acquisition of additional securities of Metrotrans or the
disposition of securities of Metrotrans, (ii) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, involving
Metrotrans or any of its subsidiaries, (iii) a sale or transfer of a material
amount of assets of Metrotrans or any of its Subsidiaries, (iv) any change in
the present board of directors or management of Metrotrans, including any plans
or proposals to change the number or terms of directors or to fill any existing
vacancies on the Board, (v) any material change in the present capitalization or
dividend policy of Metrotrans, (vi) any other material change in Metrotrans'
business or corporate structure, (vii) changes in Metrotrans' charter, bylaws or
instruments corresponding thereto or other actions which may impede the
acquisition of control of Metrotrans by any person, (viii) causing a class of
securities of Metrotrans to be delisted from a national securities exchange or
to cease to be authorized to be quoted in an inter-dealer quotation system of a
registered national securities association, (ix) a class of equity securities of
Metrotrans becoming eligible for termination of registration pursuant to Section
12(g)(4) of the Securities Exchange Act of 1934, as amended, or (x) any action
similar to any of those enumerated above.
However, Mayflower and its affiliates, in their capacities as such and/or their
capacities as shareholders and/or directors of Metrotrans, may from time to time
be involved in discussions that relate to the transactions described in this
Item 4, and therefore retain the rights to modify their plans with respect to
the transactions described in this Item 4, to acquire or dispose of securities
of Metrotrans and to formulate plans and proposals that could result in the
occurrence of any such event described above, subject to compliance with
applicable laws and regulations and the terms of the Agreement.
Page 4 of 8
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ITEM 5. INTEREST AND SECURITIES OF METROTRANS
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Mayflower beneficially owns 1,650,400 shares of Metrotrans Common Stock, which
represents approximately 40.4% of the outstanding shares of Metrotrans Common
Stock. As detailed above, pursuant to the Agreement, on September 15, 1998,
Mayflower acquired such from Mr. Meck and Mr. Stanley. In addition, pursuant to
the Agreement, Mr. Walden and Ms. Hobbs have agreed to vote the Walden Shares
(as defined below) and the Hobbs Shares (as defined below), respectively, in
favor of the Mayflower Directors (as defined below).
Mayflower has shared power to vote or to direct the vote, and sole power to
dispose or direct the disposition, with respect to 1,650,400 shares of
Metrotrans Common Stock.
To Mayflower's knowledge, Mr. Walden has sole power to vote or to direct the
vote, and sole power to dispose or to direct the disposition, with respect
to 843,950 shares of Metrotrans Common Stock (which includes vested options to
acquire 18,750 shares).
To Mayflower's knowledge, Ms. Hobbs has sole power to vote or to direct the
vote, and sole power to dispose or to direct the disposition, with respect
to 69,750 shares of Metrotrans Common Stock (which includes vested options to
acquire 18,750 shares).
Mr. Walden is Chairman and Chief Executive Officer of Metrotrans and his
business address is 200 Westpark Drive, Suite 220, Peachtree City, Georgia
30269. Ms. Hobbs is Deputy Chief Executive Officer of Metrotrans and her
business address is 200 Westpark Drive, Suite 220, Peachtree City, Georgia
30269.
To Mayflower's knowledge, neither Mr. Walden nor Ms. Hobbs has during the last 5
years (i) been convicted in a criminal proceeding (excluding traffic violations
or similar misdemeanors) or (ii) been a party to a civil proceeding of a
judicial or administrative body of competent jurisdiction and as a result of
such proceeding was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, Federal
or State securities laws or finding any violation with respect to such laws.
To Mayflower's knowledge, none of the Related Persons beneficially owns any
securities of Metrotrans.
Except as disclosed in this Statement, Mayflower has not effected any
transaction involving Metrotrans Common Stock during the past 60 days.
Page 5 of 8
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ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
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TO SECURITIES OF METROTRANS
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Except with respect to the Agreement, the Loan Agreement (as defined below) and
the Subordination Agreement (as defined below), there are at present no
contracts, arrangements, understanding or relationships (legal or otherwise)
between the persons named in response to Item 2 or between such persons and any
person with respect to any securities of Metrotrans.
The Agreement provides, among other things, for the following:
. The purchase by Mayflower of the Purchased Shares. The closing of the
purchase and sale of the Purchased Shares took place on September 15, 1998
(the "Closing Date").
. The resignation of Mr. Meck and Mr. Stanley from the Metrotrans Board of
Directors (the "Board") on the Closing Date.
. The reconstitution of the Board to increase the number of directors from 6
to 8, consisting of 5 directors appointed by the directors of Metrotrans
immediately following the Closing Date and 3 directors appointed by
Mayflower (the "Mayflower Directors").
. The agreement by Mayflower, Mr. Walden and Ms. Hobbs to vote their shares
of Metrotrans Common Stock to maintain the composition and membership of
the Board as provided above.
. The agreement by Mayflower to vote its shares of Metrotrans Common Stock in
accordance with the vote of the majority of the Board with respect to all
matters presented to a vote of the shareholders; provided that Mayflower
may vote such shares as it determines with respect to certain matters
involving extraordinary transactions and certain other matters set forth in
Section 3(d) of the Agreement, which is attached to this Statement as
Exhibit 1 and incorporated herein by this reference, should any such matter
be presented to a vote of shareholders.
. The agreement (the "Loan Agreement") by Mayflower to loan to Metrotrans up
to $15 million (the "Loan") for a term of 5 years, which will be used for
working capital and to finance capital expenditures. A copy of the Loan
Agreement is attached hereto as Exhibit 2.
. Mr. Walden and Ms. Hobbs are each given a right (the "Put"), commencing
December 31, 2000 and expiring 45 days after results of operation are
published by Metrotrans for the period ending December 31, 2002 (the
"Option Term"), to tender all of their shares of Metrotrans Common Stock to
Mayflower at a price equal to the average of the closing bid and asked
prices reported on the Nasdaq National Market for the 20 trading days
immediately prior to the date that notice of intent to exercise the Put is
given; provided that in no event will the purchase price per share exceed
$40.00 per share, and provided further that the purchase price per share
will be no less than $10.00 per share for the period from December 31, 2000
to December 31, 2001; no less than $12.50 per share for the period from
January 1, 2002 to September 30, 2002; and no less than $15.00 per share
for the period from October 1, 2002 to December 31, 2002. As of the date of
the Agreement, to Mayflower's knowledge, Mr. Walden owned 843,950 shares of
Metrotrans Common Stock (including vested options to acquire 18,750 shares)
(the "Walden Shares") and Ms. Hobbs owned 69,750 shares of Metrotrans
Common Stock (including vested options to acquire 18.750 shares) (the
"Hobbs Shares").
. In the event that the Option Term expires without Mr. Walden and Ms. Hobbs,
or either of them, having exercised the Put, or under certain other
circumstances, Mayflower will have the right to purchase (the "Call"), at
any time prior to December 31, 2004, all of the Walden Shares and the Hobbs
Shares at a purchase price of $15.00 per share.
. The agreement by Mayflower that until the earlier to occur of Mr. Walden
exercising the Put, or Mayflower exercising the Call with respect to the
Walden Shares or the expiration of the Option Term (the "Standstill
Period"), Mayflower will not sell or purchase any shares of Metrotrans
Common Stock.
. After the Standstill Period, Mayflower will have certain rights to acquire
all of the remaining shares of Metrotrans Common Stock. However, if such
acquisition occurs prior to 45 days after publication of results of
operation of Metrotrans for the year ended December 31, 2001, Mayflower
must offer a minimum price of $15.00 per share.
The Loan Agreement provides for Mayflower to loan to Metrotrans up to $15
million for a term of 5 years, which will be used for working capital and to
finance capital expenditures. The Loan Agreement further provides that the Loan
is subordinated to Metrotrans' indebtedness to NationsBank, N.A. ("NationsBank")
under the terms of a credit agreement between NationsBank and Metrotrans (the
"NationsBank Credit Agreement"). On August 21, 1998, Mayflower, Metrotrans and
NationsBank executed a subordination agreement (the "Subordination Agreement")
effectuating such subordination. The Loan Agreement provides that the Loan will
bear interest, payable quarterly, at a rate of 0.5% above the rate paid by
Metrotrans under the NationsBank Credit Agreement and further provides that,
upon exercise of the Put or Call, Mayflower may convert the unpaid principal
amount of the Loan into Metrotrans Common Stock.
Page 6 of 8
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ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
--------------------------------
The following are filed herewith as Exhibits to this Statement:
Exhibit 1 Agreement dated August 21, 1998 between Mayflower, Metrotrans,
D. Michael Walden, Terri B. Hobbs, Randolph B. Stanley and
M. Earl Meck.
Exhibit 2 Loan Agreement dated August 21, 1998 between Mayflower and
Metrotrans.
Page 7 of 8
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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.
Dated as of this 24th day of September, 1998.
THE MAYFLOWER CORPORATION PLC
By: /s/ Robin Lamb
_______________________________
Name: Robin Lamb
Title: Corporate Secretary
Page 8 of 8
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EXHIBIT 99.1
AGREEMENT
This Agreement (this "Agreement") dated August 21, 1998 represents the
agreement of the parties listed below to the matters described herein, subject
only to the Conditions described in Section 2(d) and 8 below:
WHEREAS, the Board of Directors of The Mayflower Corporation plc has
approved this Agreement;
WHEREAS, the Board of Directors of Metrotrans Corporation, a Georgia
corporation (the "Corporation"), has duly approved Sections 3, 4, 7, 8 and 9 of
this Agreement;
WHEREAS, the Board of Directors of the Corporation has duly approved
transactions contemplated by Sections 2 and 5 of this Agreement, solely for the
purpose of approving Mayflower becoming an "interested shareholder" as
contemplated by Section 14-2-1132(a) of the Georgia Business Corporation Code;
and
WHEREAS, concurrently with the execution and delivery of this Agreement,
the Corporation and Mayflower (as defined below) are entering into a Loan
Agreement pursuant to which Mayflower has agreed to lend to the Corporation an
aggregate amount of $15.0 million (the "Loan Agreement").
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt, adequacy and sufficiency of which
are hereby acknowledged by the parties hereto, the parties hereto hereby agree
as follows:
(1) PARTIES
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The parties to this Agreement are the following:
a. The Mayflower Corporation plc, a United Kingdom corporation, having its
principal offices at Mayflower House, Loudon Road, London, High
Wycombe, Bucks HP10 9RF, England and Mayflower (U.S. Holdings), Inc., a
Delaware corporation (hereinafter "Mayflower");
b. The Corporation, having its principal offices at Suite 220, 200
Westpark Drive, Peachtree City, Georgia 30269, USA ;
c. Mr. D. Michael Walden, a United States citizen, residing at 111
Christopher Road, Sharpsburg, Georgia 30277, USA (hereinafter "Mr.
Walden");
d. Ms. Terri B. Hobbs, a United States citizen, residing at 250 Broadmoor
Drive, Fayetteville, Georgia 30215, USA (hereinafter "Ms. Hobbs" and
together with Mr. Walden, the "Management Stockholders");
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e. Messrs. Randolph B. Stanley (hereinafter "Mr. Stanley") and M. Earl
Meck (hereinafter "Mr. Meck" and together with Mr. Stanley, the
"Selling Stockholders"), both United States citizens, residing
respectively at 490 Potts Road, Conyers, Georgia 30094, and 275 Derby
Drive, Fayetteville, GA 30214, USA.
From time to time, Messrs. Walden, Stanley and Meck and Ms. Hobbs will be
referred to herein collectively as the "Shareholders"
(2) PURCHASE OF SHARES
-------------------
a. Each of the Selling Stockholders hereby agrees to sell, transfer,
convey, assign and deliver and Mayflower agrees to purchase from each
of the Selling Stockholders all of the shares of the common stock of
the Corporation (the "Corporation Common Stock") owned by each of the
Selling Stockholders (the "Shares") on the Closing Date provided in
Section 2(c) at a purchase price of $ 15.00 per Share (the "Purchase of
Shares").
b. Each of the Selling Stockholders represents and warrants to Mayflower
that:
1. Such Selling Stockholder is the record and beneficial owner of
825,200 Shares.
2. Such Selling Stockholder has sole power of disposition with respect
to the Shares owned by him.
3. The Shares and the certificates representing such Shares are now,
and the Shares and the certificates representing such Shares, except
as herein provided, at all times prior to the Closing Date will be,
held by such Selling Stockholder, free and clear of all claims,
liens, charges, security interests, proxies, pledges, charges,
equities, options, voting restrictions, rights of first refusal,
voting trusts or agreements, understandings or arrangements and any
other encumbrances of any kind or nature whatsoever (collectively
"Liens"), except liens pursuant to a Pledge Agreement involving
approximately 500,000 of the Shares of each Selling Stockholder in
favor of NationsBank, N.A., which shall be released as a condition
to the closing of the Purchase of Shares. On the Closing Date, upon
delivery of the certificates representing the Shares to Mayflower
and payment by Mayflower of the purchase price, each Selling
Stockholder will deliver to Mayflower and Mayflower will receive,
good, marketable and valid title to the Shares free and clear of any
Liens.
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4. The Selling Stockholders have the power and authority to execute
this Agreement and to perform the transactions contemplated hereby.
Subject to obtaining the release of NationsBank's Liens, no consent
or approval of any third party is necessary for the execution of
this Agreement by the Selling Stockholders and their performance of
the transactions contemplated hereby, except expiration of the
waiting period under the HSR Act. Subject to obtaining the release
of NationsBank's Liens, the execution of this Agreement by the
Selling Stockholders and their performance of the transactions
contemplated hereby do not violate or conflict with any obligations
of the Selling Stockholders to any third party.
c. The closing of the Purchase of Shares shall take place at the offices
of Long Aldridge & Norman LLP, Atlanta, Georgia at 10:00 A.M., Atlanta,
Georgia time within two (2) business days after the satisfaction of the
conditions set forth in Sections 2(d) and 8 hereof (the "Closing Date")
or at such other place and time as shall be mutually agreed upon by
Mayflower and the Corporation. On the Closing Date, (i) each of the
Selling Stockholders shall deliver his stock certificates to Mayflower
duly endorsed in favor of Mayflower and any other documents necessary
for Mayflower to have new share certificates issued in its name and to
effect the valid transfer of the Shares to Mayflower and (ii) Mayflower
shall pay the purchase price to each Selling Stockholder by wire
transfer of immediately available funds to the account designated by
such Selling Stockholder.
d. The respective obligation of Mayflower and each of the Selling
Stockholders to effect the Purchase of Shares is subject to the
following conditions:
1. Sections 3, 4, 7, 8 and 9 (as applicable) of this Agreement, shall
have been approved by the Board of Directors of the Corporation.
2. Any waiting period applicable to the Purchase of Shares under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended
(the "HSR Act") shall have expired or been terminated. Mayflower
shall be responsible for the filing fee payable under the HSR Act
and all reasonable cost to prepare any such filing.
3. The release by NationsBank of its Liens on the Shares.
4. No injunction or other legal restraint or prohibition prohibiting
the Purchase of Shares shall be in effect.
5. All other conditions contained in Section 8 hereof.
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e. The obligation of Mayflower to effect the Purchase of Shares is
subject to the following additional conditions:
1. The representations and warranties of the Selling Stockholders set
forth herein shall be true and correct as of the Closing Date.
2. The written resignation of the Selling Stockholders as directors of
the Corporation, effective on the close of business on the Closing
Date.
f. Each of the Selling Stockholders shall be liable for, and shall pay
when due, any and all taxes payable by the Selling Stockholders by
reason of the Purchase of Shares (as they relate to each Selling
Stockholder), or attributable to the Selling Stockholders by virtue of
the sale, transfer or delivery of the Shares hereunder. Mayflower
shall be responsible for payment of any transfer tax related to the
Purchase of Shares.
g. The Selling Stockholders shall use their best efforts to cause
NationsBank, N.A. to agree as soon as practicable to release its Liens
on the Shares of the Selling Stockholders on or before the Closing
Date. Mayflower and the Corporation shall make their respective
filings under the HSR Act as soon as practicable following execution of
this Agreement and shall reasonably cooperate with each other to effect
compliance with the HSR Act.
(3) BOARD OF DIRECTORS AND MANAGEMENT OF THE CORPORATION AND REPRESENTATIONS
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AND WARRANTIES
--------------
a. In connection with the Purchase of Shares, the Selling Stockholders
shall submit their resignations from the Board of Directors of the
Corporation, effective the close of business on the Closing Date. The
remaining Directors and the Directors appointed by those Directors
immediately thereafter in accordance with the following provisions of
this section 3(a), other than the Mayflower nominees, shall be referred
to herein as the "Non-Mayflower Directors." The remaining Directors
shall be the "Continuing Directors." The Non-Mayflower Directors shall
convene a meeting of the Board of Directors and increase the number of
Directors from six to eight. The Non-Mayflower Directors shall fill the
four vacancies so created with three nominees whose names and
biographical information shall be submitted by Mayflower and one
nominee selected by the Non-Mayflower Directors. Each year thereafter
in connection with the Annual Meeting of Shareholders or any other
meeting of Shareholders at which directors are nominated or elected,
the Non-Mayflower Directors shall nominate five Directors and Mayflower
shall nominate three Directors to fill the Board of Directors of the
Corporation. In the event any Non-Mayflower Director ceases to serve as
a Director of the Corporation, whether as a result of his resignation,
removal or otherwise, his successor shall be named by majority vote of
the remaining Non-Mayflower Directors, to serve until the next
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annual meeting of stockholders of the Corporation, and the successor
shall thereafter be treated as a Non-Mayflower Director for all
purposes of this Agreement; provided that any successor to a Continuing
Director may be elected only upon the recommendation of such successor
by a majority of the remaining Continuing Directors. In the event any
Director nominated by Mayflower ceases to serve as a Director of the
Corporation, whether as a result of his resignation, removal or
otherwise, his successor shall be named by majority vote of the
remaining Directors who were nominated by Mayflower, to serve until the
next annual meeting of stockholders of the Corporation. The size of the
Board of Directors shall not be expanded without approval of the Non-
Mayflower Directors and Mayflower Directors. The Bylaws of the
Corporation shall be amended to provide for the constituency of the
Board of Directors as herein provided, which bylaw provision may be
changed only by vote of a majority of the Directors, including a
majority of the Non-Mayflower Directors, the consent of which will not
be unreasonably withheld.
b. Mr. Walden shall continue to serve as Chairman and Chief Executive
Officer of the Corporation, for the period of and subject to the terms
of his employment agreement with the Corporation, as amended as of the
Closing Date. The foregoing is not intended to, and shall not be
construed to, change any of the obligations under the employment
agreement or create any obligations of Mayflower with respect to the
employment agreement. As soon as practicable after the date hereof but
in any event no later than the Closing Date, Mayflower will enter into
a separate agreement with Mr. Walden and Ms. Hobbs, which will contain
a non-competition provision effective following exercise of the Put or
the Call set forth in Section 5 hereof in consideration for the payment
of $1,500,000.00 to Mr. Walden and $500,000.00 for Ms. Hobbs. After the
Put described in Section (5) below has been exercised by Mr. Walden or
Ms. Hobbs, as the case may be, and the consideration for the Put option
paid, such agreement shall restrict Mr. Walden and Ms. Hobbs from
engaging in the activities specified in paragraph 6 of their respective
employment agreements for a period of five years from the date of
exercise of the Put or Call, as the case may be, and shall otherwise be
in a form reasonably satisfactory to Mayflower, Mr. Walden and Ms.
Hobbs. The cash consideration payable under such agreements shall be
payable in three (3) equal annual payments beginning on the date the
Put is exercised.
c. Mayflower, Mr. Walden and Ms. Hobbs each agree to vote their shares at
any meeting of the stockholders of the Corporation or in any written
consent in lieu thereof to maintain the composition and membership of
the Board of Directors of the Corporation as provided in section 3(a)
above.
d. Mayflower represents that neither it nor any of its directors, officers
or affiliates either individually or as a Group (as defined in Section
13(d) of the
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Securities Exchange Act of 1934, as amended) own, of record or
beneficially, or have the right to purchase any shares of the
Corporation Common Stock, other than pursuant to this Agreement.
Mayflower shall vote its shares of Corporation Common Stock in
accordance with the vote of the majority of the Board of Directors with
respect to all matters presented to a vote of the shareholders;
provided, however, Mayflower may vote its shares of Corporation Common
Stock as it shall determine on any of the following matters, should any
such matter be presented to a vote of shareholders:
(i) a proposal to transfer, lease or sell substantially all of the
assets of the corporation;
(ii) a merger, combination or amalgamation of the corporation with any
unaffiliated entity;
(iii) a recapitalization of the corporation, including specifically the
creation of a new class of shares of the corporation;
(iv) an increase in the authorized stock of the corporation;
(v) any stock splits or stock dividends;
(vi) any change in the independent auditors of the corporation.
(vii) any proposal to the shareholders, which would result in the
dissolution and/or liquidation of the corporation.
Neither Mayflower nor any affiliate of Mayflower shall call a meeting of
the shareholders of the Corporation for the purpose of submitting a
proposal to the shareholders to accomplish any of the matters listed in
(i) through (vii) above. Neither Mayflower nor any affiliate of
Mayflower will call, attempt to call or solicit consents to call a
special meeting of shareholders of the Corporation. Neither Mayflower
nor any affiliate of Mayflower shall solicit the vote or consent of any
stockholder of the Corporation for any purpose other than has been
approved by a majority vote of the Board of Directors of the Corporation
or that is inconsistent with provisions of this Agreement.
e. The rights and obligations of Mayflower under this Section 3 shall
terminate forty-five (45) days after results of operations are published
by the Corporation for the period ended on December 31, 2002, on the
date that the "Put" contained in Section 5 hereof is consummated by Mr.
Walden, or the Call is exercised as to Mr. Walden as a result of his
termination from employment with the Company, whichever event shall
first occur.
6
<PAGE>
f. Upon the acquisition of Mr. Walden's shares of Corporation Common Stock
by Mayflower, whether as a result of the Put or Call described in
Paragraph (5) below or otherwise, Mr. Walden and the other Non-Mayflower
Directors shall tender their resignations effective immediately or upon
acceptance by Mayflower.
g. The Corporation's dividend policy will not be changed without
concurrence of the Mayflower Directors, which concurrence will not be
unreasonably withheld.
h. Representations and Warranties of Stockholders. The Management
----------------------------------------------
Stockholders hereby represent and warrant to Mayflower as follows:
1. Organization; Authorization; Validity of Agreement. Each
--------------------------------------------------
Management Stockholder has the legal capacity to execute and deliver this
Agreement and to consummate the transactions contemplated by this Agreement.
This Agreement has been duly executed and delivered by such Management
Stockholder and constitutes a valid and binding obligation of such Management
Stockholder enforceable against such Management Stockholder in accordance with
its terms.
2. Consents and Approvals; No Violations. The execution and delivery
-------------------------------------
of this Agreement does not and the performance of this Agreement by such
Management Stockholder will not (a) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or give
rise to any third party right of termination, cancellation, material
modification or acceleration) or result in the creation of any Lien on any
property or assets of such Management Stockholder under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
contract, commitment, arrangement, understanding, lease, permit, franchise,
agreement or other instrument or obligation of any kind to which such Management
Stockholder is a party or by which such Management Stockholder or any of its
properties or assets is bound or affected or (b) conflict with or violate any
order, writ, injunction, decree, judgment, statute, rule or regulation
applicable to such Management Stockholder or any of its properties or assets.
3. Ownership of Shares.
-------------------
Except for the rights accruing to a brokerage house with regard to 51,000
shares of Corporation Common Stock held by Ms. Hobbs in a margin account (the
"Hobbs Margin Shares"),
(a) Such Management Stockholder is the record and beneficial owner of
that number of shares of Corporation Common Stock set forth opposite such
Management Stockholder's name on Exhibit A attached hereto (the "Existing
Shares," and together with any other shares of Corporation Common Stock
subsequently acquired by such Management Stockholder in compliance with
this Agreement, the "Management Shares").
7
<PAGE>
(b) On the date hereof, the Existing Shares constitute all of the
outstanding shares of Corporation Common Stock owned of record and/or
beneficially by such Management Stockholder and all Stock Options held by
such Management Stockholder.
(c) Such Management Stockholder has sole power of disposition with
respect to all of the Existing Shares owned by such Management Stockholder
and sole voting power with respect to the matters set forth herein and sole
power to demand dissenter's or appraisal rights, in each case with respect
to all of the Existing Shares owned by it with no restrictions on such
rights, subject to applicable federal and state securities laws and the
terms of this Agreement.
4. No Encumbrances. Except for the Hobbs Margin Shares, the Existing
---------------
Shares and the certificates representing such shares are now, and the
Existing Shares and the certificates representing such Existing Shares at
all times during the term hereof will be, held by such Management
Stockholder, free and clear of all Liens. On the Put/Call Closing Date (as
defined herein), upon delivery of the certificates representing the
Management Shares to Mayflower, and payment by Mayflower of the purchase
price, the Management Stockholders will deliver to Mayflower and Mayflower
will receive, good, marketable and valid title to the Management Shares,
free and clear of any Liens.
i. Representations and Warranties of Mayflower. Mayflower hereby
-------------------------------------------
represents and warrants to the Stockholders as follows:
1. Organization; Authorization; Validity of Agreement. Mayflower is a
--------------------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of Delaware or the United Kingdom, as the case may be, and has the corporate
power and authority to enter into this Agreement and to carry out its
obligations hereunder. The execution and delivery of this Agreement by
Mayflower and the consummation by Mayflower of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on the part
of Mayflower and no other corporate proceedings on the part of Mayflower are
necessary to authorize this Agreement or any of the transactions contemplated
hereby. This Agreement has been duly executed and delivered by Mayflower and
constitutes a valid and binding obligation of Mayflower enforceable against
Mayflower in accordance with its terms.
2. Consents and Approvals; No Violations. The execution and delivery
-------------------------------------
of this Agreement do not and the performance of this Agreement by Mayflower will
not (a) conflict with, violate or result in any breach of the certificate of
incorporation or by-laws of Mayflower, (b) result in a violation or breach of,
or constitute (with or without notice or lapse of time or both) a default (or
give rise to any third party right of termination, cancellation, material
modification or acceleration) or result in the creation of any Lien on any
property or assets of Mayflower under any of the terms, conditions or provisions
of any note, bond, mortgage, indenture, license, contract, commitment,
arrangement, understanding, lease, permit, franchise, agreement or other
instrument or obligation of any kind to which Mayflower is a party or by which
Mayflower or any of its properties or assets is bound or affected or (c)
conflict with or violate any order, writ, injunction, decree, judgment, statute,
rule or regulation applicable to
8
<PAGE>
Mayflower or any of its properties or assets. Except as provided in the
Agreement, no consent, approval, order or authorization of, or registration,
declaration or filing with, or notice to, any state, federal or foreign public
body or authority is required by or with respect to Mayflower in connection with
the execution and delivery of this Agreement by Mayflower or the consummation by
Mayflower of the transactions contemplated hereby.
(4) MAYFLOWER LOAN
--------------
a. On the date hereof, Mayflower and the Corporation shall enter into a
mutually acceptable Loan Agreement providing for Mayflower or an
affiliate of Mayflower to lend up to US $15 Million Dollars (the
"Loan") to the Corporation for a term of five years, with principal due
at the end of the term. The Loan will be subordinated to the
Corporation's indebtedness to NationsBank pursuant to the terms of the
Credit Agreement in effect between the Corporation and NationsBank (the
"Credit Agreement"). The Loan will bear interest, payable quarterly on
the outstanding principal balance, at a rate of 0.5% above the rate
paid by the Corporation to NationsBank pursuant to the Credit
Agreement. The proceeds of the Loan shall be used to provide working
capital and to fund capital expenditures pursuant to a business plan
approved by the Board of Directors of the Corporation. The Loan
Agreement shall provide for a system of cash calls by which the
Corporation's management will be able to draw down the Loan. The Loan
shall be evidenced by a promissory note in favor of Mayflower or its
affiliate.
b. If Mr. Walden exercises his right to require Mayflower to purchase his
Shares pursuant to Section 5 below, or Mayflower exercises the call
pursuant to Section 5, Mayflower or its affiliate may thereafter have
the right to convert the unpaid principal and interest of the Loan into
common stock of the Corporation. The price per share for such
conversion shall be the average of the closing bid and asked prices for
the Corporation's common stock reported on the Nasdaq National Market
for the twenty (20) trading days immediately prior to the date of
Mayflower's or its affiliate's exercise of its conversion rights or the
appraised fair value determined by an independent appraiser if the
Common Stock is not traded on a trading market.
(5) PUT RIGHTS
----------
a. Mr. Walden and Ms. Hobbs shall have the right, commencing December 31,
2000 and expiring forty-five (45) days after results of operations are
published by the Corporation for the period ending December 31, 2002
(the "Option Term"), to tender all, but not less than all, of either of
their Management Shares (the "Put") to Mayflower in accordance with the
provisions set forth in this Agreement. During the Option Term, the Put
may be exercised at the election of Mr. Walden or Ms. Hobbs by giving
9
<PAGE>
notice of exercise to Mayflower at any time that is at least 20 days
but not more than 45 days after the Corporation has made a public
announcement of its quarterly or annual earnings for the fiscal quarter
immediately preceding such exercise. If the Put is exercised, Mayflower
shall be required to purchase the Management Shares at the average of
the closing bid and asked prices reported on the Nasdaq National Market
for the twenty (20) trading days immediately prior to the date the
notice of exercise is given, provided, however, that the purchase price
shall not exceed US $40.00 per Management Share and provided further
that the purchase price shall be no less than $10.00 per Management
Share for the period from December 31, 2000 to December 31, 2001; no
less than $12.50 per Management Share for the period from January 1,
2002 to September 30, 2002; and, not less than $15.00 per Management
Share for the period from October 1, 2002 to December 31, 2002.
Mayflower shall have the option to pay the purchase price in cash or,
with the consent of Mr. Walden or Ms. Hobbs, in Mayflower publicly
traded stock having a value equivalent to the purchase price.
b. Notwithstanding the foregoing, the Put may be exercised at any time
prior to the expiration of the Option Term by Mr. Walden and/or Ms.
Hobbs, or by their legal representative, in the event that his or her
employment with the Corporation should terminate because of death or
disability, as defined in Mr. Walden's employment agreement. In any
such event, the purchase price for the Put shall be $15.00 per
Management Share or the average of the closing bid and asked prices
reported on the Nasdaq National Market (or other primary exchange or
inter-dealer quotation system on which the Corporation Common Stock is
then listed or traded) the twenty (20) trading days immediately prior
to the date of exercise of the Put, whichever amount is higher. Ms.
Hobbs shall have the right, prior to the expiration of the Option Term,
to exercise the Put at any time on or after the date of death or
disability of Mr. Walden.
c. In the event that the Option Term expires without Mr. Walden and Ms.
Hobbs, or either of them, having exercised the Put, or Mr. Walden or
Ms. Hobbs voluntarily terminates their employment with the Corporation,
or a Management Stockholder's employment with the Corporation is
terminated for "Cause" (as defined below), Mayflower shall have the
right to purchase (the "Call"), at any time prior to December 31, 2004,
all of the Management Shares owned by each of Mr. Walden and Ms. Hobbs
at a purchase price of US $15.00 per Management Share, in accordance
with the provisions set forth in this Agreement. The Call shall be
exercised by written notice from Mayflower, accompanied by a tender of
the aggregate purchase price. Mr. Walden and Ms. Hobbs shall
immediately deliver all of their share certificates duly endorsed for
transfer to Mayflower. For purposes of this subsection, termination of
employment for "Cause" shall mean termination as a result of Mr. Walden
or Ms. Hobbs, as the case may be, being convicted of, or the subject of
an indictment by a governmental authority within the United States for,
a felony.
10
<PAGE>
d. Transfers by Operation of Law. In the event that prior to the
-----------------------------
expiration of the Option Term a Management Stockholder (i) files a
voluntary petition under any bankruptcy or insolvency law or a petition
for the appointment of a receiver or makes an assignment for the
benefit of creditors, or (ii) is subjected involuntarily to such a
petition or assignment or to an attachment or other legal or equitable
interest with respect to its Existing Shares, and such involuntary
petition or assignment or attachment is not discharged within 30 days
after its date, or (iii) is subject to a transfer of Existing Shares by
operation of law, Mayflower shall have the right, at any time from the
date of such event to the date 60 days after the date the Corporation
receives written notice from the Management Stockholder of such event,
to elect to purchase all of the Management Shares which are owned by
said Management Stockholder, at the higher of the prices provided in
Sections 5(a) and 5(c) hereof in accordance with the terms provided in
this Agreement.
e. Transfers in Violation of Agreement. If any transfer of Management
-----------------------------------
Shares is made or attempted contrary to the provisions of this
Agreement, Mayflower shall have the right to purchase such Management
Shares from the owner thereof or his transferee at any time before or
after the transfer, at the lower of the prices provided in Sections
5(a) or 5(c) hereof. In any such case, if any Management Stockholder
whose Management Shares are purchased by Mayflower pursuant to the
provisions of this Agreement fails to tender certificates for such
Management Shares for transfer to Mayflower as required by Section 5 of
this Agreement, Mayflower may deposit the purchase price for such
Management Shares with any bank or trust company doing business within
50 miles of the Corporation's principal office, for the account of such
Management Stockholder, to be held by such bank or trust company until
withdrawn by such Management Stockholder. Upon such deposit by
Mayflower of such amount and upon notice to the Management Stockholder
who was required to sell the Management Shares to be sold pursuant to
this Agreement shall at such time be deemed to have been sold,
assigned, transferred and conveyed to Mayflower, such Management
Stockholder shall have no further rights thereto and the Corporation
shall record such transfer in its stock transfer book. In addition to
the foregoing remedy and any other legal or equitable remedies which it
may have, Mayflower may enforce its rights by actions for specific
performance, for judgment for specific acts or for vesting of title (
in each case to the extent permitted by law), and may refuse to
recognize any transferee of such Management Shares as one of its
stockholders for any purpose, including without limitation for purposes
of dividend and voting rights, until all applicable provisions of this
Agreement have been complied with.
11
<PAGE>
f. Stop Transfer. Each Management Stockholder agrees with and covenants to
-------------
Mayflower that it shall not request that the Corporation register the
transfer (book-entry or otherwise) of any certificate or uncertificated
interest representing any of the Management Shares other than the Hobbs
Margin Shares. Within two Business Days of the date hereof and the
receipt of any Management Shares, the Corporation will direct the
Corporation's transfer agent to place stop transfer order instructions
with respect to the Management Shares and will notify such transfer
agent that this Agreement places restrictions on the Management Shares.
g. Payment of Purchase Price. The purchase price for any Shares being
-------------------------
purchased and sold pursuant to the provisions of Sections 5 and 6 of
this Agreement shall be paid at the Put/Call Closing (as hereinafter
defined) of the purchase and sale of such Management Shares.
h. Closing. The closing (the "Put/Call Closing") of the purchase and sale
-------
of any Management Shares pursuant to Sections 5 or 6 hereof shall take
place at the offices of Long Aldridge & Norman LLP in Atlanta, Georgia
at 10:00 a.m. (Georgia time) on the fifth (5th) business day following
the date the Put Notice or the Call Notice is given or such other time
as may be agreed upon by the Management Stockholders and Mayflower. At
the Closing, the certificate(s) representing the Management Shares
being purchased and sold pursuant hereto shall be delivered by or on
behalf of the Management Stockholder, in proper form for transfer,
accompanied by stock powers duly executed in blank (and with all
requisite stock transfer stamps and such supporting instruments, if
any, as then may be required to effect transfer of registration)
against delivery of a check payable to the Management Stockholder in
the amount of the purchase price or delivery of certificates
representing shares of Mayflower stock deliverable in payment of the
purchase price, as applicable.
i. Refusal to Deliver Certificates. If the Management Stockholder refuses
-------------------------------
to deliver the certificates representing any of its Management Shares
to be sold hereunder in connection with the exercise of the Put,
Mayflower shall not be obligated to proceed with the Put/Call Closing.
If the Management Stockholder refuses to deliver the certificates
representing any of its Management Shares to be sold hereunder in
connection with the exercise of the Call, Mayflower may, in addition to
all other remedies it may have, deposit the purchase price for such
Management Shares with any bank or trust company doing business within
50 miles of Mayflower's principal office, for the account of such
Management Stockholder, to be held by such bank or trust company until
withdrawn by such Management Stockholder. Upon such deposit by
Mayflower of such amount and upon notice to the Management Stockholder
who was required to sell, the Management Shares to be sold pursuant to
this Agreement shall at such time be deemed to have been sold,
assigned, transferred and conveyed to Mayflower, such Management
12
<PAGE>
Stockholder shall have no further rights thereto and the Corporation
shall record such transfer in its stock transfer book. In addition to
the foregoing remedy and any other legal or equitable remedies which it
may have, Mayflower may enforce its rights by actions for specific
performance, for judgment for specific acts or for vesting of title (
in each case to the extent permitted by law), and may refuse to
recognize the Management Stockholder who was required to sell his or
her Management Shares as one of its stockholders for any purpose,
including without limitation for purposes of dividend and voting
rights.
j. Legends. An original of this Agreement shall be kept in the files of
-------
the Corporation at its principal office, and reference to this
Agreement shall be endorsed on all stock certificates of the
Corporation for all Management Shares held by the Stockholders now or
hereafter issued, by writing or stamping thereon the following (or a
similar) legend, provided, however, that no legend shall be placed on
the Hobbs Margin Shares:
"The transfer, sale, assignment, mortgage, hypothecation, pledge,
creation of a security interest in or lien on, encumbrance of, gift of,
trust (voting or other) of, or other disposition of the securities
represented by this certificate is restricted by an Agreement dated
August ___, 1998, a copy of which may be examined at the principal
office of the Corporation.
THE FOLLOWING SHALL BE PLACED ON ALL MANAGEMENT SHARES THAT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.] The securities
represented by this certificate have not been registered under the
Securities Act of 1933 and may not be disposed or of encumbered without
such registration or an opinion of counsel satisfactory to the
Corporation that such registration is not required."
(6) FURTHER PURCHASE OF SHARES BY MAYFLOWER
---------------------------------------
Until such time as Mr. Walden shall have exercised his Put pursuant to
Section 5 above, Mayflower shall have exercised its Call with respect to Mr.
Walden's shares pursuant to Section 5 above or the Option Term shall have
expired, whichever shall occur first, (i) Mayflower and its directors, officers
and affiliates, individually and as a group, directly or through any affiliate,
agree not to sell or purchase, contract to sell or purchase, obtain a right to
purchase or sell or otherwise acquire or sell any shares of common stock of the
Corporation and (ii) each of the Management Stockholders hereby covenants and
agrees that such Management Stockholder shall not (A) except with respect to the
Hobbs Margin Shares, offer for sale, sell, transfer (including by way of gift),
tender, pledge, encumber or otherwise subject to a Lien, assign or otherwise
dispose of, enforce or permit the execution of the provisions of any redemption
agreement with the Corporation or enter into any contract, option or other
arrangement or understanding with respect
13
<PAGE>
to or consent to the offer for sale, sale, transfer, tender, pledge,
encumbrance, or other disposition of, or exercise any discretionary powers to
distribute (collectively, "Transfer"), directly or indirectly, any or all of the
Management Shares owned by him or her or any interest therein to any Person, (B)
grant any proxies or powers of attorney with respect to any Management Shares,
deposit any Management Shares into a voting trust or enter into a voting
agreement with respect to any Management Shares; or (C) take any action that
would make any representation, warranty or covenant of any Management
Stockholder contained in this Agreement untrue or incorrect or have the effect
of preventing or disabling any Management Stockholder from performing its
obligations under this Agreement. The foregoing shall not apply to the exercise
by Mr. Walden or Ms. Hobbs of options to purchase Shares granted to either of
them by the Corporation. Thereafter, Mayflower may offer to acquire all of the
remaining shares of common stock of the Corporation, provided, however, that in
the event that Mayflower shall offer to acquire all of the publicly traded
shares of common stock of the Corporation prior to forty-five (45) days after
publication of results of operations of the Corporation for the year ended
December 31, 2001, Mayflower shall offer a price of not less than US $15.00 per
share, subject to receipt of a fairness opinion satisfactory to the Board of
Directors of the Corporation.
(7) TECHNICAL SERVICES
------------------
After the closing of the Purchase of Shares, Mayflower will provide
various technical services to the Corporation, at the request of Mr. Walden.
These shall include, but not be limited to, Mayflower arranging for its
affiliated company, Walter Alexander, to second Mr. Nigel McGaughey or such
other person(s) designated by Mayflower and approved by the Corporation (which
approval may not be unreasonably withheld) on behalf of the Corporation for a
period of up to two years. Mayflower and the Corporation will also select
various specialized industry consultants, satisfactory to both Mayflower and the
Corporation, which will be retained by the Corporation. The Corporation will pay
the base salary while Mr. McGaughey or such other person(s) are assigned to the
Corporation not to exceed US $150,000 per year. The Corporation will also pay
the fees of any consultants which may be retained to provide technical services
to the Corporation.
(8) CONDITIONS TO THIS AGREEMENT
----------------------------
This Agreement is intended to commit the parties to the terms and
conditions applicable to such party, as contained herein subject to the
satisfaction of the following conditions:
a. Mayflower Loan -- The Loan Agreement shall have been duly executed
--------------
and delivered by the parties thereto with written consent and approval
of NationsBank.
(9) ADDITIONAL PROVISIONS
---------------------
a. Fee Agreement -- The Corporation will receive a fee if the Corporation
-------------
through Mr. Walden or other executive of the Corporation introduces to
Mayflower, or Mr. Walden or other executive of the Corporation provides
material assistance to Mayflower at Mayflower's request in connection
with, an entity for the purpose of a transaction which results in
Mayflower
14
<PAGE>
acquiring a company or an interest in a company or substantially all of
the assets of a company in the business of manufacturing and assembling
coaches, buses, chassis or the principle components thereof. The
Corporation will receive a commission based on the Lehman formula (5%
of the first one million of the purchase consideration; 4% of the next
one million; 3% of the next one million; 2% of the next one million; 1%
of any consideration in excess of US $4 million). The fee will not be
earned in an acquisition made by the Corporation.
b. Exclusivity Agreement -- Notwithstanding any provision contained in the
---------------------
Exclusivity Agreement dated as of July 1, 1998 between the parties
hereto to the contrary (the "Exclusivity Agreement") the Exclusivity
Period (as defined in the Exclusivity Agreement) and the termination
date provided in Section 6 thereof, shall each be extended to September
30, 1998 or the Closing Date, whichever occurs first.
c. Confidentiality Agreement -- The Confidentiality Agreement between
-------------------------
Mayflower and the Corporation, dated as of June 23, 1998, shall remain
in effect in accordance with its terms.
d. Public Announcement -- No party shall make a public announcement of nor
-------------------
disclose the existence or terms of this Agreement until all conditions
of Sections 2(d) and 8 herein have been fulfilled and only then with
the prior written consent of Mayflower and the Corporation. In the
event that either Mayflower or the Corporation is required to disclose
the existence and terms of this Agreement by applicable law, rules or
regulations, any disclosure will be subject to prior review of the
Corporation and Mayflower.
e. Cooperation -- Each of the parties hereto agrees to use its reasonable
-----------
best efforts to take, or cause to be taken, all actions, and to do, or
cause to be done, and to assist and cooperate with the other parties in
doing, all things necessary, proper or advisable under applicable laws
and regulations to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this
Agreement.
f. Terms and Termination -- This Agreement shall terminate on September
---------------------
30, 1998 if the Closing Date has not occurred.
g. Assignment -- Neither this Agreement nor any of the rights, interests
----------
or obligations hereunder shall be assigned by any of the parties hereto
(whether by operation of law or otherwise) without prior written
consent of the other parties, provided that Mayflower may assign, at
its sole discretion, its rights and obligations hereunder in whole to
any direct or indirect wholly owned subsidiary of Mayflower, but no
such assignment shall relieve Mayflower of its obligations hereunder if
such assignee does not
15
<PAGE>
perform such obligations. Subject to the foregoing, this Agreement will
be binding upon, inure to the benefit of and be enforceable by, the
parties and their respective successors and permitted assigns, and the
provisions of this Agreement are not intended to confer any rights or
remedies hereunder upon any person other than the parties hereto and
their respective successors and permitted assigns.
h. Amendments -- This agreement may not be modified, amended, altered or
----------
supplemented, except upon the execution and delivery of a written
agreement executed by the parties hereto.
i. Notices -- All notices, requests, claims, demands and other
-------
communications hereunder shall be in writing and shall be given (and
shall be deemed to have been duly received if so given) by hand
delivery, telecopy, or by mail (registered or certified mail, postage
prepaid, return receipt requested) or by any courier service, such as
Federal Express, providing proof of delivery. All communications
hereunder shall be delivered to the respective parties at the following
addresses:
(i) If to Mayflower, to:
Mayflower House
Loudon Road
London
High Wycombe, Bucks HP10 9RF
England
Telephone: 011 -- 44 -- 1494 450 145
Telecopier: 011 -- 44 -- 1494 450 607
Attention: Mr. Terry Clapp
With a copy to:
Philippe Schreiber, Esq.
26 Sheep Pond Road
Nantucket, Massachusetts 02553
Telephone: 508.325.0092
Telecopier: 508.325.5157
And to:
16
<PAGE>
Gibson, Dunn & Crutcher, LLP
200 Park Avenue
New York, New York 10166-0193
Telephone: 212.351.4000
Telecopier: 212.351.4035
Attn: Steven P. Buffone, Esq.
(ii). If to the Corporation, to:
200 Westpark Drive
Suite 220
Peachtree City, Georgia 30269
Telephone: 770.632.0003
Telecopier: 770.632.0414
Attn: Mr. D. Michael Walden
With a copy to:
Long Aldridge Norman LLP
One Peachtree Center
303 Peachtree Street, Suite 5300
Atlanta, Georgia 30308
USA
Telephone: 404.527.4000
Telecopier: 404.527.4198
Attn: William L. Floyd, Esq.
17
<PAGE>
(iii) If to the Stockholders, to:
Randolph B. Stanley
490 Potts Road
Conyers, Georgia 30094
USA
Telephone: 770.483.8781
Telecopier: 770.761.0322
With a copy to:
M. Earl Meck
275 Derby Drive
Fayetteville, Georgia 30214
USA
Telephone: 770.461.9183
Telecopier: 770.460.8076
Or to such other address as the person to whom notice is given may
have previously furnished to the others in writing in the manner set
forth above.
j. Governing Law -- This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of Georgia, without giving effect
to the principles of conflicts of laws thereof.
k. Enforcement -- Each of the parties hereto agrees, recognizes and
-----------
acknowledges that a breach by it of any covenants or agreements
contained in this Agreement will cause the other party to sustain
damages for which it would not have an adequate remedy at law for money
damages, and therefore each of the parties hereto agrees that in the
event of such breach, the aggrieved party shall be entitled to the
remedy of specific performance of such covenants and agreements and
injunctive and other equitable relief in addition to any other remedy
to which it may be entitled, at law or in equity.
l. Costs and Expenses -- Mayflower shall pay prior to the Closing Date the
------------------
reasonable fees, costs and expenses of the Corporation from May 31,
1998 to the Closing Date in any manner related to Mayflower as more
specifically set forth in a letter to Mr. Clapp dated August 3, 1998.
In no event shall Mayflower be obligated to pay more than $483,000
pursuant to this Section 9(1).
18
<PAGE>
m. Counterparts -- This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed to be an original, but all
of which shall constitute one and the same Agreement.
n. Entire Agreement. This Agreement constitutes the entire agreement among
----------------
the parties with respect to the subject matter hereof and supersedes
all other prior and contemporaneous agreements and understandings, both
written and oral, among the parties with respect to the subject matter
hereof.
o. Severability. Whenever possible, each provision or portion of any
------------
provision of this Agreement will be interpreted in such manner as to be
effective and valid under applicable law but if any provision or
portion of any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or
rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or portion of any
provision in such jurisdiction, and this Agreement will be reformed,
construed and enforced in such jurisdiction to the maximum extent
permitted by law in accordance with the intention of the parties.
p. Definitions. For purposes of this Agreement:
-----------
(a) "beneficially own" or "beneficial ownership" with respect to any
securities shall mean having "beneficial ownership" of such
securities (as determined pursuant to Rule 13d-3 under the
Securities Exchange Act of 1934, as amended, and the rules and
regulations thereunder (the "Exchange Act"), including pursuant to
any agreement, arrangement or understanding, whether or not in
writing. Without duplicative counting of the same securities by
the same holder, securities beneficially owned by a Person shall
include securities beneficially owned by all other Persons with
whom such Person would constitute a "group" as described in
Section 13(d)(3) of the Exchange Act.
(b) "Person" shall mean an individual, corporation, limited liability
Corporation, partnership, joint venture, association, trust,
unincorporated organization or other entity.
(c) In the event of a stock dividend or distribution, or any change in
the Corporation Common Stock by reason of any stock dividend,
split-up, recapitalization, combination, exchange of shares or the
like, the term "Shares" shall be deemed to refer to and include
the Shares as well as all such stock dividends and distributions
and any shares into which or for which any or all of the Shares
may be changed or exchanged.
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(d) "Business Day" shall mean a day on which banks are not required or
authorized to be closed in the City of Atlanta, Georgia.
SIGNATURES ON NEXT PAGE
20
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
as of the date first written above.
The Mayflower Corporation plc
By: /s/ John Fleming
-----------------------------------
Name: John Fleming
Title: Chairman Director
Mayflower (U.S. Holdings), Inc.
By: /s/ John Fleming
-----------------------------------
Name: John Fleming
Title: Director
Metrotrans Corporation
By: /s/ D.Michael Walden
----------------------------------
D. Michael Walden
Chairman and Chief Executive Officer
/s/ D. Michael Walden
-------------------------------------
D. Michael Walden
/s/ Terri B. Hobbs
-------------------------------------
Terri B. Hobbs
/s/ Randolph B. Stanley
-------------------------------------
Randolph B. Stanley
/s/ M. Earl Meck
-------------------------------------
M. Earl Meck
21
<PAGE>
EXHIBIT 99.2
LOAN AGREEMENT
THIS LOAN AGREEMENT (this "Loan Agreement") is made as of this 21st day of
August, 1998 between METROTRANS CORPORATION, a Georgia corporation, as borrower
("Borrower") and THE MAYFLOWER CORPORATION PLC or an Affiliate thereof,
("Lender").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, Borrower has requested that Lender make available to Borrower a
revolving credit facility permitting advances of up to Fifteen Million Dollars
($15,000,000) at any one time outstanding; and
WHEREAS, Lender is willing to extend such financing to Borrower subject to
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt, adequacy and sufficiency of which
are hereby acknowledged by the parties hereto, Borrower and Lender hereby agree
as follows:
ARTICLE 1
DEFINITIONS
Section 1.1 Defined Terms. When used herein the following terms shall
-------------
have the following meanings (terms in the singular to have the same meaning when
used in the plural and vice versa) and capitalized terms used herein and not
otherwise defined herein shall have the meanings given to such terms in the
NationsBank Loan Agreement:
"Advance" or "Advances" shall mean the amount advanced by Lender to
Borrower pursuant to Article 2 hereof on the occasion of any borrowing.
"Agreement" shall mean this Agreement.
"Agreement Date" shall mean the date as of which this Agreement is dated.
"Available Commitment" shall mean, at any time, the difference between (a)
the commitment in effect on such date minus (b) the aggregate principal amount
of all Loans outstanding on such date.
"Borrower" shall mean Metrotrans Corporation, a Georgia corporation.
"Borrower Common Stock" shall mean the common stock par value $0.01 of
Borrower.
"Business Day" shall mean a day on which banks are open for the transaction
of business required for this Agreement in London, England and Atlanta, Georgia.
"Commitment" shall mean the obligation of Lender to make Advances to
Borrower from time to time, pursuant to the terms hereof in the aggregate amount
outstanding of Fifteen Million Dollars ($15,000,000.00).
<PAGE>
"Default" shall mean any of the events specified in Section 8.1 hereof,
regardless of whether there shall have occurred any passage of time or giving of
notice, or both, that would be necessary in order to constitute such event an
Event of Default.
"Default Rate" shall mean a simple interest rate per annum equal to the
Default Rate (as defined in the NationsBank Loan Agreement) plus 2.5%.
"Dollars" shall mean lawful currency of the United States of America.
"Event of Default" shall mean any of the events specified in Section 8.1
hereof, provided that any requirement for notice or lapse of time has been
satisfied.
"General Agreement" means the Agreement dated August __, 1998 between
Borrower, Lender and certain shareholders of Borrower.
"Indebtedness" shall mean, with respect to any Person, (a) all items,
except items of partners' equity or capital stock or surplus or general
contingency or deferred tax reserves, which in accordance with GAAP,
consistently applied, would be included in determining total liabilities as
shown on the liability side of a balance sheet of such Person, (b) all direct or
indirect obligations secured by any Lien to which any property or asset owned by
such Person is subject, whether or not the obligation secured thereby shall have
been assumed, (c) to the extent not otherwise included, all obligations of other
Persons which such Person has guaranteed, including but not limited to, all
obligations of such Person consisting of recourse liability with respect to
accounts receivable sold or otherwise disposed of by such Person, and (d) to the
extent not otherwise included, all Capitalized Lease Obligations of such Person
and all obligations of such Person with respect to leases constituting part of a
sale and leaseback arrangement.
"Interest Period" shall mean the period beginning on the date such Advance
is made and ending on the last day of the calendar month in which such Advance
is made, provided, however, that if an Advance is made on the last day of any
calendar month, it shall have an Interest Period ending on, and its Payment Date
shall be, the last day of the following calendar month.
"Lender" shall mean The Mayflower Corporation plc or any Affiliate thereof.
"Loans" shall mean, collectively, the amounts advanced by Lender to
Borrower under the Commitment, not to exceed the Commitment, and evidenced by
the Note.
"Loan Documents" shall mean this Agreement, the Note and all other
documents, agreements, certificates, reports, and instruments now or hereafter
executed in connection herewith or contemplated hereby.
"Materially Adverse Effect" shall mean any act, omission, or undertaking
which would, singly or in the aggregate, have a materially adverse effect upon
the business, assets, liabilities, financial condition, results of operations,
or business prospects of Borrower or any of its Subsidiaries or upon the ability
of Borrower or any of its Subsidiaries to perform any material obligations under
this Agreement or any other Loan Document; in any case, whether resulting from
any single act, omission, situation, status, event, or undertaking, together
with other such acts, omissions, situations, statuses, events, or undertakings.
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<PAGE>
"Maturity Date" shall mean August 20, 2003 or such earlier date as payment
of the remaining outstanding principal amount of the Loans or of all remaining
outstanding Obligations shall be due (whether by acceleration or otherwise).
"NationsBank" means NationsBank, N.A.
"NationsBank Consent" means the written consent of NationsBank to the
transactions contemplated by this Agreement in form and substance reasonably
acceptable to Lender.
"NationsBank Loan Agreement" means the Loan Agreement, dated as of
September 5, 1997 between Metrotrans Corporation and NationsBank, N.A., and all
amendments, renewals, extensions, refundings or refinancings thereof.
"NationsBank Loan Agreement Interest Rate" means (i) the interest rate as
in effect from time to time under the NationsBank Loan Agreement or (ii) if the
NationsBank Loan Agreement is no longer in effect, the Prime Rate. A copy of
the NationsBank Loan Agreement, as amended through the Agreement date, is
attached hereto as Exhibit 4.
"Note" shall mean that certain promissory note dated as of the Agreement
Date in the original principal amount of Fifteen Million Dollars
($15,000,000.00) issued to Lender by Borrower, substantially in the form of
Exhibit 1 attached hereto, and any other notes executed and delivered by
Borrower to Lender with respect to the Loan, and any amendments, renewals or
extensions of the foregoing.
"Obligations" shall mean (a) all payment and performance obligations of
every kind, nature and description of Borrower, its Subsidiaries and any other
obligors to Lender under this Agreement and the other Loan Documents (including
any interest, fees and other charges on the Loans or otherwise under the Loan
Documents that would accrue but for the filing of a bankruptcy action with
respect to Borrower or any of its Subsidiaries or any other such obligor,
whether or not such claim is allowed in such bankruptcy action), as they may be
amended from time to time, or as a result of making the Loans, whether such
obligations are direct or indirect, absolute or contingent, due or not due,
contractual or tortious, liquidated or unliquidated, arising by operation of law
or otherwise, now existing or hereafter arising and (b) the obligation to pay an
amount equal to the amount of any and all damage which Lender may suffer by
reason of a breach by Borrower, any of its Subsidiaries, or any other obligor,
of any obligation, covenant or undertaking with respect to this Agreement or any
other Loan Document.
"Payment Date" shall mean the last day of any Interest Period.
"Permitted Liens" shall mean, as applied to any Person:
(a) Any Lien in favor of Lender given to secure the Obligations;
(b) (i) Liens on real estate for real estate taxes not yet delinquent
and (ii) Liens for taxes, assessments, judgments, governmental charges or
levies or claims the non-payment of which is being diligently contested in
good faith by appropriate proceedings and for which adequate reserves have
been set aside on such Person's books in accordance with GAAP, but only so
long as no foreclosure, distraint, sale or similar proceedings have been
commenced with respect thereto and remain unstayed for a period of thirty
(30) days after their commencement;
3
<PAGE>
(c) Liens of carriers, warehousemen, mechanics, laborers and
materialmen incurred in the ordinary course of business for sums not yet
due or being diligently contested in good faith, if reserves or appropriate
provisions shall have been made therefor;
(d) Liens incurred in the ordinary course of business in connection
with worker's compensation and unemployment insurance;
(e) Easements, rights-of-way, restrictions and other similar
encumbrances on the use of real property which do not interfere with the
ordinary conduct of the business of such Person, or Liens incidental to the
conduct of the business of such Person or to the ownership of its
properties which were not incurred in connection with Indebtedness or other
extensions of credit and which do not in the aggregate materially detract
from the value of such properties or materially impair their use in the
operation of the business of such Person;
(f) Purchase money security interests, which are perfected
automatically by operation of law, only for the period (not to exceed
twenty (20) days) of automatic perfection under the law of the applicable
jurisdiction, and limited to Liens on assets so purchased;
(g) Liens reflected by Uniform Commercial Code financing statements
filed in respect of Capitalized Lease Obligations permitted hereunder and
true leases of Borrower or any of its Subsidiaries;
(h) Liens incurred in the ordinary course of business reflected by
Uniform Commercial Code financing statements filed in respect of vehicles
on which Borrower is reflected as the owner but the lease and related title
have been assigned or otherwise conveyed to a third party;
(i) Other Liens outstanding on the Agreement Date;
(j) Other Liens in an amount not to exceed $500,000 in the aggregate
at any time outstanding;
(k) Liens on any asset of any corporation, partnership or other Person
existing at the time such Person is merged or consolidated with or into
Borrower or a Subsidiary in accordance with this Agreement and not created
in contemplation of such event; and
(l) Liens existing on any asset prior to the acquisition thereof by
Borrower or a Subsidiary in accordance with this Agreement and not created
in contemplation of such acquisition.
"Person" shall mean an individual, corporation, partnership, limited
liability company trust, or unincorporated organization, or a government or any
agency or political subdivision thereof.
"Prime Rate" shall mean, at any time, the fluctuating and floating rate per
annum equal to the rate of interest announced by NationsBank as its reference
rate for the determination of interest rates for loans of varying maturities in
Dollars to United States residents of varying degrees of creditworthiness and
being quoted by NationsBank as its "prime rate". The Prime Rate in effect as of
the close of business of each day shall be the applicable Prime Rate for that
day and each succeeding non-business day of NationsBank, in determining the
applicable Prime Rate. If NationsBank shall cease announcing a
4
<PAGE>
Prime Rate, the parties hereto shall mutually agree on a comparable reference
rate for purposes of this Agreement.
"Request for Advance" shall mean a certificate designated as a "Request for
Advance," signed by an Authorized Signatory requesting an Advance hereunder,
which shall, among other things, (a) specify the date of the Advance, which
shall be a Business Day and the amount of the Advance, (b) state that there
shall not exist, on the date of the requested Advance and after giving effect
thereto, a Default, as of the date of such Advance and after giving effect
thereto, (c) as to Advances which will increase the principal amount of the
Loans then outstanding, state that the proceeds of the Advance are needed by
Borrower to provide working capital and/or to fund capital expenditures of
Borrower approved by the Board of Directors of Borrower and (d) state the
NationsBank Loan Agreement Interest Rate as in effect on the date of the Request
for Advance, as certified to by an Authorized Signatory of Borrower in the
Request for Advance.
"Schedule of Permitted Advances" means the schedule attached hereto as
Exhibit 2 which sets forth the amount of permitted Advances.
"Senior Indebtedness" shall mean all Indebtedness of Borrower outstanding
from time to time under the NationsBank Loan Agreement, subject to a maximum
amount of $25,000,000.00
"Subsidiary Guaranty" shall mean each Subsidiary Guaranty in favor of
Lender, given by a Subsidiary of Borrower, each substantially in the form of
Exhibit 3 attached hereto.
Section 1.2 Interpretation. Each definition of an agreement in this
--------------
Article 1 shall, unless otherwise specified, include such agreement as modified,
amended, restated or supplemented from time to time in accordance herewith, and
except where the context otherwise requires, the singular shall include the
plural and vice versa. Except where otherwise specifically restricted,
reference to a party to this Agreement or any other Loan Document includes that
party and its successors and assigns. All capitalized terms used herein which
are defined in Article 9 of the Uniform Commercial Code in effect in the State
of Georgia on the date hereof and which are not otherwise defined herein shall
have the same meanings herein as set forth therein.
Section 1.3 General Cross References. Unless otherwise specified,
------------------------
references in this Agreement and in each other Loan Document to any Article or
Section are references to such Article or Section of this Agreement or such
other Loan Document, as the case may be, and, unless otherwise specified,
references in any Article, Section or definition to any clause are references to
such clause in such Article, Section or definition.
Section 1.4 Cross References to NationsBank Loan Agreement. Each cross
----------------------------------------------
reference to the NationsBank Loan Agreement shall be deemed a reference to (i)
the NationsBank Loan Agreement, or (ii) if the NationsBank Loan Agreement shall
no longer be in effect, such reference shall automatically be deemed a reference
to substantially similar provisions contained in any new agreement that replaces
the NationsBank Loan Agreement or (iii) if the NationsBank Loan Agreement shall
no longer be in effect and there shall be no agreement in effect which replaces
the NationsBank Loan Agreement, such references shall be deemed references to
additional terms provisions to be mutually agreed upon by Borrower and Lender at
such time, which provisions will be incorporated into this Agreement.
5
<PAGE>
ARTICLE 2
LOANS
Section 2.1 The Loans. Lender agrees, upon the terms and subject to the
---------
conditions of this Agreement, to lend and relend to Borrower from time to time
from the Agreement Date until the Maturity Date amounts which do not exceed in
the aggregate at any one time outstanding the amount of the Available Commitment
as in effect from time to time, provided, however, that such amounts are
permitted by the Schedule of Permitted Advances.
Section 2.2 Manner of Borrowing and Disbursement. Within two (2)
------------------------------------
Business Days of receipt by Lender of a Request for Advance, Lender shall,
subject to the satisfaction of the conditions set forth in Article 3, disburse
the amounts of the requested Advance in like funds by transferring the amounts
by wire transfer pursuant to Borrower's instructions.
Section 2.3 Interest.
--------
(a) Interest on each Advance shall be computed on the basis of a 360-day
year for the actual number of days elapsed and shall be payable at the
NationsBank Loan Agreement Interest Rate as in effect on the date of the
applicable Request for Advance plus 0.50%, in arrears on each applicable Payment
Date. Interest on Advances then outstanding shall also be due and payable on
the applicable Maturity Date.
(b) Interest Upon Default. Immediately upon the occurrence of an Event of
---------------------
Default, the outstanding principal balance of the Loans shall bear interest at
the Default Rate. Such interest shall be payable on demand, and shall accrue
until the earliest of (a) waiver or cure of the applicable Default, (b)
agreement by Lender to rescind the charging of interest at the Default Rate, or
(c) payment in full of the Obligations. Lender shall not be required to (x)
accelerate the maturity of any of the Loans, or (y) exercise any other rights or
remedies under the Loan Documents in order to charge interest hereunder at the
Default Rate.
Section 2.4 Prepayment. The principal amount of any Advance may be
----------
prepaid in full or in part at any time, without premium or penalty and without
regard to the Payment Date for such Advance. A notice of prepayment shall be
irrevocable.
Section 2.5 Repayment. The principal balance of all Loans shall be due
---------
and payable on the Maturity Date.
Section 2.6 Manner of Payment.
-----------------
(a) Each payment (including prepayments) by Borrower on account of the
principal of or interest on the Loans, fees, and any other amount owed to Lender
under this Agreement or the Note shall be made not later than 9:00 a.m.
(Atlanta, Georgia time) on the date specified for payment under this Agreement
to Lender in Dollars in immediately available funds. Any payment received by
Lender after 11:00 a.m. (Atlanta, Georgia time) shall be deemed received on the
next Business Day.
(b) If any payment under this Agreement or the Note shall be specified to
be made upon a day which is not a Business Day, it shall be made on the next
succeeding day which is a Business Day, and such extension of time shall in such
case be included in computing interest and fees, if any, in connection with such
payment.
6
<PAGE>
(c) Borrower agrees to pay principal, interest, fees and all other amounts
due hereunder or under the Note or under any other Loan Document without set-off
or counterclaim or any deduction whatsoever and free and clear of all taxes,
levies and withholding.
ARTICLE 3
CONDITIONS PRECEDENT
Section 3.1 Conditions Precedent to Initial Advance. The obligation of
---------------------------------------
Lender to make the initial Advance is subject to the fulfillment of each of the
following conditions prior to or contemporaneously with the making of such
Advance:
(a) Lender shall have received each of the following, in form and substance
satisfactory to Lender:
(i) duly executed Note;
(ii) duly executed Subsidiary Guaranty executed and delivered by
each Subsidiary of Borrower;
(iii) legal opinion of Long, Aldridge & Norman LLP, as general
counsel to Borrower and its Subsidiaries, addressed to Lender, and dated as
of the Agreement Date on such matters as Lender may reasonably request;
(iv) the NationsBank Consent and any other required consents to
the closing of this Agreement or to the execution, delivery and performance
of this Agreement and the other Loan Documents, each of which shall be in
form and substance satisfactory to Lender;
(v) a true, complete and correct copy of the resolutions of
Borrower authorizing it to execute, deliver and perform this Agreement and
the other Loan Documents;
(vi) copy of the duly executed General Agreement;
(vii) evidence that the Closing Date of the Purchase of Shares
(each as defined in the General Agreement) shall have occurred; and
(viii) all such other documents as Lender may reasonably request,
certified by an appropriate governmental official or an Authorized
Signatory if so requested.
Section 3.2 Conditions Precedent to Each Advance. The obligation of
------------------------------------
Lender to make each Advance, including but not limited to the initial Advance,
is subject to the fulfillment of each of the following conditions immediately
prior to or contemporaneously with such Advance:
(a) No Default shall then exist or be caused thereby;
(b) Lender shall have received a duly executed Request for Advance;
(c) There shall have occurred no Materially Adverse Effect and no event
which, in the reasonable opinion of Lender, may be expected to have a
Materially Adverse Effect;
7
<PAGE>
(d) The amount of the Advance shall be permitted by the Schedule of
Permitted Advances; and
(e) Lender shall have received all such other certificates, reports,
statements, opinions of counsel or other documents as Lender may reasonably
request.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES
Section 4.1 Representations and Warranties. Each of Borrower and its
------------------------------
Subsidiaries hereby represents and warrants to Lender that:
(a) Organization; Power; Qualification. Borrower is a corporation duly
----------------------------------
organized, validly existing, is in good standing under the laws of the state of
its incorporation. Borrower has had the power and authority, corporate and
otherwise, to own or lease and operate its properties and to carry on its
business as now being and hereafter proposed to be conducted. Each Subsidiary
of Borrower is a corporation or partnership, as applicable, duly organized,
validly existing and in good standing under the laws of the state of its
formation and has the corporate or partnership power (as applicable) and
authority to own or lease and operate its properties and to carry on its
business as now being and hereafter proposed to be conducted. Borrower and each
of its Subsidiaries are duly qualified and is in good standing as a foreign
corporation, and authorized to do business, in each jurisdiction in which given
the character of its properties or the nature of its business the failure to so
qualify or obtain such authorization would have a Materially Adverse Effect.
(b) Authorization; Enforceability. Borrower has the power and has taken
-----------------------------
all necessary action to authorize it to execute, deliver, and perform this
Agreement and each of the other Loan Documents to which it is a party in
accordance with the terms thereof and to consummate the transactions
contemplated hereby and thereby. This Agreement has been duly executed and
delivered by Borrower, and is, and each of the other Loan Documents to which
Borrower is a party is, a legal, valid, and binding obligation of Borrower,
enforceable in accordance with its terms, subject, as to enforcement of
remedies, to the following qualifications: (i) an order of specific performance
and an injunction are discretionary remedies and, in particular, may not be
available where damages are considered an adequate remedy at law, and (ii)
enforcement may be limited by bankruptcy, insolvency, liquidation,
reorganization, reconstruction, and other similar laws affecting enforcement of
creditors' rights generally (insofar as any such law relates to the bankruptcy,
insolvency, or similar event of Borrower).
(c) Compliance with Other Loan Documents and Contemplated Transactions.
------------------------------------------------------------------
The execution, delivery and performance, in accordance with their respective
terms, by Borrower of this Agreement and the Note, and by Borrower and its
Subsidiaries of each of the other Loan Documents to which they are respectively
party, and the consummation of the transactions contemplated hereby and thereby,
do not and will not (i) require any consent or approval, governmental or
otherwise not already obtained, (ii) violate any material Applicable Law
respecting Borrower or any Subsidiary of Borrower, (iii) conflict with, result
in a breach of, or constitute a default under the certificate or articles of
incorporation or by-laws, as amended, of Borrower or of any Subsidiary of
Borrower, or under any material indenture, agreement, or other instrument to
which Borrower or any of its Subsidiaries is a party or by which any of them or
any of their respective properties may be bound, or (iv) result in or require
the creation or imposition of any Lien upon or with respect to any property now
owned or hereafter acquired by Borrower or any of its Subsidiaries, except for
Permitted Liens.
8
<PAGE>
(d) Necessary Authorizations. Borrower and its Subsidiaries have secured
------------------------
all Necessary Authorizations, and all such Necessary Authorizations are in full
force and effect. None of said Necessary Authorizations are the subject of any
pending or, to the best of Borrower's knowledge, threatened attack or
revocation, by the grantor of the Necessary Authorization. Neither Borrower nor
any Subsidiary is required to obtain any additional Necessary Authorizations in
connection with the execution, delivery, and performance, in accordance with the
terms of this Agreement or any other Loan Document and the borrowing hereunder.
(e) No Senior Indebtedness. Except with respect to $2,000,000.00 of
----------------------
Indebtedness owed by Borrower in connection with certain Industrial Development
Revenue Bonds originally issued by Spaulding County Development Authority, the
Indebtedness of Borrower hereunder ranks and will rank at least equal with all
other present and future Indebtedness of Borrower other than Senior
Indebtedness.
ARTICLE 5
GENERAL COVENANTS
So long as any of the Obligations are outstanding and unpaid or Borrower
shall have the right to borrow hereunder (whether or not the conditions
precedent to borrowing have been or can be fulfilled), and unless Lender shall
otherwise consent in writing:
Section 5.1 Visits and Inspections. Borrower will, and will cause each
----------------------
of its Subsidiaries to, permit representatives of Lender to (a) visit and
inspect the properties of Borrower or any of its Subsidiaries during normal
business hours, (b) inspect and make extracts from and copies of its books and
records, and (c) discuss with its principal officers its businesses, assets,
liabilities, financial positions, results of operations, and business prospects.
Borrower and each of its Subsidiaries will also permit representatives of Lender
to discuss with their respective auditors their respective businesses, assets,
liabilities, financial condition, results of operations and business prospects.
Section 5.2 Use of Proceeds. Borrower will use the proceeds from the
---------------
Advances only for working capital and/or to fund capital expenditures approved
in advance by the Board of Directors of Borrower.
Section 5.3 Indemnity. Borrower for itself and on behalf of each of its
---------
Subsidiaries jointly and severally agrees to indemnify and hold harmless the
Lender and their Affiliates, employees, representatives, shareholders, officers,
directors and counsel (any of the foregoing shall be an "Indemnitee") from and
against any and all claims, liabilities, losses, damages, actions, reasonable
attorneys' fees of external counsel and expenses (as such fees and expenses are
incurred) and demands by any party, including the costs of investigating and
defending such claims, whether or not the Borrower, any Subsidiary or the Person
seeking indemnification is the prevailing party (a) resulting from any breach or
alleged breach by the Borrower or any Subsidiary of the Borrower of any
representation or warranty made hereunder; or (b) otherwise arising out of (i)
the Commitments or otherwise under this Agreement, any Loan Document or any
transaction contemplated hereby or thereby, including, without limitation, the
use of the proceeds of Loans hereunder in any fashion by the Borrower or the
performance of their respective obligations under the Loan Documents by the
Borrower or any of its Subsidiaries, (ii) allegations of any participation by
the Lender in the affairs of the Borrower or any of its Subsidiaries, or
allegations that the Lender has any joint liability with the Borrower or any of
its Subsidiaries for any reason, (iii) any claims against the Lender by any
shareholder or other
9
<PAGE>
investor in or lender to the Borrower or any Subsidiary, by any brokers or
finders or investment advisers or investment bankers retained by the Borrower or
by any other third party, arising out of the Commitments or otherwise under this
Agreement; or (c) in connection with taxes (not including federal or state
income taxes or other taxes based solely upon the revenues of such Persons),
fees, and other charges payable in connection with the Loans, or the execution,
delivery, and enforcement of this Agreement, the other Loan Documents, and any
amendments thereto or waivers of any of the provisions thereof; unless the
Person seeking indemnification hereunder is determined to have acted with gross
negligence or willful misconduct. The obligations of the Borrower and the
Subsidiaries under this Section 5.3 are in addition to, and shall not otherwise
limit, any liabilities which the Borrower might otherwise have in connection
with any warranties or similar obligations of the Borrower or any of its
Subsidiaries in any other Loan Document.
Section 5.4 Further Assurances. Borrower will promptly cure, or cause to
------------------
be cured, defects in the creation and issuance of the Note and the execution and
delivery of the Loan Documents (including this Agreement), resulting from any
act or failure to act by Borrower or any employee or officer thereof. Borrower
at its expense will promptly execute and deliver to Lender, or cause to be
executed and delivered to Lender, all such other and further documents,
agreements, and instruments in compliance with or accomplishment of the
covenants and agreements of Borrower in the Loan Documents, including this
Agreement, or to correct any omissions in the Loan Documents, or more fully
state the obligations set out herein or in any of the Loan Documents, or to make
any recordings, to file any notices, or to obtain any consents, all as may be
necessary or appropriate in connection therewith as may be reasonably requested.
Section 5.5 Miscellaneous. Borrower will comply with each and all of the
-------------
covenants contained in Article 5 of the NationsBank Loan Agreement.
ARTICLE 6
INFORMATION COVENANTS
So long as any of the Obligations are outstanding and unpaid or Borrower
has a right to borrow hereunder (whether or not the conditions precedent to
borrowing have been or can be fulfilled), Borrower will, upon request from
Lender, furnish or cause to be furnished to Lender at the address provided in
Section 9.1 hereof, all of the information, documents, certificates, notices,
reports and other items contained in Article 6 of the NationsBank Loan
Agreement.
ARTICLE 7
NEGATIVE COVENANTS
So long as any of the Obligations are outstanding and unpaid or Lender has
any obligation to make Advances hereunder, and unless Lender shall otherwise
consent in writing Borrower hereby agrees that:
Section 7.1 Indebtedness. Borrower shall not, and shall not permit any
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of its Subsidiaries to, create, assume, incur, or otherwise become or remain
obligated in respect of, or permit to be outstanding, any Indebtedness or
liability on account of deposits or advances for borrowed money or for the
deferred purchase price of any property or services, except: (a) the
Obligations; (b) Trade or accounts payable and/or similar obligations, and
accrued expenses, incurred in the ordinary course of business, other than
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for borrowed money; (c) Indebtedness expressly subordinated to the Obligations
upon terms approved in advance by Lender, in writing; (d) Indebtedness existing
on the date of this Agreement which is reflected in the financial statements
delivered to Lender in connection herewith; (e) Indebtedness secured by
Permitted Liens; (f) Indebtedness of Borrower or any of the Subsidiaries to
Borrower or any other Subsidiary so long as such Indebtedness is unsecured; (g)
Capitalized Lease Obligations to leasing companies incurred in the ordinary
course of business, related to sales-type leases for vehicles sold; (h) Other
Capitalized Lease Obligations not included in Section 7.1(g) hereof in an
aggregate principal amount outstanding at any time not to exceed $500,000; (i)
Indebtedness under deferred compensation plans in an aggregate principal amount
outstanding at any time not to exceed $1,000,000; (j) Other unsecured
Indebtedness of Borrower in an aggregate principal amount outstanding at any
time not to exceed $1,000,000; (k) Indebtedness in the form of Guaranties
permitted by Section 7.5 of the NationsBank Loan Agreement and (l) Indebtedness
outstanding from time to time under the NationsBank Loan Agreement in an
aggregate principal amount at any one time outstanding not to exceed $25.0
million.
Section 7.2 Limitation on Liens. Borrower shall not, and shall not
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permit any of its Subsidiaries to, create, assume, incur or permit to exist or
to be created, assumed, incurred or permitted to exist, directly or indirectly,
any Lien on any of its properties or assets, whether now owned or hereafter
acquired, except for Permitted Liens.
Section 7.3 Miscellaneous. Borrower shall comply with Sections 7.3
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through and including 7.14 of the NationsBank Loan Agreement.
ARTICLE 8
DEFAULT
Section 8.1 Events of Default. Each of the following shall constitute an
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Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule, or regulation of any
governmental or non-governmental body:
(a) Any representation or warranty made under this Agreement or any
other Loan Document shall prove incorrect or misleading in any adverse
material respect when made or deemed to be made pursuant to Section 4.1
hereof; or
(b) Borrower shall default in the payment of (i) any interest under
the Note or fees or other amounts, unremedied for fifteen (15) days,
payable to Lender under any of the Loan Documents, or any of them, when
due, or (ii) any principal under the Note when due; or
(c) Borrower shall default in the performance or observance of any
agreement or covenant contained in Article 6 or 7 hereof;
(d) Borrower shall default in the performance or observance of any
other agreement or covenant contained in this Agreement not specifically
referred to elsewhere in this Section 8.1, and such Default shall not be
cured to Lender's satisfaction within a period of thirty (30) days from the
occurrence of such Default;
(e) There shall occur any default in the performance or observance of
any agreement or covenant or breach of any representation or warranty
contained in any of the Loan Documents
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(other than this Agreement or as otherwise provided in Section 8.1 of this
Agreement) by Borrower, any of its Subsidiaries, or any other obligor
thereunder, which shall not be cured within a period of thirty (30) days
from the occurrence of such default; or
(f) There shall occur an Event of Default (as defined in the
NationsBank Loan Agreement and subject to any applicable cure periods
provided therein or any waivers provided by NationsBank) under the
NationsBank Loan Agreement and the principal of and interest on the loans
thereunder shall have been accelerated in accordance with the provisions of
the NationsBank Loan Agreement.
Section 8.2 Remedies. Subject to the provisions of Article 12, if an
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Event of Default shall have occurred and shall be continuing, Lender shall have
the right and option to take any of the actions provided in Section 8.2 of the
NationsBank Loan Agreement as if such actions were set forth herein and
applicable hereto.
ARTICLE 9
[INTENTIONALLY DELETED]
ARTICLE 10
MISCELLANEOUS
Section 10.1 Notices.
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(a) All notices and other communications required or permitted under this
Agreement shall be in writing and, if mailed by prepaid first-class mail or
certified mail, return receipt requested, at any time other than during a
general discontinuance of postal service due to strike, lockout or otherwise,
shall be deemed to have been received on the earlier of the date shown on the
receipt or three (3) Business Days after the official postmarked date thereof
and, if telecopied, shall be followed forthwith by letter and shall be deemed to
have been received on the next Business Day following dispatch and
acknowledgment of receipt by the recipient's telecopy machine. In addition,
notices hereunder may be delivered by hand or overnight courier, in which event
the notice shall be deemed effective when delivered. All notices and other
communications under this Agreement shall be given to the parties hereto at the
following addresses:
(i) If to Borrower, to it at:
Metrotrans Corporation
777 Greenbelt Parkway
Griffin, Georgia 30223
Attn: Richard M. Bruno
Telecopy: (770) 229-1422
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with a copy to:
Long, Aldridge & Norman
One Peachtree Center
Suite 5300
303 Peachtree Street, N.E.
Attn: William Floyd
Telecopy: (404) 527-4198
(ii) If to Lender, to it at:
The Mayflower Corporation plc
Mayflower House
London Road, Loudwater
High Wycombe, Buckinghamshire
HP10 9RF
Telecopy: 011-44-1494 450607
Attn: Mr. Terry Clapp
with copies to:
Philippe Schreiber, Esq.
26 Sheep Pond Road
Nantucket, MA 02553
Telecopy: (508) 325-5157
Gibson, Dunn & Crutcher LLP
200 Park Avenue, 48th Floor
New York, NY 10166
Telecopy: (212) 351-4035
Attn: Steven P. Buffone, Esq.
(b) Any party hereto may change the address to which notices shall be
directed under this Section 10.1 by giving ten (10) days' written notice of such
change to the other parties.
Section 10.2 Expenses. Borrower will promptly pay all reasonable costs
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and reasonable out-of-pocket expenses of obtaining performance under this
Agreement or the other Loan Documents and all reasonable costs and reasonable
out-of-pocket expenses of collection if default is made in the payment of the
Note, which in each case shall include reasonable fees and expenses of external
counsel for Lender actually incurred by Lender.
Section 10.3 Waivers. The rights and remedies of Lender under this
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Agreement and the other Loan Documents shall be cumulative and not exclusive of
any rights or remedies which it would otherwise have. No failure or delay by
Lender in exercising any right shall operate as a waiver of it. Lender
expressly reserves the right to require strict compliance with the terms of this
Agreement in connection with any funding of a request for an Advance. In the
event Lender decides to fund a request for an Advance at a time when Borrower is
not in strict compliance with the terms of this Agreement, such decision by
Lender shall not be deemed to constitute an undertaking by Lender to fund any
further requests for Advances or preclude Lender from exercising any rights
available to Lender under the Loan
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Documents or at law or equity. Any waiver or indulgence granted by Lender shall
not constitute a modification of this Agreement, except to the extent expressly
provided in such waiver or indulgence, or constitute a course of dealing by
Lender at variance with the terms of this Agreement such as to require further
notice by Lender of Lender's intent to require strict adherence to the terms of
this Agreement in the future. Any such actions shall not in any way affect the
ability of Lender, in its sole discretion, to exercise any rights available to
it under this Agreement or under any other agreement, whether or not Lender is a
party, relating to Borrower.
Section 10.4 [Intentionally Deleted]
Section 10.5 Assignment.
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(a) Borrower may not assign or transfer any of its rights or obligations
hereunder or under the Note without the prior written consent of Lender.
(b) Nothing in this Agreement or the Note, expressed or implied, is
intended to or shall confer on any Person other than the respective parties
hereto and thereto and their successors and assignees permitted hereunder and
thereunder any benefit or any legal or equitable right, remedy, or other claim
under this Agreement or the Note.
Section 10.6 Counterparts. This Agreement may be executed in any number
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of counterparts, each of which shall be deemed to be an original, but all such
separate counterparts shall together constitute but one and the same instrument.
Section 10.7 GOVERNING LAW. THE PARTIES HEREBY ACKNOWLEDGE AND AGREE
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THAT (A) THIS LOAN AGREEMENT AND THE NOTES HAVE, IN PART, BEEN NEGOTIATED IN,
EXECUTED AND DELIVERED IN, AND WILL PARTIALLY BE PERFORMED IN, THE STATE OF
GEORGIA, AND (B) ALL ADVANCES UNDER THE LOAN WILL BE MADE IN GEORGIA, AND (C)
THIS AGREEMENT AND THE NOTES SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF THE STATE OF GEORGIA.
Section 10.8 Severability. Any provision of this Agreement which is
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prohibited or unenforceable shall be ineffective to the extent of such
prohibition or unenforceability without invalidating the remaining provisions
hereof in that jurisdiction or affecting the validity or enforceability of such
provision in any other jurisdiction.
Section 10.9 [Intentionally Deleted]
Section 10.10 Headings. Headings used in this Agreement are for
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convenience only and shall not be used in connection with the interpretation of
any provision hereof.
Section 10.11 Pronouns. The pronouns used herein shall include, when
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appropriate, either gender and both singular and plural, and the grammatical
construction of sentences shall conform thereto.
Section 10.12 Entire Agreement; Amendments. This Agreement and the other
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Loan Documents represent the entire agreement between Borrower and Lender with
respect to the Loan and this Agreement and supersede all prior and
contemporaneous agreements relating to the subject matter hereof. No amendment
or modification of the terms and provisions of this Agreement shall be effective
unless in writing and signed by Lender and Borrower.
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ARTICLE 11
CONVERSION
Section 11.1 If (i) Michael Walden exercises the Put (as defined in the
General Agreement) in accordance with the terms of the General Agreement or (ii)
Lender exercises the Call (as defined in the General Agreement) in accordance
with the terms of the General Agreement, Lender or its Affiliate shall have the
right at any time thereafter, upon notice to Borrower (the "Conversion Notice")
-----------------
to convert the outstanding principal, interest, fees and other amounts owing
under this Agreement into Borrower Common Stock. The price per share for such
conversion shall be the average of the closing bid and asked prices for Borrower
Common Stock reported on the Nasdaq National Market, such other exchange or
system on which the shares may then be trading for the twenty (20) trading days
immediately prior to the date of Lender's or its Affiliate's exercise of its
conversion rights or the appraised fair value by an independent appraiser if the
Borrower Common Stock is not traded on an exchange.
ARTICLE 12
SUBORDINATION
Section 12.1 Agreement to Subordinate. Borrower agrees, and Lender by
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accepting the Note agrees, that the Indebtedness evidenced hereby and by the
Note is subordinated in right of payment to all Senior Indebtedness to the
extent and on the terms set forth in the Subordination Agreement, dated the date
hereof, by and among Lender, Borrower and NationsBank, a copy of which is
attached hereto as Exhibit 5.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement or
caused it to be executed under seal by their duly authorized officers, all as of
the day and year first above written.
METROTRANS CORPORATION
By:___________________
Name:
Title:
THE MAYFLOWER CORPORATION PLC
By____________________
Name:
Title:
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Exhibit 1
Form of Note
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Exhibit 2
SCHEDULE OF PERMITTED ADVANCES
DATE MAXIMUM AMOUNT OF NOTE PERMITTED
TO BE OUTSTANDING
August 20, 1998 through $ 4,500,000.00
December 31, 1998
January 1, 1999 through $10,000,000.00
June 30, 1999
July 1, 1999 and thereafter $15,000,000.00
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Exhibit 3
FORM OF SUBSIDIARY GUARANTY
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Exhibit 4
NATIONSBANK LOAN AGREEMENT
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Exhibit 5
SUBORDINATION AGREEMENT
21
