Document:

Exhibit
10.13

EXECUTION
COPY

PURCHASE AND EXCHANGE AGREEMENT

This Purchase and Exchange Agreement (this “Agreement”) is dated as of December 1, 2006
between TRC Companies, Inc., a Delaware corporation (the “Company”), and Fletcher International,
Ltd., a Bermuda company (“Purchaser”).

WHEREAS, the Purchaser is the holder of 15,000 shares
of Series A-1 Cumulative Convertible Preferred Stock, par value $0.10 per
share, of the Company (the “Preferred Stock”);

WHEREAS, subject to the terms and conditions set forth
in this Agreement and pursuant to Section 4(2) of the Securities Act of 1933,
as amended (the “Securities Act”),
and Rule 506 promulgated thereunder, the Purchaser wishes (i) to exchange its
Preferred Stock for 1,132,075 shares of the Company’s Common Stock, par value
$.10 per share (the “Common Stock”)
plus accrued and unpaid dividends through the Closing Date (as defined herein),
and (ii) to purchase from the Company additional shares of Common Stock as more
fully described in this Agreement.

NOW, THEREFORE, IN CONSIDERATION of the mutual
covenants contained in this Agreement, and for other good and valuable
consideration the receipt and adequacy of which are hereby acknowledged, the
Company and the Purchaser agree as follows:

ARTICLE I

DEFINITIONS

1.1           Definitions.  In addition to the terms defined elsewhere in
this Agreement, the following terms have the meanings indicated:

“Affiliate”
means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person, as such terms are used in and construed under Rule 144.  With respect to the Purchaser, any investment
fund or managed account that is managed on a discretionary basis by the same investment
manager as the Purchaser will be deemed to be an Affiliate of the Purchaser.

“Closing”
means the closing of the purchase and sale of the Shares pursuant to Section
2.1.

“Closing Date”
means the date of the Closing.

“Commission”
means the Securities and Exchange Commission.

“Common Stock”
means the common stock of the Company, par value $0.10 per share.

“Company Counsel”
means Paul, Hastings, Janofsky & Walker LLP.

 

 

“Exchange Act”
means the Securities Exchange Act of 1934, as amended.

“Exchanged Shares”
means the shares of Common Stock issuable hereunder pursuant to Section
2.1(ii).

“Person”
means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

“Purchased Shares” means the shares of Common Stock issuable
hereunder pursuant to Section 2.1(i).

“Purchase Price” means $9.79, the closing price of the
Common Stock on the New York Stock Exchange on the date hereof.

“Rule 144”
means Rule 144 promulgated by the Commission pursuant to the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect as
such Rule.

“Securities Act”
means the Securities Act of 1933, as amended.

“Shares”
means the Purchased Shares and the Exchanged Shares.

“Subsidiary”
means any subsidiary of the Company that would be required to be listed on
Exhibit 21 to the Company’s Annual Report on Form 10-K.

“Trading Day”
means (a) any day on which the Common Stock is traded on its primary Trading
Market, or (b) if the Common Stock is not then listed or quoted on any national
securities exchange, market or trading or quotation facility, then a day on
which trading occurs on the New York Stock Exchange (or any successor thereto).

“Trading Market”
means New York Stock Exchange or any other national securities exchange, market
or trading or quotation facility on which the Common Stock is then listed or
quoted.

ARTICLE II

PURCHASE AND SALE

2.1           Closing.  Subject to the terms and conditions set forth
in this Agreement, at the Closing (i) the Company shall issue and sell to the
Purchaser, and the Purchaser shall, purchase from the Company 204,290 shares of
Common Stock (determined by dividing $2,000,000 by the Purchase Price), and
(ii) in exchange for the 15,000 shares of Preferred Stock held by the Purchaser
(which shall constitute the sole consideration for the Exchanged Shares), the
Company shall issue to the Purchaser 1,132,075 shares of Common Stock.  The Closing shall take place via facsimile on
December 8, 2006 or such earlier date specified by the Purchaser and acceptable
to the Company; provided that original certificates representing the Purchased
Shares shall be delivered via overnight carrier to the Purchaser.

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2.2           Closing
Deliveries.

(a)           At
the Closing, the Company shall deliver or cause to be delivered to the
Purchaser:

(i)         one or more stock certificates
evidencing the Purchased Shares, registered in the name of the Purchaser and
delivered to the address listed on Schedule A; and

(ii)        issue the Exchanged Shares and the
shares of Common Stock representing payment for the accrued and unpaid
dividends on the Preferred Stock through the Closing Date, to the Purchaser’s
account listed on Schedule A with The Depository Trust Company through its
Deposit Withdrawal Agent Commission system.

(b)           At
the Closing, the Purchaser shall deliver or cause to be delivered to the
Company, the following:

(i)         valid
and marketable title to the Preferred Stock, 
free and clear of all liabilities, obligations,  claims, 
liens  and  encumbrances 
(except  for  those 
imposed by applicable securities laws), 
by  delivering to the Company one
or more stock certificates  representing
the Preferred Stock,  duly  endorsed 
in  blank  or accompanied  by one or more stock powers duly endorsed in
blank, and in form for transfer reasonably satisfactory to Company Counsel; and

(ii)        $2,000,000
in immediately available funds delivered in accordance with the wire
instructions set forth on Schedule A.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

3.1           Representations
and Warranties of the Company.  The
Company hereby makes the following representations and warranties to the
Purchaser:

(a)           (i)
The Company’s Annual Report on Form 10-K for the fiscal year ended June 30,
2005 (the “10-K”) complied in all material
respects with the requirements of the Exchange Act and the rules and
regulations of the SEC promulgated thereunder applicable to the 10-K, and none
of the Company’s filings with the Commission under Section 13(a) or 15(d) of
the Exchange Act, at the time they were filed with the Commission, contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

(ii)           The financial statements of the
Company included in the 10-K complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the Commission with respect thereto. 
Such financial statements have been prepared in accordance with United
States generally accepted accounting principles, consistently applied (“GAAP”), during the periods involved (except
(i) as may be otherwise indicated in such financial statements or the notes
thereto, or (ii) in the case of

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unaudited interim statements, to the extent they may
not include footnotes, normal year-end adjustments or may be condensed or
summary statements) and fairly present in all material respects the
consolidated financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments).

(b)           Schedule
3.1(b) includes a list of all Subsidiaries of the Company.  Each of the Company and each Subsidiary is an
entity duly incorporated or otherwise organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation or
organization (as applicable), with the requisite power and authority to own and
use its properties and assets and to carry on its business as currently
conducted.  Neither the Company nor any
Subsidiary is in violation of any of the provisions of its respective
certificate or articles of incorporation, bylaws or other organizational or
charter documents.  Each of the Company
and the Subsidiaries is duly qualified to conduct business and is in good
standing as a foreign corporation or other entity in each jurisdiction in which
the nature of the business conducted or property owned by it makes such
qualification necessary, except where the failure to be so qualified or in good
standing, as the case may be, could not, individually or in the aggregate: (i)
adversely affect the legality, validity or enforceability of this Agreement,
(ii) have or reasonably be expected to result in a material adverse effect on
the results of operations, assets, prospects, business or condition (financial
or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii)
adversely impair the Company’s ability to perform fully on a timely basis its
obligations under this Agreement (any of (i), (ii) or (iii), a “Material Adverse Effect”).

(c)           The
Company has the requisite corporate power and authority to enter into and to
consummate the transactions contemplated by this Agreement and otherwise to
carry out its obligations hereunder.  The
execution and delivery of each of this Agreement by the Company and the
consummation by it of the transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the Company and no
further action is required by the Company, or its stockholders.  This Agreement has been duly executed by the
Company and, assuming this Agreement constitutes the legal, valid and binding
agreement of each other party thereto other than the Company, will constitute
the valid and binding obligation of the Company enforceable against the Company
in accordance with its terms.

(d)           As
of the date hereof and immediately prior to giving effect to the transactions
contemplated by this Agreement, the authorized capital stock of the Company
consists of 30,000,000 shares of Common Stock, of which 16,749,369 shares are
issued and outstanding and 500,000 shares of preferred stock, $.10 par value,
15,000 of which are designated as Series A-1 Cumulative Convertible Preferred
Stock, and all of which are issued and outstanding.  All of such outstanding shares of Common
Stock are duly authorized, validly issued, fully paid and nonassessable.  The Shares have been duly authorized and when
issued pursuant to the terms hereof will be validly issued, fully paid and
nonassessable and will not be subject to any encumbrances, preemptive rights or
any other similar contractual rights of the stockholders of the Company or any
other Person.  No shares of capital stock
of the Company are subject to preemptive rights or any other similar rights of
the stockholders of the Company or any other Person or any liens or
encumbrances imposed through the actions or failure to act of the Company.  As of the date hereof, the Company had
outstanding options to purchase 3,124,477 shares of Common Stock, as well as
options to purchase 211,430 shares of Common

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Stock that may be issued, under its Restated Stock Option Plan.  As of the date of this Agreement, except to
the extent described in the preceding sentence and Schedule 3.1(d) there are no
outstanding options, warrants, scrip, rights to subscribe for, puts, calls,
rights of first refusal, agreements, understandings, claims or other
commitments or rights of any character whatsoever relating to, or securities or
rights convertible into or exchangeable for any shares of capital stock of the
Company or any of its Subsidiaries, or arrangements by which the Company or any
of its Subsidiaries is or may become bound to issue additional shares of
capital stock.

(e)           The
execution, delivery and performance of this Agreement by the Company and the
consummation by the Company of the transactions contemplated hereby do not and
will not: (i) conflict with or violate any provision of the Company’s or any
Subsidiary’s certificate or articles of incorporation, bylaws or other
organizational or charter documents, or (ii) subject to obtaining the Required
Approvals (as defined below), conflict with, or constitute a default (or an
event that with notice or lapse of time or both would become a default) under,
or give to any Person any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company or Subsidiary
debt or otherwise) or other understanding to which the Company or any
Subsidiary is a party or by which any property or asset of the Company or any
Subsidiary is bound or affected, or (iii) result in a violation of any law,
rule, regulation, order, judgment, injunction, decree or other restriction of
any court or governmental authority to which the Company or a Subsidiary is
subject (including federal and state securities laws and regulations), or by
which any property or asset of the Company or a Subsidiary is bound or affected
or (iv) result in a violation of any rule or regulation of the New York Stock
Exchange applicable to the Company or the transactions contemplated hereby;
except in the case of each of clauses (ii), (iii) and (iv), such as could not,
individually or in the aggregate, have or could reasonably be expected to
result in a Material Adverse Effect.

(f)            Neither
the Company nor any Subsidiary is required to obtain any consent, waiver,
authorization or order of, give any notice to, or make any filing or
registration with, any court or other federal, state, local or other
governmental authority or other Person in connection with the execution,
delivery and performance by the Company of the Agreement, other than applicable
Blue Sky filings (the “Required Approvals”).

(g)           There
is no action, suit, inquiry, notice of violation, proceeding or investigation
pending or, to the knowledge of the Company, threatened against or affecting
the Company, any Subsidiary or any of their respective properties before or by
any court, arbitrator, governmental or administrative agency or regulatory
authority (federal, state, county, local or foreign) (collectively, an “Action”) which adversely affects or challenges the legality,
validity or enforceability of any of this Agreement.

(h)           All
of the Shares will, when issued, be duly listed and admitted for trading on the
New York Stock Exchange.

(i)            Assuming
the accuracy of the representations and warranties of the Purchaser set forth
herein, the offer, issuance and sale of the Shares to the Purchaser as
contemplated hereby are exempt from the registration requirements of the
Securities Act.  Neither the Company nor
any Person acting on the Company’s behalf has sold or offered to sell

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or solicited any offer to buy the Shares by means of
any form of general solicitation or advertising.  The offer, sale and issuance of the Common
Stock to the Purchaser pursuant to this Agreement will not be integrated with
any other past or current offer, sale and issuance of the Company’s securities
under the Securities Act or any regulations of any exchange or automated
quotation system on which any of the securities of the Company are listed or
designated or for purposes of any stockholder approval provision applicable to
the Company or its securities.

(j)            The
Purchaser has not requested from the Company and the Company has not furnished
to the Purchaser, any material non-public information concerning the Company or
its subsidiaries.

3.2           Representations
and Warranties of the Purchaser.  The
Purchaser hereby represents and warrants to the Company as follows:

(a)           The
Purchaser is an entity duly organized, validly existing and in good standing
under the laws of Bermuda with the requisite corporate power and authority to
enter into and to consummate the transactions contemplated by this Agreement
and otherwise to carry out its obligations hereunder.  The purchase by the Purchaser of the Shares
hereunder has been duly authorized by all necessary action on the part of the
Purchaser.  This Agreement has been duly
executed by the Purchaser, and when delivered by the Purchaser in accordance
with the terms hereof and assuming the Agreement constitutes the legal, valid
and binding agreement of the Company, will constitute the valid and legally
binding obligation of the Purchaser, enforceable against it in accordance with
its terms except as limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws that affect creditors’ rights
generally; (ii) equitable limitations on the availability of specific remedies;
and (iii) principles of equity.

(b)           The
Purchaser is the lawful owner of 15,000 shares of Preferred Stock and has good
title thereto, free and clear of all liens, claims and encumbrances of any
kind, other than liens in favor of Credit Suisse Securities (USA) that will be
released on or before the Closing.  Such
Preferred Stock and 60,803 shares of Common Stock owned by the Purchaser are
the only shares of capital stock of the Company beneficially owned by the
Purchaser or its Affiliates.

(c)           The
Purchaser is acquiring the Shares as principal for its own account for
investment purposes only and not with a view to or for distributing or
reselling such Shares or any part thereof, without prejudice, however, to the
Purchaser’s right, subject to the provisions of this Agreement at all times to
sell or otherwise dispose of all or any part of such Shares pursuant to an
effective registration statement under the Securities Act or under an exemption
from such registration and in compliance with applicable federal and state
securities laws.  The Purchaser is
acquiring the Shares hereunder in the ordinary course of its business. The
Purchaser does not have any agreement or understanding, directly or indirectly,
with any Person to distribute any of the Shares.

(d)           At
the time the Purchaser was offered the Shares, it was, and at the date hereof
it is, an “accredited investor” as defined in Rule 501(a) under the Securities
Act.  The Purchaser has not been formed
solely for the purpose of acquiring the Shares.

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(e)           The
Purchaser, either alone or together with its representatives, has such
knowledge, sophistication and experience in business and financial matters so
as to be capable of evaluating the merits and risks of the prospective
investment in the Shares, and has so evaluated the merits and risks of such
investment.

(f)            The
Purchaser is able to bear the economic risk of an investment in the Shares and,
at the present time, is able to afford a complete loss of such investment.

(g)           The
Purchaser acknowledges that it has reviewed the 10-K and has been afforded (i)
the opportunity to ask such questions as it has deemed necessary of, and to
receive answers from, representatives of the Company concerning the terms and
conditions of the offering of the Shares and the merits and risks of investing
in the Shares; (ii) access to information about the Company and the
Subsidiaries and their respective financial condition, results of operations,
business, properties, management and prospects sufficient to enable it to evaluate
its investment; and (iii) the opportunity to obtain such additional information
that the Company possesses or can acquire without unreasonable effort or
expense that is necessary to make an informed investment decision with respect
to the investment.

(h)           The
Purchaser is not purchasing the Purchased Shares as a result of any
advertisement, article, notice or other communication regarding the Purchased
Shares published in any newspaper, magazine or similar media or broadcast over
television or radio or presented at any seminar or any other general
solicitation or general advertisement.

(i)            The
Purchaser understands and acknowledges that: (i) the Shares are being offered
and sold to it without registration under the Securities Act in a private
placement that is exempt from the registration provisions of the Securities Act
and (ii) the availability of such exemption, depends in part on, and the
Company will rely upon the accuracy and truthfulness of, the foregoing
representations and the Purchaser hereby consents to such reliance.

ARTICLE IV

OTHER AGREEMENTS OF THE PARTIES

4.1           Preferred Rights.  The
Purchaser and the Company expressly acknowledge and agree that effective at the
Closing, all rights of the Purchaser in and to the Preferred Stock shall cease
and the Shares are being received in full satisfaction of any rights associated
therewith, including, without limitation, any rights to dividends or redemption
payments.  Accordingly, all obligations
of the Company under the Purchase and Sale Agreement between the Purchaser and
the Company dated December 14, 2001 (the “Prior Purchase Agreement”)
shall be deemed satisfied and discharged and the Prior Purchase Agreement shall
be cancelled, terminated and of no further force and effect. The Purchaser
hereby releases and forever discharges the Company from any and all claims it
may have had under the Prior Purchase Agreement or in connection with its
ownership of the Preferred Stock.

4.2           Piggy-Back
Registrations; Other Registrations. 
If at any time between the date hereof and the later of (i) November 30,
2008 and (ii) the date when the Purchaser can resell all of the Purchased
Shares pursuant to Rule 144(k) of the Securities Act, the Company shall 

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determine to prepare and file with the Commission a
registration statement relating to an offering for its own account or the
account of others under the Securities Act of any of its equity securities,
other than on Form S-4 or Form S-8 (each as promulgated under the Securities
Act) or their then equivalents relating to equity securities to be issued
solely in connection with any acquisition of any entity or business or equity
securities issuable in connection with a stock option, equity compensation or
other employee benefit plans, then the Company shall send to the Purchaser a
written notice of such determination as soon as practicable, but in no event
less than fifteen (15) days before the anticipated filing date, and, if within
ten (10) days after the date of such notice, the Purchaser shall so request in
writing, the Company shall include in such registration statement all or any
part of the Purchased Shares the Purchaser requests to be registered pursuant
to a plan of distribution to be provided by the Purchaser, subject to customary
underwriter cutbacks applicable to all holders of registration rights.

4.3           Form
D; Blue Sky Laws.  Promptly upon
completion of the Closing and in any event within 15 days thereof, the Company
shall file with the Commission a Form D with respect to the Shares as required
under Regulation D and each applicable state securities commission and will
provide a copy thereof to the Purchaser promptly after such filing.

4.4           Transfer Restrictions.

(a)           Shares may only be disposed of
pursuant to an effective registration statement under the Securities Act, to
the Company or pursuant to an available exemption from or in a transaction not
subject to the registration requirements of the Securities Act, and in
compliance with any applicable state securities laws.  In connection with any transfer of Shares
other than pursuant to an effective registration statement or to the Company,
except as otherwise set forth herein, the Company may require the transferor
thereof to provide to the Company an opinion of counsel selected by the
transferor, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require
registration of such transferred Shares under the Securities Act.  Notwithstanding the foregoing, the Company
hereby consents to and agrees to register on the books of the Company and with
any transfer agent for the Shares of the Company, without any such legal
opinion, any transfer of Shares by a Purchaser to an Affiliate of the
Purchaser, provided that the transferee certifies to the Company that it is an “accredited
investor” as defined in Rule 501(a) under the Securities Act and that it is
acquiring the Shares solely for investment purposes (subject to the
qualifications hereof).  As a condition
of transfer, any such transferee shall agree in writing to be bound by the
terms of this Agreement and shall have the rights of a Purchaser under this
Agreement.

(b)           The
Purchaser agrees to the imprinting, so long as is required by this Section
4.4(b), of the following legend on the Purchased Shares:

THE SECURITIES
REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR APPLICABLE STATE SECURITIES
LAWS.  THE SECURITIES HAVE BEEN ACQUIRED
FOR INVESTMENT AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED
UNLESS (1) THERE IS AN EFFECTIVE 

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REGISTRATION STATEMENT
UNDER SUCH SECURITIES ACT COVERING SUCH SECURITIES, OR (2) THE SALE IS MADE IN
ACCORDANCE WITH RULE 144 OR ANOTHER APPLICABLE EXEMPTION UNDER THE SECURITIES
ACT.

The legend set forth above shall be removed and the
Company shall issue a certificate without such legend to any holder of
Purchased Shares if, unless otherwise required by state securities laws, such
Purchased Shares are sold pursuant to (i) an effective Registration Statement
under the Securities Act, (ii) Rule 144 or (iii) another applicable exemption
from registration under the Securities Act.

4.5           Furnishing
of Information.  From and after the
first anniversary of the date hereof, as long as the Purchaser owns Shares, the
Company covenants to timely file (or obtain extensions in respect thereof and
file within the applicable grace period) all reports required to be filed by
the Company after the date hereof pursuant to the Exchange Act.  Upon the request of the Purchaser, the
Company shall deliver to the Purchaser a written certification of a duly
authorized officer as to whether it has complied with the preceding sentence.
As long as the Purchaser owns Shares, if the Company is not required to file
reports pursuant to such laws, it will prepare and furnish to the Purchaser and
make publicly available in accordance with Rule 144(c) such information as is
required for the Purchaser to sell the Shares under Rule 144.  The Company further covenants that it will
take such further action as the Purchaser may reasonably request, all to the
extent required from time to time to enable the Purchaser to sell such Shares
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144.

4.6           Integration.  The Company shall not, and shall use its best
efforts to ensure that no Affiliate of the Company shall, sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security (as
defined in Section 2 of the Securities Act) that would be integrated with the
offer or sale of the Shares in a manner that would require the registration
under the Securities Act of the sale of the Shares to the Purchaser or that
would require the Company to seek stockholder approval for the issuance of the
Shares under any stockholder approval provision applicable to the Company.

4.7           Indemnification
of the Purchaser.  The Company will
indemnify and hold the Purchaser and its directors, officers, shareholders,
partners, employees and agents (each, a “Purchaser
Party”) harmless from any and all losses, liabilities, obligations,
claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and
costs of investigation that any such Purchaser Party may suffer or incur as a
result of or relating to (i) any misrepresentation, breach or inaccuracy, or
any allegation by a third party that, if true, would constitute a breach or
inaccuracy, of any of the representations and warranties made by the Company in
this Agreement, (ii) any breach or non-performance by the Company of any of its
covenants, agreements or obligations contained in this Agreement or (iii) any
litigation, investigation or proceeding instituted by any Person with respect
to this Agreement or the Shares (excluding, however, any such litigation,
investigation or proceeding which arises solely from the acts or omissions of
the Purchaser Party seeking indemnification or its Affiliates).  The Company will reimburse such Purchaser
Party for its reasonable legal and other expenses (including the cost of 

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any investigation, preparation and travel in
connection therewith) incurred in connection therewith, as such expenses are
incurred.

ARTICLE V

CONDITIONS TO CLOSING

5.1           Conditions
Precedent to the Obligations of the Purchaser.  The obligation of the Purchaser to acquire
Shares at the Closing is subject to the satisfaction or waiver by the
Purchaser, at or before the Closing, of each of the following conditions:

(a)           Representations
and Warranties.  The representations
and warranties of the Company contained herein shall be true and correct in all
material respects (provided however that such materiality qualification shall
only apply to representations and warranties not otherwise qualified by
materiality) as of the Closing Date;

(b)           Performance.  The Company and the Purchaser shall have
performed, satisfied and complied in all material respects with all covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by it at or prior to the Closing;

(c)           Consents.  Any consents or approvals required to be
secured by the Company for the consummation of the transactions contemplated by
this Agreement shall have been obtained and shall be reasonably satisfactory to
the Purchaser.

(d)           No
Injunction.  No statute, rule,
regulation, executive order, decree, ruling or injunction shall have been
enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction that prohibits the consummation of any of
the transactions contemplated by this Agreement;

(e)           Adverse
Changes.  Since the date of execution
of this Agreement, there shall have been no Material Adverse Effect, nor shall
any event or series of events shall have occurred that reasonably could be
expected to have or result in a Material Adverse Effect.

(f)            No
Suspensions of Trading in Common Stock; Listing.  Trading in the Common Stock shall not have
been suspended by the Commission or any Trading Market (except for any
suspensions of trading of not more than one Trading Day solely to permit
dissemination of material information regarding the Company) at any time since
the date of execution of this Agreement, and the Common Stock shall be listed
for trading on the New York Stock Exchange.

(g)           Delivery of Exhibit A.  On or prior to December 6, 2006, the Company
shall have delivered the letter set forth in Exhibit A.

5.2           Conditions
Precedent to the Obligations of the Company.  The obligation of the Company to sell Shares
at the Closing is subject to the satisfaction or waiver by the Company, at or
before the Closing, of each of the following conditions:

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(a)           Representations
and Warranties.  The representations
and warranties of the Purchaser contained herein shall be true and correct in
all material respects as of the Closing Date; and

(b)           No
Injunction.  No statute, rule,
regulation, executive order, decree, ruling or injunction shall have been
enacted, entered, promulgated or endorsed by any court or governmental
authority of competent jurisdiction that prohibits the consummation of any of
the transactions contemplated by this Agreement.

(c)           Release of Liens.  Any and all liens by Credit Suisse Securities
(USA) on the Preferred Stock shall have been released.

ARTICLE
VI

MISCELLANEOUS

6.1           Entire Agreement.  This Agreement, together with the Exhibits
and Schedules hereto, contain the entire understanding of the parties with
respect to the subject matter hereof and thereof and supersede all prior
agreements and understandings, oral or written, with respect to such matters,
which the parties acknowledge have been merged into such documents, Exhibits
and Schedules.

6.2           Notices.  Any and all notices or other communications
or deliveries required or permitted to be provided hereunder shall be in
writing and shall be deemed given and effective on the earliest of (a) the date
of transmission, if such notice or communication is delivered via facsimile at
the facsimile number specified in this Section prior to 5:30 p.m. (New York
City time) (with confirmation of transmission) on a Trading Day, (b) the next
Trading Day after the date of transmission, if such notice or communication is
delivered via facsimile at the facsimile number specified in this Section on a
day that is not a Trading Day or later than 5:30 p.m. (New York City time)
(with confirmation of transmission) on any Trading Day, (c) the Trading Day
following the date of mailing, if sent by U.S. nationally recognized overnight
courier service (next day service specified), or (d) upon actual receipt by the
party to whom such notice is required to be given.  The address for such notices and
communications shall be as follows:

	
  

  	
  If to the Company:

  	
  TRC Companies, Inc.

  21 Griffin Road North

  Windsor, Connecticut 06095

  Attention: General Counsel and Chief Financial Officer

  
	
   

  	
   

  	
  Telephone:

  	
  (860) 298-9692

  
	
   

  	
   

  	
  Facsimile:

  	
  (860) 298-6291

  
	
   

  	
   

  	
   

  
	
   

  	
  If to the Purchaser:

  	
  To the address set forth under the Purchaser’s name
  on the signature pages hereof;

  

 

or such other address as may be designated in writing
hereafter, in the same manner, by such Person.

 11
 

 

 

To the extent that any funds shall be delivered to the
Company by wire transfer, unless otherwise instructed by the Company, such
funds should be delivered in accordance with the wire instructions set forth on
Schedule A.

6.3           Amendments;
Waivers.  No provision of this
Agreement may be waived or amended except in a written instrument signed, in
the case of an amendment, by the Company and the Purchaser or, in the case of a
waiver, by the party against whom enforcement of any such waiver is sought.

6.4           Headings.  The headings herein are for convenience only,
do not constitute a part of this Agreement and shall not be deemed to limit or
affect any of the provisions hereof.

6.5           Successors
and Assigns.  This Agreement shall be
binding upon and inure to the benefit of the parties and their successors and
permitted assigns.  The Company may not
assign this Agreement or any rights or obligations hereunder without the prior
written consent of the Purchaser.

6.6           No
Third-Party Beneficiaries.  This
Agreement is intended for the benefit of the parties hereto and their
respective successors and permitted assigns and is not for the benefit of, nor may
any provision hereof be enforced by, any other Person, except that each
Purchaser Party is an intended third party beneficiary of Section 4.7 and may
enforce the provision of such Section.

6.7           Governing
Law. All questions concerning the construction, validity, enforcement and
interpretation of this Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of Delaware, without
regard to the principles of conflicts of law thereof.  Each party hereto hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof.  Nothing contained herein shall
be deemed to limit in any way any right to serve process in any manner
permitted by law. Each party hereto (including its affiliates, agents,
officers, directors and employees) hereby irrevocably waives, to the fullest
extent permitted by applicable law, any and all right to trial by jury in any
legal proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.  If any
party shall commence an action or proceeding to enforce any provisions of this
Agreement, then the prevailing party in such action or proceeding shall be
reimbursed by the non-prevailing party for its attorneys fees and other costs
and expenses incurred with the investigation, preparation and prosecution of
such action or proceeding.

6.8           Survival.  The covenants and representations and
warranties contained herein shall survive the Closing and the delivery of the
Shares until the three-year anniversary of the Closing Date.

6.9           Execution.  This Agreement may be executed in one or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall 

 12
 

 

 

become effective when counterparts have been signed by
each party and delivered to the other parties, it being understood that all
parties need not sign the same counterpart. 
In the event that any signature is delivered by facsimile transmission,
such signature shall create a valid and binding obligation of the party
executing (or on whose behalf such signature is executed) with the same force
and effect as if such facsimile signature page were an original thereof.

6.10         Severability.  If any provision of this Agreement is held to
be invalid or unenforceable in any respect, the validity and enforceability of
the remaining terms and provisions of this Agreement shall not in any way be
affected or impaired thereby and the parties will attempt to agree upon a valid
and enforceable provision that is a reasonable substitute therefor, and upon so
agreeing, shall incorporate such substitute provision in this Agreement.

6.11         Remedies.  In addition to being entitled to exercise all
rights provided herein or granted by law, including recovery of damages, the
Purchaser and the Company will be entitled to specific performance under this
Agreement.  The parties agree that
monetary damages may not be adequate compensation for any loss incurred by
reason of any breach of obligations described in the foregoing sentence and
hereby agrees to waive in any action for specific performance of any such
obligation the defense that a remedy at law would be adequate.

6.12         Publicity.  The Company and the Purchaser shall have the
right to review for a reasonable period of time before issuing any press
releases or any other public statements with respect to the transactions
contemplated hereby; provided, however, that the Company shall be entitled,
without the prior approval of the Purchaser, to make any press release with
respect to such transactions as is required by applicable law and regulations
(although the Purchaser shall be consulted by the Company in connection with
any such press release prior to its release and shall be provided with a copy
thereof and be given an opportunity to comment thereon).  Notwithstanding the foregoing, the Company
shall file with the SEC a Form 8-K disclosing the transactions herein within
two (2) business days of the Closing Date and attach the relevant agreements
and instruments to either such Form 8-K or the first Quarterly Report on Form
10-Q filed by the Company following the Closing Date.

[SIGNATURE PAGES FOLLOW]

 13

 

IN WITNESS WHEREOF, the parties hereto have caused
this Purchase Agreement to be duly executed by their respective authorized
signatories as of the date first indicated above.

	
  

  	
  TRC COMPANIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Martin H. Dodd

  
	
   

  	
  Name:

  	
  Martin H. Dodd

  
	
   

  	
  Title:

  	
  Secretary

  

 

 

 

	
  

  	
  FLETCHER INTERNATIONAL, LTD., by
  its

  duly authorized investment advisor,

  FLETCHER ASSET MANAGEMENT, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter Zayfert

  
	
   

  	
  Name:

  	
  Peter Zayfert

  
	
   

  	
  Title:

  	
  Authorized Signatory

  
	
  

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Michael McCarville

  
	
   

  	
  Name:

  	
  Michael McCarville

  
	
   

  	
  Title:

  	
  Authorized Signatory

  

 

	
  

  	
  Address for Notice:

  
	
   

  	
   

  
	
   

  	
  Fletcher International, Ltd.

  
	
   

  	
  c/o A. S. & K. Services Ltd.

  
	
   

  	
  Cedar House, 41 Cedar Avenue

  
	
   

  	
  Hamilton HM EX Bermuda

  
	
   

  	
  Attention:

  
	
   

  	
  Telephone: 441-295-2244

  
	
   

  	
  Facsimile: 441-292-8666

  
	
   

  	
   

  
	
   

  	
  with a copy to:

  
	
   

  	
   

  
	
   

  	
  Fletcher Asset Management, Inc.

  
	
   

  	
  48 Wall Street

  
	
   

  	
  5th Floor

  
	
   

  	
  New York, NY 10005

  
	
   

  	
  Attention:

  
	
   

  	
  Telephone: (212) 284-4800

  
	
   

  	
  Facsimile: (212) 284-4801

  
	
   

  	
   

  
	
   

  	
  with a copy (which copy shall not constitute notice)
  to:

  
	
   

  	
   

  
	
   

  	
  Skadden, Arps, Slate, Meagher & Flom LLP

  
	
   

  	
  525 University Avenue, Suite 1100

  
	
   

  	
  Palo Alto, CA 94301

  
	
   

  	
  Attention: Leif King, Esq.

  
	
   

  	
  Telephone: (650) 470-4500

  
	
   

  	
  Facsimile: (650) 470-4570Exhibit
4.1

AMENDED AND RESTATED 

CERTIFICATE OF INCORPORATION

OF 

WATSON WYATT WORLDWIDE, INC.

A.           The name of the Corporation is Watson Wyatt Worldwide, Inc. The
Corporation was originally incorporated under the name of Watson Wyatt &
Company Holdings by the filing of a Certificate of Incorporation with the
Secretary of State of Delaware on January 7, 2000.

B.             This Amended and Restated Certificate of
Incorporation was duly adopted in accordance with the provisions of Sections
242 and 245 of the General Corporation Law of the State of Delaware.

C.             The text of the Certificate of Incorporation
of the Corporation is hereby amended and restated to read in full as follows:

1.     Name.   The name of the corporation is Watson Wyatt
Worldwide, Inc.

2.     Registered Office;
Registered Agent.     The address of the Corporation’s registered
office in the State of Delaware is 160 Greentree Drive, Suite 101, Dover,
Delaware 19904, in the County of Kent. The name of its registered agent at such
address is National Registered Agents, Inc.

3.     Purpose.    The purpose of the Corporation is to engage
in any lawful act or activity for which corporations may be organized under the
Delaware General Corporation Law.

4.     Capital Stock.

4.1  The Corporation has the authority to issue an
aggregate of 100,000,000 shares, of which: (i) 99,000,000 are shares of Class A
Common Stock, par value $.01 per share (“Class A Common Stock”), and
(ii) 1,000,000 are shares of Preferred Stock, no par value per share (the “Preferred Stock”). The Class A Common Stock is referred to
as the “Common Stock”.

4.2  The following is a description of the
relative powers, preferences and participating, optional or other special
rights, and the qualifications, limitations or restrictions of the Common
Stock.

(a) Voting.   At every meeting of the stockholders of the
Corporation in connection with the election of directors and all other matters
submitted to a vote of stockholders, every holder of Common Stock is entitled
to one vote in person or by proxy for each share of Common Stock registered in
the name of the holder on the transfer books of the Corporation. Except as
otherwise required by law, the holders of Common Stock shall vote together as a
single class, subject to any right that may be conferred upon holders of Preferred
Stock to vote together with holders of Common Stock on all matters submitted to
a vote of stockholders of the Corporation.

(b) Reclassifications,
Subdivisions and Combinations.  
No Common Stock may be reclassified, subdivided or combined unless the
reclassification, subdivision or combination occurs simultaneously and in the
same proportion for all Common Stock.

(c) Dividends and Other
Distributions.   Subject to
the rights of the holders of Preferred Stock, holders of Common Stock are
entitled to receive such dividends and other distributions in cash, stock of
any corporation (other than Common Stock) or property of the Corporation as may
be declared thereon by the Board of Directors from time to time out of assets
or funds of the Corporation legally available therefor, and shall share equally
on a per share basis in all such dividends and other distributions. In the case
of dividends or other distributions payable in Common Stock, including
distributions pursuant to stock splits or divisions of Common Stock only shares
of Class A Common Stock are paid or distributed with respect to Class A Common
Stock.

(d) Liquidation, Dissolution
and Winding Up.   In the event
of any liquidation, dissolution or winding up of the affairs of the
Corporation, whether voluntary or involuntary, after payment in full of the
amounts required to be paid to the holders of Preferred Stock, the remaining
assets and funds of the

 

Corporation are distributed pro rata to the holders of shares of Common
Stock. For purposes of this subsection (d), the voluntary sale, conveyance,
lease, exchange or transfer (for cash, shares of stock, securities or other
consideration) of all or substantially all of the assets of the Corporation or
a consolidation or merger of the Corporation with one or more other
corporations (whether or not the Corporation is the corporation surviving the
consolidation or merger) shall not be deemed to be a liquidation, dissolution
or winding up, voluntary or involuntary.

4.3  The number
of authorized shares of any class or classes of stock may be increased or
decreased (but not below the number of shares thereof then outstanding) by the
affirmative vote of the holders of a majority of the votes entitled to be cast
by the holders of the Common Stock, voting together as a single class,
irrespective of the provisions of Section 242(b)(2) of the Delaware General
Corporation Law or any corresponding provision hereinafter enacted.

4.4  To the full extent permitted by the Delaware
General Corporation Law, as the same exists or may hereafter be amended, the
Board of Directors is authorized by resolution to divide and issue the shares
of Preferred Stock in classes or series and to fix the voting powers and any
designations, preferences, and relative, participating, optional or other
special rights of any such class or series of Preferred Stock and any
qualifications, limitations or restrictions thereof as are stated and expressed
in the resolution or resolutions providing for the issue of such stock adopted
by the Board of Directors.

4.5  No holder
of stock of any class of the Corporation has any preemptive or preferential
right of subscription to any shares of any class of stock of the Corporation
whether now or hereafter authorized, or to any obligation convertible into stock
of the Corporation, or any right of subscription therefor, other than such
rights, if any, as the Board of Directors in its discretion from time to time
determines.

5.     Board of Directors. 

5.1  The
business and affairs of the Corporation are managed by or under the direction
of a Board of Directors. The number of directors of the Corporation
constituting the whole Board is fixed in the manner provided in the by-laws.
The election of directors need not be by ballot.

5.2  At each
annual meeting of the stockholders of the Corporation from and after the annual
meeting of the stockholders to be held in 2006, each director standing for
election shall be elected to hold office for a term expiring at the next annual
meeting of stockholders, with such director to hold office until his or her
successor is elected and qualified. 
Notwithstanding the foregoing, for any director who is an employee of
the Corporation or any of its affiliates at the time of election to the Board
it is a qualification for service as a director that such director remain so
employed, so that the term of any such director automatically will terminate
upon termination of such director’s employment with the Corporation or such
affiliate for any reason, unless the Board, by majority of the members of the
Board of Directors, otherwise determines.

5.3  Any
director may be removed, with or without cause but only with the affirmative
vote of the holders of not less than 67% of the voting power of all outstanding
shares of stock of the Corporation entitled to vote generally in the election
of directors, considered for this purpose as a single class.

5.4  Vacancies
and newly created directorships resulting from any increase in the authorized
number of directors or from any other cause
(other than vacancies and newly created directorships which the holders of any
class or classes of stock or series thereof are expressly entitled by this
Restated Certificate of Incorporation to fill) shall be filled by, and only by,
a majority of the members of the Board of Directors, although less than a
quorum, or by the sole remaining director. Any director appointed to fill a
vacancy or a newly created directorship shall hold office until the next
election of the directors and until his or her successor is elected and qualified
or until his or her earlier resignation or removal.

5.5  Notwithstanding
the foregoing, in the event that the holders of any series of Preferred Stock
of the Corporation shall be entitled, voting separately as a class, to elect
any directors of the Corporation, then the number of directors that may be
elected by such holders voting separately as a class shall be in addition to
the number fixed pursuant to a resolution of a majority of the members of the
Board of Directors of the Corporation. Except as otherwise provided in the
terms of such class or series, (i) the terms of the directors elected by such
holders voting separately as a class shall expire at the annual meeting of
stockholders next succeeding their election and (ii) any director or directors
elected by such holders voting separately as a class may be removed, with or
without cause, by the holders of a majority

 2
 

 

of the voting power of all outstanding shares of stock of the
Corporation entitled to vote separately as a class in an election of such
directors.

5.6  Notwithstanding
anything to the contrary contained in this Restated Certificate of
Incorporation, the affirmative vote of the holders of at least 67% of the
voting power of the shares entitled to vote generally in the election of directors
are required to amend, alter or repeal, or to adopt any provision inconsistent
with, this Article 5.

6. Amendment of By-Laws.   In furtherance and not in limitation of the
powers conferred by the laws of the State of Delaware, the Board of Directors
is authorized to adopt, amend or repeal the bylaws of the Corporation. No
adoption, amendment or repeal of a by-law by action of stockholders shall be
effective unless approved by the affirmative vote of the holders of at least
67% of the voting power of the shares entitled to vote generally in the
election of directors.

7.  Stockholder Meetings.   No action of stockholders of the Corporation
required or permitted to be taken at any annual or special meeting of
stockholders of the Corporation may be taken without a meeting of stockholders,
without prior notice and without a vote, and the power of stockholders of the
Corporation to consent in writing to the taking of any action without a meeting
is specifically denied. Notwithstanding this Article 7, the holders of any
series of Preferred Stock of the Corporation shall be entitled to take action
by written consent to such extent, if any, as may be provided in the terms of
such series. Subject to the rights of holders of any series of Preferred Stock,
special meetings of stockholders of the Corporation may be called only by the
President or by the Board of Directors pursuant to resolution adopted by a
majority of the members of the Board of Directors. Business transacted at any
special meeting of stockholders is confined to the purpose or purposes of the
meeting as stated in the notice of the meeting. Notwithstanding anything
contained in this Restated Certificate of Incorporation to the contrary, any
amendment to or deletion of this Article 7 shall require the affirmative vote
of the holders of at least 67% of the voting power of all outstanding shares of
capital stock of the corporation entitled to vote generally in the election of
directors.

8. Limitation of Liability.   A director of the Corporation shall not be
personally liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability (a)
for any breach of the director’s duty of loyalty to the Corporation or its
stockholders, (b) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) under Section 174 of
the Delaware General Corporation Law or (d) for any transaction from which the
director derived an improper personal benefit. If the General Corporation Law
of the State of Delaware is amended after approval of this Article by the
stockholders to authorize the further elimination or limitation of the
liability of directors, then the liability of directors are eliminated or
limited to the full extent authorized.

9. Amendments.   Subject to the provisions of this Restated
Certificate of Incorporation, the Corporation reserves the right to
amend, alter, change or repeal any provision contained in this Restated
Certificate of Incorporation, in the manner now or hereafter prescribed by
statute, and all rights conferred upon stockholders in this Restated
Certificate of Incorporation are granted subject to this reservation.

 3
 

 

IN
WITNESS WHEREOF, Watson Wyatt Worldwide, Inc. has caused this certificate to be
signed by its President and Secretary, on November 17, 2006.

	
  

  	
  By:

  	
   

  
	
   

  	
  /s/ JOHN J. HALEY

  	
   

  
	
   

  	
  John J. Haley,
  President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
  /s/ WALTER W. BARDENWERPER

  	
   

  
	
   

  	
  Walter W.
  Bardenwerper, Secretary

  
				

 

 

 4

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