Document:

FORM OF SERIES C PREFERRED EXCHANGE AGREEMENT

 

EXHIBIT 10.15

[FORM OF]

SERIES C PREFERRED STOCK

EXCHANGE AGREEMENT

                    THIS SERIES C PREFERRED STOCK EXCHANGE AGREEMENT (this
“Agreement”), dated as of August
     , 2004, is by and between
Transportation Technologies Industries, Inc., a Delaware corporation (the
“Company”), and each of the holders of the Company’s Series C Preferred
Stock listed on Schedule I hereto (each, a “Holder” and
collectively, the “Holders”).

W I T N E S S E T H :

     WHEREAS,
on August [17], 2004, the Company will issue an aggregate of [
] shares of its common stock, par value $0.01 per share (the “Common
Shares”), in an initial public offering (the “IPO”);

     WHEREAS, each Holder owns the number of shares of Series C Preferred Stock
of the Company set forth opposite its name on Schedule I hereto (the
“Preferred Shares”);

     WHEREAS, the aggregate liquidation preference applicable to each
Holder’s
Preferred Shares shall be determined in accordance with the Certificate of
Designations for the Preferred Shares and the stockholders’ agreement of the
Company dated as of August ___, 2004 (as amended, the “Stockholders’
Agreement”) (the “Exchange Value”);

     WHEREAS, substantially concurrently with the consummation of the IPO and
following the 100,000-for-one reverse split of the Common Shares, each Holder
and the Company has proposed to exchange such Holder’s Preferred Shares for the
number of Common Shares obtained by dividing the Exchange Value of such
Holder’s Preferred Shares by the price at which the Common Shares are offered
to the public pursuant to the IPO (the “IPO Price”) (such number of
Common Shares, the “Exchange Amount”); and

     WHEREAS, the parties intend each of the exchanges to be effected
hereunder to qualify
as a “recapitalization” within the meaning of Section 368(a)(1)(E) of the
Internal Revenue Code of 1986, as amended (a “Recapitalization”).

     NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and promises herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:

     1.     Exchange.

     1.1.     Exchange. Each Holder shall acquire from the Company at the
Closing (as defined below), and the Company shall issue and deliver to each
Holder, upon the terms and subject to the conditions set forth in this
Agreement, the number of Common Shares equal to the Exchange Amount applicable
to such Holder in exchange for the number of Preferred Shares owned by such
Holder, issuable upon the date of the Closing. Each Holder shall grant,
convey, transfer and deliver to the Company, upon the terms and subject to the
conditions set forth in this Agreement, all right, title and interest in and to
such Holder’s Preferred Shares as of the date of the Closing.

 

                    1.2.     Sole Consideration. The sole consideration to be issued by
the Company to each Holder in exchange for each Holder’s Preferred Shares is
the number of Common Shares equal to the Exchange Amount; provided the
Company shall not be required to issue fractions of Common Shares upon exchange
of each Holder’s Preferred Shares and each Holder shall not be entitled to
receive any consideration whatsoever in respect of any such fractions of Common
Shares otherwise issuable.

                    1.3.     Plan of Reorganization. This Agreement constitutes a
“plan of reorganization”
within the meaning of Treasury Regulation Section 1.368-2(g). Unless otherwise
required by law (including the good faith resolution of an audit), each party
hereto shall treat each exchange of Preferred Shares for Common Shares to which
it is a party as a Recapitalization for all income tax purposes.

                    2.     The Closing. The closing (the “Closing”) of the exchange
of each Holder’s Preferred Shares for Common Shares shall take place at the
offices of Cahill Gordon & Reindel llp, located at 80 Pine Street, New York,
New York 10005, or its designated agent, at 8:00 AM Eastern Standard Time on
August [17], 2004, or such later time and date as the Company and the Holders
may agree. At the Closing, the Company shall deliver to each Holder a
certificate, in the name of such Holder, evidencing the acquisition by such
Holder of the Common Shares issuable to such Holder. Simultaneously at the
Closing, each Holder shall deliver to the Company the Holder’s Preferred
Shares, together with any reasonably requested instruments of transfer duly
endorsed in blank. Each Holder understands that the Company intends to
promptly deliver such Holder’s Preferred Shares to the transfer agent for the
Preferred Shares (the “Transfer Agent”) for cancellation. Accordingly,
each Holder agrees to deliver to the Company promptly upon request, at or after
the Closing, any and all such instruments and documents relating to the
aforementioned transfer as the Company or the Transfer Agent may reasonably
request to facilitate the cancellation of such Preferred Shares.

                    3.     Representations and Warranties of the Company. The Company
represents and warrants to each Holder as follows:

                    3.1.     Organization. The Company is a corporation duly incorporated
and validly existing as a corporation and is in good standing under the laws of
the State of Delaware. The Company has full corporate power and authority to
execute and deliver this Agreement and to perform its obligations hereunder.

                    3.2.     Due Authorization, Execution and Delivery. The Company has
duly authorized, executed and delivered this Agreement. This Agreement
constitutes a valid, binding and enforceable agreement of the Company, except
as enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
relating to or affecting creditors’ rights generally and (b) general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).

                    3.3.     No Conflicts. The execution, delivery and performance of this
Agreement by the Company and the consummation of the transactions contemplated
hereby will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, except for such conflicts,
breaches, violations or defaults that would not have or be reasonably expected
to have, individually or in the aggregate, a Material Adverse Effect (as
defined below) on the consummation of the transactions contemplated herein, nor will such actions result in any
violation of the provisions of the charter or bylaws of the Company or any of
its subsidiaries or any statute or any order, rule or regulation of any court
or gov-

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ernmental agency or body having jurisdiction over the Company or any of
its subsidiaries or any of their properties or assets; and except for those
which have already been obtained, no consent, approval, authorization or order
of, or filing or registration with, any court or governmental agency or body is
required for the execution, delivery and performance of this Agreement by the
Company and the consummation of the transactions contemplated hereby.

     3.4.     Due Authorization and Issuance. The Common Shares, upon
issuance by the Company following receipt of the consideration provided for
herein and satisfaction of the other conditions set forth herein, will be duly
and validly authorized and issued, fully paid and non-assessable, will have
been issued in compliance with all federal and state securities laws and will
not have been issued in violation of any preemptive right, resale right, right
of first refusal or similar right.

        4.     Representations and Warranties of each Holder. Each Holder
represents and warrants to the Company as follows:

     4.1.     Organization. Each Holder, to the extent applicable, is an
entity duly organized, validly existing and in good standing under the laws of
its jurisdiction of formation. Each Holder has full power and authority to
execute and deliver this Agreement and to perform its obligations hereunder.

     4.2.     Due Authorization, Execution and Delivery. Each Holder has
duly authorized, executed and delivered this Agreement. This Agreement
constitutes a valid, binding and enforceable agreement of each Holder, except
as enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
relating to or affecting creditors’ rights generally and (b) general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).

     4.3.     No Conflicts. The execution, delivery and performance of this
Agreement by each Holder and the consummation of the transactions contemplated
hereby will not result in, as applicable, any violation of the provisions of
the charter or bylaws of any Holder or any statute or any order, rule or
regulation of any court or governmental agency or body having jurisdiction over
such Holder or any of its properties or assets; and except for those which have
already been obtained, no consent, approval, authorization or order of, or
filing or registration with, any court or governmental agency or body is
required for the execution, delivery and performance of this Agreement by any
Holder and the consummation of the transactions contemplated hereby.

     4.4.     Ownership. Each Holder is the sole beneficial owner (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of
such Holder’s Preferred Shares, free and clear of any preemptive rights or any
liens, claims, security interests or other encumbrances of any kind or nature
whatsoever (“Encumbrances”) and, subject to the Stockholders’ Agreement,
has the complete power to transfer and deliver such Holder’s Preferred Shares
to the Company as contemplated by this Agreement, free and clear of
Encumbrances. Upon transfer to the Company by each Holder of each Holder’s
Preferred Shares, the Company will have good and marketable title to each
Holder’s Preferred Shares, free and clear of all Encumbrances.

     4.5.     Investment Decision; Subsequent Transactions. Each Holder is
fully capable of bearing the economic consequences of the transactions
contemplated by this Agreement. Each Holder understands that, prior to the
consummation of the IPO, the Common Shares are not traded on any
National Securities Exchange nor on the NASDAQ National Market and are
likely to be highly illiquid, particularly as measured against the number of
Common Shares each Holder is acquiring hereby, and volatile. In making its
decision to enter into this Agreement, each Holder has relied on its own
examination of

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the Company, including, but not limited to, all information
relating to the Company filed with the U.S. Securities and Exchange Commission.
Each Holder has had an opportunity to make inquiries of the Company in
connection with this Agreement and has done so to its satisfaction. The
Company has not made any representations to any of the Holders other than those
expressly set forth in this Agreement. The Holders further understand that the
Company may, from time to time, enter into transactions with other holders of
capital stock, as a whole or individually, that may involve exchanges of
amounts of cash, securities or other property that the Holders may consider
more attractive than the Common Shares being acquired by each Holder in
exchange for such Holder’s Preferred Shares, and that following execution of
this Agreement, the Holders shall have no right whatsoever to seek any
adjustment or modification to the consideration afforded to the Holders
hereunder or to otherwise “unwind” the transactions contemplated by this
Agreement. The Holders acknowledge that the Company has no obligation
whatsoever to make any future transaction relating to capital stock available
to the Holders on any basis whatsoever.

        5.     No Registration. Each Holder understands that the exchange of
Common Shares for such Holder’s Preferred Shares hereby is intended to be
exempt from registration under the Securities Act of 1933, as amended, pursuant
to Section 3(a)(9) and Section 4(2) thereunder. In this regard, each Holder
represents that it has not provided any item of value to any person other than
the Holder’s Preferred Shares provided to the Company in connection with the
transactions contemplated by this Agreement.

        6.     Conditions. The obligations of the Company and the Holders
hereunder to exchange the Holders’ Preferred Shares for Common Shares at the
Closing are subject to the following conditions:

     6.1.     Completion of the Reverse Stock Split. The 100,000-for-one
reverse split of the Common Shares shall have been completed prior to the
cancellation of the Series D Preferred Stock and prior to the exchanges of both
the Series A Preferred Stock and the Series C Preferred Stock for Common
Shares.

     6.2.     Cancellation of Series D Preferred Stock and Exchange of Series A
Preferred Stock. The Company shall have completed the cancellation of its
Series D Preferred Stock prior to the exchange contemplated by this Agreement,
and shall have completed the exchange of its Series A Preferred Stock for
approximately 5,580,556 shares(a) of the Common Shares simultaneously with the
exchange contemplated by this Agreement.

     6.3.     Use of Proceeds. The Company shall have obtained the
additional amendment and waivers described under the “Description of Certain
Indebtedness” section of the Company’s Registration Statement, File number
333-115156, as amended, which amendment and waivers are necessary to the
consummation of the exchange contemplated by this Agreement.

     6.4.     Accuracy of Representation and Warranties. The
representations and warranties made by the Company and the Holders in
connection with this Agreement shall be true and correct in all material
respects on and as of the Closing.

	(a)	 	This number of shares is subject to change depending on the valuation of the
shares.

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                    6.5.     No Challenges. No action or event shall have occurred or been
threatened, no action shall have been taken, and no statute, rule, regulation,
judgment, order, stay, decree or injunction shall have been promulgated,
enacted, entered, enforced or deemed applicable to the exchange of the Common
Shares for each Holder’s Preferred Shares, by or before any court or
governmental regulatory or administrative agency, authority or tribunal, in the
Company’s reasonable judgment, could materially adversely affect the Company’s
business, condition (financial or otherwise), income, operations, properties,
assets, liabilities or prospects and that of the Company’s subsidiaries, taken
as a whole, or materially impair the contemplated benefits to the Company of
the transactions contemplated hereby.

                    6.6.     Waiver of Conditions. Notwithstanding any other provisions
of this Agreement, the Company, to the extent permitted by law, may waive any
or all of the conditions contained herein; provided, however,
that in no event shall the Company be required to consummate the transactions
contemplated hereby in such circumstance.

                    7.        Other Provisions.

                    7.1.     Effectiveness of this Agreement. This Agreement and the
exchange contemplated hereby will take effect immediately prior to the consummation of the IPO.

                    7.2.     Notices. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered or sent by mail,
telex or facsimile transmission as follows:

	 	 	 
	

	 	(i) if to the Company,
to:
	 
	 	 
	

	 	Transportation Technologies Industries, Inc.
	

	 	980 North Michigan Avenue, Suite 1000
	

	 	Chicago, IL 60611
	

	 	Attention: General Counsel
	

	 	Facsimile: (312) 280-4820
	 
	 	 
	

	 	With a copy to:
	 
	 	 
	

	 	Cahill Gordon & Reindel LLP
	

	 	80 Pine Street
	

	 	New York, NY 10005
	

	 	Attention: Roger Meltzer, Esq.
	 
	 	 
	

	 	(ii) if to a Holder, to:
	 
	 	 
	

	 	c/o Transportation Technologies Industries, Inc.
	

	 	980 North Michigan Avenue, Suite 1000
	

	 	Chicago, IL 60611
	

	 	Attention: General Counsel
	

	 	Facsimile: (312) 280-4820

                   7.3.     Waivers and Amendments. This Agreement may be amended or
modified, and the terms and conditions hereof may be waived, only by a written
instrument signed by the parties or, in the case of a waiver, by the party
waiving compliance. No delay on the part of any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
waiver on the part of any party of any right, power or privilege hereunder, nor
any single or partial exercise of any right,

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power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder.

                    7.4.     Further Assurances. Each of the parties hereto covenants and
agrees upon the request of the other, to do, execute, acknowledge and deliver
or cause to be done, executed, acknowledged and delivered all such further
acts, deeds, documents, assignments, transfers, conveyances, powers of attorney
and assurances as may be reasonably necessary or desirable to give full effect
to this Agreement.

                    7.5.     Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.

                    7.6.     Headings. The headings in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.

                    7.7.     Binding Effect. The provisions of this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and the
heirs, legal representatives and successors of the parties hereto.

                    7.8.     Assignment. None of the parties hereto may assign any rights
under this Agreement and any such purported assignment of rights hereunder
shall be void.

                    7.9.     Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.

                    7.10.     Third Party Beneficiaries. Nothing expressed or implied in
this Agreement is intended or shall be construed to confer upon or give to any
third party any rights or remedies against any party hereto.

                    7.11.     Expenses. The Company will bear the costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.

                    7.12.     Entire Agreement. This Agreement constitutes the entire
agreement as among the parties with respect to the transactions contemplated
hereby and supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any such party.

                    7.13.     Execution in Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute but one and the same instrument.

                    7.14. Definition of the Term “Material Adverse Effect”. For purposes of
this Agreement, the term “Material Adverse Effect” shall mean a material
adverse effect on the consolidated financial condition, results of operations, stockholders’ equity, management,
general affairs or business of the Company and its subsidiaries, taken as a
whole.

[Signature Pages Follow]

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     IN WITNESS
WHEREOF, the Company and each Holder have executed this Agreement as of the date first written above.

	 	 	 	 	 
	 	TRANSPORTATION TECHNOLOGIES

INDUSTRIES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

 

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	 	 HOLDERS:

THOMAS BEGEL:

  

CAMILLO SANTOMERO:

 

FRED CULBREATH:

  

JOE HICKS:

 

JIM CIRAR:

  

FRED CULBREATH:

  

ANDREW WELLER:

  

FRED CULBREATH:

  

KEN TALLERING:

  

JOHN WILKINSON:

  

TIM MASEK:

  

ROBERT JACKSON:

 	 
	 
	 	
	 
	 	 	 
	 	 	 

 

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DON MUELLER:

LEE SWAFFORD:

KELLY BODWAY:

DAVID REISMEYER:

BRENT WILLIAMS:

JEFFREY ELMER:

ADAM GOTTLIEB:

	 
	 	 	 
	 	 	 
	 	 	 
	 

	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

	 	 	 	 	 

Schedule I(a)

	 	 	 	 	 
	 	 	Number of Preferred	 	Number of Common
	 	 	Shares Being	 	Shares Being Received
	Name of Holder
	 	Exchanged by Holder
	 	by Holder

	Thomas Begel
	 	 	 	 
	Camillo Santomero
	 	 	 	 
	Fred Culbreath/Joe Hicks
	 	 	 	 
	Jim Cirar
	 	 	 	 
	Andrew Weller
	 	 	 	 
	Ken Tallering
	 	 	 	 
	John Wilkinson
	 	 	 	 
	Tim Masek
	 	 	 	 
	Robert Jackson
	 	 	 	 
	Don Mueller
	 	 	 	 
	Lee Swafford
	 	 	 	 
	Kelly Bodway
	 	 	 	 
	David Reismeyer
	 	 	 	 
	Brent Williams
	 	 	 	 
	Jeffrey Elmer
	 	 	 	 
	Adam Gottlieb
	 	 	 	 
	 
	 	

	Total:
	 	 	 	 

	(a)	 	These numbers are to be filled in at the time of Pricing.FORM OF SERIES D CANCELLATION AGREEMENT

 

EXHIBIT 10.16

[FORM OF]

SERIES D PREFERRED STOCK

CANCELLATION AGREEMENT

     THIS
SERIES D PREFERRED STOCK CANCELLATION AGREEMENT, dated as of
August      , 2004, by and among Transportation Technologies Industries, Inc., a
Delaware corporation (the “Company”), and each of the holders of the
Company’s Series D Preferred Stock listed on Schedule I hereto (each, a
“Holder” and collectively, the “Holders”).

WITNESSETH:

     WHEREAS,
on August [17], 2004, the Company will issue an aggregate of [
] shares of its common stock, par value $0.01 per share (the “Common
Shares”), in an initial public offering (the “IPO”);

     WHEREAS, each Holder owns the number of shares of Series D Preferred Stock
of the Company set forth opposite its name on Schedule I hereto (the
“Preferred Shares”), in each case representing the aggregate liquidation
preference applicable to each Holder’s Preferred Shares, which shall be
determined in accordance with the Certificate of Designations for the Preferred
Shares and the stockholders’ agreement (as amended) of the Company (the
“Cancellation Value”); and

     WHEREAS, substantially concurrently with the consummation of the IPO and
following the 100,000-for-one reverse split of the Common Shares, each Holder,
in consideration of the provisions of this Agreement, has agreed to cancel such
Holder’s Preferred Shares.

     NOW, THEREFORE, in sole consideration of the mutual covenants,
representations, warranties and promises herein, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:

     1.     Cancellation.

     1.1     Cancellation of the Preferred Shares. Subject to the
terms and conditions of this
Agreement, at the Closing (as hereinafter defined), each Holder shall surrender
and deliver the number of Preferred Shares set forth opposite its name on
Schedule I hereto for cancellation by the Company, including all
necessary and required forms and papers to carry out the transfer and
cancellation of said Preferred Shares.

     1.2     Sole Consideration. The parties hereto
acknowledge and agree that the Preferred
Shares have no meaningful value. Therefore, the sole consideration for the
Holders’ cancellation of the Preferred Shares are the mutual covenants,
representations, warranties and promises herein.

     2.     The Closing. The closing (the “Closing”) of the
cancellation of each Holder’s Preferred Shares shall take place at the offices
of Cahill Gordon & Reindel llp, located at 80 Pine Street, New York, New York
10005, or its designated agent, at 8:00 AM Eastern Standard Time on August
[17], 2004, or such later time and date as the Company and the Holders may
agree. At the Closing, each Holder shall deliver to the Company the Holder’s
Preferred Shares, together with any reasonably requested forms and papers to
carry out the transfer and cancellation of said Preferred Shares. Each Holder
understands that the Company intends to promptly deliver such Holder’s
Preferred Shares to the transfer agent for the Preferred Shares (the “Transfer Agent”) for
cancellation. Accordingly, each Holder agrees to deliver to the Company
promptly upon request, at or after the Closing, any and all such instruments

 

and documents relating to the aforementioned transfer as the Company or the
Transfer Agent may reasonably request to facilitate the cancellation of such
Preferred Shares.

     3.     Representations and Warranties of the Company. The Company
represents and
warrants to each Holder as follows:

     3.1     Organization. The Company is a corporation duly incorporated
and validly existing as a corporation and is in good standing under the laws of
the State of Delaware. The Company has full corporate power and authority to
execute and deliver this Agreement and to perform its obligations hereunder.

     3.2     Due Authorization, Execution and Delivery. The Company has
duly authorized, executed and delivered this Agreement. This Agreement
constitutes a valid, binding and enforceable agreement of the Company, except
as enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
relating to or affecting creditors’ rights generally and (b) general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).

     3.3     No Conflicts. The execution, delivery and performance of this
Agreement by the Company and the consummation of the transactions contemplated
hereby will not conflict with or result in a breach or violation of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, loan agreement or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which the Company or any of
its subsidiaries is bound or to which any of the property or assets of the
Company or any of its subsidiaries is subject, except for such conflicts,
breaches, violations or defaults that would not have or be reasonably expected
to have, individually or in the aggregate, a Material Adverse Effect (as
defined below) on the consummation of the transactions contemplated herein, nor
will such actions result in any violation of the provisions of the charter or
bylaws of the Company or any of its subsidiaries or any statute or any order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Company or any of its subsidiaries or any of their
properties or assets; and except for those which have already been obtained, no
consent, approval, authorization or order of, or filing or registration with,
any court or governmental agency or body is required for the execution,
delivery and performance of this Agreement by the Company and the consummation
of the transactions contemplated hereby.

     4.     Representations and Warranties of each Holder. Each Holder
represents and warrants to the Company as follows:

     4.1     Organization. Each Holder is an entity duly organized, validly
existing and in good standing under the laws of its jurisdiction of formation.
Each Holder has full power and authority to execute and deliver this Agreement
and to perform its obligations hereunder.

     4.2     Due Authorization, Execution and Delivery. Each Holder has
duly authorized, executed and delivered this Agreement. This Agreement
constitutes a valid, binding and enforceable agreement of each Holder, except
as enforceability may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or other similar laws
relating to or affecting creditors’ rights generally and (b) general principles
of equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).

     4.3     No Conflicts. The execution, delivery and performance of this
Agreement by each Holder and the consummation of the transactions contemplated
hereby will not result in, as applicable, any violation of the provisions of
the charter or bylaws of any Holder or any statute or any order, rule or
regula-

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tion of any court or governmental agency or body having jurisdiction over
such Holder or any of its properties or assets; and except for those which have
already been obtained, no consent, approval, authorization or order of, or
filing or registration with, any court or governmental agency or body is
required for the execution, delivery and performance of this Agreement by any
Holder and the consummation of the transactions contemplated hereby.

     4.4     Ownership. Each Holder is the sole beneficial owner (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended) of
such Holder’s Preferred Shares, free and clear of any preemptive rights or any
liens, claims, security interests or other encumbrances of any kind or nature
whatsoever (“Encumbrances”) and has the complete power to transfer and
deliver such Holder’s Preferred Shares for cancellation to the Company as
contemplated by this Agreement, free and clear of Encumbrances.

     4.5     Investment Decision; Subsequent Transactions. Each Holder is a
sophisticated investor with substantial assets under management and substantial
experience in making investment decisions in securities such as the Preferred
Shares, and in transactions such as the cancellation of the Holders’ Preferred
Shares as contemplated by this Agreement. Each Holder is fully capable of
bearing the economic consequences of the transactions contemplated by this
Agreement. In making its decision to enter into this Agreement, each Holder
has relied on its own examination of the Company, including, but not limited
to, all information relating to the Company filed with the U.S. Securities and
Exchange Commission. Each Holder has had an opportunity to make inquiries of
the Company in connection with this Agreement and has done so to its
satisfaction. The Company has not made any representations to any of the
Holders other than those expressly set forth in this Agreement. The Holders
acknowledge that the Company has no obligation whatsoever to make any future
transaction relating to capital stock available to the Holders on any basis
whatsoever.

     5.     Conditions. The obligations of the Company and the Holders
hereunder to cancel the Holders’ Preferred Shares at the Closing are subject to
the following conditions:

     5.1     Completion of the Reverse Stock Split. The 100,000-for-one
reverse split of the Common Shares shall have been completed prior to the
cancellation of the Preferred Shares and prior to the exchanges of both the
Series A Preferred Stock and the Series C Preferred Stock for Common Shares.

     5.2     Use of Proceeds. The Company shall have obtained the
additional amendment and waivers under its existing credit facilities described
under the “Description of Certain Indebtedness” section of the Company’s
Registration Statement, File number 333-115156, as amended, which are necessary
to the consummation of the cancellation contemplated by this Agreement.

     5.3     Accuracy of Representation and Warranties. The representations
and warranties made by the Company and the Holders in connection with this
Agreement shall be true and correct in all material respects on and as of the
Closing.

     5.4     No Challenges. No action or event shall have occurred or been
threatened, no action shall have been taken, and no statute, rule, regulation,
judgment, order, stay, decree or injunction shall have been promulgated,
enacted, entered, enforced or deemed applicable to the cancellation of the
Preferred Shares, by or before any court or governmental regulatory or
administrative agency, authority or tribunal, in the Company’s reasonable
judgment, could materially adversely affect the Company’s business, condition (financial or otherwise), income, operations,
properties, assets, liabilities or prospects and that of the Company’s
subsidiaries, taken as a whole, or materially impair the contemplated benefits
to the Company of the transactions contemplated hereby.

-3-

 

     5.5     Waiver of Conditions. Notwithstanding any other provisions of
this Agreement, the Company, to the extent permitted by law, may waive any or
all of the conditions contained herein; provided, however, that
in no event shall the Company be required to consummate the transactions
contemplated hereby in such circumstance.

     6.     Other Provisions.

     6.1     Effectiveness of this Agreement. This Agreement and the
cancellation
contemplated hereby will take effect immediately prior to the consummation of the IPO.

     6.2     Notices. Any notice or other communication required or
permitted hereunder
shall be in writing and shall be delivered or sent by mail, telex or facsimile
transmission as follows:

	 	 	 
	

	 	(i) if to the Company,
to:
	 
	 	 
	

	 	Transportation Technologies Industries, Inc.
	

	 	980 North Michigan Avenue, Suite 1000
	

	 	Chicago, IL 60611
	

	 	Attention: General Counsel
	

	 	Facsimile: (312) 280-4820
	 
	 	 
	

	 	With a copy to:
	 
	 	 
	

	 	Cahill Gordon & Reindel llp
	

	 	80 Pine Street
	

	 	New York, NY 10005
	

	 	Attention: Roger Meltzer, Esq.
	 
	 	 
	

	 	(ii) if to a Holder, to:
	 
	 	 
	

	 	c/o Transportation Technologies Industries, Inc.
	

	 	980 North Michigan Avenue, Suite 1000
	

	 	Chicago, IL 60611
	

	 	Attention: General Counsel
	

	 	Facsimile: (312) 280-4820

     6.3     Waivers and Amendments. This Agreement may be amended or
modified, and the terms and conditions hereof may be waived, only by a written
instrument signed by the parties or, in the case of a waiver, by the party
waiving compliance. No delay on the part of any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
waiver on the part of any party of any right, power or privilege hereunder, nor
any single or partial exercise of any right, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege hereunder.

     6.4     Further Assurances. Each of the parties hereto
covenants and agrees upon the
request of the other, to do, execute, acknowledge and deliver or cause to be
done, executed, acknowledged and delivered all such further acts, deeds,
documents, assignments, transfers, conveyances, powers of attorney and
assurances as may be reasonably necessary or desirable to give full effect to
this Agreement.

-4-

 

     6.5     Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of New York.

     6.6     Headings. The headings in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of
this Agreement.

     6.7     Binding Effect. The provisions of this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and the
heirs, legal representatives and successors of the parties hereto.

     6.8     Assignment. None of the parties hereto may assign any rights
under this Agreement and any such purported assignment of rights hereunder
shall be void.

     6.9     Severability. Any term or provision of this Agreement that is
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.

     6.10     Third Party Beneficiaries. Nothing expressed or implied in
this Agreement is intended or shall be construed to confer upon or give to any
third party any rights or remedies against any party hereto.

     6.11     Expenses. The Company will bear the costs and expenses
(including legal fees and expenses) incurred in connection with this Agreement
and the transactions contemplated hereby.

     6.12 Entire Agreement. This Agreement constitutes the entire
agreement as among the parties with respect to the transactions contemplated
hereby and supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any
officer, employee or representative of any such party.

     6.13     Execution in Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed to be an original and all of which
together shall constitute but one and the same instrument.

     6.14     Definition of the Term “Material Adverse Effect”. For
purposes of this Agreement, the term “Material Adverse Effect” shall mean a
material adverse effect on the consolidated financial condition, results of
operations, stockholders’ equity, management, general affairs or business of
the Company and its subsidiaries, taken as a whole.

[Signature Pages Follow]

-5-

 

     IN WITNESS WHEREOF, the Company and each Holder have executed this
Agreement as of the date first written above.

	 	 	 	 	 
	 	TRANSPORTATION TECHNOLOGIES

INDUSTRIES, INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 

 

-2-

	 	 	 	 	 
	 	HOLDERS:
	 

	 	TRANSPORTATION INVESTMENT PARTNERS, L.L.C.
	 

		 

	 	By:
	 	          Name:
	 	          Title:

	 

	 	CARAVELLE INVESTMENT FUND, L.L.C.

	 

	 	By: Trimaran Advisors, L.L.C., its
investment manager and attorney-in-fact
	 	 
	 	

	 	Name:
	 	Title:
	 	 
	 	ALBION ALLIANCE MEZZANINE FUND, L.P.
	 	 
	 	By: Albion Alliance LLC, its general partner
	 	 
	 	

	 	Name:
	 	Title:
	 	 
	 	ALBION ALLIANCE MEZZANINE FUND II, L.P.
	 	 
	 	By: AA MEZZ II GP, LLC, its general 
	 	 
	 	By: Albion Alliance LLC, its sole member
	 	 
	 	

	 	Name:
	 	Title:

 

	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 

	 	 	 	 	 
	 	CIBC INC.

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 

 	 
	 	STEVEN SHULMAN:

	 	 

 	 
	 	 

	 	 	 	 	 

7

 

	 	 	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 

Schedule I

	 	 	 	 	 
	
	
	Number of Preferred Shares
Being
Name of Holder
Cancelled by Holder

	Albion Alliance Mezzanine Fund, L.P.

	 	 	1,581	 
	Albion Alliance Mezzanine Fund II, L.P.

	 	 	1,673	 
	Caravelle Investment Fund, L.L.C.

	 	 	5,139	 
	CIBC Inc.

	 	 	2,501	 
	Steven Shulman/Hesed Foundation

	 	 	34	 
	Transportation Investment Partners, L.L.C.

	 	 	31,072

	 
	Total:

	 	 	42,000	 

8

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