EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
BY AND AMONG
LIH HOLDINGS, LLC,
XXXXX X. XXXX,
THE XXXX FAMILY LIMITED PARTNERSHIP,
XXXX AND XXXXX XXXX FAMILY FOUNDATION
AND
THE XXXX FAMILY MEMBERS
LISTED ON SCHEDULE 1 HERETO
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DATED AS OF SEPTEMBER 9, 1997
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AGREEMENT dated as of September 9, 1997, by and among LIH HOLDINGS,
LLC, a Delaware limited liability company ("Purchaser"), XXXXX X. XXXX, an
individual residing at Xxxxx Xxxxx 0, Xxx 0000, Xxxxxxx, XX 00000 ("Xxxx"), THE
XXXX FAMILY LIMITED PARTNERSHIP, a Georgia limited partnership having a
principal mailing address at Xxxxx Xxxxx 0, Xxx 0000, Xxxxxxx, XX 00000 (the
"Partnership"), XXXX AND XXXXX XXXX FAMILY FOUNDATION, a non-profit corporation
organized under the laws of Minnesota, having its registered office at c/o Xxxx
X. Xxxxxxxx, Ltd., 0000 00xx Xxxxxx X., Xxxxx 000, Xxxxxxxx, XX 00000 (the
"Foundation"; Xxxx, the Partnership and the Foundation are sometimes
hereinafter individually referred to as a "Seller" and collectively referred to
as the "Sellers"), and THOSE INDIVIDUALS LISTED ON SCHEDULE 1 HERETO
(individually, a "Xxxx Family Member," and, collectively, the "Xxxx Family
Members.")
W I T N E S S E T H :
WHEREAS, each Seller is the owner of the number of shares (the
"Shares") of common stock, $.10 par value per Share (the "Common Stock"), of
Xxxx International Holdings, Inc., a Delaware corporation (the "Company") set
forth opposite each such Seller's name on Schedule 2 hereto, which Shares
represent in the aggregate 1,426,501 shares of the Company's Common Stock;
WHEREAS, Sellers desire to sell and transfer to Purchaser, and
Purchaser desires to purchase and acquire from Sellers, all of Sellers' right,
title and interest in and to the Shares currently owned by Sellers, all subject
to the terms and conditions contained herein (the "Acquisition"); and
WHEREAS, the Xxxx Family Members desire to sell and transfer to
Purchaser, and Purchaser desires to purchase and acquire from the Xxxx Family
Members, all of their right, title and interest in and to an aggregate of
260,392 shares (the "Family Member Shares") of Common Stock, all subject to the
terms and conditions contained herein; and
WHEREAS, in furtherance of the consummation of the sale of the Shares
and the Family Member Shares, Purchaser, Sellers and the Xxxx Family Members
propose to enter into this Agreement (certain terms used herein have the
respective meanings set forth in Article IX hereof); and
WHEREAS, the Board of Directors of the Company has approved the
Acquisition and the other transactions contemplated by this Agreement
(collectively, the "Contemplated Transactions");
NOW, THEREFORE, in consideration of and in reliance upon the mutual
agreements contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby expressly acknowledged, the parties
hereto agree as follows:
ARTICLE I
PURCHASE AND SALE
SECTION 1.1 AGREEMENT TO SELL AND PURCHASE THE SHARES; CONSIDERATION.
Subject to the terms and conditions of this Agreement, and in reliance upon the
representations, warranties, covenants and agreements contained herein, at the
Closing, Sellers shall sell, transfer and deliver to Purchaser, and Purchaser
shall purchase and accept from Sellers, free and clear of all Liens, all of
Sellers' right, title and interest in and to the Shares for a purchase price
(the "Purchase Price") consisting of (i) $11.50 per Share payable on the Closing
Date by Purchaser to Sellers by wire transfer to accounts designated by Sellers
for that purpose, and (ii) the additional consideration calculated and payable
in accordance with the provisions of Section 1.2 hereof (the "Additional
Consideration").
SECTION 1.2 CALCULATION AND PAYMENT OF ADDITIONAL CONSIDERATION.
(a) Definitions. For purposes of this Section 1.2, the following terms
shall have the following meanings:
"Closing Price" of the Company's Common Stock on a Trading Day shall
mean the last reported sale price for Common Stock regular way or, in case no
such reported sale takes place on such Trading Day, the average of the closing
bid and asked prices regular way for the Common Stock for such Trading Day, in
either case on the principal national securities exchange on which the Common
Stock is listed or admitted to trading, or if the Common Stock is not listed or
admitted to trading on any national securities exchange, but is traded in the
over-the-counter market, the closing sale price of the Common Stock or, in case
no such sale is publicly reported, the average of the closing bid and asked
quotations for the Common Stock, as reported by the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") or any comparable
system or, if the Common Stock is not listed or quoted on NASDAQ or a comparable
system, the closing sale price of the Common Stock or, in case no sale is
publicly reported, the average of the closing bid and asked prices, as furnished
by two members of the National Association of Securities Dealers, Inc. who make
a market in the Common Stock selected from time to time by the Company for that
purpose. If shares of the Company's Common Stock are not so listed for the 20
consecutive business days preceding any Anniversary Date (as defined below),
then the average Closing Price for shares of the Company's Common Stock for such
20 day period shall be determined by a nationally recognized investment banking
firm selected by Purchaser and reasonably acceptable to Sellers' Representative,
provided that such investment banking firm is not affiliated with, and does not
have a direct or indirect financial interest in, Purchaser or the Company (the
"Investment Banker"). The determination by the Investment Banker shall be final
and binding on Purchaser and Sellers. In addition, for purposes of this Section
1.2, a "Trading Day" shall mean, if the Common Stock is listed on any national
securities exchange, a business day during which such exchange was open for
trading and at least one trade of Common Stock was effected on such exchange on
such business day, or, if the Common Stock is not listed on any national
securities exchange but is traded in the over-the-counter market, a business day
during which the over-the-counter market was open for trading and at least one
"eligible dealer" quoted both a bid and asked price for the Common Stock. An
"eligible dealer" for any day shall include any broker-dealer who quoted both a
bid and asked price for such day, but shall not include any broker-dealer who
quoted only a bid or only an asked price for such day.
"Triggering Event" shall mean (i) the sale of all or substantially all
of the assets or capital stock of the Company, (ii) the sale by Purchaser of 90%
or more of the aggregate of the Shares and the Family Member Shares
(collectively, the "Total Shares") (either in a single transaction or, if in
more than one transaction, the first such transaction that results in the sale
of more than 90% of the Total Shares), provided that such transaction(s) are on
an arm's-length basis with unaffiliated third persons or (iii) the merger,
consolidation or other business combination involving the Company, other than a
merger or consolidation of the Company in which all or substantially all of the
stockholders of the Company continue as stockholders of the entity surviving
such merger or consolidation.
(b) Additional Consideration Payable Upon a Triggering Event.
(b)(i) If, at any time from and after the Closing Date and until the
tenth anniversary thereof, a Triggering Event is consummated, concurrently with
the consummation of such Triggering Event, Purchaser shall provide Sellers with
written notice thereof. Within 30 days following the consummation of such
Triggering Event, Purchaser shall pay to Sellers, subject to the limitations set
forth herein, as Additional Consideration an aggregate amount equal to 30% of
Purchaser's Actual Realized Gain, as hereinafter defined, with respect to the
Shares.
"Actual Realized Gain" shall mean the difference between Investors
Proceeds and the Minimum Return.
"Investors Proceeds" shall mean the sum of: (A) consideration received
by Purchaser with respect to the Shares in the Triggering Event; (B) without
duplication, consideration received by Purchaser with respect to any prior sale,
if any, of any of the Shares ("Prior Sale") (it being understood that the
Purchaser shall allocate proceeds received on any Prior Sales 84.6% to Shares
and 15.4% to Family Member Shares); and (C) any dividends or other distributions
theretofore received by Purchaser with respect to the Shares;
"Minimum Return" shall mean the sum of (A) the aggregate amount paid
for the Shares pursuant to Section 1.1, $16,404,761; and (B) all out-of-pocket
expenses incurred by Purchaser, which shall include, without limitation,
Purchaser's organizational expenses, legal and accounting fees and expenses and
any brokers' fees, discounts or commissions paid or payable in connection with
the consummation of the transactions contemplated by this Agreement provided
such costs shall not exceed $.40 per share, or $570,600 in the aggregate
(collectively, the "Expenses"); discounted for each component thereof from the
date of payment or incurrence to the date of the Triggering Event or date of
Option exercise pursuant to Section 1.2(c) hereto, as the case may be, at the
rate of 10% per annum, compounded annually.
(ii) If Purchaser has the right to elect to receive, in a Triggering
Event, in whole or in part, consideration other than cash for the Shares, the
decision regarding the type of consideration to be paid to Purchaser in
connection with such Triggering Event shall be made by Purchaser in its sole
discretion. Purchaser shall consult with Sellers' Representative with respect to
any elections which may be available to Purchaser and the preferences of the
Sellers' Representative with respect to whether to receive non-cash
consideration in whole or in part in fulfillment of Purchaser's obligations to
pay Additional Consideration. To the extent Purchaser receives non-cash
consideration for the Shares in a Triggering Event, then Purchaser, in
satisfaction of its obligation to Sellers pursuant to the Agreement, in its sole
discretion, may pay the Additional Consideration with
non-cash consideration in the same form as received by Purchaser; provided that
the percentage of the Additional Consideration paid with such non-cash
consideration shall not exceed the percentage of all non-cash consideration
received by Purchaser for its Shares in the Triggering Event. The value of any
non-cash consideration received by Purchaser in a Triggering Event shall be the
value attributable to such non-cash consideration in the Triggering Event. (Any
dispute as to the value of any non-cash consideration shall be determined as
provided in subsection (b)(iii) of this Section 1.2.)
(iii) The calculation and amount of Actual Realized Gain shall be
certified to Sellers' Representative (as defined in Section 8.4 hereof) by the
Chief Executive Officer of Purchaser in writing concurrently with the payment by
Purchaser to Sellers of the Additional Consideration, together with any
schedules or exhibits reasonably necessary to support such calculations. Within
fifteen (15) business days after receipt of such certificate, Sellers'
Representative shall deliver a written notice to Purchaser stating whether it
has any objections thereto, provided, however, that if Sellers' Representative
requests additional documents, financial records, work papers or schedules
reasonably necessary to support such calculations, Sellers' Representative shall
have fifteen (15) business days after receipt of such additional materials to
deliver a written notice to Purchaser stating its objections to the calculations
prepared by Purchaser. Failure to give such timely objection notices (or written
notice that Sellers' Representative has no such objection) shall constitute
acceptance and approval of such calculation of Actual Realized Gain and shall be
final and binding upon the Purchaser and the Sellers and Sellers'
Representative.
The Purchaser and the Sellers' Representative shall promptly consult
with each other and their legal and accounting representatives with respect to
any objections by the Sellers' Representative pursuant to its objection notice
and shall use reasonable efforts to resolve all such objections within thirty
(30) days after delivery by Sellers' Representative of such objection notice. If
any objections remain unresolved after the end of such 30-day period, the
parties hereto shall promptly retain (or one party if the other party fails to
jointly retain after written notice) Ernst & Young (the "Resolving Firm") to
resolve remaining objections. The parties hereto, and their respective
representatives, shall cooperate fully with the Resolving Firm. If at the time
Purchaser and/or Sellers' Representative undertake to retain the Resolving Firm,
the Resolving Firm is engaged or during the previous two years has been engaged
in representing either the Purchaser or the Sellers in any material respect, the
Resolving Firm shall select (within thirty (30) days of receipt of any such
objections to the Resolving Firm) a firm comparable in professional standing and
expertise which is independent with respect to both Purchaser and Sellers and
which firm shall be the Resolving Firm for all purposes of this Agreement. The
parties hereto shall give, and shall cause their respective representatives to
give, the Resolving Firm and its representatives such reasonable access to
documents, financial records, work papers and schedules as the Resolving Firm
shall reasonably request. The Resolving Firm shall be directed to resolve all
objections within forty-five (45) days after being retained by the parties
hereto, and a resolution by the Resolving Firm shall be final and binding on the
parties hereto. Purchaser shall pay over any further Additional Consideration
determined to be due by the Resolving Firm within five (5) business days of
final resolution by the Resolving Firm. Fees and expenses of the Resolving Firm
shall be borne by the Sellers if the Resolving Firm determines that no
adjustment to the Purchaser's original calculation is required and shall be
borne by the Purchaser if any adjusted and additional payment due is determined
by the Resolving Firm, provided, however, based upon reasonable circumstances,
the Resolving Firm may allocate its fees between the Sellers and Purchaser in
such manner as it determines is equitable in the circumstances.
(iv) To illustrate the application of the above provisions, an example
calculating Additional Consideration Payable Upon a Triggering Event (assuming
the Triggering Event occurs at an anniversary date of the Closing) is attached
hereto as Schedule 3.
(c) Additional Consideration Payable at Sellers' Election.
(c)(i) If a Triggering Event is not consummated by the fourth
anniversary of the Closing Date, then Sellers shall have the option (the
"Option"), on such date, and, thereafter on each anniversary of the Closing Date
until and including the tenth anniversary of the Closing Date (each such date,
"Anniversary Date"), exercisable for a period of 20 days commencing on any such
Anniversary Date, to require Purchaser to pay to Sellers, as Additional
Consideration, an aggregate amount equal to 30% of Purchaser's Hypothetical Gain
with respect to the Shares (unless, at any time before any such Anniversary
Date, a Triggering Event shall have been consummated).
"Hypothetical Gain" shall mean the difference between Investors
Hypothetical Proceeds and the Minimum Return.
"Investors Hypothetical Proceeds" shall mean the sum of: (A) the
product expressed in dollars of (x) the number of Shares owned by Purchaser at
the date of exercise of the Option (the "Option Exercise Date") and (y) the
average of the Closing Price for the 20 Trading Days immediately preceding the
Option Exercise Date (the "Average Share Price"); (B) without duplication,
consideration received by Purchaser with respect to any Prior Sale, if any; and
(C) any dividends or distributions theretofore received by Purchaser with
respect to the Shares.
(ii) The Option may be exercised, in whole and not in part, on one
occasion only, by Sellers. Sellers shall exercise the Option by providing
Purchaser with written notice thereof (the "Option Exercise") executed by the
Sellers' Representative. The exercise of the Option by the Sellers'
Representative shall bind all Sellers. The amount payable by Purchaser to
Sellers pursuant to this paragraph (c) of Section 1.2 shall at Purchaser's
option, exercisable in its sole discretion, be paid (i) in cash within 30 days
of the date of Purchaser's receipt of notice of exercise of the Option, or (ii)
in whole or in part, in cash or by delivery of shares of Common Stock of the
Company (the number of shares to be so delivered to be equal to the Additional
Consideration payable pursuant to this Section (c) divided by the Average Share
Price). Purchaser agrees, to the extent that it elects to deliver shares, to
effect such delivery in certificates registered in the Sellers' respective names
within five business days after receipt of the Option Exercise. Each Seller
hereby agrees not to effect any trades, directly or indirectly, in shares of the
Company's Common Stock during the 20 Trading Days immediately preceding the
exercise of the Option.
(iii) The calculation and amount of Hypothetical Gain shall be
certified (along with any documents, financial records, work papers and
schedules reasonably necessary to support such calculations) to Sellers'
Representative by the Chief Executive Officer of Purchaser in writing
concurrently with the payment by Purchaser to Sellers of the Additional
Consideration. Sellers' Representative shall have the right to object to such
calculations and the parties shall resolve any dispute regarding such
calculations in accordance with the procedures set forth in Section 1.2(b)(iii)
hereof.
(iv) Purchaser shall furnish Sellers' Representatives, at least ten
(10) business days prior to any Anniversary Date, information to document any
Prior Sales by Purchaser during
the period prior to the date of information and Purchaser shall forthwith after
the applicable Anniversary Date update such information with respect to any
Prior Sales effected between the date of such information and the respective
Anniversary Date.
(v) To illustrate the application of the above provisions, an example
calculating Additional Consideration Payable at Sellers' Election is attached
hereto as Schedule 3.
(d) Limit on Additional Consideration In no event shall Purchaser be
required to pay to Sellers Additional Consideration in an aggregate amount
exceeding $6,268,005. The Additional Consideration shall be allocated among and
paid to Sellers in proportion to the amount that each Seller's Shares bears to
all Shares being sold to Purchaser pursuant to Section 1.1 hereof and, with
respect to Additional Consideration payable in cash, shall be paid by wire
transfer to accounts designated by Sellers for that purpose.
(e) Adjustments. If the Company shall in any manner subdivide (by stock
split, stock dividend or otherwise) or combine (by reverse stock split or
otherwise) the number of outstanding shares of its Common Stock, then, for
purposes hereof the number of Shares shall be appropriately adjusted to give
effect to such subdivision or combination.
(f) Right to Assign Additional Consideration. Each Seller's right to
receive the Additional Consideration shall be assignable by such Seller, in
whole or in part, to members of such Seller's family, family trusts or family
partnerships for estate planning purposes, and, with Purchaser's prior written
consent, to any other third party; provided, however, that no assignment
pursuant to this paragraph (f) of Section 1.2 shall be effective unless a copy
of a duly executed and notarized instrument of assignment among the Sellers and
their assignee(s) shall be delivered to Purchaser.
(g) No Effect on Purchaser's Ownership and Control of Shares. Anything
herein to the contrary notwithstanding, Sellers' right hereunder to receive
Additional Consideration shall not represent or be deemed to be (i) any right,
claim, lien, encumbrance, restriction or other interest in or with respect to
the Shares, or (ii) any restriction on the Purchaser (or any partner or
successor thereof) exercising any right with respect thereto, including without
limitation, the right to vote or direct the vote, dispose or direct the
disposition of, or enter into any agreement, arrangement or other understanding
with respect to the Shares; it being specifically agreed and acknowledged by the
Sellers that the sole right granted hereby to the Sellers, and the sole
obligation of Purchaser created hereby, is to receive and pay, respectively, the
Additional Consideration, in the circumstances and amounts and in accordance
with the procedures set forth herein. Notwithstanding the foregoing, Purchaser
agrees that until it delivers the Additional Consideration pursuant to this
Section 1.2 (i) it will not distribute all or substantially all of its assets
pro rata among its members without its members' pro rata first assuming
Purchaser's obligations under this Section 1.2, (ii) Purchaser agrees to
preserve and keep in full force and effect its existence as a limited liability
company provided it may incorporate as a corporation or become a partnership or
limited partnership as long as such successor assumes all Purchaser's
obligations under this Section 1.2, and (iii) Purchaser will not sell any of the
Shares or Family Member Shares to any affiliate of Purchaser except in exchange
for consideration which is at least equal to the fair value (as determined in
good faith by the Purchaser) of the Shares or Family Member Shares so sold.
SECTION 1.3 PURCHASE OF XXXX FAMILY MEMBER SHARES. (a) Purchaser hereby
agrees to purchase from each of the Xxxx Family Members the number of shares of
Common Stock of the Company owned by such Xxxx Family Member set forth opposite
such Xxxx Family Member's name on Schedule 1 hereto, for a purchase price of
$11.50 per share (the "Xxxx Family Purchase Price") payable on the Closing Date
by Purchaser to such Xxxx Family Member by wire transfer to an account
designated by such Xxxx Family Member for that purpose. No Xxxx Family Member
shall be entitled to any Additional Consideration in respect of the sale of
their Family Member Shares to Purchaser hereunder.
(b) Notwithstanding anything to the contrary set forth herein,
Purchaser's obligation to consummate the acquisition of shares of Common Stock
of the Company owned by Xxxx Family Members is expressly contingent upon
Purchaser's concurrent acquisition, pursuant to this Agreement, of the Shares,
but Purchaser's obligation to consummate the acquisition of the Shares from the
Sellers is not contingent upon Purchaser's concurrent acquisition pursuant to
this Agreement of the Family Member Shares owned by the Xxxx Family Members.
SECTION 1.4 CLOSING. The closing (the "Closing") of the Contemplated
Transactions shall take place at the offices of Xxxxxxxxx & Xxxxxx P.L.L.P, 4200
IDS Center, 00 Xxxxx Xxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, on September
9, 1997, at 10:00 a.m., local time, or at such other date, time or place as the
parties hereto shall mutually agree. The date of the Closing is hereinafter
called the "Closing Date." At the Closing (a) Sellers and the Xxxx Family
Members shall deliver to Purchaser certificates representing the shares duly
endorsed in blank or accompanied by a stock power or other instrument of
transfer duly executed in blank, with signatures guaranteed by a bank or member
firm of the New York Stock Exchange and accompanied by all requisite stock
transfer tax stamps, and (b) Purchaser shall deliver to (i) Sellers that portion
of the Purchase Price payable at the Closing as provided in Section 1.1 hereof
and (ii) the Xxxx Family Members, the Xxxx Family Purchase Price as provided in
Section 1.3(a) hereof. The parties hereto hereby agree to deliver at the Closing
such other documents, certificates and instruments as are specified in Article
IV hereof and as reasonably may be required to effect the sale by Sellers and
Xxxx Family Members of the shares pursuant to, and as contemplated by, this
Agreement and to consummate the Contemplated Transactions. All events which
shall occur at the Closing shall be deemed to occur simultaneously.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLERS AND
XXXX FAMILY MEMBERS
A. Sellers severally, and not jointly, represent and warrant to
Purchaser, as of the date of this Agreement and as of the Closing Date (as if
each such representation and warranty was remade on the Closing Date), as
follows:
SECTION 2.1 OWNERSHIP OF SHARES. (a) Each Seller is the beneficial
owner of the Shares set forth opposite such Seller's name on Schedule 2 hereto.
To the best knowledge of Sellers, as of the date hereof, the Shares constitute
approximately 32% of the outstanding shares of Common Stock of the Company,
without giving effect to currently outstanding stock options. The Shares are
lawfully owned by the Sellers free and clear of any Lien of any kind, and have
been owned by Sellers since February 1, 1997. There are no outstanding options,
warrants, commitments,
agreements or any other rights of any character (except as created by this
Agreement) entitling any person other than Purchaser to acquire the Shares. The
Shares are fully paid and non-assessable, with no personal liability attaching
to the ownership thereof, and the Shares are transferable to Purchaser under the
terms of this Agreement. Sellers do not own any options or other rights to
purchase Common Stock or any other security or instrument convertible into or
exchangeable for Common Stock of the Company.
(b) Each Seller has the power to dispose of all of his, her or its
Shares, with no restrictions on such rights, subject to the terms of this
Agreement.
SECTION 2.2 POWER; BINDING AGREEMENTS. Xxxx has the legal capacity,
power and authority to enter into and perform all of his obligations under this
Agreement. Each of the Trust and the Foundation has the requisite power and
authority (in accordance with the terms of its organizational documents) to
enter into and perform all of its obligations under this Agreement. Upon
delivery of the Shares to Purchaser hereunder, Purchaser will acquire good title
thereto free and clear of all Liens and claims of others of every kind and
description, subject to applicable federal and state securities laws. The
execution, delivery and performance of this Agreement by each Seller will not
violate any agreement to which such Seller is a party or by which such Seller is
bound, including, without limitation, any trust agreement, voting agreement,
stockholders agreement, voting trust, partnership or other agreement. This
Agreement has been duly and validly executed and delivered by each Seller and
constitutes the legal, valid and binding agreement of such Seller, enforceable
against such Seller in accordance with its terms.
SECTION 2.3 NO CONFLICTS; CONSENTS. (a) Neither the execution, delivery
or performance by any Seller of this Agreement nor the consummation of the
Contemplated Transactions requires such Seller to the best of his, her or its
knowledge, to obtain any consent, approval or action of or waiver from, or make
any filing with, or give any notice to, any state or federal public body or
authority or any other person, and (b) neither the execution, delivery or
performance by any Seller of this Agreement nor the consummation of the
Contemplated Transactions nor compliance by any Seller with any of the
provisions hereof shall (i) conflict with or result in any breach of any
applicable trust, partnership agreement or other agreement applicable to such
Seller, (ii) result in a violation or breach of, or constitute (with or without
notice or lapse of time or both) a default (or give rise to any third party
right of termination, cancellation, material modification or acceleration) under
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, license, contract, commitment, arrangement, understanding, agreement
or other instrument or obligation of any kind to which such Seller is a party or
by which such Seller or any of his or its properties or assets may be bound, or
(iii) violate any order, writ, injunction, decree, judgment, statute, rule or
regulation applicable to such Seller or any of such Seller's properties or
assets.
SECTION 2.4 CERTIFICATES REPRESENTING SHARES. The Shares and the
certificates representing such Shares are now, and at all times after the date
hereof and until the Closing Date will be, held by Sellers, or by a nominee or
custodian for the benefit of Sellers, free and clear of all Liens, proxies,
voting trusts or agreements, understandings or arrangements or any other
encumbrances whatsoever, except for any such encumbrances or proxies arising
hereunder.
SECTION 2.5 BROKERS. Sellers have not taken any action in connection
with this Agreement or the transactions contemplated hereby so as to give rise
to any claim against Purchaser for any brokerage or finder's commissions, fees
or similar compensation.
SECTION 2.6 DISCLOSURE. (a) Neither this Agreement nor the Schedules
hereto includes or will include any untrue statement of a material fact or omits
or will omit to state a material fact necessary in order to make the statements
contained in this Agreement or the Schedules hereto not misleading.
(b) To the best knowledge of Sellers, all reports, registration
statements and other documents of the Company filed by the Company with the
Securities and Exchange Commission (the "Commission") during the three year
period immediately preceding the Closing Date (collectively, the "Company SEC
Documents") have been prepared in accordance with, and comply in all material
respects with, the applicable rules and regulations promulgated by the
Commission under the Securities Act of 1933, as amended (the "Securities Act")
and the Securities Exchange Act of 1934, as amended (the "Exchange Act"). To the
best knowledge of Sellers, none of the Company SEC Documents at the time it was
filed or became effective, as the case may be, included, or as of the date
hereof includes (except to the extent superseded by any report, registration
statement or document subsequently filed with the Commission) any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements contained therein not misleading. All representations and
warranties made by Sellers herein will be deemed to have been relied on by
Purchaser (notwithstanding any investigation by Purchaser).
B. Each Xxxx Family Member severally represents and warrants to
Purchaser, as of the date of this Agreement and as of the Closing Date (as if
each such representation and warranty was remade as of the Closing Date) as
follows:
SECTION 2.7 OWNERSHIP OF SHARES. (a) Each Xxxx Family Member is the
beneficial owner of the Family Member Shares set forth opposite such Xxxx Fund
Member's name on Schedule 1 hereto. The Family Member Shares are lawfully owned
by each Xxxx Family Member free and clear of any Lien of any kind, and have been
owned by such Xxxx Family Member since February 1, 1997. There are no
outstanding options, warrants, commitments, agreements or any other rights of
any character (except as created by this Agreement) entitling any person other
than Purchaser to acquire the Family Member Shares. The Family Member Shares are
fully paid and non-assessable, with no personal liability attaching to the
ownership thereof, and the Family Member Shares are transferable to Purchaser
under the terms of this Agreement. Xxxx Family Members do not own any options or
other rights to purchase Common Stock or any other security or instrument
convertible into or exchangeable for Common Stock of the Company.
(b) Each Xxxx Family Member has the power to dispose of all of his or
her Shares, with no restrictions on such rights, subject to the terms of this
Agreement.
SECTION 2.8 POWER; BINDING AGREEMENTS. Each Xxxx Family Member has the
legal capacity, power and authority to enter into and perform all of his or her
obligations under this Agreement. Upon delivery of the Xxxx Family Member Shares
to Purchaser hereunder, Purchaser will acquire good title thereto free and clear
of all Liens and claims of others of every kind and description, subject to
applicable federal and state securities laws. The execution, delivery and
performance of this Agreement by such Xxxx Family Member will not violate any
agreement to which such Xxxx Family Member is a party or by which such Xxxx
Family Member is bound, including, without limitation, any trust agreement,
voting agreement, stockholders agreement, voting trust, partnership or other
agreement. This Agreement has been duly and validly executed and delivered by
such Xxxx Family Member and constitutes the legal, valid and binding agreement
of such Xxxx Family Member, enforceable against such Xxxx Family Member in
accordance with its terms.
SECTION 2.9 NO CONFLICTS; CONSENTS. (a) Neither the execution, delivery
or performance by such Xxxx Family Member of this Agreement nor the consummation
of the Contemplated Transactions requires, to the best of his, her or its
knowledge, such Xxxx Family Member to obtain any consent, approval or action of
or waiver from, or make any filing with, or give any notice to, any state or
federal public body or authority or any other person, and (b) neither the
execution, delivery or performance by such Xxxx Family Member of this Agreement
nor the consummation of the Contemplated Transactions nor compliance by such
Xxxx Family Member with any of the provisions hereof shall (i) conflict with or
result in any breach of any applicable trust, partnership agreement or other
agreement applicable to such Xxxx Family Member, (ii) result in a violation or
breach of, or constitute (with or without notice or lapse of time or both) a
default (or give rise to any third party right of termination, cancellation,
material modification or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which such Xxxx Family Member is a party or by which
such Xxxx Family Member or any of his or its properties or assets may be bound,
or (iii) violate any order, writ, injunction, decree, judgment, statute, rule or
regulation applicable to such Xxxx Family Member or any of such Xxxx Family
Member's properties or assets.
SECTION 2.10 CERTIFICATES REPRESENTING SHARES. The Xxxx Family Member
Shares and the certificates representing such Xxxx Family Member Shares are now,
and at all times after the date hereof and until the Closing Date will be, held
by such Xxxx Family Member, or by a nominee or custodian for the benefit of such
Xxxx Family Member, free and clear of all Liens, proxies, voting trusts or
agreements, understandings or arrangements or any other encumbrances whatsoever,
except for any such encumbrances or proxies arising hereunder.
SECTION 2.11 BROKERS. Such Xxxx Family Member has not taken any action
in connection with this Agreement or the transactions contemplated hereby so as
to give rise to any claim against Purchaser for any brokerage or finder's
commissions, fees or similar compensation.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Sellers and each Xxxx Family
Member, as of the date of this Agreement and as of the Closing Date (as if each
such representation and warranty was remade on the Closing Date), as follows:
SECTION 3.1 EXISTENCE. Purchaser is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Delaware.
SECTION 3.2 AUTHORITY RELATIVE TO THIS AGREEMENT. Purchaser has full
power and authority to execute and deliver this Agreement and to consummate the
Contemplated Transactions. The execution, delivery and performance by Purchaser
of this Agreement and the consummation by it of the Contemplated Transactions
have been duly and validly authorized and approved by Purchaser and no other
proceedings on the part of Purchaser are necessary to authorize the execution
and delivery by Purchaser of this Agreement or the consummation of the
Contemplated Transactions. This Agreement has been duly and validly executed and
delivered by Purchaser and constitutes the legal, valid and binding agreement of
Purchaser, enforceable against Purchaser in accordance with its terms.
SECTION 3.3 NO CONFLICTS; CONSENTS. Neither the execution, delivery or
performance by Purchaser of this Agreement nor the consummation of the
Contemplated Transactions (i) violates any provision of the Operating Agreement
of Purchaser; (ii) requires Purchaser to obtain any consent, approval or action
of or waiver from, or make any filing with, or give any notice to, any state or
federal public body or authority or any other person; or (iii) violates any
material mortgage, indenture, lease, agreement or other instrument, permit,
franchise, license, judgment, order, decree, statute, law, ordinance, rule or
regulation applicable to Purchaser or by which it (or any of its properties or
assets) is subject or bound. No filing is required with respect to the
transactions contemplated hereunder under the provisions of the
Xxxx-Xxxxx-Xxxxxx Anti-Trust Improvements Act of 1976.
SECTION 3.2 PURCHASE FOR INVESTMENT. Purchaser is acquiring the Shares
for its own account for investment, and not with a view to any distribution
thereof. Purchaser acknowledges that the certificates evidencing the Shares will
contain a legend restricting transfer thereof pursuant to the Securities Act and
that the Shares may not be sold, transferred or otherwise disposed of unless
pursuant to an effective registration statement under the Securities Act
covering the Shares or pursuant to an exemption therefrom.
SECTION 3.3 BROKERS. Purchaser has not taken any action in connection
with this Agreement or the transactions contemplated hereby so as to give rise
to any claim against any Seller for any brokerage or finder's commissions, fees
or similar compensation.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.1 CONDITIONS TO THE OBLIGATIONS OF SELLERS AND PURCHASER. The
obligations of Sellers and Purchaser hereunder to consummate each of the
Contemplated Transactions are subject to the fulfillment to their reasonable
satisfaction prior to or at the Closing of each of the following conditions, any
of which may be waived by the party for whose benefit such condition has been
imposed:
(a) Consummation of the Contemplated Transactions shall not have been
prohibited or restrained by any order, injunction, decree or judgment of any
court, governmental agency or other regulatory agency or commission and there
shall not have been promulgated, entered, issued or determined (by any court,
governmental agency or other regulatory agency or commission of competent
jurisdiction) to be applicable to this Agreement any law, regulation, order,
injunction, decree or judgment making the Contemplated Transactions illegal;
(b) All approvals or consents of, or waivers by, third parties which
are required in connection with the Contemplated Transactions shall have been
obtained, which approvals shall be without conditions or with conditions which
are reasonably acceptable to Purchaser and Sellers and such approvals shall be
effective and shall remain in force.
SECTION 4.2 ADDITIONAL CONDITIONS TO PURCHASER'S OBLIGATIONS.
Purchaser's obligations to consummate the Contemplated Transactions at the
Closing are subject to the fulfillment, to Purchaser's reasonable satisfaction,
prior to or at the Closing, of each of the following additional conditions, any
of which may be waived by Purchaser:
(a) Representations and Warranties. All representations and warranties
of each Seller contained herein shall be true and accurate at and as of the
Closing Date.
(b) Performance. Each Seller shall have performed and complied with all
agreements, covenants and conditions required by this Agreement to be performed
and complied with by him or it prior to or on the Closing Date.
(c) Certificates. Purchaser shall have received certificates, each
dated the Closing Date, signed by authorized representatives of each Seller to
the effect that the conditions set forth in Sections 4.2(a) and 4.2(b) hereof
have been satisfied.
(d) Xxxxx Xxxx and Xxxx Xxxx Consents. Xxxxx Xxxx and Xxxx Xxxx each
shall have executed and delivered to Purchaser a consent acknowledging and
authorizing Xxxxx Xxxx'x and Xxxx Xxxx'x sale, as the case may be, of the Shares
to the extent the Shares constitute community property and otherwise precluding
Xxxxx Xxxx and Xxxx Xxxx, as the case may be, from making future claims against
Purchaser with respect to the Shares or the proceeds thereof in the form of
Exhibit C hereto.
(e) Agreement With the Company. Execution and delivery by the Company
simultaneously with the Closing of agreements relating to (i) matters of
governance of the Company (the "Governance Agreement") and (ii) financial
advisory services to be rendered to the Company (the "Services Agreement"), in
the forms attached hereto as Exhibits A and B, respectively.
(f) Additional Documents. Each Seller shall have delivered, or caused
to have been delivered, any and all other documents reasonably requested by
Purchaser to evidence each Seller's compliance with the conditions set forth in
this Article IV.
SECTION 4.3 ADDITIONAL CONDITIONS TO SELLERS' OBLIGATIONS. Sellers'
obligations to deliver (or cause to be delivered) the Shares to Purchaser at the
Closing are subject to the fulfillment, to Xxxx'x reasonable satisfaction, prior
to or at the Closing, of each of the following additional conditions, any of
which may be waived by Xxxx:
(a) Representations and Warranties. All representations and warranties
of Purchaser contained herein shall be true and accurate at and as of the
Closing Date.
(b) Performance. Purchaser shall have performed and complied with all
agreements, covenants and conditions required by this Agreement to be performed
and complied with by it prior to or on the Closing Date.
(c) Certificate. Sellers shall have received a certificate, dated the
Closing Date, signed by a duly authorized officer of Purchaser to the effect
that the conditions set forth in Sections 4.3(a) and 4.3(b) hereof have been
satisfied.
(d) Additional Documents. Purchaser shall have delivered, or caused to
have been delivered, any and all other documents reasonably requested by Sellers
to evidence Purchaser's compliance with the conditions set forth in this Article
IV.
ARTICLE V
COVENANTS AND AGREEMENTS
The parties covenant and agree as follows:
SECTION 5.1 NO SOLICITATION. Beginning on the date hereof and ending on
the Closing Date, each Seller and Xxxx Family Member shall not, in his, her or
its capacity as such, directly or indirectly, initiate, solicit (including by
way of furnishing information), encourage or respond to or take any other action
knowingly to facilitate, any inquiries or the making of any proposal by any
person or entity (other than Purchaser or any Affiliate of Purchaser) with
respect to the Company that constitutes or reasonably may be expected to lead
to, an Acquisition Proposal, or enter into or maintain or continue discussions
or negotiate with any person or entity in furtherance of such inquiries or to
obtain any Acquisition Proposal, or agree to or endorse any Acquisition
Proposal, or authorize or permit any person or entity acting on behalf of such
Seller or Xxxx Family Member to do any of the foregoing. If any Seller or Xxxx
Family Member receives any inquiry or proposal regarding any Acquisition
Proposal, such Seller or Xxxx Family Member shall promptly inform Purchaser of
that inquiry or proposal and the details thereof. "Acquisition Proposal" means
discussions or negotiations with, or providing any information or assistance to,
or entering into any
agreement with any person or group of persons (other than Purchaser) concerning
any acquisition of any equity interest in, or in a merger, consolidation,
liquidation, dissolution, disposition of all or substantially all of the assets
of, the Company or any disposition of any of the capital stock of the Company
(other than (a) pursuant to the transactions contemplated by this Agreement or
(b) dispositions pursuant to death, divorce or by operation of law).
SECTION 5.2 EXPENSES. The parties to this Agreement shall bear their
respective expenses incurred in connection with the preparation, execution and
performance of this Agreement and the transactions contemplated hereby,
including, without limitation, all fees and expenses of agents, representatives,
counsel and accountants.
SECTION 5.3 BEST EFFORTS; FURTHER ASSURANCES. The parties hereto shall
execute such other documents and papers and take such further actions as may be
reasonably required or desirable to carry out the provisions hereof and the
transactions contemplated hereby. Each such party shall use his or its best
efforts to fulfill, or obtain the fulfillment of, the conditions precedent to
effect the transactions contemplated in this Agreement as promptly as
practicable.
SECTION 5.4 MATTERS RELATING TO THE SHARES. Each Seller and Xxxx Family
Member hereby agrees that during the period commencing on the date hereof and
continuing until the Closing Date, at any meeting of the holders of Common Stock
of the Company, however called, or in connection with any written consent of the
holders of Common Stock of the Company, such Seller or Xxxx Family Member shall
vote (or cause to be voted) the Shares then owned by such Seller or Xxxx Family
Member (a) against any action or agreement that would result in a breach, in any
respect, of any covenant, representation or warranty or any other obligation or
agreement of such Seller or Xxxx Family Member under this Agreement; and (b)
except as otherwise agreed to in writing in advance by Purchaser, against the
following actions (other than the Contemplated Transactions): (i) any
extraordinary corporate transaction, such as a merger, consolidation or other
business combination involving the Company or its subsidiaries; (ii) a sale,
lease or transfer of a material amount of assets of the Company or its
subsidiaries, or a reorganization, recapitalization, dissolution or liquidation
of the Company or its subsidiaries; (iii) (1) any change in a majority of the
persons who constitute the board of directors of the Company; (2) any change in
the present capitalization of the Company or any amendment of Company's
Certificate of Incorporation or By-laws; (3) any other material change in the
Company's corporate structure or business; or (4) any other action involving the
Company or its subsidiaries which is intended, or could reasonably be expected,
to impede, interfere with, delay, postpone, or materially adversely affect the
Contemplated Transactions hereunder. No Seller or Xxxx Family Member shall enter
into any agreement or understanding with any person or entity the effect of
which would be to violate the provisions and agreements contained in this
Section 5.4.
SECTION 5.5 RESTRICTION ON TRANSFER, PROXIES AND NON-INTERFERENCE.
Beginning on the date hereof and ending on the Closing Date, no Seller or Xxxx
Family Member shall (a) directly or indirectly, offer for sale, sell, transfer,
tender, pledge, encumber, assign or otherwise dispose of, or enter into any
contract, option or other arrangement or understanding with respect to, or
consent to the offer for sale, transfer, tender, pledge, encumbrance, assignment
or other disposition of, any or all of the Shares owned by such Seller or Lund
Family Member or any interest therein; (b) except as contemplated by this
Agreement, grant any proxies or powers of attorney, deposit any Shares into a
voting trust or enter into a voting agreement with respect to any Shares; or (c)
take any action that would make any representation or warranty of such Seller or
Xxxx Family
Member contained herein untrue or incorrect or have the effect of preventing or
disabling such Seller or Xxxx Family Member from performing such Seller or Xxxx
Family Member's obligations under this Agreement.
SECTION 5.6 STOP TRANSFER; CHANGES IN SHARES. Each Seller and Xxxx
Family Member agrees with, and covenants to, Purchaser that such Seller shall
not request that the Company register the transfer (book-entry or otherwise) of
any certificate or uncertificated interest representing any of the Shares,
unless such transfer is made in compliance with this Agreement. In the event of
a stock dividend or distribution, or any change in the Common Stock of the
Company by reason of any stock dividend, split-up, recapitalization,
combination, exchange of shares or the like, the term "Shares" shall be deemed
to refer to and include the Shares as well as all such stock dividends and
distributions and any shares into which or for which any or all of the Shares
may be changed or exchanged and the Purchase Price shall be appropriately
adjusted. Each Seller and Xxxx Family Member shall be entitled to receive any
cash dividend paid by the Company during the term of this Agreement until the
Closing Date.
SECTION 5.7 GRANT OF IRREVOCABLE PROXY; APPOINTMENT OF PROXY. (a) Each
Seller and Xxxx Family Member hereby irrevocable grants to, and appoints Xxx X.
Xxxxxxxx and Xxxxxx Xxxxxxxx, in his capacity as a duly authorized officer of
Purchaser, such Seller's or Xxxx Family Member's proxy and attorney-in-fact
(with full power of substitution), for and in the name, place and stead of such
Seller or Xxxx Family Member's, to vote the Shares owned by such Seller or Xxxx
Family Member's, or grant a consent or approval in respect of such Shares,
against any Acquisition Proposal or other matter set forth in Section 5.1
hereof.
(b) Each Seller and Xxxx Family Member represents that any proxies
heretofore given in respect of the Shares owned by such Seller or Xxxx Family
Member's are not irrevocable, and that any such proxies are hereby revoked.
(c) Each Seller and Xxxx Family Member hereby affirms that the
irrevocable proxy set forth in this Section 5.7 is given in connection with the
execution of this Agreement, and that such irrevocable proxy is given to secure
the performance of the duties of such Seller or Xxxx Family Member's under this
Agreement. Each Seller and Xxxx Family Member hereby further affirms that the
irrevocable proxy is coupled with an interest and may under no circumstances be
revoked. Each Seller and Xxxx Family Member hereby ratifies and confirms all
that such irrevocable proxy may lawfully do or cause to be done by virtue
hereof. Such irrevocable proxy is executed and intended to be irrevocable in
accordance with the provisions of Section 212(e) of the General Corporation Law
of the State of Delaware.
SECTION 5.8 BINDING EFFECT. Each Seller and Xxxx Family Member agrees
that this Agreement and the obligations hereunder shall attach to the shares
owned by such Seller and Xxxx Family Member and shall be binding upon any person
or entity to which legal or beneficial ownership of such shares shall pass,
whether by operation of law or otherwise, including, without limitation, such
party's heirs, guardians, administrators or successors.
ARTICLE VI
TERMINATION
SECTION 6.1 GROUNDS FOR TERMINATION. This Agreement may not be
terminated at any time prior to the Closing Date; except that (a) this Agreement
may be terminated by the mutual consent of Xxxx and Purchaser; (b) Xxxx or
Purchaser may terminate, by written notice to the other party, if (i) the
Closing shall not have occurred through no fault of Sellers or Purchaser prior
to October 31, 1997, or such later date as may be agreed by Purchaser and Xxxx,
or (ii) any court or other Federal or state agency of competent jurisdiction
shall have issued an order or decree restraining, enjoining or otherwise
prohibiting any of the parties from consummating any of the transactions
contemplated by this Agreement and either (A) such order or decree is not
dissolved or vacated prior to October 31, 1997, or such later date as may be
agreed by Purchaser and Xxxx; provided that, in the event such an order or
decree shall be issued, the parties hereto shall use their best efforts to have
the same dissolved or vacated prior to such date or (B) in the opinion of
counsel to the party giving notice of termination (which opinion is reasonable
as to its factual basis and legal conclusions in the opinion of counsel to the
party receiving such notice), such order or decree is not likely to be dissolved
or vacated within 30 days from the date such notice of termination is given; (c)
Purchaser may terminate, by written notice to Sellers, if a representation or
warranty of any Seller is incorrect or if any Seller breaches any of his or its
covenants or agreements contained in this Agreement; (d) Sellers may terminate,
such termination to be effective as to all of the Shares, by written notice to
Purchaser, if a representation or warranty of Purchaser is incorrect or if
Purchaser breaches any of its covenants or agreements contained in this
Agreement; and (e) Purchaser may terminate its obligation to purchase shares
from any Xxxx Family Member by written notice to such Xxxx Family Member if a
representation or warranty of such Xxxx Family Member is incorrect or if such
Xxxx Family Member breaches any of its covenants or agreements contained in this
Agreement.
SECTION 6.2 EFFECT OF TERMINATION. If this Agreement is terminated
pursuant to Section 6.1, such termination shall be without liability of either
party, or any stockholder, director, trustee, officer, employee, partner, agent,
consultant or representative of such party, to the other party to this
Agreement; provided that, if such termination shall result from the
incorrectness of a representation or warranty of a party contained in this
Agreement or the breach by a party of the covenants or agreements of such party
contained in this Agreement, such party shall be fully liable for any and all
costs and expenses (including reasonable attorneys' fees and disbursements)
sustained or incurred by the other party.
ARTICLE VII
INDEMNIFICATION
SECTION 7.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties contained herein or made pursuant hereto shall
survive the Closing and continue in full force and effect for a period of three
years thereafter.
SECTION 7.2 INDEMNITY. Purchaser, each Seller and Xxxx Family Member
shall indemnify and hold the other harmless to the extent provided in this
Article VII from and against any and all losses, damages, liabilities, claims,
demands, judgments, settlements, costs and expenses of any nature whatsoever
(including reasonable attorneys' fees and disbursements) resulting from or
arising out of the breach of any then surviving representation or warranty or
the non-performance, partial or total, of any covenant or agreement of the
indemnifying party contained in this Agreement, in either case, to the extent
not waived by the indemnified party.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 NOTICES. (a) Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally by
hand or by recognized overnight courier, telecopied or mailed (by registered or
certified mail, postage prepaid) as follows:
(i) If to Purchaser, one copy to:
LIH HOLDINGS, LLC
c/o Harvest Partners, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxx X. Xxxxxxxx, Manager
with a simultaneous copy to:
Xxxx & Priest LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx Xxxxx, Esq.
(ii) If to Xxxx, one copy to:
Xxxxx X. Xxxx
Rural Route 2, Box 2030
Xxxxxxx, XX 00000
with a simultaneous copy to:
Xxxxxxxxx & Xxxxxx P.L.L.P.
4200 IDS Center
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx Xxxxx, Esq.
(iii) If to the Partnership, one copy to:
The Xxxx Family Limited Partnership
Xxxxx Xxxxx 0, Xxx 0000
Xxxxxxx, XX 00000
with a simultaneous copy to:
Xxxxxxxxx & Xxxxxx P.L.L.P.
4200 IDS Center
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx Xxxxx, Esq.
(iv) If to the Foundation, one copy to:
Xxxx and Xxxxx Xxxx Family Foundation
c/o Xxxx X. Xxxxxxxx, Ltd.
0000 00xx Xxxxxx X., Xxxxx 000
Xxxxxxxx, XX 00000
with a simultaneous copy to:
Xxxxxxxxx & Xxxxxx P.L.L.P.
4200 IDS Center
00 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Telecopier: (000) 000-0000
Attention: Xxxxxxx Xxxxx, Esq.
; and
(v) Any Xxxx Family Member to the address set
forth next to his, her or its name on
Schedule 1
(b) Each such notice or other communication shall be effective (i) if
given by telecopier, when such telecopy is transmitted to the telecopier number
specified in Section 8.1(a) (with confirmation of transmission), or (ii) if
given by any other means, when delivered at the address specified in Section
8.1(a). Any party by notice given in accordance with this Section 8.1 to the
other parties may designate another address (or telecopier number) or person for
receipt of notices hereunder. Notices by a party may be given by counsel to such
party.
SECTION 8.2 ASSIGNMENT. Except as otherwise provided in Section 1.2
hereof, this Agreement may not be assigned by Sellers or any Xxxx Family Member,
except that all of the terms and provisions of this Agreement shall inure to the
benefit of and be binding upon the heirs, legal representatives, successors and
assigns of each Seller or Xxxx Family Member. Nothing in this
Agreement, express or implied, is intended to or shall confer on any person
other than the parties hereto or their respective successors and permitted
assigns, any rights, remedies, obligations or liabilities under or by reason of
this Agreement.
SECTION 8.3 MISCELLANEOUS. This Agreement and the Schedules and
Exhibits hereto embody the entire agreement and understanding between the
parties hereto with respect to the subject matter hereof. This Agreement may be
changed, waived, discharged or terminated only by an instrument in writing
signed by the party against which enforcement of such change, waiver, discharge
or termination is sought. No course of dealing and no delay on the part of any
party hereto in exercising any right, power or remedy under this Agreement shall
operate as a waiver thereof, or otherwise prejudice any party's rights, powers
and remedies. No right, power or remedy conferred by this Agreement upon any
party hereto shall be exclusive of any other right, power or remedy referred to
herein or now or hereafter available at law, in equity, by statute or otherwise.
This Agreement shall be construed in accordance with and governed by the laws of
the State of Delaware. If any term of this Agreement or application thereof
shall be invalid or unenforceable, the remainder of this Agreement shall remain
in full force and effect.
SECTION 8.4 APPOINTMENT OF SELLERS' REPRESENTATIVE. Each of the Sellers
hereby appoints Xxxxx X. Xxxx (the "Sellers' Representative") with full power
and authority to act as the agent of such Seller in connection with the
provisions of this Agreement and to perform all acts required thereunder,
including, but not limited to, making all decisions relating to the exercise of
the Option pursuant to Section 1.2 hereof or the resolution and settlement of
any disputes under Section 1.2 hereof relating to the determination of
Additional Consideration thereunder, including, without limitation, receiving
and delivering all notices, giving all approvals and waivers, entering into all
amendments and exercising all rights of Sellers thereunder. If the Sellers'
Representative shall die, become totally incapacitated, shall otherwise be
unable to perform his or her duties or shall resign from such position, the
Sellers who represent a majority percentage of the Shares sold on the Closing
Date pursuant to Section 1.1 hereof shall appoint a new Sellers' Representative
to fill such vacancy and written notice of such action shall be given to the
Purchaser and all Sellers. All decisions and actions of the Sellers'
Representative shall be binding upon all of the Sellers and no Seller shall have
the right to object, dissent from, protest or otherwise contest the same. The
Purchaser shall be permitted to rely upon any written instrument or document
executed on behalf of the Sellers' Representative.
SECTION 8.5 COUNTERPARTS. The Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original as against any
party whose signature appears thereon, and all of which shall together
constitute one and the same instrument. This Agreement shall become binding when
one or more counterparts hereof, individually or taken together, shall bear the
signatures of all of the parties reflected hereon as the signatories.
ARTICLE IX
DEFINITIONS
SECTION 9.1 DEFINITIONS. (a) The following terms, as used herein, have
the following meanings:
"Affiliate" of any person means any other person, directly or
indirectly through one or more intermediary persons, controlling, controlled by
or under common control with such person.
"Agreement" or "this Agreement" means, and the words "herein", "hereof"
and "hereunder" and words of similar import refers to, this agreement as it from
time to time may be amended.
"Lien" means, with respect to any asset, any mortgage, lien (including
mechanics, warehousemen, laborers and landlord's liens), claim, pledge, charge,
security interest, preemptive right, right of first refusal, option, judgment,
title defect or encumbrance of any kind in respect of or affecting such asset.
The term "person" means an individual, corporation, partnership, joint
venture, association, trust, unincorporated organization or other entity,
including a government or political subdivision or an agency or instrumentality
thereof.
The term "voting power" when used with reference to the capital stock
of, or units of equity interests in, any person means the power under ordinary
circumstances (and not merely upon the happening of a contingency) to vote in
the election of directors of such person (if such person is a corporation) or to
participate in the management and control of such person (if such person is not
a corporation).
(b) The following additional terms are defined in the following
sections of this Agreement:
TERM SECTION
Acquisition Recital
Acquisition Proposal 5.1
Additional Consideration 1.1
Closing 1.4
Closing Date 1.4
Commission 2.6(b)
Company Recital
Company SEC Documents 2.6(b)
Contemplated Transactions Recital
Exchange Act 2.6(b)
Family Member Shares Recital
Foundation Recital
Governance Agreement 4.2(e)
Lund Recital
Xxxx Family Members Recital
Purchase Price 1.1
Purchaser Recital
Resolving Firm 1.2(b)
Securities Act 2.6(b)
Sellers Recital
Sellers' Representative 8.4
Services Agreement 4.2(e)
Shares Recital
Trust Recital
SECTION 9.2 INTERPRETATION. Unless the context otherwise requires, the
terms defined in Section 9.1 shall have the meanings herein specified for all
purposes of this Agreement, applicable to both the singular and plural forms of
any of the terms defined herein. When a reference is made in this Agreement to
Sections, such reference shall be to a Section of this Agreement unless
otherwise indicated. The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement. Whenever the words "include", "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation."
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date set forth above.
LIH HOLDINGS, LLC
By: /s/ Xxx X. Xxxxxxxx
Name: Xxx X. Xxxxxxxx
Title: Manager
/s/ Xxxxx X. Xxxx
Xxxxx X. Xxxx
THE XXXX FAMILY LIMITED PARTNERSHIP
By: /s/ Xxxxx X. Xxxx
Name: Xxxxx X. Xxxx
Title: General Partner
/s/ Xxxx X. Xxxx
Xxxx X. Xxxx
XXXX AND XXXXX XXXX FAMILY FOUNDATION
By: /s/ Xxxxx X. Xxxx
Name: Xxxxx X. Xxxx
Title: President
XXXXX XXXX IRREVOCABLE MINORS TRUST
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx, Trustee
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx, Trustee
XXXXX XXXXXX IRREVOCABLE MINORS TRUST
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx, Trustee
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx, Trustee
/s/ Xxxxxx Xxxx
Xxxxxx Xxxx
/s/ Xxxxx X. Xxxx
Xxxxx X. Xxxx
/s/ Xxxxxxx X. Xxxx
Xxxxxxx X. Xxxx
XXXXXXXX XXXX IRREVOCABLE MINORS TRUST
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx, Trustee
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx, Trustee
XXXXXXX XXXX IRREVOCABLE MINORS TRUST
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx, Trustee
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx, Trustee
XXXXXXXXXXX XXXXXX IRREVOCABLE
MINORS TRUST
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx, Trustee
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx, Trustee
XXXXXX XXXXXXXXXX IRREVOCABLE
MINORS TRUST
By: /s/ Xxxxx X. Xxxxxx
Name: Xxxxx X. Xxxxxx, Trustee
By: /s/ Xxxx X. Xxxxxxxx
Name: Xxxx X. Xxxxxxxx, Trustee
/s/ Xxxxxx A/ Xxxx
Xxxxxx X. Xxxx
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
XXXX "FAMILY MEMBER SHARES"
SCHEDULE 1
SHARES NAME AND ADDRESS
------ ----------------
4,115 Xxxxx X. Xxxxxx & Xxxx Xxxxxxxx, Trustees
Xxxxx Xxxx Irrevocable Minors Trust
c/o Xxxx X. Xxxxxxxx, Ltd.
0000 00xx Xxxxxx X.
Xxxxx 000
Xxxxxxxx, XX 00000
4,115 Xxxxx X. Xxxxxx & Xxxx Xxxxxxxx, Trustees
Xxxxx Xxxxxx Irrevocable Minors Trust
c/o Xxxx X. Xxxxxxxx, Ltd.
0000 00xx Xxxxxx X.
Xxxxx 000
Xxxxxxxx, XX 00000
64,415 Xxxxxx Xxxx
0000 000xx Xxxx
Xxxxxx, XX 00000
80,000 Xxxxx X. Xxxx
00000 Xxxx Xxxxx Xxxx
Xxxxxxxx, XX 00000
28,249 Xxxxxxx X. Xxxx
00000 Xxxxxxxxx Xx., X.X.
Xxxxxxx, XX 00000
4,115 Xxxxx X. Xxxxxx & Xxxx X. Xxxxxxxx, Trustees
Xxxxxxxx Xxxx Irrevocable Minors Trust
c/o Xxxx X. Xxxxxxxx, Ltd.
0000 00xx Xxxxxx X.
Xxxxx 000
Xxxxxxxx, XX 00000
4,115 Xxxxx X. Xxxxxx & Xxxx Xxxxxxxx, Trustees
Xxxxxxx Xxxx Irrevocable Minors Trust
c/o Xxxx X. Xxxxxxxx, Ltd.
0000 00xx Xxxxxx X.
Xxxxx 000
Xxxxxxxx, XX 00000
4,115 Xxxxx X. Xxxxxx & Xxxx X. Xxxxxxxx, Trustees
Xxxxxxxxxxx Xxxxxx Irrevocable Minors Trust
c/o Xxxx X. Xxxxxxxx, Ltd.
0000 00xx Xxxxxx X.
Xxxxx 000
Xxxxxxxx, XX 00000
4,115 Xxxxx X. Xxxxxx & Xxxx Xxxxxxxx, Trustees
Xxxxxx XxxXxxxxxx Irrevocable Minors Trust
c/o Xxxx X. Xxxxxxxx, Ltd.
0000 00xx Xxxxxx X.
Xxxxx 000
Xxxxxxxx, XX 00000
49,179 Xxxxxx X. Xxxx
c/o Xxxxx Automotive
0000 XxXxxxxx Xxxxxx
Xxxxx, XX 00000
13,869 Xxxxx X. Xxxxxx
0000 000xx Xxxx, X.X.
Xxxxxx, XX 00000
260,392
=======
XXXXX XXXX "SHARES"
SCHEDULE 2
SHAREHOLDER SHARES CERTIFICATE NO. LOCATION
Xxxxx X. Xxxx 915,430 #6367 Xxxx X. Xxxxxxxx
Rural Xxxxx 0, Xxx 0000 68,000 #6469 Xxxxx Xxxxxxx
Xxxxxxx, XX 00000 43,171 Street name Xxxxx Xxxxxxx, Xxxxx Xxxxxxx
-------
1,026,601 no certificate number
Xxxx X. Xxxx 100,000 #5425 Xxxx X. Xxxxxxxx
Rural Xxxxx 0, Xxx 0000 100,000 #5426 Xxxx X. Xxxxxxxx
-------
Xxxxxxx, XX 00000 200,000
Xxxx and Xxxxx Xxxx 67,900 Street name Xxxxx Xxxxxxx, Xxxxx Xxxxxxx
Family Foundation
The Xxxx Family 132,000 #6468 Xxxxx Xxxxxxx
Limited Partnership
SCHEDULE 3
Xxxx Earnout Analysis
----------------------------------------------------------------------------------------------
Assumptions
-----------
Stock Purchase Price $ 11.50
Estimated Purchase Expenses $ 0.40
-------------------
Total Purchase Price $ 11.90
Return Hurdle Rate 10.0%
Harvest Share after Hurdle 70%
Al Share after Hurdle 30%
Payout Cap per share $ 4.39 per share
Payout Cap ($ in millions) $ 6.27
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
------ ------ ------ ------ ------ ------ ------ ------ ------ -------
Hurdle Price per share 13.09 14.40 15.84 17.42 19.17 21.08 23.19 25.51 28.06 30.87
Per Share Earnout Valuation
-------------------------------------------------------------------
Realized Proceeds ($ per share)
per share Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
--------- ------ ------ ------ ------ ------ ------ ------ ------ ------ -------
21.00 2.37 1.98 1.55 1.07 0.55 0.00 0.00 0.00 0.00 0.00
23.50 3.12 2.73 2.30 1.82 1.30 0.73 0.09 0.00 0.00 0.00
26.00 3.87 3.48 3.05 2.57 2.05 1.48 0.84 0.15 0.00 0.00
28.50 4.39 4.23 3.80 3.32 2.80 2.23 1.59 0.90 0.13 0.00
31.00 4.39 4.39 4.39 4.07 3.55 2.96 2.34 1.65 0.88 0.04
33.50 4.39 4.39 4.39 4.39 4.30 3.73 3.09 2.40 1.63 0.79
Total Earnout Payment
-------------------------------------------------------------------
Realized Proceeds ($ in millions)
per share Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
--------- ------ ------ ------ ------ ------ ------ ------ ------ ------ -------
21.00 3.39 2.82 2.21 1.53 0.79 0.00 0.00 0.00 0.00 0.00
23.50 4.45 3.89 3.28 2.60 1.86 1.03 0.13 0.00 0.00 0.00
26.00 5.52 4.96 4.35 3.67 2.93 2.10 1.20 0.21 0.00 0.00
28.50 6.27 6.03 5.42 4.74 3.99 3.17 2.27 1.28 0.19 0.00
31.00 6.27 6.27 6.27 5.81 5.06 4.24 3.34 2.35 1.26 0.06
33.50 6.27 6.27 6.27 6.27 6.13 5.31 4.41 3.42 2.33 1.13
EXHIBIT A
[GOVERNANCE AGREEMENT. INCLUDED AS EXHIBIT 10.2
TO THIS CURRENT REPORT ON FORM 8-K.]
EXHIBIT B
[SERVICES AGREEMENT INCLUDED AS EXHIBIT 10.3
TO THIS CURRENT REPORT ON FORM 8-K.]
EXHIBIT C
CONSENTS OF XXXX X. XXXX AND XXXXX X. XXXX
These Consents are given individually by Xxxxx X. Xxxx and Xxxx X. Xxxx
in connection with the consummation of transactions under that certain Stock
Purchase Agreement dated as of September 9, 1997 by and among LIH Holdings, LLC,
a Delaware limited liability company ("Purchaser"), Xxxxx X. Xxxx, Xxxx X. Xxxx,
the Xxxx Family Limited Partnership, the Xxxx and Xxxxx Xxxx Family Foundation
and the Xxxx Family Members listed on Schedule 1 of said Stock Purchase
Agreement.
Xxxx X. Xxxx, the wife of Xxxxx X. Xxxx, hereby consents to the sale by
Xxxxx X. Xxxx of all of his shares personally owned in his individual name and
listed on Schedule 2 to said Stock Purchase Agreement to the extent said shares
constitute marital property under the laws of the State of Wisconsin and
otherwise acknowledges and agrees that she shall have no claim or recourse
whatsoever against the Purchaser or any of its affiliates with respect to the
shares acquired by Purchaser or proceeds thereof.
Xxxxx X. Xxxx, the husband of Xxxx X. Xxxx, hereby consents to the sale
by Xxxx X. Xxxx of all of her shares personally owned in her individual name and
listed on Schedule 2 to said Stock Purchase Agreement to the extent said shares
constitute marital property under the laws of the State of Wisconsin and
otherwise acknowledges and agrees that he shall have no claim or recourse
whatsoever against the Purchaser or any of its affiliates with respect to the
shares acquired by Purchaser or proceeds thereof.
IN WITNESS WHEREOF, Xxxxx X. Xxxx and Xxxx X. Xxxx each hereby gives
this Consent as of this 9th day of September, 1997.
_____________________________________ _____________________________________
Xxxx X. Xxxx Xxxxx X. Xxxx
