Exhibit 10.5
EXECUTION COPY
STOCK PURCHASE AND SUPPORT AGREEMENT
THIS STOCK PURCHASE AND SUPPORT AGREEMENT, dated as of October 3, 2005
(this "Agreement"), is by and among X.X. Xxxxxxxxx Corporation, a Delaware
corporation ("Parent"), X.X. Xxxxxxxxx Inc., a Delaware corporation and a wholly
owned subsidiary of Parent, and the stockholders of Parent listed on Schedule A
attached hereto (each, a "Stockholder" and collectively, the "Stockholders").
RECITALS:
A. Immediately prior to the execution of this Agreement, the
Stockholders are the record and beneficial owners of the number of shares of
Convertible Cumulative Preferred Stock, par value $1 per share, of Parent (the
"Preferred Stock") set forth opposite such Stockholder's name under the caption
"Shares of Preferred Stock Beneficially Owned" on Schedule A attached hereto,
and each Stockholder has the right to vote (on an as converted basis and as
provided in the Certificate of Designations) and dispose of all of such shares
of Preferred Stock.
B. Dex Media, Inc., a Delaware corporation ("Dex Media"), Parent and
Forward Acquisition Corp., a Delaware corporation and wholly owned subsidiary of
Parent ("Merger Sub"), entered into an Agreement and Plan of Merger, dated as of
October 3, 2005 (as amended from time to time, the "Merger Agreement"), pursuant
to which Dex Media will be merged with and into Merger Sub with Merger Sub as
the surviving company (the "Merger").
C. Parent has agreed to repurchase and acquire from the Stockholders,
and the Stockholders have agreed to sell to Parent, subject to the terms and
conditions of this Agreement, all of the shares of Preferred Stock owned by the
Stockholders, as set forth opposite each such Stockholder's name under the
caption "Shares of Preferred Stock Beneficially Owned" on Schedule A attached
hereto (such shares of Preferred Stock are referred to collectively in this
Agreement as the "Purchased Shares").
D. As a condition to entering into the Merger Agreement, which will
benefit the Stockholders directly and indirectly, Parent has required that the
Stockholders agree, and the Stockholders have agreed, to enter into this
Agreement, pursuant to which, among other things, the Stockholders (a) agree to
vote their Securities owned at the time of such vote on matters relating to the
Merger, the Merger Agreement and the transactions contemplated by the Merger
Agreement as provided herein, including, without limitation, in favor of the
issuance of shares of Parent Common Stock in the Merger, and (b) consent under
the Purchase Agreement and the Certificate of Designations, on the terms and
conditions set forth herein, to the transactions contemplated herein and by the
Merger Agreement, including, without limitation, the Merger, the purchase of the
Purchased Shares and the Financing, and waive any right of first refusal in
connection with the issuance of shares of Parent Common Stock in the Merger.
E. Prior to entering into this Agreement, the disinterested members of
Parent's board of directors directed management to negotiate the terms of the
transactions contemplated herein with the Stockholders on an arms-length basis
(the "Transactions").
F. The disinterested members of Parent's board of directors, after
review of the Transactions, which included advice from an independent investment
bank of national reputation, determined that the Transactions were beneficial
and fair to Parent and its stockholders, and that the Transactions should be
consummated as described herein.
G. Parent and the Stockholders desire to set forth certain agreements
herein.
AGREEMENT:
NOW, THEREFORE, in consideration of the premises and the representations,
warranties and agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, and
intending to be legally bound hereby, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Certain Definitions. Capitalized terms used and not defined
herein have the respective meanings ascribed to them in the Merger Agreement. In
addition, for purposes of this Agreement, the following terms have the following
meanings when used herein with initial capital letters:
(a) "Affiliate" means any Person that directly, or indirectly through
one or more Persons, controls, is controlled by, or is under common control
with, the Person specified. As used in this definition, "control"
(including its correlative meanings, "controlled by" and "under common
control with") shall mean possession, directly or indirectly, of power to
direct or cause the direction of management or policies (whether through
ownership of securities or partnership or other ownership interests, by
contract or otherwise) of such Person.
(b) "Certificate of Designations" means the Certificate of
Designations governing the Convertible Cumulative Preferred Stock of
Parent.
(c) "Material Adverse Effect" means, with respect to any reference to
a state of facts, event, change, effect or condition, such state of facts,
event, change, effect or condition that has had, has, or could reasonably
be expected to have, a material adverse effect on (i) the business, assets,
operations, properties, condition (financial or otherwise), contingent
liabilities or material agreements of Parent and Parent's subsidiaries,
taken as a whole, (ii) the ability of Parent to perform its obligations
under this Agreement or (iii) the validity or enforceability of this
Agreement or the rights or remedies of the Stockholders hereunder.
Notwithstanding anything contained herein to the contrary, the commencement
by or against Parent or any of Parent's subsidiaries of any case,
proceeding or other action under any law relating to bankruptcy, insolvency
or reorganization or the seeking of an appointment of a receiver, trustee,
custodian or other similar official for Parent or any of Parent's
subsidiaries or for all or any substantial part of Parent's or any of
Parent's subsidiaries' assets, shall be deemed a Material Adverse Effect.
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(d) "Parent Common Stock" means the common stock, par value $1 per
share, of Parent.
(e) "Person" means any partnership, corporation, association, joint
stock company, trust, joint venture, limited liability company or other
entity or any individual or Governmental Entity.
(f) "Purchase Agreement" means the Preferred Stock and Warrant
Purchase Agreement, dated as of September 21, 2002, by and among Parent and
the Stockholders, as amended by the Letter Agreement, dated as of November
25, 2002, by and among the Stockholders, Parent and X.X. Xxxxxxxxx Inc.,
the Second Letter Agreement, dated as of January 3, 2003, by and among the
Stockholders, Parent and X.X. Xxxxxxxxx Inc. and the Third Letter
Agreement, dated as of July 22, 2003, by and among the Stockholders, Parent
and X.X. Xxxxxxxxx Inc..
(g) "Rights Agreement" means the Rights Agreement, dated as of October
27, 1998, as amended, by and between Parent and The Bank of New York, as
successor Rights Agent.
(h) "Securities" means the Preferred Stock together with any shares of
Parent Common Stock or other securities of Parent held by a Stockholder as
of the date hereof or acquired by a Stockholder in any capacity or form
after the date hereof and prior to the termination of this Agreement
whether pursuant to open market or other purchase or upon the exercise of
options, warrants or rights, the conversion or exchange of convertible or
exchangeable securities (including, without limitation, any shares of
Parent Common Stock issued to a Stockholder upon any exercise of the
Warrants or conversion of any shares of Preferred Stock), or by means of
purchase, dividend, distribution, split-up, recapitalization, combination,
exchange of shares or the like, gift, bequest, inheritance or as a
successor in interest in any capacity or otherwise.
(i) "Warrants" means the warrants to purchase shares of Parent Common
Stock issued pursuant to the Purchase Agreement.
ARTICLE II
PURCHASE AND SALE OF SHARES; CLOSING
Section 2.1. Sale and Transfer of Purchased Shares. At the Closing and
subject to the terms and conditions set forth in this Agreement, the
Stockholders shall sell, transfer, convey, assign and deliver to Parent, and
Parent shall repurchase and acquire from the Stockholders, the Purchased Shares,
free and clear of any mortgage, pledge, hypothecation, rights of others, claim,
security interest, encumbrance, title defect, title retention agreement, voting
trust agreement, option, lien, charge or similar restrictions or limitations,
including any restriction on the right to vote, sell or otherwise dispose of the
Purchased Shares but excluding any restrictions or limitations under applicable
law (collectively, "Liens"). The purchase price to be paid to each Stockholder
at the Closing in exchange for such Stockholder's Purchased Shares is an amount
in cash per share equal to the sum of (i) the product of (A) $64.00 (the
approximate average closing price per share of Parent Common Stock on the NYSE
for the 30 trading days ending September
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29, 2005) and (B) the number of shares of Parent Common Stock into which such
Purchased Share is convertible as of (and including) September 30, 2005 plus
(ii) an amount equal to the amount of dividends that would have accrued on such
Purchased Share from and after October 1, 2005 through and including the earlier
of (A) the Closing Date and (B) January 3, 2006 had the parties not entered into
this Agreement (such sum of (i) and (ii), the "Purchase Price"); provided,
however, that if the Closing occurs after January 3, 2006, the Purchase Price
will increase by an amount equal to the weighted average annual interest rate
with respect to Parent's or its Affiliates' high-yield notes issued in
connection with the Financing (and if no such securities are issued, the average
interest rate on the Dow Xxxxx CDX US High Yield index as reported on Bloomberg
for the 30 trading days immediately prior to the Closing Date) based on the
number of days elapsed after January 3, 2006 through and including the Closing
Date and a 360-day year. The aggregate Purchase Price to be paid to each
Stockholder in exchange for such Stockholder's Purchased Shares is referred to
herein as the "Specified Purchase Price." The Specified Purchase Price with
respect to each Stockholder shall be paid by wire transfer of immediately
available funds to the account(s) designated by the Stockholders. For the
avoidance of doubt, the parties hereby acknowledge and agree that, as of
September 30, 2005, (1) the Convertible Preferred Amount (as defined in the
Certificate of Designations), which includes all dividends that accrued on the
Preferred Stock to such date, was $124,630,175 and (2) the Preferred Stock was
convertible by the Stockholders (excluding fractional shares) into an aggregate
of 5,182,125 shares of Parent Common Stock. Illustrations of how the Purchase
Price would be calculated on hypothetical Closing Dates is attached hereto as
Schedule 2.1.
Section 2.2. Closing. Subject to the satisfaction or waiver of the
conditions set forth in Section 2.3, the closing of the sale of the Purchased
Shares (the "Closing") shall take place at the offices of Xxxxx Day, North
Point, 000 Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxx 00000 on the earliest of (i) a date
specified by Parent, which shall be after January 3, 2006 and no earlier than
five business days after notice to the Stockholders, (ii) the Effective Time,
(iii) if the Merger Agreement is terminated, the earlier of (A) a date specified
by Parent, which shall be no earlier than five business days after notice to the
Stockholders, and (B) 30 days following termination of the Merger Agreement or
(iv) the earlier of (A) July 15, 2006 and (B) 15 days after the outside
termination date in the Merger Agreement (the earlier of (A) and (B) is referred
to herein as the "Outside Date"), or at such other time and/or place as shall be
mutually agreed upon by Parent and the Stockholders. The date upon which the
Closing occurs is referred to herein as the "Closing Date.
Section 2.3. Conditions to the Closing.
(a) Parent. The obligation of Parent to purchase the Purchased Shares
at the Closing is subject to the satisfaction or waiver of each of the
following conditions at or prior to the Closing:
(i) Representations and Warranties; Covenants. The
representations and warranties of the Stockholders contained in this
Agreement shall be true and correct in all material respects
(disregarding for these purposes any materiality, material adverse
effect or corollary qualifications contained therein) on and as of the
date of this Agreement and on and as of the Closing with the same
effect as though made on and as of such date, and the Stockholders
shall have in all material
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respects performed all obligations and complied with all agreements,
undertakings, covenants and conditions required under this Agreement
to be performed by the Stockholders at or prior to the Closing.
(ii) No Injunction. There shall not be in effect any statute,
law, regulation, rule, order, decree or injunction of a Governmental
Entity of competent jurisdiction that enjoins or prohibits
consummation of the transactions contemplated hereby.
(iii) Stock Certificates and Stock Powers. Parent shall have
received stock certificates representing the Purchased Shares owned by
the Stockholders with duly executed stock powers attached for transfer
to Parent.
(iv) Resignation of Directors. The members of Parent's board of
directors designated by the Stockholders pursuant to the Certificate
of Designations or otherwise shall have submitted letters of
resignation to Parent and the Parent board of directors.
(v) Stockholders' Officer Certificates. Parent shall have
received a certificate from each Stockholder, in form and substance
reasonably satisfactory to Parent, dated as of the Closing, duly
executed by an authorized signatory of each such Stockholder,
certifying that the conditions set forth in Section 2.3(a)(i) and (ii)
have been satisfied.
(b) The Stockholders. The obligation of each Stockholder to sell the
Purchased Shares at the Closing is subject to the satisfaction or waiver of
each of the following conditions at or prior to the Closing:
(i) Representations and Warranties; Covenants. The
representations and warranties of Parent contained in this Agreement
shall be true and correct in all material respects (disregarding for
these purposes any materiality, Material Adverse Effect or corollary
qualifications contained therein) on and as of the date of this
Agreement and on and as of the Closing with the same effect as though
made on and as of such date, and Parent shall have in all material
respects performed all obligations and complied with all agreements,
undertakings, covenants and conditions required under this Agreement
to be performed by Parent at or prior to the Closing.
(ii) No Injunction. There shall not be in effect any statute,
law, regulation, rule, order, decree or injunction of a Governmental
Entity of competent jurisdiction that enjoins or prohibits
consummation of the transactions contemplated hereby.
(iii) Payment of the Specified Purchase Price. Such Stockholder
shall have received payment of the Specified Purchase Price by bank
wire transfer to an account or accounts designated in writing for this
purpose by such Stockholder to Parent at least two business days prior
to the Closing.
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(iv) Parent's Officer Certificate. The Stockholders shall have
received a certificate from Parent, in form and substance reasonably
satisfactory to the Stockholders, dated as of the Closing, duly
executed by an authorized officer of Parent, certifying that the
conditions set forth in Section 2.3(b)(i) and (ii) have been
satisfied.
ARTICLE III
ADDITIONAL AGREEMENTS OF THE PARTIES
Section 3.1. Disclosure. Each Stockholder hereby agrees to permit Parent to
publish and disclose in the Form S-4 and the Joint Proxy Statement (including
all documents and schedules filed with the SEC), and any press release or other
disclosure document that Parent determines to be necessary or desirable in
connection with the repurchase of the Purchased Shares hereunder, the Merger and
any transactions related thereto, such Stockholder's identity and ownership of
Parent Securities and the nature of its representations, warranties and
covenants in this Agreement. Parent will provide the Stockholders with a copy of
any proposed disclosure and will provide the Stockholders with a reasonable
opportunity to comment thereon.
Section 3.2. Voting of Securities. During the period commencing on the date
hereof and continuing until the earliest of (a) the Effective Time, (b)
termination of the Merger Agreement in accordance with its terms and (c)
termination of this Agreement (the "Support Period"), at the Parent Stockholders
Meeting or at any adjournment, postponement or continuation thereof or in any
other circumstances (including any other annual or special meeting of the
stockholders of Parent, any action by prior written consent or any separate
class vote) in which a vote, consent or other approval with respect to the
issuance of shares of Parent Common Stock in the Merger or otherwise in
connection with the Merger, the Merger Agreement or any of the transactions
contemplated by the Merger Agreement, including any separate class vote of any
Securities, each Stockholder hereby irrevocably and unconditionally agrees to
vote or to cause to be voted (in person, by proxy or otherwise) all of such
Stockholder's Securities entitled to vote thereon and held by such Stockholder
at the time of such vote (i) in favor of (A) the issuance of shares of Parent
Common Stock in the Merger and (B) if applicable, the Merger, the Merger
Agreement or any of the transactions contemplated by the Merger Agreement and
(ii) against (A) any other Acquisition Proposal (whether or not a Superior
Proposal) with respect to Parent, (B) any proposal for any merger,
consolidation, sale of assets, business combination, share exchange,
reorganization or recapitalization of Parent or any of its subsidiaries that is
in competition or inconsistent with the adoption of the Merger Agreement, or any
proposal to effect the foregoing that is made in opposition to or in competition
with the transactions contemplated by the Merger Agreement, (C) any liquidation
or winding up of Parent, (D) any extraordinary dividend by Parent (other than
the payment of any cash dividend that Parent is expressly permitted to make
under the Merger Agreement) and (E) any change in the capital structure of
Parent (other than any change in capital structure resulting from the Merger or
expressly permitted under the Merger Agreement). Neither the foregoing
agreements of the Stockholders to vote, nor any such actual vote by the
Stockholders, shall be or be deemed to be a waiver of any rights the
Stockholders have pursuant to the Purchase Agreement or the Certificate of
Designations nor shall any such vote or agreement to vote constitute or be
deemed to constitute any consent, waiver,
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acknowledgement or agreement with respect to any of the matters described in the
second sentence of Section 6.1.
Section 3.3. Restriction on Transfer; Agreement Not to Convert. (a) During
the period commencing on the date hereof and continuing until the first to occur
of (i) the Closing and (ii) the termination of this Agreement in accordance with
its terms, each Stockholder agrees that it will not, directly or indirectly,
transfer, or enter into any contract, option or other arrangement or
understanding with respect to or consent to the transfer of, any or all of the
Securities, except as otherwise provided in this Agreement or to Parent.
(b) During the period commencing on the date hereof and continuing
until the Closing or earlier termination of this Agreement pursuant to
Section 5.1, each Stockholder agrees that it will not convert any shares of
Preferred Stock into shares of Parent Common Stock.
Section 3.4. No Solicitation. (a) Each Stockholder will not, and such
Stockholder will direct and use its reasonable best efforts to cause its
officers, directors, employees, investment bankers, consultants, attorneys,
accountants, agents and other representatives not to, directly or indirectly,
take any action to solicit, initiate or knowingly encourage or facilitate the
making of any Acquisition Proposal or any inquiry with respect thereto or engage
in discussions or negotiations with any Person with respect thereto, or disclose
any nonpublic information or afford access to books or records to, any Person
that has made, or to the Stockholder's knowledge is considering making, any
Acquisition Proposal, or approve or recommend, or propose to approve or
recommend, or execute or enter into any letter of intent, agreement in
principle, merger agreement, option agreement, acquisition agreement or other
similar agreement relating to an Acquisition Proposal, or propose publicly or
agree to do any of the foregoing relating to an Acquisition Proposal.
(b) It is understood that any violation of the restrictions set forth
in this Section 3.4 by any officer, director, employee, investment banker,
consultant, attorney, accountant, agent or other representative of such
Stockholder, at the direction or with the consent of such Stockholder, will
be deemed to be a breach of this Section 3.4 by such Stockholder.
(c) Nothing in this Agreement will be deemed to require any
Stockholder or representative of any Stockholder who is also a member of
Parent's board of directors to take any action or refrain from taking any
action in his or her capacity as a member of the board of directors to the
extent such action is permitted by Section 6.10 of the Merger Agreement.
(d) The provisions of Sections 3.4(a), (b) and (c) will remain in
effect only during the Support Period and nothing herein will prevent the
Stockholders from participating in discussions, negotiations or furnishing
information with respect to an Acquisition Proposal if Parent would be
permitted to participate in such discussions, negotiations or furnish such
information pursuant to the terms and conditions of the Merger Agreement.
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(e) Notwithstanding the forgoing, nothing in this Agreement shall
prohibit Xxxxxxx, Xxxxx & Co. and its Affiliates (other than the
Stockholders) from engaging in any brokerage, investment advisory,
financial advisory, anti-raid advisory, merger advisory, financing, asset
management, trading, market making, arbitrage and/or other activities
conducted in the ordinary course of business.
Section 3.5. Stop Transfer; Legend. (a) Each Stockholder agrees with, and
covenants to, Parent that prior to the termination of this Agreement, such
Stockholder will not request that Parent register the transfer (book-entry or
otherwise) of any certificate or uncertificated interest representing any of the
Securities, unless such transfer is made in compliance with this Agreement.
(b) In the event of a stock dividend or distribution, or any change in
Parent Common Stock by reason of any stock dividend, split-up,
recapitalization, combination, exchange of shares or the like (other than
pursuant to the Merger), the terms "Parent Common Stock" and "Securities"
will be deemed to refer to and include the shares of Parent Common Stock as
well as all such stock dividends and distributions and any shares into
which or for which any or all of the Securities may be changed or exchanged
and appropriate adjustments will be made to the terms and provisions of
this Agreement.
(c) Each Stockholder agrees that it will promptly after the date
hereof surrender to Parent all certificates representing the Preferred
Stock and the Warrants, and Parent will place the following legend on such
certificates and the Warrants in addition to any other legend required
thereon:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO RESTRICTIONS
ON TRANSFER PURSUANT TO AND OTHER PROVISIONS OF A STOCK PURCHASE AND
SUPPORT AGREEMENT, DATED AS OF OCTOBER 3, 2005, BY AND AMONG X.X. XXXXXXXXX
CORPORATION AND CERTAIN STOCKHOLDERS OF X.X. XXXXXXXXX CORPORATION
SIGNATORY THERETO."
(d) Promptly (but in any event not later than five Business Days)
following the termination of this Agreement, if applicable, Parent will
issue replacement certificates or Warrants without the foregoing legend to
the relevant Stockholder.
(e) Promptly (but in any event not later than five Business Days)
following the Closing, Parent will issue replacement Warrants to the
Stockholders without the legend currently endorsed on the Warrants with
respect to the transfer conditions contained thereon.
Section 3.6. Waiver of Redemption of Preferred Stock. Prior to the
termination of this Agreement, Parent irrevocably and unconditionally waives any
right to call for a redemption of the Preferred Stock or to deliver a redemption
notice pursuant to Sections 5(a) and 6(a) of the Certificate of Designations.
Section 3.7. Waiver and Modification of Rights Under Certificate of
Designations. Each of the Stockholders agrees and acknowledges that dividends
payable on the Preferred Stock
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pursuant to Section 3 of the Certificate of Designations shall cease to accrue
on and after October 1, 2005; provided, however, that if this Agreement is
terminated, then dividends shall be deemed to have accrued from and after
September 30, 2005 through and including the effective date of such termination
(the "Termination Date") as currently provided in Section 3 of the Certificate
of Designations as if the parties hereto had not agreed to the waiver and
modifications set forth in this Section 3.7 and, thereafter, dividends shall
accrue on the Preferred Stock from and after the Termination Date as currently
provided in Section 3 of the Certificate of Designations as if the parties
hereto had not agreed to the waiver and modifications set forth in this Section
3.7. The parties agree and acknowledge that any dividends or other amounts
payable on or with respect to the Preferred Stock for any period subsequent to
September 30, 2005 may, at Parent's election, be paid in cash, or allowed to
accrue pursuant to Section 3 of the Certificate of Designations, provided that
no such cash dividends may be paid by Parent other than following termination of
this Agreement. For the avoidance of doubt, in the event this Agreement is
terminated, with respect to any period subsequent to September 30, 2005, in no
event shall any Stockholder be entitled to receive both (i) dividends on the
Preferred Stock as provided in Section 3 of the Certificate of Designations and
(ii) any additional amounts payable with respect to the Preferred Stock as
contemplated by (A) clause (ii) of the second sentence of Section 2.1 of this
Agreement and (B) the proviso to such sentence.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties of Parent. Parent represents
and warrants to, and agrees with, the Stockholders on the date hereof and at and
as of the Closing as follows:
(a) Organization; Authorization. Parent is a corporation duly
organized, validly existing and in good standing under the laws of the
State of Delaware and has all requisite corporate power and authority to
execute and deliver this Agreement and the Merger Agreement and perform its
obligations hereunder and thereunder. The execution and delivery of this
Agreement and the Merger Agreement and the performance by Parent of its
covenants and agreements under this Agreement and the Merger Agreement have
been duly and validly authorized by the board of directors of Parent, and
no other corporate proceedings on the part of Parent (including, without
limitation, any stockholder vote or approval) are necessary to authorize
the execution, delivery and performance of this Agreement and the Merger
Agreement or the consummation of the transactions contemplated hereby and
thereby, except as contemplated by the Merger Agreement. This Agreement and
the Merger Agreement have been duly executed and delivered by Parent and
constitute the valid and binding agreement of Parent, enforceable against
Parent in accordance with their terms, except that (i) such enforcement may
be subject to any bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or other laws, now or hereafter in effect relating to
or limiting creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
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(b) No Conflicts. Neither the execution and delivery of this Agreement
or the Merger Agreement nor the consummation of the transactions
contemplated by this Agreement or the Merger Agreement will (i) conflict
with or result in any breach of any provision of the incorporation
documents or by-laws of Parent or any of its subsidiaries (after giving
effect to the transactions contemplated by the Merger Agreement, including,
without limitation, the amendment to the by-laws contemplated thereby),
(ii) require any filing with, or the obtaining of any permit,
authorization, consent or approval of, any court, department, body, board,
bureau, administrative agency or commission or other governmental authority
or instrumentality, whether federal, state, local or foreign ("Governmental
Entity"), (iii) violate, conflict with or result in a default (or any event
that, with notice or lapse of time or both, would constitute a default) or
require any consent under, or give rise to any right of termination,
cancellation or acceleration under, any of the terms, conditions or
provisions of any (A) note, mortgage, indenture, credit agreement, other
evidence of indebtedness or guarantee or (B) license, agreement, lease or
other contract, instrument or obligation, to which Parent or any of its
subsidiaries is a party or by which Parent or any of its subsidiaries or
any of their respective assets may be bound or (iv) violate any order,
injunction, decree, statute, law, rule or regulation applicable to Parent
or any of its subsidiaries, excluding from the foregoing clauses (ii) and
(iii) such requirements, violations, conflicts, defaults or rights that
would not, individually or in the aggregate, constitute a Material Adverse
Effect or with respect to which consents or waivers are required to be
obtained to consummate the Merger and the transactions contemplated by the
Merger Agreement.
(c) Solvency. Parent is not, and after giving effect to any financing
obtained by Parent or its Affiliates in connection with the consummation of
the transactions contemplated by this Agreement or the Merger Agreement
(the "Financing"), the Merger and the transactions contemplated by the
Merger Agreement, and the purchase of the Purchased Shares, will not be,
insolvent within the meaning of Title 11 of the United States Code, the
DGCL or the General Laws of the State of New York.
(d) No Other Representation. Except for the representations of Parent
contained in this Agreement, Parent makes no other representation or
warranties, express or implied.
Section 4.2. Representations and Warranties of the Stockholders. Each
Stockholder represents and warrants to, and agrees with, Parent on the date
hereof and at and as of the Closing as follows:
(a) Organization; Authorization. Such Stockholder is a limited
partnership duly organized and validly existing under the laws of the state
or country of its jurisdiction of formation. Such Stockholder has the power
and authority to execute and deliver this Agreement and perform its
obligations hereunder. The execution and delivery of this Agreement and the
performance by such Stockholder of its covenants and agreements under this
Agreement have been duly and validly authorized by the general partner of
such Stockholder, and no further proceedings on the part of such
Stockholder are necessary to authorize the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby. This Agreement has been duly executed and
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delivered by such Stockholder and constitutes, or as of the Closing will
constitute, the valid and binding agreement of such Stockholder,
enforceable against such Stockholder in accordance with its terms, except
that (i) such enforcement may be subject to any bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other laws, now or
hereafter in effect, relating to or limiting creditors' rights generally
and (ii) the remedy of specific performance and injunctive and other forms
of equitable relief may be subject to equitable defenses and to the
discretion of the court before which any proceeding therefor may be
brought.
(b) No Conflicts. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated by this Agreement
will (i) conflict with or result in any breach of any provision of the
organization documents or by-laws of such Stockholder, (ii) require any
filing with, or the obtaining of any permit, authorization, consent or
approval of, any Governmental Entity, (iii) violate, conflict with or
result in a default (or any event that, with notice or lapse of time or
both, would constitute a default) or require any consent under, or give
rise to any right of termination, cancellation or acceleration under, any
of the terms, conditions or provisions of any note, mortgage, indenture,
other evidence of indebtedness, guarantee, license, agreement, lease or
other contract, instrument or obligation to which such Stockholder is a
party or by which such Stockholder or any of its assets may be bound or
(iv) violate any order, injunction, decree, statute, law, rule or
regulation applicable to such Stockholder, excluding from the foregoing
clauses (ii) and (iii) such requirements, violations, conflicts, defaults
or rights that would not adversely affect the ability of such Stockholder
to consummate the transactions contemplated by this Agreement.
(c) Purchased Shares and Interest. Such Stockholder is the sole record
and beneficial owner of the Preferred Stock owned by such Stockholder as
set forth opposite such Stockholder's name on Schedule A attached hereto
under the caption "Shares of Preferred Stock Beneficially Owned" and has
good and marketable title to such Preferred Stock, free and clear of any
Liens. No Stockholder owns any shares of Preferred Stock or any other
Securities of Parent except for the Preferred Stock set forth on Schedule A
and the Warrants.
(d) No Other Representation. Except for the representations of such
Stockholder contained in this Agreement, such Stockholder makes no other
representation or warranties, express or implied.
ARTICLE V
TERMINATION
Section 5.1. Termination. This Agreement may be terminated on or any time
prior to the Closing:
(a) by mutual written consent of each of the Stockholders and Parent;
(b) by the Stockholders if the Closing shall not have occurred prior
to the Outside Date, unless the failure of such occurrence shall be due to
the failure by the
11
Stockholders seeking to terminate this Agreement to perform or observe any
agreement set forth herein required to be performed or observed by the
Stockholders on or before the Closing;
(c) by either Parent or the Stockholders if the other party breaches
any of its representations, warranties or covenants contained in this
Agreement in any material respect and such breach is not cured within 10
days after receipt by the breaching party of written notice of such breach
from the non-breaching party; or
(d) by Parent or the Stockholders if a Governmental Entity shall have
issued a nonappealable final order, decree or ruling or taken any other
action having the effect of permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement.
Section 5.2. Effect of Termination. In the event of the termination of this
Agreement as provided in Section 5.1, all obligations and agreements of the
parties set forth in this Agreement shall forthwith become void except for
Section 3.7, this Section 5.2 and Sections 6.2 - 6.15 (which, in each case,
shall remain in full force and effect) and there shall be no liability or
obligation on the part of the parties hereto except as otherwise provided in
this Agreement. Notwithstanding the foregoing, the termination of this Agreement
under Section 5.1 shall not relieve either party of any liability for breach of
this Agreement prior to the date of termination.
ARTICLE VI
MISCELLANEOUS
Section 6.1. Taking of Necessary Action; Consent and Waiver. Each of the
parties hereto shall use its reasonable best efforts promptly to take or cause
to be taken all action and promptly to do or cause to be done all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement,
including, without limitation, in the case of Parent, (x) using reasonable best
efforts to cause the Merger to be successfully completed, and for such purpose,
at the reasonable request of the other party, will, without further
consideration, promptly execute and deliver, or cause to be executed and
delivered, to the other party such other instruments in addition to those
required by this Agreement, in form and substance satisfactory to the other
party and (y) taking all actions as may be necessary to assure that Parent has
adequate surplus available under applicable law to consummate the transactions
contemplated hereby, including, without limitation, revaluing assets to the
extent necessary. Pursuant to Sections 4.04 and 8.02 of the Purchase Agreement
and the Certificate of Designations, the Stockholders hereby (a) consent to the
transactions contemplated by this Agreement and the Merger Agreement, including,
without limitation, (i) the Merger, (ii) the repurchase of the Purchased Shares,
(iii) the Financing, (iv) the amendment and restatement of Parent's bylaws as
contemplated by the Merger Agreement, (v) the increase in size, and changes in
composition, of Parent's board of directors as contemplated by the Merger
Agreement (which the Stockholders agree and acknowledge that the election of
such Persons to Parent's board of directors shall satisfy any rights that the
Stockholders have to designate members of Parent's board of directors pursuant
to the Certificate of Designations or otherwise) and (vi) the amendment of the
Rights Agreement as contemplated by the Merger Agreement, (b) waive any right of
first refusal in connection with the issuance of shares of Parent Common Stock
in the
12
Merger and (c) agree and acknowledge that (i) none of the antidilution, price
protection or other Conversion Price (as such term is defined in the Certificate
of Designations) adjustment provisions of Section 9 of the Certificate of
Designations shall apply in connection with the Merger and the other
transactions contemplated by the Merger Agreement, including, without
limitation, the issuance of shares of Parent Common Stock in the Merger and (ii)
the consummation of (A) the Merger and the other transactions contemplated by
the Merger Agreement shall not constitute a "Change in Control" under the
Certificate of Designations and (B) the repurchase of the Purchased Shares by
Parent pursuant to this Agreement is in lieu of any rights that such Stockholder
may have to require Parent to redeem the Preferred Stock pursuant to the
Certificate of Designations or otherwise. Parent agrees and acknowledges that
the foregoing consents, waivers, agreements and acknowledgments by each
Stockholder are expressly conditioned on Parent's agreement to purchase the
Preferred Shares in accordance with the terms of this Agreement, and shall be
ineffective (and deemed not to have been given on the date hereof) if Parent
fails to consummate the purchase of the Preferred Shares at the Closing.
Section 6.2. Expenses; Transfer Taxes. Each party hereto will bear the
legal, accounting and other expenses incurred by such party in connection with
the negotiation, preparation and execution of this Agreement and the
transactions contemplated hereby and thereby. All sales, transfer, recordation
and documentary taxes and fees that may be payable in connection with the
transactions contemplated by this Agreement will be borne by Parent.
Section 6.3. Entire Agreement; Amendments; Waivers. This Agreement and the
agreements, certificates and documents referred to herein and therein set forth
the entire agreement between the parties hereto with respect to the transactions
contemplated by this Agreement. Any provision of this Agreement may be amended
or modified in whole or in part at any time by an agreement in writing among the
parties hereto executed in the same manner as this Agreement. No failure on the
part of any party to exercise, and no delay in exercising, any right shall
operate as a waiver thereof nor shall any single or partial exercise by any
party of any right preclude any other or future exercise thereof or the exercise
of any other right. No investigation by the Stockholders or Parent prior to or
after the date hereof shall stop or prevent the Stockholders from exercising any
right hereunder or be deemed to be a waiver of any such right.
Section 6.4. Counterparts. This Agreement may be executed by facsimile
signature and may be executed in one or more counterparts, each of which shall
be deemed to constitute an original, but all of which together shall constitute
one and the same documents.
Section 6.5. Governing Law. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of New York applicable to
contracts made and to be performed in that State without giving effect to any
conflict of laws rules or principles that might require the application of the
laws of another jurisdiction.
Section 6.6. Public Announcements. Subject to Section 3.1 and except with
respect to the initial public announcement that Parent has entered into the
Merger Agreement and the transactions contemplated thereby, including, without
limitation, this Agreement, each of the parties hereto agrees to hold in strict
confidence and not to publicly disclose the status of any discussions or
relations between the parties with respect to the subject matter of this
Agreement, or any of the terms or conditions of this Agreement, except to the
extent that (i) the parties
13
mutually agree to publicly disclose such information or (ii) any party is
legally required (whether by federal securities laws, the rules of any stock
exchange or otherwise) to disclose such information; provided, however, that in
each case, the disclosing party shall consult with the non-disclosing party
prior to making any such disclosure and shall give the non-disclosing party a
reasonable opportunity to comment on the content of such disclosure.
Section 6.7. Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been duly given, if delivered
personally, by facsimile or sent by overnight courier as follows:
If to the Stockholders, to:
GS Capital Partners 2000, L.P.
GS Capital Partners 2000 Offshore, L.P.
GS Capital Partners 2000 GmbH & Co. Beteiligungs KG
GS Capital Partners 2000 Employee Fund, X.X.
Xxxxxxx Xxxxx Direct Investment Fund 2000, L.P.
c/o Goldman, Sachs & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xx. Xxxxxx Xxxx
Attention: Xxx Xxxxx, Esq.
with a copy to (which shall not constitute notice):
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx LLP
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxx X. Shine, Esq.
If to Parent, to:
X.X. Xxxxxxxxx Corporation
0000 Xxxxxxxx Xxxxx
Xxxx, Xxxxx Xxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxx, Esq
14
with a copy to (which shall not constitute notice):
Xxxxx Day
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
or to such other address or addresses as shall be designated in writing. All
notices shall be effective when received.
Section 6.8. Successors and Assigns. The terms of this Agreement shall be
binding upon, and inure to the benefit of, the parties hereto and their
respective successors and permitted assigns. Parent may not assign any of its
rights or delegate any of its duties under this Agreement without the prior
written consent of the Stockholders, provided that, after the Closing, subject
to applicable law, Parent may assign its rights under this Agreement in whole or
in part to any of its Affiliates, but no such assignment shall relieve Parent of
its obligations hereunder. No Stockholder may assign any of its rights or
delegate any of its duties under this Agreement without the prior written
consent of Parent. Any purported assignment in violation of this Section 6.8
shall be void.
Section 6.9. Jurisdiction; Waiver of Jury Trial. The state and federal
courts located in the State of New York in New York County shall have
jurisdiction over the parties with respect to any dispute or controversy between
them arising under or in connection with this Agreement and, by execution and
delivery of this Agreement, each of the parties to this Agreement submits to the
jurisdiction of those courts, including but not limited to the in personam and
subject matter jurisdiction of those courts, waives any objections to such
jurisdiction on the grounds of venue or forum non conveniens, the absence of in
personam or subject matter jurisdiction and any similar grounds, consents to
service of process by mail (in accordance with Section 6.7) or any other manner
permitted by law, and irrevocably agrees to be bound by any judgment rendered
thereby in connection with this Agreement. EACH PARTY WAIVES ANY RIGHT TO A
TRIAL BY JURY, TO THE EXTENT LAWFUL, AND AGREES THAT ANY OF THEM MAY FILE A COPY
OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY
AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE ITS RIGHT TO
TRIAL BY JURY IN ANY DISPUTE WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 6.10. Captions; References. The captions contained in this
Agreement are for reference purposes only and are not part of this Agreement.
Unless otherwise indicated, all references to Articles, Sections, subsections or
Schedules in this Agreement refer to the Articles, Sections, subsections and
clauses of, and the Schedules to, this Agreement.
Section 6.11. Schedules. The Schedules attached to this Agreement are
incorporated herein and will be part of this Agreement for all purposes.
15
Section 6.12. Third Parties. Nothing expressed or implied in this Agreement
is intended, or will be construed, to confer upon or give any Person other than
Parent and the Stockholders and their respective Affiliates any rights or
remedies under or by reason of this Agreement and no such other Person shall be
a third party beneficiary of any of the provisions hereof.
Section 6.13. Severability. Should any part of this Agreement for any
reason be declared invalid, such decision shall not affect the validity of any
remaining portion, which remaining portion shall remain in full force and effect
as if this Agreement had been executed with the invalid portion thereof
eliminated, and it is hereby declared the intention of the parties hereto that
they would have executed the remaining portion of this Agreement without
including therein any such part or parts which may, for any reason, be hereafter
declared invalid.
Section 6.14. No Strict Construction. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. If any ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the parties hereto, and no presumption or burden of
proof shall arise favoring or disfavoring any party by virtue of the authorship
of any of the provisions of this Agreement.
Section 6.15. Survival; Indemnification.
(a) Survival. Subject to Article V, the representations, warranties,
covenants and agreements of the parties hereto contained in this Agreement
shall survive the Closing. In the case of the representations and
warranties made by the Stockholders in this Agreement, such representations
and warranties are being made severally and not jointly by such
Stockholders.
(b) Indemnification by Parent. From and after the Closing, Parent
agrees to indemnify, defend and hold harmless the Stockholders, their
Affiliates, and their officers, directors, partners, employees, agents,
representatives, successors and any assigns of any of the foregoing
("Stockholder Indemnitees") against all claims, losses, liabilities,
damages, interest and penalties, costs and expenses (other than any of the
foregoing resulting from tax liabilities incurred by any of the
Stockholders), including, without limitation, losses resulting from the
defense, settlement or compromise of a claim, action, suit, investigation,
subpoena or other compulsion of testimony, or proceeding, reasonable
attorneys', accountants' and expert witnesses' fees, costs and expenses of
investigation, and the costs and expenses of enforcing the indemnification
provided hereunder incurred by any of the Stockholder Indemnitees arising
out of or relating to: (i) any breach of any representation or warranty
made by Parent in this Agreement, (ii) any breach of any covenant,
agreement or obligation of Parent contained in this Agreement or (iii) any
actual or threatened claim, litigation, action, suit, investigation or
proceeding by any Person (other than a Stockholder Indemnitee) in
connection with the (A) transactions contemplated hereby or by the Merger
Agreement, or by any documents executed in connection therewith, or (B)
negotiation, execution, delivery and performance of this Agreement, the
Merger Agreement or any documents executed in connection therewith. Any
payments made by Parent to a Stockholder under this Section 6.15 shall be
considered an increase to such Stockholder's Specified Purchase Price.
16
(c) Indemnification by the Stockholders. From and after the Closing,
the Stockholders, severally in proportion to their respective holdings of
Preferred Stock, agree to indemnify, defend and hold harmless Parent, its
other Affiliates, and their officers, directors, partners, employees,
agents, representatives, successors and any assigns of any of the foregoing
("Parent Indemnitees") against all claims, losses, liabilities, damages,
interest and penalties, costs and expenses, including, without limitation,
losses resulting from the defense, settlement or compromise of a claim,
action, suit, investigation, subpoena or other compulsion of testimony, or
proceeding, reasonable attorneys', accountants' and expert witnesses' fees,
costs and expenses of investigation, and the costs and expenses of
enforcing the indemnification provided hereunder incurred by any of the
Parent Indemnitees arising out of or relating to: (i) any breach of any
representation or warranty made by the Stockholders in this Agreement or
(ii) any breach of any covenant, agreement or obligation of the
Stockholders contained in this Agreement.
Section 6.16. Termination of Purchase Agreement; No Further Rights. Each of
the Stockholders hereby acknowledges and agrees that immediately following the
Closing (a) the Purchase Agreement shall terminate and be null and void and of
no further force or effect without any further action of the parties, (b) none
of the Stockholders will have any further rights to designate any directors of
Parent or veto any corporate action as provided in the Purchase Agreement or
otherwise, (c) the Registration Rights Agreement, dated November 25, 2002, among
Parent and the Stockholders shall terminate upon the Closing and be null and
void and of no further force or effect without any further action of the
parties, and, following the Closing, none of the Stockholders shall have any
registration rights with respect to any Securities of Parent, including, without
limitation, the Warrants or any shares of Parent Common Stock that may be issued
or issuable upon exercise of the Warrants (or issued or distributed in respect
of such shares of Parent Common Stock by way of stock dividend or stock split or
other distribution, recapitalization, reclassification, merger, consolidation or
otherwise), and (d) Parent may take such actions as it deems necessary,
desirable or appropriate following the Closing to cancel or otherwise terminate
the Certificate of Designations.
(Signatures are on the following pages.)
17
IN WITNESS WHEREOF, this Agreement has been executed by the respective duly
authorized officers of the parties hereto, all as of the date first above
written.
X.X. XXXXXXXXX CORPORATION
By: /s/ Xxxxxx X. Xxxx
------------------------------------
Name: Xxxxxx X. Xxxx
----------------------------------
Title: Vice President, General Counsel
---------------------------------
and Corporate Secretary
---------------------------------
X.X. XXXXXXXXX INC.
By: /s/ Xxxxxx X. Xxxx
------------------------------------
Name: Xxxxxx X. Xxxx
----------------------------------
Title: Vice President, General Counsel
---------------------------------
and Corporate Secretary
---------------------------------
Stock Purchase and Support Agreement Signature Page
GS CAPITAL PARTNERS 2000, L.P.
By: GS Advisors 2000, L.L.C.
Its General Partner
By: /s/ Xxxxxx Xxxx
------------------------------------
Name: Xxxxxx Xxxx
----------------------------------
Title: Vice President
---------------------------------
GS CAPITAL PARTNERS 2000 OFFSHORE, L.P.
By: GS Advisors 2000, L.L.C.
Its General Partner
By: /s/ Xxxxxx Xxxx
------------------------------------
Name: Xxxxxx Xxxx
----------------------------------
Title: Vice President
---------------------------------
GS CAPITAL PARTNERS 2000 GmbH & CO.
BETEILIGUNGS KG
By: Xxxxxxx Xxxxx Management GP GmbH
Its General Partner
By: /s/ Xxxxxx Xxxx
------------------------------------
Name: Xxxxxx Xxxx
----------------------------------
Title: Vice President
---------------------------------
GS CAPITAL PARTNERS 2000 EMPLOYEE FUND,
L.P.
By: GS Employee Funds 2000 GP, L.L.C.
Its General Partner
By: /s/ Xxxxxx Xxxx
------------------------------------
Name: Xxxxxx Xxxx
----------------------------------
Its: Vice President
-----------------------------------
Stock Purchase and Support Agreement Signature Page
XXXXXXX SACHS DIRECT INVESTMENT FUND
2000, L.P.
By: GS Employee Funds 2000 GP, L.L.C.
Its General Partner
By: /s/ Xxxxxx Xxxx
------------------------------------
Name: Xxxxxx Xxxx
----------------------------------
Title: Vice President
---------------------------------
Stock Purchase and Support Agreement Signature Page
SCHEDULE A
STOCKHOLDERS
Shares of Preferred Stock
Stockholder Beneficially Owned
----------- -------------------------
GS Capital Partners 2000, L.P. 55,313
GS Capital Partners 2000 Offshore, L.P. 20,098
GS Capital Partners 2000 GmbH & Co.
Beteiligungs KG 2,311
GS Capital Partners 2000 Employee Fund,
L.P. 17,564
Xxxxxxx Xxxxx Direct Investment Fund
2000, L.P. 5,015
A-1
