Exhibit 2(b)
CONFORMED COPY
STOCKHOLDER AGREEMENT
THIS STOCKHOLDER AGREEMENT, dated as of August 14, 1995, is made by and
among Argotyche, L.P., a Delaware limited partnership ("Parent"), Space
Acquisition Corporation, a Delaware corporation and Parent's wholly owned
subsidiary ("Purchaser"), and Xxxxx Industries, Inc., an Indiana corporation
("Stockholder").
WHEREAS, Parent desires to acquire all the outstanding equity of Space
Industries International, Inc., a Delaware corporation (the "Company");
WHEREAS, Parent, Purchaser and the Company have entered into an Agreement
and Plan of Merger, dated as of the date hereof (the "Merger Agreement"),
pursuant to which, among other things, subject to certain terms and conditions,
the Company will merge with and into Purchaser (the "Merger") and all the
outstanding shares of the Company's Common Stock, $.01 par value ("Common
Stock"), other than those held by the Parent and Purchaser, will be converted
into the right to receive the Merger Consideration (as defined in the Merger
Agreement);
WHEREAS, as of the date hereof, Stockholder owns beneficially 6,981,240
shares of Common Stock (the "Common Shares"), representing approximately 70% of
the total issued and outstanding Common Stock and 10,000 shares of the Company's
Series A Convertible Redeemable Preferred Stock, $.01 par value (the "Preferred
Shares" and, together with the Common Shares, the "Shares");
WHEREAS, Stockholder has entered into an Agreement in Principle, dated June
30, 1995, with Xx. Xxxxxx X. Xxxxx, XX and Xx. Xxxxx X. Xxxxxxxxx;
WHEREAS, in connection with the Merger, Purchaser has entered into an
Amended and Restated Credit Agreement, dated as of the date hereof (the "Credit
Agreement"), with NBD Bank and Manufacturers and Traders Bank, as Banks (the
"Banks"), and NBD Bank, as Agent (the "Agent"), providing for certain loans and
advances (the "Loans") to Purchaser to enable Parent and Purchaser to consummate
the Merger;
WHEREAS, as a requirement under the Credit Agreement, Stockholder has
entered into a Guaranty Agreement, dated as of the date hereof (the "Guaranty"),
for the benefit of the Agent and the Banks in the form of Exhibit A to the
Credit Agreement;
WHEREAS, Stockholder, the Agent, the Banks and Purchaser have entered into
an Intercreditor Agreement, dated as of the date hereof (the "Intercreditor
Agreement"), in the form of Exhibit A to the Guaranty Agreement; and
WHEREAS, this Agreement is entered into by Parent, Purchaser and
Stockholder in order to induce Parent and Purchaser to enter into the Merger
Agreement and the Credit Agreement and to provide reasonable assurances that the
transactions contemplated by the Merger Agreement will be consummated.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency are hereby acknowledged,
the parties hereto, intending to be legally bound hereby, agree as follows:
SECTION 1. AGREEMENT TO VOTE IN FAVOR OF MERGER AND TO GRANT PROXY.
(i) AGREEMENT TO VOTE IN FAVOR OF MERGER. Except as otherwise provided
herein, so long as the Merger Agreement is in effect, Stockholder
specifically agrees to: (i) if requested by the Company, vote all of the
Common Shares and, if applicable, all of the Preferred Shares in favor of the
calling of a special meeting of the stockholders of the Company (the "Special
Meeting") to be held as soon as is practicable for the purpose of voting upon
and approving the Merger, the Merger Agreement and the transactions
contemplated thereby, and (ii) at the Special Meeting, vote all of the Common
Shares (and, if applicable, all of the Preferred Shares) in favor of the
Merger, the Merger Agreement and the transactions contemplated thereby.
(i) PROXY. Stockholder hereby revokes any proxy heretofore granted
with respect to any shares of capital stock of the Company owned by
Stockholder. Stockholder hereby agrees to grant to the Parent a proxy in the
form of Exhibit A attached hereto (the "Proxy") simultaneously with the
execution of this Agreement; provided, however, that in the event of the
termination of this Agreement or the Merger Agreement, the Proxy will
automatically be revoked as of the time of such termination. It is expressly
understood and agreed that the Proxy is coupled with an interest and that
Parent shall have no duty, liability or obligation whatsoever to Stockholder
arising out of the exercise by Parent of the Proxy granted hereby unless
Parent acts in a manner inconsistent with the understandings set forth in
this Agreement and the Merger Agreement.
SECTION 2. RESTRICTIONS ON SALE OR OTHER DISPOSITION OR ENCUMBRANCE OF
SHARES. Stockholder hereby covenants and agrees, that, except as contemplated
by this Agreement and except as provided in the Tagalong Rights Agreement,
dated as of July 16, 1993 (the "Tagalong Rights Agreement"), among
Stockholder, the Company and a corporation no longer existing named "Space
Industries International, Inc.", it shall not, and shall not offer or agree
to, sell, transfer, tender, assign, place in trust, hypothecate or otherwise
dispose of, or create or permit to exist any security interest, lien, claim,
pledge, option, right of first refusal, agreement, proxy, limitation on
Stockholder's voting or dispositive rights, charge or other encumbrance of
any nature whatsoever (collectively, "Liens") with respect to any of the
Shares.
SECTION 3. NO SOLICITATION.
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(i) Stockholder agrees that it shall not, and shall not permit any
affiliate to, directly or indirectly, through any agent or representative or
otherwise, (i) take any action to solicit, initiate or encourage any
Acquisition Proposal (as defined below); (ii) except as may be required by
Xxxxx X. Xxxxx, Xxxxxx X. Xxxxx and Xxxxxx X. Xxxxxxx (the "Company
Directors") in the exercise of their fiduciary duties in their capacity as
members of the Board of Directors of the Company, engage in negotiations
with, or disclose any nonpublic information relating to the Company or any
subsidiary of the Company or afford access to the properties, books or
records of the Company or any subsidiary of the Company to, any Person (as
defined below) that may be considering making, or has made, an Acquisition
Proposal; or (iii) except as may be required by the Company Directors in the
exercise of their fiduciary duties in their capacity as members of the Board
of Directors of the Company, otherwise cooperate in any way with, or assist
or participate in or facilitate or encourage, any effort or attempt by any
Person to do or seek any of the foregoing. Except as may be required by the
Company Directors in the exercise of their fiduciary duties in their capacity
as members of the Board of Directors of the Company, Stockholder agrees that
it shall cease and cause to be terminated all existing discussions or
negotiations in which it or any of its agents or other representatives is or
has been engaged with any Person with respect to any of the foregoing.
(ii) Notwithstanding Section 3(a), during the period from the date the
Proxy Statement is mailed until (but not including) the date the Special
Meeting is held, Stockholder and its affiliates, agents and representatives
shall be permitted to take any of the actions prohibited by Section 3(a)
above with (i) three particular Persons to be disclosed in writing by
Stockholder to Parent and Purchaser no later than the date on which the press
release announcing the Merger is issued pursuant to Section 5(g) of the
Merger Agreement (the "Permitted Contacts"), and (ii) any Person which makes
an unsolicited offer to Stockholder to acquire the Shares with respect to
which any member of the Board of Directors of Stockholder reasonably believes
it has a fiduciary duty to negotiate (an "Additional Contact").
(iii) For purposes of this Agreement, (i) "Person" means an individual,
a corporation, a limited liability company, a partnership, an association, a
trust or any other entity or organization, including a government or
political subdivision or any agency or instrumentality thereof other than
Parent, Purchaser or any of their affiliates and (ii) "Acquisition Proposal"
means any offer or proposal for, or any indication of interest in, a merger
or other business combination involving the Company or any Subsidiary of the
Company or the acquisition of any equity interest in, or a substantial
portion of the assets of, the Company or any Subsidiary of the Company, other
than the transactions contemplated by the Merger Agreement.
SECTION 4. VOTING AGREEMENT. Except as otherwise provided herein,
Stockholder hereby agrees that prior to the time, if any, that the Merger
Agreement is terminated, at any meeting of the stockholders of the Company,
however called, and in any action by consent of the stockholders of the
Company, Stockholder shall vote the Shares: (a) in favor of the Merger, the
Merger Agreement (as amended from time to time with the prior consent of
Stockholder in the case of any material amendment) or any of the transactions
contemplated by the Merger Agreement; and (b) against any proposal for any
recapitalization, merger, sale of assets or other business combination
between the
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Company and any Person (other than the Merger) or any other action or
agreement that would result in a breach of any covenant, representation or
warranty or any other obligation or agreement of the Company under the Merger
Agreement or which could result in any of the conditions to any party's
obligations under the Merger Agreement not being fulfilled. Stockholder
shall not seek any appraisal right. Stockholder acknowledges receipt of a
copy of the Merger Agreement.
SECTION 5. CERTAIN CLAIMS. The Stockholder agrees that it will not
assert that the Board of Directors of the Company or the Special Committee
has breached its fiduciary duties to the Stockholder if, at any time prior to
the termination of the Merger Agreement, the Board of Directors of the
Company refuses to accept or recommend an offer by a third party to acquire
any or all of the outstanding shares of Company Common Stock for
consideration not in excess of $4.50 per share or if the Merger is
consummated.
SECTION 6. GUARANTY OF LOANS. Stockholder covenants and agrees that at
or prior to the Closing of the Merger it will execute and deliver to the
Agent and the Banks such documents, agreements, opinions and instruments as
are required under the Guaranty, the Intercreditor Agreement and the Credit
Agreement in order for the Loans to be made to Purchaser under the Credit
Agreement. Stockholder acknowledges and agrees that the Guaranty is necessary
for the issuance of the Loans and that the Merger cannot be completed without
such Guaranty.
SECTION 7. DIRECTORS AND OFFICERS INSURANCE. Stockholder covenants and
agrees to maintain in effect for a period ending not sooner than the sixth
anniversary of the Effective Time of the Merger, at no expense to the
beneficiaries thereof, coverage under the current directors' and officers'
liability insurance policies maintained by or on behalf of the directors,
officers or other covered employees of the Company with respect to matters
occurring at or prior to the Effective Time; PROVIDED, HOWEVER, that in the
event Stockholder terminates, fails to renew or allows such policies to lapse
prior to the sixth anniversary of the Effective Time, Stockholder at its
election shall either (a) provide such insurance coverage under a separate
policy which shall provide for coverage on the whole no less favorable to the
insureds than that provided by the current policies, or (b) indemnify such
officers, directors and covered employees to the extent, and subject to the
limitations of, the coverage provided by such current policies during the
period ending on the sixth anniversary of the Effective Time.
SECTION 8. REPRESENTATIONS AND WARRANTIES OF STOCKHOLDER. Stockholder
represents and warrants to Parent and Purchaser as of the date hereof and as
of the Closing Date, as follows:
(i) it is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Indiana, and it has all corporate
power, authority, capacity and right to enter into this Agreement and the
Guaranty and to consummate the transactions contemplated hereby and thereby;
(ii) the execution and delivery of this Agreement, the Guaranty and the
Intercreditor Agreement and the performance by it of its obligations
hereunder and thereunder are within its
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corporate powers and have been duly authorized by all necessary corporate
action on its part; each of this Agreement, the Guaranty and the
Intercreditor Agreement has been duly executed and delivered by Stockholder,
and this Agreement constitutes a valid and binding agreement enforceable by
Parent and Purchaser against it in accordance with its terms, except as the
enforceability hereof may be limited by bankruptcy, insolvency, moratorium or
other similar laws affecting the enforcement of creditors' rights generally
and except for limitations imposed by general principles of equity;
(iii) no approval, authorization, consent or filing is required in
connection with the execution, delivery and performance of this Agreement, the
Guaranty or the Intercreditor Agreement by Stockholder;
(iv) the execution, delivery and performance of this Agreement, the
Guaranty and the Intercreditor Agreement by it does not and will not contravene
or conflict with or, with the passage of time, the serving of notice or both
violate or constitute a default under any agreement, contract or other
instrument, or any law, rule, regulation, order or decree, binding upon or
applicable to it;
(v) Stockholder is the sole record and beneficial owner of the Shares
and has good title to the Shares free and clear of all Liens (other than the
Tagalong Rights Agreement), and the Shares are the only shares of Company
Common Stock or Company Preferred Stock which Stockholder owns, has any
rights to acquire or over which Stockholder exercises control or direction
either alone or in concert with third parties; and
(vi) Stockholder has the right to grant to Parent the Proxy and to
dispose of and vote the Shares as provided in this Agreement and there are no
proxies, voting trusts or other agreements or understandings with respect to
the voting of any of the Shares other than this Agreement.
SECTION 9. REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASER.
Parent and Purchaser hereby represent and warrant that:
(i) Parent is a limited partnership duly organized and existing under
the laws of the State of Delaware;
(ii) Purchaser is a corporation duly incorporated and validly existing
under the laws of the State of Delaware;
(iii) each of Parent and Purchaser has all necessary partnership or
corporate (as the case may be) power, authority, capacity and right to enter
into this Agreement and the Merger Agreement and to consummate the transactions
contemplated hereby and thereby;
(iv) each of this Agreement, the Intercreditor Agreement, the Credit
Agreement and the Merger Agreement has been duly executed and delivered by
Parent and/or Purchaser (as the case may be), and this Agreement constitutes
a valid and binding agreement enforceable against
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Parent and Purchaser in accordance with its terms, except as the
enforceability hereof or thereof may be limited by bankruptcy, insolvency,
moratorium or other similar laws affecting the enforcement of creditors'
rights generally and except for limitations imposed by general principles of
equity;
(v) no approval, authorization, consent or filing is required in
connection with the execution, delivery and performance of this Agreement,
the Credit Agreement or the Intercreditor Agreement by Parent or Purchaser
(as the case may be);
(vi) the execution, delivery and performance of this Agreement, the
Credit Agreement and the Intercreditor Agreement by Parent or Purchaser (as
the case may be) does not and will not contravene or conflict with or, with
the passage of time, the serving of notice or both violate or constitute a
default under any agreement, contract or other instrument, or any law, rule,
regulation, order or decree, binding upon or applicable to Parent or
Purchaser (as the case may be); and
(vii) to the best of Parent's and Purchaser's knowledge, no director or
officer of Stockholder (other than Xxxxxx X. Xxxxx, XX) has any economic
interest in Parent, Purchaser or the Merger, other than by reason of being a
stockholder or optionholder of the Company and, to the knowledge of Parent and
Purchaser, no such interest has been, or is presently intended to be, offered or
proposed to any such person (other than Xxxxxx X. Xxxxx, XX), except that Parent
and Purchaser may invite one or more directors of Stockholder to serve as a
director of the Surviving Corporation after the Merger.
SECTION 10. REMEDIES. The parties hereto acknowledge that irreparable
damage would result if this Agreement is not specifically enforced and that,
therefore, the rights and obligations of the parties under this Agreement may
be enforced by a decree of specific performance issued by a court of
competent jurisdiction and appropriate injunctive relief may be applied for
and granted in connection therewith. Such remedies shall, however, not be
exclusive and shall be in addition to any other remedies which any party may
have under this Agreement, at law or otherwise.
SECTION 11. EXPENSES. Except as otherwise provided herein or in the
Merger Agreement, all costs and expenses incurred in connection with the
transactions contemplated by this Agreement shall be paid by the party
incurring such expenses.
SECTION 12. FURTHER ASSURANCES. Each of Stockholder, Parent and
Purchaser will execute and deliver all such further documents and instruments
and take all such further action as may be necessary in order to permit the
consummation of the transactions contemplated hereby and by the Merger
Agreement.
SECTION 13. DEFINITIONS. Capitalized terms used herein, but not otherwise
defined, are used herein with the same respective meanings ascribed to such
terms in the Merger Agreement, unless the context otherwise requires.
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SECTION 14. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement among Stockholder, Parent and Purchaser with respect to the subject
matter hereof and supersedes all prior agreements and understandings, both
written and oral, among Stockholder, Parent and Purchaser (or any affiliate
or representative of Parent or Purchaser) with respect to the subject matter
hereof.
SECTION 15. ASSIGNMENT. This Agreement shall not be assigned, except
that Parent may assign all or any of its rights and obligations hereunder to
any affiliate of Parent, PROVIDED that no such assignment shall relieve
Parent of its obligations hereunder if such assignee does not perform such
obligations.
SECTION 16. PARTIES IN INTEREST. This Agreement shall be binding upon,
inure solely to the benefit of, and be enforceable by, the parties hereto and
their respective successors and permitted assigns. Nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement, except that the provisions in Section 7 concerning
insurance and indemnification are intended for the benefit of the individuals
specified therein.
SECTION 17. AMENDMENT; WAIVER. This Agreement may not be amended and
no provision of this Agreement may be waived except by an instrument in
writing signed by the parties hereto.
SECTION 18. SEVERABILITY. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of
law, or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of this Agreement is not affected in any manner materially
adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the terms of this Agreement remain as
originally contemplated to the fullest extent possible.
SECTION 19. TERMINATION. This Agreement shall terminate upon
termination of the Merger Agreement, upon termination by Stockholder pursuant
to Section 19(b) or upon written agreement of the parties hereto, provided
that a party will not be relieved from liability for any breach of this
Agreement.
(i) Stockholder may terminate this Agreement by giving written notice
to Parent and Purchaser in the event that (i) any of the Permitted Contacts
makes a BONA FIDE Acquisition Proposal to Stockholder or the Company or (ii)
any Additional Contact makes a BONA FIDE Acquisition Proposal to Stockholder
or the Company.
(ii) If (i) Stockholder terminates this Agreement pursuant to Section
19(b), (ii) the Company terminates the Merger Agreement pursuant to Section
7(a)(ii)(C) thereof or Parent or Purchaser terminates the Merger Agreement
pursuant to Section 7(c) thereof in connection with an Acquisition Proposal
made by or on behalf of any Person (or any Affiliate of any such Person)
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directly or indirectly solicited, and referred to the Company, by
Stockholder, or (iii) Stockholder, in violation of the terms of this
Agreement, sells, transfers, assigns or otherwise disposes (collectively, a
"Sale") of any of the Shares to any Person other than Parent or Purchaser, or
grants a proxy to vote or votes the Shares in favor of any Acquisition
Proposal, or enters into any agreement with respect to any of the foregoing,
Stockholder shall promptly (A) pay Parent an amount equal to all of Parent's
and Purchaser's reasonable fees and expenses (including, without limitation,
the fees and expenses of its counsel, bank and accountants) incurred in
connection with the transactions contemplated by this Agreement, the Merger
Agreement and the Credit Agreement, not to exceed $500,000 in the aggregate,
and (B) pay Parent an amount equal to three percent (3%) (or, in the event of
a termination by Stockholder pursuant to Section 19(b)(i), two percent (2%))
of the total consideration (in whatever form) proposed to be paid to the
holders of the Common Stock of the Company (including Stockholder) in
connection with such Acquisition Proposal or Sale; PROVIDED, HOWEVER, that
there shall be credited against any amounts owed pursuant to clauses (A) or
(B) of this subsection the amount of any Termination Fee and Expense
Reimbursement Amount payable by the Company to Parent or Purchaser pursuant
to the Merger Agreement.
(iii) Notwithstanding anything herein to the contrary, Sections 7, 19
and 20 of this Agreement shall survive the termination of this Agreement and
the Effective Time of the Merger.
SECTION 20. CONFIDENTIALITY. The parties hereto agree that all
discussions and negotiations in connection with this Agreement and the Merger
will be conducted with the utmost confidentiality and that no party will
disclose any confidential information regarding any other party obtained
during the course of these discussions and negotiations except to their
respective attorneys, accountants, financial advisors and executives who have
a need to know in order to implement the purpose of this Agreement and except
or any be required to be disclosed to the Company in order to consummate the
Merger. Unless specifically required by law, including Federal securities
laws, the parties hereto shall not make any public disclosure with respect to
this Agreement or the Merger, other than as necessary to consummate the
transactions contemplated by this Agreement and the Merger Agreement, without
prior written consent of the other parties.
SECTION 21. NOTICES. All notices or other communications hereunder
shall be in writing and shall be deemed given if delivered by receipted hand
delivery or mailed by prepaid registered or certified mail (return receipt
requested) or by cable, telegram, telex or telecopy addressed as follows:
If to Parent or Purchaser: Xx. Xxxxx X. Xxxxxxxxx
c/o Space Industries International, Inc.
000 Xxxxxxxxxxx Xxxxxx, X.X. - Xxxxx 0000
Xxxxxxxxxx, X.X. 00000
Tel: 000-000-0000
Fax: 000-000-0000
with a copy to: Xxxxxxx & Xxxxx L.L.P.
000 Xxxxxxxxx Xxxxxx
0
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
If to Stockholder: Xx. Xxxxxxx X. Xxxxx
Chief Financial Officer
Xxxxx Industries, Inc.
Xxx Xxxxxxx Xxxxx
Xxx 0000
Xxxxxxxx, Xxxxxxx 00000-0000
Tel: 000-000-0000
Fax: 000-000-0000
with a copy to: Xxxxxxxxx, Xxxxxxx & Xxxxx L.L.P.
0000 X Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxx X. Xxxxxxx
Tel: 000-000-0000
Fax: 000-000-0000
SECTION 22. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Delaware.
SECTION 23. HEADINGS. The descriptive headings contained in this
Agreement are included for convenience of reference only and shall not affect
in any way the meaning or interpretation of this Agreement.
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SECTION 24. COUNTERPARTS. This Agreement may be executed in one or
more counterparts, and by the different parties hereto in separate
counterparts, each of which when executed shall be deemed to be an original
but all of which taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement
to be signed as of the date first above written.
XXXXX INDUSTRIES, INC.
By: /s/ XXXXXXX X. XXXXX
----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chief Financial Officer
ARGOTYCHE, L.P.
By SANTAEUS, L.P.
General Partner of Argotyche, L.P.
By DANTAEUS CORP.
General Partner of Santaeus, L.P.
By: /s/ XXXXX X. XXXXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President
SPACE ACQUISITION CORPORATION
By: /s/ XXXXX X. XXXXXXXXX
----------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President
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