Exhibit 1
SALE AND ASSIGNMENT AGREEMENT dated as of October 21, 1996 between THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA ("Seller") and WARBURG, XXXXXX
INVESTORS, L.P. ("Buyer").
1. Subject to the terms and conditions hereof, on the Closing Date (as
defined below), Seller hereby agrees to sell, transfer and assign to Buyer,
without recourse, representation or warranty of any kind except as set forth
herein, and Buyer hereby agrees to purchase from Seller, the Securities for an
aggregate purchase price equal to $23,318,034.72 (the "Purchase Price"). For
purposes of this Agreement, "Securities" means (a) $5,000,000 Principal Amount
Amended and Restated Revolving Credit Note due November 1, 1999; (b) $6,500,000
Amended and Restated 9.90% Senior Note due November 1, 1998; (c) $3,500,000
Principal Amount Amended and Restated 9.90% Senior Note due November 1, 1998;
(d) $10,900,834.33 Principal Amount Amended and Restated 10.65% Subordinated
Payment-In-Kind Note due November 1, 2001; (e) $1,520,058.79 Principal Amount
11.65% Subordinated Payment-in-Kind Note, due November 1, 2001; (f) $723,517.03
Principal Amount 11.65% Subordinated Payment-In-Kind Note due November 1, 2001;
(g) 130,233 Shares of Junior Convertible Preferred Stock; (h) Restated Stock
Subscription Warrant No. 16 to Subscribe for 200,000 Shares of Common Stock; and
(i) New Stock Subscription Warrant No. 17 to Subscribe for 150,000 Shares of
Common Stock, all of Xxxxx & Xxxxx Company (the "Company") issued pursuant to
(i) that certain Senior Note, the Subordinated Note and Revolving Credit Note
Agreement between the Company and Seller, dated as of November 2, 1992, as
amended from time to time (the "Note Agreement") and (ii) that certain
Securities Purchase Agreement between the Company and Seller, dated as of
November 2, 1992 (the "Securities Purchase Agreement").
2. The purchase and sale of the Securities will take place on October
22, 1996 or such later date as the parties hereto shall mutually agree (the
"Closing Date") and on the Closing Date Seller will deliver the Securities to
Buyer, together with duly executed bond or stock powers, as applicable, payable
to the order of Buyer and an incumbency certificate, against payment of (a)
$19,739,109.72 in immediately available funds to Seller's account number
000-0000-000 at Bank of New York, New York, N.Y., ABA number 000-000-000 and (b)
$3,578,925 in immediately available funds to Seller's account number
000-0000-000 at Bank of New York, New York, N.Y., ABA number 000-000-000.
3. Seller hereby represents and warrants as of the date hereof and as
of the Closing Date that: (a) Neither Seller nor anyone acting on its behalf has
offered the Securities or any of them by means of any general solicitation or
general advertising and neither Seller nor anyone acting on its behalf has taken
any action which would subject the sale of the Securities to Buyer to the
registration provisions of Section 5 of the Securities Act of 1933, as amended
(the "Act"); (b) Seller has provided Buyer with a true, correct and complete
copy of the Securities, the Note Agreement and the Securities Purchase
Agreement; (c) Seller is the sole legal, record and beneficial owner of the
Securities with good title thereto free and clear of any liens, claims, options
or other encumbrances; (d) Seller has full power, authority and legal right to
sell the Securities; (e) Seller has been the sole beneficial owner of the
Securities since their respective dates of issuance; (f) the $3,500,000
Principal Amount 9.90% Senior Note constitutes an asset of a pooled separate
account of Seller (the "Separate Account") subject to the prohibited transaction
rules in Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"); and (g) following execution by Buyer of a letter in the form
attached hereto as Exhibit A, Seller has provided Buyer with a list of sponsors
of employee benefit plans that participate in the Separate Account to the extent
of 10% or more (the "10% Plans"). Seller further represents and warrants that as
of the date hereof, and after giving effect to the sale of the Securities to
Buyer as contemplated herein, it holds for its own account the following
securities of the Company: (a) 19,767 shares of Junior Convertible Preferred
Stock and (b) 397,549 shares of Common Stock, par value $.01 per share.
4. As of the date hereof and as of the Closing Date, Buyer hereby (a)
acknowledges that the Securities have not been registered under the Act or the
securities or blue sky laws of any jurisdiction and agrees that it is not
acquiring the Securities with a view to sale or distribution in violation of
applicable securities laws; (b) confirms that Buyer has received a copy of the
Note Agreement, the Securities Purchase Agreement and the Securities, and such
other documents and information which Buyer has deemed necessary and appropriate
to make its own credit analysis and decision to purchase the Securities, and has
independently and without reliance on Seller, other than reliance upon the
representations, warranties and covenants of the Seller made herein, made its
own analysis and decision to enter into this Agreement and to purchase the
Securities; (c) represents and warrants that (i) in the normal course of its
business it invests in securities and is familiar with the terms of securities
with characteristics similar to the Securities and by reason of its business and
financial experience possesses such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the risks and
merits of an investment in the Securities; (ii) on the Closing Date, after
giving effect to the purchase contemplated hereby, Buyer will not be a
party-in-interest to any of the 10% Plans; and (iii) neither it nor any of its
affiliates is currently, and none of them has been at any time during the twelve
month period immediately preceding the date hereof, engaged in substantive
discussions with any party (other than the Company, with respect to the option
agreement referred to in paragraph 8(a) below, or Seller) with respect to either
(x) a sale of the Company or substantially all of its assets, or (y) a sale of
all or a part of the securities of the Company held by Buyer (including
Securities purchased hereunder), nor does Buyer have any present intention to
engage in any such transaction. Buyer further confirms that it has obtained a
representation from the Company for the benefit of Seller in substantially the
form attached hereto as Exhibit B.
5. Seller hereby agrees that if Buyer exercises its right to convert
all of its holdings of the Company's preferred stock to shares of the Company's
common stock, Seller will (promptly upon receipt of written notice that Buyer
has effected such conversion) exercise its right to convert the shares of the
Company's Junior Convertible Preferred Stock held by it (the "Retained Preferred
Shares") to shares of the Company's common stock in accordance with the
provisions of the Company's Certificate of Incorporation governing such
conversion as in effect on the date hereof. Seller further agrees (a) that the
provisions of this paragraph 5 shall (i) be binding on any transferee of the
Retained Preferred Shares and (ii) be specifically enforceable against Seller
and (b) that Seller shall cause any such transferee to agree that this paragraph
5 shall be specifically enforceable against it.
6. Seller hereby agrees that it will record the Purchase Price on its
books and records as follows: $1,000 of the Purchase Price will be allocated to
the sale of the Securities referred to in subparagraphs 1(g) - (i) hereof, and
the balance will be allocated to the sale of the Securities referred to in
subparagraphs 1(a) - (f).
7. Seller and Buyer hereby acknowledge that each of them may possess
material non-public information with respect to the Company not known to the
other, and each agrees to hold the other harmless with respect to any such
information.
8. The obligations of the parties under this Agreement are subject to
the satisfaction of the following conditions: (a) the Company and Buyer shall
have executed an option agreement with respect to the Securities in
substantially the form attached hereto as Exhibit C; and (b) there shall have
been executed by the parties hereto an amendment to that certain Stockholders
Agreement, dated as of January 29, 1993, as heretofore amended, among the
Company, Seller, Buyer and Xxx X. Xxxxxxx, terminating Seller's obligations
thereunder and pursuant to which Seller releases all of its rights under such
agreement.
9. Each party hereto shall execute and deliver all further documents or
instruments reasonably requested by the other party in order to effect the
intent and purposes of this Agreement and obtain the full benefit of this
Agreement.
10. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE CONFLICTS OF
LAWS PROVISIONS THEREOF AND SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF
BUYER AND SELLER AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS.
11. This Agreement, together with the letter referred to in paragraph
3(g) hereof, constitutes the complete agreement of the parties with respect to
the subject matter hereof, and supersedes all prior communications and
agreements of the parties with respect thereto, all of which have become merged
and integrated into this Agreement. This Agreement cannot be amended, modified
or waived, except by a writing executed by each of the parties hereto.
12. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /S/ XXXXXXX X. XXXXXXX
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
WARBURG, XXXXXX INVESTORS, L.P.
By: Warburg, Xxxxxx & Co.
its General Partner
By: /S/ XXXX X. XXXXXXXXX
Name: Xxxx X. Xxxxxxxxx
Title: Partner
Exhibit A
Warburg, Xxxxxx Investors, L.P.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, X.X. 00000-0000
October 15, 1996
The Prudential Insurance Company
of America
Four Gateway Center
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxxx
Re: $3,500,000 Principal Amount 9.90% Senior Note of Xxxxx &
Xxxxx Company due November 1, 1998 (the "Note")
Ladies and Gentlemen:
We refer to the proposed purchase of the Note by Warburg, Xxxxxx Investors,
L.P. from The Prudential Insurance Company of America ("Prudential").
We understand that the Note constitutes an asset of a separate account
maintained by Prudential and that, in order to permit us to conclude that the
proposed purchase will not involve any "prohibited transaction" under the
Employee Retirement Income Security Act of 1974, as amended, Prudential will
disclose to us the names of certain employee benefit plans participating to the
extent of 10% or more in such separate account. In order to induce Prudential to
make such disclosure, we agree that any such information disclosed to us (i)
will be held by us in strict confidence and will not be disclosed by us to
anyone other than our employees and legal counsel and (ii) will be used by us
and our legal counsel solely for the purpose of determining whether the proposed
purchase would involve such a "prohibited transaction."
Very truly yours,
WARBURG PINCUS INVESTORS, L.P.
By: Warburg, Xxxxxx & Co.,
its General Partner
By:/S/ XXXX X. XXXXXXXXX
Partner
Exhibit B
Xxxxx & Xxxxx
October ___, 1996
The Prudential Insurance
Company of America
Four Gateway Center
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Gentlemen:
Please be advised that Xxxxx & Xxxxx Company (the "Company") is not
currently, nor has it been at any time during the twelve month period
immediately preceding the date of the Sale and Assignment Agreement dated as of
October __, 1996, between The Prudential Insurance Company of America and
Warburg, Xxxxxx Investors, L.P., engaged in substantive discussions with any
party with respect to a sale of all or substantially all of the Company or its
assets, nor does the Company have any present intention to engage in any such
transaction.
Very truly yours,
XXXXX & XXXXX COMPANY
By:/S/ XXX X. XXXXXXX
Xxx X. Xxxxxxx
Chairman
By:/S/ XXXX XXXXX
Xxxx Xxxxx
President & CEO
