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Exhibit 10.1
ESOP STOCK SALE AND EXCHANGE AGREEMENT
This ESOP STOCK SALE AND EXCHANGE AGREEMENT (this "Agreement"), is
dated as of July 22, 1998 by and among XXXXXXX HOLDINGS, INC., a Delaware
corporation ("Holdings"), XXXXXXX COMPANY, a Delaware corporation (the
"Company"), STATE STREET BANK & TRUST COMPANY, solely in its capacity as Trustee
(the "Trustee") of the Xxxxxxx Company Employee Stock Ownership Trust (the
"ESOT") and REM Acquisition, Inc., a Delaware corporation ("MergerCo").
W I T N E S S E T H:
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WHEREAS, the ESOT is, as of the date hereof, the record and beneficial
owner of 5,663,721 shares of Series A Preferred Stock of the Company, of which
2,250,049 shares are, pursuant to the terms of the Xxxxxxx Company Employee
Stock Ownership plan, as amended and restated effective January 17, 1989, and as
further amended through the date hereof (the "ESOP"), allocated to the accounts
of ESOP participants (such shares are referred to herein as the "Allocated
Shares"), and 3,413,672 shares are, pursuant to the terms of the ESOP, not so
allocated (such shares are referred to herein as the "Unallocated Shares" and
together with the Allocated Shares, the "ESOP Shares");
WHEREAS, MergerCo and Holdings entered into an Agreement and Plan of
Merger, dated as of July 16, 1998 (as such agreement may be amended from time to
time, the "Merger Agreement"), which is attached as Exhibit A hereto, pursuant
to which MergerCo will be merged with and into Holdings, with Holdings being the
surviving corporation (the "Merger"). Terms used and not otherwise defined
herein shall have the meanings ascribed to such terms in the Merger Agreement;
WHEREAS, pursuant to the Merger Agreement, the consummation and
effectiveness of the Merger is conditioned in part upon the execution, delivery
and performance of this Agreement;
WHEREAS, the Trustee, as successor to NationsBank, N.A. (South), the
Company and Holdings are parties to a 1996 Stockholders' Agreement dated as of
March 22, 1996 (the "Stockholders' Agreement");
WHEREAS, in connection with the consummation of the Merger, the parties
hereto have agreed, effective as of the Closing hereunder, to terminate the
Stockholders' Agreement and enter into a new stockholders' agreement
substantially in the form of Exhibit B hereto (the "New Stockholders'
Agreement") which, among other things, will provide the Trustee with certain
rights with respect to the ESOP Shares;
NOW THEREFORE, in consideration of the foregoing and the mutual
premises, representatives, warranties, agreements and covenants set forth herein
and in the Merger Agreement, MergerCo Holdings, the Company and the Trustee,
each intending to be legally bound, hereby agree as follows:
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1. PURCHASE AND SALE OF THE ALLOCATED SHARES.
1.1. PURCHASE AND SALE.
(a) Subject to the terms and conditions hereof, on
the Closing Date (as defined below), the Trustee shall sell
(the "Sale") to MergerCo, and MergerCo shall purchase from the
Trustee, all of the shares of Series A Preferred Stock to the
Company that constitute Allocated Shares owned by the ESOT on
the Closing Date (which number of shares shall be 2,250,049
shares), for a purchase price per share in cash of $ 7.1463
(the "Purchase Price"), which is equal to the price per share
that would have been payable to the ESOP pursuant to the
Merger Agreement with respect to a share of Series A Preferred
Stock of the Company if, immediately prior to the Effective
Time, that share had been converted into one share of Common
Stock of the Company and exchanged for shares of Class C
Common Stock of Holdings in accordance with the exchange ratio
set forth in the Stockholders Agreement and had such shares of
Class C Common Stock been converted into the right to receive
the Cash Price pursuant to Section 3.1(c)(ii) of the Merger
Agreement.
(b) Not less than 10 days prior to the Closing Date,
the Trustee and the Company shall notify MergerCo of the
number of Allocated Shares and Unallocated Shares that the
Trustee estimates will be outstanding at the Closing Date
under the ESOP.
1.2. CLOSING.
(a) Subject to the terms and conditions hereof, the
closing of the Sale shall take place immediately prior to the
Effective Time of the Merger and at the same place as the
closing of the Merger under the Merger Agreement (the time and
date of the closing of the Sale shall be referred to herein as
the "Closing Date").
(b) On the Closing Date, the Trustee shall deliver to
MergerCo one or more stock certificates representing the
Allocated Shares to be purchased by MergerCo pursuant to
Section 1.1 in proper form for transfer, accompanied by
appropriate stock powers duly executed in blank, together with
any and all necessary documentary or transfer tax stamps duly
affixed and cancelled and otherwise in form satisfactory to
MergerCo.
(c) On the Closing Date, MergerCo shall deliver to
the Trustee the aggregate Purchase Price for the Allocated
Shares sold pursuant to Section 1.1, in cash by wire transfer
of immediately available funds to such bank account as the
Trustee shall designate in writing to MergerCo at least two
business days prior to the Closing Date.
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2. EXCHANGE OF THE UNALLOCATED SHARES.
2.1. EXCHANGE OF UNALLOCATED SHARES. Subject to the terms and
conditions hereof, the Trustee shall exchange the shares of Series A
Preferred Stock of the Company that constitute Unallocated Shares owned
by the ESOT on the Closing Date (which, for this purpose is assumed to
be approximately 3,413,672 shares) for, and Holdings shall issue to the
Trustee in exchange therefor an aggregate of, 3,484,997 shares of Class
C Stock of Holdings, which is the number determined in accordance with
the exchange ratio for "Exchange Shares" set forth in Section 3.1(c) of
the Stockholders' Agreement as if each Unallocated Share had been
converted into one share of Common Stock of the Company and exchanged
for Class C Stock of Holdings in accordance with the Stockholders
Agreement and the Trustee hereby acknowledges that such Unallocated
Shares shall be shares of Common Stock of Holdings and shall remain
outstanding following the Merger (the "Exchange"). In connection
therewith, the Trustee does hereby waive its right to be redeemed or to
receive any cash consideration as Merger Consideration (as defined in
the Merger Agreement) for any of the Unallocated Shares held thereby,
and agrees that all such Unallocated Shares shall constitute "Rollover
Shares" for all purposes in connection with the Merger.
2.2. CLOSING OF THE EXCHANGE. The closing of the Exchange
shall take place, at the sole option of MergerCo, simultaneously with,
immediately before, or immediately after, the closing of the Sale.
MergerCo shall notify the Trustee two business days prior to the
Closing Date of the order of occurrence of the Sale and Exchange. At
such closing, the Trustee shall deliver to Holdings one or more stock
certificates representing the Unallocated Shares in proper form for
transfer, accompanied by appropriate stock powers duly executed in
blank, together with any and all necessary documentary or transfer tax
stamps duly affixed and cancelled and otherwise in form satisfactory to
MergerCo, and Holdings shall deliver to the Trustee one or more
certificates representing the Shares of Common Stock determined in
accordance with Section 2.1.
3. ADDITIONAL PURCHASE RIGHTS. Subject to the terms and conditions
hereof, if all the conditions set forth in Section 8.1 are satisfied, provided
that the condition set forth in Section 8.1.5(d) is not satisfied, then MergerCo
shall have the right to purchase all but not less than all of the Unallocated
Shares (which shall be Series A Preferred Shares) held by the Trustee and the
Trustee shall be obligated to sell such shares to MergerCo, at the request of
MergerCo, at the Purchase Price per share set forth in Section 1.1, and upon the
same terms and conditions as set forth in Section 1 with respect to the
Allocated Shares.
4. REPRESENTATIONS AND WARRANTIES OF TRUSTEE. As an inducement to
MergerCo to enter into this Agreement and to consummate the transactions
contemplated hereby, the Trustee represents and warrants, as of the date hereof
and as of the Effective Time, to MergerCo as follows:
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4.1. AUTHORITY AND RELATED MATTERS.
(a) The Trustee has full legal right, power, capacity
and authority to execute and deliver this Agreement and all of
the other instruments contemplated hereby, to consummate the
transactions contemplated hereby (including the New
Stockholders' Agreement) and by the Merger Agreement and to
comply with the terms, conditions and provisions hereof and
thereof. This Agreement is, and each other instrument of the
Trustee contemplated hereby (including the New Stockholders'
Agreement) will be, the legal, valid and binding obligation of
the Trustee, enforceable against it in accordance with its
terms.
(b) The ESOT is the record and beneficial owner of
5,663,721 shares of Series A Preferred Stock of the Company,
of which 2,250,049 constitute Allocated Shares and 3,413,672
constitute Unallocated Shares. Except for this Agreement and
the transactions contemplated hereby (including the New
Stockholders' Agreement), and except as disclosed in the
Merger Agreement or the Plan, there are no agreements,
arrangements, warrants, options, puts, calls, rights, option
or other employee benefit plans or other commitments or
understandings of any character to which the ESOT is a party
or by which any of its assets (including the ESOP Shares) is
bound and relating to the issuance, sale, purchase,
redemption, conversion, exchange, registration, voting or
transfer of any ESOP Shares or other securities of Holdings or
the Company. As of the Closing Date and subject to the
Company's releasing the ESOP Shares from the Company's pledge
agreement with the ESOT, the ESOP Shares to be sold to
MergerCo will be transferred to MergerCo free of any
preemptive or subscription rights and free and clear of all
liens, claims, charges, security interests, mortgages,
pledges, easements, conditional sales or other title retention
agreements, defect in title, covenants or other encumbrances
or restrictions of any kind (collectively, "Encumbrances").
(c) Neither the execution and delivery by the Trustee
of this Agreement or of any of the other instruments
contemplated hereby to be executed by it (including the New
Stockholders' Agreement), the consummation by the Trustee of
any of the transactions contemplated hereby, nor compliance by
the Trustee with or fulfillment by the Trustee of the terms,
conditions and provisions hereof or thereof will:
(i) conflict with, result in a breach of the
terms, conditions or provisions of, or constitute a
default, an event of default or an event creating
rights of acceleration, amendment, termination or
cancellation or a loss of rights under, or result in
the creation or imposition of any Encumbrance upon,
any of the assets or properties of the Trustee or the
ESOT under any charter, by-laws, trust agreement,
partnership agreement or certificate of partnership
or other constitutive documents of the Trustee and
the ESOT
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(including the ESOP), any note, instrument,
agreement, mortgage, lease, license, franchise,
Governmental Permit (as defined in the Merger
Agreement) or judgment, order, award or decree to
which the Trustee or the ESOT is a party or by which
the Trustee or the ESOT (provided that the Trustee
makes no representation with respect to ERISA); or
(ii) require the approval, consent,
authorization or act of, or the making by the Trustee
of any declaration, filing or registration with, any
third Person or any Governmental Body (as defined in
the Merger Agreement).
4.2. NO FINDER. None of the Trustee, the ESOT, or any party
acting on his or its behalf, has paid or become obligated to pay any
fee or commission to any broker, finder or intermediary for or on
account of the transactions contemplated by this Agreement or the
Merger Agreement, except that the Trustee has engaged Houlihan, Lokey,
Xxxxxx and Xxxxx, Inc. ("HL") in connection with the transactions
contemplated by this Agreement and the Merger Agreement.
4.3. ABSENCE OF PROCEEDINGS. There is no action, suit,
proceeding or investigation pending or, to the knowledge of the
Trustee, threatened, against the Trustee or the ESOT to consummate the
transactions contemplated hereby or by the Merger Agreement.
4.4. FAIRNESS OPINION. On the date hereof, the ESOT has
received the fairness opinion (the "ESOT Fairness Opinion") of HL to
the effect that the consideration to be received by the ESOT for the
ESOP Shares in connection with the transactions contemplated by this
Agreement and the Merger is not less than fair value and that such
transactions, considered as a whole, is fair to the ESOP from a
financial point of view, and such opinion has not been withdrawn,
qualified or otherwise modified.
4.5. INVESTMENT INTENT. The Trustee is exchanging the
Unallocated Shares hereunder solely for its own account and with no
intention of distributing or reselling the Unallocated Shares of any
part thereof, or interest therein, in any transaction that would be in
violation of the Securities Act of 1933, as amended (the "Securities
Act") or any other securities laws of the United States of America or
any state thereof.
4.6. STATUS AS ACCREDITED INVESTOR. As the Closing Date, the
Trustee will be an "accredited investor" (as that term is defined in
Rule 501 of Regulation D under the Securities Act). The Trustee has
such knowledge and experience in business and financial matters so that
the Trustee is capable of evaluating the merits and risks of the
Exchange and of the investment in Holdings. The Trustee understands the
full nature and risk of an investment in Holdings. The Trustee further
acknowledges that it has had access to the books and records of
Holdings, is generally familiar with the business being conducted by
Holdings and its subsidiaries and has had an opportunity to ask
questions concerning Holdings and its subsidiaries; provided, however,
that nothing herein shall affect the
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representations and warranties of Holdings or the Company hereunder,
any of the obligations of Holdings or the Company, or any the Trustee's
rights under the other provisions of this Agreement. The Trustee
acknowledges that none of MergerCo, Holdings, the Company nor any
Affiliate thereof has made, or will make, and the Trustee has not
relied upon, any representation or warranty, whether express or
implied, of any character, except as expressly set forth herein.
5. REPRESENTATIONS AND WARRANTIES OF MERGERCO. As an inducement to the
Trustee to enter into this Agreement and to consummate the transactions
contemplated hereby, MergerCo represents and warrants to the Trustee as follows:
5.1. ORGANIZATION. MergerCo is a corporation duly organized,
legally existing and in good standing under the laws of the
jurisdiction of its formation and has full corporate power and
authority to own or lease and to operate and use its properties and
assets and to carry on its business as now conducted.
5.2. AUTHORITY.
(a) MergerCo has the requisite power and authority to
execute and deliver this Agreement and all of the other
instruments contemplated hereby to be executed by it
(including the New Stockholders' Agreement), to consummate the
transactions contemplated hereby and to comply with the terms,
conditions and provisions hereof. The execution, delivery and
performance of this Agreement by MergerCo have been duly
authorized and approved by all necessary corporate action on
its behalf and do not require any further authorization or
consent of MergerCo or its stockholders. This Agreement is,
and each other instrument of MergerCo contemplated hereby to
be executed by them (including the New Stockholders'
Agreement) will be, the legal, valid and binding obligation of
MergerCo, enforceable against MergerCo in accordance with
their terms.
(b) Neither the execution and delivery of this
Agreement by MergerCo or any of the other instruments
contemplated hereby, the consummation by MergerCo of any of
the transactions contemplated hereby nor compliance by
MergerCo with or fulfillment by MergerCo of the terms,
conditions and provisions hereof will:
(i) conflict with or result in a breach of
the terms, conditions or provisions of, or constitute
a default, an event of default or an event creating
rights of acceleration, termination or cancellation
or a loss of rights under the charter, or by-laws, or
other constitutive documents of MergerCo or any note,
instrument, agreement, mortgage, lease, license,
franchise, Governmental Permit or judgment, order,
award or decree to which any of its properties is
subject, or by which MergerCo is bound; or
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(ii) require the approval, consent,
authorization or act of, or the making by MergerCo of
any declaration, filing or registration with, any
third person or any Governmental Body, except as
provided under the New Jersey Industrial Site
Recovery Act or under the Xxxx Xxxxx Xxxxxx Act (the
"H-S-R Act").
5.3. NO FINDER. Neither MergerCo nor any party acting on its
behalf or become obligated to pay any fee or commission to any broker,
finder or intermediary for or on account of the transactions
contemplated by this Agreement.
5.4. ABSENCE OF PROCEEDINGS. There is no action, suit,
proceeding or investigation pending, or to the knowledge of MergerCo,
threatened, against MergerCo which might adversely affect or restrict
MergerCo's ability to consummate the transactions contemplated by this
Agreement and the Merger Agreement.
5.5. COMMITMENT LETTERS. To the extent the financing under
this Agreement or the Merger Agreement is to be provided by third
parties, MergerCo has provided the Trustee with complete and correct
copies of the commitment letters (the "Commitment Letters") relating to
the provisions of such financing.
5.6. GOVERNMENTAL CONSENTS. No consent, approval or
authorization of, or declaration, filing or registration with, any
governmental or regulatory authority (other than filings pursuant to
the H-S-R Act) is required to be made or obtained by MergerCo in
connection with the execution, delivery and performance of this
Agreement.
5.7. REPRESENTATIONS AND WARRANTIES. The representations and
warranties of MergerCo under the Merger Agreement are true and correct
as of the date thereof except for (i) representations and warranties
that speak as of a specific date or time which need only be true and
correct as of such date or time and (ii) representations and warranties
which are not qualified by a Material Adverse Effect (as defined in the
Merger Agreement) or otherwise by material adversity (which need be
true and correct in all material respects only).
5.8. CERTAIN TRANSACTIONS OR ARRANGEMENTS. Except for
arrangements and agreements previously disclosed to the Trustee or as
expressly contemplated by this Agreement, the Commitment Letters and
the Merger Agreement immediately following the Closing Date, neither
MergerCo nor any of its respective affiliates will be, directly or
indirectly, a party to any agreement, arrangement or understanding with
Holdings or any of its subsidiaries.
6. REPRESENTATIONS AND WARRANTIES OF HOLDINGS AND THE COMPANY. As an
inducement to the Trustee to enter into this Agreement and to consummate the
Exchange contemplated hereby, each of the Holdings and the Company hereby
represent and warrant to the Trustee as and to the
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extent provided in Sections 4.1, 4.2, 4.4(a) (first three sentences only),
4.4(b) and 4.5 of the Merger Agreement.
7. COVENANTS
7.1. CERTAIN AGREEMENTS. Each of the parties hereto shall use
his or its commercially reasonable best efforts to consummate the
transactions contemplated by this Agreement and the Merger Agreement.
Each party shall promptly notify the others of any action suit or
proceeding that shall be instituted or threatened against such party to
restrain, prohibit or otherwise challenge the legality of any
transaction contemplated by this Agreement. Each party shall promptly
notify the other parties of any lawsuit, claim, proceedings or
investigation that may be threatened, brought, asserted or commenced
after the date hereof against Holdings, the Company or any Subsidiary
that would have been required to be disclosed under Section 4.3, 5.4 or
6 hereof, and, in the case of any of the foregoing pending on the date
hereof, of any material development in respect thereto. Each of the
parties hereto, shall give prompt notice to the other parties of (a)
any notice or other communication received by any such Person from any
Governmental Body or third Person alleging that the consent of such
Governmental Body or third Person is or may be required in connection
with the transactions contemplated by this Agreement, (b) the
occurrence of any event or circumstance which could have a Material
Adverse Effect, and of which such party has knowledge, (c) the breach
of any representation, warranty, covenant or other material agreement
of any such party contained herein or (d) any amendments or supplements
to, or waivers or consents under, the Merger Agreement; provided,
however that notice of any such amendments, supplements, waivers or
consents shall be given to the Trustee at least two business days prior
to the adoption, granting or execution thereof.
7.2. GOVERNMENTAL FILINGS. The Trustee, Holdings, the Company
and MergerCo shall cooperate with each other in filing any necessary
applications, reports or other documents with any federal or state
agencies, authorities or bodies (domestic or foreign) having
jurisdiction with respect to this Agreement and the transactions
contemplated hereby, and in seeking necessary consultation with and
prompt favorably action by, including required consents of, any such
agencies, authorities or bodies.
7.3. AGREEMENTS. The Company and the Trustee shall cooperate
to amend, effective as of the Effective Time, the ESOP, the Trust
Agreement and any other documents which MergerCo reasonably determines
are made necessary or desirable to implement the transactions
contemplated herein including, but not limited to, the following:
(a) The amendment of the Consolidated ESOP Loan
Agreement, dated March 22, 1996 (the "Loan Agreement"), and
the Consolidated Pledge Agreement dated March 22, 1996 (the
"Pledge Agreement"), to provide that $1,000,000 of the final
repayment of principal with respect to that loan made by the
Company to the
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ESOT as described in the Loan Agreement (the "ESOP Loan") will
be extended through a date which is the earlier of:
(i) the seventh anniversary of the Closing
Date;
(ii) the sale of all or substantially all of
the assets of the Company; the merger of Holdings or
the Company with or into another person where
Holdings or the Company, as applicable, is not the
surviving entity; the sale in a single transaction or
series of related transactions, of shares of common
stock or Holdings or the Company, but not in the
aggregate, representing 90% or more of such then
outstanding common stock; or the liquidation or
dissolution of Holdings or the Company; or
(iii) a Holdings IPO (as defined in the New
Stockholders' Agreement)
(b) The amendment of the Loan Agreement to delete
Section 12 thereof.
(c) The amendment of the Loan Agreement and related
pledge agreement to provide for the release of the Unallocated
Shares if sold pursuant to Section 3 or a substitution of the
Common Stock of Holdings to be received in the Merger for the
Unallocated Shares as collateral for the Loan if the Exchange
is consummated.
(d) The amendment of the ESOP to delete the last
sentence of Section 5.04(f) thereof.
(e) With respect to shares of Common Stock
distributed to participants and "put" back to the Company or
the Trust in accordance with statutory put rights, the
addition of provisions that calculate the put price with
reference to an enterprise value basis, without the
application of any minority discounts.
(f) The amendment of the ESOP to include a provision
whereby the proceeds of the sale of the Allocated Shares by
the ESOP as contemplated herein will be allocated to the
Profit Sharing Component of Participants' Accounts (each as
defined in the ESOP) and will not be available for, or be
required to be invested in, stock of Holdings or of the
Company.
Notwithstanding the foregoing, no amendment to the ESOP, the Trust
Agreement or any other document shall be made which would limit or eliminate the
protections currently affecting the ESOT as to the circumstances under which the
ESOP Loan may be declared in default; the limitation on the ability to use
dividend payments made with respect shares of employer securities held by the
ESOT to repay the ESOP Loan; and the general prohibitions on repaying the ESOP
Loan using the
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proceeds of a sale of the assets of the suspense account. In addition, the
suspense account shall remain in effect and amounts held therein will be
continued to be invested in stock of Holdings.
7.4. INVESTIGATION OF HOLDINGS, THE COMPANY AND MERGERCO BY
THE TRUSTEE. Holdings, the Company and MergerCo shall afford to the
officers, employees and authorized representatives of the Trustee
(including, without limitation, independent public accountants,
attorneys, environmental consultants and engineers) reasonable access
during normal business hours to the offices, properties, employees and
business and financial records (including computer files, retrieval
programs and similar documentation) of Holdings, the Company and
MergerCo to the extent the Trustee shall reasonably deem necessary or
desirable and shall furnish to the Trustee or its authorized
representatives, such additional information concerning Holdings, the
Company and MergerCo and their properties, assets, businesses and
operations as shall be reasonably requested, including all such
information as shall be necessary to enable the Trustee or its
representatives to verify the accuracy of the representations and
warranties contained in Section 6, to verify that the covenants of
Holdings, the Company and MergerCo have been complied with, and to
determine whether the conditions set forth in Section 8 have been
satisfied. The Trustee covenants that such investigation shall be
conducted in such a manner as not to interfere unreasonably with the
operations of Holdings, the Company and MergerCo. No investigation by
the Trustee or its representatives hereunder shall affect the
representations and warranties of Holdings, the Company and MergerCo.
Nothing in this section shall be interpreted so as to grant MergerCo
the right to perform invasive or subsurface investigations of the
properties.
8. CONDITIONS.
8.1. CONDITIONS PRECEDENT TO OBLIGATIONS OF TRUSTEE. The
obligations of the Trustee to consummate the transactions contemplated
by this Agreement shall, at its option, be subject to the satisfaction
on or prior to the Closing Date, of the following conditions:
8.1.1 NO MISREPRESENTATION OR BREACH OF COVENANTS AND
WARRANTIES. There shall have been no material breach of
covenants by MergerCo, Holdings or the Company in the
performance of any of their covenants and agreements herein;
each of the representations and warranties of MergerCo,
Holdings and the Company contained to in this Agreement and of
MergerCo contained in the Merger Agreement shall be true and
correct as of the Closing Date as though made as of the
Closing Date, except for (i) representations and warranties
that speak as of a specific date or time which need only be
true and correct as of such date or time, (ii) representations
and warranties which are not qualified by Material Adverse
Effect or otherwise by material adversity (which need be true
and correct except for such inaccuracies as in the aggregate
(together with the inaccuracies referred to in the following
clause (iii)) would not have a Material Adverse Effect), (iii)
representations and warranties which are qualified by Material
Adverse Effect or otherwise by material adversity shall also
be true and correct without regard to such qualification
except for such inaccuracies
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as in the aggregate (together with the inaccuracies referred
to in the preceding clause (ii)) would not have a Material
Adverse Effect, (iv) the representations and warranties set
forth in Section 4.2 shall be true and correct, and (v)
changes therein specifically permitted by this Agreement and
the Merger Agreement and there shall have been delivered to
the Trustee a certificate to such effect, dated the Closing
Date, and signed by the President or other senior executive
officer of Merger Co., Holdings and the Company.
8.1.2 LITIGATION. At the Closing Date, there shall be no
injunction, restraining order or decree of any nature of any
court or other Governmental Body of competent jurisdiction
that is in effect that restrains or prohibits the consummation
of the transactions or other material obligations of the
parties hereto as contemplated hereby, and no proceedings
seeking any such relief or seeking material damages with
respect to the transactions contemplated hereby shall be
threatened or pending by any Governmental Body of competent
jurisdiction.
8.1.3 MERGER AGREEMENT. The Merger Agreement shall not
have been terminated and shall be scheduled to be consummated
immediately after the consummation of the Sale. In the event
that following the consummation of the transactions
contemplated by this Agreement, the Merger Agreement shall be
terminated or the Merger shall not be consummated, all
obligations of the Trustee hereunder shall cease and all
actions taken by the Trustee under this Agreement (including
amendments, waivers, exchanges or sales) shall be deemed void
ab initio and the Trustee and each other party to this
Agreement shall be restored to its legal, contractual and
ownership position immediately prior to entering into this
Agreement.
8.1.4 ADDITIONAL CONDITION WITH RESPECT TO THE SALE. The
Trustee's obligations to consummate the Sale shall be subject
to the satisfaction of the additional condition that (i) the
closing under the Sale be consummated concurrently immediately
or before the closing under the Exchange (unless MergerCo
shall have exercised its right to purchase all of the ESOP
Shares as set forth under Section 1.3) and (ii) either the
Exchange must occur or MergerCo must purchase the Unallocated
Shares pursuant to, and subject to the terms and conditions
set forth or referred to in, Section 1.3. In the event that
notwithstanding the fact, that the conditions to the Sale
shall be satisfied under this Agreement, the Trustee shall
have determined that any conditions to the Exchange set forth
in Section 8.1.5 of this Agreement shall not have been
satisfied or MergerCo shall not have exercised its additional
right, if applicable, to purchase all the Unallocated Shares
as provided under Section 1.3, the Trustee's and MergerCo's
obligation to consummate the Sale shall automatically be
terminated and rescinded and the Trustee's actions with
respect thereto (including amendments, waivers, exchanges or
sales) shall be void ab initio and the Trustee and each other
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party to this Agreement shall be restored to its legal,
contractual and ownership position immediately prior to
entering into this Agreement.
8.1.5 ADDITIONAL CONDITIONS WITH RESPECT TO THE EXCHANGE.
The Trustee's obligations to consummate the Exchange
shall be subject to the satisfaction of the following additional conditions:
(a) at the Closing Date, each of the representations
and warranties of Holdings and the Company contained in the
Merger Agreement shall be true and correct as of the Closing
Date as though made as of the Closing Date, except for (i)
representations and warranties that speak as of a specific
date or time which need only be true and correct as of such
date or time, (ii) representations and warranties which are
not qualified by Material Adverse Effect or otherwise by
material adversity (which need be true and correct except for
such inaccuracies as in the aggregate (together with the
inaccuracies referred to in the following clause (iii)) would
not have a Material Adverse Effect), (iii) representations and
warranties which are qualified by Material Adverse Effect or
otherwise by material adversity shall also be true and correct
without regard to such qualification except for such
inaccuracies as in the aggregate (together with the
inaccuracies referred to in the preceding clause (ii)) would
not have a Material Adverse Effect and (v) changes therein
specifically permitted by the Merger Agreement.
(b) the outstanding capital stock of the Surviving
Corporation following the consummation of the Merger under the
Merger Agreement and the transactions contemplated hereby
shall be as described in the Commitment Letters and the pro
forma information delivered to the Trustee on July 20, 1998 by
MergerCo and the Trustee shall have received a certificate of
the Surviving Corporation signed by the President or any other
senior executive officer of the Surviving Corporation setting
forth the capitalization of the Surviving Corporation
following the consummation of the Merger under the Merger
Agreement and confirming that the price per share of Common
Stock of MergerCo paid by the sole stockholder of MergerCo is
not less than the implied price per share being paid by the
Trustee for each share of Common Stock of Holdings in the
Exchange.
(c) no amendment shall have been made to the Merger
Agreement that adversely affects the rights of the Trustee or
the ESOT hereunder without the prior written consent of the
Trustee.
(d) the Trustee shall not have determined that, due
to facts and circumstances arising after the date hereof, the
consummation of the transactions contemplated hereby or by the
Merger Agreement would constitute a "Prohibited Transaction"
within the meaning of Section 4975 of the Code or Section 406
of
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ERISA, such determination to be made in good faith, based upon
consultation with the Trustee's financial advisor and legal
counsel and consistent with the written opinion of the
Trustee's legal counsel;
(e) The Trustee shall have received the legal
opinions, dated as of the Closing Date, of Xxxxx, Day, Xxxxxx
& Xxxxx as counsel to the Company, and Ropes & Xxxx as counsel
to MergerCo and the Surviving Corporation (as defined in the
Merger Agreement), as applicable, with respect to the matters
set forth on Exhibit I hereto, such opinions to be in form and
substance reasonably satisfactory to the Trustee; and
(f) the indebtedness and other credit arrangements
incurred or made by Holdings or the Company shall be
materially in the amount and on the terms provided to the
Trustee in the Commitment Letters.
8.1.6 STOCKHOLDERS AGREEMENT. The parties thereto, other
than the Trustee on behalf of the ESOT and ESOP, shall have
executed and delivered the Stockholders Agreement.
8.2. CONDITIONS PRECEDENT TO OBLIGATIONS OF MERGERCO. The
obligations of MergerCo to consummate the transactions contemplated by
this Agreement shall, at its option, be subject to the satisfaction on
or prior to the Closing Date, of the following conditions:
8.2.1 NO MISREPRESENTATIONS OR BREACH OF COVENANTS AND
WARRANTIES. There shall have been no material breach of
covenants by the Trustee, Holdings or the Company in the
performance of any of their covenants and agreements herein;
each of the representations and warranties of the Trustee,
Holdings and the Company contained in this Agreement shall be
true and correct as of the Closing Date as though made as of
the Closing Date, except for (i) representations and
warranties that speak as of a specific date or time which need
only be true and correct as of such date or time, (ii)
representations and warranties which are not qualified by
materiality or Material Adverse Effect and which need be true
and correct in all material respects only, and (iii) changes
therein specifically permitted by this Agreement and the
Merger Agreement; and there shall have been delivered to
MergerCo a certificate to such effect, dated the Closing Date,
and signed by the President or other senior executive officer
of the Trustee, Holdings and the Company.
8.2.2 LITIGATION. At the Closing Date, there shall be no
injunction, restraining order or decree of any nature of any
court or other Governmental Body of competent jurisdiction
that is in effect that restrains or prohibits the consummation
of the transactions or other material obligations of the
parties hereto as contemplated hereby, and no proceedings
seeking any such relief or seeking material damages with
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respect to the transactions contemplated hereby shall be
threatened or pending by any Governmental Body of competent
jurisdiction.
8.2.3 MERGER AGREEMENT. The Merger Agreement shall not
have been terminated and shall be scheduled to be consummated
immediately after the consummation of the Sales, and the
conditions precedent to MergerCo's obligations under the
Merger Agreement shall have been satisfied or waived and
MergerCo shall have received such assurances to that effect as
it may reasonably request. In the event that following the
consummation of the transactions contemplated by this
Agreement the Merger has not occurred, all obligations of
MergerCo hereunder shall cease and all actions taken by
MergerCo under this Agreement (including amendments, waivers,
exchanges or sales) shall be deemed void ab initio and
MergerCo and each other party to this Agreement shall be
restored to its legal, contractual and ownership position
immediately prior to entering into this Agreement.
8.2.4 ADDITIONAL CONDITIONS WITH RESPECT TO THE SALE.
MergerCo's obligations to consummate the Sale shall be subject
to the satisfaction of the additional condition that the
closing under the Sale be consummated concurrently with,
immediately before, or immediately after the closing under the
Exchange (unless MergerCo shall have exercised its right to
purchase all of the ESOP Shares as set forth in Section 3). In
the event that notwithstanding that fact that the conditions
to he Sale shall be satisfied under this agreement, the
Trustee shall have determined that any conditions to the
Exchange set forth in Section 8.1.5 of this Agreement shall
not have been satisfied or MergerCo shall not have exercised
its additional right, if applicable, to purchase all the
Unallocated Shares as provided under Section 3, the Trustee's
and MergerCo's obligation to consummate the Sale shall
automatically be terminated and rescinded and the Trustee's
actions with respect thereto (including amendments, waivers,
exchanges or sales) shall be void ab initio and the Trustee
and each other party to this Agreement shall be restored to
its legal, contractual and ownership position immediately
prior to entering into this Agreement.
8.2.5 STOCKHOLDERS AGREEMENT. The Trustee, on behalf
of the ESOP and ESOT, and Holdings shall have executed and
delivered the Stockholders Agreement.
8.3. CONDITIONS PRECEDENT TO OBLIGATIONS OF HOLDINGS AND THE
COMPANY. The obligations of Holdings and the Company to consummate the
transactions contemplated by this Agreement shall, at their respective
option, be subject to the satisfaction at or prior to the Closing Date,
of the following conditions:
8.3.1 NO MISREPRESENTATIONS OR BREACH OF COVENANTS AND
WARRANTIES. There shall have been no material breach of
covenants by the Trustee and MergerCo
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in the performance of any of their covenants and agreements
herein; each of the representations and warranties of the
Trustee and MergerCo contained in this Agreement shall be true
and correct as of the Closing Date as though made as of the
Closing Date, except for (i) representations and warranties
that speak as of a specific date or time which need only be
true and correct as of such date or time and (ii)
representations and warranties which are not qualified
Material Adverse Effect or otherwise by material adversity
(which need be true and correct except for such inaccuracies
as in the aggregate (together with the inaccuracies referred
to in the following clause (iii)) would not have a Material
Adverse Effect), (iii) representations and warranties which
are qualified by Material Adverse Effect or otherwise by
material adversity shall also be true and correct without
regard to such qualification except for such inaccuracies as
in the aggregate (together with the inaccuracies referred to
in the preceding clause (ii)) would not have a Material
Adverse Effect and (iv) changes therein specifically permitted
by this Agreement and the Merger Agreement and there shall
have been delivered to Holdings a certificate to such effect,
dated the Closing Date, and signed by the President or other
senior executive officer of the Trustee and MergerCo.
8.3.2 LITIGATION. At the Closing Date, there shall be no
injunction, restraining order or decree of any nature of any
court or other Governmental Body of competent jurisdiction
that is in effect that restrains or prohibits the consummation
of the transactions or other material obligations of the
parties hereto as contemplated hereby, and no proceedings
seeking any such relief or seeking material damages with
respect to the transactions contemplated hereby shall be
threatened or pending by any Governmental Body of competent
jurisdiction.
8.3.3 MERGER AGREEMENT. The Merger Agreement shall not
have been terminated and shall be scheduled to be consummated
immediately after the consummation of the Sale. In the event
that following the consummation of the transactions
contemplated by this Agreement, the Merger Agreement shall be
terminated or the Merger shall not be consummated, all
obligations of Holdings or the Company hereunder shall cease
and all actions taken by Holdings or the Company under this
Agreement (including amendments, waivers, exchanges, sales)
shall be deemed void ab initio and Holdings, the Company and
each other party to this Agreement shall be restored to its
legal, contractual and ownership position immediately prior to
entering into this Agreement.
9. ADDITIONAL CONSENTS.
9.1. CONSENT TO THE MERGER. The Trustee hereby consents to the
terms of the Merger as set forth in the Merger Agreement, and
acknowledges that such consent shall constitute a final and irrevocable
waiver of any further rights that the Trustee may otherwise have
pursuant to the Stockholders' Agreement as the same applies to the
Merger.
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10. GENERAL.
10.1. NON-SURVIVAL OF REPRESENTATIONS. Warranties and
Agreements. All representations and warranties in this Agreement shall
terminate at the earlier of (i) the consummation of the transactions
contemplated hereby and (ii) the termination of this Agreement in
accordance with Section 10.2. All covenants and agreements set forth in
this Agreement shall survive in accordance with their terms.
10.2. TERMINATION. Anything contained in this Agreement to the
contrary notwithstanding, this Agreement (i) may be terminated at any
time prior to the Closing Date by the mutual consent of the parties
hereto and (ii) shall terminate automatically upon the earlier
termination of the Merger Agreement in accordance with section 9.1
thereof; provided, however, that if pursuant to the terms thereof, the
Merger Agreement is amended by the parties thereof to extend its
termination date beyond September 30, 1998, this Agreement may only be
extended for the same period with the prior consent of the Trustee,
which consent shall not be unreasonably withheld. In the event that
this Agreement shall be terminated pursuant to this Section, all
obligations of the parties under this Agreement (other than under this
Section and Section 10.1) shall be terminated without liability or
penalty on the part of any party or its officers or directors to any
other party, other than may result from any willful and material breach
by a party of this Agreement.
10.3. NOTICES. All notices and other communications given or
made pursuant to this Agreement shall be in writing and shall be deemed
to have been duly given or made (a) five business days after being sent
by registered or certified mail, return receipt requested, (b) upon
delivery, if hand delivered, (c) one business day after being sent by
prepaid overnight carrier with guaranteed delivery, with a record of
receipt, or (d) upon transmission with confirmed delivery if sent by
cable, telegram, facsimile or telecopy to the parties at the following
addresses (or at such other addresses as shall be specified by the
parties by like notice):
(a) If to MergerCo:
REM Acquisition, Inc.
c/o Fenway Partners, Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopy: 000-000-0000
with copies to:
Ropes & Xxxx
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00
Xxx Xxxxxxxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telecopy: 000-000-0000
(b) if to the Company:
Xxx Xxxxxxxxx Xxxxxxx Xxxxx 000
Xxxxxxx, XX 00000
Attention: Xxxxx X. Xxx
Telecopy: 000-000-0000
with copies to:
(i) Xxxxx X. Xxxxxxxx
(at the address listed above)
and
(ii) Xxxxx, Day, Xxxxxx & Xxxxx
3500 One Peachtree Center
000 Xxxxxxxxx Xxxxxx XX
Xxxxxxx, XX 00000
Attention: Xxxxxxx Xxxxxx, Esq.
Telecopy: 404-581-8330
(c) if to Holdings:
c/o Investcorp International, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxxxx X. X'Xxxxx
Telecopy: 000-000-0000
with a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
Telecopy: 000-000-0000
(d) if to the Trustee:
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00
Xxxxx Xxxxxx Xxxx & Trust Company
Batterymarch Park III
Xxxxx Xxxx Xxxx Xxxxx
Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxxx
Telecopy: 000-000-0000
with a copy to:
Xxxxxxxxxxx & Xxxxxxxx LLP
0000 Xxxxxx Xxxxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telecopy: 000-000-0000
10.4. PARTIAL INVALIDITY. Wherever possible, each provision
hereof shall be interpreted in such manner as to be effective and valid
under applicable law, but in the case that any provision contained
herein shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this
Agreement, and this Agreement shall be construed as if such invalid,
illegal or unenforceable provision or provisions had never been
contained herein unless the deletion of such provision or provisions
would result in such a material change as to cause completion of the
transactions contemplated hereby to be unreasonable.
10.5. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in one or more counterparts, each of which shall be considered
an original instrument, but all of which shall be considered one and
the same agreement, and shall become binding when one or more
counterparts have been signed by each of the parties and delivered to
each of the Trustee, Holdings and MergerCo.
10.6. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with ERISA and the laws of the State of
Delaware without regard to principles of conflicts of laws.
10.7. ASSIGNMENT: SUCCESSORS AND ASSIGNS. Neither this
Agreement nor any of the rights, interests or obligations hereunder
shall be assigned by any of the parties hereto without the prior
written consent of the other parties, except that MergerCo may, without
the prior written consent of the other parties, assign its rights
hereunder (but, not its obligations) in whole or in part to one or more
other special purpose entities formed for investment by MergerCo.
Subject to the foregoing, this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective
successors or assigns, heirs, legatees, distributees, executors,
administrators and guardians. Nothing in this Agreement, expressed
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or implied, is intended or shall be construed upon any Person any
right, remedy or claim under or by reason of this Agreement.
10.8. TITLES AND HEADINGS. Titles and headings to sections
herein are inserted for convenience of reference only and are not
intended to be a part of or to affect the meaning or interpretation of
this Agreement. All references to"Sections" in this Agreement refer to
Sections of this Agreement unless the context otherwise clearly
indicates.
10.9. KNOWLEDGE. In each provision of this Agreement in which
a representation or warranty is qualified to the "knowledge" of a
Person or to the "best of the knowledge" of a person, unless otherwise
stated in such provision, each such phrase means that the Person does
not have actual knowledge after due investigation thereof of any state
of facts which is different from the facts described in the warranty or
representation.
10.10. ENTIRE AGREEMENT: AMENDMENTS. This Agreement contains
the entire understanding of the parties hereto with regard to the
subject matter contained herein. The parties hereto, by mutual
agreement in writing, may amend, modify and supplement this Agreement.
Any such agreement shall be validly and sufficiently authorized for
purposes of this Agreement if it is signed by the Trustee, MergerCo,
Holdings and the Company.
10.11. WAIVERS. Any term or provision of this Agreement may be
waived, or the time for its performance may be extended, by the party
or parties entitled to the benefit thereof. The failure of any party
hereto to enforce at any time any provision of this Agreement shall not
be construed to be a waiver of such provision, nor in any way to affect
the validity of this Agreement or any part hereof or the right of any
party thereafter to enforce each and every such provision. No Waiver of
any breach of this Agreement shall be held to constitute a waiver of
any other or subsequent breach.
10.12. SPECIFIC PERFORMANCE. The parties acknowledge that
irreparable damage would result if this Agreement were not specifically
enforced, and they therefore consent that the rights and obligations of
the parties under this Agreement may be enforced by a decree of
specific performance issues by a court of competent jurisdiction. Such
a remedy shall, however, not be exclusive, and shall be in addition to
any other remedies which any party may have under this Agreement or
otherwise.
10.13. STOCKHOLDER AGREEMENT. On or prior to the closing
hereunder or under the Merger Agreement, Holdings shall not enter into
any agreement with another stockholder of Holdings (other than the
Trustee or the Principal Stockholder or a management stockholder) with
provisions relating to tag-along rights and drag-along obligations and
registration rights for resales of Common Stock of Holdings after the
Closing Date that are more favorable to such stockholder than the
rights and obligations of the Trustee under the Stockholders Agreement.
For purposes of this Section 10.13 "Principal Stockholder" shall have
the meaning set forth in the Stockholder Agreement.
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[ESOP Stock Sale and Exchange Agreement]
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
this 22nd day of July, 1998.
XXXXXXX HOLDINGS, INC., a
Delaware corporation
By: /s/ Xxxxx X. Xxx
--------------------------------------------
Name: Xxxxx X. Xxx
Title: Chief Executive Officer
XXXXXXX COMPANY, a Delaware corporation
By: /s/ Xxxxx X. Xxx
--------------------------------------------
Name: Xxxxx X. Xxx
Title: Chief Executive Officer
STATE STREET BANK AND TRUST
COMPANY, AS TRUSTEE OF THE
XXXXXXX COMPANY EMPLOYEE
STOCK OWNERSHIP TRUST
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President
REM ACQUISITION, INC., a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
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[ESOP Stock Sale and Exchange Agreement]
EXHIBIT I
Form of Legal Opinions
Pursuant to Section 8.1.5(e) of the Agreement, the Trustee shall receive legal
opinions, dated as of the Closing Date, from Xxxxx, Day, Xxxxxx & Xxxxx, as
counsel to the Company, __________, as counsel to Holdings and from Ropes & Xxxx
as counsel to MergerCo and the Surviving Corporation, as applicable, subject to
usual and customary qualifications and assumptions, with respect to the
following matters.
A. The Company:
1. Each of the Company and Holdings has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
State of Delaware with corporate power and authority to own or lease its
properties and to conduct its business as it is currently conducted.
2. Except as set forth in the final sentence of this paragraph, the
authorized capital stock and the number of shares of capital stock issued and
outstanding of Holdings and the Company as of the date hereof and prior to the
Closing Date are as set forth in the Agreement. To our knowledge, as of the date
hereof all of the shares of capital stock of Holdings and the Company are duly
and validly issued, fully paid and nonassessable, and free of any statutory
preemptive rights. Except for the agreements disclosed or entered into in
connection with the Agreement or referenced therein, to our knowledge neither
Holdings nor the Company is a party to any agreement, arrangement, warrant,
option, put, call, rights or other employee benefit plans, or other commitments
or understandings, relating to the issuance, sale, purchase, redemption,
conversion or exchange of any shares of capital stock of Holdings or the
Company.
We note that certificates representing ______ previously issued
shares of the Company's capital stock have been lost or that such certificates
have not been canceled in the stock records at the time of subsequent transfer
of shares represented thereby. In expressing the foregoing opinions, we are not
passing on the effect of the loss or non-cancellation of any such certificates.
3. Each of Holdings and the Company has the corporate power and
authority to execute, deliver and perform the terms and provisions of the
Agreement, the Merger Agreement and the New Stockholders' Agreement (the
"Transaction Documents") and each of Holdings and the Company has taken or
caused to be taken all necessary corporate action to authorize the same.
4. The Transaction Documents have been duly executed and delivered
by each of Holdings and the Company.
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[ESOP Stock Sale and Exchange Agreement]
5. Neither the execution and delivery by Holdings or the Company of
the Transaction Documents nor the performance by Holdings or the Company of
their respective obligations thereunder violates any provision of the
Certificate of Incorporation or Bylaws of Holdings or the Company, each as
amended and restated to date.
B. MergerCo
1. MergerCo has been duly incorporated and is validly existing as a
corporation in good standing under the laws of Delaware, with corporate power
and authority to own or lease its properties and to conduct its business as
currently conducted.
2. The authorized capital stock and the number of shares of capital
stock issued and outstanding of MergerCo as of the date hereof and after giving
effect to the Merger is ________________. To our knowledge, as of the date
hereof, all of the shares of capital stock are duly and validly issued, fully
paid and nonassessable, and free of any statutory preemptive rights.
3. MergerCo has the corporate power and authority to execute,
deliver and perform the terms and provisions of the Agreement and the New
Stockholders' Agreement and any other agreement or document made pursuant
thereto and they have taken or caused to be taken all necessary corporate action
to authorize the same.
4. Each Transaction Document to which MergerCo is a party has been
duly executed and delivered by MergerCo.
5. Neither the execution and delivery by MergerCo of the Transaction
Documents, nor the performance by it of its obligations thereunder, violates any
provision of the Certificate of Incorporation or Bylaws of MergerCo, or, to our
knowledge, any agreement or other arrangement to which MergerCo is a party or by
which its properties is bound.
6. The Merger has been consummated and according to the records of
Holdings ____ shares of Common Stock are held by the Trustee, which shares are
duly authorized, validly issued and fully paid and non-assessable. The other
shares held of record of Holdings are, to our knowledge, as set forth in the
Agreement.
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