SHARE PURCHASE AGREEMENT
EXHIBIT 1
EXECUTION COPY
SHARE PURCHASE AGREEMENT (the “Agreement”), dated as of June 17, 2009 by and among The Xxxxxxx
X. Xxxxxx Family Limited Partnership, a Nevada limited partnership (the “Family LP”), Xxxxxxx X.
Xxxxxx, Xxxxx X. Xxxxxx, and Xxxxx Xxxxxx (each such person and the Family LP, a “Seller” and
together the “Sellers”), and Harbinger Capital Partners Master Fund I, Ltd., Global Opportunities
Breakaway Ltd. and Harbinger Capital Partners Special Situations Fund, L.P. (each, an “Investor”
and together the “Investors”).
RECITALS:
The Sellers own the number of shares of common stock, par value $0.01 per share (“Company
Shares”), of Xxxxxx Corporation, a Nevada corporation (the “Company”) set forth on Schedule I,
which shares constitute approximately 51.300% of the issued and outstanding Company Shares.
The Sellers own the number of shares of common stock, par value $0.01 per share (“Xxx.xxx
Shares”), of Xxx.xxx Corporation, a Nevada corporation (“Xxx.xxx”) set forth on Schedule I, which
shares constitute approximately 1.5% of the issued and outstanding Xxx.xxx Shares.
The Investors desire to purchase, and the Sellers desire to sell, upon the terms and
conditions set forth herein, all of the Company Shares and all of the Xxx.Xxx Shares owned by the
Sellers.
NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, and
intending to be legally bound, the parties hereto agree as follows:
ARTICLE 1
PURCHASE AND SALE OF SHARES
PURCHASE AND SALE OF SHARES
Section 1.1 Purchase and Sale of Shares. Subject to the satisfaction of the
conditions set forth in Sections 5.1 and 5.2 (or the waiver thereof by the party entitled to waive
that condition), the Sellers shall sell to the Investors, and the Investors shall purchase from the
Sellers on the Closing Date (as defined below), the Company Shares and the Xxx.xxx Shares set forth
opposite each Seller’s name on Schedule I (the “Closing”).
Section 1.2 Purchase Price. The purchase price for the Company Shares shall be $7.50
per Company Share and the purchase price for the all of the Xxx.xxx Shares shall be $2.00 in the
aggregate (the “Purchase Price”). At the Closing, each Investor shall pay the portion of the
Purchase Price set forth opposite such Investor’s name on Schedule II and immediately following the
Closing shall be the owner and holder of record of the number of Company Shares and Xxx.xxx Shares
set forth opposite each Investor’s name on Schedule II.
Section 1.3 Form of Payment. At the Closing, in exchange for the Company Shares and
Xxx.xxx Shares set forth on Schedule I, each Investor shall pay the portion of the Purchase Price
opposite its name on Schedule II to the Sellers in the amount set forth opposite each Seller’s name
on Schedule I by wire transfer of immediately available funds into the account or accounts
designated on Schedule I.
ARTICLE 2
CLOSING
CLOSING
Section 2.1 Closing Date. The date and time of the Closing (the “Closing Date”) shall
be 10:00 a.m., New York City Time, at the offices of Xxxx Xxxxxxx LLP, 000 Xxxx Xxxxxx, Xxx Xxxx,
XX 00000 (or at such other time or place as the parties may designate in writing) on that date that
is two business days following the satisfaction or waiver of each condition to the Closing set
forth in Sections 5.1 and 5.2 (other than those conditions that may be satisfied only by a delivery at or action to
be taken at the Closing).
Section 2.2 Items To Be Delivered by the Sellers. At the Closing, and subject to the
terms and conditions contained herein, the Sellers shall deliver (i) to the Investors one or more
share certificates representing the Company Shares and Xxx.xxx Shares to be purchased and sold
hereunder, which are held in certificated form, in each case accompanied by a duly endorsed stock
power in blank or other appropriate instrument of transfer (duly endorsed and otherwise in form
sufficient for transfer and reasonably satisfactory to each Investor) and (ii) cause to be issued
to the Investors confirmation of book entry transfer of such Company Shares and Xxx.xxx Shares as
are held for any Seller’s benefit in a Depository Trust Company account into such Depository Trust
Company as may be designated by the Investors, as well as deliver each of the other items described
in Section 5.1.
Section 2.3 Items to be Delivered by the Investors. At the Closing, and subject to
the terms and conditions contained herein, each Investor shall deliver to the Sellers the Purchase
Price set forth opposite such Investor’s name on Schedule II, and each of the other items described
in Section 5.2.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Family LP hereby represents and warrants to the Investors, and each Seller, individually as to
itself and not jointly, hereby represents and warrants to the Investors, each as of the date hereof
and the Closing Date, as follows:
Section 3.1 Ownership of Company Shares and Xxx.xxx Shares. Each Seller is the sole
record and beneficial owner of, and has marketable valid title to the Company Shares and Xxx.xxx
Shares set forth opposite such Seller’s name on Schedule I and all such Company Shares and Xxx.xxx
Shares are held free and clear of any and all claims, liens, security interests and other
encumbrances of any nature and free and clear of any claim by any person to or against such shares
(together, “Encumbrances”), other than the Encumbrance of the Shareholders’ Agreement dated as of
May 30, 1997 (as amended, the “Shareholders’ Agreement”), by Xxxxxxx X. Xxxxxx and Family LP in
favor of the Company. A true and complete copy of the Shareholders’ Agreement has been made
available to the Investors. The Company Shares and Xxx.xxx Shares constitute all of the shares of
capital stock of the Company and Xxx.xxx owned by any Seller. After giving effect to the
transactions contemplated hereunder, no Seller has any options, warrants or other rights to acquire
any capital stock of either the Company or Xxx.xxx. Each Seller has, and as of the Closing, shall
have, the full right, power and authority to sell, assign, transfer and convey the Company Shares
and Xxx.xxx Shares to the Investors as provided herein. As of the Closing, each Seller shall
transfer all of its right, title and interest in and to the Company Shares and Xxx.xxx Shares to
the Investors free and clear of any Encumbrance.
Section 3.2 Authorization, Validity and Enforceability. This Agreement and the
transactions of the Sellers contemplated hereby have been duly authorized by each Seller. This
Agreement has been duly executed and delivered by each Seller and constitutes the valid and binding
obligation of each Seller, enforceable against each Seller in accordance with its terms except to
the extent that its enforceability may be subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of creditors’ rights
generally and by general equitable principles. The execution, delivery and performance of this
Agreement by the Sellers will not violate or result in a default under any provision of any
commitment, agreement or instrument to which any Seller is a party or by which any Seller is bound
and will not contravene any law (including common law), rule or regulation of any administrative
agency or governmental or regulatory body (“Governmental Authority”), or any order, writ,
injunction or decree of any court or Governmental Authority applicable to any Seller.
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Section 3.3 Litigation; Approvals. There are no proceedings pending or, to the
knowledge of any Seller, threatened, and there is no order, writ, judgment or decree affecting any
Seller which, if adversely determined, would reasonably be expected to have a material adverse
effect on the transactions contemplated hereby. No approval by or filing with any Governmental
Authority or other
person is required for any Seller to enter into or perform this Agreement, except for such as
have been received or made and except for any filings under Schedule 13D or Section 16 under the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), as Sellers may be required to
make in connection with this Agreement and the transactions contemplated hereby. The foregoing
notwithstanding, the Investors acknowledge that the Sellers and Investors have jointly determined
that the transactions contemplated hereby do not require that any party make filings under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the “HSR Act”), and Sellers make
no representation or warranty with respect to the applicability of the HSR Act.
Section 3.4 Capitalization. Based solely on the Lists of Shareholders from the
Company’s and Xxx.xxx’s respective transfer agents, dated as of the date hereof, a copies of which
are annexed hereto as Schedule 3.4, the Sellers own approximately 51.300% of the issued and
outstanding Company Shares and approximately 1.5% of the issued and outstanding Xxx.xxx Shares.
Since March 31, 2009, there has been no change to the Company’s or its subsidiaries’ authorized
capital stock and no capital stock or rights exchangeable or convertible into, or rights to acquire
any, shares of capital stock of the Company or its subsidiaries have been issued.
Section 3.5 Exchange Act Documents. To the actual knowledge of the Sellers, as of
their respective dates, none of the Company’s and Xxx.xxx’s Annual Reports on Form 10-K for the
fiscal year ended December 31, 2008, the Company’s and Xxx.xxx’s Quarterly Report on Form 10-Q for
the quarterly period ended March 31, 2009, the Company’s Proxy Statement on Schedule 14A for the
Annual Meeting of Stockholders dated April 14, 2009 and Xxx.xxx’s Information Statement on Schedule
14C for the Annual Meeting of Stockholders dated April 14, 2009, and the Company’s and Xxx.xxx’s
Current Reports on Form 8-K, since January 1, 2009 (collectively, the “Exchange Act Documents”), at
the time they were filed with the SEC, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not misleading.
Section 3.6 No Intermediary; No Payments to Sellers. (a) Other than pursuant to the
letter agreement, dated June 17, 2009 (the “Jefferies Engagement Letter”), among Family LP, an
affiliate of the Investors and Xxxxxxxxx & Company, Inc. or one of its designated affiliates, there
is no investment banker, broker, finder or other intermediary who might be entitled to any fee or
commission upon consummation of the transactions contemplated hereby based upon arrangements made
by or on behalf of any Seller, the Company or Xxx.xxx. Any such fee or commission (other than
those required to be paid by the Investors in accordance with the Jefferies Engagement Letter),
shall be the sole responsibility of the Sellers and shall be paid in full by the Sellers.
(b) Other than (i) the Purchase Price, (ii) compensation in the ordinary course consistent
with past practice for services rendered through the effective date of said termination and/or
resignation, and (iii) other benefits that have accrued to Sellers in the ordinary course
consistent with past practice under the Xxxxxx Corporation Pension Plan and the 401(k) Plan and
which are described on Schedule 3.6(b), no Seller, no immediate family member, affiliate or
associate (as each such term is defined in the Exchange Act) of any Seller is entitled to any
payment whether for severance, defined benefit, change of control payment or otherwise, arising
from or relating to the purchase and sale of the Company Shares and Xxx.xxx Shares or the
resignation by such Seller or other person as a director, officer or other capacity of the Company
or Xxx.xxx.
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ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF INVESTORS
REPRESENTATIONS AND WARRANTIES OF INVESTORS
Each Investor, individually as to itself and not jointly, represents and warrants to Sellers
as of the date hereof and the Closing Date as follows:
Section 4.1 Validity and Enforceability. This Agreement and the transactions of the
Investors contemplated hereby have been duly authorized by each Investor. This Agreement has been
duly executed and delivered by each Investor and constitutes the valid and binding obligation of
each Investor,
enforceable in accordance with its terms, and the execution, delivery and performance of this
Agreement by such Investor will not violate or result in a default under any provisions of any
commitment, agreement or instrument to which such Investor is a party or by which such Investor is
bound, and will not contravene any law (including common law), rule or regulation of any
Governmental Authority or any order, writ, injunction or decree of any court or governmental
Authority applicable to such Investor.
Section 4.2 Litigation; Approvals. There are no proceedings pending or threatened,
and there is no order, writ, judgment or decree affecting such Investor, which, if adversely
determined, would have a material adverse effect on the transactions contemplated hereby. No
approval by or filing with any Governmental Authority or other party is required for such Investor
to enter into or perform this Agreement, except for such as have been received or made and except
for any filing on Schedule 13D or Section 16 under the Exchange Act as the Investors may be
required to make in connection with the transactions contemplated hereby. The foregoing
notwithstanding, the Sellers acknowledge that the Sellers and Investors have jointly determined
that the transactions contemplated hereby do not require that any party make filings under the HSR
Act, and Investors make no representation or warranty with respect to the applicability of the HSR
Act.
Section 4.3 Certain Securities Law Matters. Each Investor is an “accredited investor”
as defined in Rule 501(a) of Regulation D promulgated pursuant to the Securities Act. Each
Investor has substantial experience in evaluating and investing in securities in companies similar
to the Company and Xxx.xxx so that such Investor is capable of evaluating the merits and risks of
such Investor’s investment in the Company and Xxx.xxx and has the capacity to protect such
Investor’s own interests. Each Investor is acquiring the Company Shares and Xxx.xxx Shares being
purchased by such Investor for investment for such Investor’s own account and not with the view to
any public distribution thereof or with any intention of disposing thereof in a manner that would
violate the registration requirements of the Securities Act; provided, however,
that by making the representations herein, no Investor is required to hold any of the Company
Shares and Xxx.xxx Shares being purchased by it for any minimum or other specific term and reserves
the right to dispose of the Company Shares and Xxx.xxx Shares being purchased by it at any time in
accordance with or pursuant to a registration statement or an exemption under the Securities Act.
Each Investor understands that the offer and sale of the Company Shares and Xxx.xxx Shares have not
been, and will not be, registered under applicable Federal or state securities laws.
Section 4.4 No Reliance. Each Investor acknowledges and agrees that, in negotiating
and entering into this Agreement, (i) it has not relied on any representations made by the Sellers,
the Company, Xxx.xxx, or any director, officer, employee, investment banker, legal counsel or other
representative or agent thereof other than those of the Sellers expressly set forth herein, (ii) it
has been afforded the opportunity to do a due diligence review of the business and affairs of the
Company and Xxx.xxx, including to ask such questions of the Company and Xxx.xxx, as it deems
appropriate and material to the transactions contemplated hereby and that its requests for
information and questions have been addressed to its satisfaction, and (iii) it has not relied on
the Sellers, the Company, Xxx.xxx or any director, officer, employee, investment banker, legal
counsel or other representative or agent thereof with respect to the sufficiency of its due
diligence or the information provided to it and has relied on its own expertise and judgment in
deciding the sufficiency thereof. The Investors understand and acknowledge that the Sellers have
received material non-public information regarding the Company, Company Shares, Xxx.xxx and Xxx.xxx
Shares. Each Investor hereby represents and warrants that it is financially sophisticated with
respect to the Company, Company Shares, Xxx.xxx and Xxx.xxx Shares; it is capable of evaluating the
risks associated with a transaction involving the Company, Company Shares, Xxx.xxx and Xxx.xxx
Shares, including the risk of transacting on the basis of information that may be materially
different from the information available to the Sellers, and that it is capable of sustaining any
loss that may result from engaging in such a transaction on such basis without material injury. In
light of the foregoing, each Investor hereby waives any and all claims (including, without
limitation, any and all claims under any applicable securities law) it may have or may hereafter
acquire against the Sellers relating to any failure by the Sellers to disclose to the Investors in
connection with the Investors’ purchase of the Company Shares and Xxx.xxx Shares pursuant hereto
any information which may be considered
to be material non-public information in respect of the Company, Company Shares, Xxx.xxx and
Xxx.xxx Shares.
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Section 4.5 No Intermediary. Other than pursuant to the Jefferies Engagement Letter,
there is no investment banker, broker, finder or other intermediary who might be entitled to any
fee or commission upon consummation of the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of any Investor.
ARTICLE 5
CONDITIONS TO CLOSING
CONDITIONS TO CLOSING
Section 5.1 Investors’ Conditions. The obligation of the Investors hereunder to
purchase the Company Shares and Xxx.xxx Shares at the Closing is subject to the satisfaction, at or
before the Closing Date, of the following conditions, provided that these conditions are for the
Investors’ sole benefit and may be waived by the Investors at any time in their sole discretion by
providing the Sellers with prior written notice thereof:
5.1.1 Representations and Warranties. Except as otherwise contemplated or
permitted hereby, (a) the representations and warranties of the Sellers contained in this
Agreement or in any certificate or document to be delivered to the Investors pursuant hereto
shall be deemed to have been made again at and as of the Closing Date and shall be true and
correct in all material respects as of such date, and (b) each of the Sellers shall have
performed and complied in all material respects with all agreements and conditions required
by this Agreement to be performed or complied with by the Sellers prior to or on the Closing
Date, including but not limited to the requirements of each Seller to deliver all of the
Company Shares and Xxx.xxx Shares set forth on Schedule I to the Investors.
5.1.2 No Actions. No action, suit or proceeding by any court or Governmental
Authority shall be pending, no investigation by any Governmental Authority shall have been
commenced and no action, suit or proceeding by any Governmental Authority shall have been
threatened against any of the Investors, the Sellers, the Company or Xxx.xxx or any of their
respective principals, trustees, officers or directors seeking to restrain, prevent or
change the transactions contemplated hereby or questioning the legality or validity of any
such transactions or seeking damages in connection with any such transactions.
5.1.3 Consents. All consents, approvals and authorizations of Governmental
Authority and all filings with and notifications of Governmental Authority or other entities
which regulate the business of the Company and Xxx.xxx necessary to the execution and
delivery of this Agreement and the consummation of the transactions contemplated hereby
shall have been obtained or effected.
5.1.4 No Material Adverse Change. There shall have been no material adverse
change since the date hereof in the business, assets, financial condition, results of
operations or prospects of the Company or Xxx.xxx, including that nothing has occurred
(other than the transactions contemplated hereunder) since the date of Company’s and
Xxx.xxx’s most recent Exchange Act Documents that would be required to be disclosed in such
Exchange Act Documents and no agreement entered into (other than this Agreement) that would
be required to be filed as an exhibit to any Exchange Act Documents.
5.1.5 Election of Directors; Resignations. Xxxxxx X. Xxxxxxx and Xxxxxxx X.
Xxxxx shall have been elected as members of the Board of Directors of the Company (as Class
II directors). The number of members of the boards of directors of the Company and Xxx.xxx
shall remain at seven and one, respectively. The resignations of Xxxxx X. Xxxxxx, Xxxxxx X.
Xxxxxx, Xxxxxx X. Xxxxxx and Xxxxx X. Xxxxxx contemplated by Section 6.3 shall have
occurred.
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5.1.6 Capitalization. Sellers shall have delivered to the Investors a record
list of shareholders, prepared by the transfer agent of the Company and dated as of the date
of Closing (the “Shareholder List”), which Shareholder List confirms that the Company Shares
and Xxx.xxx Shares set forth on Schedule I represent the same percentage of issued and
outstanding Company Shares (subject only to the exercise of options by persons other than
the Sellers) on the Closing Date as such shares represent on the date hereof. Since March
31, 2009, there shall have been no change to the Company’s or its subsidiaries’ authorized
capital stock and no capital stock or rights exchangeable or convertible into, or rights to
acquire any, shares of capital stock of the Company or its subsidiaries shall have been
issued.
5.1.7 Sale of Shares Held by Other Xxxxxx Family Members. The persons listed
on Schedule III shall have entered into one or more binding agreements with the Investors,
in form and substance reasonably acceptable to each party thereto, providing for the sale of
the Company Shares set forth on Schedule III at a price per Company Share equal to the
Purchase Price which purchase and sale shall occur concurrently with the Closing.
Section 5.2 Sellers’ Conditions. The obligation of the Sellers hereunder to sell to
the Investors the Company Shares and Xxx.xxx Shares at the Closing is subject to the satisfaction,
at or before the Closing Date, of each of the following conditions, provided that these conditions
are for the Sellers’ sole benefit and may be waived by the Sellers at any time in their sole
discretion by providing the Investors with prior written notice thereof:
5.2.1 Representations and Warranties. Except as otherwise contemplated or
permitted hereby, (a) the representations and warranties of each of the Investors contained
in this Agreement or in any certificate or document to be delivered to the Sellers by each
of the Investors pursuant hereto shall be deemed to have been made again at and as of the
Closing Date and shall be true and correct in all material respects as of such date,
(b) each of the Investors shall have performed and complied in all material respects with
all agreements and conditions required by this Agreement to be performed or complied with by
the Investors prior to or on the Closing Date, and (c) the Purchase Price shall have been
delivered to the Sellers.
5.2.2 No Actions. No action, suit or proceeding by any court or governmental
Authority shall be pending, no investigation by any Governmental Authority shall have been
commenced and no action, suit or proceeding by any Governmental Authority shall have been
threatened against the Sellers, the Company, Xxx.xxx or the Investors or any of their
respective general partners, principals, trustees, officers or directors seeking to
restrain, prevent or change the transactions contemplated hereby or questioning the legality
or validity of any such transactions or seeking damages in connection with any such
transactions.
5.2.3 Consents. All consents, approvals and authorizations of Governmental
Authorities and all filings with and notifications of Governmental Authorities or other
entities which regulate the businesses of the Company and Xxx.xxx necessary to the execution
and delivery of this Agreement and the consummation of the transactions contemplated hereby
shall have been obtained or effected.
ARTICLE 6
COVENANTS
COVENANTS
Section 6.1 Efforts. Between the date of this Agreement and the Closing Date, Family
LP will, and will cause Sellers to, and the Investors will use their respective reasonable best
efforts to cause the conditions in Section 5.1 and 5.2, respectively, to be satisfied, including
but not limited to causing the election to the boards of directors of the nominees of the Investors
named in Section 5.1.5 as promptly as practicable.
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Section 6.2 Proxies. Each Seller hereby grants to Harbinger Capital Partners LLC (the
“Investor Representative”) a proxy to vote all Company Shares and Xxx.xxx Shares owned by each
Seller for the election of three (3) individuals to the Board of Directors of the Company, one
of whom shall be Xxxxx X. Xxxxxx and two (2) of whom shall be as directed by the Investor
Representative. Each Seller agrees that this proxy shall be irrevocable during the term of this
Agreement and is coupled with an interest. Each Seller will take such further action or execute
such other instruments as may be necessary to effectuate the intent of this proxy and no Seller
shall take any action which is inconsistent with the proxy granted hereby. Each Seller hereby
revokes any proxy previously granted by such Seller with respect to any Company Shares or Xxx.xxx
Shares.
Section 6.3 Resignations. Concurrently with the Closing, the Sellers shall use their
best efforts to cause each of Xxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx and Xxxxx X.
Xxxxxx and each Seller and every person who is an immediate family member of a Seller or who is an
affiliate or associate of a Seller who is an officer or director of the Company or Xxx.xxx shall
have resigned from each position held by such person without any continuing benefits (other than
compensation for services rendered through the effective date of said resignation and benefits that
have accrued under the Xxxxxx Corporation Pension Plan and the Company’s 401(k) Plan), severance
obligations or other similar obligations or liabilities of the Company or Xxx.xxx. Notwithstanding
the foregoing, all options to purchase Company Shares or Xxx.xxx Shares held by any such person
(other than Xxxxx Xxxxxx, who shall terminate his options, if any, in the Company and Xxx.xxx
without cost) shall remain outstanding.
Section 6.4 Transfer Restrictions. Each Seller agrees not to (a) sell, transfer,
pledge, encumber, assign or otherwise dispose of or hypothecate (including by gift or by
contribution or distribution to any trust or similar instrument (collectively, “Transfer”), or
enter into any contract, option or other arrangement or understanding (including any profit-sharing
arrangement) with respect to the Transfer of any of such Seller’s Company Shares or Xxx.xxx Shares
other than pursuant to the terms hereof, (b) enter into any voting arrangement or understanding
with respect to such Seller’s Company Shares or Xxx.xxx Shares (other than this Agreement), whether
by proxy, voting agreement or otherwise, or (c) take any action that could make any of its
representations or warranties contained herein untrue or incorrect in any material respect or would
have the effect of preventing, delaying or disabling such Seller from performing any of its
obligations hereunder.
Section 6.5 Additional Documents. The parties hereto will, at any time after the date
hereof, sign, execute and deliver, or cause others so to do, all such powers of attorney, deeds,
assignments, documents and instruments (in form and substance reasonably acceptable to the parties
hereto), and do or cause to be done all such other acts and deeds as may be necessary or proper to
carry out the transactions contemplated by this Agreement.
Section 6.6 Covenants.
(a) From the date hereof until the Closing, the Sellers shall not, and shall cause the Company
not to, (i) operate or take any action (corporate or otherwise) of the Company or its subsidiaries
outside the ordinary course of business; (ii) declare, pay or set aside funds for the payment of
any dividends or any other distribution or payment in respect of the capital stock of the Company
and its subsidiaries; (iii) change the Company’s or its subsidiaries’ authorized capital stock or
issue any capital stock or rights exchangeable or convertible into, or rights to acquire any,
shares of capital stock of the Company or its subsidiaries; (iv) amend the Articles of
Incorporation or bylaws of the Company or its subsidiaries; (v) grant any registration rights of
the Company or its subsidiaries; (vi) purchase, redeem, retire or otherwise acquire any shares of
any capital stock of the Company or its subsidiaries; (vii) enter into or amend the terms of any
transactions between the Company or any of its subsidiaries and any immediate family member,
affiliate or associate of the Sellers; (viii) sell, lease, or otherwise dispose of any asset or
property of the Company or its subsidiaries; or (ix) enter into any loan, mortgage or pledge, or
impose any lien or other encumbrance on any asset or property of any Company or its subsidiaries or
(x) enter into any agreement or commitment to do any of the foregoing. Without limiting the
foregoing, from the date hereof until Closing, no Seller shall (1) vote on or consent to any matter
in his or its capacity as a stockholder of the Company or Xxx.xxx except as specifically
contemplated by Section 6.2, or (2) take any action as a member of the board of directors of the
Company or Xxx.xxx other thanan action (x) that will not result in a failure of any condition set
forth in Section 5.1 of this Agreement and (y) such Seller is
advised by counsel he or she must take such action or be in breach of his or her fiduciary
duty as a director.
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(b) Within two business days of the date hereof, Sellers shall make such filings as are
required of them under the Exchange Act, including but not limited to making amendments to the
filings on Schedule 13D and under Section 16 of the Exchange Act of each Seller, in each case,
describing the terms and conditions of this Agreement required thereby or otherwise necessary to
permit the Company to prepare and mail its proxy materials as contemplated below. Sellers shall
cause the Company to (i) reconvene its adjourned meeting of shareholders, and (ii) prepare and mail
a notice of meeting and revised proxy materials, in each case, in a manner that provides for the
election of directors of the Company as contemplated by this Agreement. The Sellers shall use
their best efforts to cause the Company to (x) take such actions as promptly as practicable and, in
any event, to cause the Company to mail such notice of meeting and proxy materials within four
business days of the date hereof and (y) hold such meeting of shareholders within ten business days
following such mailing. The Sellers shall provide the Investor Representative a reasonable
opportunity to review and comment on the amendments to its filings on Schedule 13D and under
Section 16 prior to the filing thereof and shall endeavor to give the Investor Representative an
opportunity to review and comment on the Company’s proxy materials described above. The Sellers
shall reasonably consider revising such documents to incorporate the comments of the Investor
Representative.
ARTICLE 7
MISCELLANEOUS
MISCELLANEOUS
Section 7.1 Survival of Agreements. All the representations, warranties and covenants
made herein shall survive the execution and delivery of this Agreement and the sale and delivery of
the Company Shares and Xxx.xxx Shares pursuant hereto; provided, however, that the representation
and warranty set forth in Section 3.5 shall only survive for a period of 120 days from and after
the Closing Date.
Section 7.2 Expenses. Each party hereto shall pay its own expenses in connection with
the transactions contemplated hereby and the expenses of Jefferies & Company, Inc. shall be paid
pursuant to the Jefferies Engagement Letter.
Section 7.3 Notices. All notices, requests, consents, or other communication
hereunder shall be in writing and shall be delivered personally or reputable overnight courier, in
the case of the Investors, to c/o Harbinger Capital Partners LLC, 000 Xxxxxxx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, XX 00000, Attention: General Counsel, with a copy to Xxxx Xxxxxxx LLP, 000 Xxxx Xxxxxx,
Xxx Xxxx, XX 00000, Attention: Xxxx Xxxx Xxxxxx and Xxxxx Xxxxxx, and, in the case of the Sellers,
to c/o Xxxxxxx X. Xxxxxx Family Limited Partnership, 0 Xxxxxx Xxxx, Xxxx Xxxxx, XX 00000,
Attention: Xxxxx X. Xxxxxx, with a copy to Xxxxxx Beach PLLC, 00 Xxxxxxx Xxxx, Xxxxxxxxx, XX
00000, Attention: Xxxxxx X. Xxxxxxx and Xxxxxxx X. Xxxxxx.
Section 7.4 Captions and Section Headings. As used herein, captions and section
headings are for convenience only and are not a part of this Agreement and shall not be used in
construing it.
Section 7.5 Entire Agreement. This Agreement and the other documents delivered
pursuant hereto and thereto, or incorporated by reference herein, contain the entire agreement
between the parties hereto concerning the transactions contemplated herein and supersede all prior
agreements or understandings between the parties hereto relating to the subject matter hereof.
8
Section 7.6 Termination; Amendment. This Agreement may be specifically enforced by
either party if such party is not in material breach of this Agreement. This Agreement may be
terminated at any time after December 16, 2009 by either party (acting through the Investor
Representative or the Family LP, as applicable), by notice given to the other party, if the Closing
has not occurred by December 16, 2009 unless failure to close is by reason of the breach of this
Agreement by the party seeking to
terminate, and upon such termination neither the Investors nor the Sellers shall have any
obligation or liability hereunder (except for damages arising out of any such breach). This
Agreement may be amended, supplemented or interpreted at any time, but only by a written agreement
executed by the parties hereto. For purposes of this Section 7.6, the “parties” shall mean the
Investors (individually and together), on the one hand, and the Sellers (individually and together)
on the other.
Section 7.7 Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which together shall constitute one and the same
instrument.
Section 7.8 Severability. If any one or more of the provisions of this Agreement
shall be held to be invalid, illegal or unenforceable, the validity, legality or enforceability of
the remaining provisions of this Agreement shall not be affected thereby. To the extent permitted
by applicable law, each party waives any provision of law which renders any provision of this
Agreement invalid, illegal or unenforceable in any respect.
Section 7.9 Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns. No assignment of this
Agreement or of any rights or obligations hereunder may be made by either the Sellers or the
Investors, directly or indirectly (by operation of law or otherwise), without the prior written
consent of the other parties hereto, except that any Investor may assign its rights but not its
obligations to an affiliate thereof.
Section 7.10 Governing Law. This Agreement, and all matters arising directly or
indirectly hereunder, shall be governed by the laws of the State of New York. Each party hereby
irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the
State of New York, for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees
not to assert in any suit, action or proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient
forum or that the venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof to such party at the address for such notices
to it under this Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed to limit in any
way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY
DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT.
[Signature Pages Follow]
9
IN WITNESS WHEREOF, the Investors and the Sellers have duly executed this Share Purchase
Agreement as of the date first written above.
| SELLERS: | ||||
| The Xxxxxxx X. Xxxxxx Family Limited Partnership | ||||
| Xxxxxxx X Xxxxxx G.P. Inc. | ||||
| By: Xxxxx Xxxxxx, President | ||||
| /s/ Xxxxx Xxxxxx | ||||
| Xxxxx Xxxxxx | ||||
| /s/ Xxxxx Xxxxxx as Power of Attorney for Xxxxxxx X. Xxxxxx | ||||
| Xxxxxxx X. Xxxxxx | ||||
| /s/ Xxxxx X. Xxxxxx | ||||
| Xxxxx X. Xxxxxx | ||||
| /s/ Xxxxx Xxxxxx | ||||
| Xxxxx Xxxxxx | ||||
[Signature Page to Share Purchase Agreement]
S-1
| INVESTORS: | ||||||||
| HARBINGER CAPITAL PARTNERS MASTER FUND I, LTD. By: Harbinger Capital Partners LLC, its investment manager |
||||||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||||||
| Name: | Xxxxxx X. Xxxxxxx | |||||||
| Title: | Senior Managing Director | |||||||
| HARBINGER CAPITAL PARTNERS SPECIAL SITUATIONS FUND, L.P. | ||||||||
| By: Harbinger Capital Partners Special Situations GP, LLC, its general partner |
||||||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||||||
| Name: | Xxxxxx X. Xxxxxxx | |||||||
| Title: | Senior Managing Director | |||||||
| GLOBAL OPPORTUNITIES BREAKAWAY LTD. | ||||||||
| By: Global Opportunities Breakaway Management, L.P., its investment manager |
||||||||
| By: | /s/ Xxxxxx X. Xxxxxxx | |||||||
| Name: | Xxxxxx X. Xxxxxxx | |||||||
| Title: | Senior Managing Director | |||||||
[Signature Page to Share Purchase Agreement]
S-2
SCHEDULE I
SELLERS, SHARE OWNERSHIP,
ALLOCATION OF PROCEEDS AND ACCOUNT INFORMATION
ALLOCATION OF PROCEEDS AND ACCOUNT INFORMATION
| Allocation of | ||||||||||||||||||||||||
| Number of | Allocation of | Number of | Proceeds of | |||||||||||||||||||||
| Company | Proceeds of | Xxx.xxx | Xxx.xxx | Total Allocation | Account | |||||||||||||||||||
| Name of Seller | Shares | Company Shares | Shares | Shares | of Proceeds | Information | ||||||||||||||||||
The Xxxxxxx X. Xxxxxx Family Limited Partnership |
9,813,112 | $ | 73,598,340.00 | 707,907 | $ | 1.00 | $ | 73,598,341.00 | ||||||||||||||||
Xxxxx Xxxxxx |
6,400 | $ | 48,000.00 | 0 | $ | 0 | $ | 48,000.00 | ||||||||||||||||
Xxxxxxx Xxxxxx |
28,052 | $ | 210,390.00 | 0 | $ | 0 | $ | 210,390.00 | ||||||||||||||||
Xxxxx Xxxxxx |
41,120 | $ | 308,400.00 | 50,000 | $ | 1.00 | $ | 308,401.00 | ||||||||||||||||
Total |
9,888,684 | $ | 74,165,130.00 | 757,907 | $ | 2.00 | $ | 74,165,132.00 | ||||||||||||||||
SCHEDULE II
INVESTORS, PURCHASED SHARES AND
ALLOCATION OF PURCHASE PRICE
ALLOCATION OF PURCHASE PRICE
| Number of | Purchase Price | Number of | Purchase Price | |||||||||||||||||
| Company | of Company | Xxx.xxx | of Xxx.xxx | Total Purchase | ||||||||||||||||
| Name of Investor | Shares | Shares | Shares | Shares | Price | |||||||||||||||
Harbinger Capital Partners Master Fund I, Ltd. |
3,296,228 | $ | 24,721,710 | 252,636 | $ | 0.67 | $ | 24,721,710.67 | ||||||||||||
Harbinger Capital Partners Special Situations Fund, L.P. |
3,296,228 | $ | 24,721,710 | 252,636 | $ | 0.67 | $ | 24,721,710.67 | ||||||||||||
Global
Opportunities Breakaway Ltd. |
3,296,228 | $ | 24,721,710 | 252,635 | $ | 0.66 | $ | 24,721,710.66 | ||||||||||||
SCHEDULE III
SALE OF SHARES BY FAMILY MEMBERS
| Number of Company | ||||||||
| Name of Seller | Shares | Allocation of Proceeds of Company Shares | ||||||
Xxxxx Xxxxxx |
24,737 | $ | 185,527.50 | |||||
Xxxxxx Xxxxxx |
12,442 | $ | 93,315.00 | |||||
Xxxx Xxxxxx |
12,099 | $ | 90,742.50 | |||||
Schedule 3.6(b)
Xxxxx Xxxxxx has accumulated a benefit under the Xxxxxx Corporation Pension Plan. As of December
31, 2008, the present value of the accumulated benefit for Xx. Xxxxxx under the Xxxxxx Corporation
Pension Plan was $155,852.
