Exhibit 4.3
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is dated this 11th day of
December, 1996, by and between Xxxxx & Xxxxx Company, a Delaware corporation
(the "Company"), and Xxxx Xxxxxxx, Xxxxxxx X. Xxxxxxx and C. Xxxxxxx Xxxxxxx,
all of whom are residents of the State of Michigan (collectively, the
"Purchasers").
RECITAL:
The Company desires to sell to Xxxx Xxxxxxx, to Xxxxxxx X. Xxxxxxx and
to C. Xxxxxxx Xxxxxxx, 833,334, 833,333 and 833,333 shares, respectively, of the
Company's Common Stock, $0.01 par value per share (the "Purchased Shares"), for
a purchase price of $4.00 per Purchased Share, on the terms and subject to the
conditions set forth herein.
In consideration of the foregoing, the Purchasers and the Company agree as
follows:
I. PURCHASE OF PURCHASED SHARES
At the Closing (as described in Section V(A) of this Agreement), and
subject to the conditions set forth in Section V(B) and V(C) of this Agreement,
the Purchasers shall severally purchase the following number of Purchased Shares
from the Company: Xxxx Xxxxxxx - 833,334; Xxxxxxx X. Xxxxxxx - 833,333; and C.
Xxxxxxx Xxxxxxx 833,333; each at a purchase price of $4.00 per Purchased Share.
Such purchase price shall be paid by wire transfer in immediately available
funds to a bank account designated by the Company.
II. PURCHASER ACKNOWLEDGMENTS
A. Each Purchaser understands and acknowledges that: (i) no federal or
state agency has made any finding or determination as to the fairness of this
offering for investment, nor any recommendation or endorsement of the Purchased
Shares; (ii) the Purchased Shares have not been registered under the Securities
Act of 1933, as amended (the "Securities Act") or, any applicable state
securities laws, are being offered and sold to the Purchasers pursuant to an
exemption from such registration laws, and the Purchased Shares cannot be sold
by the Purchasers, or any of them, unless subsequently registered under the
Securities Act and such state laws or, in the opinion of counsel for the
Company, an exemption from such registration is available; (iii) except for the
Registration Rights Agreement described in Section V(B) below, such registration
under the Securities Act and such state laws is unlikely at any time in the
future; and (iv) except
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for the Registration Rights Agreement described in Section V(B) below, the
Company is not obligated to file a registration statement under the Securities
Act.
B. Each Purchaser (i) is acquiring the Purchased Shares for investment
for his own account and not with a view to distribution or resale, (ii) has not
subdivided the Purchased Shares with, nor is he holding all or any portion of
the Purchased Shares, for any other person, (iii) does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to the
Purchased Shares, (iv) agrees not to sell, hypothecate or otherwise dispose of
all or any of the Purchased Shares unless the Purchased Shares have been
registered under the Securities Act and applicable state securities laws or, in
the opinion of counsel for the Company, an exemption from the registration
requirements of the Securities Act and such state laws is available, and (v)
does not currently own any Common Stock of the Company.
C. The Company has made available to the Purchasers and/or their
professional advisers all documents that they have requested relating to an
investment in the Company and has provided satisfactory answers to all of their
questions concerning the business, management and financial affairs of the
Company, the offering and an investment in the Company. The Purchasers
understand that such discussions, as well as written information issued by the
Company, were intended to describe certain aspects of the Company's business and
prospects but were not a thorough or exhaustive description. The Purchasers
have visited, or have had the opportunity to visit, the Company's facilities.
D. Each Purchaser recognizes that an investment in the Company involves a
high degree of risk, and he has taken full cognizance of and understands all of
the risk factors related to an investment in the Purchased Shares. Each
Purchaser understands that he may lose his entire investment in the Purchased
Shares.
E. Each Purchaser understands and acknowledges that the Company is
relying on representations, warranties and agreements made by the Purchasers to
the Company herein and, thus, each Purchaser hereby agrees to indemnify and hold
each of the Company and the directors, officers, shareholders, affiliates,
agents, attorneys and employees of the Company harmless against any and all
loss, damage, liability or expense, including reasonable attorneys' fees, which
they or any of them may suffer, sustain or incur by reason of or in connection
with any misrepresentation or breach of warranty or agreement made by or default
of the Purchasers under this Stock Purchase Agreement, or in connection with the
sale or distribution by the Purchasers of the Purchased Shares.
F. Purchasers agree that, to the extent permitted by law, (i) the
obligations imposed on Purchasers and the Company in this Agreement are special,
unique and of an extraordinary character, and that in the event of a breach of
this Stock Purchase Agreement by Purchasers or the Company, damages alone would
not be an adequate
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remedy; and (ii) if Purchasers or the Company breach this contract, the non-
breaching party shall be entitled to specific performance and injunctive and
other equitable relief in addition to any other remedy to which it or he may be
entitled at law or in equity, without posting any bond.
G. Each Purchaser acknowledges that the Purchased Shares must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption from such registration is available. Each Purchaser is aware of
the provisions of Rule 144 promulgated under the Securities Act which permit
limited resale of shares purchased in a private placement without registration
under the Securities Act subject to the satisfaction of certain conditions,
including, among other things, the existence of a public market for the shares,
the availability of certain current public information about the Company, and
the resale occurring not less than two years after a party has purchased and
paid for the securities to be sold.
III. ACCREDITATION
A. Each Purchaser hereby acknowledges that he is an "accredited investor"
as that term is defined in Rule 501 promulgated pursuant to the Securities Act
in that such Purchaser is a natural person and either (i) his individual net
worth, or joint net worth with his spouse, exceeds $1,000,000, or (ii) he had
individual income in excess of $200,000 in each of the two most recent years or
joint income with his spouse in excess of $300,000 in each of those years and he
has a reasonable expectation of reaching the same income level in the current
year.
B. Each Purchaser further represents that (i) his overall commitment to
investments which are not readily marketable is not disproportionate to his net
worth, and his investment in the Purchased Shares will not cause such overall
commitment to become excessive; (ii) he has adequate net worth and means of
providing for his current needs and to sustain a complete loss of investment in
the Purchased Shares, and he has no need for liquidity in his investment in the
Purchased Shares; (iii) he has such knowledge and experience in financial and
business matters in general and in particular with respect to this type of
investment that he is capable of evaluating the merits and risks of an
investment in the Company; and (iv) he has evaluated and understands the risks
and terms of investment in the Purchased Shares.
C. The execution, delivery and performance by each Purchaser of this
Purchase Agreement will not result in any violation of and will not conflict
with, or result in a breach of any of the terms of or constitute a default
under, any provision of federal or state law to which such Purchaser is subject,
or any mortgage, indenture, agreement, instrument, judgment, decree, order, rule
or regulation or other restriction to which such Purchaser is a party or by
which he is bound.
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IV. COMPANY REPRESENTATIONS
The Company hereby represents and warrants to the Purchasers as of the date
hereof and as of the date of Closing as follows:
A. Corporate Organization and Authority. The Company:
(i) is a corporation duly organized, validly existing, authorized
to exercise all its corporate powers, rights and privileges, and in good
standing in the State of Delaware;
(ii) has all requisite corporate power and corporate authority to
own, lease and operate its properties and to carry on its business as now
conducted and possesses all business licenses, franchises, rights and privileges
material to the conduct of its business; and
(iii) is qualified as a foreign corporation and is in good standing
in all jurisdictions in which such qualification is required, except where the
failure to be so qualified or in good standing would not have a material adverse
effect on the Company and its subsidiaries taken as a whole.
B. Capitalization
(i) As of December 9, 1996, the authorized and outstanding capital
stock of the Company consists of:
(a) Preferred Stock. 1,000,000 shares of Preferred Stock
authorized, of which 8,894 shares of Series A Senior Preferred Stock are
outstanding, 128,266 shares of Series B Senior Preferred Stock are outstanding,
and 150,000 shares of Junior Convertible Preferred Stock are outstanding.
(b) Common Stock. 25,000,000 shares of Common Stock
authorized, of which 8,935,810 shares are issued and outstanding. All such
issued and outstanding shares of Common Stock have been duly and validly issued
(including, without limitation, issued in compliance with the applicable federal
and state securities laws), have been approved for listing on the New York Stock
Exchange and are fully paid and nonassessable.
(ii) Other Securities. In addition to the Common Stock, as of
December 9, 1996, the Company had outstanding warrants and options to purchase
3,165,909 shares of the Company's Common Stock. All such issued and outstanding
warrants and options have been duly and validly issued (including, without
limitation, issued in compliance with applicable federal and state securities
laws).
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(iii) Schedule IV B(iii) attached hereto contains a list of Company
benefit plans pursuant to which the Company may be obligated to issue Common
Stock or options to purchase Common Stock in the Company.
C. Authorization. All corporate action on the part of the Company, its
officers, directors and stockholders necessary for the authorization, execution,
delivery and performance of all obligations under this Agreement, and for the
issuance and delivery of the Purchased Shares has been taken, and this Agreement
constitutes a legally binding, valid obligation of the Company enforceable in
accordance with its terms.
D. Validity of the Securities. The Purchased Shares, when issued, sold
and delivered in accordance with the terms and for the consideration expressed
in this Agreement, shall be duly authorized and validly issued (including,
without limitation, issued in compliance with applicable federal and state
securities laws assuming the accuracy of the Purchasers' representations
herein), fully-paid, nonassessable, and neither the Company nor the holder
thereof shall be subject to any preemptive or similar right with respect
thereto.
E. No Conflict with other Instruments. The execution, delivery and
performance of this Agreement will not result in any violation of, be in
conflict with, or constitute a default under, with or without the passage of
time or the giving of notice: (i) any provision of the Company's certificate of
incorporation or by-laws; (ii) any provision of any judgment, decree or order to
which the Company is a party or by which it is bound; (iii) any lease,
instrument, contract, obligation or commitment to which the Company is a party
or by which it is bound; or (iv) any law, statute, rule or governmental
regulation applicable to the Company, except in the case of clauses (ii), (iii)
and (iv) for any such violation, conflict or default which would not,
individually or in the aggregate, have a material adverse effect on the Company
and its subsidiaries taken as a whole or prevent the Company from performing its
obligations under this Agreement in any material respect.
F. Securities Act. Subject to the accuracy of the Purchasers'
representations herein, the offer, sale and issuance of the Purchased Shares
constitute transactions exempt from the registration requirements of Section 5
of the Securities Act.
G. Registration Rights. Except for registration rights set forth in the
Registration Rights Agreement defined in Section V(B), at the Closing the
Company will be under no contractual obligation to register under the Securities
Act any of its presently outstanding securities.
V. CLOSING AND CONDITIONS TO CLOSING
A. The closing of the purchase and sale of the Purchased Shares shall
take place at the offices of Xxxxx & Xxxxx Company, 00000 X. Xxxxxxx Xxxx,
Xxxxxxxx, XX 00000, on December 11, 1996, at 10:00 a.m. or at such other place
and time as the
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Company and the Purchasers mutually agree (which date, time and place are
designated the "Closing"). At the Closing, the Purchasers, and each of them,
shall pay the purchase price as specified in Article I and the Company shall
thereafter promptly issue to the Purchasers certificates registered in the
Purchasers' respective names representing the Purchased Shares, which will
contain appropriate restrictive legends. From time to time following the
closing, the Company will remove such restrictive legends upon request of a
Purchaser; provided that the restrictions described in such legends are no
longer applicable and the Purchaser has provided the Company with an opinion of
counsel satisfactory to the Company that the conditions to the termination of
such restrictions have been met.
B. The Purchasers' obligation to purchase the Purchased Shares shall be
subject to the occurrence of the following at or prior to the Closing:
(i) Warburg, Xxxxxx Investors, L.P. ("Warburg"), Xxx X. Xxxxxxx
("Xxxxxxx"), The Purchasers and the Company shall have entered into the
Registration Rights Agreement dated December 11, 1996, attached hereto as
Exhibit A.
(ii) C. Xxxxxxx Xxxxxxx shall have been elected to the Board of
Directors of the Company (subject to his re-election by an annual vote of the
stockholders as early as May, 1997).
(iii) Xxxxxxx and Warburg shall have converted any and all of their
respective shares of Series A Senior Preferred Stock and Series B Senior
Preferred Stock into shares of Common Stock of the Company. The Company shall
have notified Warburg that it intends to acquire and cancel approximately
130,233 shares of Junior Preferred Stock of the Company held by Warburg, or its
assignee, and the Company or Warburg shall have requested The Prudential
Insurance Company of America ("Prudential") to convert its remaining 19,767
shares of Junior Preferred Stock into Common Stock pursuant to an agreement
between Warburg and Prudential dated October 21, 1996 whereby Prudential agreed
to convert its Junior Preferred Stock into Common Stock at such time as it is
notified that Warburg has converted its Senior Preferred Stock into Common
Stock.
(iv) The representations and warranties of the Company contained in
Article IV shall be true in all material respects on and as of the Closing with
the same effect as if made on and as of the Closing.
(v) The Company shall have complied with all state securities or
Blue Sky laws applicable to the offer and sale of the Purchased Shares to the
Purchasers.
(vi) All corporate and legal proceedings taken by the Company in
connection with the transactions contemplated by this Agreement and all
documents relating to such transactions shall be reasonably satisfactory to the
Purchasers and their counsel. The Company shall have delivered to the
Purchasers a certificate dated as of the
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Closing, signed by the Company's President, certifying that the conditions set
forth in Article V. B. (ii)-(viii) have been satisfied.
(vii) Each Purchaser shall have received the following:
(a) Copies of resolutions of the Board of Directors of the
Company, certified by the Secretary of the Company, authorizing and approving
the execution, delivery and performance of this Agreement and the other
documents and instruments to be delivered pursuant hereto; and
(b) Such additional supporting documentation and other
information with respect to the transactions contemplated hereby as the
Purchasers or their counsel may reasonably request.
(viii) Each Purchaser shall receive a copy of the opinions of counsel
for the Company, which are delivered to the New York Stock Exchange in
connection with this transaction, which Purchasers may rely on.
C. The Company's obligation to sell the Purchased Shares to the
Purchasers shall be subject to the occurrence of the following at or prior to
the Closing:
(i) The representations and warranties of the Purchasers contained
in this Agreement shall be true in all material respects on and as of the
Closing with the same effect as if made on and as of the Closing.
(ii) Purchasers shall have complied with all state securities or
Blue Sky laws applicable to the offer and sale of the Purchased Shares to the
Purchasers.
(iii) All individual and legal proceedings taken by the Purchasers in
connection with the transactions contemplated by this Agreement and all
documents relating to such transactions shall be reasonably satisfactory to the
Company and its counsel. The Purchasers shall have delivered to the Company a
certificate dated as of the Closing, certifying that the conditions set forth in
Article V. C. (i)-(iv) have been satisfied.
(iv) The Company shall have received such additional supporting
documentation and other information with respect to the transactions
contemplated hereby as the Company or its counsel may reasonably request.
(v) The Company shall have received from Houlihan, Lokey, Xxxxxx &
Zukin, customary solvency and fairness opinions, dated approximately the date of
this Agreement, in connection with the transactions among Hanauer, Warburg, the
Purchasers and the Company.
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VI. MISCELLANEOUS
A. The provisions of this Agreement shall survive the issuance of the
Purchased Shares and continue in full force and effect.
B. This Agreement shall be enforced, governed and construed in all
respects in accordance with the laws of the State of Delaware without regard to
its conflicts of laws provisions. This Agreement and the rights, powers and
duties set forth herein shall be binding upon the Purchasers, and each of them,
and their respective successors and assigns and shall inure to the benefit of
the Company, and its successors and assigns. In the event that any provision of
this Agreement is invalid or unenforceable under any applicable statute or rule
of law, then such provision shall be deemed inoperative to the extent that it
may conflict therewith and shall be deemed modified to conform with such statute
or rule of law. Any provision hereof which may prove invalid or unenforceable
under any law shall not affect the validity or enforceability of any other
provision hereof. The unsuccessful party in any dispute arising out of or
related to this Agreement shall pay the costs, expenses and reasonable
attorneys' fees of the successful party.
C. Neither the Company nor the Purchasers have engaged any brokers,
finders or agents, and neither party will incur, directly or indirectly, any
liability for brokerage or finders' fees or agents' commissions or any similar
charges in connection with this Agreement and the transactions contemplated
hereby.
D. After the conversion of Preferred Stock into Common Stock pursuant to
Section V(B) above, there would be one class of Company stock outstanding.
However, the Company preserves its right to issue, from time to time, in one or
more series, Preferred Stock or other equity securities of the Company pursuant
to its Restated Certification of Incorporation, as may be amended from time to
time.
E. Notices. All notices and other communications provided for herein
shall be in writing and shall be delivered by hand or overnight courier service
or by facsimile with electronic confirmation, as follows:
(a) If to the Company:
Xxxxx & Xxxxx Company
00000 X. Xxxxxxx Xxxx
Xxxxx 000
Xxxxxxxx, XX 00000
Attention: General Counsel
facsimile number: (000) 000-0000
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(b) If to the Purchasers:
c/o Kojaian Management Corporation
00000 Xxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000-0000
Attention: C. Xxxxxxx Xxxxxxx
facsimile number: (000) 000-0000
or to such other address or attention of such other person as either party shall
advise the other party in writing. All notices and other communications given
pursuant to this Agreement shall be deemed to have been given on the date of
receipt.
F. Following the Closing, the Company shall acquire and cancel
approximately 130,233 shares of Junior Preferred Stock of the Company held by
Warburg, or its assignee.
G. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but which together shall constitute one and
the same instrument.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement this
11 day of December, 1996.
/s/ Xxxx Xxxxxxx
---------------------------------
Xxxx Xxxxxxx
/s/ Xxxxxxx X. Xxxxxxx
--------------------------------- XXXXX & XXXXX COMPANY
Xxxxxxx X. Xxxxxxx
/s/ C. Xxxxxxx Xxxxxxx
--------------------------------- By: /s/ Xxxxxx X. Xxxxxx
C. Xxxxxxx Xxxxxxx ---------------------------
Name: Xxxxxx X. Xxxxxx
-------------------------
Title: Senior Vice President
and General Counsel
------------------------
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SCHEDULE IV B(III) TO STOCK PURCHASE AGREEMENT
Name of Employee Amount of Amount of
---------------- --------- ---------
Benefit Plan Auth. Shares Outst. Shares
------------ ------------ -------------
1. Xxxxx & Xxxxx and Axiom 401(k) PLUS 250,000 114,238
2. 1990 Amended & Restated Stock Option Plan,
as amended 1,500,000* 26,240
3. Employee New Stock Purchase Plan 107,170 71,179
Other Plans Which Are Not Employee Benefit Plans
------------------------------------------------
4. 1993 Outside Director's Stock Option Plan 50,000** 0
5. 60,000 Stock Appreciation Rights Held by
Xxxxx X. Xxxxxxx, Xx. 40,000 0
* Options for 1,411,600 shares have been issued.
** Options for 30,000 shares have been issued.
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