EXHIBIT 5
EXECUTION COPY
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SUBSCRIPTION AND CONTRIBUTION AGREEMENT
SUBSCRIPTION AND CONTRIBUTION AGREEMENT, dated as of March 26,
2001 (this "AGREEMENT"), by and between LF ACQUISITION CO., a Delaware
corporation (the "COMPANY"), and XXXXXX X. XXXXXXX (the "CONTRIBUTING
SHAREHOLDER").
W I T N E S S E T H:
WHEREAS, the Company, LF Merger Co., a Delaware corporation
and a wholly-owned subsidiary of the Company (the "MERGER SUB"), and certain
other Persons have entered an Agreement and Plan of Merger, dated as of March
26, 2001 (the "MERGER AGREEMENT"), relating to the merger (the "Merger") of
Merger Sub with and into The Xxxxxx Xxx Company, Inc., a Delaware corporation
("XXXXXX XXX");
WHEREAS, the Contributing Shareholder owns beneficially and of
record 218,758 shares of common stock, par value $.01 per share, of Xxxxxx Xxx
(the "CONTRIBUTED SHARES"); and
WHEREAS, the Contributing Shareholder has agreed to contribute
the Contributed Shares to the Company, and the Company has agreed to issue to
the Contributing Shareholder an equal number of shares of common stock, par
value $.01 per share, of the Company (the "EXCHANGE SHARES") in exchange for the
Contributed Shares (the "CONTRIBUTION").
NOW, THEREFORE, in consideration of the mutual covenants and
agreements set forth herein and for good and valuable consideration, the receipt
and adequacy of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. As used in this Agreement, and unless
the context requires a different meaning, the following terms have the meanings
indicated:
"AFFILIATE" means, when used with respect to any Person, any
other Person directly or indirectly through one or more intermediaries
controlling, controlled by, or under common control with such Person. As used in
the definition of "Affiliate," the term "CONTROL" means possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
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"AGREEMENT" has the meaning set forth in the preamble to this
Agreement.
"BY-LAWS" means the by-laws of the Company in effect on the
Closing Date, as the same may be amended from time to time.
"CERTIFICATE OF INCORPORATION" means the Certificate of
Incorporation of the Company in effect on the Closing Date, as the same may be
amended from time to time.
"CLOSING" has the meaning set forth in Section 2.2 of this
Agreement.
"CLOSING DATE" has the meaning set forth in Section 2.2 of
this Agreement.
"COMMISSION" means the United States Securities and Exchange
Commission or any similar agency then having jurisdiction under the Securities
Act.
"COMPANY" has the meaning set forth in the preamble to this
Agreement.
"COMPANY COMMON STOCK" has the meaning set forth in Section
3.5 of this Agreement.
"CONDITION OF THE COMPANY" means the assets, business,
properties, operations or condition (financial or otherwise) of the Company and
its Subsidiaries, taken as a whole.
"CONTRACTUAL OBLIGATIONS" means, as to any Person, any
provision of any agreement, undertaking, contract, indenture, mortgage, deed of
trust or other instrument to which such Person is a party or by which it or any
of its property is bound.
"CONTRIBUTED SHARES" has the meaning set forth in the recitals
to this Agreement.
"CONTRIBUTING SHAREHOLDER" has the meaning set forth in the
preamble to this Agreement.
"CONTRIBUTION" has the meaning set forth in the recitals to
this Agreement.
"EXCHANGE SHARES" has the meaning set forth in the recitals to
this Agreement.
"GOVERNMENTAL AUTHORITY" means the government of any nation,
state, city, locality or other political subdivision thereof, any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any corporation or other entity
owned or controlled, through share or capital ownership or otherwise, by any of
the foregoing.
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"XXXXXX XXX" has the meaning set forth in the recitals to this
Agreement.
"XXXXXX XXX LIEN" has the meaning set forth in Section 3.5 of
this Agreement.
"LIEN" means any mortgage, deed of trust, pledge,
hypothecation, assignment, encumbrance, lien (statutory or other) or preference,
priority, right or other security interest or preferential arrangement of any
kind or nature whatsoever (excluding preferred stock and equity related
preferences).
"MERGER" has the meaning set forth in the recitals to this
Agreement.
"MERGER AGREEMENT" has the meaning set forth in the recitals
to this Agreement.
"MERGER SUB" has the meaning set forth in the recitals to this
Agreement.
"ORDERS" has the meaning set forth in Section 3.2 of this
Agreement.
"PERSON" means any individual, firm, corporation, partnership,
trust, incorporated or unincorporated association, joint venture, joint stock
company, limited liability company, Governmental Authority or other entity of
any kind, and shall include any successor (by amalgamation or otherwise) of such
entity.
"REQUIREMENT OF LAW" means, as to any Person, any law,
statute, treaty, rule, regulation, or determination of a court or other
Governmental Authority, in each case applicable or binding upon such Person or
any of its property or to which such Person or any of its property is subject.
"SECURITIES ACT" means the United States Securities Act of
1933, as amended, and the rules and regulations of the Commission thereunder.
"SUBSIDIARY" means, as of the relevant date of determination,
with respect to any Person, a corporation or other Person of which 50% or more
of the voting power of the outstanding voting equity securities is held,
directly or indirectly, by such Person. Unless otherwise qualified, or the
context otherwise requires, all references to a "SUBSIDIARY" or to
"SUBSIDIARIES" in this Agreement shall refer to a Subsidiary or Subsidiaries of
the Company.
1.2 USAGE GENERALLY. The definitions in this Article I
shall apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. All references herein to Articles and
Sections shall be deemed to be references to Articles and Sections of this
Agreement unless the context shall otherwise require. The words "include,"
"includes" and "including" shall be deemed to be followed by the
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phrase "without limitation." The words "hereof," "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
Unless otherwise expressly provided herein, any agreement, instrument or statute
defined or referred to herein or in any agreement or instrument that is referred
to herein means such agreement, instrument or statute as from time to time
amended, modified or supplemented, including (in the case of agreements or
instruments) by waiver or consent and (in the case of statutes) by succession of
comparable successor statutes and references to all attachments thereto and
instruments incorporated therein.
ARTICLE II
CONTRIBUTION OF SHARES
2.1 CONTRIBUTION OF SHARES. Subject to the terms and
conditions set forth herein, on the Closing Date (as hereinafter defined), the
Company and the Contributing Shareholder hereby agree that the Contributing
Shareholder shall contribute to the Company the Contributed Shares (together
with all rights now or hereafter attaching thereto), and the Company shall issue
and deliver to the Contributing Shareholder the Exchange Shares.
2.2 CLOSINGS; DELIVERIES AT CLOSING.
(a) The closing of the transactions contemplated
by Section 2.1 hereof (the "CLOSING") shall take place at the offices of Xxxx,
Weiss, Rifkind, Xxxxxxx & Xxxxxxxx, at 10:00 a.m., local time, immediately prior
to the Effective Time (as defined in the Merger Agreement) of the Merger, or at
such other time, place and date that the Company and the Contributing
Shareholder may agree in writing (the "CLOSING DATE").
(b) At the Closing (i) the Contributing
Shareholder shall deliver to the Company certificates evidencing the Contributed
Shares, each such certificate being duly endorsed in blank and accompanied by
such stock powers and such other documents as may reasonably be requested by the
Company and (ii) the Company shall deliver to the Contributing Shareholder
certificates representing the Exchange Shares, registered in the name of the
Contributing Shareholder and in such denominations as specified in advance by
the Contributing Shareholder.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Contributing
Shareholder as follows:
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3.1 CORPORATE EXISTENCE AND POWER. The Company (a) is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, and (b) has the corporate power and authority to
execute, deliver and perform its obligations under this Agreement. Neither the
Company nor any of its Subsidiaries has conducted any business activities or
engaged in any operations other than in connection with its organization and the
transactions contemplated by the Merger Agreement.
3.2 AUTHORIZATION; NO CONTRAVENTION. The execution,
delivery and performance by the Company of this Agreement and the transactions
contemplated hereby (a) have been or will be duly authorized by all necessary
corporate action of the Company, (b) do not contravene the terms of the
Certificate of Incorporation or the By- laws (copies of which have been
delivered to the Contributing Shareholder), (c) do not violate, conflict with or
result in any breach, default or contravention of (or with due notice or lapse
of time or both would result in any breach, default or contravention of), or the
creation of any Lien under, any Contractual Obligation of the Company or any
Requirement of Law applicable to the Company and (d) do not violate any
judgment, injunction, writ, award, decree or order of any nature (collectively,
"ORDERS") of any Governmental Authority against, or binding upon, the Company.
3.3 GOVERNMENTAL AUTHORIZATION; THIRD PARTY CONSENTS. No
approval, consent, compliance, exemption, authorization or other action by, or
notice to, or filing with, any Governmental Authority or any other Person, and
no lapse of a waiting period under a Requirement of Law, is necessary or
required in connection with the execution, delivery or performance (including,
without limitation, the issuance and delivery of the Company Common Shares) by,
or enforcement against, the Company of this Agreement or the transactions
contemplated hereby, except where the failure to obtain an approval, consent,
compliance, exemption, authorization or other action or to make any filing would
not have a material adverse effect on the Condition of the Company or the
ability of the Company to perform its obligations under this Agreement.
3.4 BINDING EFFECT. This Agreement has been duly executed
and delivered by the Company, and constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, fraudulent conveyance or transfer, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general principles of equity relating to enforceability (regardless of whether
considered in a proceeding at law or in equity).
3.5 CAPITALIZATION. On the Closing Date, immediately
after giving effect to the Contribution (and subscriptions and contributions
made pursuant to certain other subscription and contribution agreements entered
into between the Company and any other Person prior to the Closing Date), (i)
the authorized capital stock of the Company shall consist of Ten Million
(10,000,000) shares of common stock, par value $.01 per share, of the Company
(the "COMPANY COMMON STOCK"), of which 5,680,694
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shares shall be issued and outstanding and (ii) except for the options that will
be assumed by the Company pursuant to Section 2.5 of the Merger Agreement, there
will be no options, warrants, conversion privileges, subscription or purchase
rights or other rights outstanding to purchase or otherwise acquire any shares
of the Company Common Stock. The Exchange Shares are duly authorized, and when
issued pursuant to this Agreement, will be validly issued, fully paid and
non-assessable, will be issued in compliance with the registration and
qualification requirements of all applicable federal, state and foreign
securities laws and will be free and clear of all Liens except for Liens that
the Company may have thereon as successor to the Lien of Xxxxxx Xxx under that
certain Stock Pledge Agreement, dated as of September 22, 2000, between Xxxxxx
Xxx and the Contributing Shareholder (the "XXXXXX XXX LIEN").
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
THE CONTRIBUTING SHAREHOLDER
The Contributing Shareholder hereby represents and warrants to
the Company as follows:
4.1 EXISTENCE; POWER AND AUTHORITY. The Contributing
Shareholder is an individual with legal capacity and has the legal capacity to
execute, deliver and perform his obligations under this Agreement and to
consummate the transactions contemplated hereby.
4.2 AUTHORIZATION; NO CONTRAVENTION. The execution,
delivery and performance by the Contributing Shareholder of this Agreement and
the transactions contemplated hereby (assuming the consent of Xxxxxx Xxx with
respect to the Xxxxxx Xxx Lien) will not violate, conflict with or result in any
breach or contravention of or the creation of any Lien under, any Contractual
Obligation of the Contributing Shareholder, or any Requirement of Law or Orders
applicable to the Contributing Shareholder.
4.3 TITLE. The Contributing Shareholder is the beneficial
and record owner of the Contributed Shares and has good and valid title to the
Contributed Shares, free and clear of all Liens, except for the Xxxxxx Xxx Lien.
Upon the consent of Xxxxxx Xxx with respect to the Xxxxxx Xxx Lien, the
Contributing Shareholder will have sole and unrestricted (except for
restrictions imposed by applicable securities laws) power and authority to
transfer the Contributed Shares to the Company. Upon delivery to the Company by
the Contributing Shareholder of the share certificates representing such
Contributed Shares pursuant to Article 2 hereof, the Company will receive good
and valid title to such Contributed Shares, free and clear of all Liens (except
for restrictions imposed by the applicable securities laws).
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4.4 GOVERNMENTAL AUTHORIZATION; THIRD PARTY CONSENTS. No
approval, consent, compliance, exemption, authorization, or other action by, or
notice to, or filing with, any Governmental Authority or any other Person, and
no lapse of a waiting period under any Requirement of Law, is necessary or
required in connection with the execution, delivery or performance by, or
enforcement against, the Contributing Shareholder of this Agreement or the
transactions contemplated hereby.
4.5 BINDING EFFECT. This Agreement has been duly executed
and delivered by the Contributing Shareholder and constitutes a legal, valid and
binding obligation of the Contributing Shareholder, enforceable against him in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability (regardless of
whether considered in a proceeding at law or in equity).
4.6 PURCHASE FOR OWN ACCOUNT. The Company Common Shares
to be acquired by the Contributing Shareholder pursuant to this Agreement are
being or will be acquired for his own account and with no intention of
distributing or reselling such Company Common Shares or any part thereof in any
transaction that would be in xxxxx tion of the securities laws of the United
States of America, or any state, without prejudice, however, to the rights of
the Contributing Shareholder at all times to sell or otherwise dispose of all or
any part of such Company Common Shares under an effective registra tion
statement under the Securities Act, or under an exemption from such registration
available under the Securities Act, and subject, nevertheless, to the
disposition of the Contributing Shareholder's property being at all times within
its control. If the Contributing Shareholder should in the future decide to
dispose of any of such Company Common Shares, the Contributing Shareholder
understands and agrees that he may do so only in compliance with the Securities
Act and applicable state securities laws, as then in effect. The Contributing
Shareholder agrees to the imprinting, so long as required by law, of a legend on
certificates representing all of its Company Common Shares to the following
effect:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"ACT"), OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES
MAY NOT BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
4.7 RESTRICTED SECURITIES. The Contributing Shareholder
understands that the Company Common Shares to be acquired by him pursuant to
this Agreement will not be registered at the time of their issuance under the
Securities Act for the reason that
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the sale provided for in this Agreement is exempt pursuant to Section 4(2) of
the Securities Act and that the reliance of the Company on such exemption is
predicated in part on the Contributing Shareholder's representations set forth
herein.
4.8 ACCREDITED INVESTORS. The Contributing Shareholder
is an accredited investor within the meaning of Rule 501(a) under the Securities
Act. The Contributing Shareholder has had access to the same kind of information
concerning the Company that is required by Schedule A of the Securities Act to
the extent that the Company possesses such information and the Contributing
Shareholder has such knowledge and experience in business matters that the
Contributing Shareholder is capable of utilizing the information that is
available to the Contributing Shareholder concerning the Company to evaluate the
risks of investment in the Company.
ARTICLE V
MISCELLANEOUS
5.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of the Contributing Shareholder made herein shall
survive the execution and delivery of this Agreement, notwithstanding any
investigation made or information obtained by the Company and shall survive
beyond the Closing.
5.2 NOTICES. All notices, demands and other
communications provided for or permitted hereunder shall be made in writing and
shall be by registered or certified first-class mail, return receipt requested,
telecopier, courier service or personal delivery:
(a) if to the Company:
LF Acquisition Co.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: W. Xxxxxx Xxxxxx
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxx, Esq.
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(b) if to the Contributing Shareholder:
c/o The Xxxxxx Xxx Company, Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
with a copy to:
Jenkens & Xxxxxxxxx Xxxxxx Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
All such notices, demands and other communications shall be
deemed to have been duly given when delivered by hand, if personally delivered;
when delivered by courier, if delivered by commercial courier service; five (5)
business days after being deposited in the mail, postage prepaid, if mailed; and
when receipt is mechanically acknowledged, if telecopied. Any party may by
notice given in accordance with this Section 5.2 designate another address or
Person for receipt of notices hereunder.
5.3 SUCCESSORS AND ASSIGNS; THIRD PARTY BENEFICIARIES.
This Agreement shall inure to the benefit of and be binding upon the successors
and permitted assigns of the parties hereto. Subject to applicable securities
laws and the terms and conditions thereof, the Contributing Shareholder may
assign any of his or its rights under this Agreement to any of his or its
respective Affiliates. The Company may not assign any of its rights under this
Agreement without the written consent of the Contributing Shareholder.
5.4 AMENDMENT AND WAIVER.
(a) No failure or delay on the part of the
Company or the Contributing Shareholder in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
remedies provided for herein are cumulative and are not exclusive of any
remedies that may be available to the Company or the Contributing Shareholder at
law, in equity or otherwise.
(b) Any amendment, supplement or modification of
or to any provision of this Agreement, any waiver of any provision of this
Agreement, and any consent to any departure by the Company or the Contributing
Shareholder from the terms of any provision of this Agreement, shall be
effective only if it is made or given in writing and signed by the Company and
the Contributing Shareholder. Except where
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notice is specifically required by this Agreement, no notice to or demand on the
Company in any case shall entitle the Company to any other or further notice or
demand in similar or other circumstances.
5.5 COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
5.6 HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
5.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
5.8 SEVERABILITY. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired, unless the
provisions held invalid, illegal or unenforceable shall substantially impair the
benefits of the remaining provisions hereof.
5.9 ENTIRE AGREEMENT. This Agreement is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein and therein. There are no
restrictions, promises, representations, warranties or undertakings, other than
those set forth or referred to herein or therein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to such
subject matter.
5.10 PUBLICITY; CONFIDENTIALITY. Except as may be required
by applicable Requirements of Law, none of the parties hereto shall issue a
publicity release or public announcement or otherwise make any disclosure
concerning this Agreement or the transactions contemplated hereby, without prior
approval by the other parties hereto (which approval shall not be unreasonably
withheld); PROVIDED, HOWEVER, that nothing in this Agreement shall restrict the
Contributing Shareholder from disclosing information (a) that is already
publicly available, and (b) to his attorneys, accountants, consultants and other
advisors to the extent necessary to obtain their services in connection with the
Contributing Shareholder's investment in the Company. If any announcement is
required by law to be made by any party hereto, prior to making such
announcement such party will deliver a draft of such announcement to the other
parties and shall give the other parties an opportunity to comment thereon.
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5.11 FURTHER ASSURANCES. Each of the parties shall
execute such documents and perform such further acts (including, without
limitation, obtaining any consents, exemptions, authorizations or other actions
by, or giving any notices to, or making any filings with, any Governmental
Authority or any other Person) as may be reasonably required or desirable to
carry out or to perform the provisions of this Agreement.
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IN WITNESS WHEREOF, the undersigned have executed, or have
caused to be executed, this Agreement on the date first above written.
LF ACQUISITION CO.
By: /s/ Xxxxxxxx Xxxxx
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Name: Xxxxxxxx Xxxxx
Title: Vice President & Secretary
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
