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EXHIBIT 10.9
AGREEMENT WITH SHAREHOLDERS
THIS AGREEMENT dated as of August 18, 1998, by and among Xxxx Xxxxx &
Associates, Inc., a Delaware corporation ("Xxxx Xxxxx"), and certain officers
and directors of Peerless Group, Inc., a Delaware corporation ("Peerless"), who
are signatories hereto (each, a "Shareholder" and collectively, the
"Shareholders").
WHEREAS, simultaneously with the execution and delivery of this
Agreement, Xxxx Xxxxx and Peerless are entering into an Agreement and Plan of
Merger ("Merger Agreement"), whereby, among other things, upon the terms and
subject to the conditions thereof, (i) a newly formed subsidiary of Xxxx Xxxxx
will be merged with and into Peerless in accordance with the General Corporation
Law of the State of Delaware (the "Merger") and (ii) each share of common stock,
par value $.01 per share, of Peerless (the "Shares") issued and outstanding at
the effective time of the Merger will be converted into the right to receive
$7.25 per share in common stock, par value $.01 per share, of Xxxx Xxxxx; and
WHEREAS, consummation of the Merger Agreement and the transactions
contemplated therein is conditioned upon the affirmative vote of the holders of
a majority of the Shares; and
WHEREAS, in order to induce Xxxx Xxxxx to enter into the Merger
Agreement, each undersigned Shareholder desires to enter into this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, Xxxx Xxxxx and the Shareholders agree as follows.
1. REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS. Each Shareholder
hereby severally represents and warrants to Xxxx Xxxxx as follows: (a) each
Shareholder has good and marketable title to such Shareholder's Shares as set
forth on Schedule A, free and clear of any liens, encumbrances, restrictions on
transfer or rights of others, except for those liens, encumbrances, restrictions
on transfer and rights of others listed on Schedule B; (b) the execution and
delivery of this Agreement and the consummation of the transactions herein
provided, do not and will not violate any agreement binding upon any
Shareholder; and (c) this Agreement is the valid and binding agreement of each
Shareholder enforceable against each Shareholder in accordance with its terms.
2. REPRESENTATIONS AND WARRANTIES OF XXXX XXXXX. Xxxx Xxxxx hereby
represents and warrants to the Shareholders that this Agreement has been duly
authorized by all necessary corporate action on the part of Xxxx Xxxxx, has been
duly executed by a duly authorized officer of Xxxx Xxxxx and constitutes a valid
and binding agreement of Xxxx Xxxxx enforceable against Xxxx Xxxxx in accordance
with its terms.
3. COVENANTS. From the date hereof, each Shareholder severally agrees
not to take any of the following actions so long as this Agreement remains in
effect: (a) either directly or indirectly sell, transfer, pledge (except for
pledges in place on the date hereof), assign, hypothecate or otherwise dispose
of, or enter into any contract, option or other arrangement or understanding
with respect to the sale, transfer, pledge, assignment, hypothecation or other
disposition of such Shareholder's Shares or rights to obtain any Shares; and (b)
either directly or indirectly grant any proxy to any person regarding his
ownership of any Shares, deposit any Shares into a voting trust or enter into a
voting agreement regarding such Shares that would be inconsistent with the terms
of this Agreement. Each Shareholder agrees and consents to the entry of stop
transfer instructions with Peerless against the transfer of any Shares in
violation of subparagraph (a) above.
4. VOTING AGREEMENT; PROXY. For so long as this Agreement is in
effect, each Shareholder agrees that:
(a) He shall vote, or cause to be voted, all of his Shares in favor
of the approval and adoption of the Merger as provided for in the Merger
Agreement and the transactions contemplated therein.
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(b) In any meeting of the stockholders of Peerless called to
consider the Merger and in any action by consent of the stockholders of Peerless
with respect to the Merger, he shall vote or cause to be voted all of his
Shares: (i) against any action or agreement that would result in a breach in any
material respect of any covenant, representation or warranty or any other
obligation of Peerless under the Merger Agreement or of such Shareholder under
this Agreement; and (ii) against any action or agreement that would impede,
interfere with or discourage the transactions contemplated by the Merger
Agreement, including, without limitation: (1) any extraordinary corporate
transaction, such as a merger, reorganization or liquidation involving Peerless
or any of its subsidiaries, (2) a sale or transfer of a material amount of
assets of Peerless or any of its subsidiaries or the issuance of securities by
Peerless or any of its subsidiaries; (3) any change in the Peerless Board of
Directors, (4) any change in the present capitalization or dividend policy of
Peerless or any of its subsidiaries (other than as contemplated by the Merger
Agreement) or (5) any other material change in Peerless' or any of its
subsidiaries' corporate structure or business.
(c) He shall, upon request, grant Xxxx Xxxxx an irrevocable proxy
appointing Xxxx Xxxxx or its designee(s), with full power of substitution, its
attorney and proxy to vote all such Shareholder's Shares at any meeting of the
stockholders of Peerless called to consider the Merger or in connection with any
action by written consent by the stockholders of Peerless with respect to the
Merger. Each Shareholder acknowledges and agrees that such proxy, if and when
given, will be coupled with an interest, will be irrevocable and shall not be
terminated by operation of law or otherwise upon the occurrence of any event and
that no subsequent proxies will be given ( and if given will not be effective).
(d) Nothing contained herein shall be deemed to vest in Xxxx Xxxxx
any direct or indirect ownership of any Shares. By reason of this Agreement,
Xxxx Xxxxx shall have no authority to manage, direct, superintend, restrict,
regulate, govern, or administer any of the policies or operations of Peerless or
exercise any power or authority to direct the Shareholders in the voting of any
of the Shares (except as specifically provided herein) or the performance of the
Shareholders' duties or responsibilities as stockholders, officers and directors
of Peerless.
5. NO SOLICITATION.
(a) Each Shareholder represents that he is not engaged in any
discussions or negotiations with third parties with respect to any Acquisition
Proposal (as defined below). Each Shareholder agrees that he shall not,
individually or with others, directly or indirectly, through any employee,
representative or agent (i) solicit, initiate or encourage any inquiries or
proposals which constitute, or would lead to, a proposal or offer for sale of
the Shares, a merger, consolidation, business combination, sale of substantial
assets, sale of substantial portion of the outstanding of the Shares of capital
stock (including, without limitation, by way of a tender offer) or similar
transactions involving Peerless or any of its subsidiaries, other than the
transactions contemplated by this Agreement or the Merger Agreement (any of the
foregoing inquiries or proposals being referred to in this Agreement as an
"Acquisition Proposal"), (ii) engage in negotiations or discussions concerning,
or provide any non-public information to any person or entity relating to, any
Acquisition Proposal, or (iii) agree to, approve or recommend any Acquisition
Proposal; provided, however, that nothing herein shall prohibit any Shareholder,
acting as an officer or Director of Peerless, from fulfilling his fiduciary
duties to Peerless and its stockholders with respect to an unsolicited bona fide
written Acquisition Proposal in accordance with section 7.15 of the Merger
Agreement.
(b) Each Shareholder agrees to notify Xxxx Xxxxx immediately (in no
even later than 24 hours) after receipt by him of any Acquisition Proposal or
any request for non-public information in connection with an Acquisition
Proposal or for access to the properties, books or records of Peerless by any
person or entity that informed such Shareholder that it is considering making,
or has made, an Acquisition Proposal. Such notice shall be made orally or by
facsimile and shall indicate in reasonable detail the identity of the offeror
and the terms and conditions of such proposal, inquiry or contract.
6. PUBLIC ANNOUNCEMENTS. The Shareholders will consult with Xxxx Xxxxx
before issuing any press release with respect to the transactions contemplated
by this Agreement and the Merger Agreement, and shall not issue any press
release prior to such consultation, except as may be required by applicable law.
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7. SPECIFIC PERFORMANCE. The parties hereto agree that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
8. TERMINATION. This Agreement shall terminate upon the earlier of (i)
the Closing Date (as defined in the Merger Agreement), (ii) notice of
termination being given by Xxxx Xxxxx to the Shareholders, (iii) the termination
of the Merger Agreement, or (iv) February 1, 1999. No such termination shall
relieve any party from liability for any breach of this Agreement.
9. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and shall be binding upon the parties hereto and their respective heirs, legal
representatives and assigns. If any Shareholder shall at any time hereafter
acquire ownership of, or voting power with respect to, any additional Shares in
any manner, whether by exercise of options, operation of law or otherwise, such
Shares shall be held subject to all of the terms and provisions of this
Agreement.
10. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without giving effect to the
provisions thereof relating to conflicts of law.
11. SEVERAL OBLIGATIONS. The obligations and covenants of the
Shareholders herein are several and not joint.
IN WITNESS WHEREOF, Xxxx Xxxxx and the Shareholders have caused this
Agreement to be duly executed on the date first above written.
XXXX XXXXX & ASSOCIATES, INC.
By:
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Title:
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SHAREHOLDERS:
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Xxxxxx X. Xxxxxxxxx, Xx.
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Xxxxxx X. Xxxxxx
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Xxxxx X. Xxxxx
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Xxxxx X. Xxxxxxx
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AGREEMENT WITH SHAREHOLDERS
SCHEDULE A
NO. OF SHARES OF PEERLESS COMMON STOCK
SHAREHOLDER OWNED BY SHAREHOLDER:
Xxxxxx X. Xxxxxxxxx, Xx. 769,440
Xxxxxx X. Xxxxxx 26,725
Xxxxx X. Xxxxx 223,200
Xxxxx X. Xxxxxxx 139,200
