EXHIBIT 2.1
CONTRIBUTION AND RECAPITALIZATION AGREEMENT
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This Contribution and Recapitalization Agreement (this "Agreement") is
made as of September __, 1997, by and among The Xxxxxxxx Companies, Inc., a
Delaware corporation (the "Company"), Xxxxxx Xxxxx & Partners, L.P. ("Xxxxxx
Xxxxx"), Nassau Capital Partners II, L.P. ("Nassau") and NAS Partners I, L.L.C.
("NAS" and, together with Xxxxxx Xxxxx and Nassau, the "PIC Investors"), and
each of the other Persons listed on the Schedule of Investors attached hereto
(each, a "Holdings Investor" and all of such Persons, collectively, the
"Holdings Investors"). The PIC Investors and the Holdings Investors are
collectively referred to herein as the "Investors." Capitalized terms used
herein and not otherwise defined herein have the meanings given to such terms in
Section 8 below.
The Investors hold all of the outstanding capital stock of the Company
and, with the Company, hold directly or indirectly all of the membership
interests in Xxxxxxxx Holdings, L.L.C., a Delaware limited liability company
("Holdings"), Xxxxxxxx Publishing Company, L.L.C., a Delaware limited liability
company ("Publishing"), and Xxxxxxxx Investment Corp., a Delaware corporation
("PIC"). The Company and the Investors desire to consummate the transactions
contemplated by this Agreement in order to facilitate an initial public offering
and sale by the Company of shares of its common stock pursuant to an effective
registration statement filed with the U.S. Securities and Exchange Commission
(the "SEC") under the Securities Act (the "Company IPO"). The Company has
engaged Xxxxxx Xxxxxxx Xxxx Witter, Donaldson, Lufkin & Xxxxxxxx Securities
Corporation, Alex. Xxxxx & Sons Incorporated and Xxxxxxx Sachs & Co. to act as
representatives of the underwriters of such offering (the "Underwriters") and,
in connection therewith, contemplates entering into an underwriting agreement
(the "Underwriting Agreement") with such persons.
Immediately prior to the effectiveness of the registration statement
filed with the SEC in connection with the Company IPO, the Company will file an
amendment to its certificate of incorporation substantially in the form of
Exhibit A hereto (the "Certificate of Amendment") with the Secretary of State of
the State of Delaware to increase the number of authorized shares of Class A
Common Stock, par value $.01 per share (the "Company Voting Stock"), and to
increase the number of authorized shares of Class B Common Stock, par value $.01
per share (the "Company Non-Voting Stock" and, together with the Company Voting
Stock, the "Company Stock"). Upon filing the Certificate of Amendment, each
share of Company Voting Stock outstanding prior thereto (the "Old Company Voting
Stock") will be canceled and the Company will issue to the holder thereof shares
of Company Voting Stock on the terms set forth herein, and each share of Company
Non-Voting Stock outstanding prior thereto (the "Old Company Non-Voting Stock"
and, together with the Old Company Voting Stock, the "Old Company Stock") will
be canceled and the Company will issue to the holder thereof shares of Company
Non-Voting Stock on the terms set forth herein. Such amendment to the Company's
certificate of incorporation, cancellation of the outstanding
shares of Old Company Stock and issuance of Company Stock to the holders of Old
Company Stock are referred to herein collectively as the "Recapitalization
Transactions."
The PIC Investors hold all of the outstanding shares of capital stock
of PIC and the Holdings Investors hold all of the outstanding membership
interests in Holdings, other than those membership interests in Holdings held by
the Company or PIC. The PIC Investors desire to contribute to the Company all
of the outstanding shares of PIC's Common Stock, par value $.01 per share (the
"PIC Common Stock"), and all of the outstanding shares of PIC's Preferred Stock,
par value $.01 per share (the "PIC Preferred Stock" and, together with the PIC
Common Stock, the "PIC Stock"). The Holdings Investors desire to contribute to
the Company all of their membership interests in Holdings, including all of
their Class A Common Units, Class D Common Units and Preferred Units of Holdings
(each as defined in the LLC Agreement and all referred to herein collectively as
the "Holdings Units"). In exchange, the Company shall issue to the PIC
Investors and the Holdings Investors shares of the Company Voting Stock or
Company Non-Voting Stock, as provided herein. The transactions described in
this paragraph and more particularly described below are referred to herein
collectively as the "Contribution Transactions". The Contribution Transactions
will be consummated immediately prior to the consummation of the Company IPO and
are intended to be tax-free pursuant to Section 351 of the Internal Revenue Code
of 1986, as amended.
In consideration of the mutual covenants and agreements set forth
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
Section 1. Recapitalization and Contribution.
1A. Authorization of Company Stock. Prior to the Closing, the
Company shall authorize the issuance to the Investors of shares of Company
Voting Stock and shares of Company Non-Voting Stock in the amounts required to
be issued to the Investors hereunder.
1B. Contribution Transactions. Subject to the satisfaction or waiver
of the conditions set forth in Section 3 below, each of the Investors and the
Company agrees to and shall consummate, at the Closing, the following
Contribution Transactions:
(i) Each of the PIC Investors shall contribute, transfer and assign to
the Company the number of shares of PIC Common Stock and the number of shares of
PIC Preferred Stock set forth opposite its name on the Schedule of Investors,
each of the Holdings Investors shall contribute, transfer and assign to the
Company all of the Class A Common Units, and Preferred Units of Holdings held by
such Holdings Investor, as set forth opposite its name on the Schedule of
Investors, and each of the Class D Holders shall contribute, transfer and assign
to the Company all of the Class D1 Common Units, Class D2 Common Units, Class D3
Common Units, Class D4 Common Units, Class D5 Common Units held by such Class D
Holder.
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(ii) In exchange for the PIC Stock and the Holdings Units contributed
by the Investors, the Company shall issue a number of shares of Company Voting
Stock to each of the Voting Investors and Company Non-Voting Stock to each of
the Non-Voting Investors equal to:
(a) in the case of PIC Preferred Stock and Preferred Units of
Holdings, the quotient determined by dividing (x) the sum of the Accreted
Value of the PIC Preferred Stock and Preferred Units of Holdings held by
such Investor, by (y) the IPO Price; and
(b) in the case of PIC Common Stock and Common Units of Holdings,
the product determined by multiplying (x) the aggregate number of shares of
PIC Common Stock, Class A Common Units and "Converted Class D Units" held
by such Investor by (y) the Conversion Ratio.
For purposes of the foregoing, each Class D Holder will be deemed to
hold the number of "Converted Class D Units" set forth opposite such Class D
Holder's name on the attached Schedule of Class D Units (which is equivalent to
the number of Class A Common Units which are equal in value to the Class D
Common Units held by such Class D Holder). Class D Holders will receive no
other consideration in respect of their Class D Units.
(iii) At the written election of any Investor, the Company shall,
in lieu of issuing Company Voting Stock to such Investor, issue an equal number
of shares of Company Non-Voting Stock to such Investor.
1C. Recapitalization Transactions. Each of the Investors and the
Company understands and agrees that, effective upon filing of the Certificate of
Amendment, the shares of Old Company Voting Stock or Old Company Non-Voting
Stock held by such Investor shall be canceled and deemed to be no longer
outstanding, and the Company shall issue to each Investor:
(i) the right to receive at the Closing a number of shares of Company
Voting Stock or Company Non-Voting Stock, respectively, equal to the quotient
determined by dividing (a) the Accreted Value of a number Preferred Units of
Holdings equal to (x) the number of shares of Old Company Stock held by such
Investor multiplied by (y) the Imputed Preferred Holdings Multiple by (b) the
IPO Price; plus
(ii) a number of shares of Company Voting Stock or Company Non-Voting
Stock, respectively, equal to the product of (x) the number of shares of Old
Company Stock held by such Investor, multiplied by (y) the Imputed Common
Holdings Multiple, multiplied by (z) the Conversion Ratio.
1D. Holdings Options. Each Investor hereby acknowledges and agrees
that in accordance with the terms of the Holdings Options, contemporaneously
with the consummation of the Contribution Transactions, (i) each of the Holdings
Options shall cease to be exercisable to purchase Class A Common Units of
Holdings and, in lieu thereof, shall automatically become exercisable, subject
to the other terms and conditions set forth therein, to purchase up to a number
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of shares of Company Stock equal to the Unit Exercise Number thereof multiplied
by the Conversion Ratio (provided that such maximum number of shares of Company
Stock issuable under any Holdings Option shall be rounded up or down to the
nearest whole share of Company Stock), and (ii) the exercise price per share of
Company Stock for each of the Holdings Options shall be automatically adjusted
to be equal to the Unit Exercise Price thereof divided by the Conversion Ratio.
For purposes hereof, the "Unit Exercise Number" means, in respect of any
Holdings Option, the maximum number of Class A Common Units obtainable upon
exercise thereof immediately prior to consummation of the Contribution
Transactions, and the "Unit Exercise Price" means, in respect of any Holdings
Option, the price payable per Class A Common Unit upon exercise thereof
immediately prior to consummation of the Contribution Transactions.
1E. No Fractional Shares. If any fractional interest in a share of
Company Stock would, except for the provisions of this Section 1E, be
deliverable to any Investor upon contribution of such Investor's PIC Stock or
Holdings Units or upon conversion of such Investor's Old Company Stock after
taking into account and consolidating all shares of Company Stock to be issued
to such Investor pursuant to the Recapitalization Transactions and the
Contribution Transactions, such fractional interest shall be rounded up or down
to the nearest whole share of Company Stock.
1F. Closing. The closing of the Contribution Transactions (the
"Closing") shall take place at the offices of Xxxxxxxx & Xxxxx, 000 X. Xxxxxxxx
Xxxxx, Xxxxxxx, Xxxxxxxx, or at such other place as may be agreeable to Xxxxxx
Xxxxx and the Company, immediately prior to the consummation of the Company IPO
(the "Closing Date"). Upon execution of this Agreement, each Investor shall
deliver to the Company stock certificates evidencing all of such Investor's
outstanding shares of PIC Stock and Old Company Stock, duly endorsed in blank or
accompanied by duly executed stock powers, and each Holdings Investor shall
deliver to the Company such documentation as the Company may reasonably request
to indorse such Holdings Investor's delivery to the Company of such Investor's
Holdings Units. At the Closing, the Company shall cancel all such certificates
and shall deliver to each Investor stock certificates evidencing the shares of
Company Stock to be issued as described in Paragraphs 1B and 1C and as set forth
on the Schedule of Investors, registered in such Investor's or its nominee's
name (it being understood that such amounts of shares of stock set forth in the
Schedule of Investors have been calculated assuming the IPO Price and a Closing
Date as set forth therein, and that such amounts shall be adjusted in accordance
with the provisions hereof if the actual IPO Price or Closing Date are different
than as assumed).
Section 2. Securityholders Agreement Matters. Each of the Investors
hereby (a) acknowledges that it has received prompt written notice of the
Company's intention to effect the Company IPO contemplated by the Underwriting
Agreement pursuant to Section 5.2(a) of the Securityholders Agreement, (b)
irrevocably waives any rights that it has pursuant to Section 5.2 of the
Securityholders Agreement (the "Piggyback Rights") to have the Company include
Registrable Securities (as defined in the Securityholders Agreement) in the
Company IPO contemplated by the Underwriting Agreement and (c) acknowledges that
the shares of Company Stock that are issued as described herein shall be
"Manager Common Stock" and "Registrable Securities" within the meaning of the
Securityholders Agreement.
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Section 3. Conditions to the Obligations of the Parties at the
Closing.
3A. Conditions to the Obligations of the Investors. The obligations
of each of the Investors hereunder are subject to the satisfaction or waiver of
the following conditions: (i) the representations and warranties of the Company
are true and correct in all material respects at and as of the Closing as though
then made, (ii) all conditions precedent to the consummation of the Company IPO
shall have been satisfied or waived (including the conditions to the obligations
of the parties to the Underwriting Agreement relating thereto between the
Company and the underwriters party thereto) and (iii) the Certificate of
Amendment shall have been duly filed with the Secretary of State of the State of
Delaware and shall be in full force and effect under the laws of the State of
Delaware.
3B. Conditions to the Obligations of the Company. The obligations of
the Company hereunder are subject to the satisfaction or waiver of the following
conditions: (i) the representations and warranties of the Investors are true
and correct in all respects at and as of the Closing as though then made, (ii)
all conditions precedent to the consummation of the Company IPO shall have been
satisfied or waived (including the conditions to the obligations of the parties
to the Underwriting Agreement relating thereto between the Company and the
underwriters party thereto), (iii) the Certificate of Amendment shall have been
duly filed with the Secretary of State of the State of Delaware and shall be in
full force and effect under the laws of the State of Delaware and (iv) the
amendment to the Securityholders Agreement in the form of Exhibit B attached
hereto shall have been executed by certain Investors and shall be in full force
and effect.
Section 4. Representations and Warranties of the Investors.
4A. Ownership of PIC Stock and Holdings Units. Each Investor
severally represents and warrants to the Company that such Investor (i) is the
beneficial and record owner of the amount of each class and type of PIC Stock,
Holdings Units and Old Company Stock set forth opposite its name on the Schedule
of Investors attached hereto, (ii) holds such PIC Stock, Holdings Units or Old
Company Stock, as applicable, free and clear of all liens, charges and other
encumbrances (subject only to liens, charges and other encumbrances pursuant to
agreements with the Company), and (iii) holds no capital stock of PIC or the
Company or membership interest in Holdings, other than the Class D Common Units
of Holdings. Each of the Class D Holders represent and warrants to the Company
that he has not transferred any interest in any of the Class D1 Common Units,
Class D2 Common Units, Class D3 Common Units, Class D4 Common Units, Class D5
Common Units issued to him by Holdings and that he holds such interests free and
clear of all liens, charges and other encumbrances (subject only to liens,
charges and other encumbrances pursuant to agreements with the Company).
4B. Transfer. Each Investor severally represents and warrants to the
Company that such Investor has full power, authority and legal right to execute
and deliver this Agreement and to perform the terms and provisions hereof.
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4C. Registration Statement. Each Investor severally represents and
warrants to the Company that such Investor has received and reviewed the
prospectus included in the Amendment No.1 to Registration Statement on Form S-1
prepared by the Company and filed with the Securities and Exchange Commission on
September 15, 1997 relating to the Company IPO (the "Registration Statement").
4D. Capitalization of PIC. Each PIC Investor severally represents
and warrants that as of the Closing, the authorized capital stock of PIC shall
consist of 200,000 shares of PIC Preferred Stock, of which 121,000 shares shall
be issued and outstanding, and 200,000 shares PIC Common Stock, of which 121,000
shares shall be issued and outstanding, and that PIC shall not have outstanding
any other stock or securities convertible or exchangeable for any shares of its
capital stock or containing any profit participation features, nor shall it have
outstanding any rights or options to subscribe for or to purchase its capital
stock or any stock or securities convertible into or exchangeable for its
capital stock or any stock appreciation rights or phantom stock plans.
4E. Investment Intent; Accredited Investor. Each Investor severally
represents and warrants that such Investor: (i) is acquiring the Restricted
Securities acquired hereunder for its own account with the present intention of
holding such securities for investment purposes and it has no intention of
selling such securities in a public distribution in violation of the federal
securities laws or any applicable state securities laws; provided that nothing
contained herein will prevent such Investor and the subsequent holders of
Restricted Securities from transferring such securities in compliance with the
provisions of Section 6 hereof and the Securityholders Agreement; (ii) possesses
knowledge and experience in financial and business matters such that it is
capable of evaluating the risks of the investment in the securities issued
pursuant to this Agreement; and (iii) is an "accredited investor" as defined in
Rule 501(a) under the Securities Act.
Section 5. Representations and Warranties of the Company.
5A. Organization; Good Standing. The Company is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Delaware, and has all requisite power and authority to own and operate its
properties and assets and to carry on its business as now conducted and as
proposed to be conducted, to execute, deliver and carry out the provisions of
this Agreement and to issue the Company Stock.
5B. Authorization. As of the Closing, all action on the part of the
Company necessary for the authorization, execution and delivery of this
Agreement, the performance of all obligations of the Company hereunder and the
authorization, issuance and delivery of the Company Stock will have been taken,
and will constitute a valid and legally binding obligations of the Company,
enforceable in accordance with its terms except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors' rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies, and (iii) to the extent the indemnification
provisions contained herein may be limited by applicable federal or state
securities law.
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5C. Valid Issuance of Company Stock. The shares of Company Stock
when issued and delivered in accordance with the terms of this Agreement for the
consideration expressed herein, will be duly and validly issued, fully paid, and
nonassessable, and will be free of restrictions on transfer other than
restrictions on transfer under the Securityholders Agreement and applicable
state and federal securities laws.
5D. Capitalization. As of the Closing, after the filing of the
Certificate of Amendment and after giving effect to the Recapitalization
Transactions and the Contribution Transactions, the authorized capital stock of
the Company shall consist of (i) 5,000,000 shares of preferred stock, par value
$.01 per share, of which no shares shall be issued and outstanding, (ii)
75,000,000 shares of Company Voting Stock, of which only the shares issued
hereunder shall be issued and outstanding immediately prior to the issuance of
shares in the Company IPO, and (iii) 25,000,000 shares of Company Non-Voting
Stock, of which only the shares hereunder shall be issued and outstanding
immediately prior to the issuance of shares in the Company IPO. Except for
Holdings Options exercisable in the aggregate for 8,866.53 Class A Common Units,
except for the obligations of the Company to issue Company Stock to the
Underwriters pursuant to the Underwriting Agreement in connection with the
Company IPO and except as otherwise described in the Registration Statement, the
Company shall not have outstanding any other stock or securities convertible or
exchangeable for any shares of its capital stock or containing any profit
participation features, nor shall it have outstanding any rights or options to
subscribe for or to purchase its capital stock or any stock or securities
convertible into or exchangeable for its capital stock or any stock appreciation
rights or phantom stock plans.
Section 6. Transfer.
6A. Restrictions. Restricted Securities are only transferable (i)
pursuant to public offerings registered under the Securities Act, (ii) pursuant
to Rule 144 or Rule 144A if such rules are available and (iii) subject to the
conditions specified in Section 6B below, any other legally available means of
transfer pursuant to the Securities Act.
6B. Procedure for Transfer. In connection with the transfer of any
Restricted Securities (other than a transfer referred to in clauses (i) or (ii)
of Section 6A above), the holder thereof will deliver written notice to the
Company describing in reasonable detail the transfer or proposed transfer,
together with an opinion of Xxxxxxxx & Xxxxx or other counsel which (to the
Company's reasonable satisfaction) is knowledgeable in securities law matters to
the effect that such transfer of Restricted Securities may be effected without
registration of such Restricted Securities under the Securities Act. In
addition, if the holder of such Restricted Securities delivers to the Company an
opinion of such counsel that no subsequent transfer of such Restricted
Securities will require registration under the Securities Act. The Company will
promptly upon such contemplated transfer deliver new certificates for such
Restricted Securities which do not bear the Securities Act legend set forth in
Section 6C below. If the Company is not required to deliver new certificates
for such Restricted Securities not bearing such legend, the holder thereof will
not transfer the same until the prospective transferee has confirmed to the
Company in writing its agreement to be bound by the agreements related to
transfer of Restricted Securities contained in this Agreement.
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6C. Legend. Each certificate representing Restricted Securities
shall be endorsed with the legend in substantially the form set forth below.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON
__________, 1997 AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. THE TRANSFER OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE IS SUBJECT TO THE CONDITIONS SPECIFIED IN THE CONTRIBUTION
AGREEMENT, DATED AS OF SEPTEMBER __, 1997, AS AMENDED AND MODIFIED FROM
TIME TO TIME, BY AND AMONG THE ISSUER (THE "COMPANY") AND CERTAIN
INVESTORS, AND THE COMPANY RESERVES THE RIGHT TO REFUSE THE TRANSFER OF
SUCH SECURITIES UNTIL SUCH CONDITIONS HAVE BEEN FULFILLED WITH RESPECT TO
SUCH TRANSFER. A COPY OF SUCH CONDITIONS SHALL BE FURNISHED BY THE COMPANY
TO THE HOLDER HEREOF UPON WRITTEN REQUEST AND WITHOUT CHARGE.
Whenever any of the Restricted Securities cease to be Restricted Securities, the
holder thereof will be entitled to receive from the Company, without expense,
upon surrender to the Company of the certificate representing such securities, a
new certificate representing such securities of like tenor but not bearing a
legend of the character set forth above.
Section 7. Termination. Upon execution by Xxxxxx Xxxxx and the
Company of any agreement to terminate this Agreement at any time prior to
consummation of the Company IPO, this Agreement shall immediately terminate.
Upon any such termination, no party hereunder shall have any liability hereunder
to any other party hereto, except for wilful breach hereof by such party prior
to such termination.
Section 8. Certain Definitions.
"Accreted Value" of any PIC Stock or Holdings Unit as of any date
means:
(i) in the case of any share of PIC Preferred Stock, the sum of the
Unreturned Preferred Capital and the Unpaid Preferred Yield of such share (as
defined in the Certificate of Incorporation of PIC); and
(ii) in the case of any Preferred Unit of Holdings, the quotient
determined by dividing (x) the sum as of such date of the Unreturned Preferred
Capital and the Unpaid Preferred Yield (as defined in the LLC Agreement),
divided by (y) the aggregate number of Preferred Units outstanding as of the
determination thereof.
"Board" means the Board of Directors of the Company.
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"Class A Common Units" has the meaning given to such term in the LLC
Agreement.
"Class D Common Units" means the Class D1 Common Units, Class D2
Common Units, Class D3 Common Units, Class D4 Common Units and Class D5 Common
Units, each as defined in the LLC Agreement.
"Class D Holder" means each holder of Class D Common Units listed on
the attached Schedule of Class D Units.
"Conversion Ratio" means 36.166847.
"Holdings Options" means the options which were granted to employees
of the Company and its Subsidiaries as of July 31, 1997 to purchase the number
of Class A Common Units of Holdings.
"Imputed Common Holdings Multiple" means 1.13265.
"Imputed Preferred Holdings Multiple" means 1.11111.
"IPO Price" means the price per share at which the Company Stock is to
be offered and sold to the public at the closing of the Company IPO.
"LLC Agreement" means the Limited Liability Company Agreement of
Holdings originally effective as of September 30, 1996, as amended and restated
as of July 31, 1997.
"Non-Voting Investors" means, collectively, BankAmerica Investment
Corporation, CIVC Partners II, Chase Equity Associates, L.P., FUI, Inc. and CIBC
WG Argosy Merchant Fund 2, L.L.C.
"Restricted Securities" means the Company Stock and Company Class B
Stock issued hereunder and any securities issued with respect to such Company
Stock or Company Class B Stock by way of any stock dividend or stock split, or
in connection with a combination of shares, recapitalization, merger,
consolidation or other reorganization. As to any particular Restricted
Securities, such securities will cease to be Restricted Securities when (a) they
have been effectively registered under the Securities Act and disposed of in
accordance with the registration statement covering them, (b) they have become
eligible for sale pursuant to Rule 144 or Rule 144A or (c) an opinion of
Xxxxxxxx & Xxxxx or other counsel which (to the Company's reasonable
satisfaction) is knowledgeable in securities law matters to the effect that the
transfer of such Restricted Securities may be effected without registration of
such Restricted Securities under the Securities Act and that no subsequent
transfer of such Restricted Securities will require registration under the
Securities Act has been delivered to the Company.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal law then in force.
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"Securityholders Agreement" means the Securityholders Agreement dated
as of September 30, 1996 among PIC, Holdings, the Company and certain of the
Investors, as amended.
"Voting Investors" means all Investors other than the Non-Voting
Investors.
Section 9. Miscellaneous.
9A. Reasonable Best Efforts. Each Investor shall use its reasonable
best efforts to cause the conditions to the obligations of the parties contained
in Section 3 hereof to be satisfied promptly, including without limitation by
voting such Investor's Old Voting Shares and Old Non-Voting Shares to approve
the Certificate of Amendment.
9B. Amendment and Waiver. Any modification, amendment or waiver of
any provision of this Agreement shall be effective against any Investor if such
modification, amendment or waiver is approved in writing by Xxxxxx Xxxxx;
provided that any amendment, modification or waiver of any provision of this
Agreement which has a material adverse effect on any Investor in its capacity as
such, which would be borne disproportionately by such Investor relative to
Xxxxxx Xxxxx (measured by the value of such Investor's holdings of PIC Stock,
Holdings Units and Old Company Stock), shall be effective against such Investor
only if consented to in writing by such Investor; provided further that if more
than one Investor is materially adversely affected in such a disproportionate
manner, such amendment, modification or waiver shall be effective against all
Investors who are similarly so affected if consented to in writing by Investors
holding a majority in value of the PIC Stock, Holdings Units and Old Company
Stock held by such holders.
9C. No Transfer. Each of the Investors hereby agrees that it will
not, directly or indirectly, transfer any interest in any of its PIC Stock,
Holdings Units or Old Company Stock except to the Company at the Closing, unless
this Agreement is terminated prior thereto in accordance with Section 7 above.
9D. Severability. Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Agreement.
9E. Captions. The captions used in this Agreement are for the
convenience of reference only and do not constitute a part of this Agreement and
will not be deemed to limit, characterize or in any way affect any provision of
this Agreement, and all provisions of this Agreement will be enforced and
construed as if no caption had been used in this Agreement.
9F. Gender. Reference herein to any gender, including the neutral
gender, includes each other gender.
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9G. Entire Agreement. This Agreement, together with all exhibits and
schedules attached hereto, and the other agreements dated the date hereof,
contain the entire agreement between the parties with respect to the subject
matter hereof, and supersede any prior understandings, agreements or
representations by or between the parties, written or oral, which may have
related to the subject matter hereof in any way.
9H. Counterparts. This Agreement may be executed in one or more
counterparts all of which taken together will constitute one and the same
instrument.
9I. Governing Law. The corporate law of Delaware will govern all
issues concerning the relative rights of the Company and its stockholders. All
other issues concerning this Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to any
choice of law or conflict of law provision or rule (whether of the State of
Delaware or any other jurisdiction) that would cause the application of the law
of any jurisdiction other than the State of Delaware.
9J. No Third Party Beneficiary Rights. This Agreement is intended
solely for the benefit of the parties hereto. Nothing herein shall be construed
or deemed to create any rights or benefits in any third parties or third party
beneficiaries.
9K. Several Obligations; Understanding Among Investors. The
obligations hereunder of each of the Investors shall be several and not joint.
The liabilities of each PIC Investor in respect of the representations and
warranties included in Section 4D above shall be several, in proportion to each
such Investor's holdings of PIC Stock. The determination of each Investor to
execute this Agreement, to contribute PIC Stock and Holdings Units pursuant
hereto and to consent to the cancellation of its Old Common Stock and the
issuance therefor of Company Stock has been made by such Investor independent of
any other Investor and independent of any statements or opinions as to the
advisability of such transaction which may have been made or given by any other
Investor or by any agent or employee of any other Investor. In addition, it is
acknowledged by each of the other Investors that Xxxxxx Xxxxx has not acted as
an agent of such Investor in connection with making its investment hereunder and
that Xxxxxx Xxxxx shall not be acting as an agent of such Investor in connection
with monitoring its investment hereunder or in any other respect.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Contribution and
Recapitalization Agreement as of the date first written above.
THE XXXXXXXX COMPANIES, INC.
By: ________________________________
Title:
XXXXXX XXXXX & PARTNERS, L.P.
By: Xxxxxx Xxxxx & Partners, L.L.C.
Its: General Partner
By: ________________________________
Name: Xxxxxx X. Xxxxxxxxxx
Title: Managing Director
NASSAU CAPITAL PARTNERS II, L.P.
By: Nassau Capital, L.L.C.
Title: General Partner
By: _______________________________
Name:
Title:
NAS PARTNERS I, L.L.C.
By: _______________________________
Name:
Title:
XXXXXXXX PROPERTIES
By: _______________________________
Name: Xxxxxx X. Xxxxxxxx
Title: Chairman of the Board
BANKAMERICA INVESTMENT CORPORATION
By: _______________________________
Name:
Title:
[Signature Page to Contribution and Recapitalization Agreement]
CHASE EQUITY ASSOCIATES, L.P.
By: Chase Capitals Partners
Its: General Partner
By:
------------------------------
Name:
Title: General Partner
ALLSTATE INSURANCE COMPANY
By:
------------------------------
Name:
Title:
FUI, INC.
By:
------------------------------
Name:
Title:
CIBC WG ARGOSY MERCHANT FUND 2, L.L.C.
By:
------------------------------
Name:
Title:
NORWEST EQUITY CAPITAL, L.L.C.
By: Itasca NEC, L.L.C.
Its: Managing Member
By:
------------------------------
Name:
Title:
------------------------------------
Xxxxx X. Xxxxxxx,Xx.
XXXXX X. XXXXXXX III TRUST
By:
------------------------------
Name:
Title:
[Signature Page to Contribution and Recapitalization Agreement]
XXXXX X. XXXXXXX TRUST
By: ________________________________
Name:
Title:
CIVC PARTNERS II
By: ________________________________
Name:
Title: A General Partner
THE XXXXXXXX X. XXXXX AND XXXXX XXXXX
TRUST
By: ________________________________
Name: Xxxxxxxx X. Xxxxx
Title:
_____________________________________
Xxxxxx Xxxx
_____________________________________
Xxxxxx X. Xxxxxxx
_____________________________________
Xxxxx Xxxx
_____________________________________
Xxxxxxx Xxxxxxx
_____________________________________
X. Xxxxxx Xxxxxxxxxx
_____________________________________
Xxxx Xxxxxx
[Signature Page to Contribution and Recapitalization Agreement]
________________________________________
Xxxxxxx X Xxxxxx
________________________________________
Xxxx Xxxxxx
________________________________________
Xxxxxxx X. Xxxxx
________________________________________
Xxxx Xxxxxxxxx
________________________________________
Xxxxx Xxxxx
________________________________________
Xxx Xxxxxx
________________________________________
Xxx Xxxxxx
________________________________________
Xxxxxxx Xxxxxxxxx
________________________________________
Xxxxxx XxXxxxxxx
XXXX XXXXXX XXXXXXXX, Custodian for Xxxxxx
XxXxxxxxx XXX Rollover
By: _______________________________
Name:
Title:
[Signature Page to Contribution and Recapitalization Agreement]
MLPF&S, Custodian FPO Xxxxx Xxxxxxx XXX FBO
Xxxxx Xxxxxxx
By: _______________________________
Name:
Title:
_________________________________________
Xxxxxxxxx Xxxxxxx
_________________________________________
Xxx Xxxxxxx
SCHEDULE OF INVESTORS (PAGE 1)
====================================================================================================================================
Imputed Ownership of
Direct Ownership of Holdings LLC
Direct Ownership of PCI Holdings LLC through PCI(2)
-------------------------- -------------------------- ----------------------
A (Voting) B (Non-voting) Preferred Class A Preferred Class A
Group Shares Shares Units Common Units Units Common Units
----- ---------- -------------- --------- ------------ --------- ------------
Xxxxxx Xxxxx & Partners, L.P. 1,000.0 - 110,000.0(1) 110,000.0(1) 1,111.1 1,132.6
Xxxxxxxx Publishing Company 500.0 - 55,000.0 55,000.0 555.6 566.3
BankAmerica Investment Corporation - 360.0 39,600.0 39,600.0 400.0 407.8
Chase Equity Associates, L.P. - 300.0 33,000.0 33,000.0 333.3 339.8
Allstate Insurance Company 300.0 - 33,000.0 33,000.0 333.3 339.8
FUI, Inc. - 250.0 27,500.0 27,500.0 277.8 283.2
CIBC WG Argosy Merchant Fund 2, L.L.C. - 250.0 27,500.0 27,500.0 277.8 283.2
Norwest Equity Capital, L.L.C. 100.0 - 11,000.0 11,000.0 111.1 113.3
Nassau Capital Partners II L.P. 99.5 - 10,945.6(1) 10,945.6(1) 110.6 112.7
Xxxxx X. Xxxxxxx, Xx. 42.0 - 4,620.0 4,620.0 46.7 47.6
Xxxxx X. Xxxxxxx III Trust 1.0 - 110.0 110.0 1.1 1.1
Xxxxx X. Xxxxxxx Trust 1.0 - 110.0 110.0 1.1 1.1
CIVC Partners II - 40.0 4,400.0 4,400.0 44.4 45.3
X. Xxxxxx Xxxxxxxxxx 30.0 - 3,300.0 3,300.0 33.3 34.0
The Xxxxxxxx X. Xxxxx and Xxxxx Xxxxx Trust 20.0 - 2,200.0 2,200.0 22.2 22.7
Xxxxxx Xxxx 20.0 - 2,200.0 2,200.0 22.2 22.7
Xxxx Xxxxxx 15.0 - 1,650.0 1,650.0 16.7 17.0
Xxxxxxx X. Xxxxxx 6.0 - 660.0 660.0 6.7 6.8
Xxxxx Xxxx 10.0 - 1,100.0 1,100.0 11.1 11.3
Xxxxxxx Xxxxxxx 3.0 - 330.0 330.0 3.3 3.4
Xxxx Xxxxxx 2.0 - 220.0 220.0 2.2 2.3
Xxxx Xxxxx 2.0 - 220.0 220.0 2.2 2.3
Xxxx Xxxxxxxxx 2.0 - 220.0 220.0 2.2 2.3
Xxxxx Xxxxx 1.0 - 110.0 110.0 1.1 1.1
Xxx Xxxxxx 1.0 - 110.0 110.0 1.1 1.1
Xxx Xxxxxx 0.2 - 22.0 22.0 0.2 0.2
Xxxxxxx Xxxxxxxxx - - - - - -
Xxxxxx X. Xxxxxxx 1.0 - 110.0 110.0 1.1 1.1
Xxxxxx XxXxxxxxx 2.0 - 220.0 220.0 2.2 2.3
MLPF&S Custodian FPO Xxxxx Xxxxxxx IRRA FBO Xxxxx 1.8 - 200.0 200.0 2.0 2.1
Xxxxxxxxx Xxxxxxx 0.7 - 80.0 80.0 0.8 0.8
Xxx Xxxxxxx 0.9 - 100.0 100.0 1.0 1.0
NAS Partners I L.L.C. 0.5 - 54.4(1) 54.4(1) 0.5 0.6
---------- -------------- --------- --------- --------- ------------
Sub-Total 2,162.7 1,200.0 369,892.0 369,892.0 3,736.3 3,808.7
========== ============== ========= ========= ========= ============
Management Units Total Direct & Imputed
Total Direct & Imputed Direct Ownership of Ownership of
Ownership of Holdings LLC Holdings LLC Holdings LLC
-------------------------- -------------------------- ----------------------
Converted
Class A Class D
Preferred Common Common Common
Group Units Percent Units Units(3) Units Percent
----- ---------- -------------- --------- ------------ --------- ------------
Xxxxxx Xxxxx & Partners, L.P. 111,111.1 29.7% - - 111,132.6 24.9%
Xxxxxxxx Publishing Company 55,555.6 14.9% - - 55,566.3 12.5%
BankAmerica Investment Corporation 40,000.0 10.7% - - 40,007.8 9.0%
Chase Equity Associates, L.P. 33,333.3 8.9% - - 33,339.8 7.5%
Allstate Insurance Company 33,333.3 8.9% - - 33,339.8 7.5%
FUI, Inc. 27,777.8 7.4% - - 27,783.2 6.2%
CIBC WG Argosy Merchant Fund 2, L.L.C. 27,777.8 7.4% - - 27,783.2 6.2%
Norwest Equity Capital, L.L.C. 11,111.1 3.0% - - 11,113.3 2.5%
Nassau Capital Partners II L.P. 11,056.2 3.0% - - 11,058.3 2.5%
Xxxxx X. Xxxxxxx, Xx. 4,666.7 1.2% 8,278.6 13,201.3 26,147.5 5.9%
Xxxxx X. Xxxxxxx III Trust 111.1 0.0% - - 111.1 0.0%
Xxxxx X. Xxxxxxx Trust 111.1 0.0% - - 111.1 0.0%
CIVC Partners II 4,444.4 1.2% - - 4,445.3 1.0%
X. Xxxxxx Xxxxxxxxxx 3,333.3 0.9% 5,174.1 4,748.7 13,256.8 3.0%
The Xxxxxxxx X. Xxxxx and Xxxxx Xxxxx Trust 2,222.2 0.6% 6,209.0 6,591.1 15,022.8 3.4%
Xxxxxx Xxxx 2,222.2 0.6% 4,139.3 3,798.9 10,160.9 2.3%
Xxxx Xxxxxx 1,666.7 0.4% 5,174.1 7,028.0 13,869.2 3.1%
Xxxxxxx X. Xxxxxx 666.7 0.2% 1,034.8 2,621.3 4,322.9 1.0%
Xxxxx Xxxx 1,111.1 0.3% - - 1,111.3 0.2%
Xxxxxxx Xxxxxxx 333.3 0.1% - - 333.4 0.1%
Xxxx Xxxxxx 222.2 0.1% 413.9 - 636.2 0.1%
Xxxx Xxxxx 222.2 0.1% 413.9 - 636.2 0.1%
Xxxx Xxxxxxxxx 222.2 0.1% 413.9 - 636.2 0.1%
Xxxxx Xxxxx 111.1 0.0% 207.0 - 318.1 0.1%
Xxx Xxxxxx 111.1 0.0% 413.9 - 525.1 0.1%
Xxx Xxxxxx 22.2 0.0% 413.9 - 436.2 0.1%
Xxxxxxx Xxxxxxxxx - 0.0% 413.9 - 413.9 0.1%
Xxxxxx X. Xxxxxxx 111.1 0.0% - - 111.1 0.0%
Xxxxxx XxXxxxxxx 222.2 0.1% 413.9 - 636.2 0.1%
MLPF&S Custodian FPO Xxxxx Xxxxxxx IRRA FBO Xxxxx 202.0 0.1% 413.9 - 616.0 0.1%
Xxxxxxxxx Xxxxxxx 80.8 0.0% 413.9 - 494.8 0.1%
Xxx Xxxxxxx 101.0 0.0% 413.9 - 515.0 0.1%
NAS Partners I L.L.C. 54.9 0.0% - - 54.9 0.0%
---------- ----- --------- --------- --------- ------
Sub-Total 373,628.3 100.0% 34,356.3 37,989.3 446,046.3 100.0%
========== ===== ========= ========= ========= ======
Defined Terms
-------------
The Xxxxxxxx Companies, Inc. ("PCI")
Xxxxxxxx Holdings, L.L.C. ("Holdings LLC")
Xxxxxxxx Publishing, L.L.C. ("Publishing LLC")
Xxxxxxxx Investment Corp. ("PIC")
-------------------------------
(1) Represents holdings of Common Stock or Preferred Stock of PIC, as
applicable. Also represents an equivalent number of Class A Common Units or
Preferred Units, as applicable, held indirectly through PIC.
(2) Includes PCI's ownership of Publishing LLC.
(3) Assumes an IPO Price within the $15 per share to $17 per share filing range
as shown on the cover of the Prospectus.
CONFIDENTIAL
SCHEDULE OF INVESTORS (PAGE 2)
-------------------------------------------------------------------------------
Common Shares of The Xxxxxxxx Companies, Inc.
From Direct Ownership of Holdings LLC
--------------------------------------------------------------------------------
Invested Management Units
----------------------------- ------------------------------
Class A Preferred Class A Converted Class
Entity Common Units Units Common Units D Common Units Sub-Total
------------------------------------------- -------------- ------------- ------------- --------------- -----------
Xxxxxx Xxxxx & Partners, L.P. 3,978,353.2 3,447,222.5 - - 7,425,575.6
Xxxxxxxx Publishing Company 1,989,176.6 1,723,611.2 - - 3,712,787.8
BankAmerica Investment Corporation 1,432,207.1 1,241,000.1 - - 2,673,207.2
Chase Equity Associates, L.P. 1,193,506.0 1,034,166.7 - - 2,227,672.7
Allstate Insurance Company 1,193,506.0 1,034,166.7 - - 2,227,672.7
FUI, Inc. 994,588.3 861,805.6 - - 1,856,393.9
CIBC WG Argosy 994,588.3 861,805.6 - - 1,856,393.9
Norwest Equity Capital, L.L.C. 397,835.3 344,722.2 - - 742,557.6
Nassau Capital Partners II L.P. 395,868.3 343,017.8 - - 738,886.1
Xxxxx X. Xxxxxxx, Xx. 167,090.8 144,783.3 299,411.8 477,449.2 1,088,735.2
Xxxxx X. Xxxxxxx III Trust 3,978.4 3,447.2 - - 7,425.6
Xxxxx X. Xxxxxxx Trust 3,978.4 3,447.2 - - 7,425.6
CIVC Partners II 159,134.1 137,888.9 - - 297,023.0
X. Xxxxxx Xxxxxxxxxx 119,350.6 103,416.7 187,132.4 171,744.3 581,644.0
The Xxxxxxxx X. Xxxxx and Xxxxx Xxxxx Trust 79,567.1 68,944.4 224,558.9 238,381.1 611,451.5
Xxxxxx Xxxx 79,567.1 68,944.4 149,705.9 137,395.4 435,612.9
Xxxx Xxxxxx 59,675.3 51,708.3 187,132.4 254,181.6 552,697.6
Xxxxxxx X. Xxxxxx 23,870.1 20,683.3 37,426.5 94.802.9 176,782.8
Xxxxx Xxxx 39,783.5 34,472.2 - - 74,255.8
Xxxxxxx Xxxxxxx 11,935.1 10,341.7 - - 22,276.7
Xxxx Xxxxxx 7,956.7 6,894.4 14,970.6 - 29,821.7
Xxxx Xxxxx 7,956.7 6,894.4 14,970.6 - 29,821.7
Xxxx Xxxxxxxxx 7,956.7 6,894.4 14,970.6 - 29,821.7
Xxxxx Xxxxx 3,978.4 3,447.2 7,485.3 - 14,910.9
Xxx Xxxxxx 3,978.4 3,447.2 14,970.6 - 22,396.2
Xxx Xxxxxx 795.7 689.4 14,970.6 - 16,455.7
Xxxxxxx Xxxxxxxxx - - 14,970.6 - 14,970.6
Xxxxxx X. Xxxxxxx 3,978.4 3,447.2 - - 7,425.6
Xxxxxx XxXxxxxxx 7,956.7 6,894.4 14,970.6 - 29,821.7
Xxxxx Xxxxxxx 7,233.4 6,267.7 14,970.6 - 28,471.6
Xxxxxxxxx Xxxxxxx 2,893.3 2,507.1 14,970.6 - 20,371.0
Xxx Xxxxxxx 3,616.7 3,133.8 14,970.6 - 21,721.1
NAS Partners I L.L.C. 1,967.1 1,704.4 - - 3,671.5
Other Management - - - - -
Public - - - - -
-------------- ------------- ------------- --------------- -----------
Total 13,377,827.4 11,591,818.2 1,242,559.1 1,373,954.5 27,586,159.2
Total Shares
From Ownership of PCI through Total
Imputed Ownership of Holdings LLC -------------------------
---------------------------------------- Class A Class B
Class A Preferred Voting Non-Voting
Entity Common Units Units Sub-Total Total Shares Shares
------------------------------------------- -------------- ------------ ----------- ------------ ------------ -----------
Xxxxxx Xxxxx & Partners, L.P. 40,964.3 34,820.4 75,784.7 7,501,360.0 7,501.360.0 -
Xxxxxxxx Publishing Company 20,482.1 17,410.2 37,892.4 3,750,680.0 3,750,680.0 -
BankAmerica Investment Corporation 14,747.1 12,535.4 27,282.5 2,700,490.0 - 2,700,490.0
Chase Equity Associates, L.P. 12,289.3 10,446.1 22,735.4 2,250,408.0 1,319,000.0 931,408.0
Allstate Insurance Company 12,289.3 10,446.1 22,735.4 2,250.408.0 2,250,408.0 -
FUI, Inc. 10,241.1 8,705.1 18,946.2 1,875,340.0 - 1,875,340.0
CIBC WG Argosy 10,241.1 8,705.1 18,946.2 1,875,340.0 - 1,875,340.0
Norwest Equity Capital, L.L.C. 4,096.4 3,482.0 7,578.5 750,136.0 750,136.0 -
Nassau Capital Partners II L.P. 4,076.2 3,464,8 7,541.0 746,427.0 746,427.0 -
Xxxxx X. Xxxxxxx, Xx. 1,720.5 1,462.5 3,183.0 1,091,918.0 1,091,918.0 -
Xxxxx X. Xxxxxxx III Trust 41.0 34.8 75.8 7,501.0 7,501.0 -
Xxxxx X. Xxxxxxx Trust 41.0 34.8 75.8 7,501.0 7,501.0 -
CIVC Partners II 1,638.6 1,392.8 3,031.4 300,054.0 - 300,054.0
X. Xxxxxx Xxxxxxxxxx 1,228.9 1,044.6 2,273.5 583,918.0 583,918.0 -
The Xxxxxxxx X. Xxxxx and Xxxxx Xxxxx Trust 819.3 696.4 1,515.7 612,967.0 612,967.0 -
Xxxxxx Xxxx 819.3 696.4 1,515.7 437,129.0 437,129.0 -
Xxxx Xxxxxx 614.5 522.3 1,136.8 553,834.0 553,834.0 -
Xxxxxxx X. Xxxxxx 245.8 208.9 454.7 177,237.0 177,237.0 -
Xxxxx Xxxx 409.6 348.2 757.8 75,014.0 75,014.0 -
Xxxxxxx Xxxxxxx 122.9 104.5 227.4 22,504.0 22,504.0 -
Xxxx Xxxxxx 81.9 69.6 151.6 29,973.0 29,973.0 -
Xxxx Xxxxx 81.9 69.6 151.6 29,973.0 29,973.0 -
Xxxx Xxxxxxxxx 81.9 69.6 151.6 29,973.0 29,973.0 -
Xxxxx Xxxxx 41.0 34.8 75.8 14,987.0 14,987.0 -
Xxx Xxxxxx 41.0 34.8 75.8 22,472.0 22,472.0 -
Xxx Xxxxxx 8.2 7.0 15.2 16,471.0 16,471.0 -
Xxxxxxx Xxxxxxxxx - - - 14,971.0 14,971.0 -
Xxxxxx X. Xxxxxxx 41.0 34.8 75.8 7,501.0 7,501.0 -
Xxxxxx XxXxxxxxx 81.9 69.6 151.6 29,973.0 29,973.0 -
Xxxxx Xxxxxxx 74.5 63.3 137.8 28,609.0 28,609.0 -
Xxxxxxxxx Xxxxxxx 29.8 25.3 55.1 20,426.0 20,426.0 -
Xxx Xxxxxxx 37.2 31.7 68.9 21,790.0 21,790.0 -
NAS Partners I L.L.C. 20.3 17.2 37.5 3,709.0 3,709.0 -
Other Management - - - - - -
Public - - - - 6,250,000.0 -
-------------- ------------ ----------- ------------ ------------ ------------
Total 137,748.7 117,089.1 254,837.8 27,840,994.0 26,408,362.0 7,682,632.0
Total Shares 34,090,994.0
For the calculation of the number of shares issued in exchange for Preferred Units, the IPO Price has been assumed to be equal to
the midpoint ($16 per share) of the filing range as shown on the cover of the Prospectus and the Closing Date has been assumed to be
September 30, 1997. All numbers shown in the table above are denominated in Common Shares of The Xxxxxxxx Companies, Inc.
CONFIDENTIAL
SCHEDULE OF CLASS D UNITS
--------------------------------------------------------------------------------
Converted
Class D Units (1)
-----------------
Xxxxx X. Xxxxxxx, Xx. 13,201.29
The Xxxxxxxx X. Xxxxx and Xxxxx Xxxxx Trust 6,591.15
Xxxxxx Xxxx 3,798.93
X. Xxxxxx Xxxxxxxxxx 4,748.67
Xxxx Xxxxxx 7,028.03
Xxxxxxx X. Xxxxxx 2,621.26
---------
Total 37,989.33
-----------------
(1) Assumes an IPO Price within the $15 per share to $17 per share filing range
as shown on the cover of the Prospectus.
CONFIDENTIAL
