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EXHIBIT 10.14
STOCK PURCHASE AGREEMENT
BY AND AMONG
XXXXX/XXXXXX, INC.
AND
XXXXXX X. XXXXXXX, XXXXXXX X. XXXXXX,
X.X. XXXXXXXXX, III and XXX X. XXXXXXX
AUGUST 22, 1997
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TABLE OF CONTENTS
SECTION Page
1. PURCHASE AND SALE OF SHARES .........................................................................1
1.1 Purchase and Sale of Shares ..................................................................1
1.2 Consideration for Sale and Transfer of the Purchased Shares ..................................1
1.3 Purchase of Xxxxx Shares/Sale of Shares ......................................................2
1.4 Closing ......................................................................................2
1.5 Closing Documents of Sellers .................................................................3
1.6 Closing Documents of Buyer ...................................................................4
2. REPRESENTATIONS AND WARRANTIES OF SELLERS ...........................................................4
2.1 Ability and Authorization to Carry Out Agreement; Consents....................................4
2.2 Consents and Approvals .......................................................................5
2.3 Litigation ...................................................................................5
2.4 Accuracy of Representations ..................................................................5
2.5 Title to Shares ..............................................................................6
2.6 Ownership of Shares ..........................................................................6
3. REPRESENTATIONS AND WARRANTIES OF BUYER .............................................................6
3.1 Organization of Buyer ........................................................................6
3.2 Authorization of and Ability to Perform Agreement.............................................6
3.3 Accuracy of Representations ..................................................................7
4. COVENANTS OF SELLERS AND BUYER ......................................................................7
4.1 Covenants of Sellers ............................................................................7
4.2 Covenants of Buyer ..............................................................................7
5. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS .........................................................7
5.1 Form Satisfactory to Buyer's Counsel .........................................................7
5.2 Representations and Warranties; Certificates of Compliance ...................................8
5.3 Litigation ...................................................................................8
5.4 Delivery of Documents ........................................................................8
5.5 Financing ....................................................................................8
5.6 Waiver .......................................................................................8
6. CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS ........................................................8
6.1 Form Satisfactory to Sellers' Counsel .....................................................8
6.2 Representations and Warranties; Compliance with Conditions ................................8
6.3 Litigation ................................................................................9
6.4 Delivery of Documents .....................................................................9
6.5 Waiver ....................................................................................9
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7. TERMINATION..........................................................................................9
8. OTHER AGREEMENTS ...................................................................................10
8.1 Termination of Voting Agreement . ...........................................................10
8.2 Xxxxxxxxx and Xxxxx Transactions ............................................................10
8.3 Election to Close Buyer's Tax Year . ........................................................10
8.4 Approval of Related Financing ...............................................................10
8.5 Approval of BCSI Acquisition and Related Financing . ........................................11
8.6 Rights to Profits or Future Distributions . .................................................11
8.7 S Corp. Termination . ................................ ......................................11
8.8 Right to Participate in Future Stock Offerings ..............................................11
8.9 Call Restriction and Voting of Shares .......................................................12
8.10. Appraisal of Buyer...........................................................................13
9. ARBITRATION.........................................................................................14
10. SURVIVAL OF WARRANTIES, REPRESENTATIONS AND AGREEMENTS .............................................14
11. NOTICES.............................................................................................14
12. ENTIRE AGREEMENT ...................................................................................16
13. AMENDMENTS..........................................................................................16
14. SPECIFIC PERFORMANCE ...............................................................................16
15. FURTHER ASSURANCES .................................................................................16
16. REMEDIES CUMULATIVE; NO WAIVER; PERSONS LIABLE .....................................................17
17. COUNTERPARTS; CAPTIONS; PRONOUNS ...................................................................17
18. PARTIES IN INTEREST ................................................................................17
19. APPLICABLE LAW......................................................................................17
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EXHIBITS
Exhibit A - Shareholder Ownership Schedule
Exhibit B - Form of Settlement Agreement
Exhibit C - Form of Termination Agreement
Exhibit D - Form of Cochlan Phantom Stock Agreement
Exhibit E - Form of Supplemental Agreement Concerning SOP-FS
Exhibit F - Form of Shareholder Agreement
Exhibit G - Form of Xxxxxxx Office Agreement
Exhibit H - Form of Amendments to Principal Agreements - Xxxxxx X. Xxxxxxx,
Xxxxxxx X. Xxxxxx, X.X. Xxxxxxxxx, III., Xxx X. Xxxxxxx
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT (this "Agreement") made and entered into as of the
22nd day of August, 1997, by and among XXXXX/XXXXXX, INC., a Texas corporation
("Buyer"), XXXXXXX X. XXXXXX ("Xxxxxx"), XXXXXX X. XXXXXXX ("Cochlan"), X.X.
XXXXXXXXX, III ("Xxxxxxxxx") and XXX X. XXXXXXX ("Xxxxxxx") (Briggs, Cochlan,
Xxxxxxxxx and Xxxxxxx are hereinafter sometimes referred to individually as a
"Seller" or collectively as "Sellers").
W I T N E S S E T H:
WHEREAS, Sellers own certain issued and outstanding capital stock of the
Buyer in accordance with Exhibit A attached hereto; and
WHEREAS, Sellers desire to sell to Buyer, and Buyer desires to purchase
from Sellers, certain of the issued and outstanding shares of capital stock of
the Buyer (the "Shares") upon the terms and conditions herein set forth.
NOW, THEREFORE, for and in consideration of the above premises and of the
mutual covenants and promises contained herein, the parties hereto agree as
follows:
1. PURCHASE AND SALE OF SHARES
1.1 Purchase and Sale of Shares. Subject to the terms and conditions of
this Agreement, in reliance on the representations and warranties of Buyer, and
in consideration of the obligations of Buyer herein provided, Sellers hereby
agree to sell, convey, transfer, assign and deliver to Buyer, and the Buyer
hereby agrees to purchase from the Sellers at the closing provided for in
Section 1.2 hereof (the "Closing"), an aggregate of 2,793,143 of the Shares (the
"Purchased Shares") in accordance with the terms and conditions of this
Agreement, free and clear of any and all liens, security interests, mortgages,
charges, restrictions, adverse claims, encumbrances and rights of other persons
of every nature and description whatsoever.
1.2 Consideration for Sale and Transfer of the Purchased Shares. Subject
to the terms and conditions of this Agreement, in reliance on the
representations and warranties of Sellers, and in consideration of the
obligations of Sellers herein provided and such sale, conveyance, transfer,
assignment and delivery by Sellers at the Closing of all of the Purchased Shares
and the execution and delivery by Sellers of the other documents provided for
herein, Buyer agrees to pay Sellers an amount equal to $3.00 per Share and, in
the aggregate, an amount equal to Eight Million Three Hundred Seventy-Nine
Thousand Four Hundred Twenty-Nine Dollars ($8,379,429) (the "Purchase Price").
The Purchase Price shall be payable as follows: (i) cash payment to be made to
each Seller by certified or official bank check to the order of such Seller or
by wire transfer of immediately available funds of the amount to such Seller as
provided for below; and (ii) delivery to each Seller of a Promissory Note of
Buyer in amounts as provided for below (the "Promissory Notes"). The
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number of Purchased Shares are as follows and the Purchase Price shall be
payable at the Closing as follows:
NUMBER
CASH PORTION OF NOTE PORTION OF OF SHARES
SELLER PURCHASE PRICE PURCHASE PRICE PURCHASED
------ --------------- --------------- ---------------
Xxxxxxx X. Xxxxxx $ 2,265,065 $ 251,674 838,913
Xxxxxx X. Xxxxxxx 3,847,500 427,500 1,425,000
X.X. Xxxxxxxxx, III 202,500 22,500 75,000
Xxx X. Xxxxxxx 1,226,421 136,269 454,230
--------------- --------------- ---------------
Totals $ 7,541,486 $ 837,943 2,793,143
=============== =============== ===============
1.3 Purchase of Xxxxx Shares/Sale of Shares. The Parties agree that:
(a) Buyer may purchase 1,404,305 shares of issued and outstanding capital
stock of Buyer owned by Xxxxx X. Xxxxx ("Xxxxx") at a price of $2.40 per share
pursuant to that certain Stock Purchase Agreement dated as of August 22, 1997
between Buyer and Xxxxx (the "Xxxxx Purchase Agreement") at or prior to the
Closing.
(b) Within 90 days after the Closing, the Buyer shall use its best
efforts to offer up to 1,400,000 shares of capital stock of Buyer at a price of
$2.40 per share or such other price as determined in the sole discretion of
Buyer and to such third parties as are selected in the sole discretion of Buyer,
which may include one or more present shareholders of Buyer and may exclude each
or any of the Sellers; provided, however, that Buyer shall apply the net
proceeds (after deducting all applicable discounts, attorney and accountant fees
and other transaction costs) to prepay each of the Promissory Notes (as defined
in Section 1.2 hereof) and the Promissory Note to be issued to Xxxxx pursuant to
the Xxxxx Purchase Agreement, taken together, on a pro rata basis in the
proportion which (x) the then outstanding principal amount of each such
Promissory Note bears to (y) the total of the then outstanding principal amounts
of all such Promissory Notes.
1.4 Closing. The Closing of the transactions contemplated by this
Agreement shall be on or prior to August 29, 1997, or on such other date as may
be mutually agreed upon by Buyer and Sellers or as otherwise determined
hereunder (the "Closing Date"). At the Closing, the parties will exchange the
various documents and take such other actions as contemplated by this Agreement.
The exchanges herein provided shall take place commencing at 10:00 a.m., local
time, on the Closing Date, at the offices of Vedder, Price, Xxxxxxx & Kammholz,
000 X. XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx.
1.5 Closing Documents of Sellers. At the Closing, the Sellers shall
deliver or cause to be delivered to Buyer the following duly executed documents
and other items:
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(i) Good and valid certificates representing all of the Purchased
Shares, free and clear of any liens, security interests, mortgages,
charges, restrictions, adverse claims, encumbrances and rights of other
persons of every nature and description whatsoever, duly endorsed for
transfer to Buyer or accompanied by duly executed stock powers, with all
applicable transfer taxes, if any, paid;
(ii) A certificate of accuracy of representations and warranties
and compliance with covenants executed by each of the Sellers;
(iii) The written opinions of counsel for the Sellers relating to
certain representations and warranties of Sellers which are reasonably
satisfactory to Buyer and to Buyer's Lenders referred to in Paragraph 8.4;
(iv) All necessary approvals or consents of third parties to the
purchase and sale of the Shares and consummation of the transactions
provided for herein;
(v) Settlement Agreement among X.X. Xxxxxxx ("Xxxxxxx"), the Buyer
and the Sellers in the form of Exhibit B hereto (the "Settlement
Agreement") duly executed by each Seller;
(vi) Termination of any Voting Agreement and Irrevocable Proxy,
both dated April 18, 1997, between the Sellers and other shareholders in
the form of Exhibit C hereto (the "Termination Agreement") duly executed by
parties to such Voting Agreements and Irrevocable Proxy;
(vii) Phantom Stock Agreement between the Buyer and Cochlan in the
form of Exhibit D hereto (the "Cochlan Phantom Stock Agreement") duly
executed by the parties thereto;
(viii) Supplemental Agreement Concerning SOP-FS between the Buyer and
Cochlan in the form of Exhibit E hereto (the "SOP-FS Amendment") duly
executed by the parties thereto;
(ix) Amended and Restated Shareholder Agreement among the Buyer and
each shareholder of the Buyer in the form of Exhibit F hereto (the
"Shareholder Agreement") duly executed by each of the Sellers and their
respective spouses;
(x) Agreement among the Buyer and Xxxxxxx regarding the lease of
certain office space in the form of Exhibit G hereto (the "Xxxxxxx Office
Agreement") duly executed by Xxxxxxx;
(xi) Amendment to Principal Office Agreement of each Seller in the
form attached hereto as Exhibit H (the "Principal Agreement") duly executed
by the respective Seller who is a party thereto; and
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(xii) Such other documents and actions as shall reasonably be
required by Buyer or by its counsel.
1.6 Closing Documents of Buyer. At the Closing, the Buyer shall deliver
or cause to be delivered to Sellers, or such other persons as appropriate, the
following duly executed documents and other items:
(i) The payment of the Purchase Price in the amounts described in
Section 1.2(i) hereof;
(ii) The executed Promissory Notes as provided for in Section
1.2(ii) hereof;
(iii) The written opinion of counsel for the Buyer relating to
certain representations and warranties of Buyer which is reasonably
satisfactory to Sellers and to Buyer's Lenders referred to in Paragraph
8.4;
(iv) A certificate of accuracy of representations and warranties
and compliance with covenants executed by the Buyer;
(v) The documents listed in Sections 1.5(a)(v), (vi), (vii),
(viii), (ix), (x), (xi) and (xii) duly executed by Buyer, and other parties
thereto (excluding the Sellers and Xxxxx and Xxxxxxxxx) as appropriate; and
(vi) Such other documents and actions as shall reasonably be
required by Sellers or by their counsel.
2. REPRESENTATIONS AND WARRANTIES OF SELLERS.
Each Seller, severally and not jointly, for himself and not with respect to
any other Seller, represents and warrants to and covenants with Buyer as
follows:
2.1 Ability and Authorization to Carry Out Agreement; Consents. The
Seller has the full capacity, right, power and authority to enter into, execute
and deliver this Agreement and each of the following agreements to which he is
a party: the Settlement Agreement, the Termination Agreement, the Cochlan
Phantom Stock Agreement, the Supplemental Agreement Concerning SOP-FS, the
Amended and Restated Shareholder Agreement and the Xxxxxxx Office Agreement
(collectively, the "Related Agreements"), to consummate the transactions
contemplated by this Agreement and the Related Agreements, to comply with and
fulfill the terms and conditions of this Agreement and the Related Agreements,
and to sell, transfer, assign and deliver all of his Shares to the Buyer. This
Agreement constitutes a valid and binding obligation of the Seller, enforceable
in accordance with its terms and conditions. The Related Agreements each
constitute a valid and binding obligation of each Seller who is a party to such
Related Agreement, enforceable in accordance with their respective terms and
conditions. Neither the execution and delivery of this
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Agreement or any Related Agreement, nor the consummation of the transactions
contemplated hereby or thereby, nor compliance by the Seller with any of the
provisions of this Agreement or any Related Agreement will:
(a) In any material respect, conflict with, violate, result in a breach
of, constitute a default (or an event which, with notice or lapse of time or
both, would constitute a default) under, or give rise to any right of
termination, cancellation, or acceleration under any of the terms, conditions or
provisions of any note, lien, bond, mortgage, indenture, license, lease,
contract, commitment, agreement, understanding, arrangement, restriction or
other instrument or obligation to which the Seller is a party or by which the
Seller or any of his respective properties or assets may be bound or subject;
(b) Violate any judgment, order, writ, injunction, or decree of any court,
administrative agency, or governmental agency or body or any law or regulation
applicable to the Seller or his properties, assets, or Shares; or
(c) Constitute an event of which, with or without notice, lapse of time,
or action by a third party, could result in the creation of any lien, charge, or
encumbrance upon his Shares.
2.2 Consents and Approvals. The execution, delivery and performance of
this Agreement and the Related Agreements by the Seller and the consummation by
the Seller of the transactions contemplated hereby or thereby will not require
any notice to, or consent, authorization or approval from any court or
governmental authority or any other third party.
2.3 Litigation. To the best of the Seller's knowledge, there is no action,
suit or proceeding or governmental investigation, judgment, order, writ,
injunction or decree outstanding, pending or threatened against or relating to
his Shares before any court or before or by any federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, nor does the Seller know or have reasonable grounds to know of
any basis for any such action.
2.4 Accuracy of Representations. No representation or warranty of the
Seller contained in this Agreement and no statement contained in any exhibit,
certificate, list, schedule or other document referred to in this Agreement
contains or will contain any untrue statement of any material fact, or omits or
will omit to state any material fact necessary to make the statements contained
therein or herein not false or misleading.
2.5 Title to Shares. The Seller represents and warrants to the Buyer that
he has good title to, and is the beneficial and record owner of, all of his
Shares free and clear of any and all liens, security interests, mortgages,
charges, restrictions, adverse claims, encumbrances and rights of other persons
of every nature and description whatsoever.
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2.6 Ownership of Shares. The Seller represents and warrants to the Buyer
that he owns no other shares in the Buyer and has no other rights in any shares
of the Buyer other than those Shares listed on Exhibit A hereto.
3. REPRESENTATIONS AND WARRANTIES OF BUYER.
Buyer represents and warrants to Sellers as follows:
3.1 Organization of Buyer. Buyer is a company duly organized, validly
existing and in good standing under the laws of the State of its incorporation
with full corporate power to execute and deliver this Agreement and to carry out
its obligations hereunder.
3.2 Authorization of and Ability to Perform Agreement. The execution,
delivery and performance of this Agreement and all other documents in connection
herewith by Buyer have been duly and validly authorized by the Board of
Directors of the Buyer and all requisite corporate action has been taken to make
them valid and binding upon Buyer in accordance with their respective terms. The
Buyer has the corporate power and authority to enter into, execute and deliver
this Agreement and the Related Agreements to which it is a party (the "Buyer
Related Agreements"), to consummate the transactions contemplated by this
Agreement and the Buyer Related Agreements, and to comply with and fulfill the
terms and conditions of this Agreement and the Buyer Related Agreements. This
Agreement and all Buyer Related Agreements each constitute a valid and binding
obligation of the Buyer, enforceable in accordance with their respective terms
and conditions. Neither the execution and delivery of this Agreement or any
Buyer Related Agreement, nor the consummation of the transactions contemplated
hereby or thereby, nor compliance by the Buyer with any of the provisions of
this Agreement or any Buyer Related Agreement will in any material respect:
(a) Conflict with, violate, result in a breach of, constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a material default) under, or give rise to any right of termination,
cancellation or acceleration under any of the terms, conditions or provisions of
any note, lien, bond, mortgage, indenture, license, lease, contract,
commitment, agreement or other instrument or obligation to which the Buyer is a
party and which would prohibit the Buyer from performing its obligations under
this Agreement; or
(b) Violate any judgment, order, writ, injunction or decree of any
court, administrative agency or governmental agency or body or any law or
regulation applicable to the Buyer which would prohibit the Buyer from
performing its obligations under this Agreement.
3.3 Accuracy of Representations. No representation or warranty of Buyer
contained in this Agreement and no statement contained in any certificate, list,
schedule, exhibit or other document referred to in this Agreement contains or
will contain any untrue statement of any material fact, or omits or will omit to
state any material fact necessary to make the statements contained therein or
herein not false or misleading.
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4. COVENANTS OF SELLERS AND BUYER
4.1 Covenants of Sellers. From and after Closing, or prior to
Closing if required by Buyer's lender referred to in Paragraph 8.4 or 8.5, and
for so long as Buyer is not in breach or default with respect to the terms,
provisions and covenants in this Agreement, or the respective Seller's
Promissory Note each Seller, severally and not jointly, for himself only and
not with respect to any other Seller:
(a) If shareholder approval is necessary or requested,
agrees to vote all of his shares of Buyer's capital stock in favor of: (i)
Buyer's purchase of the Shares hereunder, Buyer's purchase of its shares under
the Xxxxx Agreement referred to in Paragraphs 1.3 (a) and 8.4 and Buyer's
purchase of assets of BCSI referred to in Paragraph 8.5, and (ii) all equity or
debt financing arrangements approved by the Buyer for purposes of funding
working capital requirements and said transactions, including the financing
arrangements referred to in Paragraphs 8.4 and 8.5; and
(b) Agrees to vote all of his shares of Buyer's capital
stock in favor of any merger or reorganization where the purpose of such merger
or reorganization is to change the Buyer's state of incorporation from a Texas
corporation to a corporation organized in Delaware or some other state of the
Buyer's choosing, and the Sellers hereby expressly waive any statutory
dissenters' rights with respect thereto.
4.2 Covenants of Buyer. Buyer hereby agrees to use its best
efforts to obtain financing for the transactions contemplated hereunder which
is reasonably satisfactory to the Buyer. Buyer hereby agrees to notify Sellers
or a representative of the Sellers upon Buyer's execution of a binding term
sheet with respect to such financing.
5. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS.
All obligations of Buyer under this Agreement to consummate the
purchase and sale of the Shares and the other transactions contemplated hereby
are subject to the fulfillment prior to or at the Closing of each of the
following conditions:
5.1 Form Satisfactory to Buyer's Counsel. All proceedings taken by
the Sellers in connection with the transactions contemplated herein and all
instruments and documents required to be furnished by them in connection
herewith or incident hereto shall be reasonably satisfactory to Buyer's
counsel.
5.2 Representations and Warranties, Certificates of Compliance.
All representations and warranties of Sellers contained in this Agreement or in
any certificate or document heretofore delivered to Buyer or hereafter
delivered to Buyer pursuant hereto shall be deemed to have been made again at
the Closing and shall be true and correct in all material respects both on the
date of this Agreement and as of the Closing; and all agreements and conditions
required by this Agreement to be performed or satisfied prior to or at the
Closing (except agreements on the part of Buyer) shall
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have been fulfilled in all material respects; and Buyer shall have been
furnished with certificates of Sellers dated the Closing Date, certifying as to
the fulfillment of the foregoing conditions.
5.3 Litigation. No action or proceeding shall have been instituted
or threatened by third parties against Buyer or Sellers to restrain or
prohibit, or to obtain damages in respect of, the transactions contemplated by
this Agreement if such action or proceeding in the reasonable opinion of Buyer
makes it inadvisable to consummate such transactions.
5.4 Delivery of Documents. Sellers shall have delivered to Buyer
the instruments and documents referred to in Section 1.5 hereof and any other
documents referred to elsewhere in this Agreement.
5.5 Financing. Buyer's lenders shall have approved financing
arrangements on terms which are satisfactory to the Buyer and delivered all
funds to be provided under such arrangements.
5.6 Waiver. Any of the foregoing conditions may be waived in
writing by Buyer.
6. CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS.
All obligations of the Sellers under this Agreement to consummate the purchase
and sale of the Shares and the other transactions contemplated hereby are
subject to the fulfillment prior to or at the Closing of the following
conditions:
6.1 Form Satisfactory to Sellers' Counsel. All proceedings taken
by Buyer in connection with the transactions contemplated herein and all
instruments and documents required to be furnished by it in connection herewith
or incident hereto shall be reasonably satisfactory to Sellers' counsel.
6.2 Representations and Warranties; Compliance with Conditions.
All representations and warranties of Buyer contained in this Agreement or in
any certificate or document delivered pursuant hereto shall be deemed to have
been made again at the Closing and shall be true in all material respects as of
the Closing; and Buyer shall have performed and complied with all agreements
and conditions required by this Agreement to be performed or complied with by
it prior to or at the Closing; and Sellers shall have been furnished with
certificates of appropriate officers of Buyer dated the Closing Date,
certifying to the fulfillment of the foregoing conditions.
6.3 Litigation. No action or proceeding shall have been instituted
or threatened by third parties against Buyer or the Sellers to restrain or
prohibit, or to obtain damages in respect of, the transactions contemplated by
this Agreement if such action or proceeding in the reasonable opinion of a
majority of the Sellers makes it inadvisable to consummate such transactions.
6.4 Delivery of Documents. Buyer shall have delivered to Sellers
the payments, instruments and documents referred to in Section 1.6 hereof and
any other documents referred to elsewhere in this Agreement.
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6.5 Waiver. Any of the foregoing conditions may be waived in
writing by a majority of the Sellers.
7. TERMINATION.
7.1 This Agreement may be terminated at any time prior to the
Closing:
(a) By mutual agreement of the Buyer and Seller(s), as to
such Seller(s); or
(b) By mutual consent of Buyer and a majority of the
Sellers, as to all Sellers; or
(c) At the option of Buyer as to any Seller(s) upon the
non-satisfaction by such Seller(s) of any of the conditions precedent set forth
in Section 5 hereof, which in the reasonable judgment of Buyer, cannot be
corrected or cured on or prior to the Closing Date; or
(d) At the option of a majority of the Sellers upon the
non-satisfaction of any of the conditions precedent set forth in Section 6
hereof, which in the reasonable judgment of a majority of the Sellers, cannot
be corrected or cured on or prior to the Closing Date;
7.2 Either Buyer or any Seller as to himself, or a majority of the
Sellers as to all Sellers, may, at its/their election, waive in writing any of
its/their rights to terminate this Agreement because of the failure to satisfy
the conditions set forth in Sections 5 or 6, and shall be deemed to have waived
such rights to terminate this Agreement upon consummation of the Closing. No
such waiver shall constitute a waiver of any other rights arising from the
non-fulfillment of any such condition or otherwise. In addition, the party
entitled to waive such rights or conditions may withhold payment or delivery of
other closing documents until, and may require, performance or fulfillment of
such conditions or obligations by the breaching party. No party shall be liable
to any other party for any damages or expenses attributable to a termination
permitted by Sections 5 or 6, unless such termination results from the breach
by any of the terms of this Agreement.
8. OTHER AGREEMENTS.
8.1 Termination of Voting Agreement. Each Seller represents and
warrants to Buyer that he is not a party to, and neither his Shares nor any his
other shares of the capital stock of Buyer are subject to, any voting
agreement or voting trust agreement other than that certain Voting Agreement
and Irrevocable Proxy dated as of April 18, 1997 by and among Sellers and Xxxxx
and Xxxxxxxxx and no other persons or entities, and true and complete copies of
the Voting Agreement and Irrevocable Proxy have been delivered to CBI. Each
Seller agrees that such Voting Agreement and Irrevocable Proxy shall be
terminated and canceled in all respects upon the Closing, and will deliver a
Termination Agreement with respect thereto in the form of Exhibit C hereto duly
executed by all of the Sellers who are parties thereto at the Closing.
8.2 Xxxxxxxxx and Xxxxx Transactions. Each Seller acknowledges
that he has had full access to information and opportunity to become fully
informed concerning the transactions
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contemplated by the Xxxxxxxxx/Xxxxx Business Agreement and the Xxxxxxxxx/Xxxxx
Stock Purchase Agreement, hereby consents thereto and agrees that Buyer may
take all actions which in the sole discretion of Buyer are considered necessary
or appropriate to carry out the intent of such transactions, including without
limitation, the termination of Buyer's rights and marketing agreements
concerning the MCPP and Cash Value products and any rights of such Seller to
future commissions, fees or other revenues with respect thereto.
8.3 Election to Close Buyer's Tax Year and Tax Administration
Agreement. The parties hereto recognize that the contemplated purchases of
shares of the Buyer's capital stock pursuant to the Xxxxx Purchase Agreement
will, if all other requirements are satisfied, make available the election
under Section 1377(a)(2) of the Internal Revenue Code. Accordingly, Buyer and
each Seller agree that:
(a) Buyer shall use its best efforts to obtain the
necessary consents of all holders of Buyer's capital stock
during the 1997 taxable year to such an election by the Buyer
and take such other action as is appropriate to make such an
election effective;
(b) Each Seller agrees to and hereby does consent to such
an election, will obtain the consent of any other party having
an interest in his shares as required for such election, and
will cooperate with Buyer in all other respects in order to
make such election effective; and
(c) If the Buyer's allocation of taxable net income to
its Shareholders with respect to the 1997 calendar year is
reallocated for any reason, Buyer shall make and effect
appropriate adjustments for any distributions to the
Shareholders for individual tax purposes attributable to the
1997 calendar year, including payments to correct
under-distribution and obtain credit or refunds to correct
over-distribution.
8.4 Approval of Related Financing. Each Seller acknowledges that
he has had full access to information and opportunity to become fully informed
concerning the secured debt financing arrangements, which include the issuance
of warrants for capital stock of Buyer, between Buyer and certain lenders for
the purposes of Buyer's purchases of the Shares under this Agreement and
Buyer's purchase of shares of its capital stock under the Xxxxx Agreement, and
is in a position to make and informed decision with respect thereto. Each
Seller hereby consents to such transactions and agrees that Buyer may take all
actions which in the sole discretion of Buyer are considered necessary or
appropriate to carry out the intent of such transactions.
8.5 Approval of BCSI Acquisition and Related Financing. Each
Seller acknowledges that he has had full access to information and opportunity
to become fully informed concerning the terms and conditions and other
information related to the potential acquisition by Buyer of the assets of Bank
Compensation Strategies, Inc. ("BCSI") and the related secured debt financing
arrangements between Buyer and certain lenders for such purposes, and is in a
position to make an informed decision regarding such acquisition and financing
transactions. Each Seller hereby consents to the BCSI acquisition and related
financing transactions and, if requested, agrees to vote
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informed decision regarding such acquisition and financing transactions. Each
Seller hereby consents to the BCSI acquisition and related financing
transactions and, if requested, agrees to vote all of his shares of Buyer's
capital stock in favor of such transactions. Each Seller agrees that Buyer may
take all actions which in the sole discretion of Buyer are considered necessary
or appropriate to carry out the intent of such transactions.
8.6 Rights to Profits or Future Distribution. Each Seller hereby
acknowledges that after the Closing he has no rights in any portion of
accounts, earnings, profits or other funds of, or distributions by, Buyer,
including but not limited to, any portion of the S Corporation "AAA" account
attributable to the Shares.
8.7 S Corp. Termination. Each Seller acknowledges and agrees that
Buyer's S Corporation election and status under the Internal Revenue Code may
be terminated voluntarily or involuntarily and at any time and releases Buyer,
the holders of the warrants referred to in Paragraph 8.4, and the respective
directors, officers, employees, attorneys, and the respective successors and
assigns of each them from any claims arising out of or in connection with any
such termination.
8.8 Right to Participate in Future Stock Offerings. Until the
earlier of: (i) the tenth anniversary of the Closing; or (ii) the successful
completion of a firmly underwritten public offering of Buyer's Common Stock
pursuant to an effective registration statement filed under the Securities Act
of 1933, as amended, and except as provided below:
(a) Each Seller shall have the right to participate as an
offeree in any non-public offering for the sale of Buyer's
Common Stock of Buyer for cash, promissory notes or a
combination of such consideration (alone or as part of an
investment unit including other securities);
(b) The number of shares which each Seller shall be
entitled to purchase in such offering shall be determined by
multiplying the number shares of Common Stock of Buyer being
offered for sale in such offering (alone or as part of an
investment unit including other securities) by a fraction (y)
the numerator of which is the number of shares of Common Stock
of Buyer owned by such Seller, and (z) the denominator of
which is the total number of issued and outstanding shares of
Common Stock of Buyer immediately prior to the effective date
of such offering;
(c) This right to participate in a non-public offering of
shares of Common Stock of Buyer shall not apply to:
(1) The offering of up to 1,400,000 shares of
Common Stock at a purchase price of $2.40 referred to
in Paragraph 1.3 (b);
(2) The issuance or grant of shares of Common
Stock or other securities of Buyer, or options (in
any form) to acquire such shares or other securities,
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to present or future employees of Buyer or any
subsidiary or affiliate of Buyer or pursuant to
existing or future employee incentive and/or
compensation plans or practices;
(3) The issuance or grant of shares of Common
Stock or other securities of Buyer, or options (in
any form) to acquire such shares or other securities
to present or future members of the Board of
Directors of, or parties as either Principals,
Associates or Independent Sales Representatives to
agreements with, Buyer or any subsidiary or affiliate
of Buyer, pursuant to existing or future
incentive/and or compensation plans or practices;
(4) The issuance of shares of Common Stock or
other securities of Buyer, or options (in any form)
to acquire such shares or other securities, in
connection with debt or equity financing arrangements
with financial institutions, insurance companies,
commercial lending or venture capital transactions,
whether secured or otherwise; or
(5) The issuance of shares of Common Stock or
other securities of Buyer or options (in any form) to
acquire such shares or other securities, in
connection with any acquisition of stock or assets of
another entity or any merger, consolidation or other
reorganization involving the Buyer or any subsidiary
or affiliate of Buyer.
8.9 Call Restriction and Voting of Shares. Until the tenth
anniversary of the Closing:
(a) Buyer will not, without the consent of such Seller,
initiate the Call Option provided under Paragraph 3 of the
Amended and Restated Shareholders Agreement and Voting
Agreement, dated February 1, 1991, as currently in effect or
as hereafter amended from time to time, with respect to any
shares of Common Stock of Buyer presently owned or hereafter
acquired by such Seller;
(b) Each Seller agrees that he will vote all shares of
Common Stock of Buyer presently owned or hereafter acquired by
such Seller, or to which such Seller presently or hereafter
controls the voting rights, as specified or directed by the
Board of Directors of Buyer; and
(c) Each Seller agrees that this voting agreement is
COUPLED WITH AN INTEREST AND IS IRREVOCABLE FOR THE TEN YEAR
PERIOD SPECIFIED ABOVE, and in furtherance thereof hereby
IRREVOCABLY appoints the person serving as the Chairman and if
no person is serving as such, the person serving as the
President of Buyer from time to time, with full power of
substitution, to vote all such shares of Common Stock of Buyer
in accordance with this voting agreement with respect to all
matters submitted for vote of the shareholders of Buyer at any
meeting of its shareholders, or adjournment thereof, including
without limitation, the power
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to waive notice thereof or to take action with respect to any
such matters by written consent on behalf or such Seller
without a meeting of the shareholders. Upon request at any
time and from time to time, each Seller agrees to deliver a
duly executed Irrevocable Proxy conforming to the terms hereof.
8.10. Appraisal of Buyer. Until the earlier of: (i) the tenth
anniversary of the Closing; (ii) any termination of his respective Principal
Office Agreement; or (iii) the successful completion of a firmly underwritten
public offering of Buyer's Common Stock pursuant to an effective registration
statement filed under the Securities Act of 1933, as amended:
(a) If requested jointly by all Sellers who at the time
of such request own shares of Common Stock of the Buyer, an
appraisal will be obtained by the Buyer of the fair market
value of Buyer's Common Stock;
(b) The appraisal shall be obtained at Buyer's expense,
by an appraiser selected by Buyer who shall be regularly
engaged in the profession of valuation of closely-held
businesses, and the Buyer shall use its best efforts to obtain
completion of the appraisal within 45 days after receipt of
Sellers' written request therefor;
(c) The result of such appraisal shall be furnished to
the Sellers who are qualified to make such request, and shall
be kept confidential by them if and to the extent requested by
Buyer; and
(d) Notwithstanding the foregoing, Buyer shall not be
required to obtain such appraisal at Sellers' request more
often than once in any fiscal year or within less than six
calendar months after having obtained an appraisal with
includes an appraisal of the fair market value of Buyer's
Common Stock.
9. ARBITRATION.
Any dispute between the Buyer and any Seller arising out of or
relating to this Agreement or the breach, termination or validity thereof,
which has not been resolved by agreement within 30 days after notice of the
dispute is given by either party to the other shall be exclusively determined
by binding arbitration in accordance with the then current Center for Public
Resources ("CPW") Rules for Non-Administered Arbitration of Business Disputes
by a sole independent and impartial arbitrator selected pursuant to said Rules.
The arbitration shall be governed by the United States
Arbitration Act, 9 U.S.C. Section 1-16, and judgment upon the award rendered
by the arbitrator may be entered by any court having jurisdiction thereof. The
place of arbitration shall be Dallas, Texas.
The arbitrator is not empowered to award damages in excess of
compensatory damages and the costs of arbitration (including the arbitrator's
fees and expenses) to be apportioned among the parties as the arbitrator shall
determine.
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10. SURVIVAL OF WARRANTIES, REPRESENTATIONS AND AGREEMENTS.
All representations, warranties and agreements made by a party
herein or hereunder shall be deemed to be relied upon by the other party(ies)
and shall survive the Closing for a period of two (2) years from the Closing
Date and all statements made in any certificate, list, schedule, exhibit or
other document delivered pursuant hereto prior to or at the Closing shall be
deemed warranties and representations made under this Agreement.
11. NOTICES.
All notices, consents, requests, demands and other communications
hereunder shall be in writing and shall be deemed duly given as follows to any
party or parties (a) upon delivery to the address of the party or parties as
specified below if delivered in person or by courier or if sent by certified or
registered mail upon receipt (return receipt requested), or (b) upon dispatch
if transmitted by telecopy or other means of facsimile transmission, in any
case to the party or parties at the following addresses or telecopy numbers, as
the case may be:
If to Buyer, to:
Xxx Xxxx
Xxxxx/Xxxxxx, Inc.
0000 Xxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Fax No.: 000-000-0000
X. X. Xxxxxxx
Xxxxx/Xxxxxx, Inc.
000 Xxxxx Xxxxxxxx Xxxx Xxxxx
Xxxxx Xxxxxxxxxx, Xxxxxxxx 00000
Fax No.: 000-000-0000
with a required copy to:
Xxxxxxx X. Block, Esq.
Vedder, Price, Xxxxxxx & Kammholz
000 Xxxxx XxXxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000-0000
Fax No.: 000-000-0000
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If to Sellers, to:
Xxx X. Xxxxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Fax No.: 000-000-0000
Xxxxxx X. Xxxxxxx
Xxx Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
Fax No.: 000-000-0000
Xxxxxxx X. Xxxxxx
0000 Xxxxx Xxxxx Xxxxx Xxxx.
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Fax No.: 000-000-0000
X. X. Xxxxxxxxx, III
0000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000
Fax No.: 000-000-0000
with a required copy to:
Xxxxxxx X. Xxxx, III, Esq.
Xxxxxx and Xxxxx, L.L.P.
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000-0000
Fax No.: 000-000-0000
or to such other address or telecopy number as any party may hereafter
designate by written notice in the aforesaid manner. Rejection or refusal to
accept or inability to deliver because of changed address when no notice of
changed address was given, shall be deemed to be receipt.
12. ENTIRE AGREEMENT.
This Agreement, including the exhibits hereto, contains the entire
understanding of the parties hereto with respect to the subject matter hereof
and supersedes all prior agreements between the parties hereto concerning the
subject matter hereof.
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13. AMENDMENTS.
This Agreement may be amended by an instrument in writing made by the
parties to be bound thereby.
14. SPECIFIC PERFORMANCE.
Each Seller acknowledges and agrees that the Shares are unique, that
damages for the failure of any Seller to transfer the Shares pursuant to this
Agreement would be an inadequate remedy, and that Buyer shall be entitled to
enforcement by judgment for specific performance.
15. FURTHER ASSURANCES.
From time to time after the Closing and without further consideration
from Buyer, Sellers shall execute and deliver such other instruments of
conveyance and transfer and such other documents, and take such other action,
as Buyer may reasonably request more effectively to convey, assign, transfer
and deliver to, and vest in, Buyer full and complete title to the Shares to
which it is entitled at the Closing and otherwise to carry out the terms,
provisions and intents of this Agreement.
16. REMEDIES CUMULATIVE; NO WAIVER; PERSONS LIABLE
All remedies of the parties provided for herein shall, to the extent
permitted by law, be deemed cumulative and not exclusive of any thereof or of
any other remedies available to the parties, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained herein, and no delay or omission of a party to exercise
any right accruing upon any breach of the provisions hereof shall impair any
such right, or shall be construed to be a waiver of any such breach or an
acquiescence therein; and every remedy given herein or by law to any party
hereto may be exercised from time to time, and as often as shall be deemed
expedient, by such party.
17. COUNTERPARTS; CAPTIONS; PRONOUNS.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which together shall constitute
one and the same instrument. The section and subsection headings contained in
this Agreement, references to the schedules and the exhibits hereto are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. All pronouns used herein shall be construed
in the masculine, feminine or neuter and in the singular or plural, all as the
sense requires.
18. PARTIES IN INTEREST.
This Agreement shall not be assignable by any party, shall be binding
upon the parties and their respective successors, heirs, and legal
representatives, as the case may be, and, except as otherwise expressly
provided, shall inure only to the benefit of the parties signatory to this
Agreement (and, as third party beneficiaries, the holders of the debt and
warrant instruments issued
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in connection with the financing arrangements referred to in Paragraphs 8.4 and
8.5) and their respective successors, heirs and legal representatives, as the
case may be; provided, however, that Buyer may assign its rights hereunder
after the Closing (including, but not limited to, any company that may acquire
all or substantially all of the assets or business of Buyer or with or into
which Buyer may be consolidated or merged).
19. APPLICABLE LAW.
This Agreement shall be governed by, and construed and enforced in
accordance with, the laws of the State of Texas, without giving effect to the
principles of conflicts of laws thereof.
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the date first above written.
XXXXX/XXXXXX,INC. /s/ XXXXXXX X. XXXXXX
---------------------------------------
Xxxxxxx X. Xxxxxx
By: /s/ XXXXXX XXXX
------------------------------ /s/ XXXXXX X. XXXXXXX
---------------------------------------
Its: President - CEO Xxxxxx X. Xxxxxxx
-----------------------------
/s/ X.X. XXXXXXXXX, III
---------------------------------------
X.X. Xxxxxxxxx, III
/s/ XXX X. XXXXXXX
---------------------------------------
Xxx X. Xxxxxxx
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EXHIBIT A
Xxxxxxx X. Xxxxxx 1,118,551
Xxxxxx X. Xxxxxxx 1,900,000
X.X. Xxxxxxxxx, III 100,000
Xxx X. Xxxxxxx 605,640
----------
Total 3,724,191
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