SHARE EXCHANGE AGREEMENT
THIS AGREEMENT made as of the 1st day of July, 1998 by and among THE
XXXXXXX GROUP, INC., a South Carolina corporation (the "Company"), MMC HOLDING,
INC., a South Carolina corporation ("MMC"), the INDIVIDUAL RETIREMENT ACCOUNT OF
XXXXXXX X. XXXXXXXX (the "Xxxxxxx X. Xxxxxxxx Account"), and the INDIVIDUAL
RETIREMENT ACCOUNT OF XXXX X. XXXXXXXX (the "Xxxx X. Xxxxxxxx Account").
RECITALS:
A. MMC, the Xxxxxxx X. Xxxxxxxx Account, and the Xxxx X. Xxxxxxxx Account
(collectively, the "Purchasers") desire to exchange the securities listed on the
schedule attached hereto as Exhibit A for Fifty-Six Thousand Two Hundred
Seventy-Six (56,276) shares of the Company's Series D Preferred Stock (the
"Series D Preferred Stock") and the Company desires to make this exchange in
accordance with the terms hereof. A copy of the Certificate of Designations,
Preferences and Rights of the Series D Preferred Stock is attached hereto as
Exhibit B.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. Exchange of Stock. Subject to the terms and conditions contained
herein, and as of the date hereof, the Company hereby agrees to issue Fifty-Six
Thousand Two Hundred Seventy-Six (56,276) shares of Series D Preferred Stock,
par value $.01 per share, of the Company (the "Preferred Shares"), to the
Purchasers upon receipt of the securities listed on the schedule attached hereto
as Exhibit A (the "Tendered Securities"). Certificates representing the
Preferred Shares shall bear an appropriate legend reflecting the status of the
Preferred Shares as "restricted securities" under the Securities Act of 1933, as
amended.
2. Representations and Warranties of the Company. In order to induce the
Purchasers to enter into this Agreement, the Company hereby represents and
warrants that:
(a) The Company has the legal right to execute and deliver this
Agreement and to carry out the transactions and perform its obligations
hereunder. This Agreement constitutes a valid, legal, and binding
obligation of the Company, enforceable in accordance with its terms.
(b) The Company is a corporation, duly organized, validly existing
and in good standing under the laws of the State of South Carolina.
(c) The Preferred Shares represent Series D Preferred Stock.
3. Representation Disclaimer. The Company shall not be deemed to have made
to the Purchasers any representation or warranty other than as expressly made by
the Company in paragraph 2 hereof.
4. Representations and Warranties of the Purchasers. In order to induce
the Company to enter into this Agreement, each of the Purchasers hereby
represent and warrant to the Company that:
(a) The Purchaser has the legal right to execute and deliver this
Agreement and to carry out the transactions and perform the obligations
contemplated hereunder. This Agreement has been duly authorized by the
Purchaser and constitutes the legal, valid, and binding obligation of the
Purchaser enforceable in accordance with its terms.
(b) The Purchaser is acquiring the Preferred Shares for investment
and not with a view to or for resale in connection with the distribution
thereof.
(c) The Purchaser is the true and lawful beneficial and record owner
of the Tendered Securities listed opposite of his, her, or its name on
Exhibit A to this Agreement and has good and marketable title thereto,
free and clear of mortgages, pledges, liens, security interests, or any
other encumbrances.
5. Indemnification. The parties hereto agree to indemnify and hold each
other harmless as follows:
(a) The Company agrees to indemnify and hold the Purchasers harmless
at all times after the date of this Agreement from and against any and all
loss, liability, damage, or deficiency resulting from any
misrepresentation, breach of warranty, or nonfulfillment of any covenants
or agreements on the part of the Company contained herein or in any other
document or certificate furnished by the Company pursuant hereto and any
loss or damage resulting from any claims, litigation, actions, suits,
proceedings, judgments, reasonable attorneys' fees, costs, and expenses
relating to or arising out of such misrepresentation, breach, or
nonfulfillment.
(b) The Purchasers jointly and severally agree to indemnify and hold
the Company harmless at all times after the date of this Agreement from
and against any and all loss, liability, damage or deficiency resulting
from any misrepresentation, breach of warranty, or nonfulfillment of any
covenants or agreements on the part of the Purchasers contained herein or
any certificate or document furnished by the Purchasers pursuant hereto
and any loss or damage resulting from any such claims, litigation,
actions, suits, proceedings, judgments, reasonable attorneys' fees, costs,
and expenses related to or arising out of such misrepresentation, breach,
or nonfulfillment.
(c) Should any claim be made by a person not a party to this
Agreement with respect to any matter to which the foregoing indemnity
relates, the party against whom such claim is asserted (the "Indemnified
Party"), within a reasonable period of time, shall give written notice to
the other party (the "Indemnifying Party") of any such claim, and
the Indemnifying Party shall thereafter defend or settle any such claim,
at its sole expense, on its own behalf and with counsel of its selection.
In such defense or settlement of any claims, the Indemnified Party shall
cooperate with and assist the Indemnifying Party to the maximum extent
reasonably possible. Any payment resulting from such defense or
settlement, together with the total expense thereof, shall be binding on
the Company and the Purchasers for the purposes of this paragraph 5.
(d) Notwithstanding the foregoing, should any claim be made by a
person not a party to this Agreement with respect to any matter to which
the foregoing indemnity relates, the Indemnified Party, on not less than
thirty (30) days' notice to the Indemnifying Party, may make settlement of
such claims, and such settlement shall be binding on the Indemnifying
Party and the Indemnified Party for the purposes of this paragraph 5;
provided, however, that if within said thirty (30) day period the
Indemnifying Party shall have requested the Indemnified Party not to
settle such claim and to deny such claim at the expense of the
Indemnifying Party, the Indemnified Party will promptly comply and the
Indemnifying Party shall have the right to defend on its own behalf with
counsel of its selection. Any payment of settlement resulting from such
contest, together with the total expense thereof, shall be binding on the
Company and the Purchasers for the purposes of this paragraph 5.
6. Due Diligence Acknowledgment.
(a) The Purchasers acknowledge that they have had an opportunity to
review, for information purposes only, the business and financial
information contained in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 1997 and Form 10-QSB for the Quarter Ended
March 31, 1998.
(b) The Purchasers acknowledge that they have made their own
independent examination, investigation, analysis, and evaluation of the
Company, including Purchasers' own estimates of the value of the Preferred
Shares.
(c) The Purchasers acknowledge that they have undertaken such due
diligence (including a review of the assets, liabilities, books, records,
and contracts of the Company) as the Purchasers deem adequate, including
that described above in this paragraph 6.
7. Post-Closing Deliveries. The Purchasers shall promptly deliver or cause
to be delivered to the Company or its counsel the certificates representing the
Tendered Securities. Upon receipt of the certificates representing the Tendered
Securities, the Company shall promptly deliver certificates representing the
Preferred Shares to the Purchasers.
8. Further Assurances. The Company and the Purchasers hereby covenant and
agree that at any time and from time to time that they will promptly execute and
deliver such further instruments and documents and take such further action as
are reasonably necessary in order to further carry out the intent and purpose of
this Agreement.
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9. Notices. All notices, requests and demands and other communications to
any party hereto shall be in writing and shall be deemed to have been duly given
as if delivered by hand or mailed, certified or registered, with postage prepaid
to the following address of each party or such other addresses as may be
hereafter designated in writing by such party to the other parties:
To the Company: The Xxxxxxx Group, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxxxx Xxxx
Chief Financial Officer
To the Purchaser: Xxxx X. Xxxxxxxx
Xxxx Xxxxxx Xxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
10. Expenses. It is hereby agreed and understood that Xxxxxxx shall bear
and pay all expenses relative to the consummation of the transaction referred to
in this Agreement.
11. Successors and Assigns. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.
12. Applicable Law. The Agreement shall be governed by, and construed in
accordance with, the laws of the State of South Carolina.
13. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction, shall as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
14. Counterparts. This Agreement may be executed in one or more
counterparts, all of which together shall represent the same single agreement.
15. Survival of Representations and Indemnity. The representations and
warranties and the indemnification provisions contained herein shall survive the
closing and the delivery of all the required documents hereunder.
16. Entire Agreement. This Agreement contains the entire agreement between
the parties hereto with respect to the transactions contemplated herein.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, as of the day and year first above written.
THE XXXXXXX GROUP, INC.
By:
------------------------
Xxxxx X. Xxxxxxx
President
MMC HOLDING, INC.
By:
----------------------
Xxxx X. Xxxxxxxx
President
Individual Retirement Account of Xxxxxxx X.
Xxxxxxxx
Interstate/Xxxxxxx Lane Corporation, Custodian
By:_______________________________________
_______________________________________
______________________________________________
Xxxxxxx X. Xxxxxxxx, Participant
Individual Retirement Account of Xxxx X. Xxxxxxxx
Interstate/Xxxxxxx Xxxx Corporation, Custodian
By:_________________________________________
_________________________________________
___________________________________________
Xxxx X. Xxxxxxxx, Participant
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