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EXHIBIT 2.2
PREFERRED STOCK
PURCHASE AGREEMENT
This Preferred Stock and Subordinated Note Purchase Agreement (this
"Agreement") is entered into this 31st day of July, 1997, by and among NorAm
Energy Corp., a Delaware corporation ("Seller"), and Transcrypt International,
Inc., a Delaware corporation ("Buyer").
BACKGROUND
WHEREAS, Seller owns 80,000 shares of the Preferred Stock, $100 par
value per share (the "Preferred Stock"), of X. X. Xxxxxxx Company, a Minnesota
corporation ("EFJ"), constituting all of the issued and outstanding shares of
such Preferred Stock (the "Shares");
WHEREAS, Seller is the payee and holder of EFJ's 9.79% Senior
Subordinated Note dated July 31, 1992 in the principal amount of $10,000,000
(the "Note");
WHEREAS, based upon the representations, covenants, agreements and
warranties herein made by Seller, and subject to the terms and conditions
contained in this Agreement, Buyer wishes to purchase and acquire the Shares
from Seller;
WHEREAS, based upon the representations, covenants, agreements and
warranties herein made by Buyer, and subject to the terms and conditions
contained in this Agreement, Seller wishes to sell and transfer the Shares to
Buyer;
WHEREAS, Seller has previously agreed to cancel the Note and accrued
interest on all debt obligations to EFJ; and
WHEREAS, Seller and Buyer wish to provide for the above-described
sale and transfer of the Shares;
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and covenants set forth below, the parties hereto hereby agree as
follows:
1. SALE AND PURCHASE OF SHARES. Subject to the terms and conditions
set forth in this Agreement, at the Closing (as defined in Section 5.1 hereof)
Seller shall sell and transfer to Buyer, and Buyer shall purchase and acquire
from Seller, the Shares (together with Seller's right to all accrued and unpaid
dividends thereon) and the Note (together with Seller's right to all accrued and
unpaid interest thereon).
2. CONSIDERATION. The total consideration to be paid for the Shares
(together with Seller's right to all accrued and unpaid dividends thereon)
pursuant hereto is a number of whole shares of the common stock, par value $.01
per share, of Buyer ("Transcrypt Common Stock"), equal to 457,856 shares,
determined by taking the quotient obtained by dividing (x) $5.5 million by (y)
the average of the per share closing prices for Transcrypt Common Stock on
NASDAQ for the ten
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consecutive trading days two days before the day of the Closing, provided that
any fractional shares of Transcrypt Common Stock resulting from such division
shall be rounded down to the nearest share, which consideration, subject to the
terms and conditions of this Agreement, shall be payable by Buyer to Seller at
the Closing as set forth in Section 5 hereof.
3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller represents and
warrants to Buyer as follows:
3.1. TITLE. Seller is the sole record and beneficial holder of all
the Shares and the sole owner of the Note, in each case, free and clear of any
and all liens, claims or encumbrances of any nature whatsoever (whether
absolute, accrued, contingent or otherwise).
3.2. CORPORATE ORGANIZATION OF SELLER. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the state of
its incorporation, and has the requisite corporate power and authority to own,
lease or otherwise hold the assets owned, leased and held by it and to carry on
the business currently conducted by it.
3.3 AUTHORIZATION AND EFFECT OF AGREEMENT. Seller has the requisite
corporate power and authority to execute and deliver this Agreement and to
perform the transactions contemplated hereby to be performed by Seller. The
execution and delivery by Seller of this Agreement and the performance by Seller
of the transactions contemplated hereby to be performed by Seller have been duly
authorized by all necessary corporate action on the part of Seller. This
Agreement has been duly executed and delivered by Seller and, assuming the due
execution and delivery of this Agreement by Buyer, constitutes a valid and
binding obligation of Seller, enforceable in accordance with its terms.
3.4 ABSENCE OF CONFLICTS. The execution and delivery of this
Agreement by Seller does not, and the performance by Seller of the transactions
contemplated hereby to be performed by Seller will not, conflict with, or result
in any violation of, or constitute a default (with or without notice or lapse of
time, or both) under, (i) any provision of the certificate of incorporation or
bylaws of Seller or any contract to which Seller is a party, (ii) any license,
permit or approval ("Permit") of any domestic or foreign court, government,
governmental agency, authority or instrumentality ("Governmental Authority"),
(iii) any domestic or foreign statute, law, ordinance, rule, regulation, order
or common law obligation ("Law") of any Governmental Authority issued or
applicable to Seller, or to any of its properties or assets. No consent,
approval, order or authorization of, or registration, declaration or filing
with, any Governmental Authority is required to be obtained or made by or with
respect to Seller in connection with the execution and delivery of this
Agreement by Seller or the performance by Seller of the transactions
contemplated hereby to be performed by it.
3.5 CERTAIN LIMITATIONS ON REPRESENTATIONS AND WARRANTIES. Seller is
a sophisticated person that was advised by knowledgeable counsel in connection
with this Agreement. Seller (i) has not relied nor will it rely upon any
document or written or oral information previously furnished to or discovered by
it or its representatives, other than this Agreement, and (ii) there are no
representations or warranties by or on behalf of Buyer or any of its Affiliates
or representatives other than those set forth in this Agreement. As used in this
Agreement, the term "Affiliate" means, with respect to any person, any person in
control of, controlled by, or under common control with,
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such person, and the term "person" means any individual, corporation,
partnership, limited liability company, trust or other legal entity.
4. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and
warrants to Seller as follows:
4.1 CORPORATE ORGANIZATION. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has the requisite corporate power and authority to own, lease or otherwise
hold the assets owned, leased or held by it and to carry on the business
currently conducted by it.
4.2 AUTHORIZATION AND EFFECT OF AGREEMENT. Buyer has the requisite
corporate power and authority to execute and deliver this Agreement and to
perform the transactions contemplated hereby to be performed by it. The
execution and delivery by Buyer of this Agreement and the performance by it of
the transactions contemplated hereby to be performed by it have been duly
authorized by all necessary corporate action on the part of Buyer. This
Agreement has been duly executed and delivered by Buyer and, assuming the due
execution and delivery of this Agreement by Seller, constitutes a valid and
binding obligation of Buyer, enforceable in accordance with its terms.
4.3 ABSENCE OF CONFLICTS. The execution and delivery of this
Agreement by Buyer does not, and the performance by Buyer of the transactions
contemplated hereby to be performed by it will not, conflict with, or result in
any violation of, or constitute a default (with or without notice or lapse of
time, or both) under, (i) any provision of the certificate of incorporation or
bylaws of Buyer or any contract to which Buyer is a party, or (ii) any Permit of
any Governmental Authority, (iii) any Law of any Governmental Authority issued
or applicable to Buyer, or to any of its properties or assets. No consent,
approval, order or authorization of, or registration, declaration or filing
with, any Governmental Authority is required to be obtained or made by or with
respect to Buyer in connection with the execution and delivery of this Agreement
by Buyer or the performance by Buyer of the transactions contemplated hereby to
be performed by it.
4.4 ABSENCE OF PAYMENTS. Except as provided in the Stock Purchase
Agreement, dated July 31, 0000, xxxxxxx XXX Partners, a New York general
partnership ("EFJ Partners"), and Buyer (the "Stock Purchase Agreement"), there
are no agreements between Buyer or any of its Affiliates, on the one hand, and
EFJ, EFJ Partners or any of their respective Affiliates, on the other hand, that
provide for the payment of sums of money or any other form of consideration
including, but not limited to, Transcrypt Common Stock, from Buyer or any of its
Affiliates to EFJ, EFJ Partners or any of their respective Affiliates.
4.5 CERTAIN LIMITATIONS ON REPRESENTATIONS AND WARRANTIES. Buyer is
a sophisticated person that was advised by knowledgeable counsel and other
advisors in connection with this Agreement. Buyer (i) has not relied nor will it
rely upon any document or written or oral information previously furnished to it
or discovered by it or its representatives, other than this Agreement, and (ii)
there are no representations or warranties by or on behalf of Seller or any of
its Affiliates or representatives other than those expressly set forth in this
Agreement.
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5. CLOSING.
5.1 DATE OF CLOSING. (a) The closing of the transactions
contemplated hereby (the "Closing") shall take place at 10:00 a.m. local time at
the offices of Proskauer Rose LLP ("Proskauer"), 0000 Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx on the same day as the closing of the transactions contemplated by the
Stock Purchase Agreement, provided that there shall have occurred the
fulfillment or waiver of the conditions precedent set forth in Sections 6 and 7
hereof, or at such other time and place as the parties hereto may mutually
agree. The date on which the Closing occurs is hereinafter referred to as the
"Closing Date." The following transactions shall take place at the Closing, all
of which shall be deemed to have occurred simultaneously and none of which shall
be deemed completed unless and until all of them shall have been completed (or
waived in writing by the parties entitled to performance):
(b) At the Closing, Seller shall deliver to Buyer the
following:
(i) one or more stock certificates representing the
Shares, duly endorsed for transfer to Buyer or accompanied by stock powers
executed in blank;
(ii) the cancelled Note;
(iii) certificates of an authorized officer of Seller,
in form and substance reasonably satisfactory to Buyer, certifying Seller's
valid existence and good standing in the state of its incorporation, the
incumbency of officers or others acting in a representative capacity, the due
authorization of the transactions contemplated hereby, and the matters referred
to in Section 6.1 hereof; and
(iv) agreements of even date herewith between EFJ and
Seller providing for mutual releases.
(c) At the Closing, Buyer shall deliver to Seller the
following:
(i) the number of whole shares of Transcrypt Common
Stock which Seller has the right to receive pursuant to Section 2 hereof; and;
(ii) certificates of an authorized officer of Buyer, in
form and substance reasonably satisfactory to Seller, certifying Buyer's
certificate of incorporation and bylaws, Buyer's valid existence and good
standing in the state of its incorporation, the incumbency of officers or others
acting in a representative capacity, the due authorization of the transactions
contemplated hereby, and the matters referred to in Section 7.1 hereof;
6. CONDITIONS TO OBLIGATIONS OF BUYER. The obligations of Buyer to
consummate the transactions contemplated by this Agreement are subject to the
following conditions, except to the extent waived by Buyer in writing at the
Closing:
6.1 ACCURACY OF REPRESENTATIONS AND COMPLIANCE WITH CONDITIONS. All
representations and warranties of Seller contained in this Agreement shall be
accurate in all material respects as of the Closing Date with the same effect as
if made on and as of such date, except to the
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extent that any of such representations and warranties refers specifically to a
date other than the Closing Date, in which case such representations and
warranties shall be true and correct in all material respects on and as of such
date. As of the Closing, Seller shall have performed and complied in all
material respects with all covenants and agreements and satisfied all conditions
required to be performed and complied with by it at or before such time.
6.2 SELLER'S DELIVERIES. Seller shall have delivered to Buyer the
documents set forth in Section 5.1(b) hereof.
6.3 LEGAL ACTION. There shall not have been instituted or threatened
any legal proceeding (a) relating to, or seeking to prohibit or otherwise
challenge this Agreement or the consummation of the transactions contemplated by
this Agreement, or seeking to obtain substantial damages with respect thereto,
or (b) which Buyer shall reasonably determine could have a material adverse
effect on it or its business.
6.4 NO GOVERNMENTAL ACTION. There shall not have been any action
taken, or any law, rule, regulation, order, judgment, or decree proposed,
promulgated, enacted, entered, enforced, or deemed applicable to the
transactions contemplated by this Agreement, by any Governmental Authority or
other tribunal, including the entry of a preliminary or permanent injunction,
which, in the reasonable judgment of Buyer makes any of the transactions
contemplated by this Agreement illegal.
6.5 CLOSING WITH EFJ PARTNERS. Buyer shall have completed the
purchase and acquisition of all of the issued and outstanding shares of Common
Stock of EFJ (the "EFJ Common Stock") from EFJ Partners pursuant to the terms of
the Stock Purchase Agreement.
6.6 OTHER CLOSING DOCUMENTS. Seller shall have delivered to Buyer,
at or prior to the Closing, such other documents as Buyer may reasonably request
to carry out the provisions of and the transactions contemplated by this
Agreement in form and substance reasonably satisfactory to Buyer.
7. CONDITIONS TO THE OBLIGATIONS OF SELLER. The obligations of
Seller to consummate the transactions contemplated by this Agreement are subject
to the following conditions, except to the extent waived by Seller in writing at
the Closing:
7.1 ACCURACY OF REPRESENTATIONS AND COMPLIANCE WITH CONDITIONS. All
representations and warranties of Buyer contained in this Agreement shall be
accurate in all material respects as of the Closing Date with the same effect as
if made on and as of such date except to the extent that any of such
representations and warranties refers specifically to a date other than the
Closing Date, in which case such representations and warranties shall be true
and correct in all material respects on and as of such date. As of the Closing,
Buyer shall have performed and complied in all material respects with all
covenants and agreements and satisfied all conditions required to be performed
and complied with by Buyer at or before such time.
7.2 BUYER'S DELIVERIES. Buyer shall have delivered to Seller the
Transcrypt Common Stock and the documents set forth in Section 5.1(c) hereto.
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7.3 LEGAL ACTION. There shall not have been instituted or threatened
any legal proceeding (a) relating to, or seeking to prohibit or otherwise
challenge this Agreement or the consummation of the transactions contemplated by
this Agreement, or to obtain substantial damages with respect thereto, or (b)
which Seller shall reasonably determine could have a material adverse effect on
it or its business.
7.4 NO GOVERNMENTAL OR LEGAL ACTION. There shall not have been any
action taken, or any law, rule, regulation, order, judgment, or decree proposed,
promulgated, enacted, entered, enforced, or deemed applicable to the
transactions contemplated by this Agreement, by any Governmental Authority or
other tribunal, including the entry of a preliminary or permanent injunction,
which, in the reasonable judgment of Seller makes any of the transactions
contemplated by this Agreement illegal.
7.5 REGISTRATION RIGHTS AGREEMENT. Seller and Buyer shall have
entered into a registration rights agreement in the form attached as Exhibit A
with respect to the shares of Transcrypt Common Stock to be received pursuant
hereto.
8. FURTHER AGREEMENTS OF THE PARTIES.
8.1 PERFORMANCE OF COVENANTS. Seller shall perform or cause to be
performed the covenants of Seller under this Agreement. Buyer shall perform or
cause to be performed the covenants of Buyer under this Agreement.
8.2 GENERAL.
(a) Seller shall use all reasonable efforts and take all
reasonable steps, and shall cooperate with Buyer to cause to be fulfilled, those
of the conditions set forth in this Agreement to the parties' respective
obligations to consummate the transactions contemplated by this Agreement that
are dependent upon the actions or inactions of Seller, and to execute and
deliver such instruments and take such other reasonable actions as may be
necessary or appropriate in order to carry out the intent of this Agreement and
consummate the transactions contemplated hereby.
(b) Buyer shall use all reasonable efforts and take all
reasonable steps, and shall cooperate with the Seller to cause to be fulfilled,
those of the conditions set forth in this Agreement to the parties' respective
obligations to consummate the transactions contemplated by this Agreement that
are dependent upon the actions or inactions of Buyer, and to execute and deliver
such instruments and take such other reasonable actions as may be necessary or
appropriate in order to carry out the intent of this Agreement and consummate
the transactions contemplated hereby.
8.3 EXPENSES. Buyer and Seller shall bear their own respective
expenses incurred by them in respect of the transactions contemplated hereby.
8.4 FURTHER ASSURANCES. At any time and from time to time after the
date hereof, each party hereto shall, without further consideration, execute and
deliver to the other such instruments of transfer and assumption, and shall take
such other action, as the other may reasonably request to carry out the
transactions contemplated by this Agreement.
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9. SURVIVAL OF REPRESENTATIONS. The representations and warranties
of Seller and of Buyer contained in this Agreement shall survive the
consummation of the transactions contemplated hereby for the longest period of
time permitted by the applicable statute(s) of limitations.
10. TERMINATION.
10.1 BASES FOR TERMINATION. This Agreement and the transactions
contemplated hereby may be terminated at any time on or prior to the Closing
Date:
(a) by the mutual written consent of the parties hereto;
(b) by Buyer (i) if any representation or warranty of Seller
made in this Agreement was untrue in any material respect when made or is untrue
in any material respect on the Closing Date; or (ii) if Seller shall have
defaulted in any material respect in the performance of any covenant, agreement
or obligation under this Agreement, and such default is not cured within ten
days after Seller's receipt of written notice from Buyer that such default
exists or has occurred; or (iii) if the conditions to Buyer's obligations to
consummate the transactions contemplated hereby are not or cannot be satisfied
on or before July 31, 1997 for any reason other than a breach by Buyer;
(c) by Seller (i) if any representation or warranty of Buyer
made in this Agreement was untrue in any material respect when made or is untrue
in any material respect on the Closing Date; or (ii) if Buyer shall have
defaulted in any material respect in the performance of any covenant, agreement
or obligation under this Agreement, and such default is not cured within ten
days after Buyer's receipt of written notice from Seller that such default
exists or has occurred; or (iii) if the conditions to Seller's obligations to
consummate the transactions contemplated hereby are not or cannot be satisfied
on or before July 31, 1997 for any reason other than a breach by Seller.
10.2 MANNER OF EXERCISE. In the event of the termination of this
Agreement prior to the Closing pursuant to Section 10.1, written notice thereof
(with a reasonable description of the reasons for such termination) shall
forthwith be given to the non-terminating party, and this Agreement shall
terminate and the transactions contemplated hereunder shall be abandoned without
further action by any party hereto.
10.3 EFFECT OF TERMINATION. In the event of the termination of this
Agreement prior to the Closing pursuant to Section 10.1, all rights and
obligations of the parties hereunder shall terminate, except for the rights and
obligations of the parties under Section 8.3 hereof and the right of the
non-breaching party to seek damages from a breaching party.
11. MISCELLANEOUS.
11.1 FINDERS. Each party hereto represents and warrants that it has
not employed or utilized the services of any broker or finder in connection with
this Agreement or the transactions contemplated hereby, except for the persons
identified by Seller on Schedule 11.1(a) hereto and by Buyer on Schedule 11.1(b)
hereto.
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11.2 ENTIRE AGREEMENT. This Agreement (together with the Schedules
and Exhibit A hereto) contains, and is intended as, a complete statement of all
of the terms of the arrangements between the parties hereto with respect to the
matters provided for herein, and supersedes any previous agreements and
understandings between the parties hereto with respect to those matters.
11.3 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the law of the State of Texas without regard to the
conflicts of laws provisions thereof.
11.4 HEADINGS. The Section headings of this Agreement are for
reference purposes only and are to be given no effect in the construction or
interpretation of this Agreement.
11.5 NOTICES. All notices and other communications under this
Agreement shall be in writing and shall be deemed given when delivered
personally or mailed by registered mail, return receipt requested, to the
parties at the following addresses (or to such other address as a party may have
specified by notice given to the other party pursuant to this provision):
If to Buyer, to it at:
Transcrypt International, Inc.
0000 XX Xxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Telecopy No.: (000) 000-0000
Attention: Xx. Xxxx Xxxxxx
with a copy to:
Manatt, Xxxxxx & Xxxxxxxx, LLP
Trident Center, East Tower
00000 Xxxx Xxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
If to Seller, to it at:
NorAm Energy Corp.
0000 Xxxxx Xxxxxx
Xxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xx. Xxxxxxx X. Xxxxx
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with a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
0000 Xxxxxxx Xxxx Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxxx X. XxXxxxxx, Esq.
11.6 SEPARABILITY. If any provision of this Agreement is invalid or
unenforceable, the balance of this Agreement shall remain in effect.
11.7 WAIVERS AND AMENDMENTS. No waiver of any provision hereof shall
be construed as a waiver of any other provision. Any waiver or amendment of this
Agreement must be in writing and signed by the party to be charged therewith.
11.8 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Neither this Agreement nor any right or
obligation hereunder may be assigned or transferred by Seller without Buyer's
written consent or by Buyer without Seller's written consent; provided, however,
that Buyer may, without Seller's consent, assign its rights and delegate its
obligations under this Agreement to any Affiliate of Buyer; provided, however,
that as a condition to any such assignment and delegation, such Affiliate of
Buyer shall expressly assume such obligations pursuant to a written instrument
of assumption. Notwithstanding any such assignment or delegation, Buyer shall
remain liable for the failure, if any, of its Affiliate to perform Buyer's
obligations hereunder.
11.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
shall be considered one and the same instrument.
[END OF TEXT. SIGNATURE PAGE FOLLOWS.]
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This Agreement has been duly executed as of the date hereinabove set
forth.
NORAM ENERGY CORP.
By: /s/ W. Xxxxxxx Xxxxxx
-------------------------------------
Authorized Officer
TRANSCRYPT INTERNATIONAL, INC.
By: /s/ Xxxx X. Xxxxxx
-------------------------------------
Authorized Officer
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SCHEDULE 11.1(a)
BROKER OR FINDER RETAINED BY SELLER
NONE
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SCHEDULE 11.1(b)
BROKER OR FINDER RETAINED BY BUYER
Xxxxxx Xxxx
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EXHIBIT A
REGISTRATION RIGHTS AGREEMENT
[See Exhibit 4.1 to this Report on Form 8-K.]
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