EXHIBIT 1.1
QUALIFIED DESIGNEE ASSIGNMENT AND ASSUMPTION AGREEMENT
THIS QUALIFIED DESIGNEE ASSIGNMENT AND ASSUMPTION AGREEMENT (the
"Agreement") is made as of the ____ day of May, 1999 by and among XXXXXXXX
ENTERPRISES, INC., an Indiana corporation ("REI"), ________________________ (the
"Assignee") and XXXXX CREDITORS TRUST (the "Seller"). Capitalized terms used but
not defined in this Agreement shall have the meanings set forth in the Purchase
Agreement (as defined below).
RECITALS:
A. REI and the Seller are parties to that certain Stock Purchase
Agreement dated May ___, 1999 (the "Purchase Agreement") pursuant to
which the Seller agreed to sell, and REI and/or certain Qualified
Designees agreed to purchase, 997,475 Class B Common Shares of
Xxxxxxxx Industries, Inc. (the "Company").
B. Upon execution of this Agreement, the Assignee shall for all
purposes under the Purchase Agreement be a Qualified Designee within
the meaning of the Purchase Agreement.
AGREEMENT:
In consideration of the terms and conditions contained herein and in the
Purchase Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. ASSIGNMENT. REI hereby transfers and assigns to the Assignee its right
to purchase [______________] Shares pursuant to the Purchase Agreement and
further transfers and assigns to the Assignee, pro rata with the other Qualified
Designees identified on SCHEDULE 1 attached hereto, all other right, title and
interest of REI in, to and under the Purchase Agreement.
2. ASSUMPTION. The Assignee hereby agrees to purchase [_______] Shares
pursuant to the Purchase Agreement and accepts and, severally (but not jointly)
to the extent of the Assignee's pro rata interest in the Purchase Agreement,
assumes and agrees to be bound by REI's (and, where applicable, Purchaser's)
obligations under the Purchase Agreement except that the Assignee does not
assume the obligations of REI under ARTICLE XII of the Purchase Agreement. The
parties hereby acknowledge and agree that the obligations of REI under ARTICLE
XII of the Purchase Agreement shall remain obligations solely of REI.
3. REPRESENTATIONS AND WARRANTIES OF THE ASSIGNEE. The Assignee hereby
severally (and not jointly) and to the extent of the Assignee's pro rata
interest in the Purchase Agreement represents and warrants to the Seller as
follows:
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[A. ORGANIZATION; GOOD STANDING; QUALIFICATION; AND POWER. THE
ASSIGNEE IS A COMPANY, ORGANIZATION, ENTITY, ACCOUNT OR PLAN DULY
ORGANIZED, VALIDLY EXISTING AND, TO THE EXTENT ASSIGNEE IS A
CORPORATION OR OTHER ENTITY, IN GOOD STANDING, UNDER THE LAWS OF THE
STATE OF ITS ORGANIZATION. THE ASSIGNEE HAS ALL REQUISITE POWER AND
AUTHORITY AND ALL GOVERNMENTAL LICENSES, AUTHORIZATIONS, CONSENTS
AND APPROVALS TO EXECUTE AND DELIVER THIS AGREEMENT AND TO
CONSUMMATE THE TRANSACTIONS CONTEMPLATED HEREBY.]
b. AUTHORITY. [The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby by the Assignee
have been duly authorized by all necessary action on the part of the
Assignee.] This Agreement constitutes a valid and legally binding
obligation of the Assignee enforceable against the Assignee in
accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer or similar laws affecting creditors' rights
generally or by the principles governing the availability of
equitable remedies.
c. NO CONFLICT OR VIOLATION. The execution, delivery and performance
of this Agreement and the consummation of the transactions
contemplated hereby do not and shall not: [(A) VIOLATE OR CONFLICT
WITH THE ORGANIZATIONAL DOCUMENTS OF THE ASSIGNEE;] (b) violate any
provision of law or any order, judgment, or decree of any court or
other governmental or regulatory authority applicable to the
Assignee; or (c) result in a breach of, or 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 of, or result in the
creation of any Lien upon any of the assets or properties of the
Assignee under, any loan agreement, mortgage, security agreement,
indenture, or other agreement or instrument to which the Assignee is
a party or by which the Assignee is bound or to which any of its
properties or assets is subject or prohibit the Assignee from
consummating the purchase and sale of the Shares as contemplated
hereby.
d. NO CONSENT. No authorization, consent, approval, exemption, or
other action by or notice to or filing with any court or
administrative or governmental body or any third party is required
to permit the Assignee to execute and deliver this Agreement, to
consummate the transactions contemplated by this Agreement or to
comply with and fulfill the terms and conditions of this Agreement.
e. SECURITIES MATTERS. The Assignee understands that the offering
and sale of the Shares under the Purchase Agreement is intended to
______________
Bold representations shall only be given by Qualified Designees other than
individuals.
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be exempt from the registration requirements of the Securities Act.
The Shares are being acquired by the Assignee for its own account
and without a view to the public distribution of the Shares or any
interest therein. The Assignee is an "accredited investor" as such
term is defined in Regulation D promulgated under the Securities
Act. The Assignee is not a broker-dealer subject to Regulation T
promulgated by the Board of Governors of the Federal Reserve System.
The Assignee has sufficient knowledge and experience in financial
and business matters so as to be capable of evaluating the merits
and risks of its investment in the Shares, and the Assignee is
capable of bearing the economic risks of such investment, including
a complete loss of its investment in the Shares. In evaluating the
suitability of an investment in the Shares, the Assignee has relied
upon the representations, warranties, covenants and agreements made
by the Seller in the Purchase Agreement and on such other
information regarding the Company sufficient to allow the Assignee
to make an informed decision regarding purchase of the Shares. The
Assignee has not relied upon any other representations or other
information (whether oral or written and including any estimates,
projections or supplemental data) made or supplied by or on behalf
of Seller, the Company or any Affiliate, employee, agent or other
representative of Seller or the Company other than as contemplated
by this SECTION 3.E. The Assignee acknowledges that Seller has no
responsibility for any information furnished to it other than as set
forth in the representations and warranties made by Seller in the
Purchase Agreement. The Assignee understands and agrees that it may
not sell or dispose of any of the Shares other than pursuant to a
registered offering or in a transaction exempt from the registration
requirements of the Securities Act and that the Shares will bear an
appropriate legend to that effect.
f. BROKERS OR FINDERS COMMISSIONS. No broker's or finder's fee or
commission or investment banking fee has been or will be payable, or
asserted to be payable by any of the Assignee, the Seller, the
Company or the Subsidiary with respect to the purchase of the Shares
from the Seller or the transactions contemplated by this Agreement
as a result of any agreement entered into by the Assignee.
g. FINANCIAL CONDITION. The Assignee has sufficient liquidity
and financial condition to consummate the purchase of the Shares
at Closing.
h. EXCLUSIVITY OF REPRESENTATIONS. THE REPRESENTATIONS AND
WARRANTIES MADE BY THE ASSIGNEE IN THIS AGREEMENT ARE IN LIEU OF AND
ARE EXCLUSIVE OF ALL OTHER REPRESENTATIONS AND WARRANTIES, INCLUDING
ANY IMPLIED WARRANTIES. THE ASSIGNEE HEREBY DISCLAIMS ANY SUCH OTHER
OR IMPLIED REPRESENTATIONS OR WARRANTIES, NOTWITHSTANDING THE
DELIVERY OR DISCLOSURE TO SELLER OR ITS OFFICERS, DIRECTORS,
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EMPLOYEES, AGENTS OR REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER
INFORMATION.
4. INDEMNIFICATION BY THE ASSIGNEE. The Assignee shall indemnify and hold
harmless the Seller from and against any and all Indemnity Losses which the
Seller may suffer, incur or become subject to as a result of or in connection
with (a) any breach of any representation or warranty made by the Assignee in
this Agreement and (b) any and all suits, actions, investigations, proceedings,
demands, assessments, audits, and judgments arising out of any of the foregoing.
The obligations of the Assignee pursuant to the foregoing sentence shall be
several (and not joint) with the other Qualified Designees and to the extent of
the Assignee's pro rata interest in the Purchase Agreement. Indemnification of
the Seller by the Assignee shall be pursuant to the terms, conditions and
limitations contained in SECTIONS 12.03, 12.04, 12.06, 12.07 and 12.08 of the
Purchase Agreement (except that the reference to Article VI in SECTION 12.08
shall be deemed to refer to SECTION 3 hereof). The representations and
warranties of the Assignee contained in this Agreement shall survive the Closing
indefinitely.
5. OBLIGATIONS OF THE SELLER. Seller hereby acknowledges the assignment
and assumption of the rights and obligations of REI under the Purchase Agreement
by the Assignee. Seller further acknowledges and affirms that the
representations, warranties, covenants and agreements of Seller contained in the
Purchase Agreement, including without limitation, the obligation to indemnify
the REI Indemnified Parties shall inure to the benefit of the Assignee to the
same extent as though the Assignee were a party to the Purchase Agreement.
6. STOCK PRICE ADJUSTMENT. If, on the third anniversary of the date of
this Agreement, the Market Value per Share of the Class A Common Stock of the
Company is less than Eleven and 50/100 Dollars ($11.50) (the amount of any such
deficiency as of such date being referred to as the "Stock Price Deficiency"),
then no later than 15 Business Days thereafter and as additional consideration
for the Shares, the Qualified Designee shall pay in cash to the Seller its pro
rata portion of an amount equal to (a) 22,525, MULTIPLIED BY (b) the Stock Price
Deficiency. Notwithstanding the above, the Qualified Designee shall have the
right to assign its obligations under this Section to a corporation, partnership
or other entity with the prior written consent of Seller, which consent shall
not be unreasonably withheld, conditioned or delayed, and upon the assumption of
the obligations by such corporation, partnership or other entity, the Qualified
Designee shall be released from its obligations under this Section. For purposes
of this Section, "Market Value per Share" shall mean the average trading price
of one share of Class A Common Stock of the Company over the 20 trading days
ending on the third anniversary of the date of this Agreement as quoted in the
National Quotation Bureau Pink Sheets or on such exchange or in such interdealer
quotation system or other trading market as the Class A Common Stock of the
Company is then quoted.
For purposes of this Agreement, "pro rata" shall mean the ratio (expressed
as a percentage) that the number of Shares purchased by the Qualified Designee
hereunder bears to the total number of Shares purchased by all Qualified
Designees (as set forth on SCHEDULE 1 attached hereto) at the Closing.
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7. MISCELLANEOUS.
A. Each party hereto shall be responsible for the fees and expenses of
its accountants, attorneys and advisors and any other costs and
expenses incurred by it in the negotiations and consummation of the
transactions contemplated by this Agreement.
B. All notices, requests, demands, and other communications
under this Agreement shall be in writing and shall be deemed to
have been duly given (a) on the date of service if served
personally on the party to whom notice is to be given, (b) on the
day of transmission if sent via facsimile transmission to the
facsimile number given below, provided that telephonic
confirmation of receipt is obtained promptly after completion of
transmission, (c) on the day after delivery to a nationally
recognized overnight courier service or the Express Mail service
maintained by the United States Postal Service, or (d) on the
fifth (5th) day after mailing, if mailed to the party to whom
notice is to be given, by first class mail, registered or
certified, postage prepaid, and addressed as follows:
If to Seller, to:
Xxxxx Creditors Trust
The Chancery
Xxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
Tel. No. (000) 000-0000
Fax No. (000) 000-0000
With a copy to:
Xx Xxxxxxxx, Esq.
Xxxxxx Xxxxxxx & Xxxx, LLP
Xxx Xxxxxxx Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Tel. No. (000) 000-0000
Fax No. (000) 000-0000
which copy alone shall not constitute notice for the purposes of this
Purchase Agreement.
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If to REI, to:
Xxxxxxxx Enterprises, Inc.
c/x Xxxxxxx Xxxxxxx Xxxxxxx & Company, Inc.
Xxxxxxxx Xxxxxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx Xxxxxxx
Tel. No. (000) 000-0000
Fax. No. (000) 000-0000
With a copy to:
Xxxxxxx X. Xxxxxxx, Esq.
Ice Xxxxxx Xxxxxxx & Xxxx
Xxx Xxxxxxxx Xxxxxx, Xxx 00000
Xxxxxxxxxxxx, Xxxxxxx 00000
Tel. No. (000) 000-0000
Fax. No. (000) 000-0000
which copy alone shall not constitute notice for the purposes of this
Purchase Agreement.
If to the Assignee, to the address and/or fax number set forth below such
Assignee's signature below.
Any party may change its address for the purpose of this SECTION 6.B. by
giving the other parties written notice of its new address in the manner set
forth above.
a. The section and paragraph headings in this Agreement are for
reference purposes only and shall not affect the meaning or
interpretation of this Agreement.
b. If any provision of this Agreement is declared by any court or
other governmental body to be null, void, or unenforceable, this
Agreement shall be construed so that the provision at issue shall
survive to the extent it is not so declared and that all of the
other provisions of this Agreement shall remain in full force and
effect.
c. This Agreement and the Transaction Documents (and the schedules
hereto and thereto) contain the entire understanding among the
parties hereto with respect to the transactions contemplated hereby
and thereby and supersede and replace all prior and contemporaneous
agreements, understandings, representations or warranties, oral or
written, with regard to those transactions. All SCHEDULES hereto are
expressly made a part of this Agreement as fully as though
completely set forth herein.
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d. This Agreement may be amended or modified, and any of the
terms, covenants, representations, warranties, or conditions hereof
may be waived, only by a written instrument executed by the parties
hereto, or in the case of a waiver, by the party waiving compliance.
Any waiver by any party of any condition, or of the breach of any
provision, term, covenant, representation, or warranty contained in
this Agreement, in any one or more instances, shall not be deemed to
be or construed as a further or continuing waiver of any condition
or of the breach of any other provision, term, covenant,
representation, or warranty of this Agreement.
e. Nothing in this Agreement is intended to confer any rights or
remedies under or by reason of this Agreement on any Person other
than the Seller, REI and the Assignee and their respective
successors and permitted assigns.
f. Except as contemplated by SECTION 6 above, no party hereto
shall assign or delegate this Agreement or any rights or obligations
hereunder without the prior written consent of the other parties
hereto, and any attempted assignment or delegation without prior
written consent shall be void and of no force or effect. This
Agreement shall inure to the benefit of and shall be binding upon
the successors and permitted assigns of the parties hereto.
g. This Agreement shall be construed and enforced in accordance
with, and governed by, the laws of the State of New York applicable
to contracts made and to be performed in such state.
h. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which shall together
constitute the same instrument.
i. Assignee hereby appoints REI as its authorized representative
for purposes of executing and delivering the receipt specified in
SECTION 3.03(D) of the Purchase Agreement and hereby authorizes and
directs REI to deliver such receipt upon Seller's delivery and REI's
receipt of the items described in SECTION 3.02 of the Purchase
Agreement.
[SIGNATURES FOLLOW NEXT PAGE.]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed as of the date first written above.
"REI"
XXXXXXXX ENTERPRISES, INC.
By:_________________________________________
Its:________________________________________
"SELLER"
XXXXX CREDITORS TRUST
By:_________________________________________
Xxxxxxx X. Xxxxx, Trustee
By:_________________________________________
Xxxxxx X. Xxxxx, Trustee
By:_________________________________________
Xxxx X. Xxxxxxx, Trustee
"ASSIGNEE"
Address:____________________________________
____________________________________________
____________________________________________
Telephone No. (___)________________________
Fax No. (___)______________________________
SCHEDULE 1
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OTHER QUALIFIED DESIGNEES
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QUALIFIED DESIGNEE NUMBER OF SHARES
