EXHIBIT 99.1
SALE AND ASSIGNMENT AGREEMENT dated as of October 21, 1996 between THE
PRUDENTIAL INSURANCE COMPANY OF AMERICA ("Seller") and WARBURG, XXXXXX
INVESTORS, L.P. ("Buyer").
1. Subject to the terms and conditions hereof, on the Closing Date (as
defined below), Seller hereby agrees to sell, transfer and assign to Buyer,
without recourse, representation or warranty of any kind except as set forth
herein, and Buyer hereby agrees to purchase from Seller, the Securities for an
aggregate purchase price equal to $23,318,034.72 (the "Purchase Price"). For
purposes of this Agreement, "Securities" means (a) $5,000,000 Principal Amount
Amended and Restated Revolving Credit Note due November 1, 1999; (b) $6,500,000
Amended and Restated 9.90% Senior Note due November 1, 1998; (c) $3,500,000
Principal Amount Amended and Restated 9.90% Senior Note due November 1, 1998;
(d) $10,900,834.33 Principal Amount Amended and Restated 10.65% Subordinated
Payment-In-Kind Note due November 1, 2001; (e) $1,520,058.79 Principal Amount
11.65% Subordinated Payment-In-Kind Note, due November 1, 2001; (f) $723,517.03
Principal Amount 11.65% Subordinated Payment-In-Kind Note due November 1, 2001;
(g) 130,233 Shares of Junior Convertible Preferred Stock; (h) Restated Stock
Subscription Warrant No. 16 to Subscribe for 200,000 Shares of Common Stock; and
(i) New Stock Subscription Warrant No. 17 to Subscribe for 150,000 Shares of
Common Stock, all of Xxxxx & Xxxxx Company (the "Company") issued pursuant to
(i) that certain Senior Note, the Subordinated Note and Revolving Credit Note
Agreement between the Company and Seller, dated as of November 2, 1992, as
amended from time to time (the "Note Agreement") and (ii) that certain
Securities Purchase Agreement between the Company and Seller, dated as of
November 2, 1992 (the "Securities Purchase Agreement").
2. The purchase and sale of the Securities will take place on October
22, 1996 or such later date as the parties hereto shall mutually agree (the
"Closing Date") and on the Closing Date Seller will deliver the Securities to
Buyer, together with duly executed bond or stock powers, as applicable,
payable to the order of Buyer and an incumbency certificate, against payment
of (a) $19,739,109.72 in immediately available funds to Seller's account
[omitted] at Bank of New York, New York, N.Y., [omitted] and (b) $3,578,925
in immediately available funds to Seller's account [omitted] at Bank of New
York, New York, N.Y., [omitted].
3. Seller hereby represents and warrants as of the date hereof and as of
the Closing Date that: (a) Neither Seller nor anyone acting on its behalf has
offered the Securities or any of them by means of any general solicitation or
general advertising and neither Seller nor anyone acting on its behalf has taken
any action which would subject the sale of the Securities to Buyer to the
registration provisions of Section 5 of the Securities Act of 1933, as amended
(the "Act"); (b) Seller has provided Buyer with a true, correct and complete
copy of the Securities, the Note Agreement and the Securities Purchase
Agreement; (c) Seller is the sole legal, record and beneficial owner
of the Securities with good title thereto free and clear of any liens, claims,
options or other encumbrances; (d) Seller has full power, authority and legal
right to sell the Securities; (e) Seller has been the sole beneficial owner of
the Securities since their respective dates of issuance; (f) the $3,500,000
Principal Amount 9.90% Senior Note constitutes an asset of a pooled separate
account of Seller (the "Separate Account") subject to the prohibited transaction
rules in Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"); and (g) following execution by Buyer of a letter in the form
attached hereto as Exhibit A, Seller has provided Buyer with a list of sponsors
of employee benefit plans that participate in the Separate Account to the extent
of 10% or more (the "10% Plans"). Seller further represents and warrants that
as of the date hereof, and after giving effect to the sale of the Securities to
Buyer as contemplated herein, it holds for its own account the following
securities of the Company: (a) 19,767 shares of Junior Convertible Preferred
Stock and (b) 397,549 shares of Common Stock, par value $.01 per share.
4. As of the date hereof and as of the Closing Date, Buyer hereby (a)
acknowledges that the Securities have not been registered under the Act or the
securities or blue sky laws of any jurisdiction and agrees that it is not
acquiring the Securities with a view to sale or distribution in violation of
applicable securities laws; (b) confirms that Buyer has received a copy of the
Note Agreement, the Securities Purchase Agreement and the Securities, and such
other documents and information which Buyer has deemed necessary and appropriate
to make its own credit analysis and decision to purchase the Securities, and has
independently and without reliance on Seller, other than reliance upon the
representations, warranties and covenants of the Seller made herein, made its
own analysis and decision to enter into this Agreement and to purchase the
Securities; (c) represents and warrants that (i) in the normal course of its
business it invests in securities and is familiar with the terms of securities
with characteristics similar to the Securities and by reason of its business and
financial experience possesses such knowledge, sophistication and experience in
business and financial matters so as to be capable of evaluating the risks and
merits of an investment in the Securities; (ii) on the Closing Date, after
giving effect to the purchase contemplated hereby, Buyer will not be a
party-in-interest to any of the 10% Plans; and (iii) neither it nor any of its
affiliates is currently, and none of them has been at any time during the
twelve month period immediately preceding the date hereof, engaged in
substantive discussions with any party (other than the Company, with respect to
the option agreement referred to in paragraph 8(a) below, or Seller) with
respect to either (x) a sale of the Company or substantially all of its assets,
or (y) a sale of all or a part of the securities of the Company held by Buyer
(including Securities purchased hereunder), nor does Buyer have any present
intention to engage in any such transaction. Buyer further confirms that it has
obtained a representation from the Company for the benefit of Seller in
substantially the form attached hereto as Exhibit B.
5. Seller hereby agrees that if Buyer exercises its right to convert all
of its holdings of the Company's preferred stock to shares of the Company's
common stock, Seller will (promptly upon receipt of written notice that Buyer
has effected such
2
conversion) exercise its right to convert the shares of the Company's Junior
Convertible Preferred Stock held by it (the "Retained Preferred Shares") to
shares of the Company's common stock in accordance with the provisions of the
Company's Certificate of Incorporation governing such conversion as in effect on
the date hereof. Seller further agrees (a) that the provisions of this
paragraph 5 shall (i) be binding on any transferee of the Retained Preferred
Shares and (ii) be specifically enforceable against Seller and (b) that Seller
shall cause any such transferee to agree that this paragraph 5 shall be
specifically enforceable against it.
6. Seller hereby agrees that it will record the Purchase Price on its
books and records as follows: $1,000 of the Purchase Price will be allocated to
the sale of the Securities referred to in subparagraphs 1(g) - (i) hereof, and
the balance will be allocated to the sale of the Securities referred to in
subparagraphs 1(a) - (f).
7. Seller and Buyer hereby acknowledge that each of them may possess
material non-public information with respect to the Company not known to the
other, and each agrees to hold the other harmless with respect to any such
information.
8. The obligations of the parties under this Agreement are subject to the
satisfaction of the following conditions: (a) the Company and Buyer shall have
executed an option agreement with respect to the Securities in substantially the
form attached hereto as Exhibit C; and (b) there shall have been executed by the
parties thereto an amendment to that certain Stockholders Agreement, dated as of
January 29, 1993, as heretofore amended, among the Company, Seller, Buyer and
Xxx X. Xxxxxxx, terminating Seller's obligations thereunder and pursuant to
which Seller releases all of its rights under such agreement.
9. Each party hereto shall execute and deliver all further documents or
instruments reasonably requested by the other party in order to effect the
intent and purposes of this Agreement and obtain the full benefit of this
Agreement.
10. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE CONFLICTS OF LAWS
PROVISIONS THEREOF AND SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF BUYER
AND SELLER AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS.
11. This Agreement, together with the letter referred to in paragraph
3(g) hereof, constitutes the complete agreement of the parties with respect to
the subject matter hereof, and supersedes all prior communications and
agreements of the parties with respect thereto, all of which have become merged
and integrated into this Agreement. This Agreement cannot be amended, modified
or waived, except by a writing executed by each of the parties hereto.
3
12. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first above written.
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Name: Xxxxxxx X. Xxxxxxx
Vice President
WARBURG, XXXXXX INVESTORS, L.P.
By: Warburg, Xxxxxx & Company, L.P.,
its General Partner
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------
Name: Xxxx. X. Xxxxxxxxx
Title: Partner
4
