Exhibit 10.3
AGREEMENT
This agreement (the "AGREEMENT") dated as of May 25, 2005, is entered
into by, between and among, Xxxxx Corporation, a Delaware corporation (the
"COMPANY") and Santa Xxxxxx Partners Opportunity Fund L.P., a New York limited
partnership, Santa Xxxxxx Partners, L.P., a New York limited partnership, Santa
Xxxxxx Partners Asset Management LLC, a Delaware limited liability company, SMP
Asset Management LLC, a Delaware limited liability company, and Xx. Xxxxxxxx
Xxxxxxxxx (each a member of, and who shall collectively be referred to as,
"SANTA XXXXXX" and together with the Company, the "PARTIES").
RECITALS
WHEREAS, it is the Company's present intention to conduct a tender
offer for the purchase of its common stock to commence within approximately 60
days provided it can reach certain agreements with Santa Xxxxxx regarding Santa
Monica's sale of Company's common stock;
WHEREAS, the Parties have negotiated to enter in this Agreement to
provide for the orderly disposition of Santa Monica's holdings of the Company's
common stock and the orderly governance of the Company going forward;
NOW, THEREFORE, intending to be legally bound, and for, and in
consideration of, the terms, conditions and mutual obligations set forth herein,
including the performance by each of the Parties of their respective mutual and
independent covenants, representations and obligations as set forth herein, and
understanding the meaning and legal effect of entering into this Agreement, the
Parties hereto stipulate, agree, warrant and represent as follows:
SECTION 1. COMPANY TENDER OFFER AND STOCK DISPOSITION.
(a) The Company agrees that it shall conduct a tender offer for the
purchase of its common stock having an aggregate value of $185 million
at a per share price of $42.00 to be commenced on or before August 1,
2005 (the "TENDER OFFER").
(b) The Company confirms that it has received a commitment from each member
of the Board of Directors of the Company that he/she will not tender
any of their holdings of the Company's common stock in the Tender
Offer.
(c) Santa Xxxxxx agrees that it will, and will ensure that its affiliates
or associates shall, tender any and all shares of the Company's common
stock , par value $.01, that it owns, directly or indirectly,
beneficially or otherwise (the "SANTA MONICA'S COMMON STOCK"), in the
Tender Offer.
(d) Santa Xxxxxx agrees that it shall not dispose of Santa Monica's Common
Stock in a block sale(s) (for the purposes of this Agreement "block
sale" shall mean, a public or private sale, in a single or series of
coordinated transaction(s), of a block of 100,000 or more shares of
Company common stock) between the date first written above and the date
upon which Santa Xxxxxx tenders Santa Monica's Common Stock in the
Tender Offer. Santa Xxxxxx further agrees that following the close of
the Tender Offer, to the extent it has identified, or been presented
with, a third party that is willing and able to acquire, in a block
sale(s), any proportion of, or all of, Santa Monica's Common Stock, the
Company shall have a right of first refusal with respect thereto.
(e) Santa Xxxxxx agrees that it shall not acquire any additional shares of
the Company's common stock, directly or indirectly, beneficially or
otherwise, for a period of 5 years commencing as of the date first
written above (the "RESTRICTION PERIOD").
SECTION 2. STANDSTILL PROVISIONS. Santa Xxxxxx agrees that during the
Restriction Period neither it nor any affiliate nor associate shall:
(a) make any statement, proposal or offer, whether written or oral, to the
Company's Board of Directors or to any director, officer or agent of
the Company, or make any public announcement, proposal or offer with
respect to an acquisition, merger (or other business combination),
sale, transfer of the Company's assets, recapitalization, dividend,
share repurchase, liquidation or other extraordinary corporate
transaction with the Company or any other transaction that could result
in a change of control of the Company; and Santa Xxxxxx commits not to
solicit or encourage any other person to make such an announcement,
statement, proposal or offer, or to take any action that might require
the Company to make a public announcement regarding the possibility of
any such transaction or similar transaction, and commits not to advise,
assist or encourage any other person in connection with any of the
foregoing.
(b) initiate, encourage, participate in or engage in any proxy solicitation
or contest or otherwise publicly oppose the Board of Directors of the
Company.
(c) initiate, encourage or propose any shareholder proposal regarding the
Company.
(d) disclose to any third party, or make any filing under the Securities
Exchange Act of 1934, as amended, (the "EXCHANGE ACT") including,
without limitation, under Section 13(d) thereof, disclosing, any
intention, plan or arrangement inconsistent with any term or provision
of this Agreement.
(e) join, or in any way participate, in a "group" as that term is defined
in the Exchange Act in connection with any action, plan, arrangement or
objective prohibited by or inconsistent with any term or provision of
this Agreement.
(f) seek to control the management, policies, affairs, actions, or business
of the Company, including, without limitation, by taking any action to
seek to obtain representation on the Company's Board of Directors.
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(g) have any communications with any of the Company's other shareholders,
directors, officers, associates, employees, customers or suppliers
regarding matters relating to the Company that could reasonably be
expected to, or with an intention to, interfere with or otherwise
adversely affect the operation of the Company and/or the Company's
relationship with any of the aforementioned constituents of the
Company.
SECTION 3. VOTING. Santa Xxxxxx agrees that it shall vote any and all shares of
Santa Monica's Common Stock in favor of the position advocated by a majority of
the Company's Board of Directors until such time as Santa Xxxxxx has completed
the disposition of Santa Monica's Common Stock in accordance with the terms and
provisions of this Agreement.
SECTION 4. REPRESENTATIONS, WARRANTIES AND COVENANTS.
(a) Representations of the Company. The Company represents, warrants and
covenants to Santa Xxxxxx that: (i) the Company has full legal right,
power and authority to enter into and perform this Agreement; (ii) the
execution and delivery of this Agreement by the Company and the
consummation by it of the transactions, terms and conditions
contemplated by this Agreement have been duly authorized by the
Company; (iii) this Agreement constitutes a valid, binding and
enforceable agreement of the Company; and (iv) the Company will use its
best efforts to commence the Tender Offer within 60 days of the date
first written above.
(b) Representations of Santa Xxxxxx. Each member of Santa Xxxxxx, jointly
and severally, represents, warrants and covenants to the Company that:
(i) it has the full legal right, power and authority to enter into and
perform this Agreement; (ii) the execution and delivery of this
Agreement and the consummation of the transactions, terms, conditions,
restrictions and limitations contemplated by this Agreement have been
duly authorized by each member of Santa Xxxxxx; (iii) this Agreement
constitutes a valid, binding and enforceable Agreement of each member
of Santa Xxxxxx; (iv) Santa Xxxxxx owns, directly or indirectly,
beneficially or otherwise, all of the Santa Monica's Common Stock and
none of Santa Xxxxxx, any member of Santa Xxxxxx or any affiliate or
associate thereof owns any other Company common stock, directly or
indirectly, beneficially or otherwise, or any rights or interests in
any Company common stock; (v) no member of Santa Xxxxxx has any
agreement, arrangement or understanding with any person including,
without limitation, any possible shareholder proposal with respect to
the Company, with respect to any possible solicitation of proxies for
any matter with respect to the Company or with respect to any matter
prohibited by Sections 1, 2 or 3 of this Agreement; (vi) it shall, and
shall ensure that any and all affiliates, associates, directors,
officers, partners (general or limited), members and principles of each
member of Santa Xxxxxx, comply with and fulfill all of the obligations
and restrictions that apply to Santa Xxxxxx pursuant to this Agreement;
(vii) it will not request, directly or indirectly, a waiver or
modification of any provision of this Agreement; and (viii) each member
of Santa Xxxxxx hereby waives and releases any and all claims against
the Company, its directors, officers and agents arising under this
Agreement or otherwise, including,
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without limitation, any claim to terminate or suspend performance of
this Agreement other than in accordance with Section 5.
SECTION 5. NULLIFICATION. Either of the Parties to this Agreement may terminate
this Agreement rendering it null, void and of no force or effect, if the Company
fails for any reason to commence the Tender Offer; provided that, the Company
has made a good faith effort to obtain the financing necessary to carry out the
Tender Offer and has failed to acquire such financing.
SECTION 6. MISCELLANEOUS.
(a) Specific Performance. The Company and each member of Santa Xxxxxx
acknowledge and agree that irreparable damage would occur in the event
that any provision, term, condition, representation, warranty, covenant
or restriction were not performed or complied with in accordance with
their specific terms or were otherwise breached. It is accordingly
agreed that the parties shall be entitled to an injunction or
injunctions to prevent or cure breaches of the provisions of this
Agreement and to enforce specifically the terms and provisions hereof,
this being in addition to any other remedy to which they may be
entitled by law or equity.
(b) Joint and Several Liability. Each member of Santa Xxxxxx shall be
jointly and severally liable for any breach of this Agreement by any
other member of Santa Xxxxxx; provided that, to the extent the entities
identified on the Schedule 13D filed with the Securities and Exchange
Commission on June 16, 2004 file an amended Schedule 13D announcing
that each entity is no longer a part of, and no longer intends to act
as, a "group" (as such term is used in Section 13d(3) of the Exchange
Act), each such entity shall no longer be liable for any breach of this
Agreement by any other entity that is a party to this Agreement.
(c) Non-Disclosure. The Company agrees promptly to issue a press release
announcing, among other things, the execution of this Agreement and the
material non-public information contained herein. Except for the
issuance of such press release, the Company and Santa Xxxxxx agree not
to make (and Santa Xxxxxx agrees to ensure that its affiliates,
associates, directors, officers, partners (general or limited), members
and principals do not make) any disclosure with respect to this
Agreement, the performance hereof or any matter covered hereby;
provided that, neither the Company nor Santa Xxxxxx shall be restricted
from making such disclosure if and to the extent it shall be advised by
independent legal counsel that such disclosure is required by law or
administrative regulation or by the regulations of the American Stock
Exchange; provided however, that prior to such a disclosure, the
disclosing party shall provide notice to the other party of such
intention to disclose and the notice shall provide a reasoned legal
analysis as to why such disclosure is required by law, administrative
regulation or regulation of the American Stock Exchange.
(d) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the
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remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect.
(e) Counterparts. 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. This
Agreement may be executed by facsimile signatures.
(f) Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of Delaware without
regard to conflicts of laws principally that would require the
application of any other law. Any action or proceeding seeking to
enforce any provision of, or based on any claims for equitable relief
arising out of this Agreement may be brought against any of the Parties
only in the federal or state courts of Delaware and each of the Parties
consents to the jurisdiction of such courts (and of the appropriate
appellate courts) in any such action or proceeding and waives any
objection to venue laid therein. Process in any action or proceeding
referred to in the preceding sentence may be served on any party
anywhere in the world.
(g) Entire Agreement. This Agreement contains the entire understanding of
the Parties with respect to the matters covered hereby and this
Agreement may be amended only by an agreement in writing executed by
the Parties hereto.
(h) Notices. Any notice or other communication required or permitted to be
given hereunder shall be in writing and be effective (a) when
personally delivered on a business day during normal business hours at
the address designated below; or (b)on the business day following the
date of mailing by overnight courier, fully prepaid, addressed to such
address.
i. Notice to the Company:
000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxx 00000-0000
Attention:
ii. Notice to Santa Xxxxxx:
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IN WITNESS, WHEREOF, the Parties hereto have executed this Agreement as
of the date first written above.
XXXXX CORPORATION
By: /s/ XXXXX X. XXXXXXX
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Name: Xxxxx X. Xxxxxxx
Title: Board Chairman
SANTA XXXXXX PARTNERS OPPORTUNITY FUND L.P
By: /s/ XXXXXXXX X. XXXXXXXXX
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Name: Xxxxxxxx X. Xxxxxxxxx
Title:
SANTA XXXXXX PARTNERS, L.P.
By: /s/ XXXXXXXX X. XXXXXXXXX
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Name: Xxxxxxxx X. Xxxxxxxxx
Title:
SANTA XXXXXX PARTNERS ASSET MANAGEMENT LLC
By: /s/ XXXXXXXX X. XXXXXXXXX
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Name: Xxxxxxxx X. Xxxxxxxxx
Title:
SMP ASSET MANAGEMENT LLC
By:
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Name:
Title:
XX. XXXXXXXX XXXXXXXXX
By: /s/ XXXXXXXX X. XXXXXXXXX
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Name: Xxxxxxxx X. Xxxxxxxxx
