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SETTLEMENT AGREEMENT
Pure Group, Inc. (the "Soliciting Shareholder"),
Xxxxx X. Xxxxx, Xxxxx Xxxxxx, and Xxxxxx X. Xxxxxx,
individually and as the members of the
Board of Directors of Ranger Industries, Inc.,
and
Ranger Industries, Inc., a Connecticut corporation
(the "Company")
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612624.6
AGREEMENT made this 29th day of July, 1997, among Pure Group, Inc., a
Delaware corporation (the "Soliciting Shareholder"); Ranger Industries, Inc., a
Connecticut corporation (the "Company"); Xx. Xxxxx X. Xxxxx, a New York resident
("Xxxxx"); Mr. Xxxxx Xxxxxx, a Connecticut resident ("Xxxxxx"); and Xxxxxx X.
Xxxxxx, a New York resident ("Xxxxxx," and, collectively with Xxxxx and Xxxxxx,
the "Current Board").
WHEREAS, the Current Board constitute the current board of directors (the
"Board," which term refers to the Board of Directors of the Company actually in
office at a specified time) of the Company;
WHEREAS, the Soliciting Shareholder is a holder of record of not less than
90,000 shares of the common stock, $0.01 par value (the "Common Stock") of the
Company, and the beneficial owner of additional shares of Common Stock;
WHEREAS, the Soliciting Shareholder commenced an action (the "Action")
against the Company and certain other persons on or about , 1997, in Connecticut
Superior Court for the Judicial District of Fairfield at Bridgeport, Docket No.
CV-97-0342437S, which seeks, among other things, the call of an annual meeting
of shareholders of the Company;
WHEREAS, on or about April 28, 1997, Superior Court entered as an order in
the Action a stipulation among the Soliciting Shareholder, the Company and the
Current Board pursuant to which, among other things, the Company and the Current
Board agreed to hold the Company's 1997 annual meeting of shareholders (the
"Annual Meeting" or the "Meeting") on July 29, 1997, subject to confirmation;
WHEREAS, commencing on or about June 20, 1997, the Soliciting Shareholder
commenced the solicitation of proxies for use at the Annual Meeting, and, in
connection with such solicitation, has distributed a proxy statement (the
"Opposition Proxy Statement" or the "Proxy Statement") and form of proxy (the
"Opposition Proxy Card") which, if duly executed in accordance with the
instructions and advice in the Opposition Proxy Statement, authorizes the
proxies named therein (among other things) to vote FOR the election of Messrs.
Xxxxx Xxxxxxxxxx, Xxxxxx X. Xxxxxx and Xxxxxxx Xxxxxxx (the "Nominees" or,
whether or not elected or appointed, the "New Board") as the Board of Directors
of the Company; and
WHEREAS, the Current Board, intending to act in the best interests of the
shareholders of the Company, desires to resign and appoint the Nominees as their
successors, and to provide for an orderly transition of control of the Company
to the New Board, and to make other provisions for the welfare of the Company;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, it is hereby agreed as follows:
1. Postponement, Relocation of the 1997 Annual Meeting.
a. The date for the Annual Meeting shall be postponed to 10:00 a.m. on
August 11, 1997. The Board will use its best efforts to cause the Company to
send out a timely and otherwise legally sufficient notice of the Annual Meeting
to the shareholders of record (the "Shareholders") as of June
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16, 1997 (the "Record Date"). The place of the Annual Meeting will be the
offices of Battle Xxxxxx LLP, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
b. The parties to the Action shall take (or have taken) such steps as may
be necessary to notify and/or obtain the approval of the Superior Court to the
postponement as aforesaid.
2. Loan and Escrow.
a. Simultaneously with the execution and delivery of this Agreement:
i. The Soliciting Shareholder shall lend the Company the sum of One
Hundred Ninety-six Thousand Four Hundred Seventy-six and 77/100
($196,476.77) Dollars (the "Loan Proceeds" or the "Proceeds"), on
all the terms and conditions set forth in the form of promissory
note (the "Note") attached hereto as Exhibit A.
ii. All parties hereto shall enter into the escrow agreement (the
"Escrow Agreement") with Battle Xxxxxx LLP, as escrow agent (the
"Escrow Agent"), substantially in the form attached hereto as
Exhibit B.
iii. The executed Note shall be delivered to the Escrow Agent and held
pursuant to the Escrow Agreement.
iv. The Soliciting Shareholder shall deliver the Proceeds to the
Escrow Agent by delivering certified checks payable to those
certain creditors of the Company listed on Exhibit C (the
"Creditors").
b. The Proceeds will be delivered by the Escrow Agent to the Creditors, and
the Note will be delivered to the Soliciting Shareholder at the earlier of (A)
the final adjournment of the Annual Meeting if the conditions (the "Conditions")
set forth in subparagraphs (i), (ii) and (iii) below are fulfilled by such time,
or (B) September 9, 1997 (the "Deadline") if the Conditions in subparagraphs
(ii) and (iii) are fulfilled at such time. The Conditions are as follows:
i. The Nominees are duly elected by the Shareholders at the Annual
Meeting as the Board of Directors of the Company, for a term of
one year and until their successors have been elected and
qualified;
ii. Xxxxx, Xxxxxx and Xxxxxx, each severally, shall have complied
with and observed all the covenants and undertakings set forth
herein; and
iii. No action or proceeding shall have been commenced and be
continuing at the Deadline which challenges the rights of the
Soliciting Shareholder (whether alone or together with any other
person) to own its shares of Common Stock of the Company or to
exercise any rights arising out of the full and unrestricted
ownership of the shares under the Company's certificate of
incorporation or by-laws, or which seeks to enjoin the holding of
the Annual Meeting or enjoin,
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prevent, postpone or invalidate the election of the Nominees as
the Board of Directors of the Company at the Annual Meeting.
3. Resignations and Elections. Simultaneously with the execution and delivery
of this Agreement, Xxxxx, Xxxxxx and Xxxxxx shall sequentially resign from
the Board of Directors of the Company and elect as their successors the
Nominees by the following procedure:
x. Xxxxxx and Xxxxxx shall each, severally, tender his resignation
as a director of the Company, and promptly thereafter, Xxxxx
shall elect Xx. Xxxxx Xxxxxxxxxx ("Xxxxxxxxxx") and Xx. Xxxxxx X.
Xxxxxx (Handel") as directors to fill the vacancies on the Board
of Directors resulting from the resignations of Messrs. Xxxxxx
and Xxxxxx.
ii. Promptly thereafter, Xxxxx shall tender his resignation as a
director of the Company, and Xxxxxxxxxx and Handel, in their
capacities as directors of the Company, shall elect Xx. Xxxxxxx
Xxxxxxx to fill the vacancy on the Board of Directors resulting
from the resignation of Xxxxx.
iii. Xxxxx and Xx. Xxxxxx X. Xxxxxxxxx shall resign as officers of the
Company.
iv. The resignations and elections shall be effected by unanimous
written consents in the form attached hereto as Exhibits D and E
attached hereto; the resignations shall be tendered substantially
in the form of Exhibit F attached hereto.
4. Covenants and Representations of the Rubin, Berman, Xxxxxx and the Company.
From the date hereof until the final adjournment of the Annual Meeting,
each of Xxxxx, Xxxxxx and Xxxxxx and, prior to the resignations and elections
contemplated by Section 3, the Company, or such of them as hereinafter
specified, shall severally keep and observe the following covenants, and/or
hereby warrants and represents as follows:
a. None of them shall, directly or indirectly, engage in the solicitation
of any Shareholder (which term, for purposes of this Section, includes any duly
authorized proxy, officer, partner or other agent of a Shareholder) to vote or
refrain from voting at the Annual Meeting, provided, however, that none of them
shall be prohibited from soliciting any Shareholder to vote in favor of the New
Board.
b. None of them shall, directly or indirectly, discourage any Shareholder
from attending the Meeting, in person or by proxy.
c. None of them, without the prior written approval of the Soliciting
Shareholder, shall issue any press release or make any public announcement with
respect to the Company, the Soliciting Shareholder, the New Board or the Annual
Meeting.
x. Xxxxx shall, not later than three days hereafter, deliver to the
Soliciting Shareholder a duly executed Opposition Proxy Card, covering all
shares of Common Stock owned, directly or indirectly, of record or beneficially,
in whole or in part, by him. Xxxxx may, in his discretion, direct the proxies
named in the Opposition Proxy Card to withhold the vote of the shares
represented thereby
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with respect to the election of directors. Xxxxx hereby warrants and represents
that no other signature of any other person nor any other authorization is
required to make the execution and delivery of such proxy valid in all respects.
Xxxxx shall not, prior to the earlier of (i) the final adjournment of the Annual
Meeting or (ii) the Deadline, revoke the proxy thereby granted, either in
writing, or by attending the Annual Meeting and voting thereat.
e. Each of Xxxxxx and Xxxxxx severally warrants and represents that he is
not, directly or indirectly, the record or beneficial owner of any shares
entitled to be voted at the Annual Meeting, and he is not the holder of any
equity interest in, or an officer, director, partner, proxy, representative or
other agent of any person who owns Common Stock of the Company entitled to vote
at the Annual Meeting.
x. Xxxxx, Xxxxxx and Xxxxxx each severally undertakes that if he becomes
the direct or indirect beneficial owner of any shares of Common Stock, or the
holder of any equity interest in, or an officer, director, partner, proxy,
representative or other agent of any person who owns any Common Stock entitled
to vote at the Annual Meeting, he will use his best efforts to cause such shares
(i) to be present at the Annual Meeting, and (ii) either (A) voted in favor of
the New Board, or (B) not voted with respect to the election of directors.
g. Each of Xxxxx, Xxxxxx and Xxxxxx severally warrants and represents as
follows:
i. The Company is not indebted to him for any compensation or
reimbursement of expenses incurred by him on behalf of the
Company, or the payment of any employee benefits or similar
benefits of any nature (whether directly to him or to any plan,
trust or insurance carrier for the benefit of, or as a
contribution on behalf of, him), other than as set forth on
Exhibit C.
ii. The Company is not indebted to him or any affiliate for any money
loaned by him or any affiliate, other than as set forth on
Exhibit C.
h. Each of Xxxxx, Xxxxxx and Xxxxxx, as directors of the Company, hereby
severally warrants and represents as follows:
i. This Agreement, the Note and the Escrow Agreement each has been
duly authorized and delivered by the Company and is legal, valid
and binding against the Company and each of them. Attached hereto
as Exhibit H is a Secretary's certificate confirming the due
adoption of a resolution of the Board of Directors of the
Company, and an incumbency certificate with respect to Xxxxx,
Xxxxxx and Xxxxxx at the time such resolution was adopted.
ii. The annual premium for the directors' and officers' liability
insurance policy maintained by the Company and in force for the
current term is not more than $35,000.00. The policy is currently
in full force and effect and the premium has been paid in full
for a term expiring not earlier than December 23, 1997.
iii. To the best of their knowledge, the Company has no accrued
liabilities other than (i) as set forth on Exhibit C, (ii)
liabilities incurred in the ordinary course
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of business, not exceeding $10,000 in the aggregate, and (iii)
liabilities for federal, state and local income taxes
attributable to the income of the products liability trust and
the reorganization trust for tax periods beginning after December
31, 1995.
i. Each of Xxxxx, Xxxxxx and Xxxxxx severally warrants and represents all
stock records of the Company are in the possession of Continental Stock Transfer
and Trust Company; all corporate minutes and legal records of the Company are in
the custody of Xxxxx, Day, Xxxxxx & Xxxxx, Esqs., in their office in New York,
New York; and all financial and other records of the Company are in the
possession of Xxxxx and/or Coopers & Xxxxxxx. Xxxxx, Xxxxxx and Xxxxxx each
hereby severally undertakes to cause all the Company's books and records to be
delivered promptly to such persons as the Board of Directors or any executive
officer of the Company may hereafter direct.
5. Representation of the Soliciting Shareholder.
The Soliciting Shareholder warrants and represents that this Agreement, the
Note and the Escrow Agreement each has been duly authorized and delivered by the
Soliciting Shareholder and is legal, valid and binding against the Soliciting
Shareholder. Attached hereto as Exhibit I is a Secretary's certificate
confirming the due adoption of a resolution of the Board of Directors of the
Soliciting Shareholder, and an incumbency certificate with respect to the
members of the Board of Directors of the Soliciting Shareholder.
6. Additional Covenants.
a. The Company shall maintain in full force the directors' and officers'
liability insurance policy heretofore maintained by the Company, for a period of
one year beyond the current term of such policy, provided that (i) the premium
for such coverage is not greater than 150% of the annual premium of such policy
for the current one-year term, and (ii) such coverage is reasonably available
from a reputable insurer. If coverage is not available from the current insurer,
the Company shall seek coverage from any other reputable insurer, and the scope
and terms of such coverage, including the limits of liability and deductibles,
shall be substantially similar to the coverage in force on the date hereof.
b. Each party hereto shall hereafter provide reasonable cooperation to all
other parties hereto to effect the orderly change of management of the Company
contemplated by this Agreement, including, without limitation, (i) any filings
with the Securities and Exchange Commission, the Connecticut Department of
State, any taxing authorities or any other governmental authority or (ii) any
communications or authorizations to be given to persons having custody or
possession of any assets, properties or records of the Company.
c. No party hereto shall propose any substantive matter for presentment to
or action by the shareholders at the Annual Meeting other than the election of
directors.
d. The Company shall, and the Soliciting Stockholder hereby undertakes to
cause the Company to, promptly upon receipt thereof from the Escrow Agent,
deposit the Escrow Funds into its payroll accounts then maintained by the
Company and apply the Proceeds to promptly pay Xxxxx'x net
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salary to Xxxxx, and to the full and timely payment of all withholdings and
payroll taxes to the appropriate taxing authorities.
7. Releases.
x. Xxxxx, Xxxxxx and Xxxxxx shall each severally deliver a release in favor
of the Soliciting Shareholder in the form of Exhibit I attached hereto, upon
execution of this Agreement.
b. The Soliciting Shareholder shall deliver to each of Xxxxx, Xxxxxx and
Xxxxxx a release in favor of each of Xxxxx, Xxxxxx and Xxxxxx in the form of
Exhibit J attached hereto, upon execution of this Agreement.
8. Legal Fees.
If any action or proceeding is commenced to enforce any provision of the
Agreement, the prevailing parties will be entitled, in such action or
proceeding, or otherwise, to payment in full of such party's reasonable
expenses, including attorneys' fees, incurred in connection with such action or
proceeding.
9. Miscellaneous Provisions.
a. Governing Law, Jurisdiction and Venue. This agreement shall be governed
and construed under the law of the State of New York and the applicable federal
securities laws, except to the extent that the laws of Connecticut exclusively
and pre-emptively govern any particular issue.
b. Notice. Any notice to be given hereunder shall be deemed given only if
delivered by (i) certified mail, return receipt requested, or (ii) commercial
overnight delivery service which regularly obtains a signed receipt upon
delivery, or (iii) by hand, which delivery is acknowledged in writing, to the
parties at the addresses as set forth below:
If to the Soliciting Shareholder: With a copy to:
Pure Group, Inc. Battle Xxxxxx LLP
P.O. Box 1028 00 Xxxx 00xx Xxxxxx
Xxxx Xxxxx, Xxxxxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Att'n: Xxxx X. Xxxxxxxx, Esq.
If to the Company: With a copy to:
Ranger Industries, Inc. Battle Xxxxxx LLP, at the address
x/x Xxxxxxx & Xxxxxxx, Xxxx. stated above, AND
000 Xxxxxxx Xxxxxx Xxxxx, Day, Xxxxxx & Xxxxx
Xxxxxxxxxx, Xxxxxxxxxxx 00000 000 Xxxxxxxxx Xxxxxx
Att'n: Xx. Xxxxxx X. Xxxxxxxxx, Secretary Xxx Xxxx, Xxx Xxxx 00000
Att'n: Xxxxx X. Xxxxxxxx, Esq.
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If to Xxxxx:
Mr. Xxxxx Xxxxx
c/o Resurgence Asset Management
1185 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000
If to Xxxxxx:
Xxxxx Xxxxxx, Esq.
x/x Xxxxxxx & Xxxxxxx, Xxxx.
000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxx 00000
If to Xxxxxx:
Xxxxxx X. Xxxxxx, Esq.
c/o Orrick, Xxxxxxxxxx & Xxxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
c. Further Assurances. The parties agree (a) to furnish upon request to
each other such further information, (b) to execute and deliver to each other
such other documents, and (c) to do such other acts and things, all as the other
party may reasonably request for the purpose of carrying out the intent of this
Agreement and the documents referred to in this Agreement.
d. Waiver. The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power, or privilege, and no single or partial exercise of any such right, power,
or privilege will preclude any other or further exercise of such right, power,
or privilege or the exercise of any other right, power, or privilege. To the
maximum extent permitted by applicable law, (a) no claim or right arising out of
this Agreement or the documents referred to in this Agreement can be discharged
by one party, in whole or in part, by a waiver or renunciation of the claim or
right unless in writing signed by the other party; (b) no waiver that may be
given by a party will be applicable except in the specific instance for which it
is given; and (c) no notice to or demand on one party will be deemed to be a
waiver of any obligation of such party or of the right of the party giving such
notice or demand to take further action without notice or demand as provided in
this Agreement or the documents referred to in this Agreement.
e. Entire Agreement and Modification. This Agreement supersedes all prior
agreements between the parties with respect to its subject matter, other than
the agreement contained in the letter dated April 26, 1997, from Xxxxx, Day,
Xxxxxx & Xxxxx to Day Xxxxx & Xxxxxx, and constitutes (along with the documents
referred to in this Agreement) a complete and exclusive statement of the terms
of the agreement between the parties with respect to its subject matter. This
Agreement may not be amended except by a written agreement executed by the party
to be charged with the amendment.
f. Assignments, Successors, and No Third-party Rights. No party may assign
any of his/its rights under this Agreement. Notwithstanding the foregoing, this
Agreement will apply to, be
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binding in all respects upon, and inure to the benefit of the successors and
permitted assigns of the parties.
g. Severability. If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
h. Section Headings, Gender and Number. The section headings in this
Agreement are provided for convenience only and shall not affect its
construction or interpretation. All words used in this Agreement will be
construed to be of such gender or number as the circumstances require.
i. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement
as of the date first written above.
Pure Group, Inc.
By: /s/ Xxxxx Xxxxxxxxxx /s/ Xxxxx X. Xxxxx
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Xxxxx Xxxxxxxxxx, President Xxxxx X. Xxxxx, individually
/s/ Xxxxx Xxxxxx
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Ranger Industries, Inc. Xxxxx Xxxxxx, individually
By: /s/ Xxxxx X. Xxxxx /s/ Xxxxxx X. Xxxxxx
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Xxxxx X. Xxxxx, President Xxxxxx X. Xxxxxx, individually
By: /s/ Xxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxxxxxx, Secretary
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TABLE OF EXHIBITS
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Section
Exhibit Description Reference
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A Form of Note 2.a.i.
B Escrow Agreement 2.a.ii.
C List of Certain Expenses 2.a.iv.
D Form of Unanimous Written Consent - 3.iv.
Resignation of Xxxxxx and Xxxxxx
E Form of Unanimous Written Consent - 3.iv.
Resignation of Xxxxx
F Form of Resignation 3.iv.
G Company's Secretary's Certificate 5.g.3.
H Soliciting Shareholder's Secretary's Certificate 6.
I Form of Release by Rubin, Berman, Xxxxxx 7.a.
J Form of Release by the Soliciting Shareholder 7.b.
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612624.6
