AGREEMENT
This AGREEMENT (the "Agreement"), made and entered into this 5th day of March,
2001, is by and between Baltek Corporation, a Delaware corporation ("Baltek"),
and Jacques and Xxxx Xxxx (the "Stockholders") and Xxxxxxx Xxxx (the "Seller").
W I T N E S S E T H:
WHEREAS, the Seller and each Stockholder respectively own 332,194 (the
"Seller's Shares"), 469,565 and 469,565 shares (collectively (including the
Seller's Shares) the "Xxxx Shares") of Baltek common stock, par value of $1.00
per share (the "Common Stock");
WHEREAS, the Seller's Shares are subject to a voting trust which the
Seller contends terminated in 2000 and the Stockholders contend will terminate
in 2001; and
WHEREAS, the parties to this Agreement desire to provide liquidity to
the Seller in respect to the Seller's Shares while preserving the controlling
interest of the Xxxx family in Baltek;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein, Baltek agrees to purchase from the Seller and the Seller
agrees to sell to Baltek the Seller's Shares upon the following terms and
conditions:
Section 1. The Purchase and Sale. Subject to the terms and conditions
hereinafter set forth, at the respective closings of the transactions
contemplated hereby, the Seller shall sell, convey and transfer the portion of
the Seller's Shares set forth in Section 3 hereof, and deliver to Baltek
certificates representing such shares, and Baltek shall purchase from Seller
such portion of the Seller's Shares in consideration of the purchase price set
forth in Section 4 herein below. The certificates representing Baltek's Common
Stock shall be duly endorsed for transfer or accompanied by appropriate stock
transfer powers duly executed in blank, in either case with signatures
guaranteed in the customary fashion.
Notwithstanding any provision to the contrary contained in this
Agreement, the following transfers of Seller's Shares shall be permitted: (a)
the Seller may transfer Seller's Shares pursuant to a will or pursuant to the
laws of descent and distribution (subject to compliance with the next paragraph
hereof, which compliance shall be procured by the Seller's executor,
administrator or other legal representative); and (b) the Seller may transfer
all or any portion of Seller's Shares to (i) the spouse or any lineal ancestor
or descendant of the Seller or (ii) any trust, the sole beneficiaries of which
are any one or more of the Seller's spouse or any lineal ancestors or
descendants of the Seller, subject to compliance with the next paragraph hereof.
For purposes of this Agreement, the term lineal descendant of Seller shall
include the Seller's children, grandchildren, nephews and nieces, whether
natural born or adopted.
In the event of a transfer of some of all of Seller's Shares pursuant
to the preceding paragraph hereof, including a transfer pursuant to a will or
pursuant to the laws of descent and distribution, each transferee of the
transferred Seller's Shares shall promptly notify the Stockholders and Baltek in
writing of the transfer and shall abide by, and shall hold the transferred
Seller's Shares subject to, the terms of this Agreement that are applicable to
the Seller as of the time of the transfer and that would have been applicable to
the Seller had he retained such Seller's Shares. As promptly as practicable
after such transfer, the transferee of such Seller's Shares shall execute
counterpart copies of this Agreement and shall deliver such counterparts to the
Stockholders and Baltek.
Section 2. The Closing. The closings of the transactions contemplated
by this Agreement shall be held at such place as is agreed upon by the parties
hereto (i) on the date of execution hereof and (ii) on the first business day of
2002 and each subsequent year until, and including, the year 2005 (each, a
"Closing Date").
Section 3. The Installments. Except as otherwise provided herein, on
each Closing Date, the Seller shall sell, convey and transfer to Baltek that
number of shares equal to one-fifth (1/5) of Seller's Shares, rounded to the
closest number of whole shares, except that the fifth installment shall be all
of the remaining Seller's Shares (each, an "Installment"), and Baltek shall pay
to the Seller, in either cash or certified or cashier's check, the fair market
value for such Seller's Shares (the "Purchase Price") determined in accordance
with Section 4 hereof. Notwithstanding the foregoing, Baltek's purchase of each
of the last four (4) Installments in accordance with the provisions of this
Agreement shall be subject to the good faith determination of the Baltek Board
of Directors (the "Board") that Baltek has available sufficient capital, whether
in terms of borrowing power or otherwise, to permit it to consummate the
purchase of such subsequent Installment. Baltek may assign its purchase
obligation with respect to any Installment to a third party or third parties,
provided, however, that no such assignment shall relieve Baltek of any of its
obligations hereunder.
Section 4. The Purchase Price.
(a) The Purchase Price for each Installment shall be the product of
(x) the average closing market price per share of Common Stock over the twenty
(20) trading day period ending immediately prior to the respective Closing Date
and (y) the number of Seller's Shares in the respective Installment.
(b) If the Common Stock is no longer traded on the NASDAQ or other
national exchange in which closing sale prices are available, the Purchase Price
for each Installment shall be the product of (z) the average bid and asked price
per share during the same twenty (20) trading day period ending immediately
prior to the respective Closing Date and (y) the number of Seller's Shares in
the respective Installment.
(c) In the event that neither closing sale prices nor bid and asked
prices are available for the Common Stock, Seller and Baltek shall each name
(and bear the costs and expenses of) its own independent appraiser to assess the
fair market value of the Common Stock for the purposes of determining the
Purchase Price pursuant to this Section 4. Such fair market value shall be
calculated without regard to any discount that might apply because the Seller's
Shares or any Installment thereof represent a minority interest, are restricted
as to transferability or are otherwise illiquid. If the independent appraisers
cannot agree on a valuation, such independent appraisers shall designate a third
appraiser (the costs and expenses thereof being borne half by Seller and half by
Baltek whose valuation shall be determinative as to the Purchase Price, all in
such manner as to insure that the final determination of the Purchase Price is
made within thirty (30) calendar days after the respective Closing Date;
provided, however, that the valuation for each share of Common Stock shall not
be lower than the lowest valuation or higher than the highest valuation of the
independent appraisers chosen by Seller and Baltek. In all such cases, the
Purchase Price for each Installment shall be the product of (w) the price per
share established by the appraisers or appraiser, as the case may be, and (y)
the number of Seller's Shares in the respective Installment.
Section 5. Deferral. In accordance with Section 3 hereinabove and other
relevant provisions of this Agreement, should the Board determine, in good
faith, that the purchase of any Installment subsequent to the first Installment
cannot be consummated pursuant to the terms of this Agreement due to a lack of
capital availability, and the Board cannot cause a third party to consummate the
same, any and all such subsequent Installments shall be deferred until the Board
causes a third party to purchase such subsequent Installment or Installments or
it makes a good faith determination that Baltek has, or can reasonably acquire,
the capital to consummate the same and causes Baltek to effect such purchase.
Section 6. Voting Trust: Agreement.
(a) The Voting Trust. To the extent that it has not already
terminated, the voting trust, dated May 25, 1991, to which the Seller is a party
and pursuant to which the Stockholders act as trustees, shall terminate
immediately upon the execution of this Agreement, at which time Baltek shall
take any necessary action or actions required to deliver to the Seller
certificates of stock representing all of Seller's Shares.
(b) Voting Agreement. During the term of this Agreement, the
Stockholders and the Seller expressly agree to vote the Xxxx Shares as a single
unit and consent to or withhold consent from, similarly as a single unit, any
corporate or shareholder action of any kind whatsoever, whenever such vote or
consent is required or permitted by law or otherwise, including, without
limitation, the election of directors, amendment or repeal of the Certificate of
Incorporation and Bylaws of Baltek, or any proposed increase, decrease or change
in the classification of the capital stock of Baltek or any proposed dissolution
and liquidation or merger or consolidation of Baltek into or with another
corporation or corporations, or any sale, lease, transfer, conveyance, mortgage
or encumbrance of all or any substantial part of Baltek property. In order to
effect the voting of the Xxxx Shares as a single unit, the Stockholders and the
Seller shall confer at a mutually agreeable time, but in any event no later than
ten (10) calendar days prior to the date on which such vote or consent is
required to be given, whether at a shareholders' meeting or otherwise, in which
conference each individual shall be given one vote, for each matter requiring
the vote or consent of the Xxxx Shares. In respect to each such matter, the Xxxx
Shares will then be voted as one unit based on the majority vote of the three
(3) individuals. Notwithstanding the foregoing, at the election of Seller, in
the event of a deferral pursuant to Section 5 hereinabove, either (i) this
Section 6 (b) shall be suspended and shall remain suspended until such deferred
Installment or Installments have been purchased in accordance with the terms of
this Agreement or (ii) Seller shall remain subject to the voting agreement
contained in this Section 6 (b) but shall be free to sell such deferred
Installment or Installments in one or more open market or privately negotiated
transactions, subject to any applicable legal requirements pertaining to such
sales, provided, however, that such right shall lapse as to any unsold Seller's
Shares if and when the unsold portion of any deferred Installment or
Installments is purchased in accordance with the provisions of Section 3 hereof.
Section 7. General Transactions. If Baltek enters into a transaction,
such as a merger, sale or liquidation, whereby all Baltek shareholders will sell
all of their Common Stock, this Agreement shall terminate concurrently with the
consummation of such transaction, and all parties hereto shall be discharged
from all further obligations hereunder.
Section 8. Tag-Along Right.
(a) In the event that the Stockholders receive, at any time during
the term of this Agreement, a bona fide third party offer in writing (the "Bona
Fide Offer"), which the Stockholders desire to accept, to purchase any or all of
the Baltek shares owned by the Stockholders, then the Stockholders shall give
the Seller the name of the third party making the Bona Fide Offer (the "Proposed
Acquirer") and a copy of the Bona Fide Offer, containing all of the material
terms and conditions thereof (the "Stockholder Notice").
(b) The Seller shall have the irrevocable right (the "Tag-Along
Right") to require the Stockholders to arrange with the Proposed Acquirer that
the Proposed Acquirer purchase from the Seller, on the same terms as set forth
in the Bona Fide Offer as applicable to the Stockholders in their capacity as
shareholders of Baltek, that number of Seller's Shares (but not less than such
number of Seller's Shares) which is equal to the product of (x) the number of
shares of Common Stock currently owned by the Seller and (y) a fraction, the
numerator if which is the number of shares of Common Stock proposed to be sold
by the Stockholders and the denominator of which is the number of shares of
Common Stock (calculated on a fully diluted basis) currently owned by the
Stockholders (the "Tag-Along Amount").
(c) The Tag-Along Right may be exercised by the Seller by delivery
of a written notice to the Stockholders within twenty (20) calendar days
following his receipt of the Stockholder Notice stating that the Seller intends
to sell the Tag-Along Amount. Failure to deliver a Tag-Along Notice shall be
deemed conclusive of the Seller's intent to decline to exercise his Tag-Along
Right.
(d) The Seller's Shares (whether all or any portion thereof)
purchased by the Proposed Acquirer pursuant to this Section 8 shall be paid for
at the same closing and upon the same terms and conditions, including price, as
the shares of Common Stock sold by the Stockholders.
(e) Any Seller's Shares sold pursuant to the Tag-Along Right shall
reduce the Installments by the same number of Seller's Shares, applied in
inverse order of maturity.
Section 9. Fiduciary Duties. Nothing contained in this Agreement shall
be deemed to relieve any officer of director of Baltek of any applicable
fiduciary duty with respect to any transaction described in or related to the
transactions described in a Stockholder Notice or with respect to the Seller's
Shares.
Section 10. Legends on Share Certificates. So long as the Seller's
Shares remain subject to the restrictions in this Agreement, each certificate
representing the Seller's Shares shall bear the following legends:
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE
SECURITIES LAWS OF ANY STATE. NO TRANSFER OF THIS CERTIFICATE OR ANY INTEREST
HEREIN MAY BE MADE EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
THE ACT AND THE LAWS OF SUCH STATES UNDER WHOSE LAWS A TRANSFER OF THE INTEREST
REPRESENTED HEREBY WOULD BE SUBJECT TO A REGISTRATION REQUIREMENT, UNLESS BALTEK
CORPORATION AND ITS COUNSEL HAVE RECEIVED A SATISFACTORY OPINION OF COUNSEL THAT
SUCH TRANSFER DOES NOT REQUIRE REGISTRATION UNDER THE ACT OR THE SECURITIES LAWS
OF SUCH STATES.
THIS CERTIFICATE AND THE SHARES REPRESENTED HEREBY MAY NOT DIRECTLY OR
INDIRECTLY BE OFFERED FOR SALE, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED
OR OTHERWISE DISPOSED OF OR BE MADE THE SUBJECT OF A SECURITY INTEREST EXCEPT AS
PROVIDED IN THAT CERTAIN AGREEMENT DATED AS OF MARCH ____, 2001, BY AND AMONG
BALTEK CORPORATION AND CERTAIN STOCKHOLDERS OF BALTEK CORPORATION, A COPY OF
WHICH AGREEMENT IS ON FILE AT THE OFFICE OF BALTEK CORPORATION. ANY PURPORTED
TRANSFER IN VIOLATION OF THAT AGREEMENT SHALL BE VOID.
Section 11. Termination Right. Notwithstanding any other provision of
this Agreement, Seller shall have the right to terminate this Agreement, by
written notice to Stockholders and Baltek, at any time on or after December 31,
2005. Upon such termination, Seller shall have no further obligation and shall
be subject to no further restrictions as set forth in this Agreement.
Section 12. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof and
is intended as the complete and exclusive statement of the agreement and the
intention of the parties. This Agreement replaces any and all understandings and
agreements among the parties heretofore with respect to the subject matter
hereof.
Section 13. Amendment; Waiver; Consent. This Agreement may be amended
only by a written instrument signed by all the parties hereto at the time of
such amendment; provided, however, that no such amendment shall deprive any
party hereto of any right which has accrued hereunder prior to the effective
date of such amendment. No waiver of any provision of this Agreement, and no
consent to any departure therefrom, shall in any event be effective unless the
same shall be in writing and signed by the parties hereto, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given.
Section 14. Notices. All notices, demands, waivers, requests and other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given when delivered in person, or when
sent by telecopy (with receipt confirmed), or on the fifth (5th) business day
after posting thereof by registered or certified mail, with return receipt
requested, pre-paid and addressed to any such parties at the following addresses
(or at such other addresses as the parties hereto may designate by written
notice in the manner aforesaid):
(a) For Baltek:
00 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
(a) For the Stockholders:
Xxxxxxx Xxxx
c/o Baltek Corporation
00 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Xxxx Xxxx
c/o Baltek Corporation
00 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
(a) For the Seller:
Xxxxxxx Xxxx
Maison de l'Horloge
Xxxxx Xxx, 00000
Xxxxxxxxxxxxx
XXXXXX
Section 15. Binding Effect. All of the covenants and agreements in this
Agreement by or on behalf of any of the parties hereto shall bind and inure to
the benefit of their respective heirs, guardians, personal and legal
representatives, successors and assigns.
Section 16. Headings. The headings in this Agreement are intended
solely for convenience of reference and shall be given no effect in the
construction or interpretation of this Agreement.
Section 17. Invalidity. In the event that one or more of the provisions
of this Agreement shall be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
Section 18. Governing Law.This Agreement shall be construed and
enforced in accordance with, and the rights of the parties hereto shall be
governed by, the laws of the State of New York; provided, however, that the
fiduciary duties of the officers and directors of Baltek and the rights of
Seller as a Stockholder of Baltek with respect to Seller's Shares shall be
construed, enforced, and governed under and by the laws of the State of
Delaware.
Section 19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
BALTEK CORPORATION
By:
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Name:
Title:
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Xxxxxxx Xxxx
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Xxxx Xxxx
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Xxxxxxx Xxxx
