SERIES A-1 PREFERRED STOCK EXCHANGE AGREEMENT Dated as of April 28, 2006 By and Between GRUBB & ELLIS COMPANY and KOJAIAN VENTURES, L.L.C.
Exhibit
99.1
SERIES A-1 PREFERRED STOCK
EXCHANGE AGREEMENT
Dated as of
April
28, 2006
By and Between
XXXXX & XXXXX COMPANY
and
KOJAIAN VENTURES, L.L.C.
This Series A-1 Preferred Stock Exchange Agreement (the “Agreement”) is made as of this
28th day of April, 2006 by and between Xxxxx & Xxxxx Company, a Delaware corporation (the
“Company”) and Kojaian Ventures, L.L.C., a Michigan limited liability (“KV”).
WHEREAS, pursuant to that certain securities purchase agreement made as of May 13, 2002 by and
between the Company and KV, as subsequently amended as of June 30, 2002, KV acquired, among other
things, a subordinated convertible promissory note in the principal amount of $11,237,500 bearing
interest at the rate of 12% per annum (the “Subordinated Note”); and
WHEREAS, the Subordinated Note was convertible into shares of the Company’s Series A Preferred
Stock, par value $.01 per share (the “Series A Preferred Stock”), which bore a cumulative
dividend of 12% per annum, and which had such other rights and preferences as set forth in that
certain amended and restated certificate of designations, number, voting rights, preferences and
rights of Series A Preferred Stock of the Company as filed with the Secretary of State of the State
of Delaware on September 13, 2002; and
WHEREAS, on or about September 19, 2002, KV converted the Subordinated Note into 11,725 shares
of Series A Preferred Stock; and
WHEREAS, in accordance with terms and conditions of the certain Preferred Stock Exchange
Agreement dated as of December 30, 2004, on January 4, 2005, KV exchanged its 11,725 shares of
Series A Preferred Stock for an identical number of shares of a newly created series of preferred
stock of the Company, having the voting powers, preferences and rights of such series of preferred
stock as set forth in that certificate of designations, number, voting power, preferences and
rights of Series A-1 Preferred Stock (the “Series A-1 Preferred Stock”) of the Company
filed with the Secretary of State of the State of Delaware on January 4, 2005 (the “Certificate
of Designations”); and
WHEREAS, the Company deems it to be in the best interests of its stockholders to eliminate the
Series A-1 Preferred Stock from its capital structure pursuant to an exchange transaction to be
completed simultaneously with the closing of a public offering of the Company’s securities under
Section 5 of the Securities Act of 1933, as amended, pursuant to which upon the closing of such
public offering KV, along with all affiliates of KV, will own less than 50% of all of the issued
and outstanding voting securities of the Company (the “Qualifying Public Offering”), as
more fully set forth herein.
NOW THEREFORE, for good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto agreed as follows:
1. Exchange of Securities. Subject to the full satisfaction or waiver of all of the
conditions to closing set forth in Section 2.1 and Section 2.2 below, on the
“Closing Date” (as that term is defined in Section 2.3 below) and immediately prior to the
closing of the Qualifying Public Offering, KV shall deliver to the Company an original certificate
representing all of 11,725 shares of Series A-1 Preferred Stock owned by KV in exchange for (i) a
certificate, issued in the name of KV, representing such number of shares of the Company’s common
stock, par value $.01 per share (the “Common Stock”) which is equal to the difference
between 11,173,925 shares of Common Stock and the number of shares of Common Stock actually sold by
KV in the Qualifying Public Offering (the shares represented by that certificate are referred to in
this Agreement as the “Shares”) and (ii) $10,056,532.50 in cash (the “Exchange Cash
Consideration”). It is agreed and understood by KV and the Company that the shares of Common
Stock to be sold by KV in the Qualifying Public Offering shall be retained by the Company on behalf
of KV and, immediately after the Closing, such shares shall be sold in the Qualifying Public
Offering and all proceeds of such sale shall be remitted by the underwriter directly to KV.
2. Closing Conditions.
2.1 Conditions to Closing for KV. The obligations of KV to effect the Closing (as
defined herein) shall be subject to the following conditions, except to the extent waived in
writing by KV:
(i) the Registration Statement filed with the Securities and Exchange Commission
(“SEC”) for the Qualifying Public Offering shall have been declared effective by the SEC
and no stop order shall have been issued with respect to that Registration Statement.
(ii) the Company’s Common Stock shall have been accepted for listing on the New York
Stock Exchange (the NYSE, not NYSE Arca), or such other stock exchange or trading facility
as may be approved by KV in writing in its sole and absolute discretion, effective upon the
closing of the Qualifying Public Offering.
(iii) the Company and KV (and such affiliates of KV as KV shall determine) shall have
executed and delivered a registration rights agreement (“the Registration Rights
Agreement”) in form and substance acceptable to KV.
(iv) at the time the Company and the representative or representatives of the several
underwriters, as the case may be (collectively, the “Representative”), execute and
deliver the definitive underwriting agreement with respect to the Qualifying Public
Offering (the “Underwriting Agreement”), all of the terms and conditions of the
Qualifying Public Offering, including without limitation the number of shares to be sold by
the Company and KV, subject to §5.1 (ii) below, shall be acceptable to KV and KV shall have
delivered to the Company the Notice of Approved Terms and Conditions in the form annexed
hereto as Schedule 2.1 (“Notice of Approved Terms”);
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(v) all conditions to the closing of the Qualifying Public Offering, as set forth in
the Notice of Approved Terms, shall have been satisfied or waived;
(vi) there shall be no injunction, restraining order or decree of any nature of any
governmental entity that is in effect that restrains or prohibits the consummation of the
transactions contemplated hereby, including, but not limited to a stop order issued by the
U.S. Securities and Exchange Commission (the “SEC”) with respect to the Qualifying
Public Offering;
(vii) KV shall have received an original stock certificate, issued in the name of KV,
representing duly and validly issued Shares;
(viii) KV shall have received, via wire transfer in accordance with the wire transfer
instructions annexed hereto as Exhibit A, the Exchange Cash Consideration; and
(ix) KV shall have received from the Company a certificate from a duly authorized
officer of the Company, dated as of the date of the Closing, and in the form annexed hereto
as Exhibit B, certifying that all of the representations and warranties of the
Company set forth herein are true and correct in all respects, and all of the covenants of
the Company required by this Agreement to be performed at or prior to the Closing are
performed in all respects, as of the date of the Closing.
2.2 Conditions to Closing for the Company. The obligations of the Company to effect
the Closing shall be subject to the following conditions, except to the extent waived in writing by
the Company:
(i) there shall be no injunction, restraining order or decree of any nature of any
governmental entity that is in effect that restrains or prohibits the consummation of the
transactions contemplated hereby, including but not limited to a stop order issued by the
SEC with respect to the Qualifying Public Offering;
(ii) the Company shall have received from KV the original Series A-1 Preferred Stock
certificate(s), with an accompanying stock power executed in blank with signature
guaranteed, and with all necessary, if any, stock transfer stamps attached;
(iii) the Company shall have received from KV a certificate from a duly authorized
representative of KV, dated as of the date of the Closing, and in the form annexed hereto
as Exhibit C, certifying that all of the representations and warranties of KV set
forth herein are true and correct in all respects, and all of the covenants of KV required
by this Agreement to be performed at or prior to the Closing are performed in all respects,
as of the date of the Closing; and
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(iv) all conditions to the closing of the Qualifying Public Offering as set forth in
the Notice of Approved Terms shall have been satisfied or waived and such closing shall be
scheduled to occur immediately after the exchange contemplated in Section 1 of this
Agreement.
2.3 Closing. Upon the full satisfaction or waiver of all of the conditions set forth
in Section 2.1 and Section 2.2 above and simultaneously upon the closing of the
Qualifying Secondary Offering, the parties shall effect the closing (the “Closing”) of the
transactions contemplated by Section 1 hereof (the date of the Closing, the “Closing Date”)
which shall take place at the offices of Xxxxxxxx Xxxx & Brandeis, LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, 00000, or at such other time, at such other place, and in such other manner, as the
parties hereto shall agree.
3. Representations and Warranties of the Company. The Company warrants and
represents, as of the date hereof and as of the Closing Date as if such representations and
warranties were made on the Closing date as follows:
3.1 Corporate Power. The Company has the full legal right, power and authority to
execute, deliver and perform its obligations under this Agreement. The delivery to KV of the
Shares pursuant to the terms of this Agreement will transfer to KV valid title thereto, free and
clear of all liens, encumbrances, restrictions and claims of every kind whatsoever, other than
those imposed by (i) the Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder (the “Securities Act”), and any other applicable federal and state
securities laws, and (ii) any agreements pertaining to the resale of the Shares hereinafter entered
into by KV with the Representative.
3.2 Due Authorization. This Agreement has been duly and validly authorized, executed
and delivered by the Company and constitutes a valid and legally binding agreement of the Company,
enforceable in accordance with its terms, subject as to enforcement, to bankruptcy, insolvency,
reorganization and other laws of general applicability relating to or affecting creditors’ rights
and to general equity principals. The execution and delivery by the Company of this Agreement and
the other agreements and instruments, to be executed and delivered by the Company in connection
herewith, do not, and the consummation of the transaction contemplated hereby and thereby will not,
(i) violate any provision in the certificate of incorporation or by-laws of the Company, (ii)
violate any provision of, or result in the termination or acceleration of, or default under, or
entitle any party to accelerate (with or after the filing of notice or lapse of time of both) any
obligation under, or result in the creation or imposition of any lien, charge, pledge, security
interest or other encumbrance upon any of the assets of the Company pursuant to any provision of
any mortgage, lien, lease, agreement, license, or instrument, or violate any law, regulation,
order, arbitration award, judgment or decree to which the Company is a party or by which its
property is bound; (iii) violate or conflict with, or create a default under, any other material
restriction of any kind or character to which the Company is subject; (iv) require any governmental
consent, authorization, filing, approval, or exemption, except as may be required by the Securities
Exchange Act of
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1934, as amended, and the rules and regulations promulgated thereunder (the “Exchange
Act”), or (v) violate any consent decree or requirement to which the Company is subject.
3.3 Existence and Good Standing. The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware. The Company has the power
to own its property and to carry on its business as it is now being conducted. The Company is duly
qualified to do business and is in good standing in the jurisdictions in which the character and
location of the properties owned or leased by the Company or the nature of the business conducted
by the Company make such qualification necessary, except with the failure to qualify individually
or in the aggregate will not have a material adverse effect of the business of the Company.
3.4 Valid Issuance. When exchanged and delivered in accordance with the terms hereof
for the consideration expressed herein, the Shares will be duly and validly issued, fully paid,
non-assessable and free of preemptive rights, and, when delivered by the Company, the Shares
constitute valid and legally binding obligations of the Company, enforceable in accordance with
their terms, except as enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other law affecting creditor’s rights generally and of general principles of equity
(regardless of whether considered in a proceeding at law or in equity). Based in part upon the
representations of KV in this Agreement, the Shares will be issued in compliance with all
applicable federal and state securities laws and the offer, exchange and issuance of the Shares
will constitute a transaction exempt from the registration requirements of Section 5 of the
Securities Act.
3.5 No Brokers or Finders. No agent, broker, person or firm acting on behalf of the
Company is, or will be, entitled to any commission or broker’s or finder’s fees from any of the
parties hereto, or from any person controlling or controlled by or under common control with any of
the parties hereto, in connection with any of the transactions contemplated by this Agreement. The
Company agrees to indemnify and hold KV harmless with respect to the foregoing.
3.6 Series A-1 Preferred Stock. The Series A-1 Preferred Stock of the Company owned
by KV: (i) has an Assumed Share Number (as that phrase is defined in the Certificate of
Designations) of 953; and (ii) for voting purposes, pursuant to Section 4 of the Certificate of
Designations, is equivalent to 11,173,925 shares of Common Stock.
3.7 Common Stock. As of the date of this Agreement, the authorized capital stock of
the Company, the number of outstanding shares of capital stock of the Company, the number of shares
of Common Stock which may be issued upon exercise of outstanding stock options, warrants, or other
rights or obligations for issuance of any share of stock of the Company or any of its subsidiaries
or any security convertible into or exchangeable for stock of the Company or any of its
subsidiaries are fully and accurately described in Exhibit C to this Agreement.
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4. Representations and Warranties of KV. KV warrants and represents, as of the date
hereof and as of the Closing Date as if such representations and warranties were made on the
Closing date as follows:
4.1 Power and Authority; Authorization and Noncontravention. KV has the full legal
right, power and authority to execute, deliver and perform its obligations under this Agreement and
this Agreement has been duly and validly authorized, executed and delivered by KV and constitutes a
valid and legally binding agreement of KV, enforceable in accordance with its terms, subject, as to
enforcement, to bankruptcy, insolvency, reorganization and other laws of general applicability
relating to or affecting creditors’ rights and to general equity principles. The execution and
delivery by KV of this Agreement and the other agreements and instruments to be executed and
delivered by KV in connection herewith, do not, and the consummation of the transaction
contemplated hereby and thereby will not, (i) violate any provision of the Articles of
Organization, Operating Agreement or any other like organizational or governing documents of KV;
(ii) violate any provision of, or result in the termination or acceleration of, or default under,
or entitle any party to accelerate (whether after the filing of notice or lapse of time or both)
any obligation under, or result in the creation or imposition of any lien, charge, pledge, security
interest or other encumbrance upon any of the assets of KV pursuant to any provision of any
mortgage, lien, lease, agreement, license, or instrument, or violate any law, regulation, order,
arbitration award, judgment or decree to which KV is a party or by which its property is bound;
(iii) violate or conflict with, or create a default under, any other material restriction of any
kind or character to which KV is subject; (iv) require any governmental consent, authorization,
filing, approval, or exemption, except as may be required under the Securities Act and Exchange
Act; or (v) violate any consent decree or requirement to which KV is subject.
4.2 Existence and Good Standing. KV is a limited liability company, duly organized,
validly existing and in good standing under the laws of the State of Michigan. KV has the power to
own its property and to carry on its business as it is now being conducted.
4.3 Experience; Certain Risks. KV has substantial experience in evaluating and
investing in non-registered securities of publicly traded entities, is capable of evaluating the
merits and risks of investment in the Company and has the capacity to protect its own interests.
KV hereby acknowledges that: (i) the Shares represent a non-registered equity security in a
corporate entity that has a retained deficit; (ii) no return on investment, whether through
distributions, appreciation, transferability or otherwise, and no performance by, through or of the
Company, has been promised, assured, represented or warranted by the Company, or by any director,
officer, employee, agent or representative thereof; (iii) the Shares (x) are not registered under
applicable federal or state securities laws, and thus may not be sold, conveyed, assigned or
transferred unless registered under such laws or unless an exemption from registration is available
under such laws, as more fully described below, and (y) although there presently is a public market
with respect to the shares of the Company’s Common Stock, the Shares will not be quoted, traded or
listed for trading or quotation on any organized market or quotation
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system, and there have not been any representations made by the Company or its representatives
to KV that the Shares will ever be quoted, traded or listed for trading or quotation on any
organized market or quotation system or that there ever will be a public market for the Shares or
that there will continue to be a public market with respect to the Common Stock, and (iv) the
acquisition of the Shares is a speculative investment, involving a degree of risk, and is suitable
only for a person or entity of adequate financial means who has no need for liquidity in this
investment in that, among other things, (a) such person or entity may not be able to liquidate its
investment in the event of an emergency or otherwise, (b) transferability is limited, and (c) in
the event of a dissolution or otherwise, such person or entity could sustain a complete loss of its
entire investment. KV, which is an “affiliate” of C. Xxxxxxx Xxxxxxx, as that term is defined in
Rule 405 promulgated under the Securities Act, has adequate means of providing for its current
financial needs and possible contingencies and has no need for liquidity of its investment in the
Shares. KV is able to bear the economic risks inherent in an investment in the Shares and can
afford to bear the risk of holding the shares for an indefinite period of time. An important
consideration bearing on its ability to bear the economic risk of the purchase of the Shares is
whether KV can afford a complete loss of its investment in the Shares, and KV represents and
warrants that it can afford such a complete loss. KV has such knowledge and experience in
business, financial, investment and banking matters (including, but not limited to investments in
restricted, non-listed and non-registered securities) that KV is capable of evaluating the merits,
risks and advisability of an investment in the Shares.
4.4 Accredited Investor or Business and Financial Experience. KV is an accredited
investor as defined in Rule 501 under the Securities Act.
4.5 Investment. KV is acquiring the Shares for investment purposes only and solely
for its own account, not as a nominee or agent, and not with the view towards the resale or
distribution thereof except pursuant to a registered offering as contemplated by the Registration
Rights Agreement. KV understands that the Shares have not been, and will not be, registered under
the Securities Act or qualified under any state securities laws, by reason of a specific exemption
from the registration provisions of the Securities Act and various states’ securities laws, which
exemption depends upon, among other things, the bona fide nature of the investment intent and the
accuracy of KV’s representations as expressed herein. KV understands that, in the view of the SEC,
among other things, a purchase with a present intent to distribute or resell would represent a
purchase and acquisition with an intent inconsistent with its representation to the Company, and
the SEC might regard such a transfer as a deferred sale for which the registration exemption is not
available. Consequently, KV agrees not to sell, offer to sell or otherwise transfer the Shares in
violation of the Securities Act and consents to the placement of a legend on the certificate(s)
evidencing the Shares, as the case may be, that they have not been registered under federal
securities laws and applicable state securities laws.
4.6 Access to Information. KV expressly acknowledges and agrees that it has not
relied on any representation, warranty or statements, written or oral, other
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than the express representations and warranties contained herein and the information contained
within the Company’s filings with the SEC (including without limitation the Company’s Form S-1
Registration Statement), and that KV’s decision to exchange the Series A-1 Preferred Stock for the
Shares and the Exchange Cash Consideration is not based on any promotional, marketing or sales
materials, and KV and its representatives have been afforded an opportunity to ask questions of,
and has received answers thereto from, the Company and its representatives regarding the business,
management and financial affairs of the Company, and has had access to all documents and
information that XX xxxxx material to an investment decision with respect to the acquisition of the
Shares and the receipt of the Exchange Cash Consideration hereunder, in each case, prior to the
acquisition of the Shares and receipt of the Exchange Cash Consideration.
4.7 Beneficial Ownership. KV is the lawful record and beneficial owner of 11,725
shares of Series A-1 Preferred Stock, free and clear of any liens, claims, encumbrances or
restrictions of any kind, except those arising under the Certificate of Designation, Number, Voting
Powers, Preferences and Rights of Series A-1 Preferred Stock (the “Certificate of Designation”) or
any agreement with the Company. KV is not a party to or otherwise subject to any agreement,
understanding agreement or arrangement regarding the transfer, sale, distribution, hypothecation or
disposition of the Series A-1 Preferred Stock. Upon delivery of the Series A-1 Preferred Stock to
the Company at the Closing, KV will have transferred all right, title and interest in and to the
Series A-1 Preferred Stock to the Company free and clear of any liens, claims, encumbrances and
restrictions of any kind whatsoever, other than those imposed by the Securities Act and any other
applicable securities laws, the Certificate of Designation, or any agreement with the Company.
4.8 No Brokers or Finders. No agent, broker, person or firm acting on behalf of the KV
is, or will be, entitled to any commission or broker’s or finder’s fees from any of the parties
hereto, or from any person controlling or controlled by or under common control with any of the
parties hereto, in connection with the exchange of shares contemplated by this Agreement; except
that the underwriters in the Qualified Public Offering will be entitled to an underwriting
discount, fees and expenses for the sale of KV’s shares in the Qualified Public Offering. KV
agrees to indemnify and hold the Company harmless with respect to the foregoing.
5. Additional Covenants of the Parties.
5.1 KV agrees that:
(i) upon the execution hereof, KV is hereby deemed to have given its approval, subject
to all of the other terms and conditions set forth herein, for the Company to file that
certain Registration Statement on Form S-1 with respect to the Qualifying Public Offering
that has been signed by C. Xxxxxxx Xxxxxxx in his capacity as the Chairman of the Board of
the Company; and
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(ii) upon satisfaction or waiver of all conditions to Closing provided in Section 2.1
of this Agreement, KV will sell and transfer to the underwriters, against receipt of
payment as provided in the Notice of Approved Terms, the number of shares of Common Stock
to be determined by KV in its discretion pursuant to a Qualifying Public Offering; provided
that the number of shares sold in the Qualifying Public Offering shall be such that upon
the closing of the Qualifying Public Offering, KV, along with all affiliates of KV, will
own less than 50% of all of the issued and outstanding shares of Common Stock of the
Company.
5.2 The Company agrees that:
(i) the Company expressly understands, acknowledges and agrees that, notwithstanding
the execution of this Agreement or anything set forth herein, KV is under no obligation
whatsoever to execute and deliver the Notice of Approved Terms and, accordingly, KV has the
absolute right at any time to refuse to execute and deliver the Notice of Approved Terms
for any reason or for no reason.
(ii) the Company expressly understands, acknowledges and agrees that, notwithstanding
the execution of this Agreement or anything set forth herein, KV will retain all rights of
a holder of Series A-1 Preferred Stock under the Certificate of Designation, and that,
consistent with its rights under the Certificate of Designation, KV has not authorized
issuance of any shares of Common Stock by the Company and is under no obligation to
authorize such an issuance, that KV has the absolute right to refuse to authorize the
issuance of shares by the Company; it being contemplated that such consent will be
provided, if at all, in the Notice of Approved Terms.
6. Survival of Representations and Warranties; Indemnity
6.1 Survival of Representations and Warranties. The respective representations and
warranties, covenants, agreements and obligations of each of the Company and KV contained in this
Agreement or in any Exhibit attached hereto, and the indemnification provisions set forth in this
Section 6 hereof, shall survive the Closing.
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6.2 Indemnification by the Parties.
(i) Each of the parties hereto agrees to indemnify (the “Indemnifying Party”)
and hold the other and each of its respective partners, officers, directors, members,
managers, employees, counsel, accountants, agents, successors and assigns (collectively, an
“Indemnified Party”) harmless from any and all damages, liabilities, losses, costs
or expenses (including, without limitation, reasonable counsel fees and expenses) suffered
or paid, directly or indirectly, solely as a result of or arising out of the failure of any
respective representation or warranty made by the Indemnifying Party in this Agreement or
in any Exhibit or Schedule attached hereto to be true, complete and correct in all material
respects as of the date of this Agreement and as of the Closing Date.
(ii) If any action, suit, proceeding or investigation is commenced, as to which an
Indemnified Party proposes to demand indemnification pursuant to Section 6.2(i) hereof, it
shall notify the Indemnifying Party with reasonable promptness; provided,
however, that any failure by an Indemnified Party to notify the Indemnifying Party
shall not relieve the Indemnifying Party from its obligations hereunder, except to the
extent that the Indemnifying Party shall have been materially prejudiced in its ability to
defend the action, suit, proceedings or investigation for which such indemnification is
sought by reason of such failure. Except as set forth below, an Indemnifying Party shall
have the right to retain counsel of its own choice, and the Indemnifying Party shall pay
the reasonable fees, expenses and disbursements of counsel selected by the Indemnifying
Party; and such counsel shall to the extent consistent with its professional
responsibilities, cooperate with the Indemnified Party and any counsel designated by the
Indemnified Party, which counsel designated by the Indemnified Party shall be the expense
of the Indemnified Party.
In the event the Indemnifying Party does not assume or fails to conduct in a diligent
manner the defense of any claim or litigation resulting therefrom, (a) the Indemnified
Party may defend, using its own counsel, against such claim or litigation, in such manner
as it deems appropriate, including, but not limited to, settling such claim or litigation,
on such terms as the Indemnified Party may deem appropriate, subject to first obtaining the
prior written consent of the Indemnifying Party, which consent shall not be unreasonably
withheld or delayed or conditioned, and (b) the Indemnifying Party shall be entitled to
participate in (but not control) the defense of such action, with its counsel and at its
own expense. The Indemnifying Party shall pay the reasonable fees, reasonable expenses and
reasonable disbursements of counsel selected by an Indemnified Party in the circumstances
described in the previous sentence. If the Indemnifying Party thereafter seeks to question
the manner in which the Indemnified Party defended such third party claim or the amount or
nature of any such settlement, the Indemnifying Party shall have the burden to prove that
the Indemnified Party did not defend or settle such third party claim in a reasonably
prudent manner.
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The Indemnifying Party shall be liable for any settlement of any claim against an
Indemnified Party made with the Indemnifying Party’s written consent or made in connection
with the circumstances described in the first sentence of the previous paragraph. The
Indemnifying Party shall not, without prior written consent of an Indemnified Party, which
consent shall not be unreasonably withheld or delayed or conditioned, settle or compromise
any claim, or permit a default or consent to the entry of any judgment in respect thereof;
provided, however, that notwithstanding the foregoing, the Indemnifying
Party shall have the right to settle or compromise any claim provided that (i) the
Indemnifying Party pays all sums, costs and expenses incident thereto, and (ii)
Indemnifying Party obtains for the Indemnified Party a full, non-conditional absolute
release.
Each party agrees to cooperate fully with the other, such cooperation to include,
without limitation, attendance at depositions and the production of relevant documents as
may be reasonably requested by the other parties, provided that the Indemnifying Party will
reimburse the Indemnified Party for all of its reasonable, actual out-of-pocket expenses
incurred in connection with such cooperation by the Indemnified Party.
(iii) In order to provide for just and equitable contribution, if a claim for
indemnification pursuant to these indemnification provisions is made but it is found in a
final judgment by a court of competent jurisdiction (not subject to further appeal) that
such indemnification may not be enforced in such case, even though the express provisions
hereof provide for indemnification in such case, then the Indemnifying Party (as
applicable), on the one hand, and an Indemnified Party, on the other, shall contribute to
the losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs
and expenses to which the indemnified persons may be subject in accordance with the
relative benefits received by the Indemnifying Party (as the case may be), on the one hand,
and an Indemnified Party, on the other hand, in connection with the statements, acts or
omissions which resulted in expenses and the relevant equitable considerations shall also
be considered. No person found liable for a fraudulent misrepresentation shall be entitled
to contribution from any person who is not also found liable for such fraudulent
misrepresentation.
7. Miscellaneous.
7.1 Governing Law. The interpretation and construction of this Agreement, and all
matters relating hereto, shall be governed by the laws of the State of Delaware applicable to
agreements executed and to be performed solely within such State, and each of the parties hereto
irrevocably consents to the venue and jurisdiction of the federal and state courts located in the
State of Delaware, County of Kent.
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7.2 Headings. The Section headings used herein are for reference purposes only, and
shall not in any way affect the meaning or interpretation of this Agreement.
7.3 Publicity. Except as otherwise required by applicable federal securities laws, or
as otherwise agreed to by the parties, none of the parties hereto shall issue any press release or
make any other public statement, filing or disclosure relating to, in connection with or arising
out of this Agreement or the transactions contemplated herein. It is understood and agreed that
the Company will file a Form 8-K Periodic Report and KV and its affiliates will file a Schedule
13D/A promptly to report execution of this Agreement. Any public statement, filing or disclosure
so issued or made by either party shall require the prior approval, not to be unreasonably
withheld, delayed or conditioned, of the other party hereto as to the contents and the manner of
presentation and publication thereof.
7.4 Notices. All notices, requests, demands, other communications and deliveries
required or desired to be given hereunder shall only be effective if given in writing by hand, by
certified or registered mail, return receipt requested, postage prepaid, or by U.S. express mail
service, or by private overnight mail service (e.g. Federal Express), or by facsimile transmission.
Any such notice, request, demand, other communication or delivery shall be deemed to have been
received (a) on the business day actually received if given by hand or facsimile transmission, (b)
on the business day immediately subsequent to mailing, if sent by U.S. express mail service or
private overnight mail service, or (c) three (3) business days following the mailing thereof, if
mailed by certified or registered mail, postage prepaid, return receipt requested, and all such
notices shall be sent to the following addresses (or to such other address or addresses as a party
may have advised the other in the manner provided herein):
if to KV, to:
Kojaian Ventures, L.L.C.
00000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
00000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
with a copy simultaneously by like means to:
Xxxxxx Xxxxxxx, P.L.C.
Third Floor
000 Xxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
Third Floor
000 Xxxx Xxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
Attn: Xxxxxx X. Xxxxxx, Esq.
12
if to the Company to:
Xxxxx & Xxxxx Company
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
Attn: Chief Executive Officer
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
Attn: Chief Executive Officer
with a copy simultaneously by like means:
Xxxxxxxx Xxxx & Brandeis, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxxx, Esq.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
Attention: Xxxxxxxx X. Xxxxxxxx, Esq.
and
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone No. (000) 000-0000
Facsimile No. (000) 000-0000
Attention: Xxxxx X. Xxxxxxxxx, Esq.
7.5 Headings. The section headings contained herein are for the purposes of
convenience only and are not intended to define or limit the contents of said sections.
7.6 Further Assurances. Each party hereto shall cooperate, shall take such further
action and shall execute and deliver such further documents as may be reasonably requested by the
other party hereto in order to carry out the provisions, purposes and intent of this Agreement and
the transaction contemplated hereby, including but not limited to the elimination of the Series A-1
Preferred Stock from the Company’s capital structure.
7.7 Costs. All legal, accounting and other costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by the party or parties
incurring the same.
13
7.8 Legend. The certificate(s) representing the Shares shall have a restrictive legend
on the back of such certificate(s) until removed as provided in the Registration Rights Agreement,
which shall be in form and substance substantially as follows:
“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”). ANY SALE, PLEDGE OR OTHER TRANSFER OF THE
SHARES WILL BE INVALID UNLESS SUCH SHARES ARE REGISTERED UNDER THE ACT, OR UNLESS, IN THE
OPINION OF COUNSEL FOR XXXXX & XXXXX COMPANY, AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE ACT APPLIES.”
7.9 Successors and Assigns. This Agreement may not be transferred, assigned, pledged
or hypothecated by any party hereto, other than by operation of law. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their respective successors
and assigns.
7.10 Counterparts. This Agreement may be executed in two or more original or
facsimile counterparts, all of which taken together shall constitute one instrument.
7.11 Entire Agreement. This Agreement, including the other documents referred to
herein or annexed as Exhibits hereto which form a part hereof, contains the entire understanding of
the parties hereto with respect to the subject matter contained herein and therein and supersedes
all prior agreements and understandings between the parties with respect to such subject matter
hereof.
7.12 Amendments. This Agreement may not be changed orally, but only by an agreement
in writing signed by the parties hereto.
7.13 Waivers. The observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or prospectively) by the party
entitled to enforce such term, but such waiver shall be effective only if it is in a writing signed
by the party against whom the existence of such waiver is asserted. Unless otherwise expressly
provided in this Agreement, no delay or omission on the part of any party in exercising any right
or privilege under this Agreement shall operate as a waiver thereof, nor shall any waiver on the
part of any party of any right or privilege under this Agreement operate as a waiver of any other
right or privilege under this Agreement nor shall any single or partial exercise of any right or
privilege preclude any other or further exercise thereof or the exercise of any other right or
privilege under this Agreement. No failure by either party to take any action or assert any right
or privilege hereunder shall be deemed to be a waiver of such right or privilege in the event of
the continuation or repetition of the circumstances giving rise to such right unless expressly
waived in writing by the party against whom the existence of such waiver is asserted.
14
7.14 Severability. In case any provision in this Agreement shall be held invalid,
illegal or unenforceable, the validity, legality and enforceability of the remaining provisions
hereof will not in any way be affected or impaired thereby.
7.15 Third Party Beneficiaries. Each party hereto intends that this Agreement shall
not benefit or create any right or cause of action in or on behalf of any Person other than the
parties hereto.
7.16 Waiver of Jury Trial. The parties hereto waive all right to trial by jury of any
action, suit or proceeding brought to enforce or defend any rights or remedies arising under or in
connection with this Agreement or the transaction contemplated hereby whether grounded in tort,
contract or otherwise.
[Rest of Page Intentionally Left Blank]
15
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the day and
year first above written.
| COMPANY: XXXXX & XXXXX COMPANY |
||||
| By: | /s/ Xxxx X. Xxxx | |||
| Name: | Xxxx X. Xxxx | |||
| Title: | Chief Executive Officer | |||
| KOJAIAN VENTURES, L.L.C. a Michigan limited liability company |
||||
| By: | KOJAIAN VENTURES-MM, Inc. | |||
| a Michigan Corporation, | ||||
| Managing Member | ||||
| By: | C. Xxxxxxx Xxxxxxx | |||
| Name: | C. Xxxxxxx Xxxxxxx | |||
| Title: | President | |||
16
Schedule 2.1
Kojaian Ventures, L.L.C.
00000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
00000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxxx Xxxxx, Xxxxxxxx 00000
Xxxxx & Xxxxx Company
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
000 Xxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
| Re: | Prospectus Dated _____, 2006 Under the Registration Statement for Xxxxx & Xxxxx Company on Form S-1; Registration No. 333- (the “Registration Statement”) |
Ladies & Gentlemen:
Reference is hereby made to that certain Series A-1 Preferred Exchange Agreement (the
“Exchange Agreement”) by and between Xxxxx & Xxxxx Company (the “Company”) and Kojaian Ventures,
L.L.C. (“KV”) . Except as expressly set forth herein to the contrary, all capitalized terms set
forth herein shall have the same meaning as ascribed to them in the Exchange Agreement.
Please be advised that Kojaian Ventures, L.L.C. hereby consents to the proposed offer and sale
of not less than ___shares nor more than ___shares of the Company’s Common Stock by the
Company and agrees to sell not less than ___shares nor more than ___shares of the Company’s
Common Stock to be received by KV in accordance with the terms and conditions set forth in, and as
contemplated by, the above-referenced Prospectus and the Underwriting Agreement.
| Very truly yours, KOJAIAN VENTURES, L.L.C. a Michigan limited liability company |
||||
| By: | KOJAIAN VENTURES-MM, Inc. | |||
| a Michigan Corporation, | ||||
| Managing Member | ||||
| By: | ||||
| Name: | C. Xxxxxxx Xxxxxxx | |||
| Title: | President | |||
