EXHIBIT 99.(d)
EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT, dated as of November 21, 2003 (this
"Agreement"), is by and among JAC Acquisition Company, Inc., a Delaware
corporation (the "Purchaser") and each of the parties listed on Exhibit A hereto
(each in his, her or its individual capacity, a "Stockholder," and,
collectively, the "Stockholders").
W I T N E S S E T H:
WHEREAS, contemporaneously with the execution and delivery of this
Agreement, the Purchaser is commencing a cash tender offer (the "Offer") to
purchase all of the outstanding shares of common stock (the "Company Shares") of
Joule Inc., a Delaware corporation (the "Company"), not owned by the
Stockholders, at a price of $1.52 per share, and contemplating the prompt
subsequent merger of the Company with and into the Purchaser (the "Merger");
WHEREAS, as of the date hereof, each Stockholder owns, beneficially and
of record the number of shares of capital stock of the Company set forth beside
such Stockholder's name on Exhibit A (all such Company Shares, together with any
additional Company Shares which may hereafter be acquired by such Stockholder
prior to the termination of this Agreement, whether upon the exercise of options
or by means of purchase, dividend, distribution or otherwise, being referred to
herein as the "Owned Shares");
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, the Purchaser and each Stockholder hereby agree as follows:
ARTICLE I
COVENANTS OF THE STOCKHOLDERS
Section 1.1 No Inconsistent Arrangements. Except as
contemplated by this Agreement and the Merger Agreement for the Merger, no
Stockholder shall during the term (i) transfer (which term shall include,
without limitation, any sale, assignment, gift, pledge, hypothecation or other
disposition), or consent to any transfer of, any or all of the Owned Shares or
any interest therein, or create or permit to exist any Encumbrance (as defined
in Section 3.3 hereof) on such Owned Shares, (ii) enter into any contract,
option or other agreement or understanding with respect to any transfer of any
or all of the Owned Shares or any interest therein, (iii) grant any proxy,
power-of-attorney or other authorization in or with respect to the Owned Shares,
(iv) deposit the Owned Shares into a voting trust or enter into a voting
agreement or arrangement with respect to the Owned Shares, or (v) take any other
action that would in any way restrict, limit or interfere with the performance
of its obligations hereunder or the transactions contemplated hereby.
1
Section 1.2 Waiver of Appraisal Rights. Each Stockholder
hereby waives any rights of appraisal or rights to dissent from the Merger.
Section 1.3 Stop Transfer. No Stockholder shall request that
the Company register the transfer (book-entry or otherwise) of any certificate
or uncertificated interest representing any of the Owned Shares, unless such
transfer is made in compliance with this Agreement.
Section 1.4 No Tender. No Stockholder shall tender any of
his, her or its Owned Shares in the Offer.
Section 1.5 Indemnity. The representations, warranties and
agreements made by each Stockholder herein shall survive the closing of this
Exchange (as defined in Section 2.1) as anticipated hereby. Each Stockholder
hereby agrees to indemnify and hold harmless the Purchaser from and against any
and all loss, liability, claim, damage and expense (including, without
limitation, attorney's fees and disbursements) suffered or incurred as a result
of a misrepresentation or breach of any warranty or agreement made by such
Stockholder in this Agreement.
ARTICLE II
EXCHANGE OF OWNED SHARES
Section 2.1 Exchange. The Certificate of Incorporation of
the Purchaser will be amended to increase the number of authorized shares to
10,000 shares of common stock. The equity capitalization of the Purchaser
immediately following the Exchange (as defined below) shall be as set forth on
Exhibit B hereto (the "Purchaser Equity Schedule"). Each Stockholder shall,
effective as of the expiration of the Offer, exchange such Stockholder's Owned
Shares for newly-issued shares of capital stock of the Purchaser (the "Purchaser
Shares") consistent with the Purchaser Equity Schedule (the "Exchange").
Section 2.2 Certain Warranties. The transfer by the
Stockholders of the Owned Shares to the Purchaser pursuant to this Agreement
shall pass to and unconditionally vest in the Purchaser good and valid title to
the Owned Shares, free and clear of all Encumbrances whatsoever.
Section 2.3 Disclosure. Each Stockholder hereby authorizes
the Purchaser to publish and disclose in the offer documents (including all
documents and schedules filed with the SEC), such Stockholder's identity and
ownership of the Owned Shares and the nature of its commitments, arrangements
and understandings under this Agreement.
2
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDERS
By executing this Agreement, each Stockholder makes the following
representations, declarations and warranties to the Purchaser, with the intent
and understanding that the Purchaser will rely thereon:
Section 3.1 Due Authorization, Etc. Such Stockholder has all
requisite power and authority to execute, deliver and perform this Agreement, to
appoint the Purchaser as its proxy and to consummate the transactions
contemplated hereby. The execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby have been duly
authorized by all necessary action on the part of such Stockholder. This
Agreement has been duly executed and delivered by or on behalf of such
Stockholder and constitutes a legal, valid and binding obligation of such
Stockholder, enforceable against such Stockholder in accordance with its terms.
Section 3.2 No Conflicts; Required Filings and Consents.
(a) Except as would not impair or delay the ability
of such Stockholder to consummate the transactions contemplated hereby, the
execution and delivery of this Agreement by such Stockholder does not, and the
performance of this Agreement by such Stockholder will not, (i) subject to the
filings referred to in Section 3.2(c), conflict with or violate any law
applicable to such Stockholder or by which such Stockholder or any of such
Stockholder's assets is bound or affected or (ii) result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
acceleration or cancellation of, or result in the creation of an Encumbrance on
any assets of such Stockholder, including, without limitation, the Owned Shares,
pursuant to any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which such
Stockholder is a party or by which such Stockholder or any of such Stockholder's
assets is bound or affected.
(b) Except as would not impair or delay the ability
of such Stockholder to consummate the transactions contemplated hereby, the
execution and delivery of this Agreement by such Stockholder does not, and the
performance of this Agreement by such Stockholder will not, require any consent,
approval, authorization or permit of, or filing with or notification to, any
governmental or regulatory authority (other than any necessary filing under the
Securities Exchange Act of 1934, as amended).
Section 3.3 Title to Owned Shares. Except as disclosed to
the Purchaser in writing by such Stockholder, such Stockholder is the sole
record and beneficial owner of the Owned Shares, free and clear of any pledge,
lien, security interest, mortgage, charge, claim, equity, option, proxy, voting
restriction, voting trust or agreement, understanding, arrangement, right of
first refusal, limitation on disposition, adverse claim of ownership or use or
encumbrance of any kind (collectively, "Encumbrances"), except for Encumbrances
or proxies arising pursuant
3
to this Agreement. As of the date hereof, the Owned Shares listed on Exhibit A
beside such Stockholder's name under the caption "Number of Owned Shares" are
the only Company Shares, together with any additional Company Shares which may
hereafter be acquired by such Stockholder prior to the termination of this
Agreement, whether upon the exercise of options or by means of purchase,
dividend, distribution or otherwise, owned of record or beneficially by such
Stockholder.
Section 3.4 No Finder's Fees. No broker, investment banker,
financial advisor or other person is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
transactions contemplated hereby based upon arrangements made by or on behalf of
such Stockholder. Such Stockholder, on behalf of itself and its affiliates,
hereby acknowledges that it is not entitled to receive any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
transactions contemplated hereby. Such Stockholder agrees and acknowledges that
the Exchange is being made without an underwriter or placement agent who would
have responsibilities to any of the Stockholders, and accordingly, such
Stockholder agrees and acknowledges such Stockholder's sole responsibility for a
"due diligence" investigation of the Purchaser.
Section 3.5 Investment Intent.
(a) Such Stockholder is an "accredited investor" as
that term is defined in Regulation D of the Act. Such Stockholder understands
that such Stockholder must bear the economic risk of an investment in the
Purchaser Shares for an indefinite period. Such Stockholder is investing in the
Purchaser Shares for such Stockholder's own account as principal for investment
and not with a view toward resale or distribution.
(b) The Stockholder has been advised and is aware
that: (1) there is no public market for the Purchaser Shares and it is not
likely that any public market will develop; and (ii) the Purchaser Shares have
not been registered under the Securities Act of 1933, as amended (the
"Securities Act"), or the securities laws of any state or other jurisdiction
and, therefore, cannot be sold except in compliance with such laws. Such
Stockholder agrees not to sell or otherwise dispose of the Purchaser Shares
acquired by such Stockholder unless the Purchaser Shares are subsequently
registered under the Securities Act and such state securities laws as are
applicable or unless there are available exemptions from such registration that
are supported by an opinion of counsel for such Stockholder, which opinion is
satisfactory in form and substance to the Company. Such Stockholder has no
present arrangement, understanding or agreement for transferring or disposing of
any or all shares of the Purchaser. Such Stockholder agrees that a legend to the
foregoing effect may be placed upon any and all certificates representing shares
of the Purchaser.
(c) Stockholder hereby agrees to cooperate with the
Purchaser in all of its efforts to comply with any applicable federal, state or
local statutes and regulations.
4
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to each Stockholder as
follows:
Section 4.1 Due Organization, Authorization, etc. The
Purchaser is duly organized, validly existing and in good standing under the
laws of the State of Delaware. The Purchaser has all requisite corporate power
and authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the consummation of the transactions contemplated hereby by the Purchaser
have been duly authorized by all necessary corporate action on the part of the
Purchaser. This Agreement has been duly executed and delivered by the Purchaser
and constitutes a legal, valid and binding obligation of the Purchaser,
enforceable against the Purchaser in accordance with its terms.
Section 4.2 Investment Intent. The Purchaser will be
acquiring the Owned Shares pursuant to the Exchange for its own account and not
with a view to distribution or resale in any manner which would be in violation
of the Securities Act.
ARTICLE V
MISCELLANEOUS
Section 5.1 Termination. This Agreement shall terminate and
be of no further force and effect: (i) upon the written mutual consent of the
parties hereto; (ii) automatically and without any required action of the
parties hereto upon the withdrawal of the Offer; (iii) if at least a majority of
the outstanding Company Shares, excluding the Owned Shares of Stockholders and
Company Shares owned by any executive officers of the Company not listed on
Exhibit A, fail to be tendered in the Offer; and (iv) if the Purchaser fails to
acquire a sufficient number of Company Shares, such that, after Company Shares
are purchased pursuant to the Offer, the Purchaser would own at least 80% of the
outstanding Company Shares. No such termination of this Agreement shall relieve
any party hereto from any liability for any breach of this Agreement prior to
termination.
Section 5.2 Further Assurance. From time to time, at another
party's request and without additional consideration, each party hereto shall
execute and deliver such additional documents and take all such further action
as may be necessary or desirable to consummate and make effective, in the most
expeditious manner practicable, the transactions contemplated by this Agreement.
Section 5.3 Specific Performance. Each Stockholder
acknowledges that if such Stockholder fails to perform any of its obligations
under this Agreement, immediate and
5
irreparable harm or injury would be caused to the Purchaser for which money
damages would not be an adequate remedy. In such event, each Stockholder agrees
that the Purchaser shall have the right, in addition to any other rights that it
may have, to specific performance of this Agreement. Accordingly, if the
Purchaser should institute an action or proceeding seeking specific enforcement
of the provisions hereof, each Stockholder hereby waives the claim or defense
that the Purchaser has an adequate remedy at law and hereby agrees not to assert
in any such action or proceeding the claim or defense that such a remedy at law
exists. Each Stockholder further agrees to waive any requirements for the
securing or posting of any bond in connection with obtaining any such equitable
relief.
Section 5.4 Notice. All notices, requests, claims demands
and other communications under this Agreement shall be in writing and shall be
deemed given if delivered personally or sent by overnight courier (providing
proof of delivery) to the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
(a) If to the Purchaser:
JAC Acquisition Company, Inc.
x/x Xxxxxxxx Xxxxxx
00 Xxxxxxxxxxxx Xxxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxxx
(b) If to a Stockholder:
To the appropriate address shown on Exhibit A.
Section 5.5 Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement.
Section 5.6 Severability. If any term or other provision of
this Agreement is invalid, illegal or incapable of being enforced by any rule of
law or public policy, all other conditions and provisions of this Agreement
shall nevertheless remain in full force and effect so long as the economic or
legal substance of the transactions contemplated hereby is not affected in any
manner adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the maximum
extent possible.
Section 5.7 Entire Agreement; No Third-Party Beneficiaries.
This Agreement constitutes the entire agreement among the parties hereto and
supersedes all other prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter of this Agreement, and this
Agreement is not intended to confer upon any person, other than the parties
hereto, any rights or remedies.
6
Section 5.8 Assignment. Neither this Agreement nor any of
the rights, interests or obligations under this Agreement may be assigned or
delegated, in whole or in part by any of the parties, other than by operation of
law; provided, however, that the Purchaser may assign, in its sole discretion,
its rights and obligations hereunder to any direct or indirect wholly-owned
subsidiary of the Purchaser, but no such assignment shall relieve the Purchaser
of its obligations hereunder if such assignee does not perform such obligations.
Each Stockholder agrees that this Agreement and such Stockholder's obligations
hereunder shall attach to the Owned Shares and shall be binding upon any person
or entity to which legal or beneficial ownership of the Owned Shares shall pass
by operation of law.
Section 5.9 Governing Law. This Agreement shall be governed
by, and construed in accordance with, the laws of the State of New York,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof. Each of the parties hereto (a) hereby irrevocably
and unconditionally consents to submit to the personal jurisdiction of the
courts of the State of New York and of the United States of America located in
the State of New York in the event any dispute arises out of this Agreement or
any of the transactions contemplated by this Agreement, (b) shall not object to
or attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court, and (c) shall not bring any action
relating to this Agreement or any of the transactions contemplated by this
Agreement in any other court.
Section 5.10 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
Section 5.11 Amendment. This Agreement may not be amended
except by an instrument in writing signed by the parties hereto.
Section 5.12 Waiver. Any party hereto may (a) extend the time
for the performance of any of the obligations or other acts of the other parties
hereto, (b) waive any inaccuracies in the representations and warranties of the
other parties hereto contained herein or in any document delivered pursuant
hereto and (c) waive compliance by the other parties hereto with any of their
agreements or conditions contained herein. Any agreement on the part of a party
hereto to any such extension or waiver shall be valid only as against such party
and only if set forth in an instrument in writing signed by such party. The
failure of any party hereto to assert any of its rights under this Agreement or
otherwise shall not constitute a waiver of those rights.
Section 5.13 Counterparts. This Agreement may be executed in
one or more counterparts, all of which shall be considered one and the same
instrument and shall become effective when one or more counterparts have been
signed by each of the parties and delivered to the other parties.
7
SIGNATURE PAGE FOLLOWS
8
IN WITNESS WHEREOF, the parties have executed this Exchange
Agreement as of the date first above written.
PURCHASER
JAC ACQUISITION COMPANY, INC.
By:
-----------------------------
Name:
Title:
STOCKHOLDERS
--------------------------------
Xxxxxxx X. Xxxxxxxxxx
--------------------------------
Xxxxx Xxxxxxxxxx
--------------------------------
Xxxx X. Xxxxxxxxxx
--------------------------------
Xxxxxx Xxxxxxxxxx
--------------------------------
Xxxxx Xxxxxxxxxx
--------------------------------
Xxxx X. Xxxxxxx, Xx.
9
EXHIBIT A
LIST OF OWNED SHARES
NAME AND ADDRESS NUMBER OF OWNED SHARES % OF CLASS
------------------------- ---------------------- ----------
Xxxxxxx X. Xxxxxxxxxx (1) 807,125 21.9%
c/o Joule Inc.
0000 X.X. Xxxxx 0 Xxxxx
Xxxxxx, XX 00000
Xxxxx Xxxxxxxxxx (2) 360,622 9.8%
c/o Joule Inc.
0000 X.X. Xxxxx 0 Xxxxx
Xxxxxx, XX 00000
Xxxx X. Xxxxxxxxxx 476,722 12.9%
00 Xxxxxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Xxxxxx Xxxxxxxxxx 476,622 12.9%
00 Xxxxxx Xxxx
Xxxxxx, XX 00000
Xxxxx Xxxxxxxxxx 493,348 13.4%
00 XxXxxxxx Xxxxxx
Xxxxxx, XX 00000
Xxxx X. Xxxxxxx, Xx. (3) 22,075 0.6%
c/o Joule Inc.
0000 X.X. Xxxxx 0 Xxxxx
Xxxxxx, XX 00000
Total 2,636,514 71.5%
(1) Excludes 360,622 shares of common stock beneficially owned solely by
Xxxxx Xxxxxxxxxx as to which shares he disclaims beneficial ownership.
(2) Excludes 807,100 shares of common stock beneficially owned solely by
Xxxxxxx X. Xxxxxxxxxx as to which shares she disclaims beneficial
ownership.
10
EXHIBIT B
PURCHASER EQUITY SCHEDULE
NAME NUMBER OF SHARES % OF CLASS
------------------------- ---------------- ----------
Xxxxxxx X. Xxxxxxxxxx (1) 2,191 30.6%
Xxxxx Xxxxxxxxxx (2) 979 13.7%
Xxxx X. Xxxxxxxxxx 1,294 18.1%
Xxxxxx Xxxxxxxxxx 1,294 18.1%
Xxxxx Xxxxxxxxxx 1,339 18.7%
Xxxx X. Xxxxxxx, Xx. 60 0.8%
Total 7,157 100%
11
