EXHIBIT 10.21
SUPPORT AGREEMENT
THIS SUPPORT AGREEMENT (the "Agreement") dated as of April 3, 1998,
between Xxxxxx, Xxxxx Xxxxx, Incorporated ("FBW"), Xxxxxx Xxxxxx Xxxxxxxx & Co.,
Inc. ("GKM"), and each of the individuals listed on Schedule A attached hereto
(collectively, the "Stockholders").
WHEREAS, Xxxx Computer Corporation, a Delaware corporation ("Xxxx") has
entered into a letter agreement with FBW, dated January 15, 1998 (the
"Engagement Letter"), pursuant to which FBW has agreed to serve as lead managing
underwriter in connection with a proposed public offering of common stock (the
"Offering"), the net proceeds of which are contemplated to be used in connection
with the acquisition by Xxxx of International Data Products, Corp. ("IDP") and
its affiliate, Puerto Rico Industrial Manufacturing Corp. ("PRIMO")
(collectively the transactions are referred to as the "IDP Acquisition"); and
WHEREAS, the IDP Acquisition is to be accomplished through a
reorganization whereby Xxxx Computer Corporation, a Virginia corporation
incorporated on February 26, 1998 (the "Company"), will become a holding company
owning 100% of the issued and outstanding capital stock of Xxxx, IDP and another
subsidiary which will acquire substantially all of the net assets of PRIMO; and
WHEREAS, in connection with the reorganization, a newly-formed Delaware
subsidiary of the Company will merge with and into Xxxx (the "Merger"); and
WHEREAS, in connection with the Merger, the Company has entered into an
Agreement of Merger ("Merger Agreement") with Xxxx, dated as of March 18, 1998,
pursuant to which the Company would acquire Xxxx through the conversion of (i)
each issued and outstanding share into the right to receive a share of common
stock of the Company; (ii) each outstanding option to purchase common stock of
the Company into an option to purchase a like number of shares of the common
stock of the Company; and (iii) each outstanding warrant to purchase shares of
commons stock of the Company into a warrant to purchase shares of the Company's
common stock; and
WHEREAS, pursuant to Delaware law, the Merger and the Merger Agreement
must be approved by the stockholders of Xxxx; and
WHEREAS, the closing of each of the Offering, the IDP Acquisition and
the Merger will occur simultaneously (the "Closing"( and each is conditioned
upon the closing of the other. As a result of the reorganization, the Company
will be the issuer of the common stock in the Offering; and
WHEREAS, the specific terms and conditions of the underwritten offering
are to be set forth in a definitive underwriting agreement (the "Underwriting
Agreement") to be executed by
and between the Company, certain selling stockholders and the underwriters, as
represented by FBW and GKM (the "Representatives"), at the time the public
offering price for the Offering is determined; and
WHEREAS, the Stockholders (i) collectively possess the sole or joint
right to vote, or direct the voting of, an aggregate of 3,790,000 shares of
common stock, $.001 par value, of Xxxx (the "Shares") which constitute
approximately 74% of the outstanding capital stock of the Xxxx, no other shares
of any other class of capital stock of Xxxx being issued or outstanding, and
(ii) individually possess the right to vote, or direct the voting of, the number
of shares set forth opposite such Stockholder's name on Schedule A hereto; and
WHEREAS, the Stockholders (i) collectively possess the sole or joint
power to dispose of, or to direct the disposition of an aggregate of 3,790,000
Shares, which constitute approximately 74% of the outstanding capital stock of
Xxxx, and (ii) individually possess the power to dispose of, or direct the
disposition of the number of Shares set forth opposite such Stockholder's name
on Schedule A hereto; and
NOW, THEREFORE, to induce the Representatives to initiate
preliminary selling efforts in connection with the Offering and in
consideration of the mutual covenants and agreements set forth herein and in
the Engagement Letter (and subject to the conditions and limitations set
forth in the Engagement Letter) and intending to be legally bound hereby, the
parties hereto agree as follows:
1. REPRESENTATIONS OF STOCKHOLDERS. Each of the Stockholders,
severally, and not jointly, represent that:
(a)(1) such Stockholder possesses the sole or joint right to
vote, or direct the voting of, all of the Shares set forth on Schedule A
opposite the Stockholder's name, (2) such number of Shares constitutes all of
the Shares with respect to which the Stockholder possesses the sole or joint
right to vote, or direct the voting of, as the case may be, and (3) such
Stockholder has good and marketable title to all of the Shares indicated on
said list opposite the Stockholder's name, free of all restrictions and
encumbrances of every kind and character, except as indicated on Schedule A.
(b)(1) such Stockholder possesses the sole or joint power to
dispose of, or direct the disposition of, the Shares set forth on Schedule A
opposite the Stockholder's name, (2) such number of Shares constitutes all of
the Shares with respect to which the Stockholder possesses or will possess the
sole or joint power to dispose of or direct the disposition of, and (3) such
Stockholder has good and merchantable title to all of the Shares indicated on
said list opposite the Stockholder's name free of all restrictions and
encumbrances of any kind or character except as indicated on Schedule A.
(c) such Stockholder has full right, power and authority to
enter into, deliver and perform this Agreement; this Agreement has been duly
executed and delivered by such Stockholder; and this Agreement constitutes the
legal, valid and binding obligation of the Stockholder, and is enforceable in
accordance with its terms.
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2. COVENANTS OF STOCKHOLDERS. Each of the Stockholders, severally and
not joint, covenant as follows:
(a) RESTRICTIONS ON TRANSFER. Subject to the fiduciary
obligations of such Stockholder as a director of Xxxx, with respect to Shares
listed on Schedule A, during the term of this Agreement, such Stockholder
shall not pledge, hypothecate, grant a security interest in, sell, transfer
or otherwise dispose of or encumber any of such Shares and will not enter
into any agreement, arrangement or understanding (other than a proxy for the
purpose of voting his or her Shares in accordance with Subparagraph 2(c)
hereof) which would, during that term (i) restrict, (ii) establish a right of
first refusal to, or (iii) otherwise relate to the transfer or voting of such
Shares.
(b) OTHER RESTRICTIONS. Subject to the fiduciary obligations of
such Stockholder as a direct of Xxxx, during the term of this Agreement, such
Stockholder shall not, directly or indirectly, solicit, initiate or encourage
inquiries or proposals from, or participate in any discussions or
negotiations with, or provide any information to, any individual,
corporation, partnership, or other person, entity or group (other than the
Company, IDP and PRIMO and the affiliates, officers, employees,
representatives and agents of each of them) concerning any sale of assets,
sale of shares of Capital stock, merger, consolidation, share exchange or
similar transactions involving Xxxx, and such Stockholder will use all
commercially reasonable efforts to assure that Xxxx takes no such steps. Such
Stockholder shall promptly advise the Representatives of, and communicate to
the Representatives, the terms of, any such inquiry or proposal addressed
either to such Stockholder or to Xxxx that such Stockholder receives or of
which such Stockholder has knowledge.
(c) MERGER. With respect to the Shares listed on Schedule A, such
Stockholder shall vote such Shares in favor of the Merger Agreement, the
Merger and the transactions contemplated thereby. Each of the Stockholders,
further agrees to use all commercially reasonable efforts to cause the Merger
to be effected, subject to such Stockholder's fiduciary obligations as a
director.
(d) ADDITIONAL SHARES. The provisions of subparagraphs (a) and
(c) above shall apply to all Shares currently owned and hereafter acquired,
of record or beneficially, by each of the Stockholders.
3. TERMINATION. This Agreement shall terminate upon the Closing
4. GOVERNING LAW. This Agreement shall in all respects be governed by
and construed under the laws of the State of Maryland, all rights and remedies
being governed by such laws, without regard to conflict of law principles.
5. BENEFIT OF AGREEMENT. This Agreement shall be binding upon and inure
to the benefit of, and shall be enforceable by, the parties hereto and their
respective personal representatives, successors and assigns, except that neither
party may transfer or assign any of its respective rights or obligations
hereunder without the prior written consent of the other party.
6. COUNTERPARTS. For convenience of the parties hereto, this Agreement
may be executed in several counterparts, each of which shall be deemed an
original, all of which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Representatives and the Stockholders have
caused this Agreement to be duly executed as of the day and year first above
written.
XXXXXX, XXXXX XXXXX, INCORPORATED
By: /s/ Xxxxxxx X. Place
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Xxxxxxx X. Place
Vice President
XXXXXX XXXXXX XXXXXXXX & CO., INC.
By: /s/ Xxxxxxxxxxx X. Xxxxx
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Xxxxxxxxxxx X. Xxxxx
Managing Director
STOCKHOLDERS
/s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
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SCHEDULE A
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Number of
Number of Shares as to
Shares as to which Holder
which Holder has Sole or
Number of Number of has Direct or Shared Power
Shares Shares as to Indirect to
as to which which Holder Control Dispose or
Holder has Sole has Joint Power of Power to Direct
Name Power to Vote to Vote Vote Disposition Encumbrance
---- ------------- ------- ---- ----------- -----------
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Xxxxxx X. Xxxxx 2,085,000 0 0 Same None
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Xxxxxxx X. Xxxxx 560,000 0 0 Same None
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Xxxx X. Xxxxxxx 1,145,000 0 0 Same None
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0 0 Same None
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Total 3,790,000
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