EXHIBIT 3
VOTING AGREEMENT
VOTING AGREEMENT, dated as of December 18, 1998,
between XXXXXX CHEMICAL, INC., a Delaware corporation (the "Parent"), and
S II ACQUISITION COMPANY, a Virginia corporation and a wholly owned
subsidiary of the Parent (the "Sub"), on the one hand, and XXXXXXX X.
XXXXXXX and XXXXXXXXX X. XXXXXXX (collectively "Xxxxxxx"), IRVINE X.
XXXXXXXX and XXXXXX X. XXXXXXXX (the "Xxxxxxxx Controlling Persons"),
XXXXXXXX FAMILY CORPORATION, a Virginia corporation ("Xxxxxxxx
Corporation"), XXXXXXXX FAMILY LIMITED PARTNERSHIP, a Virginia limited
partnership (the "Partnership"), Trustees under agreement, dated December
17, 1998, with Xxxxxx X. Xxxxxxxx, Xx., known as the "XXXXXX X. XXXXXXXX,
XX. DECLARATION OF LIVING TRUST DATED DECEMBER 17, 1998" (the "X.
Xxxxxxxx Trust"), and Trustees under agreement dated December 17, 1998,
with Irvine X. Xxxxxxxx, known as the "IRVINE X. XXXXXXXX DECLARATION OF
LIVING TRUST DATED DECEMBER 17, 1998" (the "X. Xxxxxxxx Trust" and,
together with Xxxxxxx, the Partnership, and the X. Xxxxxxxx Trust, the
"Shareholders"), on the other hand.
RECITALS
Concurrently herewith, the Parent, the Sub and Xxxxxxxx
Industries, Inc., a Virginia corporation (the "Company"), are entering
into an Agreement and Plan of Merger dated the date hereof (the "Merger
Agreement"; capitalized terms used but not defined herein shall have the
meanings set forth in the Merger Agreement), providing for the merger of
the Sub with and into the Company (the "Merger"), upon the terms and
subject to the conditions set forth in the Merger Agreement.
As of the date hereof, each Shareholder beneficially
owns the number of shares of no par value common stock (the "Company
Common Stock") of the Company set forth opposite its or his name on the
signature page of this Agreement (the "Existing Shares" and, together
with any shares of Company Common Stock acquired after the date hereof
and prior to the termination hereof, whether upon the exercise of
options, conversion of convertible securities or otherwise, the
"Shares").
As of the date hereof, the Corporation is the sole
general partner of the Partnership. As of the date hereof, the Xxxxxxxx
Controlling Persons collectively own 100% of the shares of common stock
of the Corporation and have the sole power to control the voting of the
3,339,800 Existing Shares owned by the Partnership.
As a condition to their willingness to enter into the
Merger Agreement and make the Offer, the Parent and the Sub have required
that each Shareholder enter into this Agreement.
AGREEMENT
To implement the foregoing and in consideration of the
mutual agreements contained herein, the parties agree as follows:
1. Covenants of Each Shareholder. Until the
termination of this Agreement in accordance with Section 2, each
Shareholder and Xxxxxxxx Corporation, severally and not jointly, agrees
as follows:
(a) Voting. Each Shareholder hereby agrees that at
any meeting of the shareholders of the Company called to vote
upon the Merger and the Merger Agreement or at any adjournment
thereof or in any other circumstances upon which a vote or other
approval with respect to the Merger and the Merger Agreement is
sought, each Shareholder shall (and the Xxxxxxxx Controlling
Persons and Xxxxxxxx Corporation shall cause the Partnership to)
vote the Shares in favor of the Merger, the adoption by the
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Company of the Merger Agreement and the approval of the terms
thereof and each of the other transactions contemplated by the
Merger Agreement. The agreements set forth in the immediately
preceding sentence shall equally apply if such approvals were to
be sought by the solicitation of written consents.
At any meeting of shareholders of the Company or at any
adjournment thereof or in any other circumstances upon which the
Shareholders' vote, consent or other approval is sought, each
Shareholder shall (and the Xxxxxxxx Controlling Persons and
Xxxxxxxx Corporation shall cause the Partnership to) vote the
Shares against (and the Shareholders shall not, and the Xxxxxxxx
Controlling Persons and Xxxxxxxx Corporation shall cause the
Partnership not to, execute consents with respect to) (i) any
action or agreement that would result in a breach in any
material respect of any covenant, representation or warranty or
any other obligation or agreement of the Company under the
Merger Agreement and (ii) any action or agreement (other than
the Merger Agreement or the transactions contemplated thereby)
that would materially impede, interfere with, delay, postpone or
attempt to discourage the Merger, including, but not limited to:
(A) any extraordinary corporate transaction (other than the
Merger Agreement and the Merger), such as a merger,
consolidation or other business combination involving the
Company and its subsidiaries, any sale or transfer of a material
amount of assets of the Company and its subsidiaries or Company
Common Stock, any reorganization, recapitalization or
liquidation of the Company and its subsidiaries or any other
takeover proposal; (B) any change in the management or board of
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directors of the Company, except as otherwise agreed to in
writing by the Sub; (C) any material change in the present
capitalization or dividend policy of the Company; (D) any
amendment to the Company's Articles of Incorporation or Bylaws
or other proposal or transaction involving the Company or the
Subsidiary, which amendment or other proposal or transaction
which changes in any manner the voting rights of any class of
the Company's capital stock or is intended or could reasonably
be expected to impede, frustrate, prevent, delay or nullify (1)
the ability of the Company to consummate the Merger or (2) any
of the transactions contemplated by this Agreement or the Merger
Agreement or (E) any other material change in the Company's
corporate structure or business. Each shareholder further
agrees not to commit or agree to take any action inconsistent
with the foregoing.
(b) Transfer Restrictions. Subject to those matters
set forth on Schedule II hereto, each Shareholder, severally and
not jointly, agrees not to, and the Xxxxxxxx Controlling Persons
and Xxxxxxxx Corporation shall cause the Partnership not to, (i)
sell, transfer, encumber, pledge, assign or otherwise dispose of
(including by gift) ("Transfer"), or enter into any contract,
option or other arrangement or understanding (including any
profit sharing arrangement) with respect to the Transfer of, any
of the Shares or any interest therein to any person other than
pursuant to the terms hereof or the Merger Agreement, (ii)
except as contemplated hereby, grant any proxy or power of
attorney with respect to the matters set forth in Section 1(a)
above, enter into any voting arrangement or understanding or
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otherwise transfer voting power, with respect to the Shares, in
each case with respect to such matters, (iii) take any action
that would make any of its representations or warranties
contained herein untrue or incorrect or have the effect of
preventing or disabling such Shareholder from performing its
obligations under this Agreement or (iv) commit or agree to take
any of the foregoing actions.
(c) Proxy. Each Shareholder hereby grants to the
Parent, and to each officer of the Parent, a proxy to vote the
Shares as indicated in Section 1(a) and hereby revokes any proxy
previously granted by such Shareholder with respect to the
Shares. Notwithstanding the foregoing, neither Parent nor any
officer of Parent shall exercise its proxy rights hereunder to
the extent that the Shareholder granting such proxy rights
attends the meeting of the shareholders of the Company at which
any action indicated in Section 1(a) is to be voted upon and
votes the Shares in person in accordance with Section 1(a).
(d) Appraisal Rights. Each Shareholder hereby
irrevocably waives any rights of appraisal or rights to dissent
from the Merger that such Shareholder may have.
(e) The Partnership, The Corporation and The Trusts.
(i) The Xxxxxxxx Controlling Persons and
Xxxxxxxx Corporation shall not (A) amend, or permit the
amendment of, the terms of the partnership agreement or other
organizational documents of the Partnership in any manner that
would adversely affect the performance by the Partnership of its
obligations under this Agreement or materially impede,
frustrate, prevent, delay or nullify the Merger or any of the
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transactions contemplated by this Agreement or the Merger
Agreement, (B) Transfer or enter into any contract, option or
other arrangement or understanding with respect to the Transfer
of, their interests in the Partnership to any person to the
extent that such Transfer would adversely affect the performance
by the Partnership of its obligations under this Agreement or
the ability of the Xxxxxxxx Controlling Persons to control the
voting of the Shares owned by the Partnership or (C) adopt a
plan of liquidation or dissolution of the Partnership or
otherwise terminate the Partnership.
(ii) The Xxxxxxxx Controlling Persons shall
not (A) amend, or permit the amendment of, the terms of the
Articles of Incorporation, by-laws or other organizational
documents of Xxxxxxxx Corporation in any manner that would
adversely affect the performance by Xxxxxxxx Corporation of its
obligations under this Agreement or materially impede,
frustrate, prevent, delay or nullify the Merger or any of the
transactions contemplated by this Agreement or the Merger
Agreement, (B) Transfer or enter into any contract, option or
other arrangement or understanding with respect to the Transfer
of, their interests in Xxxxxxxx Corporation to any person to the
extent that such Transfer would adversely affect the performance
by Xxxxxxxx Corporation of its obligations under this Agreement
or the ability of the Xxxxxxxx Controlling Persons to control
the voting of the Shares owned by the Partnership or (C) adopt a
plan of liquidation or dissolution of Xxxxxxxx Corporation or
otherwise terminate Xxxxxxxx Corporation. Xxxxxxxx Corporation
shall not issue, sell or deliver any shares of its capital stock
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or any other voting securities in any manner that would
adversely affect the performance by Xxxxxxxx Corporation of its
obligations under this Agreement or the ability of the Xxxxxxxx
Controlling Persons to control the voting of the Shares owned by
the Partnership.
(iii) Without the prior written consent of
the Parent, Xxxxxx X. Xxxxxxxx, Xx., with respect to the X.
Xxxxxxxx Trust, and Irvine X. Xxxxxxxx, with respect to the X.
Xxxxxxxx Trust, shall not (A) revoke, (B) change the identity or
number, or both, of the Trustees of, (C) amend in any manner or
(D) withdraw any or all of the Trust Property (as defined in the
respective Declaration of Trust) from, such Trust.
2. Termination. Except to the extent expressly
provided in Section 3 hereof, this Agreement, the Parent's right to vote
the Shares covered hereby pursuant to the proxy granted hereunder, and
the Shareholders' obligations to vote pursuant hereto shall terminate on
the first to occur of (a) the Effective Time, (b) the date on which the
Merger Agreement is terminated pursuant to Section 8.1 thereof and (c)
written notice of termination of this Agreement by the Parent and the Sub
to the Shareholders (the "Expiration Date"), and shall thereafter be void
and have no further effect.
3. Payment to Parent Upon Sale of Company Following
Termination. If (A) the Merger Agreement is terminated for any reason
other than by the Company pursuant to Section 8.1(b)(iv) of the Merger
Agreement or by Parent and Company pursuant to Section 8.1(a) of the
Merger Agreement and (B) within twelve months thereafter the Company
enters into an agreement with respect to any Third Party Acquisition (as
defined in the Merger Agreement), which Third Party Acquisition
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subsequently occurs and (C) pursuant to such Third Party Acquisition any
Shareholder receives consideration having a "fair market value" on a per
share basis in excess of $3.40 per share (the "per share excess amount")
(equitably adjusted in a manner reasonably satisfactory to the
Shareholders and Parent to reflect any share split, share distribution,
combination, spin-off, recapitalization, reclassification or other
similar transaction by the Company), then each such Shareholder shall pay
to Parent, within three business days following receipt of such
consideration, any amount in cash equal to the product of (x) such
Shareholder's number of Existing Shares, plus any shares of Company
Common Stock acquired from the date hereof through Expiration Date,
multiplied by (y) the percentage of such Shareholder's shares of Company
Common Stock as of the Date of such Third Party Acquisition which are
exchanged for such consideration, multiplied by (z) the per share excess
amount. For the avoidance of doubt, the per share excess amount shall be
payable, from time to time, in accordance with this Section 3 upon the
occurrence of each Third Party Acquisition. Notwithstanding anything
herein to the contrary, the parties agree that the obligations of this
Section 3 only expressly survive the Expiration Date.
For purposes of this Section 3, "fair market value" of
the consideration shall mean the consideration per share (whether cash or
non-cash) to be received by any Shareholder in connection with a Third
Party Acquisition; provided that if the consideration received by such
Shareholder in connection with a Third Party Acquisition shall be other
than cash, (i) in the case of securities listed on a national securities
exchange or traded on the NASDAQ National Market ("NASDAQ"), the per
share value of such consideration shall be equal to the closing price per
share listed on such national securities exchange or NASDAQ on the date
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the Third Party Acquisition is consummated and (ii) in the case of
consideration in a form other than such securities, the per share value
shall be determined in good faith as of the date the Third Party
Acquisition is consummated by the Parent and the Shareholders, or, if
Parent and the Shareholders cannot reach agreement, by a nationally
recognized investment banking firm reasonably acceptable to the parties,
which determination shall be conclusive for all purposes of this
Agreement.
4. Representations and Warranties of the Shareholders.
Each Shareholder and Xxxxxxxx Corporation (each hereafter, a "person")
hereby, severally and not jointly, represents and warrants to the Parent
as of the date hereof in respect of himself or itself as follows:
(a) Authority. Such person has all requisite legal
capacity, power and authority to enter into this Agreement, to
perform its obligations hereunder and to consummate the
transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by such person and
constitutes a valid and binding obligation of such person
enforceable in accordance with its terms, subject to the effects
of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, and equitable principles
(whether considered in a proceeding in equity or at law). The
execution and delivery of this Agreement do not, and the
consummation of the transactions contemplated hereby and
compliance by such person with the terms hereof will not,
conflict with, or result in any violation of, or default (with
or without notice or lapse of time or both) under, permit the
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termination of any provision of or result in the termination of
or the acceleration of the maturity or performance of, or result
in the creation or imposition of any lien upon any of the assets
or properties of such person under, (i) any provision of any
agreement, instrument, permit, concession, franchise, license,
judgment, order, notice, decree, statute, law, ordinance, rule
or regulation applicable to such person or to such person's
property or assets, other than the Pledge Agreement (with
respect to which a consent has been received from the Subsidiary
to the execution, delivery and performance of this Agreement) or
(ii) in the case of the Xxxxxxxx Corporation, the Partnership,
the X. Xxxxxxxx Trust or the X. Xxxxxxxx Trust, the charter, by-
laws or other constitutive documents of such person. If such
person is married and such person's Shares constitute community
property or otherwise need spousal or other approval to be
legal, valid and binding, this Agreement has been duly
authorized, executed and delivered by, and constitutes a valid
and binding agreement of, the person's spouse, enforceable
against such spouse in accordance with its terms. No trust of
which such person is a trustee requires the consent of any
beneficiary to the execution and delivery of this Agreement or
to the consummation of the transactions contemplated hereby. No
filing with, and no permit, authorization, consent or approval
of, any Governmental Authority or any other person is necessary
for the execution of this Agreement by such person or the
performance by such person of its obligations hereunder.
Xxxxxxxx Corporation is the sole general partner of the
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Partners; the Xxxxxxxx Controlling Persons are the sole
shareholders of Xxxxxxxx Corporation.
(b) The Shares. Such person is the record holder or
beneficial owner of the number of the Existing Shares as is set
forth opposite such person's name on the signature page hereto.
On the date hereof, the Existing Shares set forth opposite such
person's name on the signature page hereto constitute all of the
outstanding shares of Company Common Stock beneficially (without
respect to any attribution rules under applicable securities
laws and without respect to any unexercised options) owned by
such person. Such person does not have record or beneficial
ownership of any shares of Common Stock not set forth on the
signature page hereto. Subject to the limitations set forth on
Schedule II hereto, applicable federal securities laws and the
terms of this Agreement, such person has sole power of
disposition with respect to all of the Existing Shares set forth
opposite such person's name in Part I of Schedule I hereto and
sole voting power with respect to the matters set forth in
Section 1 hereof and sole power to demand dissenter's or
appraisal rights, in each case with respect to all of the
Existing Shares set forth opposite such person's name in Part II
of Schedule I hereto, with no restrictions on such rights.
Subject to the limitations set forth on Schedule II hereto,
applicable federal securities laws and the terms of this
Agreement, such person will have sole power of disposition with
respect to Shares other than Existing Shares, if any, which
become beneficially owned by such person and will have sole
voting power with respect to the matters set forth in Section 1
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hereof and sole power to demand dissenter's or appraisal rights,
in each case with respect to all Shares other than Existing
Shares, if any, which become beneficially owned by such person
with no restrictions on such rights
(c) Except as set forth in Schedule II hereto, such
person's Shares and the certificates representing such Shares
are now and at all times during the term hereof will be held by
such person, or by a nominee or custodian for the benefit of
such person, free and clear of all liens, claims, security
interests, proxies, voting trusts or agreements, understandings
or arrangements or any other encumbrances whatsoever, except for
any such encumbrances, proxies or agreements arising hereunder.
(d) No broker, investment banker, financial adviser or
other person is entitled to any broker's, finder's, financial
adviser's or other similar fee or commission in connection with
the transactions contemplated hereby based upon arrangements
made by or on behalf of such Shareholder in his or her capacity
as such.
(e) Such person understands and acknowledges that the
Parent and the Sub are entering into the Merger Agreement in
reliance upon such person's execution and delivery of this
Agreement with the Parent and the Sub.
5. Additional Shares. Each Shareholder hereby agrees,
while this Agreement is in effect, to promptly notify the Parent of the
number of any new shares of Company Common Stock acquired by such
Shareholder, if any, after the date hereof.
6. Further Assurances. From time to time, at the other
party's request and without further consideration, each party hereto
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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.
7. Repayment of Notes by the Partnership. On or prior
to the Closing Date, the Xxxxxxxx Controlling Persons and Xxxxxxxx
Corporation shall cause the Partnership to, and the Partnership shall,
repay, cause to be repaid, or make arrangements satisfactory to Parent to
repay out of its share of the Merger Consideration through direct offsets
pursuant to which the Surviving Corporation shall withhold the amounts
referred to below in satisfaction of such obligations, in full, (i) the
remaining principal amount (and all accrued but unpaid interest thereon)
and all other amounts due in respect of the remaining principal amount
(and all accrued but unpaid interest thereon) and all other amounts due
in respect of the Subsidiary Note and that certain Collateral Promissory
Note payable by Irvine X. Xxxxxxxx and H. Xxxxxx Xxxxxxxx, Xx. to Xxxxx
X. Xxxxxx in the original principal amounts of $210,176.72 and (ii) all
other unpaid amounts in respect of any loans or advances made by Company
or the Subsidiary to Irvine X. Xxxxxxxx or his wife prior to the Closing
Date.
8. Repayment of Note and Advances by Xxxxxx X.
Xxxxxxxx, Xx.. On or prior to the Closing Date, Xxxxxx X. Xxxxxxxx, Xx.
shall repay, cause to be repaid, or make arrangements reasonably
satisfactory to Parent to repay out of his share or the Partnership's
share of the Merger Consideration through direct offsets pursuant to
which the Surviving Corporation shall withhold the amounts referred to
below in satisfaction of such obligations, in full, (i) the remaining
principal amount (and all accrued but unpaid interest thereon) and all
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other amounts due in respect of that certain Collateral Promissory Note,
dated as of June 30, 1995, payable to the Subsidiary in the original
principal amount of $212,500 and (ii) all other unpaid amounts in respect
of any loans or advances made by Company or the Subsidiary to Xxxxxx X.
Xxxxxxxx, Xx., H. Xxxxxx Xxxxxxxx, Xx. or Xxxxxx Xxxxxxxx prior to the
Closing Date.
9. Stop Transfer Order. In furtherance of this
Agreement, concurrently herewith, each Stockholder shall and hereby does
authorize the Company's counsel to notify the Company's transfer agent
that there is a stop transfer order with respect to all of the Existing
Shares and that this Agreement places limits on the voting and transfer
of such shares. Each Shareholder agrees that within ten business days
after the date hereof, such Stockholder will no longer hold any Shares in
"street name" or in the name of any nominee.
10. Assignment. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement shall be assigned,
in whole or in part, by operation of law or otherwise by any of the
parties without the prior written consent of the other parties, except
that the Parent or the Sub may assign, in its sole discretion, any of or
all its rights, interests or obligations under this Agreement to any
direct wholly owned subsidiary of the Parent or Xxxxxx, Inc., a New
Jersey corporation, but no such assignment shall relieve the Parent or
the Sub, as the case may be, of any of its obligations under this
Agreement. Subject to the preceding sentence, this Agreement will be
binding upon, inure to the benefit of, and be enforceable by, the parties
and their respective successors and assigns.
11. Counterparts. This Agreement may be executed in
two or more counterparts, all of which shall be considered one and the
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same agreement and shall become effective when two or more counterparts
have been signed by each of the parties and delivered to the other
parties.
12. Entire Agreement, No Third-Party Beneficiaries.
This Agreement (including the documents referred to herein) (a)
constitutes the entire agreement, and supersedes all prior agreements and
understandings, both written and oral, among the parties with respect to
the subject matter of this Agreement and (b) is not intended to confer
upon any person other than the parties any rights or remedies.
13. Severability. Whenever possible, each provision or
portion of any provision of this Agreement will be interpreted in such
manner as to be effective and valid under applicable law but if any
provision or portion of any provision of this Agreement is held to be
invalid, illegal or unenforceable in any respect under any applicable law
or rule in any jurisdiction, such invalidity, illegality or
unenforceability will not affect any other provision or portion of any
provision in such jurisdiction, and this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal
or unenforceable provision or portion of any provision had never been
contained herein.
14. Enforcement. The parties agree that irreparable
damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or
were otherwise breached. It is accordingly agreed that the parties shall
be entitled to seek an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions of
this Agreement, this being in addition to any other remedy to which they
are entitled at law or in equity.
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15. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the Commonwealth
of Virginia, without giving effect to the conflict of laws provisions
thereof.
(SIGNATURES ON NEXT PAGE)
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IN WITNESS WHEREOF, the Parent, the Sub, the Xxxxxxxx
Controlling Persons and the Shareholders have cause this Agreement to be
duly executed as of the day and year first above written.
Xxxxxx Chemical, Inc.
By: /s/ Laggam
-------------------
Name:
Title:
S II Acquisition Company
By: /s/ Xxxxxxx Quincy
-------------------
Name:
Title:
Number of Existing Shares Xxxxxxxx Family Limited Partnership
3,339,800
By: Xxxxxxxx Family Corporation, its sole
general partner
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
--------------------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: President
Number of Existing Shares: /s/ Xxxxxxx Xxxxxxx
30,000 ------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxxxxxxx X. Xxxxxxx
------------------------------
Xxxxxxxxx X. Xxxxxxx
Number of Existing Shares Trustees U/A with Xxxxxx X. Xxxxxxxx, Xx.
Held by X. Xxxxxxxx Trust:
306,000
By: /s/ Xxxxx Xxxxx Xxxxx, duly assigned Trustee
--------------------------------------------
Xxxxx Xxxxx Xxxxx, Trustee
Number of Existing Shares Trustees U/A with Irvine X. Xxxxxxxx
Held by X. Xxxxxxxx Trust:
20,000
By: /s/ Xxxxx Xxxxx Xxxxx, duly designated Trustee
----------------------------------------------
Xxxxx Xxxxx Xxxxx, Trustee
Xxxxxxxx Family Corporation
By: /s/ Xxxxxx X. Xxxxxxxx, Xx.
----------------------------
Name: Xxxxxx X. Xxxxxxxx, Xx.
Title: President
SCHEDULE I
Part I -- Number of Existing Shares with Sole Dispositive Power
Name of Shareholder Number of Existing
Shares
The Xxxxxxxx Family Limited Partnership 0*
Xxxxxxx X. and Xxxxxxxxx X. Xxxxxxx
30,000
The X. Xxxxxxxx Trust 20,000
The X. Xxxxxxxx Trust 306,000
Part II -- Number of Existing Shares with Sole Voting Power
and Sole Power to Demand Dissenter's or Appraisal Rights
Name of Shareholder Number of Existing Shares
The Xxxxxxxx Family Limited Partnership 3,339,800*
Xxxxxxx X. and Xxxxxxxxx X. Xxxxxxx 30,000
The X. Xxxxxxxx Trust 20,000
The X. Xxxxxxxx Trust 306,000*
*2,325,000 of the Partnership's Existing Shares are pledged to the
Subsidiary and 1,014,800 of the Partnership' Existing Shares are pledged
to Xx. Xxxxx X. Xxxxxx; in addition, the Partnership's Existing Shares,
while not pledged in support of such obligations, are subject to the
contractual obligations to transfer 225,000 shares of Common Stock to Xxx
Xxxxxxxxx; and, in addition, the X. Xxxxxxxx Trust has assumed the
contractual obligation of Xxxxxx X. Xxxxxxxx, Xx. to transfer up to
180,000 shares of Common Stock to Xxxxxxx X. Xxxxxxxxx and Xxxx Xxxxxx,
all as described in Schedule II hereto.
SCHEDULE II
1. 2,325,000 of the Existing Shares owned by the Partnership
are pledged to Xxxxxxxx Adhesives, Inc. (which holds the certificates
evidencing such shares) to secure the payment of the Subsidiary Note
pursuant to the terms of that certain Pledge Agreement, dated April 8,
1998. The Pledge Agreement also subjects to the pledge thereunder any
additional shares received by the Partnership pursuant to any
distribution by Company with respect to the pledged shares. Pursuant to
the Pledge Agreement, without the prior consent of the Subsidiary, the
Partnership is prohibited from transferring the pledged shares or any
rights therein and is prohibited from becoming a party to or otherwise
bound by any agreement which restricts in any manner the rights of any
present or future holder with respect to such shares.
2. 1,014,800 of the Existing Shares owned by the Partnership
are pledged to Xxxxx X. Xxxxxx (who holds the certificates evidencing
such shares) to secure the repayment of that certain Collateral
Promissory Note payable by Irvine X. Xxxxxxxx and H. Xxxxxx Xxxxxxxx, Xx.
in the original principal amounts of $210,176.72. The shares pledged to
secure this obligation may not be transferred without the consent of
Xxxxx X. Xxxxxx and, in the event of any event of default under the
Collateral Promissory Note which is not cured as provided thereunder,
Xxxxx X. Xxxxxx shall become entitled to vote the shares and to sell the
shares to satisfy the unpaid balance under the Collateral Promissory
Note.
3. In connection with the settlement of certain claims made by
Xxx Xxxxxxxxx in connection with the complaint filed in the Derivative
Suit, the Partnership has agreed to transfer to Xxx Xxxxxxxxx 225,000 of
the Existing Shares owned by the Partnership.
4. Pursuant to that certain Settlement Agreement, dated the ___
day of November, 1998, by and between Corporate Strategies, Inc., a South
Carolina corporation, Xxxxxxx X. Xxxxxxxxx, Xxxx Xxxxxx and Xxxxxx X.
Xxxxxxxx, Xxxxxx X. Xxxxxxxx, Xx. agreed to transfer 80,000 (subject to
adjustment to up to 90,000) shares of Common Stock to each of Xxxxxxx X.
Xxxxxxxxx and Xxxx Xxxxxx in accordance with the terms and conditions set
forth in such Settlement Agreement. The X. Xxxxxxxx Trust has assumed
the above-referenced obligation of Xxxxxx X. Xxxxxxxx, Xx.
