AGREEMENT
This Agreement dated as of May 12, 1999 (the "Agreement") is made by
and among The Xxxxxx Xxx Company, Inc., a Delaware corporation (the "Company"),
and Xxxxxxxxx & Co., L.P., Xxxxxxxxx Focus Fund L.P., Xxxxxxxxx International
Limited and Xxxx X. Xxxxxxxxx (collectively, the "Xxxxxxxxx Group").
WHEREAS, the Xxxxxxxxx Group has simultaneously herewith entered into a
Stock Purchase Agreement (the "Stock Purchase Agreement") with Three Cities
Offshore II C.V., a Netherlands Antilles limited partnership, and Three Cities
Fund II, L.P., a Delaware limited partnership (collectively, the "Buyers"),
pursuant to which the Xxxxxxxxx Group is selling to the Buyer an aggregate of
2,158,000 of common stock, par value $0.01 per share, of the Company ("Common
Stock");
WHEREAS, the Company has simultaneously herewith entered into an
Agreement and Plan of Merger (the "Merger Agreement") with Buyers and a
wholly-owned subsidiary of Buyers ("Merger Sub") providing for the merger of
Merger Sub into the Company (the "Merger");
WHEREAS, the Xxxxxxxxx Group is the beneficial owner of an aggregate of
2,799,736 shares of Common Stock of the Company;
NOW, THEREFORE, in consideration of mutual representations, warranties
and covenants and for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Xxxxxxxxx
Group agree as follows:
1. As long as the Xxxxxxxxx Group beneficially owns (within the meaning
of Rule 13d- 3 under the Securities Exchange Act of 1934) at least 5% of the
outstanding shares of Common Stock of the Company or has a representative on the
Board of Directors of the Company, the Company will use its best efforts to
maintain the effectiveness of the Registration Statement on Form S-1 (file no.
333-68569) with respect to the resale of shares of Common Stock owned by members
of the Xxxxxxxxx Group (as such registration statement may be amended from time
to time, including by amendment on any other permitted form, the "Registration
Statement") and the compliance of the Registration Statement with the provisions
of the Securities Act of 1933, as amended, and the regulations promulgated
thereunder (the "Act") to permit the resale thereunder from time to time and at
any time of the shares of Common Stock owned by the Xxxxxxxxx Group (other than
shares of Common Stock hereafter acquired by the Xxxxxxxxx Group), including,
without limitation, by amending the Registration Statement or supplementing the
prospectus contained in the Registration Statement or supplementing the
prospectus contained in the Registration Statement to the extent required by the
Act; provided, however, that the Company may delay filing any such amendment or
supplement during such period of time if in the reasonable judgment of the chief
executive officer of the Company (certified in writing to the Xxxxxxxxx Group,
if so requested) disclosure of then non-public information required to be
contained in the amendment or supplement would not be in the best interests of
the Company and in such event the Xxxxxxxxx Group shall be required during such
period of time to discontinue disposition of any shares of Common Stock of the
Company pursuant to such Registration Statement and any disposition during such
period shall be made pursuant to applicable law; provided further that the
Company shall make any filing required
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pursuant to this Section 1 as promptly as practicable after the basis for
delaying such filing ceases to apply, and in no event shall the period during
which the Xxxxxxxxx Group cannot sell under the Registration Statement on
account of the preceding proviso exceed 75 days in the aggregate during any 365
day period. Notwithstanding the foregoing, in the event that outside counsel for
the Company having recognized expertise in securities law matters (which may be
Xxxxxx Xxxxxx Flattau & Klimpl, LLP) renders its written opinion to the
Company's transfer agent that all of the shares of Common Stock owned by the
Xxxxxxxxx Group may be sold without registration under the Act without volume
limitations or any other restrictions, the obligations of the Company under this
paragraph 1 shall cease.
2. The Company will take all action required to accelerate the vesting
of stock options and any restricted stock currently held by Xxxx Xxxxxxxxx and
Xxxxx Xxxxxxxxx and, at such time as he is no longer director of the Company,
Xxxx Xxxxxxx and to provide that following such acceleration such options shall
remain exercisable for the duration of their term notwithstanding that the
optionholder has ceased to be a director. The Company acknowledges that Messrs.
Xxxxxxxxx and Xxxxxxx are intended to be third party beneficiaries of the
foregoing obligation of the Company, and they may enforce the obligation of the
Company pursuant thereto as if they were parties to this Agreement.
3. As long as the Xxxxxxxxx Group beneficially owns at least 5% of the
outstanding shares of Common Stock of the Company, they shall have the right to
designate one nominee, reasonably satisfactory to the Company, as a director of
the Company. The Company acknowledges that Xxxx Xxxxxxx is reasonably
satisfactory to the Company.
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4. The Company agrees to reimburse up to $100,000 of expenses
(including reasonable legal fees) incurred by the Xxxxxxxxx Group in connection
with the transactions contemplated by this Agreement, subject to the furnishing
of reasonable documentation thereof.
5. The Company, on the one hand, and each member of the Xxxxxxxxx
Group, on the other hand, mutually acknowledge, represent and warrant that each
has no claim, demand, cause of action, obligation, damage or liability
whatsoever of every kind and nature, at law or in equity, against the other for
any period prior to the date of this Agreement.
6. The Company agrees that in the event that during the period from the
date hereof until the date following the earliest to occur of (a) the
disapproval of the Merger Agreement, (b) the termination of the Merger Agreement
in accordance with its terms or (c) the consummation of the Merger, it, any of
its subsidiaries, or its or their respective officers, directors or
representatives engage in any negotiations or substantive discussions with any
person with respect to any merger, consolidation or other business combination
involving the Company or any of its subsidiaries or the acquisition of more that
50% of the capital stock of the Company or substantially all of the assets of
the Company and its subsidiaries, taken as a whole, it will, as promptly as
reasonably practicable, notify Xxxx Xxxxxxxxx as representative of the Xxxxxxxxx
Group of the existence of such negotiations or discussions; provided, however,
that the failure to give such notice promptly shall not constitute a breach of
this Section 6 except to the extent that the Xxxxxxxxx Group is materially
prejudiced thereby. The Xxxxxxxxx Group acknowledges that it is aware, and that
it will advise its representatives who become aware of the information referred
to in the prior sentence, that the United States securities laws prohibit any
person who has material, non-public information concerning an issuer such as the
Company from purchasing or
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selling securities of such issuer or from communicating such information to any
other person under circumstances in which it is reasonably foreseeable that such
person may purchase or sell such securities. The Xxxxxxxxx Group agrees to keep
such information confidential and not to use, or allow the use by any of its
representatives and agents of, any portion of such information for any purpose
other than monitoring the potential applicability of Section 5.4 of the Stock
Purchase Agreement.
7. Any notice or other communication required or permitted hereunder
shall be in writing and shall be delivered personally, sent by facsimile
transmission or sent by certified, registered or express mail, postage prepaid.
Any such notice shall be deemed given when so delivered personally or sent by
facsimile transmission or, if mailed, five days after the date of deposit in the
United States mails, as follows:
If to the Company, to
The Xxxxxx Xxx Company, Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxx Xxxxxx Flattau & Klimpl, LLP
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to any member of the Xxxxxxxxx Group, to it c/o:
Xxxxxxxxx Partners Inc.
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000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxx
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
8. This Agreement contains the entire agreement among the parties with
respect to the subject matter hereof and supersedes all prior agreements,
written or oral, with respect thereto.
9. This Agreement may be amended, superseded, cancelled, renewed or
extended, and the terms hereof may be waived, only by a written instrument
signed by the Company and the Xxxxxxxxx Group or, in the case of a waiver, by
the party waiving compliance. No delay on the part of any party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right, power or privilege,
nor any single or partial exercise of any such right, power or privilege,
preclude any further exercise thereof or the exercise of any other such right,
power or privilege.
10. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED ENTIRELY WITHOUT SUCH STATE.
11. This Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors and legal representatives. This
Agreement is not assignable.
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12. This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute one and the same instrument.
13. The headings in this Agreement are for reference only, and shall
not affect the interpretation of this Agreement.
14. If any provision or any portion of any provision of this Agreement,
or the application of any such provision or any portion thereof to any person or
circumstance, shall be held invalid or unenforceable, the remaining portion of
such provision and the remaining provisions of this Agreement, and the
application of such provision or portion of such provision, shall not be
affected thereby so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner adverse to any party. Upon a
determination that any term or other provision is invalid or unenforceable, 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 the transactions contemplated hereby are
fulfilled
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to the fullest extent possible.
THE XXXXXX XXX COMPANY, INC.
By: ___________________________________
Name:
Title:
XXXXXXXXX & CO., L.P.
By: XXXXXXXXX PARTNERS L.P.,
its general partner
By: XXXXXXXXX PARTNERS INC.,
its general partner
By: ___________________________________
Name:
Title:
XXXXXXXXX FOCUS FUND L.P.
By: XXXXXXXXX PARTNERS L.P.,
its general partner
By: XXXXXXXXX PARTNERS INC.,
its general partner
By: ___________________________________
Name:
Title:
XXXXXXXXX INTERNATIONAL LIMITED
By: XXXXXXXXX PARTNERS INC.,
its advisor
By: ___________________________________
Name:
Title:
_______________________________________
Xxxx X. Xxxxxxxxx
