XXXXXX INDUSTRIES, INC.
Common Stock,
Par Value $.25 per share
STANDBY AGREEMENT
New York, New York
__________ __, 1996
Xxxxxx X. Xxxxxx
0 Xxxxxxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Avondale Xxxxx, Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxx, Xxxxxxx 00000
Dear Sirs:
Xxxxxx Industries, Inc., a Delaware corporation (the "Company") proposes to
issue (the "Rights Offering"), upon the terms and subject to the conditions set
forth in the Prospectus (as hereinafter defined), rights (the "Rights") to
purchase 1,607,143 shares of its Common Stock, $.25 par value per share (the
"Common Stock"), exercisable at $ 7.00 per share and evidenced by
non-transferable certificates (the "Rights Certificates"). Such Rights will be
exercisable during the period from the date hereof through 5:00 p.m., New York
City time, on ________, 1996. The date on which the Rights Offering expires is
referred to as the "Expiration Date." The offer of Common Stock pursuant to the
Rights is hereinafter referred to as the "Rights Offering." The Rights and the
Common Stock issuable and issued upon exercise thereof are hereinafter sometimes
collectively referred to as the "Securities."
The Securities are described in the Prospectus referred to below. You have
advised us that you desire to purchase from the Company that number of shares of
Common Stock which equals the excess, if any, of 1,607,143 shares [$11,250,000
in value] over that number of shares subscribed for in the Rights Offering upon
the expiration thereof (the "Unsubscribed Securities" or the "Shares"). You are
each sometimes hereinafter individually referred to as a Standby Purchaser and
collectively as the Standby Purchasers and the Company hereby confirms its
agreement with each of you as follows:
1. Purchase and Sale of Unsubscribed Securities. On the basis of the
representations and warranties herein contained, but subject to the terms and
conditions herein set forth, the Company hereby agrees to sell the Unsubscribed
Securities to the Standby Purchasers in the proportion set forth in Schedule A
hereto, and each Standby Purchaser severally agrees to purchase the Unsubscribed
Securities from the Company in the proportion set forth in Schedule A hereto, at
a purchase price of $7.00 per share. Notwithstanding the foregoing, the parties
acknowledge that the Company will not issue more than 1,607,143 shares of Common
Stock in the Rights Offering, that the Standby Purchasers' maximum aggregate
standby commitment will not exceed the difference obtained by subtracting from
$11,250,000 the aggregate of all subscription proceeds received by the Company
from stockholders in the Rights Offering and that Xxxxxx X. Xxxxxx'x and
Avondale Xxxxx, Inc.'s individual maximum standby commitments shall not exceed
$3,750,000 and $7,500,000, respectively.
2. Payment and Delivery. Payment for the Unsubscribed Securities shall be
made by the Standby Purchasers to the Company, at the election of the Standby
Purchasers, either by (a) tendering to the Company for credit against the
subscription price (to the extent of the then outstanding principal amount of,
and any accrued and unpaid interest on), those certain 10% Subordinated Notes of
the Company dated January 26, 1996 issued to the Standby Purchasers or (b) wire
transfer to an account designated by the Company. Such payment and delivery
shall be made at 10:00 A.M., New York City Time, on the fifth business day
following the Expiration Date, the date and time of such payment and delivery
being herein called the "Closing Date". The Securities so to be delivered will
be in such denominations and registered in such names as the Standby Purchasers
request, and will be made available to the Standby Purchasers for inspection not
less than one full business day prior to the Closing Date.
3. Registration Statement and Prospectus; Public Offering. The
Company will file with the Securities and Exchange Commission (the
"Commission"), pursuant to the Securities Act of 1933, as amended (the
"Securities Act"), and the published rules and regulations adopted by the
Commission under it (the "Rules"), a registration statement, including a
preliminary prospectus, relating to the Securities, and such amendments to such
registration statement as may have been required to the date of this Agreement.
The term "preliminary prospectus" means any preliminary prospectus (as referred
to in Rule 430 of the Rules) included at any time as a part of the registration
statement and any preliminary prospectus included in the registration statement
at the Effective Date (as defined below) that omits information with respect to
the Securities and the offering of the Securities permitted to be omitted from
the registration statement when it becomes effective pursuant to Rule 430A of
the Rules ("Rule 430A Information"). If a further amendment to the registration
statement is required to be filed pursuant to Rule 424(b) of the Rules, such
further amendment (the "Final Amendment") to the registration statement,
including a form of prospectus, necessary to permit such registration statement
to become effective will be prepared by the Company and submitted to the Standby
Purchasers and will promptly be filed by the Company with the Commission. The
registration statement as amended at the time it becomes effective (the
"Effective Date"), including financial statements and all exhibits, is called
the "Registration Statement." The term "Prospectus" means the prospectus
containing the Rule 430A Information as first filed with the Commission pursuant
to Rule 424(b) of the Rules or, if no such filing pursuant to Rule 424(b) of the
Rules is required, means the form of final prospectus included in the
Registration Statement at the Effective Date.
4. Representations and Warranties. The Company represents and warrants to
and agrees with the Standby Purchasers that:
(a) On the Effective Date and the date the Prospectus is first filed (if
required) with the Commission pursuant to Rule 424(b) and, if the Prospectus is
not filed pursuant to Rule 424(b) of the Rules, on the date of any filing
pursuant to Rule 424(b) of the Rules, when any post-effective amendment to the
Registration Statement becomes effective or any amendment or supplement to the
Prospectus is filed with the Commission and at the Closing Date, the
Registration Statement, the Prospectus and any such amendment or supplement will
comply in all material respects, with the requirements of the Securities Act and
the Rules, and no part of the Registration Statement, the Prospectus or any such
amendment or supplement will include any untrue statement of a material fact or
omit to state a material fact required to be stated in it or necessary to make
the statements in it not misleading; except that this representation does not
apply to statements or omissions made in reliance on and in conformity with
information relating to the Standby Purchasers furnished in writing to the
Company by the Standby Purchasers expressly for use in the Registration
Statement, Prospectus, amendment or supplement.
(b) The holders of outstanding shares of capital stock of the Company and
warrants, options or other securities to purchase shares of capital stock of the
Company are not entitled to any preemptive rights to subscribe for the Shares.
All holders, if any, of shares of common stock or other securities of the
Company having rights to have such securities registered in the Registration
Statement have waived such rights or such rights have expired by reason of lapse
of time following notification of the Company's intent to file the Registration
Statement.
(c) The Company is a corporation duly organized and validly existing, is in
good standing under the laws of the State of Delaware, and has all requisite
corporate power and authority to carry on its business as described in the
Prospectus. The Company is duly qualified as a foreign corporation and is in
good standing in all other jurisdictions in which such qualification is
required, provided however, that the Company need not be qualified in a
jurisdiction in which its failure to qualify would not have a material adverse
effect on its operations or financial condition. Each "significant" subsidiary
of the Company (as defined in Rule 1.02 of the Commission's Regulation S-X, the
"Subsidiaries") is duly organized and validly existing, is in good standing
under the laws of its state of incorporation, has all requisite power and
authority to duly carry on its business as described in the Prospectus and is
duly qualified as a foreign corporation and is in good standing in all other
jurisdictions in which such qualification is required, provided, however, that
such Subsidiary need not be qualified in a jurisdiction in which its failure to
qualify would not have a material adverse effect on its operations or financial
condition.
(d) The Company has a duly authorized and outstanding capitalization as set
forth in the Prospectus and the Securities conform to the description thereof
contained therein and such description conforms with the rights set forth in the
instruments defining the same.
(e) The financial statements and schedules filed with and as part of the
Registration Statement present fairly the financial position of the Company and
the Subsidiaries as of the respective dates thereof and the results of
operations of the Company and the Subsidiaries for the respective periods
covered thereby, all in conformity with generally accepted principles of
accounting applied on a consistent basis throughout the entire period involved
and from period to period. Since the respective dates of such financial
statements there has been no material adverse change in the condition or general
affairs of the Company or of any of the Subsidiaries, financial or otherwise,
other than as referred to in the Prospectus.
(f) The Rights Certificates, Rights and Common Stock issuable upon exercise
of the Rights have been duly authorized and, when issued and paid for, will be
validly issued, fully paid and non-assessable and the holders thereof will not
be subject to personal liability by reason of being such holders; such
securities are not subject to the preemptive rights of any stockholder of the
Company; and the Common Stock has been duly authorized for listing on the New
York Stock Exchange upon official notice of issuance.
(g) Xxxxxx Xxxxxxxx LLP, who are certifying the financial statements filed
with the Commission as a part of the Registration Statement, are independent
public accountants as required by the Securities Act and the Rules.
(h) The issuance of the Rights Certificates and the Securities and the
execution and delivery of this Agreement, the consummation of the transactions
herein contemplated and the compliance with the terms of the Rights Certificates
and this Agreement will not conflict with or result in a breach of any of the
terms or provisions of, or constitute a default under, or give rise to rights of
termination under, any deed of trust, lease, sublease, the Certificate of
Incorporation or by-laws of the Company or of any of the Subsidiaries, or any
indenture, mortgage, or other agreement or instrument to which the Company or
any of the Subsidiaries is a party or by which the Company or any of the
Subsidiaries, or the property of any of them, is bound, or any applicable law,
rule, regulation, judgment, order or decree of any government, governmental
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any of the Subsidiaries, or the properties or operations of any of
them.
Each of the Standby Purchasers represents and warrants to the Company that
he or it (as the case may be), as of the date of this Agreement, has the
financial wherewithal to honor his or its respective commitments hereunder.
5. Subscription Offer. The Company will offer to holders of its Common
Stock of record at the close of business on _____________, 1996 the right to
purchase shares of Common Stock at a price of $7.00 per share on the basis of
one right to purchase one-quarter of one share of Common Stock for every share
of Common Stock held. The Company will, or will cause its Transfer Agent to,
mail Rights Certificates to such holders of Common Stock as promptly as
practicable after the Registration Statement becomes effective, and in any event
will complete such mailing not later than midnight on the day next succeeding
the effective date of the Registration Statement, unless you shall consent to a
later time in writing.
At the time of the commencement of the mailing ("Time of Mailing") of the
Rights Certificates to such holders, the Company will notify each of the Standby
Purchasers of such mailing, and the Company will advise each of the Standby
Purchasers daily during the period of such offer of the subscriptions received
and of sales. Not later than 10 A.M., New York City Time, on the first full
business day following the Expiration Date, the Company will notify each Standby
Purchaser by telephone of the total number of shares of Common Stock subscribed
for by holders of Rights Certificates and the resulting amount of Unsubscribed
Securities and will confirm such notice in writing. The Standby Purchasers shall
be entitled to rely on such notice as to the amount of Unsubscribed Securities
to be purchased by them in accordance with Schedule A hereto.
6. Restricted Nature of Unsubscribed Securities. Each of the Standby
Purchasers acknowledges that the Unsubscribed Securities, in its or his hands,
as the case may be, will be restricted securities which may not be sold or
offered for sale in the absence of an effective registration statement as to
such Unsubscribed Securities under the Securities Act or an opinion of counsel
satisfactory to the Company that such registration is not required. In this
regard, the parties hereto have entered into a Registration Rights Agreement,
substantially in the form of Schedule B hereto, pursuant to which, among other
things, the Company granted the Standby Purchasers certain registration rights
with respect to the Unsubscribed Securities.
7. Certain Covenants of the Company. In further consideration of the
agreements of the Standby Purchasers herein contained, the Company covenants as
follows:
(a) The Company will not at any time, whether before or after the
Registration Statement shall have become effective, file or make any amendment
or supplement to the Registration Statement or Prospectus of which you shall not
have previously been advised and furnished a copy, or to which you shall
reasonably object in writing.
(b) The Company will use its best efforts to cause the Registration
Statement to become effective and will advise you immediately, and confirm the
advice in writing, (i) when the Registration Statement, or any post-effective
amendment to the Registration Statement, shall have become effective, or any
supplement to the Prospectus or any amended Prospectus shall have been filed,
(ii) of the necessity of amending or supplementing the Prospectus or any amended
Prospectus in order to then meet the requirements of the Securities Act, (iii)
of any request of the Commission for amendment or supplementation of the
Registration Statement or Prospectus or for additional information, and (iv) of
the issuance by the Commission of any stop order suspending the effectiveness of
the Registration Statement or of any order preventing or suspending the use of
any preliminary or amended preliminary prospectus, or of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, or of
the institution of any proceedings for any of such purposes. The Company will
use its best efforts to prevent the issuance of any such stop order or of any
order preventing or suspending such use and to obtain as soon as possible the
lifting thereof, if issued.
(c) The Company will deliver to the Standby Purchasers, without charge,
from time to time until the effective date of the Registration Statement, as
many copies of each preliminary or amended preliminary prospectus as the Standby
Purchasers may reasonably request, and the Company hereby consents to the use of
such copies for purposes permitted by the Securities Act. The Company will
deliver to the Standby Purchasers, without charge, as soon as the Registration
Statement shall have become effective and thereafter from time to time as
requested, such number of copies of the Prospectus (as supplemented or amended,
if the Company shall have made any supplements or amendments to the Prospectus)
as the Standby Purchasers may reasonably request. The Company has furnished or
will furnish to you two signed copies of the Registration Statement as
originally filed and of all amendments thereto, whether filed before or after
the Registration Statement becomes effective, and three copies of all exhibits
filed therewith or incorporated therein by reference and signed copies of all
consents and certificates of experts.
(d) The Company will comply to the best of its ability with the Securities
Act and the Rules and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations thereunder so as to permit the
continuance of sales of, and dealings in, the Securities under the Securities
Act and the Exchange Act. Subject to the provisions of subsection (a) of this
Section 7, if at any time when a Prospectus is required to be delivered under
the Securities Act (i) an event shall have occurred as a result of which it is
necessary to amend or supplement the Prospectus in order to make the statements
therein not untrue or misleading or to make the Prospectus comply with the
Securities Act or (ii) the proposed offering of the Securities makes it
necessary to amend or supplement the Prospectus, the Company promptly will amend
or supplement the Prospectus (and if a Post-Effective Amendment to the
Registration Statement is necessary in connection therewith, will promptly
prepare and file the same and will use its best efforts to cause the same to
become effective) as necessary to permit the lawful use of the Prospectus in
connection with the distribution of the Securities.
(e) The Company will comply to the best of its ability with blue sky laws
so as to permit the continuance of sales of and dealings in the Unsubscribed
Securities thereunder. The Company, however, shall not be obligated to qualify
as a foreign corporation or file any general consent to service of process under
the laws of any such jurisdiction or subject itself to taxation as doing
business in any such jurisdiction. The Company will take the necessary action to
qualify the Securities (and, to the extent necessary, the Rights Certificates)
in connection with the offer and sale thereof by the Company, under the laws of
such jurisdictions as may be deemed advisable by the Company in respect of the
offer of the Securities to the holders of its Common Stock and Rights
Certificates.
(f) The Company will make generally available to its security holders, by
mailing to its then security holders, as soon as practicable and in no event
later than the 15th full calendar month following the calendar quarter in which
the Effective Date falls, an earnings statement satisfying the provisions of
Section 11 (a) of the Securities Act and Rule 158 of the Rules.
(g) The Company will pay and bear all costs and expenses in connection with
(i) the preparation, printing and filing with the Commission of the Registration
Statement (including financial statements and exhibits), preliminary
prospectuses and Prospectus and any amendments or supplements thereto, (ii) the
printing of this Agreement and the agreements and other printed matter used by
you in connection with the marketing of the Securities and the publication of
any related advertisements, (iii) the issue and delivery of the Unsubscribed
Securities hereunder to the Standby Purchasers, including all Federal and other
taxes on the issue by or any transfer of the Unsubscribed Securities from the
Company to the Standby Purchasers (but not on any transfer by the Standby
Purchasers of the Unsubscribed Securities or of the right to receive the same),
(iv) the qualifying of the Securities and the Rights Certificates under the laws
of certain jurisdictions as aforesaid, including filing fees and fees and
disbursements of counsel (who may be counsel for the Standby Purchasers) in
connection therewith, (v) the cost of furnishing to the Standby Purchasers
copies of the Registration Statement, preliminary and amended preliminary
prospectuses and Prospectus and all supplements and amendments thereto, as
herein provided and (vi) the legal expenses of the Standby Purchasers incidental
to the preparation of, and the consummation by the Standby Purchasers of the
transactions contemplated by, this Agreement.
(h) The Company will do all things necessary to maintain the
exerciseability of the Rights, including, but not limited to, maintaining at all
times sufficient reserved, authorized but unissued shares of Common Stock for
issuance upon exercise thereof.
(i) The Company will use its best efforts to add the Standby Purchasers as
additional insureds on any insurance policy which provides insurance against
liabilities which may be asserted in connection with the Rights Offerings.
8. Conditions of Obligations of the Standby Purchasers and of Company. The
obligations of the Standby Purchasers to purchase and pay for the Unsubscribed
Securities which they have agreed to purchase hereunder are subject to the
accuracy (as of the date hereof and the Closing Date) of and compliance with the
representations and warranties of the Company herein, to the accuracy of the
statements of officers of the Company made pursuant to the provisions hereof, to
the performance by the Company of its obligations hereunder, and to the
following additional conditions.
(a) The Registration Statement shall have become effective not later than
5:30 P.M., New York City Time, on __________, 1996 or at such later time on such
later date as you may agree to in writing; and prior to the Closing Date, no
stop order suspending the effectiveness of the Registration Statement shall have
been issued and no proceedings for that purpose shall have been instituted or
shall be pending, or, to your knowledge or the knowledge of the Company, shall
be contemplated by the Commission, and any request on the part of the Commission
for additional information shall have been complied with.
(b) The Time of Mailing shall have occurred not later than 5:30 P.M., New
York City Time, on ___________, 1996 or at such later time on such date as you
may agree to in writing; prior to the Time of Mailing, the issuance and sale of
the Securities shall have been approved by all requisite corporate action.
(c) At the Time of Mailing, and at the Closing Date, there shall have been
delivered to you a signed opinion of Blau Xxxxxx Xxxxxxx & Xxxxxxxxx, P.C., as
counsel for the Company, dated as of the Time of Mailing and the Closing Date,
respectively, in form and substance satisfactory to Xxxx & Priest LLP, counsel
for the Standby Purchasers.
(d) At the Time of Mailing, and at the Closing Date, there shall have been
delivered to you a signed letter of Xxxxxx Xxxxxxxx LLP, in form and substance
reasonably satisfactory to you, dated as of the Time of Mailing and the Closing
Date, respectively.
(e) At the Time of Mailing, (i) the Registration Statement and the
Prospectus and any amendments or supplements thereto shall contain all
statements which are required to be stated therein in accordance with the
Securities Act and the Rules and in all material respects shall conform to the
requirements of the Securities Act and the Rules, and neither the Registration
Statement nor the Prospectus nor any amendment or supplement thereto shall
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading, (ii) since the respective dates as of which information is given
there shall have been no material adverse change in the business, properties or
financial condition of the Company from that set forth in the Registration
Statement and the Prospectus, except changes which the Registration Statement
indicates might occur after the effective date of the Registration Statement,
and since September 30, 1995 there shall have been no material transaction,
contract or agreement entered into by the Company other than in the ordinary
course of business which is not referred to in the Registration Statement, and
(iii) no action, suit or proceeding at law or in equity shall be pending or, to
the knowledge of the Company, threatened against the Company or any Subsidiary
which would be required to be set forth in the Registration Statement other than
as set forth therein, and no proceeding shall be pending or, to the knowledge of
the Company, threatened against the Company or any Subsidiary before or by any
Federal, state or other commission, board or administrative agency wherein an
unfavorable decision, ruling or finding would materially adversely affect the
business, property, financial condition or income of the Company, other than as
set forth in the Registration Statement; and the Standby Purchasers shall have
received, at the Time of Mailing, certificates of the President or a
Vice-President, and the Treasurer or an Assistant Treasurer, of the Company,
dated as of the Time of Mailing, evidencing compliance with the provisions of
this subsection (e).
(f) All proceedings taken at or prior to the Time of Mailing and the
Closing Date, respectively, in connection with the authorization, issue and sale
of the Securities and the authorization and issue of the Rights Certificates
shall be reasonably satisfactory in form and substance to you and to your
counsel, and such counsel shall have been furnished with all such documents,
certificates and opinions as it reasonably requests to verify the accuracy and
completeness of any of the representations, warranties, or statements, the
performance of any covenants of the Company, or the compliance with any of the
conditions, herein contained.
(g) At the Closing Date, the Company shall have delivered to the Standby
Purchasers a certificate of the President of the Company dated the Closing Date
certifying that the representations and warranties of the Company set forth
herein are true and correct as of the Closing Date.
In case any of the conditions specified above in this Section 8 shall
not have been fulfilled, this Agreement may be terminated by either of you on
notice to the Company.
The obligation of the Company to sell and deliver the Unsubscribed
Securities is subject to the following conditions: The Registration Statement
shall have become effective not later than 5:30 P.M., New York City Time, on
___________, 1996, or at such later time or on such later date as the Company
may agree to in writing; and prior to the Closing Date, no stop order suspending
the effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or shall be pending, or,
to your knowledge or the knowledge of the Company, shall be contemplated by the
Commission. In case any of the conditions specified in this paragraph shall not
have been fulfilled, this Agreement, upon notice to you, may be terminated by
the Company.
9. Indemnification. (a) The Company will indemnify and hold harmless each
of the Standby Purchasers and its respective directors, officers, employees and
agents, and each person, if any, who controls each Standby Purchaser within the
meaning of Section 15 of the Securities Act against any and all losses, claims,
damages and liabilities, joint or several (including any investigation, legal
and other expenses reasonably incurred in connection with, and any amount paid
in settlement of, any action, suit or proceeding or any claim asserted)
(collectively, the "Losses"), to which they, or any of them, may become subject
under the Securities Act, the Exchange Act or other Federal or state statutory
law or regulation, at common law, or otherwise, insofar as such losses, claims,
damages or liabilities arise out of or are based on any untrue statement or
alleged untrue statement of a material fact contained in any preliminary
prospectus, the Registration Statement or the Prospectus or any amendment or
supplement thereto, or the omission or alleged omission to state in such
document a material fact required to be stated in it or necessary to make the
statements in it not misleading, provided that the Company will not be liable to
the extent that such loss, claim, damage or liability is based on an untrue
statement or omission or alleged untrue statement or omission (i) made in
reliance on and in conformity with information furnished in writing to the
Company by or on behalf of the Standby Purchaser expressly for use in the
document or (ii) in a preliminary prospectus if the Prospectus corrects the
untrue statement or omission or alleged untrue statement or omission which is
the basis of the loss, claim, damage or liability for which indemnification is
sought and a copy of the Prospectus was not sent or given to such person at or
before the confirmation of the sale to such person in any case where such
delivery is required by the Securities Act, unless such failure to deliver the
Prospectus was a result of noncompliance by the Company with Section 7(c). This
indemnity agreement will be in addition to any liability that the Company might
otherwise have.
(b) The Standby Purchasers will indemnify and hold harmless the Company and
its directors, officers, employees and agents, and each person, if any, who
controls the Company within the meaning of Section 15 of the Securities Act, to
the same extent as the foregoing indemnity from the Company to the Standby
Purchasers, but only insofar as Losses arise out of or are based on any untrue
statement or omission or alleged untrue statement or omission made in or in
reliance on and in conformity with information furnished in writing to the
Company by or on behalf of the Standby Purchasers expressly for use in
preparation of the documents in which the statement or omission is made or
alleged to be made. This indemnity agreement will be in addition to any
liability that the Standby Purchasers might otherwise have.
(c) Any party that proposes to assert the right to be indemnified under
this Section will, promptly after receipt of notice of commencement of any
action against such party in respect of which a claim is to be made against an
indemnifying party or parties under this Section, notify each such indemnifying
party of the commencement of such action, enclosing a copy of all papers served,
but the omission so to notify such indemnifying party will not relieve it from
any liability that it may have to any indemnified party otherwise than under
this Section. If any such action is brought against any indemnified party and it
notifies the indemnifying party of its commencement, the indemnifying party will
be entitled to participate in, and, to the extent that it elects by delivering
written notice to the indemnified party promptly after receiving notice of the
commencement of the action from the indemnified party, jointly with any other
indemnifying party similarly notified, to assume the defense of the action, with
counsel reasonably satisfactory to the indemnified party, and, after notice from
the indemnifying party to the indemnified party of its election to assume the
defense, the indemnifying party will not be liable to the indemnified party for
any legal or other expenses except as provided below and except for the
reasonable costs of investigation previously incurred by the indemnified party
in connection with the defense. The indemnified party will have the right to
employ its counsel in any such action, but the fees and expenses of such counsel
will be at the expense of such indemnified party unless (i) the employment of
counsel by the indemnified party has been authorized in writing by the
indemnifying party, (ii) the indemnified party has reasonably concluded that
there may be a conflict of interest between the indemnifying party and the
indemnified party in the conduct of the defense of such action (in which case
the indemnifying party will not have the right to direct the defense of such
action on behalf of the indemnified party) or (iii) the indemnifying party has
not in fact employed counsel to assume the defense of such action within a
reasonable time after receiving notice of the commencement of the action, in
each of which cases the fees and expenses of counsel will be at the expense of
the indemnifying party or parties. All such fees and expenses will be reimbursed
promptly as they are incurred. An indemnifying party will not be liable for any
settlement of any action or claim effected without its written consent or, in
connection with any proceeding or related proceeding in the same jurisdiction,
for the fees and expenses of more than one separate counsel for all indemnified
parties.
10. Representations, Warranties and Agreements to Survive Delivery. The
representations, warranties, indemnities and agreements of the Company and the
Standby Purchasers made in this Agreement will remain operative and in full
force and effect regardless of any investigation made by or on behalf of the
Company, or any Standby Purchaser or controlling person and will survive
delivery of and payment for the Unsubscribed Securities.
11. Termination. Notwithstanding any provision to the contrary contained
herein, either of the Standby Purchasers shall have the right to terminate this
Agreement, by written notice addressed to the Company, if the Rights Offering is
not consummated by May 31, 1996.
12. Obligations. The parties hereto acknowledge that the obligations of the
Standby Purchasers under this Agreement are several and not joint.
13. Miscellaneous. (a) This Agreement contains the entire agreement among
the parties hereto with respect to the subject matter herein, and cannot be
modified, changed, discharged or terminated except by an instrument in writing
signed by the party against whom the enforcement of any modification, change,
discharge or termination is sought.
(b) Any notice, request, instruction or other document to be given
hereunder shall be in writing and shall be delivered personally or sent by
registered or certified mail or overnight courier as follows:
(i) If to the Company:
0000 Xxxxx Xxxxx
Xxxxx 000
Ashley Corporate Center
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: President
with a copy to:
Blau, Kramer, Wactlar & Xxxxxxxxx, P.C.
000 Xxxxxxx Xxxxxxxxxx
Xxxxxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxxx
(ii) If to the Standby Purchasers, at their respective addresses specified
on page one hereof or to such other address as any party hereto hereinafter
designates in writing to any other party hereto, with a copy, in the case of
Xxxxxx X. Xxxxxx, to:
Xxxx & Priest LLP
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxxx Xxxxx
and with a copy, in the case of Avondale Xxxxx, Inc. to:
King & Spalding
000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxxxx X. Xxxx III
(c) The captions herein are inserted for convenience only and shall not
affect the construction of this Agreement.
(d) This Agreement is executed and delivered in, and shall be construed in
accordance with, and governed by, the laws of the State of New York, without
giving effect to the conflicts of law principles thereof.
(e) This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which taken together shall
constitute one and the same instrument.
Very truly yours,
XXXXXX INDUSTRIES, INC.
By: ______________________
Title: President
Accepted and Agreed to as of
the Date First Above Written:
----------------------------
Xxxxxx X. Xxxxxx
AVONDALE XXXXX, INC.
By: ______________________
Title:
SCHEDULE A
ALLOCATION OF UNSUBSCRIBED SECURITIES
The first 750,000 shares of Unsubscribed Securities will be purchased by
Avondale Xxxxx, Inc.
The next block of Unsubscribed Securities will be purchased by the Standby
Purchasers as follows, subject to Avondale Xxxxx, Inc.'s maximum cumulative
Standby Commitment of $7,500,000:
Xxxxxx X. Xxxxxx - 50%
Avondale Xxxxx, Inc. - 50%
The balance of the Unsubscribed Securities will be purchased by Xx. Xxxxxx,
subject to his maximum cumulative Standby Commitment of $3,750,000.
