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EXHIBIT 10.3
AMENDED AND RESTATED
STOCK PURCHASE AGREEMENT
AMONG
THE PERSONS LISTED ON
THE SIGNATURE PAGES HERETO
AND
LONE STAR U.S. ACQUISITIONS, LLC
DATED AS OF FEBRUARY 27, 2001
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TABLE OF CONTENTS
Page
ARTICLE 1 PURCHASE AND SALE OF SHARES.........................................1
1.1 Purchase and Sale..................................................1
1.2 Purchase Price.....................................................2
1.3 Payment............................................................2
1.4 Xxxxxxx Money......................................................2
1.5 Inspection Period..................................................2
1.6 Dividends..........................................................3
ARTICLE 2 REPRESENTATIONS AND WARRANTIES......................................3
2.1 Representations and Warranties Regarding Stockholders..............3
(a) Ownership of REIT Equity Securities..........................3
(b) Authority; No Violations; Consents and Approvals.............3
(c) Agreements with the REIT or REIT Subsidiaries................4
(d) Brokers......................................................5
2.2 Representations and Warranties of Buyer............................5
(a) Organization, Standing and Power.............................5
(b) Authority; No Violations, Consents and Approvals.............5
(c) Litigation...................................................6
(d) Acquisition of Securities....................................6
(e) No Registration..............................................6
(f) Status as Accredited Investor................................7
(g) Brokers......................................................7
ARTICLE 3 COVENANTS OF PARTIES................................................7
3.1 Covenants of the Stockholders......................................7
(a) Other Transactions...........................................7
(b) Assistance...................................................8
(c) Notification of Certain Matters..............................8
(d) Third-Party Consents.........................................8
(e) Resignations as Directors and Officers.......................8
(f) Additional Arrangements......................................8
(g) No Amendment of Settlement Agreement.........................9
3.2 Covenants of the Buyer.............................................9
(a) Assistance...................................................9
(b) Notification of Certain Matters..............................9
(c) No Amendment of REIT Stock Purchase Agreement...............10
ARTICLE 4 MUTUAL COVENANTS...................................................10
4.1 Additional Agreements.............................................10
ARTICLE 5 CONDITIONS PRECEDENT...............................................10
5.1 Conditions to Each Party's Obligation.............................10
(a) Consents and Approvals......................................10
(b) No Injunctions or Restraints................................10
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(c) No Action...................................................11
(d) Settlement of Litigation....................................11
5.2 Conditions to Obligations of Buyer................................11
(a) Representations and Warranties..............................11
(b) Performance of Obligations..................................11
(c) Consents Under Agreements...................................11
(d) Closing Deliveries..........................................11
(e) Stock Exchange Listing......................................11
(f) Material Adverse Effect.....................................12
(g) REIT Stock Purchase Agreement...............................12
(h) Resignations as Directors and Officers......................12
5.3 Conditions to Obligations of Stockholders.........................12
(a) Representations and Warranties..............................12
(b) Performance of Obligations of Buyer.........................12
(c) Closing Deliveries..........................................12
(d) Releases....................................................12
(e) Registration Rights.........................................12
ARTICLE 6 CLOSING............................................................13
6.1 Closing...........................................................13
6.2 Actions to Occur at Closing.......................................13
ARTICLE 7 TERMINATION, AMENDMENT AND WAIVER..................................14
7.1 Termination.......................................................14
7.2 Effect of Termination.............................................15
ARTICLE 8 INDEMNIFICATION....................................................16
8.1 Indemnification of Buyer..........................................16
8.2 Indemnification of Stockholders...................................17
8.3 Defense of Third Party Claims.....................................17
8.4 Direct Claims.....................................................18
8.5 Limitations.......................................................18
(a) Limitation as to Time.......................................18
(b) No Contribution.............................................18
8.6 Tax Related Adjustments...........................................18
ARTICLE 9 GENERAL PROVISIONS.................................................19
9.1 Survival of Representations, Warranties, and Covenants............19
9.2 No Waiver Relating to Claims for Fraud............................19
9.3 Amendment and Modification........................................19
9.4 Waiver of Compliance..............................................19
9.5 Specific Performance..............................................20
9.6 Severability......................................................20
9.7 Expenses and Obligations..........................................20
9.8 Parties in Interest...............................................20
9.9 Notices...........................................................21
9.10 Counterparts......................................................22
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9.11 Entire Agreement..................................................22
9.12 Governing Law.....................................................22
9.13 Arbitration.......................................................23
9.14 Public Announcements..............................................23
9.15 Assignment........................................................23
9.16 No Affiliate Liability............................................23
9.17 Construction of "Stockholders."...................................24
9.18 Headings..........................................................24
9.19 Appointment of Stockholders' Representatives......................24
(a) Margolin Stockholders' Representative.......................24
(b) Xxxxx Stockholders' Representative..........................25
9.20 Deletion of Certain Xxxxx Stockholders............................27
EXHIBITS:
Exhibit A - Form of Deposit Escrow Agreement
Exhibit B-1 - Form of Noncompetition and Release Agreement (Xxxx X. Xxxxxxxx)
Exhibit B-2 - Form of Noncompetition and Release Agreement (Xxxxxx X. Xxxxx)
Exhibit B-3 - Form of Noncompetition and Release Agreement (Xxxxx X. Xxxxx)
Exhibit C-1 - Joint Notice and Stipulation of Dismissal With Prejudice
Exhibit C-2 - Joint Stipulation of Dismissal With Prejudice
Exhibit D - Form of Promissory Note
DISCLOSURE SCHEDULES:
Schedule 2.1(a)(i) - Owned Securities
Schedule 2.1(a)(ii) - Securities to be Sold to Buyer
Schedule 2.1(c) - Agreements with the REIT
Schedule 5.1(d) - Internal Litigation
INDEX OF DEFINED TERMS
Definitions Defined on Page #
Accredited Investor............................................................7
Affiliate......................................................................4
Agreement......................................................................1
Alternative Proposal...........................................................7
Business Day...................................................................2
Buyer..........................................................................1
Buyer Affiliate...............................................................23
Buyer Indemnified Costs.......................................................16
Buyer Indemnified Parties.....................................................17
Buyer Litigation...............................................................6
Closing.......................................................................13
Closing Date..................................................................13
control........................................................................4
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Cure Period...................................................................14
Deferred Payment Amount........................................................2
Delivery Date..................................................................2
Deposit Escrow Agreement.......................................................2
Xxxxxxx Money..................................................................2
Encumbrances...................................................................1
Escrow Agent...................................................................2
Exchange Act...................................................................4
Final Closing Date............................................................14
Former Xxxxxxxx Stockholder...................................................24
Former Xxxxx Stockholder......................................................26
Governmental Entity............................................................4
HSR Act........................................................................4
Indemnified Costs.............................................................18
Indemnified Party.............................................................17
Indemnifying Party............................................................17
Initial Payment Amount.........................................................2
Inspection Termination Time....................................................3
Internal Litigation...........................................................11
Knowledge......................................................................6
Liquidated Damages Release....................................................15
Majority-in-Interest..........................................................25
Management Stockholders........................................................1
Xxxxxxxx Stockholders.........................................................24
Xxxxxxxx Stockholders' Representative.........................................24
Nominee Shares................................................................13
Options........................................................................1
Person.........................................................................4
Promissory Note...............................................................13
Registration Rights Agreement.................................................12
REIT...........................................................................1
REIT Common Stock..............................................................1
REIT Stock Purchase Agreement.................................................12
Releases.......................................................................8
Xxxxx Stockholders............................................................25
Xxxxx Stockholders' Representative............................................25
SEC............................................................................4
Second Payment Date............................................................2
Securities.....................................................................1
Securities Act.................................................................4
Settlement Agreement...........................................................9
Share Purchase Price...........................................................2
Shares.........................................................................1
Stockholder Indemnified Costs.................................................17
Stockholders...................................................................1
Subsidiary.....................................................................4
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Successor Xxxxxxxx Stockholder................................................24
Successor Xxxxx Stockholder...................................................26
Transaction Documents..........................................................3
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AMENDED AND RESTATED STOCK PURCHASE AGREEMENT
This AMENDED AND RESTATED STOCK PURCHASE AGREEMENT (this "Agreement") is
made and entered into as of February 27, 2001, by and among Xxxx X. Xxxxxxxx,
Xxxxxx X. Xxxxx and Xxxxx X. Xxxxx (collectively, the "Management Stockholders")
and the other individuals and entities listed on the signature pages hereto
(collectively with the Management Stockholders, the "Stockholders"), and Lone
Star U.S. Acquisitions, LLC, a Delaware limited liability company (including its
permitted successors and assigns, "Buyer").
WHEREAS, on January 17, 2001 Buyer, the Stockholders and certain other
entities entered into a Stock Purchase Agreement (the "Original Agreement");
WHEREAS, the Stockholders own as of the date hereof (a) shares of common
stock, par value $0.001 per share ("REIT Common Stock"), of U.S. Restaurant
Properties, Inc., a Maryland corporation (the "REIT"), and (b) options to
purchase shares of REIT Common Stock (each such option to purchase a share, an
"Option" and, collectively, the "Options" and, collectively with the Shares (as
hereinafter defined), the "Securities"), in each case in the amounts set forth
on Schedule 2.1(a)(i);
WHEREAS, Buyer desires to purchase from the Stockholders, and the
Stockholders desire to sell to Buyer, certain shares of REIT Common Stock in
consideration of the Share Purchase Price (as hereinafter defined), upon the
terms and subject to the conditions set forth herein; and
WHEREAS, Buyer and the Stockholders now desire to amend and restate the
Original Agreement to delete certain entities as Stockholders and to make such
other amendments as are set forth herein.
NOW, THEREFORE, in consideration of the respective representations,
warranties, agreements, and conditions hereinafter set forth, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
PURCHASE AND SALE OF SHARES
1.1 Purchase and Sale. Upon the terms and subject to the conditions of
this Agreement, at the Closing (as hereinafter defined), each Stockholder shall
sell to Buyer, and Buyer shall purchase from such Stockholder, the shares of
REIT Common Stock (the "Shares") described on Schedule 2.1(a)(ii), free and
clear of all liens, pledges, charges, encumbrances, claims, security interests,
restrictions, rights of first refusal, defects in title, or options of any kind
("Encumbrances"), other than restrictions imposed by applicable Federal and
state securities laws and as set forth on Schedule 2.1(a)(ii).
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1.2 Purchase Price. The purchase price payable by Buyer to the
Stockholders in consideration for the sale of the Shares shall be an amount
equal to $11.35 per Share (the "Share Purchase Price") to be paid in two
installments as provided in Section 1.3 hereof.
1.3 Payment. Subject to the satisfaction of the other terms and conditions
of this Agreement, Buyer shall pay or cause to be paid to each Stockholder cash,
by wire transfer of immediately available funds to an account designated by such
Stockholder, as follows:
(a) At the Closing, an amount equal to $11.00 (the "Initial Payment
Amount") multiplied by the number of Shares being sold by such Stockholder.
(b) By 5:00 p.m., Central time, on September 9, 2002 (the "Second
Payment Date") an amount equal to $0.35 (the "Deferred Payment Amount")
multiplied by the number of Shares being sold by such Stockholder.
1.4 Xxxxxxx Money.
(a) Concurrently with the execution of the Original Agreement, Buyer,
the Stockholders and an escrow agent (the "Escrow Agent") executed and delivered
a Deposit Escrow Agreement (the "Deposit Escrow Agreement") in the form attached
hereto as Exhibit A.
(b) If this Agreement has not been terminated on or before the
Inspection Termination Time (as hereinafter defined), then at or before 5:00
p.m., Central time, on February 28, 2001, Buyer shall deposit $1,000,000 in cash
(the "Xxxxxxx Money") with the Escrow Agent to be held in accordance with the
terms hereof and the Deposit Escrow Agreement.
(c) Subject to the satisfaction of the conditions set forth in Article
5 hereof, at the Closing Buyer and the Stockholders shall instruct the Escrow
Agent to release and return the Xxxxxxx Money (together with any earnings
thereon) by wire transfer of immediately available funds to an account
designated by Buyer.
(d) If this Agreement is terminated after the Inspection Termination
Time, Buyer and the Stockholders shall instruct the Escrow Agent to release the
Xxxxxxx Money (together with any earnings thereon) to Buyer or to the
Stockholders, all as provided in Section 7.2.
(e) As used in this Agreement, "Business Day" means any day other than
(i) a Saturday or Sunday or (ii) a day on which commercial banks in New York,
New York or Dallas, Texas are authorized or required to be closed.
1.5 Inspection Period. On or before 5:00 p.m., Central time, on the fifth
Business Day (as hereinafter defined) after the date of the Original Agreement,
the Stockholders delivered the disclosure schedules of the Stockholders set
forth herein to Buyer (the later of (a) such date of delivery and (b) the
delivery by the REIT of the REIT Disclosure Schedule (as defined in the REIT
Stock Purchase Agreement, as hereinafter defined) shall be hereinafter referred
to as the "Delivery Date"). If for any reason Buyer, in its sole discretion,
determines that it does not desire to purchase the Securities, then Buyer may
terminate this Agreement in accordance with Section 7.1(c)(i) by delivering to
the Xxxxxxxx Stockholders' Representative (as hereinafter
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defined), Xxxxx X. Xxxxx and the Xxxxx Stockholders' Representative (as
hereinafter defined) a notice of termination at any time during the period (the
"Inspection Period") beginning on the Delivery Date and terminating at 5:00
p.m., Dallas, Texas time, on February 27, 2001 (the "Inspection Termination
Time"). If Buyer does not so terminate this Agreement before the Inspection
Termination Time, Buyer shall have waived its right to terminate this Agreement
under this Section 1.5 and Section 7.1(c)(i).
1.6 Dividends. As between Buyer and the Stockholders, any dividends paid
in respect of the Shares after the Closing Date shall be prorated between Buyer
and the Stockholders such that each Stockholder shall be entitled to the portion
of such dividends attributable to his pro rata portion of the Shares for the
period prior to the Closing Date, and Buyer shall be entitled to the dividends
attributable to the Shares for the period beginning on and after the Closing
Date. Buyer shall pay to each Stockholder the amount of any dividends owed to
such Stockholder and received by Buyer within 10 days after Buyer receives
payment thereof.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES
2.1 Representations and Warranties Regarding Stockholders. Each
Stockholder, severally as to himself and not jointly, represents and warrants to
Buyer as follows (such representations and warranties being deemed to be made on
a continuous basis until the Closing):
(a) Ownership of REIT Equity Securities.
(i) As of the date of this Agreement, such Stockholder is the
holder of record and owns beneficially the equity securities of the REIT
disclosed on Schedule 2.1(a)(i).
(ii) At the Closing, Buyer will receive good and valid title to
the Shares to be sold to Buyer by such Stockholder (as designated on
Schedule 2.1(a)(ii)), free and clear of all Encumbrances.
(b) Authority; No Violations; Consents and Approvals.
(i) Such Stockholder has full legal capacity to enter into the
Transaction Documents to which he is a party and to consummate the
transactions contemplated hereby and thereby. The "Transaction Documents"
are defined as this Agreement, the Releases (as hereinafter defined) and
the Deposit Escrow Agreement. The Transaction Documents to which such
Stockholder is a party have been (or, in the case of the applicable
Release, will be) duly executed and delivered by such Stockholder (or, if
applicable, the Xxxxxxxx Stockholders' Representative and the Xxxxx
Stockholders' Representative) and, assuming the Transaction Documents to
which other Persons are parties constitute the valid and binding
obligations of such other Persons, constitute (or, in the case of the
applicable Release, will constitute) valid and binding obligations of such
Stockholder, enforceable in accordance with their terms, subject, as to
enforceability, to bankruptcy, insolvency, reorganization, moratorium and
other laws of general applicability relating to or affecting creditors'
rights and to general principles of
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equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law). As used in this Agreement, "Person" means
an individual, corporation, partnership, limited liability company,
association, trust, estate, unincorporated organization, or other entity.
(ii) No consent, approval, order or authorization of, or
registration, declaration or filing with, or permit from, any court,
governmental, regulatory or administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign (a
"Governmental Entity"), is required by or with respect to such Stockholder
in connection with the execution and delivery of the Transaction Documents
by such Stockholder or the consummation by such Stockholder of the
transactions contemplated hereby or thereby, except for: (A) the filing
with the Securities and Exchange Commission ("SEC") of such reports under
Sections 13(a) and 16(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and such other compliance with the
Securities Act of 1933, as amended (the "Securities Act"), or the Exchange
Act and the rules and regulations thereunder, as may be required in
connection with the Transaction Documents and the transactions
contemplated hereby or thereby; (B) the submission by the REIT of a
supplemental listing application regarding certain of the Shares with the
New York Stock Exchange; (C) any filings required under state securities
laws; (D) such filings and approvals as may be required by any applicable
state laws; (E) such filings and approvals as may be required by any
foreign premerger notification, securities, corporate or other law, rule
or regulation; and (F) the filing, if applicable, of a pre-merger
notification and report by the REIT under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvements Act of 1976, as amended (the "HSR Act"), and the expiration
or termination of the applicable waiting period thereunder.
(c) Agreements with the REIT or REIT Subsidiaries. Schedule 2.1(c)
sets forth all agreements or arrangements (i) to which such Stockholder is a
party relating to (A) the equity interest of such Stockholder in the REIT or any
of its Subsidiaries or Affiliates, (B) any rights or obligations of such
Stockholder as an officer, director or stockholder of the REIT or any of its
Affiliates or Subsidiaries, (C) any right of such Stockholder to compensation or
other remuneration by the REIT, or any of its Subsidiaries or Affiliates and (D)
any other agreement between such Stockholder and the REIT or any Subsidiary of
the REIT or (ii) to the Knowledge of such Stockholder, to which Xxxxxx X. Xxxxxx
or an Affiliate of Xxxxxx X. Xxxxxx is a party and to which any of the REIT, an
Affiliate of the REIT, or a Subsidiary of the REIT is a party. As used in this
Agreement, "Affiliate" means, with respect to any Person, any other Person
controlling, controlled by or under common control with such Person. For
purposes of this definition and this Agreement, the term "control" (and
correlative terms) means the power, whether by contract, equity ownership or
otherwise, to direct the policies or management of a Person. As used in this
Agreement, the word "Subsidiary" means, with respect to any party, any
corporation or other organization, whether incorporated or unincorporated, of
which: (A) such party or any other Subsidiary of such party is a general
partner; (B) at least a majority of the securities or other interests having by
their terms ordinary voting power to elect a majority of the Board of Directors
or others performing similar functions with respect to such corporation or other
organization is, directly or indirectly, owned or controlled by such party or by
any one or more of its Subsidiaries, or by such party and any one or more of its
Subsidiaries; (C) such party and/or any other Subsidiary of such party
beneficially owns, directly or indirectly, at least a
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majority of the equity interests; or (D) such party and/or any other Subsidiary
of such party has a direct or indirect investment of $10 million or more in
equity or indebtedness in such corporation or other organization.
(d) Brokers. Except for the fee to be paid to Xxxxxxxxxxx Xxxx &
Company, Inc., as provided in Section 9.7, no agent, broker, investment banker
or other Person is or will be entitled to any broker's, finder's or other
similar fee or commission in connection with the transactions contemplated by
the Transaction Documents based upon arrangements made by or on behalf of such
Stockholder.
2.2 Representations and Warranties of Buyer. Buyer represents and warrants
to the Stockholders as follows (such representations and warranties being deemed
to be made on a continuous basis until the Closing):
(a) Organization, Standing and Power. Buyer is a limited liability
company duly formed, validly existing and in good standing under the laws of the
State of Delaware. Buyer has no Subsidiaries.
(b) Authority; No Violations, Consents and Approvals.
(i) Buyer has all requisite power and authority to enter into the
Transaction Documents to which it is a party and to consummate the
transactions contemplated hereby or thereby. The execution and delivery of
the Transaction Documents to which Buyer is a party and the consummation
of the transactions contemplated hereby or thereby have been duly
authorized by all necessary action on the part of Buyer. The Transaction
Documents to which Buyer is a party have been duly executed and delivered
by Buyer, and assuming the Transaction Documents to which any other Person
is a party constitute the valid and binding obligation of such Person,
constitute a valid and binding obligation of Buyer enforceable in
accordance with its terms, subject as to enforceability, to bankruptcy,
insolvency, reorganization, moratorium and other laws of general
applicability relating to or affecting creditors' rights and to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
(ii) The execution and delivery of the Transaction Documents to
which Buyer is a party do not, and the consummation of the transactions
contemplated hereby or thereby, and compliance with the provisions hereof
or thereof, will not, conflict with, or result in any violation of or
default (with or without notice or lapse of time, or both) under, or give
rise to a right of termination, cancellation or acceleration of any
material obligation or to the loss of a material benefit under, or give
rise to a right of purchase under, result in the creation of any
Encumbrance upon any of the properties or assets of Buyer under, require
the consent or approval of any third party or otherwise result in a
material detriment to Buyer under, any provision of (A) Buyer's limited
liability company agreement, (B) any loan or credit agreement, note, bond,
mortgage, indenture, lease or other agreement, instrument, permit,
concession, franchise or license applicable to Buyer or its respective
properties or assets or any guarantee by Buyer of the foregoing, or (C)
assuming the consents, approvals, authorizations or permits and filings or
notifications
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referred to in Section 2.2(b)(iii) are duly and timely obtained or made,
any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Buyer or any of its respective properties or assets, other
than, in the case of clauses (B) and (C), any such conflicts, violations,
defaults, rights, Encumbrances or detriments that, individually or in the
aggregate, would not, or could not reasonably be expected to, materially
impair the ability of Buyer to perform its obligations hereunder or
thereunder or prevent the consummation of any of the transactions
contemplated hereby or thereby.
(iii) No consent, approval, order or authorization of, or
registration, declaration or filing with, or permit from any Governmental
Entity is required by or with respect to Buyer in connection with the
execution and delivery by Buyer of the Transaction Documents to which it
is a party or the consummation by Buyer of the transactions contemplated
hereby or thereby, except for: (A) the filing with the SEC of such reports
under Section 13(a) of the Exchange Act and such other compliance with the
Securities Act and the Exchange Act and the rules and regulations
thereunder as may be required in connection with this Agreement and the
transactions contemplated hereby; (B) any filings required under state
securities laws; (C) such filings and approvals as may be required by any
applicable state takeover laws or environmental laws; and (D) filings
under the HSR Act, if applicable.
(c) Litigation. As of the date of this Agreement, there is no suit,
action or proceeding pending, or, to the Knowledge (as hereafter defined) of
Buyer, threatened against Buyer that could reasonably be expected to affect the
ability of Buyer to consummate the transactions contemplated hereby ("Buyer
Litigation"), and Buyer has no Knowledge of any facts that are likely to give
rise to any Buyer Litigation, nor is there any judgment, decree, injunction,
rule or order of any Governmental Entity or arbitrator outstanding against Buyer
that could reasonably be expected to affect the ability of Buyer to consummate
the transactions contemplated hereby. As used in this Agreement, "Knowledge"
means, with respect to a specified party hereto, the actual knowledge of such
party.
(d) Acquisition of Securities. Buyer is acquiring the Securities for
its own account or for one or more separate accounts maintained by it or for the
account of one or more institutional investors on whose behalf Buyer has
authority to make this representation for investment and without the view to the
distribution thereof within the meaning of the Securities Act or with any
present intention of distributing or selling any of the Securities except in
compliance with the Securities Act and except to one or more such institutional
investors, provided that the disposition by Buyer or such institutional
investors of their property shall at all time be within their control.
(e) No Registration. Buyer understands that the Securities (A) have
not been registered under the Securities Act or any state securities laws or the
securities laws of any other domestic or foreign jurisdiction and (B) will be
transferred to Buyer in reliance upon an exemption from the registration and
prospectus delivery requirements of the Securities Act and state securities
laws.
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(f) Status as Accredited Investor. Buyer is an "Accredited Investor"
within the meaning of Rule 501 of Regulation D, as promulgated by the United
States Securities and Exchange Commission pursuant to the Securities Act.
(g) Brokers. Except for the fee to be paid to Xxxxxxxxxxx Xxxx &
Company, Inc. as provided in Section 9.7, no agent, broker, investment banker or
other Person is or will be entitled to any broker's, finder's or other similar
fee or commission in connection with the transactions contemplated by the
Transaction Documents based upon arrangements made by or on behalf of Buyer or
any Affiliate of Buyer.
ARTICLE 3
COVENANTS OF PARTIES
3.1 Covenants of the Stockholders. Each of the Stockholders (or, in the
case of Sections 3.1(e), (f) and (g), the Management Stockholders), severally as
to himself or itself and not jointly, covenants to Buyer as follows:
(a) Other Transactions. None of the Stockholders shall (in their
capacities as stockholders of the REIT), nor shall they permit their respective
Affiliates to, directly or indirectly, through any officer, director,
stockholder, partner, member, manager, employee, agent, financial advisor,
banker or other representative, or otherwise, solicit, initiate, or encourage
the submission of any inquiry, proposal or offer from any Person relating to, or
any other efforts or attempts that constitute or may reasonably be expected to
lead to, any acquisition, purchase or financing of all or any material portion
of the assets of the REIT or any of its Subsidiaries or Affiliates or any equity
interest in the REIT or any of its Subsidiaries or Affiliates or any tender or
exchange offer, merger, consolidation, share exchange, business combination, or
other similar transaction with the REIT or any of its Subsidiaries or Affiliates
or participate (in their capacity as stockholders of the REIT) in any
negotiations regarding, or furnish to any other Person any information with
respect to, or otherwise cooperate in any way with, or assist or participate in,
facilitate, or encourage, any effort or attempt by any other Person to do or
seek any of the foregoing (any such inquiry, proposal or offer, an "Alternative
Proposal"). The Stockholders shall immediately communicate to Buyer the material
terms of any such Alternative Proposal (and the identity of the party making
such Alternative Proposal) which they may receive and, if such Alternative
Proposal is in writing, the Stockholders shall promptly deliver a copy of such
Alternative Proposal to Buyer. Each Stockholder immediately shall cease and
cause to be terminated all existing discussions or negotiations with any parties
conducted heretofore with respect to any of the foregoing. Each Stockholder
hereby revokes any and all previous proxies with respect to such Stockholder's
Shares and irrevocably agrees to attend, in Person or by proxy, and to vote or
cause to be voted (or if the stockholders of the REIT act by written consent, to
consent in writing, with respect to) all voting securities of the REIT that such
Stockholder owns or has the right to vote or consent with respect to (a) the
issuance of the shares of REIT Common Stock to be issued pursuant to the REIT
Stock Purchase Agreement (as hereinafter defined) and (b) against any
Alternative Proposal or other proposal or matter that may interfere with or be
inconsistent with the transactions contemplated by this Agreement or that is
reasonably likely to result in a breach in any material respect of any covenant,
representation or warranty of any other obligation of the Stockholders or the
REIT under any of
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the Transaction Documents. Buyer understands, acknowledges and agrees that the
Stockholders are officers, directors or both of the REIT and as such have
fiduciary obligations to the REIT and its stockholders and, nothing to the
contrary contained herein withstanding, no action taken or which any Stockholder
fails to take in his capacity as an officer or director of the REIT shall be a
breach of this Section 3.1(a) or any other provision of this Agreement,
including (without limitation) any action in such capacity that results in
Buyer's right to terminate the REIT Stock Purchase Agreement pursuant to Section
7.1(c)(ii), Section 7.1(c)(v) or Section 7.1(c)(vi) of such agreement or the
REIT's right to terminate the REIT Stock Purchase Agreement pursuant to Section
7.1(d) of such agreement.
(b) Assistance. If Buyer requests, the Stockholders shall use
reasonable efforts to cooperate in all reasonable respects in connection with
any financing efforts of Buyer or its Affiliates and in making any filings that
may be made by Buyer or its Affiliates with the SEC, all at the sole expense of
Buyer.
(c) Notification of Certain Matters. Each Stockholder shall give
prompt written notice to Buyer of (a) the occurrence, or failure to occur, of
any event of which he has Knowledge that has caused or that would be likely to
cause any representation or warranty of any Stockholder contained in this
Agreement or the other Transaction Documents to be untrue or inaccurate in any
material respect at any time from the date hereof to the Closing Date or (b) the
failure of any Stockholder or, to the extent of his Knowledge, the failure of
any officer, director, employee or agent of the REIT and the Subsidiaries of the
REIT, to comply with or satisfy in any material respect any covenant, condition
or agreement to be complied with or satisfied by it hereunder or thereunder. No
such notification shall affect the representations or warranties of the parties
or the conditions to their respective obligations hereunder.
(d) Third-Party Consents. After the date hereof and prior to the
Closing, each Stockholder shall use all commercially reasonable efforts,
including making any required payments, to obtain the written consent from any
party to any contract or agreement to which such Stockholder is a party that is
required to permit the consummation of the transactions contemplated hereby or
that is required to prevent a breach of such contract or agreement or the
creation of the right to terminate such contract or agreement.
(e) Resignations as Directors and Officers. At the Closing, each
Management Stockholder shall resign as a director of the REIT and its
Subsidiaries and from each position such Management Stockholder may hold as an
officer of the REIT or any of its Subsidiaries. In addition, the Management
Stockholders shall have entered into Noncompetition and Release Agreements in
favor of the REIT in the forms attached hereto as Exhibit B-1, with respect to
Xxxx X. Xxxxxxxx, Exhibit B-2, with respect to Xxxxxx X. Xxxxx, and Exhibit B-3,
with respect to Xxxxx X. Xxxxx (collectively, the "Releases"), and each
Management Stockholder shall deliver an executed copy of his respective Release
to Buyer.
(f) Additional Arrangements. Subject to the terms and conditions
herein provided, each of the Management Stockholders (in their capacities as
stockholders of the REIT) shall take, or cause to be taken, all action that
stockholders in their capacity as such can take or cause to be taken, and shall
do, or cause to be done, all things that stockholders in their capacity as such
can do or cause to be done, necessary, appropriate or desirable under any
applicable laws
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and regulations or under applicable governing agreements to consummate and make
effective the transactions contemplated by this Agreement, including using all
reasonable efforts to obtain all necessary waivers, consents and approvals and
effecting all necessary registrations and filings; provided, however, that,
except as provided in Section 3.1(d), nothing contained herein shall be
construed to require any Management Stockholder to expend any money, incur any
obligation or duty or to waive any right, privilege or preference, except as
expressly provided in the Transaction Documents, without compensation that is
acceptable to such Management Stockholder. Each of the Management Stockholders
(in their capacities as stockholders of the REIT) shall take, or cause to be
taken, all action that stockholders in their capacity as such can take or cause
to be taken, or shall do, or cause to be done, all things that stockholders in
their capacity as such can do or cause to be done, necessary, appropriate or
desirable to cause the covenants and conditions applicable to the transactions
contemplated hereby to be performed or satisfied as soon as practicable;
provided, however, that, except as provided in Section 3.1(d), nothing contained
herein shall be construed to require any Management Stockholder to expend any
money, incur any obligation or duty or to waive any right, privilege or
preference, except as expressly provided in the Transaction Documents, without
compensation that is acceptable to such Management Stockholder. In addition, if
any Governmental Entity shall have issued any order, decree, ruling or
injunction, or taken any other action that would have the effect of restraining,
enjoining or otherwise prohibiting or preventing the consummation of the
transactions contemplated hereby, each of the Management Stockholders, solely in
his capacity as a stockholder, shall use his reasonable best efforts to have
such order, decree, ruling or injunction or other action declared ineffective as
soon as practicable; provided, however, that nothing contained herein shall be
construed to require any Management Stockholder to expend any money, incur any
obligation or duty or to waive any right, privilege or preference, except as
expressly provided in the Transaction Documents, without compensation that is
acceptable to such Management Stockholder.
(g) No Amendment of Settlement Agreement. Each Management Stockholder
agrees that he shall not amend, waive, terminate or breach any provision of that
certain settlement agreement (the "Settlement Agreement") dated December 29,
2000 and entered into by and among the parties to the Internal Litigation (as
hereinafter defined), a true and correct copy of which has been delivered to
Buyer, unless such amendment, waiver or breach would not adversely affect Buyer,
Buyer's rights hereunder or the ability of Buyer, the REIT or the Stockholders
to perform on a timely basis any material obligation under this Agreement or any
of the other Transaction Documents to which such Person is a party or to
consummate the transactions contemplated hereby or thereby.
3.2 Covenants of the Buyer. Buyer covenants to each Stockholder as
follows:
(a) Assistance. If the REIT requests, Buyer shall use reasonable
efforts to cooperate in all reasonable respects in connection with any filings
that may be made by the REIT or its Affiliates with the SEC in connection with
this Agreement or the REIT Stock Purchase Agreement, all at the sole expense of
the REIT.
(b) Notification of Certain Matters. Buyer shall give prompt written
notice to each Stockholder of (i) the occurrence, or failure to occur, of any
event of which Buyer has Knowledge that has caused or that would be likely to
cause any representation or warranty of
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Buyer contained in this Agreement, the REIT Stock Purchase Agreement or the
other Transaction Documents to be untrue or inaccurate in any material respect
at any time from the date hereof through the Closing Date or (ii) the failure of
Buyer or, to the extent of its Knowledge, the failure of the REIT, or the
Subsidiaries of the REIT, to comply with or satisfy in any material respect any
covenant, condition or agreement to be complied with or satisfied by it
hereunder or thereunder. No such notification shall affect the representations
or warranties of the parties or the conditions to their respective obligations
hereunder.
(c) No Amendment of REIT Stock Purchase Agreement. Buyer agrees it
shall not amend, waive, terminate (except in accordance with its terms but other
than a termination pursuant to Section 7.1(a) thereof) or breach any provision
of the REIT Stock Purchase Agreement unless such amendment, waiver, termination
or breach would not adversely affect the ability of Buyer or the REIT to perform
on a timely basis any material obligation under this Agreement, the REIT Stock
Purchase Agreement or any of the other Transaction Documents to which Buyer is a
party or to consummate the transactions contemplated hereby or thereby.
ARTICLE 4
MUTUAL COVENANTS
4.1 Additional Agreements. Subject to the terms and conditions of this
Agreement, each of the Stockholders and Buyer will use its commercially
reasonable efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all things necessary, proper, or advisable under applicable
laws and regulations, to consummate and make effective the transactions
contemplated by this Agreement. If, at any time after the Closing Date, any
further action is necessary to comply with this Agreement, the parties to this
Agreement or their duly authorized representatives shall take all such action as
is commercially reasonable.
ARTICLE 5
CONDITIONS PRECEDENT
5.1 Conditions to Each Party's Obligation. The respective obligations of
Buyer and each Stockholder to effect the transactions contemplated hereby are
subject to the satisfaction on or prior to the Closing Date of the following
conditions:
(a) Consents and Approvals. All authorizations, consents, orders, or
approvals of, or declarations or filings with, or expirations of waiting periods
imposed by, any Governmental Entity necessary for the consummation of the
transactions contemplated by this Agreement shall have been filed, occurred, or
been obtained.
(b) No Injunctions or Restraints. No temporary restraining order,
preliminary or permanent injunction, or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the transactions contemplated hereby shall be in effect.
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(c) No Action. No action shall have been taken nor any statute, rule,
or regulation shall have been enacted by any Governmental Entity that makes the
consummation of the transactions contemplated hereby illegal.
(d) Settlement of Litigation. With respect to all litigation,
arbitration, and other proceedings described on Schedule 5.1(d) (the "Internal
Litigation"), a Joint Notice of Stipulation and Dismissal with Prejudice in the
form attached hereto as Exhibit C-1 and a Joint Stipulation of Dismissal with
Prejudice in the form attached hereto as Exhibit C-2 shall have been fully
executed and filed with the appropriate courts, and Buyer shall have received
evidence reasonably satisfactory to it of such execution and filing, and no
amendment, waiver, termination or breach of the Settlement Agreement shall have
occurred that would materially adversely affect Buyer, Buyer's rights hereunder
or the ability of Buyer, the REIT or the Stockholders to perform on a timely
basis any material obligation under this Agreement or any of the other
Transaction Documents to which such Person is a party or to consummate the
transactions contemplated hereby or thereby.
5.2 Conditions to Obligations of Buyer. The obligation of Buyer to effect
the transactions contemplated hereby is subject to the satisfaction of the
following conditions unless waived, in whole or in part, by Buyer:
(a) Representations and Warranties. The representations and warranties
of each Stockholder set forth in this Agreement shall be true and correct in all
material respects (provided that any representation or warranty of a Stockholder
contained herein that is qualified by a materiality standard or a material
adverse effect qualification shall not be further qualified hereby), and Buyer
shall have received a certificate to the foregoing effect signed by each of the
Stockholders (but only as to themselves).
(b) Performance of Obligations. The Stockholders shall have performed
in all material respects (provided that any covenant or agreement that is
qualified by a materiality standard or material adverse effect qualification
shall not be further qualified hereby) all obligations required to be performed
by them under this Agreement prior to the Closing Date, and Buyer shall have
received a certificate to such effect signed by each of the Stockholders (but
only as to themselves).
(c) Consents Under Agreements. Buyer shall have been furnished with
evidence reasonably satisfactory to it of the consent or approval of each Person
that is a party to any contract or agreement (including evidence of the payment
or any required payment) and whose consent or approval shall be required in
order to permit the consummation of the transactions contemplated hereby or to
prevent a breach of such contract or agreement or the creation of a right to
terminate such contract or agreement, and such consent or approval shall be in
form and substance reasonably satisfactory to Buyer.
(d) Closing Deliveries. All documents, instruments, certificates or
other items required to be delivered by the Stockholders pursuant to Section
6.2(b) shall have been delivered.
(e) Stock Exchange Listing. The Shares shall have been authorized for
listing on the New York Stock Exchange, subject to official notice of issuance.
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(f) Material Adverse Effect. There shall not have occurred (i) any
event, circumstance, condition, fact, effect or other matter which has had or
could reasonably be expected to have a material adverse effect on the ability of
the Stockholders to perform on a timely basis any material obligation under this
Agreement or any of the other Transaction Documents to which such Person is a
party or to consummate the transactions contemplated hereby or thereby, or (ii)
any material disruption of, or material adverse change in, financial, banking or
capital market conditions.
(g) REIT Stock Purchase Agreement. The transactions contemplated to
occur at the First Closing (as defined in the REIT Stock Purchase Agreement) by
that certain Amended and Restated Stock Purchase Agreement of even date herewith
by and between Buyer and the REIT (the "REIT Stock Purchase Agreement") shall
have been completed, in accordance with the terms of the REIT Stock Purchase
Agreement, concurrently with the Closing.
(h) Resignations as Directors and Officers. Each Management
Stockholder shall have resigned as a director of the REIT and its Subsidiaries
and from each position such Management Stockholder may hold as an officer of the
REIT or any of its Subsidiaries, and Buyer shall have received an executed copy
of each resignation required by Section 3.1(e).
5.3 Conditions to Obligations of Stockholders. The obligation of the
Stockholders to effect the transactions contemplated hereby is subject to the
satisfaction of the following conditions unless waived, in whole or in part, by
the Stockholders.
(a) Representations and Warranties. The representations and warranties
of Buyer set forth in this Agreement shall be true and correct in all material
respects (provided that any representation or warranty of Buyer contained herein
that is qualified by a materiality standard shall not be further qualified
hereby), and the Stockholders shall have received a certificate to the foregoing
effect signed on behalf of Buyer by an officer of Buyer.
(b) Performance of Obligations of Buyer. Buyer shall have performed in
all material respects (provided that any covenant or agreement that is qualified
by a materiality standard shall not be further qualified hereby) the obligations
required to be performed by it under this Agreement prior to the Closing Date,
and the Stockholders shall have received a certificate to such effect signed on
behalf of Buyer by an officer of Buyer.
(c) Closing Deliveries. All documents, instruments, certificates or
other items required to be delivered by Buyer pursuant to Section 6.2(a) shall
have been delivered.
(d) Releases. Counterparts of the Releases shall have been executed by
the REIT and delivered to the Management Stockholders.
(e) Registration Rights. REIT and Stockholders shall have entered into
an agreement providing for a resale shelf registration statement with respect to
any REIT Common Stock issuable upon exercise of the Options, to be effective for
a period of up to five years and on terms customary for agreements of such type,
including mutual indemnification provisions as are customary in similar
situations (the "Registration Rights Agreement"). The Registration Rights
Agreement shall provide that the REIT shall bear all reasonable costs and
expenses associated with such registration (except for underwriters' discounts
and commissions, if any),
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including without limitation the reasonable fees and expenses of one counsel
representing the Stockholders.
ARTICLE 6
CLOSING
6.1 Closing. The closing of the purchase and sale of the Shares (the
"Closing") shall take place, subject to the earlier satisfaction or waiver of
each of the conditions set forth in Article 5 (other than the conditions set
forth in Sections 5.2(d), 5.2(g) and 5.3(c)) concurrently with the closing of
the transactions contemplated by the REIT Stock Purchase Agreement, at 9:30
a.m., Central time, on March 9, 2001, at the offices of Xxxxxx & Xxxxxx L.L.P.,
3700 Xxxxxxxx Xxxx Center, 0000 Xxxx Xxxxxx, Xxxxxx, Xxxxx 00000, unless another
date or place is agreed to in writing by the parties (the "Closing Date").
6.2 Actions to Occur at Closing.
(a) At the Closing, Buyer shall deliver to the Stockholders the
following:
(i) Purchase Price. To each Stockholder, an amount equal to the
Initial Payment Amount multiplied by the number of Shares being sold by
such Stockholder by wire transfer of immediately available funds to an
account designated by such Stockholder; and
(ii) Certificates. The certificates referred to in Sections 5.3(a)
and 5.3(b).
(iii) Promissory Notes. Three Promissory Notes, in the form
attached hereto at Exhibit D (each a "Promissory Note"), which have an
aggregate principal amount equal to the Deferred Payment Amount multiplied
by the number of Shares being sold by the Stockholders.
(b) At the Closing, the Stockholders shall deliver to Buyer the
following:
(i) Share Certificates. Certificates representing the Shares
identified on Schedule 2.1(a)(ii), duly endorsed in blank or accompanied
by stock powers duly endorsed in blank, and otherwise in proper form for
transfer; provided, however, that the Stockholders shall use his or its
reasonable best efforts to cause the certificates for any Shares held in a
custodial account, foundation or trust (the "Nominee Shares") to be
delivered on or within 60 days after the Closing Date and, if the
certificates representing Nominee Shares are not delivered within 60 days
following the Closing Date, this Agreement shall be terminated with
respect to such Nominee Shares, and thereafter the Buyer shall have no
obligation to purchase such Nominee Shares, and such Stockholder owning
such shares shall have no obligation to sell such Nominee Shares. Nothing
to the contrary contained herein withstanding, Buyer shall have no
obligation to deliver
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payment of the Initial Installment Amount for Nominee Shares until such
time as the certificates representing such shares are tendered to Buyer;
(ii) Certificates. The certificates described in Sections 5.2(a)
and 5.2(b);
(iii) Consents. The original of each consent, if any, contemplated
by Section 5.2(c);
(iv) Releases. Provided that the condition in Section 5.3(d) has
been satisfied, counterparts of the applicable Release executed by each
Management Stockholder; and
(v) Resignations. The resignations referred to in Section 3.1(e).
ARTICLE 7
TERMINATION, AMENDMENT AND WAIVER
7.1 Termination. This Agreement may be terminated prior to the Closing:
(a) by mutual consent of Buyer and the Stockholders;
(b) by either Buyer or the Stockholders:
(i) in the event of a breach by the other party of any
representation, warranty, covenant, agreement, or obligation contained in
this Agreement which cannot be or has not been cured within ten days (the
"Cure Period") following receipt by the breaching party of written notice
of such breach; provided, however, that there shall be no right to cure
any breach of Section 1.4, Section 3.1(a) or Section 6.2; provided,
further, that no Stockholder shall be deemed to be in default of its
obligations under Section 6.2(b) as a result of any failure to obtain a
consent referred to in Section 6.2(b)(iii) (subject to compliance with the
provisions of Section 3.1(d)); and provided, further, that the
Stockholders may not terminate this Agreement pursuant to this Section
7.1(b)(i) at or prior to the Inspection Termination Time;
(ii) if a court of competent jurisdiction or other Governmental
Entity shall have issued an order, decree, or ruling or taken any other
action (which order, decree, or ruling Buyer and the Stockholders shall
use their best efforts to lift), in each case permanently restraining,
enjoining, or otherwise prohibiting the transactions contemplated by this
Agreement or the other Transaction Documents, and such order, decree,
ruling, or other action shall have become final and nonappealable; or
(iii) if the Closing shall not have occurred by 5:00 p.m., Central
time, on the 150th day after the Delivery Date (the "Final Closing Date");
provided, however, that the right to terminate this Agreement under this
clause (iii) shall not be available to any party whose breach of this
Agreement has been the cause of, or resulted in, the failure of the
Closing to occur on or before such date;
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(c) by Buyer:
(i) pursuant to the provisions of Section 1.5 upon delivery of the
notice of termination to the Xxxxxxxx Stockholders' Representative, Xxxxx
X. Xxxxx and the Xxxxx Stockholders' Representative;
(ii) if the Settlement Agreement has been amended, waived,
terminated or breached in a manner that would materially adversely affect
Buyer, Buyer's rights hereunder or the ability of Buyer, the REIT or the
Stockholders to perform on a timely basis any material obligation under
this Agreement or any of the other Transaction Documents to which such
Person is a party or to consummate the transactions contemplated hereby or
thereby;
(iii) if the REIT Stock Purchase Agreement is terminated in
accordance with its terms (other than as a result of a breach of the REIT
Stock Purchase Agreement by Buyer and other than pursuant to Section
7.1(a) thereof); or
(iv) upon the occurrence of an event described in Section 5.2(f);
or
(d) by the Stockholders, if Buyer fails to deposit $1,000,000 with the
Escrow Agent at or before 5:00 p.m., Central time, on February 28, 2001;
provided that this Agreement has not otherwise been terminated prior to such
time.
The right of any party hereto to terminate this Agreement pursuant to this
Section 7.1 shall remain operative and in full force and effect regardless of
any investigation made by or on behalf of any party hereto, any Person
controlling any such party or any of their respective officers, directors,
employees, accountants, consultants, legal counsel, agents, or other
representatives whether prior to or after the execution of this Agreement.
Notwithstanding anything in the foregoing to the contrary, a party that is in
material breach of this Agreement shall not be entitled to terminate this
Agreement except, in the case of a default by any Stockholder, with the consent
of Buyer, or in the case of a default by Buyer, with the consent of each
Stockholder.
7.2 Effect of Termination. In the event of a termination of this Agreement
by either the Stockholders or Buyer as provided above, there shall be no
liability on the part of any of the Stockholders or Buyer, except for liability
arising out of a breach of this Agreement as limited by the provisions of this
Section 7.2, except as otherwise set forth in Section 9.2. Article 9 and this
Article 7 shall survive termination of this Agreement. If, after the Inspection
Termination Time and prior to the Closing, Buyer should breach this Agreement in
a manner which gives rise to a termination right pursuant to Section 7.1(b)(i)
or 7.1(d) on the part of the Stockholders (which breach shall include a
purported or wrongful termination of this Agreement by Buyer made in breach of
this Agreement), then the Stockholders' sole and exclusive right and remedy
shall be to terminate this Agreement pursuant to Section 7.1(b)(i) or 7.1(d) and
to receive payment of the liquidated damages described below as provided in this
Section 7.2. If this Agreement is terminated by the Stockholders pursuant to
Section 7.1(b)(i) or 7.1(d), the parties agree and acknowledge that the
Stockholders will suffer damages that are not practicable to ascertain.
Accordingly, in such event and if, within ten Business Days after termination of
this Agreement
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by the Stockholders pursuant to Section 7.1(b)(i) or 7.1(d), the Stockholders
deliver to Buyer a written demand for liquidated damages and an executed copy of
the applicable release as provided in the Deposit Escrow Agreement (the
"Liquidated Damages Release"), the Stockholders shall be entitled to an
aggregate amount in cash equal to $1,000,000 (together with any Interest, as
defined in the Deposit Escrow Agreement), as liquidated damages payable by Buyer
in accordance with the provisions of the Deposit Escrow Agreement within ten
Business Days after receipt of the written demand by the Stockholders. Such
amount shall be paid to the Stockholders pro rata based on the value of the
Securities (based on the Share Purchase Price) proposed to be sold to Buyer
pursuant to the terms of this Agreement by each Stockholder. As security for
payment thereof, Buyer has concurrently with the execution hereof entered into
the Deposit Escrow Agreement with the Stockholders and the Escrow Agent as
provided in Section 1.4, and Buyer will prior to the Inspection Termination Time
deposit $1,000,000 with the Escrow Agent if this Agreement is not terminated
prior to such deposit. The parties agree that the foregoing liquidated damages
are reasonable considering all the circumstances existing as of the date hereof
and constitute the parties' good faith estimate of the actual damages reasonably
expected to be suffered by the Stockholders as a result of the termination of
this Agreement. The Stockholders agree that, to the fullest extent permitted by
law, the Stockholders' right to terminate this Agreement and to receive payment
of the liquidated damages described above as provided in this Section 7.2 shall
be the Stockholders' sole and exclusive right and remedy if the Closing does not
occur with respect to any damages whatsoever that the Stockholders may suffer or
allege to suffer as a result of any claim or cause of action asserted by the
Stockholders relating to or arising from breaches of the representations,
warranties or covenants of Buyer contained in this Agreement and to be made or
performed at or prior to the Closing. If this Agreement is terminated either by
Buyer or the Stockholders pursuant to any provision of Section 7.1 other than a
termination (A) by the Stockholders pursuant to Section 7.1(b)(i) or 7.1(d), or
(B) by Buyer pursuant to Section 7.1(c)(i), then Buyer and the Stockholders
shall instruct the Escrow Agent in writing to release the Xxxxxxx Money
(including any accrued interest thereon), if any, to Buyer. If the Stockholders
deliver to the Escrow Agent a fully executed counterpart of the Liquidated
Damages Release in accordance with the Deposit Escrow Agreement, Buyer shall be
deemed to have received a counterpart of the Liquidated Damages Release for
purposes of this Section 7.2.
ARTICLE 8
INDEMNIFICATION
8.1 Indemnification of Buyer.
(a) From and after the Closing and subject to the provisions of this
Article 8 and Section 9.2 below, each Stockholder, severally and not jointly,
agrees to indemnify and hold harmless the Buyer Indemnified Parties (as
hereinafter defined) from and against any and all Buyer Indemnified Costs (as
hereinafter defined); provided, however that the liability of any Stockholder
individually for any Buyer Indemnified Costs shall not exceed an amount equal to
the Share Purchase Price multiplied by the number of Shares purchased from such
Stockholder by Buyer.
(b) As used in this Agreement,
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(i) "Buyer Indemnified Costs" means all damages, losses, claims,
liabilities, demands, charges, suits, penalties, costs, and expenses
(including court costs and reasonable legal fees and expenses incurred in
investigating and preparing for any litigation or proceeding) that any of
the Buyer Indemnified Parties incurs and that arise out of any breach by
the indemnifying Stockholder of any of the covenants or agreements of such
Stockholder contained in this Agreement or the Deposit Escrow Agreement or
the breach by the indemnifying Stockholder of any representation or
warranty of such indemnifying Stockholder contained in Section 2.1 of this
Agreement.
(ii) "Buyer Indemnified Parties" means Buyer and each officer,
director, partner, member, manager, agent, employee, stockholder and other
Affiliate of Buyer.
8.2 Indemnification of Stockholders. From and after the Closing and
subject to the provisions of this Article 8 and Section 9.2 below, Buyer agrees
to indemnify and hold harmless each of the Stockholders from and against any and
all Stockholder Indemnified Costs. As used in this Agreement, "Stockholder
Indemnified Costs" means any and all damages, losses, claims, liabilities,
demands, charges, suits, penalties, costs, and expenses (including court costs
and reasonable legal fees and expenses incurred in investigating and preparing
for any litigation or proceeding) that any of the Stockholders incurs and that
arise out of any breach by Buyer of any of the covenants or agreements contained
in this Agreement or the Deposit Escrow Agreement or the breach of any
representation or warranty of the Buyer contained in Section 2.2 of this
Agreement.
8.3 Defense of Third Party Claims. (a) If any third party shall notice the
Buyer Indemnified Parties or the Stockholders, as the case may be (the
"Indemnified Party"), with respect to any matter which may give rise to a claim
for indemnification against any other party (the "Indemnifying Party") under
this Article 8, then the Indemnified Party shall notify each Indemnifying Party
thereof promptly; provided, however, that no delay on the part of the
Indemnified Party in notifying any Indemnifying Party shall relieve the
Indemnifying Party from any liability or obligation hereunder unless (and then
solely to the extent) the Indemnifying Party thereby is damaged. In the event
any Indemnifying Party notifies the Indemnified Party within 15 days after the
Indemnified Party has given notice of the matter that the Indemnifying Party is
assuming the defense thereof, (i) the Indemnifying Party will defend the
Indemnified Party against the matter with counsel of its choice reasonably
satisfactory to the Indemnified Party, (ii) the Indemnified Party may retain
separate co-counsel at its sole cost and expense (except that the Indemnifying
Party will be responsible for the fees and expenses of the separate co-counsel
to the extent the Indemnified Party concludes reasonably that the counsel the
Indemnifying Party has selected has a conflict of interest), (iii) the
Indemnified Party will not consent to the entry of any judgment or enter into
any settlement from all liability with respect to the matter without the written
consent of the Indemnifying Party (not to be withheld unreasonably) and (iv) the
Indemnifying Party will not consent to the entry of any judgment with respect to
the matter, or enter into any settlement from all liability with respect
thereto, without the written consent of the Indemnified Party (not to be
withheld unreasonably). An Indemnifying Party who fails to give the Indemnified
Party notice within such 15-day period that the Indemnifying Party is assuming
the defense of the matter shall have waived its right to assume the defense
thereof.
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(b) Notwithstanding the provisions of Section 8.3(a), the Indemnifying
Party shall not be entitled to control (but shall be entitled to participate at
its own expense in the defense of), and the Indemnified Party shall be entitled
to have sole control over, the defense or settlement, compromise, admission, or
acknowledgement of any third-party action to the extent that the third-party
action seeks an order, injunction, or other equitable relief against the
Indemnified Party which, if successful, would materially adversely affect the
business, operations, assets, or financial condition of the Indemnified Party.
The parties hereto shall extend reasonable cooperation in connection with
the defense of any third-party action pursuant to this Article 8 and, in
connection therewith, shall furnish such records, information and testimony and
attend such conferences, discovery proceedings, hearings, trials and appeals as
may be reasonably requested.
8.4 Direct Claims. In any case in which an Indemnified Party seeks
indemnification hereunder which is not subject to Section 8.3 because no
third-party action is involved, the Indemnified Party shall notify the
Indemnifying Party in writing of any Buyer Indemnified Costs or Stockholder
Indemnified Costs, as the case may be ("Indemnified Costs"), which such
Indemnified Party claims are subject to indemnification under the terms hereof.
Subject to the limitations set forth in Section 9.2, the failure of the
Indemnified Party to exercise promptness in such notification shall not amount
to a waiver of such claim unless (and then solely to the extent) the resulting
delay materially prejudices the position of the Indemnifying Party with respect
to such claim.
8.5 Limitations. The following provisions of this Section 8.5 shall be
applicable after the time of the Closing:
(a) Limitation as to Time. No Indemnifying Party shall be liable for
any Indemnified Costs pursuant to this Article 8 unless a written claim for
indemnification in accordance with Section 8.3 or 8.4 is given by the
Indemnified Party to the Indemnifying Party with respect thereto on or before
the first anniversary of the Closing Date, except that this time limitation
shall not apply to any (i) claims for fraud pursuant to Section 9.2 or (ii)
claims for breaches of the representations and warranties contained in Section
2.1(a) (relating to ownership of the Securities) and Section 2.1(b) (relating to
capacity of the Stockholders), which representations and warranties shall
survive until the expiration of the applicable statute of limitations.
(b) No Contribution. Effective as of the Closing, the Stockholders
waive and release any and all rights that they may have under this Agreement or
any other Transaction Document to assert claims of contribution against the REIT
or any of its Subsidiaries in respect of liability of Stockholders for breaches
of any representation, warranty or covenant of the Stockholders in any of the
Transaction Documents.
8.6 Tax Related Adjustments. The Stockholders and Buyer agree that any
payment of Indemnified Costs made hereunder will be treated by the parties on
their Tax Returns as an adjustment to the total purchase price paid for the
Shares pursuant to Section 1.2. If, notwithstanding such treatment by the
parties, any payment of Indemnified Costs is determined to be taxable income
rather than adjustment to such total purchase price by any taxing authority,
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then the Indemnifying Party shall indemnify the Indemnified Party for any Taxes
payable by the Indemnified Party or any subsidiary by reason of the receipt of
such payment (including any payments under this Section 8.6), determined at an
assumed marginal tax rate equal to the highest marginal tax rate then in effect
for corporate taxpayers in the relevant jurisdiction.
ARTICLE 9
GENERAL PROVISIONS
9.1 Survival of Representations, Warranties, and Covenants. Regardless of
any investigation at any time made by or on behalf of any party hereto or of any
information any party may have in respect thereof, each of the representations
and warranties made in this Agreement or any other Transaction Document shall
survive the Closing as provided below. The representations and warranties set
forth in this Agreement (other than representations and warranties contained in
Section 2.1(a) (relating to ownership of the Shares) and Section 2.1(b)
(relating to authority of the Stockholders), which representations and
warranties shall survive until the expiration of the applicable statute of
limitations) or any other Transaction Document shall terminate on the first
anniversary of the Closing Date. Following the date of termination of a
representation or warranty, no claim can be brought with respect to a breach of
such representation or warranty, but no such termination shall affect any claim
for a breach of a representation or warranty that was asserted in writing
pursuant to Section 8.3 or Section 8.4 hereof before the date of termination. To
the extent that such are performable after the Closing, each of the covenants
and agreements contained in each of the Transaction Documents shall survive the
Closing indefinitely; provided, however, effective as of the Closing, the
Stockholders, on the one hand, and Buyer, on the other hand, shall be deemed to
have waived any and all rights and remedies as to any breach by the other party
of any covenant and agreement of such party contained in each Transaction
Document to be performed by such party at or prior to the Closing.
9.2 No Waiver Relating to Claims for Fraud. The liability of any party
under Article 8 shall be in addition to, and not exclusive of, any other
liability that such party may have at law or equity based on such party's
fraudulent acts or omissions. None of the provisions set forth in this
Agreement, including but not limited to the provisions set forth in Section 8.5,
shall be deemed a waiver by any party to this Agreement of any right or remedy
which such party may have at law or equity based on any other party's fraudulent
acts or omissions, nor shall any such provisions limit, or be deemed to limit,
(a) the time period during which a claim for fraud may be brought, or (b) the
recourse which any such party may seek against another party with respect to a
claim for fraud; provided, that with respect to such rights and remedies at law
or equity, the parties further acknowledge and agree that none of the provisions
of this Section 9.2, nor any reference to this Section 9.2 throughout this
Agreement, shall be deemed a waiver of any defenses which may be available in
respect of actions or claims for fraud, including but not limited to, defenses
of statutes of limitations or limitations of damages.
9.3 Amendment and Modification. This Agreement may not be amended except
by an instrument in writing signed by the parties hereto or by Buyer and the
Stockholders (or, in the case of the Xxxxxxxx Stockholders and the Xxxxx
Stockholders, by the Xxxxxxxx Stockholders' Representative and/or the Xxxxx
Stockholders' Representative, as applicable).
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9.4 Waiver of Compliance. Any failure of Buyer on the one hand, or a
Stockholder, on the other hand, to comply with any obligation, covenant,
agreement, or condition contained herein may be waived only if set forth in an
instrument in writing signed by the party or parties to be bound by such waiver,
but such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement, or condition shall not operate as a waiver of,
or estoppel with respect to, any other failure.
9.5 Specific Performance. The parties recognize that in the event a
Stockholder should refuse to perform under the provisions of this Agreement,
monetary damages alone will not be adequate. Buyer shall therefore be entitled,
in addition to any other remedies which may be available, including money
damages, to obtain specific performance of the terms of this Agreement. Provided
that Buyer timely complies with its obligations under Section 1.4, in the event
of any action to enforce this Agreement specifically, the Stockholders hereby
waive the defense that there is an adequate remedy at law. Provided that Buyer
timely complies with its obligations under Section 1.4, in no event shall the
Stockholders be entitled to seek specific performance with respect to any of
Buyer's obligations arising under this Agreement.
9.6 Severability. If any term or other provision of this Agreement is
determined by a court of competent jurisdiction to be invalid, illegal, or
incapable of being enforced under any rule of applicable 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 herein are not affected in any manner materially
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 a mutually acceptable manner in
order that the transactions contemplated herein are consummated as originally
contemplated to the fullest extent possible.
9.7 Expenses and Obligations. Except as otherwise expressly provided in
this Agreement or as provided by law, if the Closing does not occur, all costs
and expenses incurred by the parties hereto in connection with the consummation
of the transactions contemplated hereby shall be borne solely and entirely by
the party which has incurred such expenses; provided, however, that this Section
9.7 shall not relieve any party from any liability resulting from such party's
breach of this Agreement. If the Closing does occur, then, except as so
provided, all costs and expenses incurred by the Stockholders, on the one hand,
and Buyer, on the other, in connection with such consummation shall be borne
solely and entirely by the Stockholders and Buyer, respectively. Notwithstanding
the foregoing, upon the Closing, Buyer shall pay $131,250, Xxxx X. Xxxxxxxx
shall pay $30,535.72, Xxxxxx X. Xxxxx shall pay $20,357.14, Xxxxx X. Xxxxx shall
pay $20,357.14, and the REIT shall pay $60,000 (or an aggregate of $262,500) to
Xxxxxxxxxxx Xxxx & Company, Inc. as a result of the consummation of the
transactions contemplated hereby.
9.8 Parties in Interest. This Agreement shall be binding upon and, except
as provided below, inure solely to the benefit of each party hereto and their
successors, assigns and transferees, and nothing in this Agreement, except as
set forth below, express or implied, is intended to confer upon any other Person
(other than the Indemnified Parties as provided in Article 8) any rights or
remedies of any nature whatsoever under or by reason of this Agreement.
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9.9 Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied, or mailed
by registered or certified mail (return receipt requested), or sent by Federal
Express or other recognized overnight courier, 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 Buyer, to:
Lone Star Fund III (U.S.), L.P.
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000, XX 164
Xxxxxx, Xxxxx 00000
Attention: X.X. Dell
Facsimile: (000) 000-0000
with copies to:
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxxxxxx Xxxx Xxxxxx
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000
(b) If to the Stockholders, to:
Xxxx X. Xxxxxxxx
Xxx X. & Xxxx X. Xxxxxxxx, Xx. Tn.
Xxx X. Xxxxxxxx, Custodian for Xxxx X. Xxxxxxxx UTXUTMA
Xxx X. Xxxxxxxx, Custodian for Xxxxxxx Xxxxxxxx UTXUTMA
Xxx X. Xxxxxxxx Trustee of Xxxx X. Xxxxxxxx Legacy Trust
Xxxx X. Xxxxxxxx Trustee of Xxx X. Xxxxxxxx Legacy Trust
The Xxx X. and Xxxx X. Xxxxxxxx Foundation
c/x Xxxxxxxx Stockholders' Representative
00000 Xxxxxx Xxxx
Xxxxxx, Xxxxx 00000
Facsimile: (000) 000-0000
Xxxxxx X. Xxxxx
Xxxxxx X. Xxxxx, Trustee of the Xxxxxx X. Xxxxx Living Trust
U/A/D 4/21/97
0000 Xxxxx Xxxx Xxxx
Xxxxxxx, Xxxxxx 00000
Facsimile: (000) 000-0000
Xxxxx X. Xxxxx
00
00
x/x XXXXXX Management Corporation
0000 Xxxxx Xxxx Xxxx
Xxxxxxx, Xxxxxx 00000
Facsimile: (000) 000-0000
with copies to:
Akin, Gump, Strauss, Xxxxx & Xxxx, L.L.P.
0000 Xxxxxxx Xxx., Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxx
Facsimile: (000) 000-0000
and
Xxxxxxxx & Xxxxxx L.L.P.
0000 Xxxxxxx Xxx., Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxx
Facsimile: (000) 000-0000
Any of the above addresses may be changed at any time by notice given as
provided above; provided, however, that any such notice of change of address
shall be effective only upon receipt. All notices, requests or instructions
given in accordance herewith shall be deemed received on the date of delivery,
if hand delivered, on the date of receipt, if telecopied, three Business Days
after the date of mailing, if mailed by registered or certified mail, return
receipt requested, and one Business Day after the date of sending, if sent by
Federal Express or other recognized overnight courier.
9.10 Counterparts. This Agreement may be executed and delivered (including
by facsimile transmission) in counterparts, all of which shall be considered one
and the same agreement and shall become effective when one or more counterparts
have been signed by each of the parties and delivered to the other parties, it
being understood that all parties need not sign the same counterpart.
9.11 Entire Agreement. This Agreement (which term shall be deemed to
include the exhibits and schedules hereto and the other certificates, documents
and instruments delivered hereunder), along with the other agreements referenced
herein, constitutes the entire agreement of the parties hereto and supersedes
all prior agreements, letters of intent and understandings, both written and
oral, among the parties with respect to the subject matter hereof. There are no
representations or warranties, agreements, or covenants other than those
expressly set forth in this Agreement.
9.12 Governing Law. This Agreement shall be construed in accordance with
and governed by the internal law of the State of Delaware (without reference to
its rules as to conflicts of law).
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9.13 Arbitration. Any controversy or claim arising out of or relating to
this Agreement, the other Transaction Documents, and the transactions
contemplated herein or therein, or the breach thereof, shall be settled by
arbitration administered by the American Arbitration Association in accordance
with its Commercial Arbitration Rules, and judgment on the award rendered by the
arbitrator may be entered in any court having jurisdiction thereof. The
arbitration shall be conducted under the Emergency Interim Relief Procedures of
the AAA Commercial Arbitration Rules. The arbitration tribunal shall be composed
of a single arbitrator, to be appointed pursuant to AAA rules and Emergency
Interim Relief Procedures. The Optional Rules for Large, Complex Commercial
Disputes shall not apply. Pursuant to Rule E-8, the arbitration hearing shall be
conducted in Dallas, Texas, within 30 days after confirmation of the
arbitrator's appointment. The arbitrator shall not have the authority to award
punitive damages.
9.14 Public Announcements. The Stockholders, on the one hand, and Buyer,
on the other, shall consult with each other before issuing any press release or
otherwise making any public statements with respect to this Agreement or the
transactions contemplated hereby, except for statements required by law or by
any listing agreements with any national securities exchange or the National
Association of Securities Dealers, Inc., or made in disclosures filed pursuant
to the Securities Act or the Exchange Act.
9.15 Assignment. Neither this Agreement nor any of the rights, interests,
or obligations hereunder shall be assigned by any of the parties hereto, whether
by operation of law or otherwise; provided, however, that upon notice to the
Stockholders and without releasing Buyer from any of its obligations or
liabilities hereunder, (a) Buyer may assign or delegate any or all of its rights
or obligations under this Agreement to any one or more Affiliates of Buyer or
any Person with or into which Buyer or any parent company of Buyer merges or
consolidates and (b) nothing in this Agreement shall limit Buyer's ability to
make a collateral assignment of its rights under this Agreement to any
institutional lender that provides funds to Buyer without the consent of the
Stockholders. The Stockholders shall execute an acknowledgment of such
collateral assignments in such forms as Buyer's lenders may from time to time
reasonably request; provided, however, that unless written notice is given to
the Stockholders that any such collateral assignment has been foreclosed upon,
the Stockholders shall be entitled to deal exclusively with Buyer as to any
matters arising under this Agreement or any of the other agreements delivered
pursuant hereto. In the event of such an assignment, the provisions of this
Agreement shall inure to the benefit of and be binding on Buyer's assigns. Any
attempted assignment in violation of this Section 9.15 shall be null and void.
9.16 No Affiliate Liability. Each of the following is herein referred to
as a "Buyer Affiliate": (a) any direct or indirect holder of any equity
interests or securities in Buyer (whether limited or general partners, members,
stockholders or otherwise), (b) any Affiliate of Buyer, or (c) any director,
officer, employee, representative or agent of (i) Buyer, (ii) any Affiliate of
Buyer or (iii) any such holder of equity interests or securities referred to in
clause (a) above. No Buyer Affiliate shall have any liability or obligation of
any nature whatsoever in connection with or under this Agreement or the other
Transaction Documents or the transactions contemplated hereby or thereby (other
than Buyer or an assignee of this Agreement), and the Stockholders hereby waive
and release all claims of any such liability and obligation, it being understood
that no such Person or entity (other than Buyer or an assignee of this
Agreement) shall be liable for or
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in respect of this Agreement or the other Transaction Documents and the
transactions contemplated hereby or thereby.
9.17 Construction of "Stockholders." Except as otherwise expressly
provided herein, all references to "Stockholders" herein shall mean all
Stockholders and any action to be taken by the Stockholders must be taken by all
of the Stockholders.
9.18 Headings. The headings of this Agreement are for convenience of
reference only and are not part of the substance of this Agreement.
9.19 Appointment of Stockholders' Representatives.
(a) Xxxxxxxx Stockholders' Representative.
(i) By the execution and delivery of this Agreement, each of Xxxx
X. Xxxxxxxx, Xxx X. & Xxxx X. Xxxxxxxx, Xx. Tn., the Xxxx X. Xxxxxxxx
UTXUTMA, the Xxxxxxx Xxxxxxxx UTXUTMA, the Xxxx X. Xxxxxxxx Legacy Trust,
the Xxxx X. Xxxxxxxx Legacy Trust, the Xxx X. and Xxxx X. Xxxxxxxx
Foundation and Xxx X. Xxxxxxxx (collectively, the "Xxxxxxxx Stockholders")
hereby irrevocably constitute and appoint Xxxx X. Xxxxxxxx as the true and
lawful agent and attorney-in-fact (the "Xxxxxxxx Stockholders'
Representative") of such Xxxxxxxx Stockholder with full authority and
power of substitution to act in the name, place and stead of such Xxxxxxxx
Stockholder with respect to the consummation of the transactions
contemplated hereunder and under any other Transaction Documents.
(ii) Buyer, the other Buyer Indemnified Parties, and any other
person, may conclusively and absolutely rely, without inquiry, upon any
action of the Xxxxxxxx Stockholders' Representative as the action of each
Xxxxxxxx Stockholder in all matters referred to herein, and each Xxxxxxxx
Stockholder confirms all that the Margolin Stockholders' Representative
shall do or cause to be done by virtue of his or her or its appointment as
the Xxxxxxxx Stockholders' Representative.
(iii) Each Xxxxxxxx Stockholder covenants and agrees that it will
not voluntarily revoke the power of attorney conferred in this Section
9.19(a). If any Xxxxxxxx Stockholder dies or becomes incapacitated,
disabled or incompetent (such deceased, incapacitated, disabled or
incompetent Xxxxxxxx Stockholder being a "Former Margolin Stockholder")
and, as a result, the power of attorney conferred by this Section 9.19(a)
is revoked by operation of law, it shall not be a breach by such Former
Xxxxxxxx Stockholder under this Agreement if the heirs, beneficiaries,
estate, administrator, executor, guardian, conservator or other legal
representative of such Former Xxxxxxxx Stockholder (each a "Successor
Xxxxxxxx Stockholder") confirms the appointment of the Xxxxxxxx
Stockholders' Representative as agent and attorney-in-fact for such
Successor Xxxxxxxx Stockholder. Notwithstanding the foregoing sentence, if
the power of attorney conferred by this Section 9.19(a) is revoked by
operation of law and thereafter not reconfirmed by the Successor Xxxxxxxx
Stockholder prior to the Closing, such revocation shall not be deemed a
breach by the Successor Xxxxxxxx Stockholder of any of the provisions of
this Agreement provided that the Securities held by such Successor
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Xxxxxxxx Stockholder are delivered for transfer to Buyer at the Closing
duly endorsed for transfer or accompanied by stock powers duly endorsed
for transfer and further provided that such Successor Xxxxxxxx Stockholder
executes and delivers such other certificates, documents or instruments
(including, without limitation, any amendments hereto, and the Deposit
Escrow Agreement) that would have been delivered on its behalf by the
Xxxxxxxx Stockholders' Representative had such Successor Xxxxxxxx
Stockholder reconfirmed the agency and power of attorney conferred by this
Section 9.19(a). The Xxxxxxxx Stockholders' Representative may resign as
the Xxxxxxxx Stockholders' Representative for any reason and at any time
by written notice to Buyer and each Xxxxxxxx Stockholder. If at any time
Xxxx X. Xxxxxxxx (or any successor Xxxxxxxx Stockholders' Representative)
resigns from his, her or its position as the Xxxxxxxx Stockholders'
Representative, the Majority-in-Interest (as hereinafter defined) of the
Xxxxxxxx Stockholders shall designate a successor as soon as practicable
and shall notify Buyer in writing of such designation. Upon written notice
delivered to Buyer, the Xxxxxxxx Stockholders may change the identity of
the Xxxxxxxx Stockholders' Representative by written consent signed by the
Majority-in-Interest of the Xxxxxxxx Stockholders (including as a result
of the resignation by the Margolin Stockholders' Representative).
"Majority-in-Interest" means, with respect to a group of Stockholders,
Stockholders whose shares represent more than 50% of the REIT Common Stock
(based on shares of the REIT Common Stock actually issued and outstanding
at the time of determination and, with respect to any time following the
Closing, as of the Closing Date) collectively owned by such group.
(iv) Each of the Xxxxxxxx Stockholders hereby consents and agrees
to all actions or inactions taken or omitted to be taken in good faith by
the Margolin Stockholders' Representative under this Agreement, the
Deposit Escrow Agreement or any other Transaction Document and hereby
agrees to indemnify and hold harmless the Xxxxxxxx Stockholders'
Representative from and against all damages, losses, liabilities, charges,
penalties, costs and expenses (including court costs and legal fees and
expenses) incurred in any claim, action, dispute or proceeding between any
such person or persons and the Xxxxxxxx Stockholders (or any of them) or
between any such person or persons and any third party or otherwise
incurred or suffered as a result of or arising out of such actions or
inactions.
(b) Xxxxx Stockholders' Representative.
(i) By the execution and delivery of this Agreement, each of
Xxxxxx X. Xxxxx and the Xxxxxx X. Xxxxx Living Trust U/A/D 4/21/97
(collectively, the "Xxxxx Stockholders") hereby irrevocably constitute and
appoint Xxxxxx X. Xxxxx as the true and lawful agent and attorney-in-fact
(the "Xxxxx Stockholders' Representative") of such Xxxxx Stockholder with
full authority and power of substitution to act in the name, place and
stead of such Xxxxx Stockholder with respect to the consummation of the
transactions contemplated hereunder and under any other Transaction
Documents.
(ii) Buyer, the other Buyer Indemnified Parties, and any other
person, may conclusively and absolutely rely, without inquiry, upon any
action of the Xxxxx Stockholders' Representative as the action of each
Xxxxx Stockholder in all matters
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referred to herein, and each Xxxxx Stockholder confirms all that the Xxxxx
Stockholders' Representative shall do or cause to be done by virtue of his
or her or its appointment as the Xxxxx Stockholders' Representative.
(iii) Each Xxxxx Stockholder covenants and agrees that it will not
voluntarily revoke the power of attorney conferred in this Section
9.19(b). If any Xxxxx Stockholder dies or becomes incapacitated, disabled
or incompetent (such deceased, incapacitated, disabled or incompetent
Xxxxx Stockholder being a "Former Xxxxx Stockholder") and, as a result,
the power of attorney conferred by this Section 9.19(b) is revoked by
operation of law, it shall not be a breach by such Former Xxxxx
Stockholder under this Agreement if the heirs, beneficiaries, estate,
administrator, executor, guardian, conservator or other legal
representative of such Former Xxxxx Stockholder (each a "Successor Xxxxx
Stockholder") confirms the appointment of the Xxxxx Stockholders'
Representative as agent and attorney-in-fact for such Successor Xxxxx
Stockholder. Notwithstanding the foregoing sentence, if the power of
attorney conferred by this Section 9.19(b) is revoked by operation of law
and thereafter not confirmed by the Successor Xxxxx Stockholder prior to
the Closing, such revocation shall not be deemed a breach by the Successor
Xxxxx Stockholder of any of the provisions of this Agreement provided that
the Securities held by such Successor Xxxxx Stockholder are delivered for
transfer to Buyer at the Closing duly endorsed for transfer or accompanied
by stock powers duly endorsed for transfer and further provided that such
Successor Xxxxx Stockholder executes and delivers such other certificates,
documents or instruments (including, without limitation, any amendments
hereto, and the Deposit Escrow Agreement) that would have been delivered
on its behalf by the Xxxxx Stockholders' Representative had such Successor
Xxxxx Stockholder confirmed the agency and power of attorney conferred by
this Section 9.19(b). The Xxxxx Stockholders' Representative may resign as
the Xxxxx Stockholders' Representative for any reason and at any time by
written notice to Buyer and each Xxxxx Stockholder. If at any time Xxxxxx
X. Xxxxx (or any successor Xxxxx Stockholders' Representative) resigns
from his, her or its position as the Xxxxx Stockholders' Representative,
the Majority-in-Interest of the Xxxxx Stockholders shall designate a
successor as soon as practicable and shall notify Buyer in writing of such
designation. Upon written notice delivered to Buyer, the Xxxxx
Stockholders may change the identity of the Xxxxx Stockholders'
Representative by written consent signed by the Majority-in-Interest of
the Xxxxx Stockholders (including as a result of the resignation by the
Xxxxx Stockholders' Representative).
(iv) Each of the Xxxxx Stockholders hereby consents and agrees to
all actions or inactions taken or omitted to be taken in good faith by the
Xxxxx Stockholders' Representative under this Agreement, the Deposit
Escrow Agreement or any other Transaction Document and hereby agrees to
indemnify and hold harmless the Xxxxx Stockholders' Representative from
and against all damages, losses, liabilities, charges, penalties, costs
and expenses (including court costs and legal fees and expenses) incurred
in any claim, action, dispute or proceeding between any such person or
persons and the Xxxxx Stockholders (or any of them) or between any such
person or persons and any third party or otherwise incurred or suffered as
a result of or arising out of such actions or inactions.
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9.20 Deletion of Certain Xxxxx Stockholders.. Xxxxxx X. Xxxxx, as the
Xxxxx Stockholders' Representative pursuant to the terms and conditions of the
Original Agreement, hereby acknowledges and consents to the deletion of the
Xxxxx X. Xxxxx Living Trust, U/A/D 4/21/97, Xxxx Xxxxx Xxxxx Trust DTD 12/21/77,
the Xxxxxx Xxxx Xxxxx Trust DTD 12/21/77 and the Xxxxxxx X. Xxxxx Charitable
Trust U/A/D 12/23/97 from the Original Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY BLANK]
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IN WITNESS WHEREOF, the Stockholders (directly or through the Xxxxxxxx
Stockholders' Representative or the Xxxxx Stockholders' Representative, as the
case may be, pursuant to the terms and provisions of the Original Agreement) and
Buyer have caused this Agreement to be signed, all as of the date first written
above.
BUYER:
LONE STAR U.S. ACQUISITIONS, LLC
By: /s/ XXXXX X. XXXX
------------------------------------------------
Name: Xxxxx X. Xxxx
----------------------------------------------
Title: President
---------------------------------------------
STOCKHOLDERS:
/s/ XXXX X. XXXXXXXX
---------------------------------------------------
Xxxx X. Xxxxxxxx, individually and as the Xxxxxxxx
Stockholders' Representative on behalf of:
Xxx X. & Xxxx X. Xxxxxxxx, Xx. Tn.
Xxx X. Xxxxxxxx, Custodian for Xxxx X. Xxxxxxxx
UTXUTMA
Xxx X. Xxxxxxxx, Custodian for Xxxxxxx Xxxxxxxx
UTXUTMA
Xxx X. Xxxxxxxx, Trustee of Xxxx X. Xxxxxxxx
Legacy Trust
Xxxx X. Xxxxxxxx, Trustee of Xxx X. Xxxxxxxx
Legacy Trust
The Xxx X. and Xxxx X. Xxxxxxxx Foundation
S-1
35
/s/ XXXXXX X. XXXXX
---------------------------------------------------
Xxxxxx X. Xxxxx, individually and as the Xxxxx
Stockholders' Representative on behalf of:
Xxxxxx X. Xxxxx, Trustee of the Xxxxxx X. Xxxxx
Living Trust U/A/D 4/21/97
/s/ XXXXX X. XXXXX
---------------------------------------------------
Xxxxx X. Xxxxx
S-2
36
Accepted and Agreed as of the
date first above written:
The undersigned has executed this Agreement for the purpose of consenting to
this Agreement and agreeing to be bound by the terms hereof with respect to her
present or future community property interest (if any) in all Shares of which
her spouse is or will become the record or beneficial owner. Nothing in this
Agreement is intended to, and this Agreement shall not, confer any community
property interest in any Shares or any other asset to the spouse of any
signatory hereto.
/s/ XXX XXXXXXXX
------------------------------------
Xxx Xxxxxxxx
S-3
37
EXHIBIT A
FORM OF DEPOSIT ESCROW AGREEMENT
A-1
38
EXHIBIT B-1
FORM OF NONCOMPETITION AND RELEASE AGREEMENT
(XXXX X. XXXXXXXX)
B-1-1
39
EXHIBIT B-2
FORM OF NONCOMPETITION AND RELEASE AGREEMENT
(XXXXXX X. XXXXX)
B-2-1
40
EXHIBIT B-3
FORM OF NONCOMPETITION AND RELEASE AGREEMENT
(XXXXX X. XXXXX)
B-3-1
41
EXHIBIT C-1
JOINT NOTICE AND STIPULATION OF DISMISSAL WITH PREJUDICE
C-1-1
42
EXHIBIT C-2
JOINT STIPULATION OF DISMISSAL WITH PREJUDICE
C-2-1
43
EXHIBIT D
FORM OF PROMISSORY NOTE
D-1-1
44
SCHEDULE 2.1(a)(i)
SECURITIES OWNED BY STOCKHOLDERS
A Ownership of Xxxxxxxx and his Affiliates:
Common Shares of USRP Stock:
Xxxx X. Xxxxxxxx 766,500
Xxx X. Xxxx X. Xxxxxxxx, Xx. Tn. 27,932
Xxx X. Xxxxxxxx XXX 2,190
Xxx X. Xxxxxxxx, Custodian for Xxxx X. Xxxxxxxx UTXUTMA 2,823
Xxx X. Xxxxxxxx, Custodian for Xxxxxxx Xxxxxxxx 4,110
Xxx X. Xxxxxxxx Trustee of Xxxx X. Xxxxxxxx Legacy Trust 1,833.5
Xxxx X. Xxxxxxxx XXX 4,324
Xxxx X. Xxxxxxxx Trustee of Xxx X. Xxxxxxxx Legacy Trust 1,833.5
The Xxx X. and Xxxx X. Xxxxxxxx Foundation 8,800
Preferred Shares of USRP Stock:
Xxx X. Xxxxxxxx XXX 1,200
Xxx X. Xxxxxxxx, Custodian for Xxxxxxx Xxxxxxxx UTXUTMA 5,000
Xxxx X. Xxxxxxxx XXX 4,000
The Xxx X. and Xxxx X. Xxxxxxxx Foundation 5,000
Options to Purchase Common Shares of USRP Stock:
Xxxx Xxxxxxxx 24,000
B. Ownership of Xxxxxx X. Xxxxx and his Affiliates:
Common Shares of USRP Stock:
Xxxxxx X. Xxxxx, Trustee of the Xxxxxx X.
Xxxxx Living Trust U/A/D 4/21/97 526,999
Xxxxx X. Xxxxx & Xxxxxx X. Xxxxx, Trustees
of the Xxxxx X. Xxxxx Living Trust, U/A/D 4/21/97 51,000
Xxxxx X. Xxxxx, Trustee of the Xxxx Xxxxx Xxxxx
Trust DTD 12/21/77 4,000
Xxxxx X. Xxxxx, Trustee of the Xxxxxx Xxxx Xxxxx
Trust DTD 12/21/77 3,000
Xxxxxx X. Xxxxx, Trustee of the Xxxxxxx X. Xxxxx
Charitable Trust U/A/D 12/23/97 8,000
Options to Purchase Common Shares of USRP Stock:
Xxxxxx X. Xxxxx, Trustee of the Xxxxxx X. Xxxxx
Living Trust U/A/D 4/21/97 16,000
C. Ownership of Xxxxx X. Xxxxx
Common Shares of USRP Stock: 515,499
Options to Purchase Common Shares of USRP Stock: 16,000
45
SCHEDULE 2.1(a)(ii)
SHARES TO BE SOLD BY STOCKHOLDERS
A Xxxxxxxx and Xxxxxxxx Stockholders:
Common Shares of USRP Stock:
Xxxx X. Xxxxxxxx 766,500
Xxx X. Xxxx X. Xxxxxxxx, Xx. Tn. 27,932
Xxx X. Xxxxxxxx, Custodian for Xxxx X. Xxxxxxxx UTXUTMA 2,823
Xxx X. Xxxxxxxx, Custodian for Xxxxxxx Xxxxxxxx 4,110
Xxx X. Xxxxxxxx Trustee of Xxxx X. Xxxxxxxx Legacy Trust 1,833.5
Xxxx X. Xxxxxxxx Trustee of Xxx X. Xxxxxxxx Legacy Trust 1,833.5
The Xxx X. and Xxxx X. Xxxxxxxx Foundation 8,800
Certain shares of USRP common stock owned by Xx. Xxxxxxxx are pledged to Intrust Bank,
N.A. in Wichita, Kansas as security for a loan. The loan will be paid off at Closing.
B. Xxxxxx X. Xxxxx and the Xxxxx Stockholders:
Common Shares of USRP Stock:
Xxxxxx X. Xxxxx, Trustee of the Xxxxxx X.
Xxxxx Living Trust U/A/D 4/21/97 526,999
C. Xxxxx X. Xxxxx
Common Shares of USRP Stock: 515,499
46
SCHEDULE 2.1(c)
a. Indemnification rights under (i) charter and bylaws of USRP and QSV and (ii)
Indemnification Agreements between USRP and each of the Stockholders dated
June 1, 1999.
b. Noncompetition and Release Agreements between USRP and each of Xxxxxxxx,
X.X. Xxxxx and X.X. Xxxxx to be entered into at the Closing.
c. Settlement Agreement relating to the Internal Litigation.
d. Ownership of Securities as set forth on Schedule 2.1(a)(i).
e. Xxxxxx X. Xxxxxx has indemnification rights under (i) charter and bylaws of
USRP and (ii) an Indemnification Agreement with URRP dated June 1, 1999.
