EXHIBIT 1
CONFIDENTIAL VERSION
STOCK PURCHASE OPTION AGREEMENT
THIS STOCK PURCHASE OPTION AGREEMENT is made as of February 4, 2004
(the "Agreement"), by and between XXXXXXX XXXXXX, 00000 Xxxxxxx, Xxxxxxxx, XX
00000 ("Xxxxxxx"), XXXXXX XXXXXX, 00000 Xxxxxxx, Xxxxxxxx, XX 00000 ("Xxxxxx",
collectively referred to in this Agreement with Xxxxxxx, as "Xxxxxx"), and
[CONFIDENTIAL TREATMENT -- INFORMATION FILED SEPARATELY WITH THE COMMISSION]
("Optionee").
RECITALS
WHEREAS, Xxxxxxx is the Chief Executive Officer and Chairman of the
Board of Lannett Company, Inc. (the "Company").
WHEREAS, Xxxxxxx owns 13,242,379 shares of common stock, $.001 par
value per share, of the Company ("Common Stock") ("William's Certificated
Shares") and 26,250 shares of Common Stock through his Individual Retirement
Account (the "XXX Shares", which together with William's Certificated Shares,
shall be referred to in this Agreement collectively as "William's Shares"), in
each case subject to adjustment as provided in Section 6.11 below.
WHEREAS, Xxxxxxx owns options to purchase 37,500 shares of Common Stock
(the "In-the-Money Options") and options to purchase 25,000 shares of Common
Stock (the "Out-of-the-Money Options", which together with the
In-the-Money-Option, shall be referred to in this Agreement collectively as
"William's Stock Options"), in each case subject to adjustment as provided in
Section 6.11 below.
WHEREAS, Xxxxxx owns 250,500 shares of Common Stock ("Audrey's Shares",
which together with William's Shares and the shares of Common Stock issuable
upon exercise of William's Stock Options, shall be referred to in this Agreement
collectively as the "Xxxxxx Common Stock").
WHEREAS, Xxxxxx desires to grant to Optionee the option to purchase the
Xxxxxx Common Stock, and Optionee desires to obtain the option to purchase from
Xxxxxx the Xxxxxx Common Stock, on the terms and subject to the conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the following mutual covenants and
agreements, the parties agree as follows:
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OPTION TO PURCHASE XXXXXX COMMON STOCK
1.1 OPTION TO PURCHASE XXXXXX COMMON STOCK. Subject to the terms and
conditions of this Agreement, and in reliance on the representations and
warranties contained in this Agreement, Xxxxxx grants to Optionee the sole and
exclusive option (the "Option"),
irrevocable until 5 p.m. EDT on August 6, 2004 (the "Option Expiration Date"),
to purchase the Xxxxxx Common Stock.
1.2 OPTION FEE. The purchase price for the Option (the "Option Fee") is
$180,000, payable by wire transfer of immediately available funds to a U.S.
account specified in writing by Xxxxxx on the next business day following
execution of this Agreement. In the event that Optionee exercises the Option as
provided for in this Agreement, the Option Fee shall be credited and applied to
the Purchase Price.
1.3 EXERCISE OF THE OPTION. Optionee may exercise the Option by
irrevocable written notice to Xxxxxx of its intention to exercise the Option at
any time prior to the Option Expiration Date (the "Option Notice").
Notwithstanding the foregoing, Optionee may not exercise the Option until such
time as all waiting periods under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements
Act of 0000 (xxx "XXX Xxx") shall have expired or been waived. Optionee may
cancel this option at any time for any reason upon written notice to Xxxxxx.
1.4 PURCHASE PRICE. Optionee shall have the sole and exclusive option
to purchase the Xxxxxx Common Stock until after the Option Expiration Date for
$197,339,000 (the "Purchase Price"), payable as follows: $179,339,000 at the
Closing (as defined in Section 2.1)(the "Closing Payment") and $18,000,000 (the
"Escrow Amount") shall be deposited with a mutually acceptable third party
escrow agent until the earlier of (i) the completion of the transaction(s)
contemplated in Section 4.4 hereof, or (ii) 180 days after the Closing. The
Escrow Amount will be held in an interest bearing escrow account pursuant to a
mutually acceptable escrow agreement as security for Xxxxxx'x indemnification
obligations pursuant to this Agreement.
1.5 ADDITIONAL CONSIDERATION. In addition to the Purchase Price,
Optionee shall pay Xxxxxx an aggregate additional amount ("Additional
Consideration") of twenty percent (20%) of the net sales of [CONFIDENTIAL
TREATMENT -- INFORMATION FILED SEPARATELY WITH THE COMMISSION] sold by the
Company (or its affiliate) to the extent that such net sales exceed $40,000,000
during the period beginning on the date of the approval by the [CONFIDENTIAL
TREATMENT -- INFORMATION FILED SEPARATELY WITH THE COMMISSION] and ending upon
the earlier of (i) the date any [CONFIDENTIAL TREATMENT -- INFORMATION FILED
SEPARATELY WITH THE COMMISSION] and (ii) the five year anniversary date of the
Closing. For purposes of this Agreement, "net sales" shall mean net cash
received from the sale of such product, after all normal chargebacks, rebates,
allowances, returns and credits. Any Additional Consideration shall be paid to
Xxxxxx quarterly in arrears, within forty-five (45) calendar days after the end
of each calendar quarter based upon a statement certified by an officer of
Optionee as correctly stating gross sales and all amounts deducted to derive at
net sales for such quarter. Within 90 days after the end of each calendar year,
an independent public accounting firm mutually selected by Optionee and Xxxxxx
shall review each such statement rendered during the prior calendar year and
provide its written report to Optionee and Xxxxxx as to whether the calculation
of net sales reflected in each such statement is reasonably accurate (based on
appropriate testing of procedures and data). To the extent any payment to Xxxxxx
made pursuant to any such statement is less than that which should have been
made to Xxxxxx, Optionee shall pay Xxxxxx the
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shortfall together with interest, from the date the deficiency should
have been paid until it is paid, at a rate equal to 300 basis points in excess
of the prime rate as announced from time to time in The Wall Street Journal.
Optionee shall pay the expenses of such accounting firm and shall provide it
with access, at reasonable times during normal business hours, to all books and
records necessary for it to confirm the reasonable accuracy (based on
appropriate testing of procedures and data) of the calculations of net sales.
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CLOSING DATE; DELIVERY
2.1 CLOSING; CLOSING DATE. The closing of the purchase and sale of the
Xxxxxx Common Stock shall be consummated on the date set forth in the Option
Notice or such other later date as Optionee shall specify, but in any event no
later than ten (10) business days after the date of the Option Notice (the
"Closing"). Unless otherwise mutually agreed to in writing by the parties,
Xxxxxx shall exercise concurrently with the Closing, at his sole cost and
expense, all of the In-the-Money-Options and cause such shares of Common Stock
issuable upon such exercise to be delivered to Optionee at the Closing. Unless
otherwise mutually agreed to in writing by the parties, Xxxxxx shall cause
concurrently with the Closing, at his sole cost and expense, all of the
Out-of-the-Money Options to be canceled effective as of the Closing or, in
Optionee's sole and absolute discretion, exercise concurrently with the Closing,
at Optionee's sole cost and expense, all or some of the Out-of-the-Money-Options
(to the extent they are exercisable) and cause such shares of Common Stock
issuable upon such exercise to be delivered to Optionee at the Closing.
2.2 DELIVERY. At the Closing, subject to the terms and conditions of
this Agreement, Xxxxxx will (or will cause the custodian of Xxxxxxx'x XXX to)
sell, assign and deliver to Optionee the Xxxxxx Common Stock by delivery of
original certificate(s) representing all of the Xxxxxx Common Stock duly
endorsed in blank, signature guaranteed, for transfer or accompanied by duly
executed stock powers endorsed in blank, signature guaranteed, and if
applicable, by electronic transmission through the Deposits and Withdrawal at
Custodian (DWAC) system to brokers designated by Optionee, in each case together
with any required transfer or documentary stamps attached, free and clear of all
Encumbrances (as defined in Section 3.3) against payment of the Closing Payment.
The Closing Payment shall be paid by wire transfer of immediately available
funds to an United States account specified in writing by Xxxxxx, unless
Optionee and Xxxxxx agree upon other means of payment. Any documentary, transfer
or other taxes imposed by reason of the transfer of Xxxxxx Common Stock provided
by this Agreement and any related deficiency, interest or penalty will be borne
solely by Xxxxxx.
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REPRESENTATIONS AND WARRANTIES OF XXXXXX
Xxxxxx represents and warrants to Optionee, on the date hereof and on
the Closing Date, as follows:
3.1 AUTHORIZATION; ENFORCEABILITY. Xxxxxx has the requisite power and
right to enter into this Agreement and to carry out and perform his obligations
under this Agreement. This
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Agreement has been, and the other agreements, instruments and certificates to be
executed and delivered by Xxxxxx will be when executed and delivered by Xxxxxx
at the Closing, duly executed and delivered by Xxxxxx, and, upon due execution
and delivery by Optionee, this Agreement is, and such other agreements,
instruments and certificates will be when executed and delivered at the Closing,
the legal, valid and binding obligations of Xxxxxx, enforceable against him in
accordance with their respective terms.
3.2 NO CONFLICT WITH OTHER INSTRUMENTS; CONSENTS. The execution,
delivery and performance of this Agreement by Xxxxxx will not result in any
violation of, be in conflict with, or constitute a default under, with or
without the passage of time or the giving of notice: (a) any obligation or duty
of Xxxxxx to the Company or any other person, (b) any provision of any judgment,
decree or order to which Xxxxxx is a party or by which he or any of his assets
is bound; (c) any contract, obligation or commitment to which Xxxxxx is a party
or by which he or any of his assets is bound; or (d) assuming compliance with
the HSR Act and applicable securities law, any applicable law, including,
without limitation, any statute, rule, order, decree, treaty or governmental
regulation. Except as required by the HSR Act and applicable securities laws,
Xxxxxx has previously obtained all authorizations, consents or approvals from,
and made all required filings with, all persons or governmental authorities
required to enter into or consummate the transactions contemplated by this
Agreement.
3.3 TITLE. Xxxxxxx is the sole record, legal and beneficial owner of
William's Certificated Shares and William's Stock Options. Xxxxxxx through his
Individual Retirement Account is the sole beneficial owner of the XXX Shares.
Xxxxxx is the sole beneficial owner of Audrey's Shares. Xxxxxx (directly or
indirectly through Xxxxxxx'x XXX) owns the Xxxxxx Common Stock and William's
Stock Options free and clear of all Encumbrances, and there are no outstanding
options, calls, puts, subscriptions, preemptive rights, rights of first refusal
or other agreements or commitments, other than this Agreement, obligating Xxxxxx
to sell or transfer the Xxxxxx Common Stock or William's Stock Options to any
person or granting an option or right to any person to purchase or acquire from
Xxxxxx the Xxxxxx Common Stock or William's Stock Options. The Xxxxxx Common
Stock and William's Stock Options constitute all of the shares of capital stock,
or securities convertible into or exercisable for, shares of capital stock owned
directly or indirectly by Xxxxxx or any child or relative of Xxxxxx who has the
same home as Xxxxxx. At the Closing, Optionee will acquire good and marketable
title to and complete ownership of the Xxxxxx Common Stock, free and clear of
all Encumbrances, upon the delivery of the certificate(s) evidencing the Xxxxxx
Common Stock to Optionee, either duly endorsed for transfer or accompanied by
duly executed stock powers transferring such certificates, or by delivery of
such shares by electronic transmission through the DWAC system to brokers
designated by Optionee. Any certificate(s) evidencing the Xxxxxx Common Stock
were not issued directly or indirectly in respect of any certificates issued in
replacement of any lost, damaged, mutilated or destroyed certificates evidencing
any common stock of capital stock of the Company or any of its predecessors.
"Encumbrance" means any claim, lien, pledge, option, right of first refusal,
buy-sell agreement, defect in title, charge, security interest, conditional
sales agreement, title retention agreement, restriction on transfer, voting
agreements, voting trusts, proxies, preemptive rights (whether statutory or
contractual), shareholder or similar agreements, adverse claims (as defined in
Section 8-302(2) of the Uniform Commercial Code) or other restrictions or
encumbrances of any nature or kind (except state and federal securities laws
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restrictions pertaining to the transfer of the Xxxxxx Common Stock), whether
voluntarily incurred or arising by operation of law, including any agreement to
give any of the foregoing in the future.
3.4 DISCLOSURE DOCUMENTS.
(a) The Company has filed all forms, reports, registration
statements, proxy statements, schedules and documents required to be filed by it
with the Securities and Exchange Commission (the "SEC") in the past three years.
As filed with the SEC, (i) the annual reports of Company on Form 10-KSB for the
fiscal years ended June 30, 2003, 2002, 2001, (ii) the quarterly report of
Company on Form 10-Q for the period ended September 30, 2003, (iii) all proxy
statements relating to Company's meetings of stockholders (whether annual or
special) held in the past three years, and (iv) all other reports filed by
Company with the SEC in the past three years (the forms, reports and other
documents referred to in clauses (i) through (iv) being referred to herein as
the "Company SEC Reports") have been filed with the SEC. As of their respective
dates, the Company SEC Reports (x) have complied in all material respects with
all requirements under the Securities Exchange Act of 1934, as amended, and the
rules and regulations thereunder (the "Exchange Act"), (y) were true and correct
in all material respects, and (z) contained no untrue statement of material fact
or omitted to state a material fact required to be stated therein or necessary
in order to make the statements made therein, in the light of circumstances
under which they were made, not misleading.
(b) The financial statements of Company included in the
Company SEC Reports complied in all material respects with applicable accounting
requirements and the rules and regulations of the SEC with respect thereto, have
been prepared in accordance with United States generally accepted accounting
principles ("GAAP") (except, in the case of interim financial statements, as
permitted by Forms 10-Q or 8-K of the SEC) consistently applied during the
periods involved and fairly presented, in all material respects, the financial
position of Company as of the dates thereof and the results of operations and
cash flows for the periods then ended, subject, in the case of interim financial
statements, to normal year-end adjustments and lack of footnote disclosures. The
books and records of Company have been, and are being, maintained in accordance
with all applicable legal requirements.
3.5 LITIGATION, VALIDITY OF AGREEMENT. There is no action, suit,
proceeding or, to the best of Xxxxxx'x knowledge, any claim or investigation
pending or currently threatened against the Company, nor, to the best of
Xxxxxx'x knowledge, is there any basis therefor, which might result, either
individually or in the aggregate, in any material adverse change in the Xxxxxx
Common Stock or the assets, condition, affairs or prospects of the Company,
financial or otherwise.
3.6 NO BROKERS. If any broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement as a result of any actions of
Xxxxxx, the Company or their respective representatives, such brokerage,
finder's or other fee or commission shall be the obligation of Xxxxxx and shall
be promptly paid and discharged by Xxxxxx as and when due.
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The representations and warranties of Xxxxxx set forth in this Section
3 will terminate upon the earlier to occur of (i) the date that is 90 days after
Optionee initiates a tender offer, merger or other business combination
involving the Company as provided in Section 4.4 of this Agreement, (ii) the
date that any such tender offer, merger or other business combination involving
the Company is consummated, or (iii) the date that is 180 days after the date of
the Closing; provided, however, that the representations and warranties
contained in Section 3.3 (title) shall survive forever.
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REPRESENTATIONS AND WARRANTIES OF OPTIONEE
Optionee represents and warrants to Xxxxxx, on the date hereof and on
the Closing Date, as follows:
4.1 LEGAL POWER. All corporate action on the part of Optionee, its
officers, directors and stockholders necessary for the authorization, execution
and delivery of this Agreement has been taken. Optionee has the requisite
corporate power to enter into this Agreement, to carry out and perform its
obligations under the terms of this Agreement and, at the Closing, will have the
requisite corporate power to purchase the shares of Xxxxxx Common Stock to be
purchased at such Closing.
4.2 BROKERS. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement as a result of any actions of
Optionee or its representatives.
4.3 ORGANIZATION, GOOD STANDING, QUALIFICATION. Optionee is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation, and has all requisite corporate power
and authority to carry on their business as now conducted and as proposed to be
conducted. Optionee is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure so to qualify would have a
material adverse effect on its business or properties.
4.4 AGREEMENT TO MAKE TENDER OR ENTER INTO MERGER. Optionee represents
that, if it exercises its right under the Option to purchase the Xxxxxx Common
Stock, it will make a tender offer (to the extent permitted by law), or
alternatively use its commercially reasonable efforts to enter into a merger
agreement or other business combination with the Company, within ninety (90)
days after the Closing for the remainder of the outstanding shares of common
stock of the Company at a total price per share which is no less than the higher
of (i) the average closing price of such shares as publicly reported by the
American Stock Exchange over the 10 trading days ending one trading day prior to
the date on which there is a public announcement (whether by the filing of a
Form 4, the issuance of a press release or otherwise) of the grant of the
Option, and (ii) the total price per share paid to Xxxxxx, including any
Additional Consideration.
4.5 DUE EXECUTION. This Agreement has been duly authorized, executed
and delivered by Optionee and, upon due execution and delivery by Xxxxxx, this
Agreement will be a valid and binding agreement of Optionee.
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4.6 NO CONFLICT WITH OTHER INSTRUMENTS; CONSENTS. The execution,
delivery and performance of this Agreement by Optionee will not result in any
violation of, be in conflict with, or constitute a default under, with or
without the passage of time or the giving of notice: (a) any obligation or duty
of Optionee to any other person, (b) any provision of any judgment, decree or
order to which Optionee is a party or by which it or any of its assets is bound;
(c) any contract, obligation or commitment to which Optionee is a party or by
which it or any of its assets is bound; or (d) assuming compliance with the HSR
Act and the applicable securities laws, any applicable law, including, without
limitation, any statute, rule, order, decree, treaty or governmental regulation.
Except as required by the HSR Act and the applicable securities laws, Optionee
has previously obtained all authorizations, consents or approvals from, and made
all required filings with, all persons or governmental authorities required to
enter into or consummate the transactions contemplated by this Agreement.
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OBLIGATIONS OF XXXXXX
5.1 INDEMNIFICATION.
(a) Xxxxxx agrees to indemnify, defend and hold Optionee harmless from
and against any and all losses, claims, damages, expenses (including, without
limitation, reasonable accounting and attorneys' fees and expenses) or
liabilities, joint or several, (collectively, "Losses") arising out of or
relating to (i) a breach of any of his representations, warranties or covenants
contained in this Agreement or any other agreement, instrument and certificate
entered into or delivered in connection with this Agreement or the Closing, (ii)
any untrue statement or alleged untrue statement of a material fact, or the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading,
contained in any public announcement or filing with the SEC by Xxxxxx in
connection with entering into or consummating this Agreement or any tender
offer, merger or other business combination involving the Company as provided in
Section 4.4 of this Agreement, or (iii) any violation or alleged violation by
Xxxxxx of the Securities Act of 1933, as amended (the "Securities Act"), the
Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law in
connection with entering into or consummating this Agreement or any tender
offer, merger or other business combination involving the Company as provided in
Section 4.4 of this Agreement; provided however, that the foregoing indemnity
agreement contained in this Section 5.1(a) shall not apply to amounts paid in
settlement of any Loss if such settlement is effected without the consent of
Xxxxxx, which consent shall not be unreasonably withheld, nor shall Xxxxxx be
liable in any such case for any Loss to the extent that it arises out of or is
based upon a violation of law that occurs in reliance upon and in conformity
with written information furnished by Optionee or its agents expressly for use
in connection with any such press release or other filing with the SEC or the
negligent or willful misconduct or omission, fraudulent misrepresentations or
violation of law by Optionee or its agents. In any event, except in the case of
willful misconduct or fraudulent misrepresentations, the liability of Xxxxxx
under this indemnity provision for breaches of representations or warranties
shall be limited to an amount equal to the Escrow Amount; provided, however,
that the liability for any breaches of any
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covenants or any breaches of the representations and warranties contained in
Section 3.3 (Title) shall be limited to the Purchase Price, plus any Additional
Consideration. If Xxxxxx undertakes the defense of any claim made under clauses
(ii) or (iii), and if a final, unappealable judgment, order or arbitration award
is entered by a court of competent jurisdiction dismissing such claim with
prejudice and without any liability of Xxxxxx, Optionee will reimburse Xxxxxx
for its reasonably out-of-pocket expenses to the extent they related to such
defense. If Optionee undertakes the defense of any claim made under clauses (ii)
or (iii), and if a final, unappealable judgment, order or arbitration award is
entered by a court of competent jurisdiction dismissing such claim with
prejudice and without any liability of Xxxxxx, Optionee will not seek
reimbursement or indemnification from Xxxxxx for any costs or expenses related
to such defense.
(b) Optionee agrees to indemnify, defend and hold Xxxxxx harmless from
and against any and all Losses arising out of or relating to (i) a breach of any
of its representations, warranties or covenants contained in this Agreement or
any other agreement, instrument and certificate entered into or delivered in
connection with this Agreement or the Closing, (ii) any untrue statement or
alleged untrue statement of a material fact, or the omission or alleged omission
to state therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading, contained in any public announcement
or filing with the SEC by Optionee in connection with entering into or
consummating this Agreement or any tender offer, merger or other business
combination involving the Company as provided in Section 4.4 of this Agreement,
(iii) any violation or alleged violation by Optionee of the Securities Act, the
Exchange Act, any state securities law or any rule or regulation promulgated
under the Securities Act, the Exchange Act or any state securities law in
connection with entering into or consummating this Agreement or any tender
offer, merger or other business combination involving the Company as provided in
Section 4.4 of this Agreement, or (iv) any action, suit or proceeding against
Xxxxxx by reason of the fact that Xxxxxxx is or was an officer and/or director
of the Company if Xxxxxxx acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company except
that no indemnification shall be made in respect of any issue or matter as to
which Xxxxxx shall have been adjudged to be liable to the Company or such other
person bringing such action, suit or proceeding; provided however, that the
foregoing indemnity agreement contained in this Section 5.1(b) shall not apply
to amounts paid in settlement of any Loss if such settlement is effected without
the consent of Optionee, which consent shall not be unreasonably withheld, nor
shall Optionee be liable in any such case for any Loss to the extent that it
arises out of or is based upon a violation of law that occurs in reliance upon
and in conformity with written information furnished by Xxxxxx or its agents
expressly for use in connection with any such press release or other filing with
the SEC or the negligent or willful misconduct or omission, fraudulent
misrepresentations or violation of law by Xxxxxx or its agent. In any event,
except in the case of willful misconduct or fraudulent misrepresentations, the
liability of Optionee under this indemnity provision for breaches of
representations or warranties shall be limited to an amount equal to the Escrow
Amount.
5.2 DOCUMENTS. Xxxxxx agrees that he shall permit Optionee or its
counsel or other representatives to inspect and copy such documents and records
as may reasonably be requested by them relating to the Xxxxxx Common Stock,
after reasonable advance notice, during normal business hours and without undue
interference with the operation of the Company's business.
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5.3 STANDSTILL. Prior to the Option Expiration Date and except pursuant
to the terms of this Agreement, Xxxxxx shall not sell, pledge or otherwise
transfer, directly or indirectly, any of the Xxxxxx Common Stock or William's
Stock Options nor grant any options or rights to the Xxxxxx Common Stock or the
William's Stock Options, to any third party nor shall Faber, directly or
indirectly, solicit or entertain offers from any third party to enter into any
such transaction.
5.4. BOARD APPROVAL. Subject to William's fiduciary duties as a
director of the Company, Xxxxxxx shall recommend that the Board of Directors of
the Company approve the transactions contemplated by this Agreement for purposes
of Section 203 of the Delaware General Corporation Law on or before the Option
Expiration Date and approve the tender offer, merger or other business
combination contemplated by Section 4.4 as soon as reasonable practicable if
Optionee exercises its right under the Option to purchase the Xxxxxx Common
Stock, but in any event within 20 days after such exercise.
5.5 HSR ACT FILING. Upon notice from Optionee, the parties will, as
soon as practicable after such date, but in any event within three business
days, file a Notification and Report Form and related material required to be
filed in connection with the transactions contemplated by this Agreement with
the Federal Trade Commission and the Antitrust Division of the Department of
Justice under the HSR Act. If and only if directed by Optionee, the parties will
use their commercially reasonable efforts to obtain a waiver from the applicable
waiting period. The parties will use their commercially reasonable efforts to
respond as promptly as practicable to all inquiries received from the
above-referenced federal agencies for additional information or documentation,
and will make any further filings pursuant thereto that may be necessary in
connection therewith. The parties agree to make available to each other such
information as may be reasonably necessary to complete any filing or supply any
additional information requested by the above-referenced federal agencies under
the HSR Act.
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MISCELLANEOUS
6.1 GOVERNING LAW. This Agreement shall be governed by and interpreted
in accordance with the substantive laws of the State of Delaware and the United
States of America, without regard to choice of law rules thereof.
6.2 PUBLIC STATEMENTS. Neither Xxxxxx, the Company nor Optionee nor any
of their representatives will issue any press release or make any public
announcement relating to the subject matter of this Agreement without the prior
written approval of the other parties, provided that such persons may make any
announcement it believes in good faith after consultation with legal counsel is
required by law or the rules of NASDAQ or the American Stock Exchange; provided,
further, that Xxxxxx may file a Form 4 in accordance with the Exchange Act and
any other filings he is required to file under any securities laws and that the
parties shall mutually agree upon the form, substance and timing of issuance of
a mutually acceptable press release to coincide approximately with the filing of
such Form 4 by Xxxxxx.
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6.3 SUCCESSORS AND ASSIGNS. Neither this Agreement nor any of the
rights or obligations under this Agreement may be assigned by any party without
the prior written consent of the other parties; provided, however, that Optionee
may assign or delegate all or part of its rights and obligations under this
Agreement to one or more direct or indirect subsidiaries or affiliates;
provided, further, that any such assignment or delegation shall not relieve
Optionee of its obligations under this Agreement. This Agreement will be binding
upon and inure to the benefit of the parties and their respective successors and
permitted assigns, and no other person will have any right, benefit or
obligation under this Agreement as a third party beneficiary or otherwise.
6.4 ENTIRE AGREEMENT. This Agreement (and any exhibits and appendices)
sets forth all of the covenants, promises, agreements, warranties,
representations, conditions, and understandings between Xxxxxx and Optionee.
There are no covenants, promises, agreements, warranties, representations,
conditions or understandings, either oral or written, between Xxxxxx and
Optionee other than as set forth in this Agreement. The Agreement is intended to
define the full extent of the legally enforceable undertakings of Xxxxxx and
Optionee and no promise or representation, whether written or oral, which is not
set forth explicitly herein or therein is intended by either party to be legally
binding or representation, written or oral, other than those explicitly set
forth in this Agreement.
6.5 NOTICES. All notices and other communications required or permitted
hereunder shall be in writing and shall be deemed effectively given and received
(a) upon personal delivery, (b) on the fifth day following mailing by registered
or certified mail return receipt requested postage prepaid, addressed to Xxxxxx
or Optionee at their respective addresses listed below (or at such other address
for a party as shall be specified by like notice; provided, that notices of a
change of address shall be effective only upon receipt thereof), (c) upon
confirmed transmission by facsimile (with telephonic notice), or (d) upon
confirmed delivery by overnight commercial courier service:
If to Xxxxxx, address to: Xxxxxxx and Xxxxxx Xxxxxx
00000 Xxxxxxx
Xxxxxxxx, XX 00000
With a simultaneous copy to:
Xxxxx Xxxxx Heuer & Xxxxx, P.C.
Attention: Xxxxxx Xxxxxx
Suite 0000
Xxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
If to Optionee, address to: [CONFIDENTIAL TREATMENT -- INFORMATION FILED
SEPARATELY WITH THE COMMISSION]
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With a simultaneous copy to:
[CONFIDENTIAL TREATMENT -- INFORMATION FILED
SEPARATELY WITH THE COMMISSION]
[CONFIDENTIAL TREATMENT -- INFORMATION FILED
SEPARATELY WITH THE COMMISSION]
6.6 REPLACEMENT OF OPTION. Upon receipt by Xxxxxx of evidence
reasonably satisfactory to him of the loss, theft, destruction or mutilation of
this Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, Xxxxxx will execute and deliver a new Agreement of like
tenor and date.
6.7 EXPENSES. Except as otherwise expressly provided herein, all costs
and expenses incurred in connection with the transactions contemplated by this
Agreement shall be paid by the party incurring such expenses; provided, however,
that Optionee shall pay all of the filing fees required pursuant to the HSR Act.
6.8 INTERPRETATION. When a reference is made in this Agreement to a
Section such reference shall be to a Section of this Agreement unless otherwise
indicated. Whenever the words "include", "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation". The descriptive headings herein are inserted for convenience of
reference only and are not intended to be part of or to affect the meaning or
interpretation of this Agreement. The masculine, feminine or neuter gender and
the singular or plural shall each be construed to include the other whenever the
context indicates.
6.9 FURTHER ASSURANCES. Each party will execute and deliver all such
further documents and instruments and take all such further action as may be
necessary in order to consummate the transactions contemplated hereby.
6.10. SPECIFIC PERFORMANCE. The parties recognize and agree that if for
any reason any of the provisions of this Agreement are not performed in
accordance with their specific terms or are otherwise breached, immediate and
irreparable harm or injury would be caused for which money damages would not be
an adequate remedy. Accordingly, each party agrees that, in addition to other
remedies, the other party shall be entitled to an injunction restraining any
violation or threatened violation of the provisions of this Agreement. In the
event that any action should be brought in equity to enforce the provisions of
the Agreement, neither party will allege, and each party hereby waives the
defense, that there is adequate remedy at law.
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6.11 ADJUSTMENTS IN EVENT OF CHANGE IN COMMON STOCK. In the event of
any change in the Company's common stock by reason of stock dividends, splitups,
mergers, recapitalizations, combinations, exchange of shares or the like, the
type and number of shares or securities subject to the Option shall be adjusted
appropriately to restore to Optionee its rights under this Agreement; provided,
however, that the Purchase Price shall remain unchanged.
6.12 COUNTERPARTS; FACSIMILE. This Agreement may be executed in one or
more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument. This Agreement may be
executed and delivered by facsimile transmission, and a facsimile of this
Agreement or of a signature of a party will be effective as an original.
[SIGNATURE PAGE FOLLOWS]
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CONFIDENTIAL VERSION
IN WITNESS WHEREOF, this Stock Purchase Option Agreement is executed
and delivered by the parties as of the date first above written.
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XXXXXX XXXXXX
[CONFIDENTIAL TREATMENT -- INFORMATION FILED
SEPARATELY WITH THE COMMISSION]
By:
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Name:
Title:
