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EXHIBIT 10.10
SECURITIES EXCHANGE AGREEMENT
This Securities Exchange Agreement (the "Agreement") dated as of the 5th
day of March, 1998, is by and among Xxxxxxxx Point Industries, Inc., a Delaware
corporation (the "Company"), and Capricorn Investors, L.P., a Delaware limited
partnership ("Cap I"), and Capricorn Investors II, L.P., a Delaware limited
partnership ("Cap II") (Cap I and Cap II being sometimes herein called the
"Stockholders").
RECITALS:
Cap I and Cap II are the only holders of the outstanding Common Stock, par
value $.01 per share, of the Company ("Common Stock"), owning of record and
beneficially 3,415,000 shares (68.3%) and 1,585,000 shares (31.7%),
respectively, which, after giving effect to the Stock Split referenced below,
will become 4,553,334 shares (68.3%) and 2,113,334 shares (31.7%),
respectively.
Cap I is also the holder of $5,084,501 in principal amount of a 13%
Subordinated Promissory Note due 2000 drawn by the Company to the order of Cap
I ("Note 1").
Cap II is also the holder of $2,359,864 in principal amount of a 13%
Subordinated Promissory Note due 2000 drawn by the Company to the order of Cap
II ("Note 2").
Note 1 and Note 2 are sometimes herein called the "Notes".
The Company is proposing to offer, sell and deliver, out of original
issue, a number of shares of Common Stock to the public in an offering (the
"Initial Public Offering") firmly underwritten by certain underwriters and
registered pursuant to a registration statement on Form S-1 to be filed by the
Company with the Securities and Exchange Commission pursuant to the
registration provisions of the Securities Act of 1933, as amended (the
"Securities Act"), and the General Rules and Regulations (the "Securities Act
Rules") thereunder (the registration statement, in the form as it shall have
been amended immediately prior to the Acceleration Date (as hereinafter
defined) being herein called the "Registration Statement").
The Stockholders, in order to assist the Company in its Initial Public
Offering, are willing to exchange the Notes for shares of Common Stock
immediately after the Acceleration Date.
The Company is currently negotiating and anticipates executing and
delivering in the near future an Agreement and Plan of Merger (the "Merger
Agreement") pursuant to which the Company will acquire The Cynara Company
("Cynara") by virtue of the merger of a wholly-owned subsidiary of the Company
with and into Cynara.
The Stockholders acknowledge that Cynara may rely on the performance of
this Agreement by the parties hereto in executing and delivering the Merger
Agreement.
The Board of Directors of the Company has authorized an amendment to the
Certificate of Incorporation of the Company pursuant to which, among other
things, the outstanding Common
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Stock will be split on the basis of four shares for each three shares then
issued, and the Stockholders expect to approve, and the Company expects then to
file, a Certificate of Amendment to the Certificate of Incorporation of the
Company giving effect to such split (the "Stock Split").
NOW, THEREFORE, the parties hereto, in consideration of the premises,
the mutual covenants hereinafter set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
agree as follows:
1 . Exchange of Securities. Subject to the terms and conditions
herein set forth,
(a) Cap I hereby agrees to sell and exchange Note 2 to
the Company, and the Company hereby agrees to purchase and accept Note
1, in consideration of the issuance by the Company, out of original
issue, of an aggregate of 1,010,333 shares of Common Stock (after
giving effect to the Stock Split); and
(b) Cap II hereby agrees to sell and exchange Note 2 to
the Company, and the Company hereby agrees to purchase and accept Note
2, in consideration of the issuance by the Company, out of original
issue, of an aggregate of 468,925 shares of Common Stock (after giving
effect to the Stock Split).
2. Closing of the Exchange.
(a) The closing of the exchange of securities shall be
effected on the business day next following the Acceleration Date (as
hereinafter defined) at 10:00 a.m., local time, at the offices of
Xxxxxx & Xxxxxx L.L.P., Xxxxx Xxxx Xxxxx, Xxxxxxx, Xxxxx 00000-0000 or
at such other date, time and place as the parties hereto shall
determine.
(b) At the closing, the Company shall deliver to Cap I a
certificate registered in the name of Cap I and otherwise in proper
form for delivery evidencing an aggregate of 1,010,333 shares of
Common Stock against delivery by Cap I to the Company of Note 1.
(c) At the closing, the Company shall deliver to Cap II a
certificate registered in the name of Cap II and otherwise in proper
form for delivery evidencing an aggregate of 468,925 shares of Common
Stock against delivery by Cap II to the Company of Note 2.
3 . Closing Conditions. The following shall be conditions to the
obligations of each party hereto to consummate the transactions contemplated
hereto:
(a) The Company shall have made a request in writing
pursuant to Rule 461 of the Securities Act Rules to accelerate the
effective date of the Registration Statement to a date certain not
more than five days later than the date on which such request is given
(the "Acceleration Date"), and Xxxxxxxxx Lufkin & Xxxxxxxx Securities
Corporation, as the principal underwriter of the Initial Public
Offering, shall have joined in such request in accordance with the
said Rule 461; and
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(b) all the transactions contemplated by Section 1 herein
shall be consummated concurrently.
4. Investment Representation. Each of the Stockholders hereby
represents, as to itself, that it is purchasing the shares of Common Stock to
be acquired by it pursuant to this Agreement without a view to the
"distribution" of all or any part thereof as such term is used in Section
2(11) of the Securities Act.
5. Waiver and Amendment. Any provision of this Agreement may be
waived at any time by the party that is entitled to the benefits of such
provision. This Agreement may not be amended or supplemented at any time,
except by an instrument in writing signed on behalf of each party hereto.
6. Benefit and Assignment. The terms and conditions of this
Agreement shall inure to the benefit of and be binding on the parties hereto
and their respective successors and assigns; provided, however, that this
Agreement shall not be assignable by any party hereto except by operation of
law or with the prior express written consent of the other parties hereto.
Nothing in this Agreement, express or implied, is intended to confer upon any
party, other than the parties hereto and their respective successors and
permitted assigns, any rights, remedies, obligations or liabilities under or by
reason of this Agreement.
7. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to be duly received if so given) in person, by telecopy, by express
courier service or by registered or certified mail, postage prepaid, return
receipt requested, to the respective parties as follows:
If to the Company: Xxxxxxxx Point Industries, Inc.
Brookhollow Central III
0000 Xxxxx Xxxx Xxxx
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxxx
Chairman of the Board and
Chief Executive Officer
Telecopy No.: (000) 000-0000
If to Cap I: Capricorn Investors, L.P.
00 Xxxx Xxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Xx.
Telecopy No.: (000) 000-0000
If to Cap II: Capricorn Investors II, L.P.
00 Xxxx Xxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000
Attention. Xxxxxxx X. Xxxxxxx, Xx.
Telecopy No.: (000) 000-0000
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or to such other address or telecopy number as either party shall have
furnished to the other in writing in accordance herewith, except that notices
of change of address shall be effective only upon receipt.
8. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, without giving
effect to the principles of conflicts of law thereof,
9. Invalidity. If any provision of this Agreement is held to
be illegal, invalid or unenforceable under any present or future law, and if
the rights or obligations of the Company or either Stockholder under this
Agreement will not be materially and adversely affected thereby, (a) such
provision shall be fully severable; (b) this Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part hereof, (c) the remaining provisions of this Agreement shall
remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance here from; and (d) in
lieu of such illegal, invalid or unenforceable provision, there shall be added
automatically as a part of this Agreement a legal, valid and enforceable
provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible.
10. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute but one and the same agreement.
11. Headings. The article and section headings herein are for
convenience only and shall not affect the construction hereof
12. Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all other prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter hereof.
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IN WITNESS WHEREOF, this Agreement has been executed and delivered
by the Company and each of the Stockholders as of the date first above written.
XXXXXXXX POINT INDUSTRIES, INC.
By: [ILLEGIBLE]
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Name:
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Title:
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CAPRICORN INVESTORS, L.P.
By: Capricorn Holdings, G.P.,
Its general partner
By: Xxxxxxx Holdings Inc.,
Its general partner
By: /s/ XXXXXXX X. XXXXXXX, XX.
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Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: President
CAPRICORN INVESTORS II, L.P.
By: Capricorn Holdings, LLC,
Its general partner
By: /s/ XXXXXXX X. XXXXXXX, XX.
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Name: Xxxxxxx X. Xxxxxxx, Xx.
Title: Manager
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