SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 3)*
AGP and COMPANY, INC.
________________________________________________________________________________
(Name of Issuer)
Common Stock, No Par Value
________________________________________________________________________________
(Title of Class of Securities)
001230-02-0
________________________________________________________________________________
(CUSIP Number)
Joseph Drucker, Esq. Peter H. Ehrenberg, Esq.
16 Stuyvesant Place Lowenstein, Sandler, Kohl,
Elberon, New Jersey 07740 with a copy to Fisher & Boylan, P.A.
(908) 229-4329 65 Livingston Avenue
Roseland, New Jersey 07068
(201) 992-8700
________________________________________________________________________________
(Name, Address and Telephone Number
of Person Authorized to Receive
Notices and Communications)
October 4, 1996
________________________________________________________________________________
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with this statement [ ]. (A fee
is not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of less than five percent of such class.
See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule 13d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
<PAGE>
Omar L. Peraza, individually and as sole trustee of the Peraza Trust u/i/t
dated May 18, 1989 (the "Peraza Trust"), Robert Drucker and Mindy Fortin,
individually and as co-trustees of the Joseph Drucker 1995 Trust (the "Drucker
Trust") and Joseph Drucker (each, a "Filing Entity" and, collectively, the
"Filing Entities") hereby amend their Schedule 13D (as previously amended as of
the date hereof, the "Schedule 13D") relating to the shares of Common Stock, no
par value ("Common Stock"), of AGP and Company, Inc. (the "Company") as follows:
Item 4. Purpose of the Transaction.
Item 4 of the Schedule 13D is hereby amended by adding thereto the
following:
The Filing Entities have entered into a Settlement Agreement, dated October
1, 1996 (the "Settlement Agreement"), with the Company, Steven W. Bingaman
("Bingaman") and James F. Howard ("Howard") which provides for the settlement of
certain disputes among the parties thereto. Pursuant to the terms of the
Settlement Agreement, the Filing Entities have agreed to adjourn a Special
Meeting of the Company's shareholders (the "Special Meeting") that had been
ordered by a New Jersey court to be held on October 15, 1996 for the purpose of
considering a proposal to remove Bingaman and Howard as directors of the
Company.
Under the terms of the Settlement Agreement, Bingaman and Howard, as
directors of the Company, have approved the sale of the Company's wholly owned
subsidiary, TMC Group, Inc. ("TMC"), to Social Expressions Acquisition
Corporation ("SEAC"), a Delaware corporation established by Omar L. Peraza
("Peraza"), the President of TMC, and Joseph Drucker ("Drucker"), a director of
the Company, on the terms contained in SEAC's Offer Letter, dated July 1, 1996,
a copy of which has previously been filed as an Exhibit to this Schedule 13D
(the "Acquisition"). Under the Settlement Agreement, a definitive agreement
relating to the Acquisition (the "Acquisition Agreement") is required to be
executed and delivered on or before October 11, 1996. The consummation of the
Acquisition will be subject to certain conditions, including the receipt of (i)
a fairness opinion from Nutmeg Securities, (ii) approval of the Acquisition by
the Company's shareholders and (iii) financing for the Acquisition satisfactory
to SEAC (subject to certain limitations and requirements). Upon consummation of
the Acquisition, (i) SEAC will assume all obligations of TMC to the Company, and
(ii) the Special Meeting will be canceled.
The Company has agreed to call a meeting of shareholders on or prior to
January 31, 1997 to consider and vote upon the Acquisition and the Acquisition
Agreement. At that meeting, Bingaman and Howard have agreed to vote all of the
Common Stock which they own, beneficially or of record, in favor of the
Acquisition, and have agreed not to transfer their shares, or any interest
therein, prior thereto. In addition, the Company, Bingaman and Howard have
agreed not to interfere with the consummation of the Acquisition, subject to
their rights under the Settlement Agreement. The Settlement Agreement provides
that the Acquisition must be consummated by February 1, 1997.
In the Settlement Agreement, the Company has given an irrevocable proxy to
Peraza and Drucker giving them the right, for a period of five years, to vote
all shares of SEAC owned by the Company from time to time. The Company has also
agreed not to issue shares of Common Stock or certain securities convertible
into or exchangeable for shares of Common Stock until consummation of the
Acquisition, subject to certain exceptions.
Under the terms of the Settlement Agreement, Bingaman, Howard and the
Company have agreed to certain covenants relating to the operations of TMC and
the Company pending consummation of the Acquisition. In addition, Bingaman has
agreed to continue to guarantee certain advances to TMC and Peraza has agreed to
effect a release of all guarantees by Bingaman of indebtedness of TMC upon
consummation of the Acquisition. SEAC has agreed to pay one-half of the audit
fees to be incurred by the Company in completing the audits of its 1994 and 1995
financial statements, subject to a cap of $75,000 and SEAC and the Filing
Entities have agreed that the Company may effect the sale of certain warrants
held by it, subject to certain conditions, and may use up to $200,000 of the net
proceeds therefrom to repay amounts owed to Bingaman. The Settlement Agreement
also contains certain provisions regarding Drucker's employment by the Company
pursuant to which, among other things, Drucker has agreed to relocate his office
off the Company's premises and, in the event that the Acquisition is approved by
the Company's shareholders, the Company and Drucker will negotiate in good faith
the termination of Drucker's existing employment agreement with the Company and
the payment to him of amounts due and owing thereunder.
To secure their obligations under the Settlement Agreement, Bingaman and
Howard have delivered to an escrow agent (i) their resignations of all positions
each of them may have as a director, officer or employee of the Company and its
subsidiaries and (ii) an irrevocable proxy from Bingaman (which appoints Peraza
and Drucker as proxies) covering all shares of Common Stock of the Company owned
beneficially or of record by him. The resignations and the proxy will be
released from escrow and delivered to Peraza upon the earlier of (i) the close
of business on February 1, 1997 if the Acquisition has not been consummated by
that date (except as described below), or (ii) the breach by Bingaman, Howard or
the Company of any of their representations or warranties contained in the
Settlement Agreement or any of their obligations under the Settlement Agreement.
In the event that the Acquisition is not consummated prior to February 1,
1997 (other than as a result of any breach by Bingaman, Howard or the Company of
their obligations under the Settlement Agreement), then the resignations and the
proxy will continue to be held in escrow and, upon Peraza's request, the Company
will call a special meeting of its shareholders within 60 days to consider and
act upon Peraza's proposal to remove Bingaman and Howard as directors of the
Company.
The Settlement Agreement also contemplates the proposed acquisition by a
newly formed, wholly owned subsidiary of the Company ("BSM") of Border Steel
Mills Incorporated in a transaction in which BSM would become a public company
and would no longer be a subsidiary of the Company (the "Border Steel
Acquisition"). In the Settlement Agreement, the Filing Entities have agreed not
to interfere with the Border Steel Acquisition, subject to their rights under
the Settlement Agreement. In addition, the Company has given a proxy to Bingaman
and Howard giving them the right, for a period of five years, to vote all shares
of BSM owned by the Company from time to time.
A copy of the Settlement Agreement has been filed as an Exhibit to this
Amendment and is herein incorporated by reference. The description of the
Settlement Agreement is a summary only, is not intended to be complete, and is
qualified in its entirety by reference to the full text of such Exhibit.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
Item 6 of the Schedule 13D is hereby amended by adding thereto the
following:
Pursuant to the terms of an Inducement Letter, dated October 1, 1996 (the
"Inducement Letter"), The Blackmor Group, Inc. has agreed to vote all of the
shares of the Common Stock which it owns, beneficially or of record (1,050,000
shares as of October 1, 1996), in favor of the Acquisition.
A copy of the Inducement Letter has been filed as an Exhibit to this
Amendment and is herein incorporated by reference. The description of the
Inducement Letter is a summary only, is not intended to be complete, and is
qualified in its entirety by reference to the full text of such Exhibit.
Item 7. Material to be Filed as Exhibits.
Exhibit Number Description of Exhibit
1 Settlement Agreement, dated October 1, 1996
(without exhibits)
2 Inducement Letter, dated October 1, 1996
<PAGE>
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: October 15, 1996
/s/ Omar L. Peraza
_________________________________
Omar L. Peraza, as Trustee of
the Peraza Trust u/i/t dated
May 18, 1989
/s/ Omar L. Peraza
_________________________________
Omar L. Peraza, Individually
/s/ Robert Drucker
________________________________
Robert Drucker, as Co-trustee of
the Joseph Drucker 1995 Trust
/s/ Mindy Fortin
________________________________
Mindy Fortin, as Co-trustee of
the Joseph Drucker 1995 Trust
/s/ Robert Drucker
________________________________
Robert Drucker, Individually
/s/ Mindy Fortin
________________________________
Mindy Fortin, Individually
/s/ Joseph Drucker
________________________________
Joseph Drucker
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL
CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001).
<PAGE>
Exhibit Index
Exhibit
Number Description
1 Settlement Agreement, dated October 1, 1996
(without exhibits)
2 Inducement Letter, dated October 1, 1996
SETTLEMENT AGREEMENT
SETTLEMENT AGREEMENT, dated October 1, 1996, by and among AGP and
Company, Inc. , a New Jersey corporation (the "Company"), Steven W. Bingaman
("Bingaman"), James F. Howard ("Howard"), Omar L. Peraza ("Peraza"),
individually and as trustee of the Peraza Trust U/I/T, dated May 18, 1989 (the
"Trust"), Social Expressions Acquisition Corporation, a Delaware corporation
("NewCo"), Joseph Drucker ("Drucker"), Robert Drucker ("R. Drucker"), solely as
co-trustee of the Joseph Drucker 1995 Trust (the "Drucker Trust"), and Mindy
Fortin, solely as co-trustee of the Drucker Trust ("Fortin" and, collectively
with Peraza, the Trust, NewCo, Drucker, R.
Drucker and the Drucker Trust, the "Peraza Entities").
W I T N E S S E T H:
WHEREAS, Peraza commenced an action against the Company in the Superior
Court for Hudson County, Chancery Division, captioned Omar L. Peraza,
individually and on behalf of the Peraza Trust v. AGP & Company, Inc., Docket
No. C-99-96 (the "Action"); and
WHEREAS, the Court has issued an order in the Action setting October 15,
1996 as the date for a Special Meeting of the Company's shareholders (the
"Special Meeting") to consider Peraza's proposal that Bingaman and Howard be
removed as directors of the Company; and
WHEREAS, Peraza and Drucker, through NewCo, have previously offered to
purchase the Company's subsidiary, TMC Group, Inc. ("TMC"), on the terms and
conditions summarized in NewCo's letter to the Company, dated July 1, 1996 (the
"Acquisition"), a copy of which is attached hereto as Exhibit A and made a part
hereof (the "Offer Letter"); and
WHEREAS, the Company has established BSM Acquisition Corp. ("BSM") as a
wholly owned subsidiary of the Company for the purpose of acquiring Border Steel
Mills Incorporated pursuant to which, among other things, BSM (or its successor)
will become a public company and the Company will own less than a majority of
BSM's capital stock (the "Border Acquisition"); and
WHEREAS, Bingaman has been elected as the President and Chief Executive
Officer of BSM; and
WHEREAS, Bingaman intends to devote substantially all of his business
efforts to operating BSM upon consummation of the Border Acquisition; and
WHEREAS, the parties have agreed to settle the disputes existing between
them by, among other things, providing for the sale of TMC to NewCo pursuant to
the terms contained in the Offer Letter and for certain other matters contained
herein.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and intending to be legally bound, the parties hereto agree as follows:
ARTICLE I
Dismissal of Action; Adjournment of the Special Meeting
Section 1.1. Dismissal of Action. Not later than the end of the business
day immediately following the closing date of the Acquisition, Peraza and the
Company shall execute and file, or cause their respective counsel to execute and
file, such mutually acceptable stipulations, orders and other documents as may
be necessary to effect the dismissals of the Action without prejudice and
without costs to any party; provided, that the Court shall retain jurisdiction
in the Action for the purpose of enforcing this Agreement.
Section 1.2. Adjournment of the Special Meeting; Cancellation. The Special
Meeting shall be adjourned so long as the Company, Bingaman and Howard are in
full compliance with the terms of this Agreement. Upon consummation of the
Acquisition, the Special Meeting shall be canceled.
ARTICLE II
Resignations; Irrevocable Proxy
Section 2.1. Resignations; Irrevocable Proxies. Simultaneously with the
execution hereof, each of Bingaman and Howard shall deliver to Continental Stock
Transfer and Trust Company (together with any successor escrow agent, the
"Escrow Agent") (i) their written resignations of all positions each of them may
have as a director, officer or employee of the Company and its subsidiaries,
such resignations to be in the form of Exhibits B and C hereto, respectively,
and (ii) irrevocable proxies, each in the form of Exhibit D hereto, covering all
shares of Common Stock, no par value (the "Common Stock"), of the Company
(collectively, the "Restricted Shares") owned beneficially or of record by
Bingaman, Howard, their respective spouses, parents, minor children and any
entities over which any of them has or shares control (collectively, the
"Bingaman Parties"). The resignations and the proxies shall be held in escrow by
the Escrow Agent pursuant to the terms of the Escrow Agreement attached hereto
as Exhibit E, which shall be entered into simultaneously herewith and which
shall provide, among other things, that such resignations and proxies shall be
released from escrow and delivered to Peraza upon the earlier of (i) except as
provided in Section 2.2, the close of business on February 1, 1997 if the
Acquisition has not been consummated prior thereto, or (ii) the breach by
Bingaman, Howard or the Company of any representations or warranties made by any
of them hereunder or their respective obligations hereunder.
Section 2.2. Return to Status Quo. Notwithstanding the other provisions of
this Agreement, if the Acquisition is not consummated prior to February 1, 1997
(other than as a result of any breach by Bingaman, Howard or the Company of
their obligations hereunder), then (i) the resignations and proxies shall
continue to be held in escrow and (ii) upon Peraza's request the Company shall
call a special meeting of shareholders to be held not later than 60 days
following receipt of Peraza's request to consider and act upon Peraza's proposal
to remove Bingaman and Howard as directors of the Company.
ARTICLE III
Sale of TMC
Section 3.1. Sale of TMC. Bingaman and Howard, in their capacities as
directors and shareholders of the Company, at a meeting of the Board of
Directors of the Company duly called and held prior to the date hereof, have
reviewed the terms of the Offer Letter and have determined that the Acquisition,
and the transactions contemplated thereby, are in the best interest of the
Company and its shareholders and, accordingly, each of them hereby approves the
sale of TMC to NewCo on the terms set forth in the Offer Letter. Drucker has
abstained and shall abstain from any Board of Directors vote on the Acquisition.
Section 3.2. Preparation of Acquisition Agreement. Promptly after the date
hereof, the Company and NewCo shall jointly prepare and negotiate in good faith
an acquisition agreement to reflect the Acquisition and shall execute and
deliver a mutually acceptable acquisition agreement (the "Acquisition
Agreement") no later than October 11, 1996. The Acquisition Agreement shall
contain no conditions precedent to either the Company's or NewCo's obligations
thereunder, other than (i) the receipt of a fairness opinion from Nutmeg
Securities (the "Fairness Opinion") (which shall (x) state that the
consideration to be received by the Company pursuant to the Acquisition
Agreement is fair from a financial point of view, and (y) be provided to the
Company as promptly as possible but in no event later than the date on which the
Company is first able to mail its Proxy Materials (as defined below) to
shareholders), (ii) the receipt of shareholder approval of the Acquisition, as
provided in Section 3.3 below, (iii) subject to the provisions of the following
sentence, the receipt of financing for the Acquisition satisfactory to NewCo in
its sole discretion, and (iv) the satisfaction or waiver of other customary
conditions of closing agreed to by the parties in good faith. The Acquisition
Agreement shall provide that in the event that NewCo is not a public company
subject to the reporting requirements of the Securities Exchange Act of 1934, as
amended, on the date of closing of the Acquisition, the consideration to be paid
by NewCo for TMC shall consist of (i) NewCo's 10% Subordinated Notes due ten
years from the closing of the Acquisition (the "Notes") in aggregate principal
amount of $2,500,000 and (ii) a royalty payment equal to 1.5% of TMC's annual
net collected revenues (defined as gross cash revenues less returns and
allowances) for a period of three years post-consummation, one-half of which
shall reduce the principal amount otherwise due and owing on the Notes. Subject
to the satisfaction or waiver of the conditions set forth in the Acquisition
Agreement, the Acquisition and the other transactions contemplated thereby shall
be consummated no later than February 1, 1997.
Section 3.3. Meeting of Shareholders. (a) As soon as practicable but in no
event later than January 31, 1997, the Company shall convene a meeting of
shareholders (the "Meeting") to consider and vote upon the Acquisition and the
Acquisition Agreement. In the event that Hall Dickler Kent Friedman & Wood LLP
provides NewCo with a written opinion on or prior to November 18, 1996 that the
Company will be able to comply with the financial statement requirements of Rule
14a-3 promulgated under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), in connection therewith, the Company shall have the right to
include in the matters to be considered at the Meeting a proposal to elect a
slate of nominees (which shall include Drucker) approved by the Company's Board
of Directors and to refer to the Meeting as an annual meeting of shareholders.
Promptly following the execution of the Acquisition Agreement, the Company shall
prepare proxy materials for use in connection with the Meeting (the "Proxy
Materials"), shall file preliminary copies of such Proxy Materials with the
Securities and Exchange Commission (the "Commission") as promptly as practicable
but in no event later than November 18, 1996 and thereafter finalize and mail
such Proxy Materials to shareholders as promptly as practicable but in no event
later than December 31, 1996. The Company shall provide Peraza and Drucker with
drafts of the Proxy Materials and shall consider and resolve in good faith their
comments on the Proxy Materials if received within 48 hours after their receipt
of such drafts.
(b) In connection with the Meeting and provided that the Company has
received the Fairness Opinion, Bingaman and Howard, in their capacity as
directors of the Company, shall in the Proxy Materials recommend to the
shareholders that the shareholders vote in favor of the approval of the
Acquisition and the adoption of the Acquisition Agreement and such
recommendation shall not be amended, modified or rescinded.
(c) All fees and expenses payable in connection with the preparation of the
Proxy Materials and the conduct of the Meeting (including any adjournments or
postponements thereof) shall be borne by the Company.
Section 3.4. Grant of Irrevocable Proxies; Transfer Restrictions. (a) Each
of Bingaman and Howard hereby revokes any and all prior proxies and irrevocably
appoints and constitutes each of Peraza and Drucker, with full power of
substitution, as their proxy to vote the shares of the Company's Common Stock
owned by each of them, whether beneficially or of record (collectively, the
"Restricted Shares"), at the Meeting in favor of the Acquisition and the
Acquisition Agreement and, in their discretion, on such other matters as may
properly come before the Meeting (including any adjournments thereof). The proxy
authority contained herein shall be deemed to be coupled with an interest and
shall be irrevocable. This proxy shall survive the death or incapacity of either
Bingaman or Howard and may not be revoked by any guardian or other personal
representative of any of them for any reason whatsoever. No later than the date
hereof, Bingaman and Howard shall cause the Bingaman Parties to execute and
deliver to Peraza irrevocable proxies in the form set forth above covering the
remaining Restricted Shares.
(b) From the date hereof until the conclusion of the Meeting, neither
Bingaman nor Howard shall, nor shall either Bingaman or Howard permit any
Bingaman Party to, transfer, sell, assign, pledge, hypothecate, give, create a
security interest in or lien on, place in trust (voting or otherwise), transfer
by operation of law, grant a proxy with respect to or in any other way encumber
or dispose of, directly or indirectly and whether or not voluntarily (each, a
"Transfer"), any of the Restricted Shares.
(c) No later than the date hereof, the Company shall provide the
transfer agent for the Common Stock (the "Transfer Agent") irrevocable written
instructions in the form of Exhibit F attached hereto not to effect any Transfer
of Restricted Shares to any person or entity in violation of this Agreement. No
later than the close of business on the fifth business day following the date
hereof, Bingaman and Howard shall cause all of the Restricted Shares to be
registered in the names of the appropriate Bingaman Party and shall exchange or
cause the Bingaman Parties to exchange the certificates representing the
Restricted Shares for certificates of like tenor which shall be stamped or
endorsed with a legend in substantially the following form:
TRANSFERS AND VOTING IN RESPECT OF THE SHARES OF COMMON STOCK REPRESENTED BY
THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF AN AGREEMENT DATED OCTOBER 1, 1996
BY AND BETWEEN AGP AND COMPANY, INC. AND THE OTHER PARTIES THERETO, A COPY OF
WHICH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY AND MAY BE
OBTAINED WITHOUT CHARGE UPON WRITTEN REQUEST TO THE COMPANY.
Section 3.5. Appointment of Proxy for NewCo Shares. The Company hereby
revokes any and all prior proxies and hereby irrevocably appoints and
constitutes each of Omar L. Peraza and Joseph Drucker, with full power of
substitution, as the Company's proxy (i) to vote the shares of Common Stock of
NewCo (or any successor or assignee of NewCo) owned by the Company from time to
time following the closing of the Acquisition on all matters presented at any
meeting of NewCo's shareholders (including any adjournments or postponements
thereof) and/or (ii) to execute and deliver any shareholder consent in lieu
thereof, as in either case any one of them may determine in their sole
discretion. This proxy shall be effective for all purposes for five years from
date of Agreement. The proxy authority contained herein shall be deemed to be
coupled with an interest and shall be irrevocable. This proxy may not be revoked
by any successor, assign or representative of the Company for any reason
whatsoever.
Section 3.6. Non-interference. So long as this Agreement remains in full
force and effect and the Peraza Entities are not in violation of their
respective obligations hereunder, each of the Company, Bingaman and Howard shall
not take any action, or omit to take any action, for the purpose of, or
reasonably calculated to result in the, impeding, interfering with, hindering or
delaying the Acquisition; provided, however, that nothing contained herein shall
restrict or in any way limit the right of the Company, Bingaman and Howard to
require strict performance with the terms and conditions of this Agreement.
Section 3.7. Assumption of Certain Indebtedness. Upon consummation of the
Acquisition, NewCo shall assume all obligations owed by TMC to the Company
arising in the ordinary course of business in bona fide transactions.
Section 3.8. Equitable Remedies. Each of the Company, Bingaman and Howard
acknowledges that the Peraza Entities would suffer immediate and irreparable
harm for which an adequate remedy would not be available at law as a result of
any breach of this Article III. Accordingly, in the event of any breach, or
threatened breach, of the provisions of this Article III, the Peraza Entities
shall be entitled to an order of specific performance or other injunctive relief
in addition to any other rights and remedies to which the Peraza Entities may be
entitled, whether at law or in equity, and each of the Company, Bingaman and
Howard, on their own behalf and on behalf of the Bingaman Parties, hereby
irrevocably and unconditionally consents to the entry of an order providing such
relief. The Peraza Entities shall not be required to post any bond or other
security in connection with any such action for specific performance or other
injunctive relief.
Section 3.9. Survival of Provisions. The provisions of this Article III
shall survive the expiration or termination of this Agreement.
ARTICLE IV
The Border Acquisition
Section 4.1. Certain Information. Simultaneous with the execution and
delivery hereof, Bingaman shall provide Peraza with true and complete copies of
all term sheets, memoranda of understanding, letters of intent and contracts or
agreements, if any, entered into on or prior to the date hereof relating to the
Border Acquisition, including, but not limited to, all financing arrangements
with National Securities or any other person or entity (collectively, the
"Border Documents"). Prior to the earlier of (i) consummation of the Acquisition
or (ii) consummation of the Border Acquisition, Bingaman shall promptly provide
Peraza with true and complete copies of all Border Documents entered into from
and after the date hereof.
Section 4.2. Non-interference. So long as this Agreement remains in full
force and effect and the Company, Bingaman and Howard are not in violation of
their respective obligations hereunder, each Peraza Entity shall not take any
action, or omit to take any action, for the purpose of, or reasonably calculated
to result in the, impeding, interfering with, hindering or delaying the Border
Acquisition; provided, however, that nothing contained herein shall restrict or
in any way limit the right of the Peraza Entities to require strict performance
with the terms and conditions of this Agreement.
Section 4.3. Appointment of Proxy for BSM Shares. The Company hereby
revokes any and all prior proxies and hereby irrevocably appoints and
constitutes each of Steven W. Bingaman and James F. Howard, with full power of
substitution, as the Company's proxy (i) to vote the shares of Common Stock of
BSM (or any successor or assignee of BSM) owned by the Company from time to time
on all matters presented at any meeting of BSM's shareholders (including any
adjournments or postponements thereof) and/or (ii) to execute and deliver any
shareholder consent in lieu thereof, as in either case any one of them may
determine in their sole discretion. This proxy shall be effective for all
purposes for five years from the date of the Agreement. The proxy authority
contained herein shall be deemed to be coupled with an interest and shall be
irrevocable. This proxy may not be revoked by any successor, assign or
representative of the Company for any reason whatsoever.
Section 4.4. Equitable Remedies. Each of the Peraza Entities acknowledges
that the Company, Bingaman and Howard would suffer immediate and irreparable
harm for which an adequate remedy would not be available at law as a result of
any breach of this Article IV. Accordingly, in the event of any breach, or
threatened breach, of the provisions of this Article IV, the Company, Bingaman
and Howard shall be entitled to an order of specific performance or other
injunctive relief in addition to any other rights and remedies to which the
Company, Bingaman and Howard may be entitled, whether at law or in equity, and
each of Peraza Entities hereby irrevocably and unconditionally consents to the
entry of an order providing such relief. The Company, Bingaman and Howard shall
not be required to post any bond or other security in connection with any such
action for specific performance or other injunctive relief.
Section 4.5. Survival of Provisions. The provisions of this Article IV
shall survive the expiration or termination of this Agreement.
ARTICLE V
Standstill Obligations
Section 5.1. Standstill Obligations. (a) From the date hereof until
consummation of the Acquisition, the Company shall not issue, grant or sell
shares of the Company's Common Stock ("Shares") or any option, warrant,
security, right or other instrument convertible into or exchangeable or
exercisable for or otherwise giving the holder thereof the right to acquire,
directly or indirectly, any of the Company's Common Stock or any other such
option, warrant, security, right or instrument, including without limitation,
any instrument the value of which is measured by reference to the value of the
Company's Common Stock (collectively, "Rights").
(b) No later than the date hereof, the Company shall provide the Transfer
Agent with written notice in the form of Exhibit G attached hereto of the
standstill obligations contained in this Section 5.1.
Section 5.2. Exceptions. (a) The provisions of Section 5.1 shall not apply
to (i) the grant of employee stock options to purchase Shares pursuant to any
stock option plan adopted by the shareholders of the Company; and (ii) the
issuance of Shares upon the exercise of any of the employee stock options
specified in clause (i) above.
(b) Any issuance of Shares or Rights, other than grants and issuances
pursuant to Section 5.2(a)(i) and 5.2(a)(ii), shall be made for consideration at
least equal to the fair market value as of the date of issuance of such Shares
or Rights as determined by the Board of Directors of the Company in the good
faith exercise of its business judgment.
ARTICLE VI
Other Obligations
Section 6.1 Other Obligations. Until the closing of the Acquisition,
Bingaman shall continue to guarantee all loans and over-advances made by BNY
Financial Corp. ("BNY") to TMC. Until the closing of the Acquisition, Bingaman
shall, and shall cause the Company to, preserve its present relationships with
BNY, AT&T Corp. and the Company's and TMC's customers, suppliers, contractors
and distributors.
Section 6.2. Release of Guarantee. Prior to the consummation of the
Acquisition, Peraza shall obtain a release (either expressly or in substance) of
Bingaman's personal guarantee of all obligations of TMC owed to BNY effective as
of the closing of the Acquisition. Bingaman shall cooperate with Peraza in
connection therewith.
Section 6.3. Payment of Audit Fees. Upon consummation of the Acquisition,
NewCo shall pay one-half of all fees and expenses incurred by Shapiro, Weiss &
Company and M.R. Weiser in connection with the completion of the Company's 1994
and 1995 audits; provided, however, that NewCo's maximum liability pursuant to
this Section 6.3 shall not exceed $75,000 in the aggregate.
Section 6.4. Sale of Warrants. The Peraza Entities shall not object to a
sale by the Company approved by the Board of Directors of the warrants
previously issued to it covering shares of common stock of each of U.S. House
and Garden and MHI, Inc. (the "Warrants") in one or more bona fide cash sales to
one or more unrelated third parties. Provided that such use is permitted under
applicable law and is approved by the Board of Directors, the Peraza Entities
shall not object to the use by the Company of up to $200,000 of the net proceeds
from such sales to repay amounts due and owing to Bingaman. Any remaining net
proceeds shall be added to the Company's working capital.
Section 6.5. Certain Other Arrangements. In light of Drucker's affiliation
with Peraza in connection with the proposed acquisition of TMC, and in
recognition of the fact that Drucker must remain on the Company's Board of
Directors until the Action is dismissed while involving himself currently in
efforts to structure and consummate the financing transactions which NewCo must
undertake in order to be able to complete such proposed acquisition, the Company
and Drucker hereby agree as follows:
(a) Drucker shall remain employed by the Company in accordance
with the terms of the employment agreement dated March 19, 1993 between the
Company and Drucker (as amended as of September 15, 1995, the "Employment
Agreement").
(b) In the event that the Company's shareholders approve the
Acquisition at the Meeting, the Company and Drucker covenant and agree with one
another that they will negotiate in good faith with respect to the termination
of the Employment Agreement which shall provide, among other things, for a
buy-out of all sums then due (including, without limitation, accrued but unpaid
salary aggregating approximately $195,000 as of September 30, 1996), or
thereafter to become due, thereunder to Drucker; and an exchange of general
releases running from the Company and its directors and officers, acting
individually and in their representative capacities, to Drucker individually and
in his representative capacities, and from Drucker to the Company and its
directors and officers, both individually and in their representative
capacities. The Company and Drucker further covenant and agree that they shall
employ their respective best efforts to complete such negotiations and
consummate such buy-out and exchange or releases simultaneously with, or at the
closing of, the Acquisition.
(c) Notwithstanding Drucker's continued employment by the
Company pursuant to the provisions of this Section 6.5, Drucker shall vacate the
Company's office premises not later than 5:00 p.m. New York time on October 15,
1996 or such later date as Bingaman and Drucker may mutually agree, and shall
thereafter be permitted to devote such time as he may deem necessary and
appropriate to structure and consummate the above-mentioned financing
transactions on behalf of NewCo. Any such activities undertaken by Drucker shall
not be considered to constitute a violation of Drucker's obligations or
responsibilities under the Employment Agreement, and shall not otherwise
constitute grounds for the maintenance of any claim by the Company, or by anyone
acting in the Company's behalf, of an alleged breach of any duty, responsibility
or obligation which Drucker may owe to the Company. Drucker's absence from the
Company's offices shall not (i) give rise to any obligation on the Company's
part to provide him, at the Company's expense or otherwise, with an office or
with telephone, secretarial or other office facilities at any other location; or
(ii) be deemed to be, or characterized as, a dismissal, change of title or
responsibilities, vacation or leave of absence.
(d) In the event that the Company's shareholders do not
approve the Acquisition at the Meeting, Drucker shall thereupon return to the
Company's offices unless he and the Company enter into an agreement providing
otherwise.
(e) Unless and until there shall be a change in Drucker's
status as an officer, general counsel and/or director of the Company, he shall
receive from the Company, or from Hall Dickler Kent Friedman & Wood LLP, the
Company's special counsel, drafts of all documents which the Company shall be
preparing for filing with the Commission, as well as copies of all documents
actually filed by the Company with the Commission. However, in light of the
activities which Drucker shall be undertaking on behalf of NewCo, and in order
to eliminate any potential claim of a conflict of interest or a breach of any
professional or fiduciary obligation which Drucker may owe to the Company by
reason of his positions as a director and officer of, and/or as general counsel
to, the Company, Drucker shall not (except to the extent necessary for him to
satisfy his fiduciary obligations as a director or as may be required by the
Company from time to time) involve himself in any activities pertaining to the
Company's ongoing business matters until the Acquisition is either disapproved
by the Company's shareholders or consummated, whichever first occurs.
Section 6.6. Engagement. The Company shall engage Nutmeg Securities to
provide the Fairness Opinion no later than the date on which the Acquisition
Agreement is executed by the parties thereto. The Company shall be solely
responsible for the fees and expenses of Nutmeg Securities in connection
therewith.
ARTICLE VII
Representations and Warranties Relating to Bingaman, Howard and the Company
Each of Bingaman, Howard and the Company, severally and not jointly,
represents and warrants to the Peraza Entities as follows:
Section 7.1. Organization; Authorization. The Company is duly
organized, validly existing and in good standing under the laws of the State of
New Jersey and has full power and authority to execute and deliver this
Agreement and to perform its obligations hereunder, all of which have been duly
authorized by all requisite corporate action (other than shareholder approval of
the Acquisition). Each of Bingaman and Howard has the capacity to execute and
deliver this Agreement and to perform his obligations hereunder and neither
Bingaman nor Howard is under any impairment or other disability, legal,
physical, mental or otherwise, that would preclude or limit his ability to
perform his obligations hereunder. This Agreement has been duly authorized,
executed and delivered by Bingaman, Howard and the Company and constitutes a
valid and binding agreement of each of them, enforceable against each of them in
accordance with its terms.
Section 7.2. Non-contravention. Neither the execution and delivery of
this Agreement by Bingaman, Howard or the Company nor the performance by any of
them of their obligations hereunder will (i) contravene any provision contained
in the Certificate of Incorporation or by-laws of the Company, (ii) violate or
result in a breach (with or without the lapse of time, the giving of notice or
both) of or constitute a default under (A) any material contract, agreement,
commitment, indenture, mortgage, lease, pledge, note, license, permit or other
instrument or obligation or (B) any judgment, order, decree, law, rule or
regulation or other restriction of any governmental authority, in each case to
which any of them is a party or by which any of them is bound or to which any of
their respective assets or properties are subject, (iii) result in the creation
or imposition of any material lien, claim, charge, mortgage, pledge, security
interest, equity, restriction or other encumbrance (collectively,
"Encumbrances") on any of the assets or properties of any of them, or (iv)
result in the acceleration of, or permit any person to accelerate or declare due
and payable prior to its stated maturity, any obligation of any of them.
Section 7.3. No Consents. Other than in connection with the shareholder
approval required for the Acquisition and the Border Acquisition, no notice to,
filing with, or authorization, registration, consent or approval of any
governmental authority or other person is necessary for the execution, delivery
or performance of this Agreement or the consummation of the transactions
contemplated hereby by Bingaman, Howard or the Company.
Section 7.4. Ownership of Restricted Shares. A true and complete
listing of each Bingaman Party, and the number of shares of Common Stock held by
each such Bingaman Party as of the date hereof is attached hereto as Exhibit H.
Each Bingaman Party is the sole beneficial owner of the shares of Common Stock
set forth opposite their names on Exhibit H (except as indicated on such
Exhibit) free and clear of any Encumbrances. Except as created hereby, there are
no voting trust arrangements, shareholder agreements or other agreements (i)
granting any option, warrant, proxy or right of first refusal with respect to
the Restricted Shares to any person or entity, (ii) restricting the right of any
Bingaman Party to grant the proxies contemplated hereby, or (iii) restricting
the right of the Bingaman Parties to vote the Restricted Shares owned by them.
Each Bingaman Party has the absolute and unrestricted right, power and capacity
to grant the proxies contemplated hereby free and clear of any Encumbrances
(except for restrictions imposed generally by applicable securities laws).
Section 7.5. Accuracy of the Proxy Materials. The Proxy Materials will
comply as to form, in all material respects, with the requirements of the
Exchange Act and the rules and regulations of the Commission promulgated
thereunder, and, at the time of filing with the Commission, at the time of
mailing to the Company's shareholders and on the date of the Meeting will not
contain any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Section 7.6. Ownership of Warrants. The Company is the sole legal and
beneficial owner of the Warrants free and clear of any Encumbrances. There are
no voting trust arrangements, shareholder agreements or other agreements
granting any option, warrant, proxy or right of first refusal with respect to
the Warrants to any person or entity. The Company has the absolute and
unrestricted right, power and capacity to sell the Warrants as contemplated
hereby free and clear of any Encumbrances (except for restrictions imposed
generally by applicable securities laws). True and complete copies of the
Warrants have been provided to Drucker on or prior to the date hereof.
ARTICLE VIII
Representations and Warranties Relating to the Peraza Entities
Each of the Peraza Entities, severally and not jointly, represents and
warrants to Bingaman, Howard and the Company as follows:
Section 8.1. Organization; Authorization. NewCo is duly organized,
validly existing and in good standing under the laws of the State of Delaware
and has full power and authority to execute and deliver this Agreement and to
perform its obligations hereunder, all of which have been duly authorized by all
requisite corporate action. Each of the Trust and the Drucker Trust has been
duly created and is validly existing under the laws of the state of its
formation. Peraza has been duly appointed as, and is currently acting as, the
sole trustee of the Trust. R. Drucker and Fortin have been duly appointed as,
and are currently acting as, the sole trustees of the Drucker Trust. Each of the
Trust, the Drucker Trust, Peraza, Drucker, R. Drucker and Fortin has the
capacity and authority to execute and deliver this Agreement and to perform its
obligations hereunder, in the case of the Trust and the Drucker Trust only, all
of which have been duly authorized by all requisite action on behalf of the
Trust or the Drucker Trust, as the case may be. No Peraza Party is under any
impairment or other disability, legal, physical, mental or otherwise, that would
preclude or limit the ability of the Peraza Entities to perform their respective
obligations hereunder. This Agreement has been duly authorized, executed and
delivered by each Peraza Party and constitutes a valid and binding obligation of
each Peraza Party, enforceable against each of them in accordance with its
terms.
Section 8.2. Non-contravention. Neither the execution and delivery of
this Agreement by any Peraza Party nor the performance by any of them of their
obligations hereunder will (i) contravene any provision contained in (x) the
Certificate of Incorporation or by-laws of NewCo, or (y) the trust instrument
creating the Trust or the Drucker Trust, as the case may be, (ii) violate or
result in a breach (with or without the lapse of time, the giving of notice or
both) of or constitute a default under (A) any material contract, agreement,
commitment, indenture, mortgage, lease, pledge, note, license, permit or other
instrument or obligation or (B) any judgment, order, decree, law, rule or
regulation or other restriction of any governmental authority, in each case to
which any of them is a party or by which any of them is bound or to which any of
their respective assets or properties are subject, (iii) result in the creation
or imposition of any material Encumbrance on any of the assets or properties of
any of them, or (iv) result in the acceleration of, or permit any person to
accelerate or declare due and payable prior to its stated maturity, any
obligation of any of them.
Section 8.3. No Consents. No notice to, filing with, or authorization,
registration, consent or approval of any governmental authority or other person
is necessary for the execution, delivery or performance of this Agreement or the
consummation of the transactions contemplated hereby by the Peraza Entities.
ARTICLE IX
Additional Covenants and Agreements
Section 9.1. Affirmative Covenants. From the date hereof until the
earlier of (i) consummation of the Acquisition, or (ii) the delivery of the
resignations to Peraza pursuant to the terms of the Escrow Agreement, Bingaman,
Howard and the Company shall, and shall cause their respective affiliates to:
(a) not take any action, or omit to take any action, for the purpose
of, or reasonably calculated to result in the, impeding, interfering with,
hindering or delaying the conduct of the business of TMC;
(b) conduct the business of the Company only in the ordinary and
regular course of business consistent with past practices;
(c) keep in full force and effect all material rights, franchises,
licenses, proprietary rights and goodwill relating or obtaining to the business
of the Company;
(d) endeavor to retain the employees of the Company and preserve its
present relationships with customers, suppliers, contractors, distributors and
such employees, and continue to compensate such employees consistent with past
practices;
(e) maintain the assets of the Company in customary repair, order and
condition and maintain insurance reasonably comparable to that in effect on the
date of this Agreement; and in the event of any casualty, loss or damage to any
of the assets of the Company repair or replace such assets with assets of
comparable quality;
(f) maintain the books, accounts and records of the Company in
accordance with generally accepted accounting principles, to the extent
applicable, and sound business practices;
(g) obtain all authorizations, consents, waivers, approvals or other
actions necessary or desirable to consummate the Acquisition and the other
transactions contemplated hereby; and
(h) promptly inform Peraza in writing of any material breach of or
change in the representations and warranties contained in Article VI hereof.
Section 9.2. Negative Covenants. From the date hereof until the earlier
of (i) consummation of the Acquisition, or (ii) the delivery of the resignations
to Peraza pursuant to the terms of the Escrow Agreement, Bingaman, Howard and
the Company shall not, and shall cause their respective affiliates not to:
(a) enter into any contract, agreement or commitment or take any other
action which, if entered into or taken prior to the date of this Agreement,
would cause any representation or warranty of Bingaman, Howard or the Company to
be untrue;
(b) enter into any contract, agreement, commitment or understanding,
make any payment to, or otherwise engage in any transaction with, Bingaman or
Howard or their respective affiliates; provided, however, that, subject to
approval by the Board of Directors, the Company may enter into such contracts,
agreements, commitments or understandings with Bingaman as may be reasonably
necessary in connection with the financing of the Company's operations;
(c) incur, create or suffer to exist any Encumbrance on the assets of
the Company and TMC;
(d) take or omit to be taken any action, or permit its affiliates to
take or to omit to take any action, which has or which could reasonably be
expected to have a material adverse effect on the business, financial condition,
results of operations or the prospects (financial or other) of the Company or
TMC;
(e) except as expressly provided in Section 9.1(c), cancel any debts
owed to or claims held by the Company (including the settlement of any claims or
litigation) other than in the ordinary course of business consistent with past
business practices;
(f) accelerate collection of any notes or accounts receivable generated
by the Company in advance of their regular due dates or the dates when the same
would have been collected in the ordinary course of business consistent with
past business practices;
(g) make any material change in the compensation of the employees of
the Company, other than changes made in accordance with normal compensation
practices and consistent with past compensation practices; or
(h) take or omit to be taken any action, or permit its respective
affiliates to take or to omit to take any action, other than in the ordinary
course of business, consistent with past practices.
Section 9.3. Further Assurances. Subject to the terms and conditions
herein provided, each of the parties hereto shall take, or cause to be taken,
all action, and to do, or cause to be done, all things reasonably necessary,
proper or advisable under applicable laws and regulations to consummate and make
effective the transactions contemplated by this Agreement. In the event that at
any time hereafter any further action is necessary to carry out the purposes of
this Agreement, the parties hereto shall take all such action without any
further consideration therefor.
ARTICLE X
Miscellaneous
Section 10.1. Notices. All notices or other communications required or
permitted hereunder shall be in writing and shall be delivered personally, by
facsimile or sent by certified, registered or express air mail, postage prepaid,
and shall be deemed given when so delivered personally, or by facsimile, or if
mailed, five days after the date of mailing, as follows:
If to Bingaman, Howard
or the Company: Mr. Steven W. Bingaman, President
AGP and Company, Inc.
551 Fifth Avenue
New York, New York 10017
with copies to:
Steven D. Dreyer, Esq.
Hall Dickler Kent Friedman & Wood LLP
909 Third Avenue
New York, NY 10022-9998
If to the Peraza Entities: Mr. Omar L. Peraza
42 Oak Drive
Bedford, Hew Hampshire 03110
and to: Ms. Mindy Fortin
21 Fencerow Drive
Fairfield, Connecticut 06430
with copies to:
Joseph Drucker, Esq.
16 Stuyvesant Place
Elberon, New Jersey 07740
and
Peter H. Ehrenberg, Esq.
Lowenstein, Sandler, Kohl, Fisher & Boylan, P.A.
65 Livingston Avenue
Roseland, New Jersey 07068
or to such other address as any party hereto shall notify the other parties
hereto (as provided above) from time to time.
Section 10.2. Expenses. Regardless of whether the transactions provided
for in this Agreement are consummated, except as otherwise provided herein, each
party hereto shall pay its own expenses incident to this Agreement and the
transactions contemplated herein.
Section 10.3. Governing Law; Consent to Jurisdiction. This Agreement
shall be governed by, and construed in accordance with, the internal laws of the
State of New Jersey, without reference to the choice of law principles thereof.
Each of the parties hereto irrevocably submits to the exclusive jurisdiction of
the courts of the State of New Jersey and the United States District Court for
the District of New Jersey for the purpose of any suit, action, proceeding or
judgment relating to or arising out of this Agreement and the transactions
contemplated hereby. Service of process in connection with any such suit, action
or proceeding may be served on each party hereto anywhere in the world by the
same methods as are specified for the giving of notices under this Agreement.
Each of the parties hereto irrevocably consents to the jurisdiction of any such
court in any such suit, action or proceeding and to the laying of venue in such
court. Each party hereto irrevocably waives any objection to the laying of venue
of any such suit, action or proceeding brought in such courts and irrevocably
waives any claim that any such suit, action or proceeding brought in any such
court has been brought in an inconvenient forum.
Section 10.4. Assignment; Successors and Assigns; No Third Party
Rights. This Agreement may not be assigned by operation of law or otherwise, and
any attempted assignment shall be null and void; provided, that, NewCo may
assign its rights and obligations hereunder to any other entity formed for the
purpose of effecting the Acquisition. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs,
successors, assigns and legal representatives.
Section 10.5. Counterparts. This Agreement may be executed in counter-
parts, each of which shall be deemed an original agreement, but all of which
together shall constitute one and the same instrument.
Section 10.6. Titles and Headings. The headings in this Agreement
are for reference purposes only, and shall not in any way affect the meaning or
interpretation of this Agreement.
Section 10.7. Entire Agreement. This Agreement, including the Exhibits
attached hereto, constitutes the entire agreement among the parties with respect
to the matters covered hereby and supersedes all previous written, oral or
implied understandings among them with respect to such matters.
Section 10.8. Amendment and Modification. This Agreement may only be
amended or modified in writing signed by the party against whom enforcement of
such amendment or modification is sought.
Section 10.9. Public Announcement. Except as may be required by law, no
party hereto shall issue any press release or otherwise publicly disclose the
existence of this Agreement or the terms and conditions hereof or any dealings
between or among the parties in connection with the subject matter hereof
without the prior approval of the other. Notwithstanding the foregoing, the
parties hereto may disclose this Agreement and the terms and conditions hereof
(i) to members of their respective immediate families, (ii) to their respective
legal and financial advisors, (iii) to the Commission, and (iv) in connection
with any litigation among the parties hereto.
Section 10.10. Waiver. Any of the terms or conditions of this Agreement
may be waived at any time by the party or parties entitled to the benefit
thereof, but only by a writing signed by the party or parties waiving such terms
or conditions.
Section 10.11. Severability. The invalidity of any portion hereof shall
not affect the validity, force or effect of the remaining portions hereof. If it
is ever held that any restriction hereunder is too broad to permit enforcement
of such restriction to its fullest extent, such restriction shall be enforced to
the maximum extent permitted by law.
Section 10.12. No Strict Construction. Each of the parties hereto
acknowledge that this Agreement has been prepared jointly by the parties hereto,
and shall not be strictly construed against any party.
Section 10.13. Time of the Essence. Time shall be of the essence in
connection with the performance of this Agreement. Accordingly, Bingaman, Howard
and the Company acknowledge that their failure to meet the time deadlines
specified herein shall be deemed to be a material breach by them of the terms
hereof, entitling the Peraza Entities to the remedies specified in Section 2.1
hereof.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
AGP AND COMPANY, INC.
By: /s/Steven W. Bingaman
___________________________
Name: Steven W. Bingaman
Title: President
WITNESS:
/s/Steven Dreyer /s/Steven W. Bingaman
________________________________
Steven W. Bingaman, Individually
WITNESS:
/s/Steven Dreyer /s/James L. Howard
________________________________
James F. Howard, Individually
SOCIAL EXPRESSIONS
ACQUISITION CORPORATION
By:/s/Omar L. Peraza
_____________________________
Name: Omar L. Peraza
Title: President
THE PERAZA TRUST U/I/T/
DATED MAY 18, 1989
By: /s/Omar L. Peraza
____________________________
Name: Omar L. Peraza
Title: Trustee
WITNESS:
/s/Joseph Drucker
/s/Omar L. Peraza
____________________________
Omar L. Peraza, Individually
THE JOSEPH DRUCKER 1995 TRUST
By: /s/Robert Drucker
___________________________
Name: Robert Drucker
Title: Co-Trustee
By: /s/Mindy Fortin
___________________________
Name: Mindy Fortin
Title: Co-Trustee
WITNESS:
/s/Omar Peraza /s/Joseph Drucker
____________________________
Joseph Drucker, Individually
October 1, 1996
Mr. Omar L. Peraza
24 Oak Drive
Bedford, New Hampshire 03110
Dear Omar:
Reference is hereby made to the proposed form of Settlement Agreement
(the "Agreement") to be entered into among AGP and Company, Inc. (the
"Company"), Social Expressions Acquisition Corporation ("NewCo"), yourself and
certain persons and entities associated with you (NewCo and such persons and
entities collectively the "Peraza Entities"). Capitalized terms used herein have
the respective meanings ascribed thereto in the Agreement unless otherwise
defined herein.
In order to induce the Peraza Entities to execute and deliver the
Agreement and to perform their respective obligations thereunder, The Blackmor
Group, Inc. ("Blackmor") hereby agrees as follows:
1. Blackmor shall cause all of the shares of the Company's Common Stock
owned by it, whether beneficially or of record, as of the record date for the
Meeting (collectively, the "Blackmor Shares"), to be present at the Meeting (or
to be represented by valid proxies) and shall cause the Blackmor Shares to be
voted in favor of the Acquisition and the Acquisition Agreement at the Meeting
(including any adjournments or postponements thereof) and otherwise shall cause
the Blackmor Shares to voted at the Meeting in accordance with Peraza's
recommendations.
2. Blackmor hereby acknowledges that the Peraza Entities would suffer
immediate and irreparable harm for which an adequate remedy would not be
available at law as a result of any breach of the terms of this letter.
Accordingly, in the event of any breach, or threatened breach, of the provisions
of this letter, the Peraza Entities shall be entitled to an order of specific
performance or other injunctive relief in addition to any other rights and
remedies to which the Peraza Entities may be entitled, whether at law or in
equity, and Blackmor hereby irrevocably and unconditionally consents to the
entry of an order providing such relief. The Peraza Entities shall not be
required to post any bond or other security in connection with any such action
for specific performance or other injunctive relief.
3. The provisions hereof shall survive the expiration or termination
of the Agreement.
4. In connection herewith, Blackmor hereby represents and warrants
to the Peraza Entities as follows:
(a) Blackmor is duly organized, validly existing and in good
standing under the laws of the State of Florida and has full power and authority
to execute and deliver this letter and to perform its obligations hereunder, all
of which have been duly authorized by all requisite corporate action This letter
has been duly authorized, executed and delivered by Blackmor and constitutes a
valid and binding agreement of Blackmor, enforceable against it in accordance
with its terms.
(b) Neither the execution and delivery of this letter by
Blackmor nor the performance by it of its obligations hereunder will (i)
contravene any provision contained in the Certificate of Incorporation or
by-laws of Blackmor, (ii) violate or result in a breach (with or without the
lapse of time, the giving of notice or both) of or constitute a default under
(A) any material contract, agreement, commitment, indenture, mortgage, lease,
pledge, note, license, permit or other instrument or obligation or (B) any
judgment, order, decree, law, rule or regulation or other restriction of any
governmental authority, in each case to which Blackmor is a party or by which it
is bound or to which any of its assets or properties are subject, (iii) result
in the creation or imposition of any material lien, claim, charge, mortgage,
pledge, security interest, equity, restriction or other encumbrance
(collectively, "Encumbrances") on any of Blackmor's assets or properties, or
(iv) result in the acceleration of, or permit any person to accelerate or
declare due and payable prior to its stated maturity, any obligation of
Blackmor.
(c) As of the date hereof, Blackmor is the sole beneficial
owner of 1,050,000 Blackmor Shares, free and clear of any Encumbrances. Except
as created hereby, there are no voting trust arrangements, shareholder
agreements or other agreements (i) granting any option, warrant, proxy or right
of first refusal with respect to the Blackmor Shares to any person or entity,
(ii) restricting the right of Blackmor to enter into the transactions
contemplated hereby, or (iii) restricting the right of Blackmor to vote the
Blackmor Shares as provided in Section 1 hereof. Blackmor has the absolute and
unrestricted right, power and capacity to vote the Blackmor Shares as provided
in Section 1 hereof free and clear of any Encumbrances (except for restrictions
imposed generally by applicable securities laws).
(d) No notice to, filing with, or authorization, registration,
consent or approval of any governmental authority or other person is necessary
for the execution, delivery or performance of this letter or the consummation of
the transactions contemplated hereby by Blackmor.
5. (a) This letter (and all matters arising, directly or indirectly,
from it) shall be governed by, and construed in accordance with, the internal
laws of the State of New Jersey, without reference to the choice of law
principles thereof. Blackmor hereby irrevocably submits to the exclusive
jurisdiction of the courts of the State of New Jersey and the United States
District Court for the District of New Jersey for the purpose of any suit,
action, proceeding or judgment relating to or arising out of this letter and the
transactions contemplated hereby. Service of process in connection with any such
suit, action or proceeding may be served on Blackmor anywhere in the world by
the same methods as are specified for the giving of notices under the Agreement.
Blackmor hereby irrevocably consents to the jurisdiction of any such court in
any such suit, action or proceeding and to the laying of venue in such court.
Blackmor hereby irrevocably waives any objection to the laying of venue of any
such suit, action or proceeding brought in such courts and irrevocably waive any
claim that any such suit, action or proceeding brought in any such court has
been brought in an inconvenient forum.
(b) This letter may not be assigned by operation of law or
otherwise, and any attempted assignment shall be null and void. This letter
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors, permitted assigns and legal representatives.
(c) This letter constitutes the entire letter among the
parties with respect to the matters covered hereby and supersedes all previous
written, oral or implied understandings among them with respect to such matters.
(d) The invalidity of any portion hereof shall not affect the
validity, force or effect of the remaining portions hereof. If it is ever held
that any restriction hereunder is too broad to permit enforcement of such
restriction to its fullest extent, such restriction shall be enforced to the
maximum extent permitted by law.
(e) From time to time after the date hereof upon the
reasonable request of any Peraza Entity, Blackmor shall execute or cause to be
executed such other documents or instruments and shall perform such other acts
as may be reasonably necessary or desirable to carry out the terms hereof.
<PAGE>
If the foregoing accurately reflects our mutual understanding, please
execute a counterpart of this letter in the space provided below and return it
to the undersigned.
Very truly yours,
/s/John T, Moran
__________________________
John T. Moran,
President
cc: Steven W. Bingaman
Steven D. Dreyer, Esq.
Joseph Drucker, Esq.
ACCEPTED AND AGREED:
/s/Omar L. Peraza
_________________
Omar L. Peraza
