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EXHIBIT 3
STOCK TRANSFER RESTRICTION AGREEMENT
This Stock Transfer Restriction Agreement (this "Agreement") is made
effective April 22, 1998, between BRIGHTSTAR INFORMATION TECHNOLOGY GROUP,
INC., a Delaware corporation ("Parent"), and Xxxxx X. Xxxxxxxxx,
("Shareholder").
WHEREAS, Parent and the Shareholder have entered into that certain
Agreement and Plan of Exchange dated December 18, 1997 ("Exchange Agreement")
by and among Parent and the holders of all of the outstanding capital stock of
XXXXX X. XXXXXXXXX AND ASSOCIATES, INC., a Texas corporation, which provides
for the issuance to Shareholder of certain Common Stock, $.001 par value per
share, of Parent ("Parent Common Stock");
WHEREAS, as required by the Exchange Agreement, certain restrictions
are to be placed on the disposition of the shares of Parent Common Stock to be
issued to the Shareholder pursuant to the Exchange Agreement and on any other
capital stock of Parent held by Shareholder.
NOW, THEREFORE, in consideration of the Exchange Agreement and the
premises and the agreements herein contained, and intending to be legally bound
hereby, the parties agree as follows:
1. Definitions.
(a) For purposes hereof, the term "Stock" shall mean any
capital stock of Parent now or at any time hereafter held of record or
beneficially by the Shareholder, including, without limitation, the Parent
Common Stock to be issued to the Shareholder pursuant to the Exchange
Agreement.
(b) The term "Disposition" shall mean any direct or
indirect transfer, assignment, gift, pledge, hypothecation, encumbrance or
other disposition.
(c) The term "Permitted Disposition" shall mean:
(i) A transfer of any Stock of the Shareholder upon
the Shareholder's death to his estate, heirs or devisees by will or
the laws of descent and distribution if each such transferee agrees in
writing to be bound by all of the provisions of this Agreement to the
same extent as if such transferee were the Shareholder by execution of
an Adoption Agreement in the form attached hereto as Exhibit A;
(ii) Any gift of Stock by the Shareholder to the
Shareholder's sibling(s) or direct lineal ascendent(s) or
descendent(s) (including any adopted children) (or to a trust created
for the benefit of any such sibling(s) or direct lineal ascendent(s)
or descendent(s)) if each such recipient of such gift agrees in
writing to be bound by all of the provisions of this Agreement to the
same extent as if such recipient were the Shareholder, by execution of
an Adoption Agreement in the form attached hereto as Exhibit A;
(iii) A transfer of any Stock of the Shareholder to
its shareholders if each such shareholder agrees in writing to be
bound by all of the provisions of this Agreement to the
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same extent as if such shareholder were the Shareholder, by execution
of an Adoption Agreement in the form attached hereto as Exhibit A; and
(iv) A transfer of any Stock of the Shareholder to a
Family Limited Partnership created for the benefit of the Shareholder,
Shareholder's spouse, Shareholder's sibling(s) or direct ascendant(s)
or descendant(s) (including any adopted children) if such Family
Limited Partnership agrees in writing to be bound by all of the
provisions of this Agreement to the same extent as if such shareholder
were the Shareholder, by execution of an Adoption Agreement in the
form attached hereto as Exhibit A.
2. Limitations on Dispositions. The Shareholder shall not make
any Disposition of any Stock during the period beginning on the date of this
agreement and for 365 days thereafter, except for a Permitted Disposition which
is not in violation of any federal or state securities laws.
3. Securities Laws Limitation. The Shareholder shall not make
any Disposition of any Stock at any time if such action would constitute (i) a
violation of the registration requirements of any federal or state securities
laws, (ii) a breach of any condition to any exemption from registration of the
Stock under any such laws, or (iii) a breach of any undertaking or agreement of
the Shareholder entered into pursuant to such laws or in connection with
obtaining an exemption thereunder. The Shareholder may dispose of the Stock in
compliance with the requirements of Rule 144 under the Securities Act of 1933
if not otherwise limited by this Agreement.
4. Standstill Agreement. During the two year period after the
date hereof, if Parent is engaged in an underwritten public offering of its
securities, the Shareholder shall not make any Disposition of any Stock on a
securities exchange or in the over-the-counter or any other public trading
market for whatever period of time and under such terms that Parent shall
direct by written notice given to the Shareholder based on the recommendation
of its underwriters; provided, however, that (i) such request shall not be for
a period extending longer than that applicable to management shareholders of
Parent; and (ii) any restrictions recommended by the underwriters shall not be
more restrictive than those imposed on the management shareholders of Parent.
5. Legal Opinion. Prior to any proposed Disposition (including a
Permitted Disposition) of any Stock by the Shareholder, and unless waived by
Parent, the Shareholder shall provide to Parent a written opinion of legal
counsel, which counsel and opinion shall be reasonably satisfactory to Parent,
to the effect that the proposed Disposition, which shall be accurately
described in such opinion, is in compliance with this Agreement and is
permitted by this Agreement and any other agreement to which the Shareholder is
a party restricting the transferability of such Stock. Any certificate
representing shares of Stock shall bear appropriate legends restricting the
sale or other transfer of such Stock in accordance with applicable federal or
state securities laws and in accordance with the provisions of this Agreement.
6. Legend; Stop Transfer Instructions. Parent shall place a
legend on either side of all certificates representing shares of Stock now
owned or hereafter acquired by the Shareholder, or any permitted transferee,
during the term of this
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Agreement to provide notice of the existence of this Agreement and its
applicability to any Disposition of Stock. The legend shall be in
substantially the following form:
BY THE TERMS OF A STOCK TRANSFER RESTRICTION AGREEMENT BETWEEN
THE HOLDER AND THE ISSUER HEREOF, CERTAIN RESTRICTIONS HAVE BEEN
PLACED UPON THE TRANSFERABILITY OF THE SHARES REPRESENTED BY THIS
CERTIFICATE. THE COMPANY WILL FURNISH COPIES OF SUCH AGREEMENTS TO
THE RECORD HOLDER OF THIS CERTIFICATE WITHOUT CHARGE UPON WRITTEN
REQUEST TO THE COMPANY AT ITS PRINCIPAL PLACE OF BUSINESS OR
REGISTERED OFFICE.
Parent also shall place stop transfer instructions with respect to such shares
of Stock in its stock transfer records for such purpose.
7. Breach. Any Disposition or attempted Disposition in breach of
this Agreement shall be void and of no effect. In connection with any such
voided Disposition, Parent may hold and refuse to transfer any Stock or
certificate therefor tendered for transfer, in addition and without prejudice
to any and all other rights and remedies which may be available to Parent.
8. Specific Enforcement. The Shareholder expressly agrees that
Parent will be irreparably damaged if this Agreement is not specifically
enforced. Upon a breach or threatened breach of the terms, covenants and/or
conditions of this Agreement by the Shareholder, Parent shall, in addition to
all other remedies, be entitled to a temporary or permanent injunction, without
showing any actual damage, and/or a decree for specific performance, in
accordance with the provisions hereof, against the Shareholder.
9. Certain Participation Provisions. Parent shall not allow any
of the officers and directors of Parent to include any shares of Parent Common
Stock owned by them in a public offering of Parent Common Stock registered
under the securities laws during the two-year period following the IPO Closing
Date (as defined in the Exchange Agreement) without allowing the owners of the
Founding Companies identified in the PPM (as defined in the Exchange
Agreement), who received restricted Parent Common Stock in the sale of the
stock or assets of the Founding Companies to Parent, to have the opportunity to
include in such an offering the restricted shares of Parent Common Stock
received by them as a result of such stock or asset sales, on the same terms
and conditions as for said officers and directors, and in relative amounts pro
rata to the number of shares of restricted Parent Common Stock owned by the
above parties who participate in such an offering.
10. Governing Law; Successors and Assigns. This Agreement shall
be governed by the laws of the State of Texas and shall be binding upon the
heirs, personal representatives, executors, administrators, and permitted
successors and assigns of the parties.
11. Waivers. No waiver of any breach or default hereunder shall
be considered valid unless in writing, and no such waiver shall be deemed a
waiver of any subsequent breach or default of the same or similar nature.
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12. Severability. If any provision of this Agreement shall be
held to be illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any
manner affect or render illegal, invalid or unenforceable any other provision
of this Agreement, and this Agreement shall be carried out as if any such
illegal, invalid or unenforceable provision were not contained herein.
13. Captions. Captions are for convenience only and are not
deemed to be part of this Agreement.
14. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15. Notices. Any notice, reply or other communication required or
permitted to be given under this Agreement must be given in writing and may be
served by depositing the same in the United States mail, certified, postage
prepaid, and addressed to the party or parties to be notified, or by delivering
such notice in person to such party or parties. Such notice shall be effective
upon receipt by the party to whom the notice is to be given. For the purposes
of this Section 15, the address of Parent shall be:
BrightStar Information Technology Group, Inc.
Attention: President
00000 Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
The address of the Shareholder shall be the Shareholder's address as shown on
the signature page hereto or on an Adoption Agreement. Parent and the
Shareholder shall have the right to change its or his address by giving written
notice of the new address to the other party to this Agreement.
This Agreement is executed by the parties hereto and shall be
effective as of the date first above written.
PARENT: SHAREHOLDER:
BrightStar Information
Technology Group, Inc.
/s/ XXXXX X. XXXXXXXXX
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(Signature)
By: /s/ XXXXXX X. XXXXXXX Print
--------------------------------- Name: XXXXX X. XXXXXXXXX
Xxxxxx X. Xxxxxxx, Executive Vice --------------------------------
President Address: 4433 Belclaire
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Xxxxxx, Xxxxx 00000
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(please print)
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