STOCKHOLDERS' AGREEMENT
DATED AS OF _________ ___, 1997
AMONG
XXXXXXXX XXXX COMPANY,
A DELAWARE CORPORATION,
AND
THE OTHER PARTIES LISTED ON THE SIGNATURE PAGES HERETO
STOCKHOLDERS' AGREEMENT
This Stockholders' Agreement (this "Agreement"), is made and entered into
as of ___________, 1997, by and among Xxxxxxxx Xxxx Company, a Delaware
corporation (the "Company"), Crow Family Partnership, L.P. ("Crow Family"), CFH
TRADE-NAMES, L.P., a Texas limited partnership ("CFH," and together with Crow
Family, "Crow"), X. XxXxxxxx Xxxxxxxx ("Xxxxxxxx") and the other parties listed
on the signature pages hereto (the "Management Stockholders").
RECITALS
WHEREAS, following the merger of Xxxxxxxx Xxxx Company, a Texas close
corporation, with and into TCC Merger Sub, Inc., a Delaware corporation and a
wholly owned subsidiary of the Company, both Crow and Xxxxxxxx will be owners of
shares of Common Stock, $.01 par value, of the Company ("Common Stock");
WHEREAS, the Company, Crow and Xxxxxxxx desire to enter into this Agreement
to reflect certain understandings they have reached with respect to (i) the
registration under the Securities Act of 1933 (the "Securities Act") of shares
of Common Stock owned by Crow, Xxxxxxxx and their assignees, (ii) notice with
respect to certain private transfers of shares of Common Stock owned by Crow and
Xxxxxxxx, (iii) the non-solicitation by each of the Company and Crow of the
other's officer-level employees and (iv) the nomination for election to the
Company's Board of Directors of a nominee of Crow, and the Management
Stockholders wish to enter into this Agreement to reflect their agreement to
vote in favor of such nominee;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby, the
parties hereto agree as follows:
ARTICLE I - REGISTRATION RIGHTS
1.1 DEFINITIONS. For purposes of this Agreement, the following terms have
the following meanings when used herein with initial capital letters:
ADVICE: As defined in Section 1.5 hereof.
BLACKOUT PERIOD: As defined in Section 1.5 hereof.
CROW: As defined in the Recitals hereof.
COMMON STOCK: As defined in the Recitals hereof.
DEMAND NOTICE: As defined in Section 1.2 hereof.
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DEMAND REGISTRATION: As defined in Section 1.2 hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934.
LOSSES: As defined in Section 1.7 thereof.
MANAGEMENT STOCKHOLDERS: As defined in the Recitals hereof.
NASDAQ: As defined in Section 1.5(l) hereof.
NOTICE: As defined in Section 1.2(b) hereof.
PIGGYBACK REGISTRATION: As defined in Section 1.3 hereof.
PROSPECTUS: The prospectus included in any Registration Statement
(including without limitation a prospectus that discloses information previously
omitted from a prospectus filed as part of an effective registration statement
in reliance upon Rule 430A promulgated under the Securities Act), as amended or
supplemented by any prospectus supplement, with respect to the terms of the
offering of any portion of the Registrable Securities covered by such
Registration Statement and all other amendments and supplements to the
Prospectus, including post-effective amendments, and all material incorporated
by reference or deemed to be incorporated by reference in such Prospectus.
REGISTRABLE SECURITIES: The Shares, together with (a) other shares of
Common Stock held by Crow, Xxxxxxxx or their respective successors and assigns
that are "restricted securities" (as such term is defined in Rule 144) and (b)
other shares of Common Stock issuable upon conversion, exercise or exchange of
other securities of the Company sold by the Company in a private transaction to
Crow, Xxxxxxxx or any of their affiliates that are controlled by or under common
control with Crow or Xxxxxxxx, from the respective original issuance thereof
until, in the case of any such share of Common Stock, (i) it is effectively
registered under the Securities Act and disposed of in accordance with the
Registration Statement covering it, (ii) it is saleable by the holder thereof
pursuant to Rule 144(k), or (iii) it is distributed to the public by the holder
thereof pursuant to Rule 144; provided, however, that any shares of Common Stock
held by assignees of Crow that would otherwise be Registrable Securities shall
cease to be Registrable Securities immediately upon the effectiveness of the
Registration Statement filed on account of the sixth Underwritten Demand
Registration effected hereunder if not included in such Registration Statement.
A share of Common Stock shall not be deemed to be saleable by the holder thereof
pursuant to Rule 144(k) while one or more of its affiliates is a director of the
Company.
REGISTRATION EXPENSES: As defined in Section 1.6 hereof.
REGISTRATION STATEMENT: Any registration statement of the Company
under the Securities Act that covers any of the Registrable Securities pursuant
to the provisions of this Agreement, including the related Prospectus, all
amendments and supplements to such registration
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statement (including post-effective amendments), all exhibits and all
material incorporated by reference or deemed to be incorporated by reference
in such registration statement.
RULE 144: Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
SEC: The Securities and Exchange Commission.
SECURITIES ACT: As defined in the Recitals hereof.
SHARES: All shares of Common Stock acquired by Crow or Xxxxxxxx
pursuant to any of the transactions contemplated by the Agreement and Plan of
Merger dated as of August 22, 1997, as amended, and any shares of Common Stock
acquired by either Crow or Xxxxxxxx prior to the consummation of such
transactions.
SHELF DEMAND REGISTRATION: As defined in Section 1.2(a) hereof.
SPECIAL COUNSEL: In connection with any registration of Registrable
Securities effected (or sought to be effected) hereunder, one counsel chosen by
the holders of a majority of such Registrable Securities.
UNDERWRITTEN DEMAND REGISTRATION. As defined in Section 1.2(a)
hereof.
UNDERWRITTEN REGISTRATION OR UNDERWRITTEN OFFERING: A registration in
which securities of the Company are sold to an underwriter for reoffering to the
public.
XXXXXXXX: As defined in the Recitals hereof.
1.2 DEMAND REGISTRATION.
(a) REQUESTS FOR REGISTRATION. At any time and from time to time
one or more holders of Registrable Securities will have the right, by written
notice delivered to the Company (a "Demand Notice"), to require the Company
to register ( a "Demand Registration") Registrable Securities under and in
accordance with the provisions of the Securities Act; PROVIDED, HOWEVER, that
(i) the Company shall have no obligation to file a Registration Statement on
account of any Demand Registration prior to the first anniversary of the
effectiveness of the Company's registration statement under the Securities
Act with respect to the Common Stock, (ii) the Company shall have no
obligation to effect more than six Demand Registrations hereunder with
respect to underwritten offerings (each, an "Underwritten Demand
Registration") and shall be obligated to effect the sixth Underwritten Demand
Registration hereunder only if it registers for sale at least all remaining
Registrable Securities of Crow, (iii) no such Underwritten Demand
Registration with respect to an underwritten offering may be required unless
the total amount of Registrable Securities to be included in such Demand
Registration has a market value of least $25,000,000 (calculated based on the
closing sale price of such securities on the principal securities exchange on
which such securities
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are listed on the business day immediately preceding the date of the Demand
Notice) as of the time a Demand Notice is given, (iv) the Company shall not be
obligated to register for sale pursuant to any Demand Registration that is
not an Underwritten Demand Registration (a "Shelf Demand Registration") a
number of Registrable Securities that exceeds the product of (A) five multiplied
by (B) the maximum amount limitation prescribed by paragraph (e) (or successor
provision) of Rule 144 as of the time the Demand Notice is given and (v) the
Company shall have no obligation to (A) cause to be declared effective an
Underwritten Demand Registration within nine months (or file such Registration
Statement within seven months) after the effective date of the Registration
Statement filed on account of the immediately preceding Demand Registration
or (B) cause to be declared effective a Registration Statement relating to a
Shelf Demand Registration within 12 months (or file such Registration
Statement within ten months) after such effective date. Subject to the
foregoing, there shall be no limit on the number of Shelf Demand
Registrations that may be required pursuant to this Agreement. For purposes
of clause (ii) above, a Demand Registration shall be deemed to have been
effected if a Registration Statement has been filed on account of such Demand
Registration and thereafter either the holders of Registrable Securities
included therein elect not to pursue such Demand Registration or such
Registration Statement is declared effective; provided that a Registration
Statement that has not become effective shall not count against the number
provided in clause (ii) above if the request therefor is withdrawn pursuant
to Section 1.2(d).
(b) FILING AND EFFECTIVENESS. Subject to Section 1.2(a) hereof,
the Company will use all reasonable efforts to file a Registration Statement
relating to any Demand Registration within 60 calendar days of the date on
which the Demand Notice is given and will use all reasonable efforts to cause
the same to be declared effective by the SEC as soon as possible, but in any
event within 120 calendar days of the date on which the holders of
Registrable Securities first give the Demand Notice required by Section
1.2(a) hereof with respect to such Demand Registration.
All requests made pursuant to this Section 1.2 will specify the number of
Registrable Securities to be registered and will also specify the intended
methods of disposition thereof.
Nothing in this Article I shall prevent any holder of Registrable
Securities from giving a Demand Notice pursuant to this Section 1.2 while any
Registration Statement is in effect or during the period of any postponement
pursuant to Section 1.2(b) or any Blackout Period.
The Company will keep the Registration Statement filed in respect of any
Shelf Demand Registration effective for a period of six months from the date on
which the SEC declares such Registration Statement effective (subject to
extension pursuant to Section 1.5 hereof) or such shorter period that will
terminate when all Registrable Securities covered by such Registration Statement
have been sold pursuant to such Registration Statement.
Within ten calendar days after receipt of such Demand Notice, the Company
will serve written notice thereof (the "Notice") to all other holders of
Registrable Securities and will, subject to the provisions of Section 1.2(c)
hereof, include in such registration all Registrable Securities with respect to
which the Company receives written requests for inclusion therein within 20
calendar days after the receipt of the Notice by the applicable holder. Subject
to clause (iii) in the proviso in
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Section 1.2(a), the holders of Registrable Securities will be permitted to
withdraw in good faith all or part of the Registrable Securities from a
Demand Registration at any time prior to the effective date of such Demand
Registration, in which event the Company will promptly amend or, if
applicable, withdraw the related Registration Statement.
(c) PRIORITY ON DEMAND REGISTRATION. If Registrable Securities are
to be registered pursuant to a Demand Registration, the Company shall provide
written notice to the other holders of Registrable Securities and will permit
all such holders who request to be included in the Demand Registration to
include any and all Registrable Securities held by such holders in such
Demand Registration. Notwithstanding the foregoing, in the case of an
Underwritten Demand Registration, if the managing underwriter or underwriters
of the underwritten offering to which such Underwritten Demand Registration
relates advise the holders of Registrable Securities that, in its or their
opinion, the total amount of Registrable Securities that such holders intend
to sell pursuant to such Underwritten Demand Registration exceeds the maximum
amount that can be marketed (i) at a price reasonably related to the current
market price of the Common Stock or (ii) without materially and adversely
affecting such offering, then the number of Registrable Securities to be sold
pursuant to such Demand Registration will, if necessary, be reduced and there
will be included in such underwritten offering the number of Registrable
Securities that, in the opinion of such managing underwriter or underwriters,
can be sold at a price reasonably related to the current market price of the
Common Stock and without materially and adversely affecting the success of
such offering. Any reduction in Registrable Securities will be allocated PRO
RATA among the holders of Registrable Securities on the basis of the amount
of Registrable Securities requested to be included therein by each such
holder. Any holders of Common Stock that are not Registrable Securities who
are entitled to include their shares in a Demand Registration pursuant to
"piggyback" rights granted by the Company in compliance with Section 1.3(c)
shall have their shares excluded from the Demand Registration before any
Registrable Securities are excluded pursuant to this Section 1.2(c).
(d) POSTPONEMENT OF DEMAND REGISTRATION. The Company will be
entitled to postpone the filing or the effectiveness of any Demand
Registration for a reasonable period of time, if the Company determines, in
the good faith exercise of the business judgment of its Board of Directors
after consultation with counsel, that such registration and offering could
materially interfere during such period with BONA FIDE financing plans of the
Company or would require disclosure during such period of information, that
if disclosed prematurely, could materially and adversely affect the Company;
PROVIDED, HOWEVER, that the duration of all periods of Demand Registration
postponement pursuant to this Section 1.2(d), together with the duration of
all Blackout Periods referenced in the last paragraph of Section 1.5 hereof,
shall not exceed 180 days during any 12-month period; and provided further,
however, that the postponement of the filing period, pursuant to this Section
1.2(d), of any Underwritten Demand Registration and the first Shelf Demand
Registration effected hereunder shall not exceed 90 days. If the Company
postpones the filing of a Registration Statement, it will promptly notify the
holders of Registrable Securities in writing when the events or circumstances
permitting such postponement have ended. If the Company postpones the filing
or effectiveness of a Registration Statement, the holders of Registrable
Securities may elect to withdraw their request for such registration, and in
the case of an
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Underwritten Demand Registration, such registration shall not be counted as
one of the Underwritten Demand Registrations.
1.3 PIGGYBACK REGISTRATION.
(a) RIGHT TO PIGGYBACK. If at any time the Company proposes to file a
registration statement under the Securities Act with respect to an offering,
whether or not for its account, of any class of equity securities, or securities
convertible into, exchangeable for or exercisable for a class of equity
securities of the Company (other than a registration statement (i) on Form X-0,
X-0 or any successor form thereto, (ii) filed in connection with an exchange
offer solely to the Company's existing stockholders or (iii) filed solely in
connection with an offering made solely to employees of the Company), then
the Company will give written notice of such proposed filing to the holders
of Registrable Securities at least 30 calendar days before the anticipated
filing date. Such notice will offer such holders the opportunity to register
such amount of Registrable Securities as each such holder may request (a
"Piggyback Registration"). Subject to Section 1.3(b) hereof, the Company
will include in each such Piggyback Registration all Registrable Securities
with respect to which the Company has received written requests for inclusion
therein. The holders of Registrable Securities will be permitted to withdraw
all or part of the Registrable Securities from a Piggyback Registration at
any time prior to the effective date of such Piggyback Registration.
(b) PRIORITY ON PIGGYBACK REGISTRATIONS. The Company will cause
the managing underwriter or underwriters of a proposed underwritten offering
on behalf of the Company or others who have demanded such registration to
permit holders of Registrable Securities requested to be included in the
registration for such offering to include therein all such Registrable
Securities requested to be so included on the same terms and conditions as
any securities of the Company included therein. Notwithstanding the
foregoing, if the managing underwriter or underwriters of such offering
deliver an opinion to the holders of Registrable Securities to the effect
that the total amount of securities which such holders and the Company or
others who demanded such registration propose to include in such offering
exceeds the maximum amount that can be marketed (i) at a price reasonably
related to the current market price of the Common Stock or (ii) without
materially and adversely affecting such offering, then the amount of
securities to be included therein for the account of holders of Registrable
Securities (allocated PRO RATA among such holders on the basis of the
Registrable Securities requested to be included therein by each such holder)
and other holders of Common Stock holding "piggyback" registration rights
that are PARI PASSU with those of the holders of Registrable Securities
granted in compliance with Section 1.3(c) will be reduced (pro rata among all
such holders and to zero if necessary) to reduce the total amount of
securities to be included in such offering to the amount recommended by such
managing underwriter or underwriters. The managing underwriter or
underwriters, applying the same standard, may also (i) exclude entirely from
such offering all Registrable Securities proposed to be included in such
offering to the extent the Registrable Securities are not of the same class
as securities of the Company included in such offering or (ii) exclude entirely
from such offering (notwithstanding the last sentence of Section 1.3(a)
above) any Registrable Securities as to which powers of attorney and/or
custody arrangements reasonably satisfactory to such managing underwriter or
underwriters and the Company are not established in a time frame reasonably
satisfactory to such parties.
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(c) REGISTRATION OF SECURITIES OTHER THAN REGISTRABLE SECURITIES.
Without the written consent of the holders of 90% of the then-outstanding
Registrable Securities, the Company will not grant to any person the right
(whether demand or piggyback) to request the Company to register any
securities of the Company under the Securities Act; PROVIDED, HOWEVER, that (i)
without the consent of the holders of Registrable Securities, the Company may
grant pursuant to a separate agreement to any person piggyback registration
rights on a PARI PASSU basis with those granted to the holders of Registrable
Securities pursuant to Section 1.3 hereof and (ii) with the consent of the
holders of 66 2/3% of the then-outstanding Registrable Securities, the Company
may grant pursuant to a separate agreement to any person demand registration
rights to request the Company to register any securities of the Company under
the Securities Act that are not more favorable to such person than the rights
of a holder of Registrable Securities under this Agreement.
1.4 RESTRICTIONS ON SALE BY HOLDERS OF REGISTRABLE SECURITIES. Each
holder of Registrable Securities agrees (a) if such holder is so requested
(pursuant to a timely written notice) by the managing underwriter or
underwriters of an underwritten offering of shares of Common Stock or
securities of any class that are convertible into or exchangeable or
exercisable for shares of Common Stock, not to effect any public sale or
distribution of any of the Company's securities of such class (except as part
of such underwritten offering), including a sale pursuant to Rule 144, during
the 10-calendar day period prior to, and during the 90-calendar day period
beginning on, the closing date of such underwritten offering and (b) if
requested, to execute a letter agreement to such effect for the benefit of
the underwriters.
1.5 REGISTRATION PROCEDURES. In connection with the Company's
registration obligations pursuant to Sections 1.2 and 1.3 hereof, the Company
will effect such registrations to permit the sale of such Registrable
Securities in accordance with the intended method or methods of disposition
thereof, and pursuant thereto the Company will as expeditiously as possible,
in each case, to the extent applicable:
(a) Prepare and file with the SEC a Registration Statement or
Registration Statements on any appropriate form under the Securities Act
available for the sale of the Registrable Securities by the holders thereof
in accordance with the intended method or methods of distribution thereof,
and cause each such Registration Statement to become effective and remain
effective as provided herein; PROVIDED, HOWEVER, that before filing a
Registration Statement or Prospectus or any amendment or supplement thereto
(including any document that would be incorporated or deemed to be
incorporated thereby by reference), the Company will furnish to the holders
of the Registrable Securities covered by such Registration Statement, the
Special Counsel and the managing underwriters, if any, copies of all such
documents proposed to be filed, which documents will be subject to the review
of such holders, the Special Counsel and such underwriters, and the Company
will not file any such Registration Statement or amendment thereto or any
Prospectus or any supplement thereto (including such documents which, upon
filing, would be incorporated or deemed to be incorporated by reference
therein) to which the holders of a majority of the Registrable Securities
covered by such Registration Statement, the Special Counsel or the managing
underwriter, if any, shall reasonably object on a timely basis.
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(b) Prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as may be necessary
to keep such Registration Statement continuously effective for the applicable
period specified in Section 1.2; cause the related Prospectus to be
supplemented by any required Prospectus supplement, and as so supplemented to
be filed pursuant to Rule 424 (or any similar provisions then in effect)
under the Securities Act; and comply with the provisions of the Securities
Act with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with the
intended methods of disposition by the sellers thereof set forth in such
Registration Statement as so amended or to such Prospectus as so supplemented.
(c) Notify the selling holders of Registrable Securities, the
Special Counsel and the managing underwriters, if any, promptly, and (if
requested by any such person) confirm such notice in writing, (i) when a
Prospectus or any Prospectus supplement or post-effective amendment has been
filed, and, with respect to a Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request by the SEC
or any other federal or state governmental authority for an amendment or
supplement to a Registration Statement or related Prospectus or for additional
information, (iii) of the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of a
Registration Statement or the initiation of any proceedings for that purpose,
(iv) if at any time the representations and warranties of the Company
contained in any agreement contemplated by Section 1.5(n) hereof (including
any underwriting agreement) cease to be true and correct, (v) of the receipt
by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction or the initiation or threatening of
any proceeding for such purpose, (vi) of the occurrence of any event which
makes any statement made in such Registration Statement or related Prospectus
or any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or which requires the making of any changes in
a Registration Statement, Prospectus or documents so that, in the case of the
Registration Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading and, in the case of
the Prospectus, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and (vii) of the Company's reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate.
(d) Use reasonable efforts to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement, or the lifting of
any suspension of the qualification (or exemption from qualification) of any
of the Registrable Securities for sale in any jurisdiction, at the earliest
possible moment.
(e) If requested by the managing underwriters, if any, or the
holders of a majority of the Registrable Securities being registered, (i)
incorporate in a Prospectus supplement or post-effective amendment such
information as the managing underwriters, if any, and such holder agree
should be included therein as may be required by applicable law, and (ii)
make all required
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filings of such Prospectus supplement or such post-effective amendment as
soon as practicable after the Company has received notification of the
matters to be incorporated in such Prospectus supplement or post-effective
amendment; PROVIDED, HOWEVER, that the Company will not be required to take
any actions under this Section 1.5(e) that are not, in the opinion of counsel
for the Company, in compliance with the applicable laws.
(f) Furnish to each selling holder of Registrable Securities, the
Special Counsel and each managing underwriter, if any, without charge, at
least one conformed copy of the Registration Statement and any post-effective
amendment thereto, including financial statements (but excluding schedules,
all documents incorporated or deemed to be incorporated therein by reference
and all exhibits, unless requested in writing by such holder, counsel or
underwriter).
(g) Deliver to each selling holder of Registrable Securities, the
Special Counsel and the underwriters, if any, without charge, as many copies
of the Prospectus or Prospectuses relating to such Registrable Securities
(including each preliminary prospectus) and any amendment or supplement
thereto as such persons may reasonably request; and the Company hereby
consents to the use of such Prospectus and each amendment or supplement
thereto by each of the selling holders of Registrable Securities and the
underwriters, if any, in connection with the offering and sale of the
Registrable Securities covered by such Prospectus or any amendment or
supplement thereto.
(h) Prior to any public offering of Registrable Securities, to
register or qualify and cooperate with the selling holders of Registrable
Securities, the underwriters, if any, and their respective counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for offer and
sale under the securities or blue sky laws of such jurisdictions within the
United States as any seller or underwriter reasonably requests in writing; use
all reasonable efforts to keep each such registration or qualification (or
exemption therefrom) effective during the period such Registration Statement
is required to be kept effective and do any and all other acts or things
necessary or advisable to enable the disposition in such jurisdiction of the
Registrable Securities covered by the applicable Registration Statement;
PROVIDED, HOWEVER, that the Company will not be required to (i) qualify
generally to do business in any jurisdiction in which it is not then so
qualified or (ii) take any action that would subject it to any general service
of process in any such jurisdiction in which it is not then so subject.
(i) Cooperate with the selling holders of Registrable Securities
and the managing underwriters, if any, to facilitate the timely preparation
and delivery of certificates representing Registrable Securities to be sold
and enable such Registrable Securities to be in such denominations and
registered in such names as the managing underwriters, if any, shall request
at least two business days prior to any sale of Registrable Securities to the
underwriters.
(j) Use all reasonable efforts to cause the Registrable Securities
covered by the applicable Registration Statements to be registered with or
approved by such other governmental agencies or authorities within the United
States except as may be required solely as a consequence of the nature of
such selling holder's business, in which case the Company will cooperate in
all
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reasonable respects with the filing of such Registration Statement and the
granting of such approvals as may be necessary to enable the seller or
sellers thereof or the underwriters, if any, to consummate the disposition of
such Registrable Securities.
(k) Upon the occurrence of any event contemplated by Section
1.5(c)(vi) or 1.5(c)(vii) hereof, prepare a supplement or post-effective
amendment to each Registration Statement or a supplement to the related
Prospectus or any document incorporated therein by reference or file any
other required document so that, as thereafter delivered to the purchasers of
the Registrable Securities being sold thereunder, such Prospectus will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
(l) Use all reasonable efforts to cause all Registrable Securities
covered by such Registration Statement to be (i) listed on each securities
exchange, if any, on which similar securities issued by the Company are then
listed or, if no similar securities issued by the Company are then so listed,
on the New York Stock Exchange or another national securities exchange if the
securities qualify to be so listed or (ii) authorized to be quoted on the
National Association of Securities Dealers Automated Quotation System
("NASDAQ") or the National Market System of NASDAQ if the securities qualify
to be so quoted; in each case, if requested by the holders of a majority of
the Registrable Securities covered by such Registration Statement or the
managing underwriters, if any.
(m) Prior to the effective date of the first Demand Registration or
the first Piggyback Registration, whichever shall occur first, (i) engage an
appropriate transfer agent and provide the transfer agent with printed
certificates for the Registrable Securities in a form eligible for deposit
with The Depository Trust Company and (ii) provide a CUSIP number for the
Registrable Securities.
(n) Enter into such agreements (including, in the event of an
underwritten offering, an underwriting agreement in form, scope and substance
as is customary in underwritten offerings) and take all such other actions in
connection therewith (including those requested by the holders of a majority
of the Registrable Securities being sold or, in the event of an underwritten
offering, those requested by the managing underwriters) to expedite or
facilitate the disposition of such Registrable Securities and in such
connection, whether or not an underwriting agreement is entered into and
whether or not the registration is an underwritten registration, (i) make
such representations and warranties to the holders of such Registrable
Securities and the underwriters, if any, with respect to the business of the
Company and its subsidiaries, the Registration Statement, Prospectus and
documents incorporated by reference or deemed incorporated by reference, if
any, in each case, in form, substance and scope as are customarily made by
issuers to underwriters in underwritten offerings and confirm the same if and
when requested; (ii) obtain opinions of counsel to the Company and updates
thereof (which counsel and opinions (in form, scope and substance) shall be
reasonably satisfactory to the managing underwriters, if any, and the holders
of a majority of the Registrable Securities being sold) addressed to such
selling holder of Registrable Securities and each of the underwriters, if
any, covering the matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be reasonably requested
by such holders and
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underwriters, including without limitation the matters referred to in Section
1.5(n)(i) hereof; (iii) use its best efforts to obtain "comfort" letters and
updates thereof from the independent certified public accountants of the
Company (and, if necessary, any other certified public accountants of any
subsidiary of the Company or of any business acquired by the Company for
which financial statements and financial data is, or is required to be,
included in the Registration Statement), addressed to each selling holder of
Registrable Securities and each of the underwriters, if any, such letters to
be in customary form and covering matters of the type customarily covered in
"comfort" letters in connection with underwritten offerings; and (iv) deliver
such documents and certificates as may be requested by the holders of a
majority of the Registrable Securities being sold, the Special Counsel and
the managing underwriters, if any, to evidence the continued validity of the
representations and warranties of the Company and its subsidiaries made
pursuant to clause (i) above and to evidence compliance with any customary
conditions contained in the underwriting agreement or similar agreement
entered into by the Company. The foregoing actions will be taken in
connection with each closing under such underwriting or similar agreement as
and to the extent required thereunder.
(o) Make available for inspection by a representative of the
holders of Registrable Securities being sold, any underwriter participating
in any disposition of Registrable Securities, and any attorney or accountant
retained by such selling holders or underwriter, all financial and other
records, pertinent corporate documents and properties of the Company and its
subsidiaries, and cause the officers, directors and employees of the Company
and its subsidiaries to supply all information reasonably requested by any
such representative, underwriter, attorney or accountant in connection with
such Registration Statement; PROVIDED, HOWEVER, that any records, information
or documents that are designated by the Company in writing as confidential at
the time of delivery of such records, information or documents will be kept
confidential by such persons unless (i) such records, information or
documents are in the public domain or otherwise publicly available, (ii)
disclosure of such records, information or documents is required by court or
administrative order or is necessary to respond to inquiries of regulatory
authorities, or (iii) disclosure of such records, information or documents,
in the opinion of counsel to such person, is otherwise required by law
(including, without limitation, pursuant to the requirements of the
Securities Act).
(p) Comply with all applicable rules and regulations of the SEC and
make generally available to its security holders earnings statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act) no
later than 45 calendar days after the end of any 12-month period (or 90
calendar days after the end of any 12-month period if such period is a fiscal
year) (i) commencing at the end of any fiscal quarter in which Registrable
Securities are sold to underwriters in a firm commitment or best efforts
underwritten offering, and (ii) if not sold to underwriters in such an
offering, commencing on the first day of the first fiscal quarter of the
Company, after the effective date of a Registration Statement, which
statements shall cover said 12-month period.
(q) In connection with an offering pursuant to an Underwritten
Demand Registration, cause appropriate members of its management to cooperate
and participate on a customary basis in the underwriters' "road show"
conferences related to such offering; PROVIDED,
11
HOWEVER, that (i) such obligation to cooperate and participate shall be
limited to such offerings, if any, in which the total amount of Registrable
Securities included therein has a market value of at least $50,000,000
(calculated based on the closing sale price of such securities on the
principal securities exchange on which such securities are listed on the
business day immediately preceding the date of the Demand Notice), (ii) such
obligation to cooperate and participate shall be limited to three such road
shows in total, (iii) the Company shall not be obligated to participate in
any road show for more than five business days and (iv) the Company shall not
be obligated to participate in more than one such road show in any twelve
month period.
The Company may require each seller of Registrable Securities as to which
any registration is being effected to furnish to the Company such information
regarding the distribution of such Registrable Securities as the Company may,
from time to time, reasonably request in writing and the Company may exclude
from such registration the Registrable Securities of any seller who
unreasonably fails to furnish such information within a reasonable time after
receiving such request.
Each holder of Registrable Securities will be deemed to have agreed by
virtue of its acquisition of such Registrable Securities that, upon receipt
of any notice from the Company of the occurrence of any event of the kind
described in Section 1.5(c)(ii), 1.5(c)(iii), 1.5(c)(v), 1.5(c)(vi) or
1.5(c)(vii) hereof, such holder will forthwith discontinue disposition of
such Registrable Securities covered by such Registration Statement or
Prospectus until such holder's receipt of the copies of the supplemented or
amended Prospectus contemplated by Section 1.5(k) hereof, or until it is
advised in writing (the "Advice") by the Company that the use of the
applicable Prospectus may be resumed, and has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus. In the event the Company shall
give any such notice, the time period prescribed in the third paragraph of
Section 1.2(b) hereof will be extended by the number of days during the time
period (each, a "Blackout Period") from and including the date of the giving
of such notice to and including the date when each seller of Registrable
Securities covered by such Registration Statement shall have received (v) the
copies of the supplemented or amended Prospectus contemplated by Section 5(k)
or (vi) the Advice. The duration of any Blackout Periods, together with the
duration of all periods of Demand Registration postponement pursuant to
Section 1.2(d) hereof, shall not exceed 180 days during any 12-month period.
1.6 REGISTRATION EXPENSES. (a) All fees and expenses incident to the
performance of or compliance with Article I of this Agreement by the Company,
whether or not any of the Registration Statements are filed or become
effective, are referred to herein as "Registration Expenses." Registration
Expenses will include, without limitation, (i) all registration and filing
fees (including without limitation fees and expenses (A) with respect to
filings required to be made with the National Association of Securities
Dealers, Inc. and (B) of compliance with securities or "blue sky" laws
(including without limitation fees and disbursements of counsel for the
underwriters or selling holders in connection with "blue sky" qualifications
of the Registrable Securities and determination of the eligibility of the
Registrable Securities for investment under the laws of such jurisdictions as
the managing underwriters, if any, or holders of a majority of the
Registrable Securities being sold may designate)), (ii) printing expenses
(including without limitation expenses of printing certificates for
Registrable Securities in a form eligible for deposit with The Depository
Trust Company and of
12
printing prospectuses if the printing of prospectuses is requested by the
holders of a majority of the Registrable Securities included in any
Registration Statement), (iii) messenger, telephone and delivery expenses,
(iv) fees and disbursements of counsel for the Company; (v) reasonable fees
and disbursements of the Special Counsel for the sellers of the Registrable
Securities, (vi) fees and disbursements of all independent certified public
accountants referred to in Section 1.5(n)(iii) hereof (including the expenses
of any special audit and "comfort" letters required by or incident to such
performance), (vii) any fees and expenses of any "qualified independent
underwriter" or other independent appraiser participating in an offering
pursuant to Section 3 of Schedule E to the Bylaws of the National Association
of Securities Dealers, Inc., (viii) Securities Act liability insurance if the
Company so desires such insurance, (ix) fees and expenses incurred in
connection with the listing of the securities to be registered on any
securities exchange on which similar securities issued by the Company are
then listed, (x) all travel and other expenses of participation in
underwriters' road shows in connection with Piggyback Registrations (to the
extent not borne by the underwriters) and (xi) fees and expenses of all other
persons retained by the Company. Registration Expenses shall not include the
Company's internal expenses (including without limitation all salaries and
expenses of its officers and employees performing legal or accounting duties)
and the expense of any annual audit, nor shall Registration Expenses include
any travel or other expenses of road shows in connection with Demand
Registrations or any underwriting discount or selling commission with respect
to any sale of Registrable Securities pursuant to this Agreement.
(b) The Company shall bear all Registration Expenses incurred in
connection with the first three Underwritten Demand Registrations effected
(or sought to be effected) hereunder and all Shelf Demand Registrations and
all Piggyback Registrations effected (or sought to be effected) hereunder.
Registration Expenses relating to any subsequent Underwritten Demand
Registration shall be borne 50% by the Company and 50% by the holders of the
Registrable Securities included (or, if the Registration Statement is not
filed, sought to be included) therein, pro rata based on the number of
Registrable Securities of each such holder included (or, if the Registration
Statement is not filed, sought to be included) therein. All travel and other
expenses of participation in underwriters' road shows in connection with any
Demand Registration shall be borne by the holders of the Registrable
Securities included (or sought to be included) in the related Registration
Statement, pro rata on the basis described in the immediately preceding
sentence, and any underwriting discount or selling commission with respect to
any sale of Registrable Securities pursuant to this Agreement shall be borne
by the holders of the Registrable Securities selling such securities. In
connection with any Demand Registration for which a portion of the
Registration Expenses or road show expenses are to be borne by holders of
Registrable Securities, the Company may require that such holders' portion of
the Registration Expenses or road show expenses, or both (in any amount or
amounts reasonably estimated by the Company), be advanced from time to time
by such holders to the Company. All Registration Expenses incurred in
connection with any Piggyback Registration and all of the Company's internal
expenses and the expense of any annual audit shall be borne by the Company.
1.7 INDEMNIFICATION.
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(a) INDEMNIFICATION BY THE COMPANY. The Company will, without
limitation as to time, indemnify and hold harmless, to the fullest extent
permitted by law, each holder of Registrable Securities registered pursuant
to this Agreement, the officers, directors and agents and employees of each
of them, each person who controls such holder (within the meaning of Section
15 of the Securities Act or Section 20 of the Exchange Act) and the officers,
directors, agents and employees of any such controlling person, from and
against all losses, claims, damages, liabilities, costs (including without
limitation the costs of investigation and attorneys' fees) and expenses
(collectively, "Losses"), as incurred, arising out of or based upon any
untrue or alleged untrue statement of a material fact contained in any
Registration Statement, Prospectus or form of Prospectus or in any amendment
or supplement thereto or in any preliminary prospectus, or arising out of or
based upon any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, except insofar as the same are based solely upon information
furnished in writing to the Company by such holder expressly for use therein;
PROVIDED, HOWEVER, that the Company will not be liable to any holder of
Registrable Securities to the extent that any such Losses arise out of or are
based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any preliminary prospectus if either (i) (A) such
holder failed to send or deliver a copy of the Prospectus with or prior to
the delivery of written confirmation of the sale of such holder of a
Registrable Security to the person asserting the claim from which such Losses
arise and (B) the Prospectus would have completely corrected such untrue
statement or alleged untrue statement or such omission or alleged omission;
or (ii) such untrue statement or alleged untrue statement, omission or
alleged omission is completely corrected in an amendment or supplement to the
Prospectus previously furnished by or on behalf of the Company with copies of
the Prospectus as so amended or supplemented, and such holder thereafter
fails to deliver such Prospectus as so amended or supplemented prior to or
concurrently with the sale of a Registrable Security to the person asserting
the claim from which such Losses arise.
(b) INDEMNIFICATION BY HOLDERS OF REGISTRABLE SECURITIES. In
connection with any Registration Statement in which a holder of Registrable
Securities is participating, such holder of Registrable Securities will
furnish to the Company in writing such information as the Company reasonably
requests for use in connection with any Registration Statement or Prospectus
and will indemnify, to the fullest extent permitted by law, the Company, its
directors and officers, agents and employees, each person who controls the
Company (within the meaning of Section 15 of the Securities Act and Section
20 of the Exchange Act), and the directors, officers, agents or employees of
such controlling persons, from and against all Losses arising out of or based
upon any untrue statement of a material fact contained in any Registration
Statement, Prospectus or preliminary prospectus or arising out of or based
upon any omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, to the extent, but
only to the extent, that such untrue statement or omission is contained in
any information so furnished in writing by such holder to the Company
expressly for use in such Registration Statement or Prospectus and was relied
upon by the Company in the preparation of such Registration Statement,
Prospectus or preliminary prospectus. In no event will the liability of any
selling holder of Registrable Securities hereunder be greater in amount than
the dollar amount of the proceeds (net of payment of all
14
expenses) received by such holder upon the sale of the Registrable Securities
giving rise to such indemnification obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. If any person shall
become entitled to indemnity hereunder (an "indemnified party"), such
indemnified party shall give prompt notice to the party from which such
indemnity is sought (the "indemnifying party") of any claim or of the
commencement of any action or proceeding with respect to which such
indemnified party seeks indemnification or contribution pursuant hereto;
PROVIDED, HOWEVER, that the failure to so notify the indemnifying party will
not relieve the indemnifying party from any obligation or liability except to
the extent that the indemnifying party has been prejudiced materially by such
failure. All fees and expenses (including any fees and expenses incurred in
connection with investigating or preparing to defend such action or
proceeding) will be paid to the indemnified party, as incurred, within five
calendar days of written notice thereof to the indemnifying party (regardless
of whether it is ultimately determined that an indemnified party is not
entitled to indemnification hereunder). The indemnifying party will not
consent to entry of any judgment or enter into any settlement or otherwise
seek to terminate any action or proceeding in which any indemnified party is
or could be a party and as to which indemnification or contribution could be
sought by such indemnified party under this Section 1.7, unless such
judgment, settlement or other termination includes as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified party of
a release, in form and substance satisfactory to the indemnified party, from
all liability in respect of such claim or litigation for which such
indemnified party would be entitled to indemnification hereunder.
(d) CONTRIBUTION. If the indemnification provided for in this
Section 1.7 is unavailable to an indemnified party under Section 1.7(a) or
1.7(b) hereof in respect of any Losses or is insufficient to hold such
indemnified party harmless, then each applicable indemnifying party, in lieu
of indemnifying such indemnified party, will, jointly and severally,
contribute to the amount paid or payable by such indemnified party as a
result of such Losses, in such proportion as is appropriate to reflect the
relative fault of the indemnifying party or indemnifying parties, on the one
hand, and such indemnified party, on the other hand, in connection with the
actions, statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations. The relative fault of such
indemnifying party or indemnifying parties, on the one hand, and such
indemnified party, on the other hand, will be determined by reference to,
among other things, whether any action in question, including any untrue or
alleged untrue statement of a material fact or omission or alleged omission
of a material fact, has been taken or made by, or related to information
supplied by, such indemnifying party or indemnified party, and the parties'
relative intent, knowledge, access to information and opportunity to correct
or prevent such action, statement or omission. The amount paid or payable by
a party as a result of any Losses will be deemed to include any legal or
other fees or expenses incurred by such party in connection with any action
or proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 1.7(d) were determined by PRO RATA
allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately preceding
15
paragraph. Notwithstanding the provisions of this Section 1.7(d), an
indemnifying party that is a selling holder of Registrable Securities will
not be required to contribute any amount in excess of the amount by which the
total price at which the Registrable Securities sold by such indemnifying
party and distributed to the public were offered to the public exceed the
amount of any damages which such indemnifying party has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
will be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
The indemnity, contribution and expense reimbursement obligations of the
Company hereunder will be in addition to any liability the Company may
otherwise have hereunder or otherwise. The provisions of this Section 1.7
will survive so long as Registrable Securities remain outstanding,
notwithstanding any transfer of the Registrable Securities by any holder
thereof or any termination of this Agreement.
1.8 RULE 144. The Company will use its best efforts to file the reports
required to be filed by it under the Securities Act and the Exchange Act, and
will cooperate with any holder of Registrable Securities (including without
limitation by making such representations as any such holder may reasonably
request), all to the extent required from time to time to enable such holder
to sell Registrable Securities without registration under the Securities Act
within the limitations of the exemptions provided by Rule 144. Upon the
request of any holder of Registrable Securities, the Company will deliver to
such holder a written statement as to whether it has complied with such
filing requirements. Notwithstanding the foregoing, nothing in this Section
1.8 will be deemed to require the Company to register any of its securities
under any section of the Exchange Act.
1.9 UNDERWRITTEN REGISTRATIONS. If any of the Registrable Securities
covered by any Demand Registration are to be sold in an underwritten
offering, the managing underwriter(s) for the offering will be selected by
the holders of a majority of the Registrable Securities included in the
Demand Notice; PROVIDED, that each of such managing underwriters shall be
reasonably satisfactory to the Company. If any Piggyback Registration is an
underwritten offering, the Company will have the right to select the managing
underwriter(s) for the offering.
1.10 MISCELLANEOUS.
(a) NO INCONSISTENT AGREEMENTS. The Company has not, as of the
date hereof, and will not, on or after the date hereof, enter into any
agreement with respect to its securities which is inconsistent with the
rights granted to the holders of Registrable Securities in this Agreement or
otherwise conflicts with the provisions hereof.
(b) AMENDMENTS AND WAIVERS. The provisions of Article I of this
Agreement, including the provisions of this sentence may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the
written consent of the holders of 90% of the then-outstanding Registrable
Securities. Notwithstanding the foregoing, a waiver or consent to depart
from the provisions hereof
16
with respect to a matter that relates exclusively to the rights of holders of
Registrable Securities whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect the
rights of other holders of Registrable Securities may be given by holders of
at least 66 2/3% of the Registrable Securities being sold by such holders;
PROVIDED, HOWEVER, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence.
(c) OWNER OF REGISTRABLE SECURITIES. The Company will maintain, or
will cause its registrar and transfer agent to maintain, a stock book with
respect to the Common Stock, in which all transfers of Registrable Securities
of which the Company has received notice will be recorded. The Company may
deem and treat the person in whose name Registrable Securities are registered
in the stock book of the Company as the owner thereof for all purposes,
including without limitation the giving of notices under this Agreement.
(d) SUCCESSORS OR ASSIGNS. The provisions of this Article I will
inure to the benefit of and be binding upon the successors and assigns of each
of Crow, Xxxxxxxx and the Company (including any pledgee acquiring securities
by foreclosure) and will inure to the benefit of each other holder of any
Registrable Securities. Notwithstanding the foregoing, no transferee will
have any of the rights granted under this Agreement (e) until such transferee
shall have acknowledged its rights and obligations hereunder by a signed
written statement of such transferee's acceptance of such rights and
obligations, (f) if the transferor notifies the Company in writing on or prior
to such transfer that the transferee shall not have such rights, or (g) if
such transferee was not a party to this Agreement on the date hereof (or an
affiliate of a party hereto) and acquired Registrable Securities in
open-market purchases or pursuant to an underwritten public offering.
ARTICLE II - PRIOR NOTICE OF PRIVATE SALE
2.1 PRIOR NOTICE. Neither Crow nor any of its affiliates controlled by
or under common control with Crow shall sell, except to such an affiliate,
any shares of Common Stock owned beneficially or of record by it in a private
transaction, whether effected with or without registration, or enter into any
binding agreement to effect any such sale prior to the 15th day following the
receipt by the Company of written notice in the form described below, nor
shall Crow or any such affiliate sell any of such shares in a private
transaction or enter into any binding agreement to effect any such sale after
the 135th day following the receipt by the Company of such notice (without
first giving to the Company another notice pursuant to this Section 2.1).
Each notice required by this Section 2.1 shall state that Crow or its
affiliate, as applicable, is considering the sale of shares of Common Stock
beneficially owned by it in a private transaction and, to the extent then
known and not subject to any non-disclosure obligation, shall identify the
number of such shares it is considering selling and the identity of the
prospective purchaser(s). All such notices shall be kept confidential by the
Company.
2.2 LEGEND. Each stock certificate representing shares of Common Stock
owned beneficially or of record by Crow or any of its affiliates will bear
the following legend:
17
IN ACCORDANCE WITH A STOCKHOLDERS' AGREEMENT DATED AS OF
______________, 1997, BY AND AMONG THE ISSUER AND CERTAIN OF ITS
STOCKHOLDERS, NONE OF THE SHARES REPRESENTED BY THIS CERTIFICATE
MAY BE SOLD IN A PRIVATE TRANSACTION, WHETHER EFFECTED WITH OR
WITHOUT REGISTRATION, UNLESS WRITTEN NOTICE IN ACCORDANCE WITH
SUCH AGREEMENT IS GIVEN TO THE ISSUER AT LEAST 15 DAYS PRIOR TO
THE EARLIER OF EITHER SUCH SALE OR ANY BINDING AGREEMENT TO
EFFECT ANY SUCH SALE, NOR MAY ANY SUCH SALE BE EFFECTED OR SUCH
AGREEMENT MADE MORE THAN 135 DAYS AFTER THE GIVING OF SUCH NOTICE
(WITHOUT FIRST GIVING ANOTHER NOTICE).
The Company shall remove such legend (or cause it to be removed) from the
stock certificates representing any shares of Common Stock to be sold in any
public transaction or to be sold in any private transaction in accordance
with Section 2.1 or take such other action as may be required (with respect
to such legend) to effect such transaction in accordance with Section 2.1.
2.3 AMENDMENT. The provisions of this Article II shall be amended only
by an instrument in writing executed by both the Company and Crow.
ARTICLE III - NON-SOLICITATION OF OFFICER EMPLOYEES
WITHOUT PRIOR NOTICE
3.1 NON-SOLICITATION. Crow covenants that, prior to the fifth
anniversary of the date of this Agreement, neither it nor any affiliated
entity controlled by or under common control with Crow (a "Crow Affiliate")
shall, directly or indirectly, (a) initiate discussions with any
officer-level employee of the Company or any of its affiliates (a "Company
Employee") concerning potential employment of such Company Employee by Crow
or any Crow Affiliate or (b) discuss with any Company Employee any terms of
employment if the Company Employee initiates any such discussions, in either
case without first giving notice to the Company's chief executive officer or,
in his absence, any executive vice president (unless such Company Employee
shall be the Company's chief executive officer, in which case such notice
shall be given to another top level executive of the Company). The Company
covenants that, prior to the fifth anniversary of this Agreement, neither it
nor any affiliated entity controlled by or under common control with the
Company (a "Company Affiliate") shall, directly or indirectly, (i) initiate
discussions with any officer-level employee of Crow or any of its affiliates
(a "Crow Employee") concerning potential employment of such Crow Employee by
the Company or any Company Affiliate or (ii) discuss with any Crow Employee
any terms of employment if the Crow Employee initiates any such discussions,
in either case without first giving notice to Crow's chief executive officer
or, in his absence, any executive vice president (unless such Crow Employee
shall be Crow's chief executive officer, in which case such notice shall be
given to another top level executive of Crow).
18
3.2 PROHIBITION AGAINST HIRING IMPROPERLY SOLICITED EMPLOYEES. Crow
covenants that if notice is not given in accordance with the foregoing
requirements with respect to a Company Employee, neither it nor any Crow
Affiliate shall engage or hire such Company Employee until the earlier of (a)
the involuntary termination of such Company Employee's employment by his/her
employer and (b) the first anniversary of the last incident in violation of
the foregoing requirements with respect to such Crow Employee (it being
understood that each recommencement of discussions in violation of the
foregoing requirements without the giving of notice and each continuation of
discussions without such notice having been given will be a new violation of
the foregoing requirements). The Company covenants that if notice is not
given in accordance with the foregoing requirements with respect to a Crow
Employee, neither it nor any Company Affiliate shall engage or hire such Crow
Employee until the earlier of (a) the involuntary termination of such Crow
Employee's employment by his/her employer and (b) the first anniversary of
the last incident in violation of the foregoing requirements with respect to
such Company Employee (it being understood that each recommencement of
discussions in violation of the foregoing requirements without the giving of
notice and each continuation of discussions without such notice having been
given will be a new violation of the foregoing requirements).
ARTICLE IV - NOMINATION OF CROW DIRECTOR;
VOTING AGREEMENT
4.1 NOMINATION. The Company agrees to nominate for election to its
Board of Directors a nominee of Crow (the "Crow Nominee") such that at all
times, if requested by Crow, the Company's Board of Directors contains one
Crow Nominee. The Crow Nominee shall be designated by the Chief Executive
Officer or Board of Directors (or the body effectively serving as such Board)
of Crow Family Holdings, subject to the approval of such designee by the
Company, which approval shall not be unreasonably withheld. Xxxxxx X. Xxxx
shall be the initial Crow Nominee. If the Crow Nominee should resign from
the Company's Board of Directors or if the Crow Nominee should die or
otherwise be removed from office, the Company shall nominate and use its best
efforts to cause the resulting vacancy to be filled with another Crow Nominee
similarly designated.
4.2 VOTING AGREEMENT. Each of the Management Stockholders, by his
execution of this Agreement, agrees to use his best efforts to cause the Crow
Nominee to be elected or appointed in any and all elections or appointments
of directors of the Company, including, without limitation, voting all shares
of Common Stock over which he then exercises voting control in favor of the
Crow Nominee in connection with any election of Company directors.
Notwithstanding the immediately preceding sentence, no Management Stockholder
who is a director of the Company will be required to cause the election of
any Crow Nominee through action as such director if the Board of Directors of
the Company determines in good faith, based as to legal matters on the advice
of independent counsel, that the election or appointment of such Crow Nominee
would be inconsistent with the fiduciary duty owed by such Board to all of
the stockholders of the Company; provided that the foregoing shall not
detract from the right of Crow to nominate another Crow Nominee for such
position.
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4.3 NONASSIGNABILITY. The rights of Crow under this Article IV shall
not be assignable.
4.4 AMENDMENT. The provisions of this Article IV shall be amended only
by an instrument in writing executed by both the Company and Crow; provided
that no Management Stockholder shall be bound by any such amendment to which
he has not consented.
4.5 TERMINATION. The provisions of this Article IV shall terminate and
be of no further force and effect on the first date on which the beneficial
ownership of shares of Common Stock by Crow and its affiliates represents
less than the lesser of (a) 12.5% of all then outstanding shares of such class
and (b) 50% of the shares of Common Stock beneficially owned by Crow and its
affiliates as of the date of execution of this Agreement; provided, however,
that in no event shall the provisions of this Article IV survive beyond the
first date on which the beneficial ownership of shares of Common Stock by
Crow and its affiliates represents less than 5% of all then outstanding
shares of such class.
ARTICLE V - MISCELLANEOUS
5.1 NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing and will be deemed to be given
(a) when made, if made by hand delivery, (b) upon confirmation, if made by
telecopier, or (c) one business day after being deposited with a reputable
next-day courier, to the parties as follows:
(i) if to the Company, initially at:
0000 Xxxx Xxxxxx
0000 Xxxxxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Chief Financial Officer
Telecopier Number: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxx L.L.P.
0000 Xxxx Xxxxxx
0000 Xxxxxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxx X. XxXxxxx
Telecopier Number: (000) 000-0000
and thereafter at such other address or addresses, notice of which is given
to the other parties hereto and the holders of Registrable Securities in
accordance with the provisions of this Section 5.1;
20
(ii) if to Crow, initially at:
0000 Xxxx Xxxxxx
0000 Xxxxxxxx Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000
Attention: General Counsel
Telecopier Number: (000) 000-0000
with a copy to:
Xxxxxx, Xxxx & Xxxxxxxx LLP
0000 Xxxx Xxxxxx
Xxxxxx, Xxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxxx, III
Telecopier Number: (000) 000-0000
and thereafter at such other address or addresses, notice of which is given
to the Company in accordance with the provisions of this Section 5.1; and
(iii) if to any holder of Registrable Securities, at the most
current address given by such holder to the Company in accordance with the
provisions of this Section 5.1.
5.2 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of
which when so executed will be deemed to be an original and all of which
taken together will constitute one and the same instrument.
5.3 HEADINGS. The headings in this Agreement are for convenience of
reference only and will not limit or otherwise affect the meaning hereof.
5.4 GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, AS APPLIED TO CONTRACTS MADE
AND PERFORMED WITHIN THE STATE OF TEXAS, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS.
5.5 SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein will remain in full force and effect and will
in no way be affected, impaired or invalidated, and the parties hereto will
use their best efforts to find and employ an alternative means to achieve the
same or substantially the same result as that contemplated by such term,
provision, covenant or restriction. It is hereby stipulated and declared to
be in the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any
of such which may be hereafter declared invalid, void or unenforceable.
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5.6 REMEDIES. In the event of a breach by any party to this Agreement
of its obligations hereunder, the other parties hereto, in addition to being
entitled to exercise all rights granted by law, including recovery of
damages, will be entitled to injunctive relief in respect of their rights
under this Agreement. Each of the parties hereto agrees that monetary damages
would not be adequate compensation for any loss incurred by reason of a
breach by it or him of any of the provisions of this Agreement and hereby
further agrees that, in the event of any action for injunctive relief in
respect of such breach, it or he will waive the defense that a remedy at law
would be adequate.
5.7 ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto
in respect of the matters addressed herein by the Company with respect to the
Registrable Securities. This Agreement supersedes all prior agreements and
understandings among the parties with respect to such matters.
5.8 ATTORNEYS' FEES. In any action or proceeding brought to enforce any
provision of this Agreement, or where any provision hereof is validly
asserted as a defense, the prevailing party, as determined by the court, will
be entitled to recover reasonable attorneys' fees in addition to any other
available remedy.
5.9 INDEPENDENT AGREEMENTS. The parties acknowledge that the respective
agreements contained in Articles I, II, III and IV hereof are to be construed
as independent agreements of the respective parties bound thereby and
benefiting therefrom. In no event shall any party be relieved of any
obligation to perform an agreement under one Article to which it is bound as
a result of a breach or alleged breach by any other party of an agreement
under any other Article.
5.10 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and will inure to
the benefit of the parties hereto and, except as otherwise provided herein,
their respective successors, assigns, heirs, executors and personal
representatives; provided that none of the Management Stockholders shall have
any rights or obligations under Articles I, II or III.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first above written.
XXXXXXXX XXXX COMPANY
a Delaware corporation
By:
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Name:
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Title:
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CROW FAMILY PARTNERSHIP, L.P.
By:
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Name:
----------------------------------
Title:
---------------------------------
CFH TRADE-NAMES, L.P.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
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X. XxXxxxxx Xxxxxxxx
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X. Xxxxx Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx
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Xxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxxx
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Asuka Nakahara
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Xxxxxxx Xxxxxxxxx
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Xxxxxx X. Xxxxxxxx
