XXXXXX X. XXXXXXXXX
000 XXXXX XXXXXX-- 00XX XXXXX
XXX XXXX, XXX XXXX 00000
March 10, 2000
Xxxxxx.xxx Inc.
00 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Gentlemen:
This letter is being delivered to you simultaneously with the execution of
and delivery of the purchase and option agreement ("Agreement"), dated March 10,
2000, between the undersigned ("Xxxxxxxxx") and Xxxxxx X. Xxxxxx ("Chrust").
I hereby consent, with respect to all of the shares of common stock of
Xxxxxx.xxx Inc. ("Company") which I own or have the right to vote (including the
"Purchased Shares," as defined in the Agreement), to the authorization and
creation of a series or class of preferred stock ("Preferred Stock") with the
following terms and any amendment to the certificate of incorporation of the
Company required in connection therewith:
o stated value of up to a maximum of $5,000,000;
o convertible into the Company's common stock (or an equivalent thereof)
at a conversion price of 80% or more of the "Fair Market Value"
(determined in customary fashion, based on a number of days prior to
closing on the sale of the Preferred Stock);
o either dividend bearing or non-dividend bearing; provided, however,
that if dividends are to accrue or be paid, the annual dividend rate
shall be 10% or less and the Company must have the option to pay
dividends either in kind or in common stock of the Company;
o senior liquidation preference in the amount of the stated value;
o voting rights as required by law and on an as-converted basis with the
common stock, together with the right, as a class, to elect no more
than two directors to the Company's board of directors; and
o such other rights and preferences as are either customary or not
materially adverse to the Company.
This letter shall constitute Xxxxxxxxx'x consent as a shareholder of the
Company, as well as his irrevocable proxy to the Company to vote his shares of
common stock, as well as any other shares over which he has voting power, in
favor of the authorization and creation of the Preferred Stock if such matter is
put to a vote of stockholders prior to July 4, 2000. Upon the reasonable request
of the Company, I will execute a "written consent of Majority Shareholders" or
other similar document to implement the consent granted hereby.
Notwithstanding the foregoing, this letter and the consent and proxy hereby
granted (i) shall become null and void and be of no force or effect if the
Preferred Stock is not issued by July 4, 2000 and (ii) shall not permit the
Company to authorize the Preferred Stock if shares of the Preferred Stock are
not issued by July 4, 2000.
As of the date of this letter, I own 3,818,750 shares of the Company's
common stock, inclusive of the Purchased Shares.
Very truly yours,
/s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx
