EXHIBIT H
AGREEMENT
This AGREEMENT (this "Agreement"), dated as of _____, 2004, by and
among Xxxx'x, Inc., a Delaware corporation (together with its subsidiaries, the
"Company"), and Xxxxxx X. Xxxxxx and Xxxxxxxxxxx X. Xxxxxx, individuals residing
in Houston, Texas (together, the "Noteholders").
In consideration of the mutual covenants and agreements set forth
herein and for good and valuable consideration, the receipt of which is hereby
acknowledged, the parties hereto agree as follows:
1. DEFINITIONS. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"CLOSING" shall have the meaning specified in Section 6.
"COMMON STOCK" means the Company's common stock, par value $.32 per
share, and any capital stock for or into which such Common Stock hereafter is
exchanged, converted, reclassified or recapitalized by the Company or pursuant
to an agreement or business combination to which the Company is a party.
"EFFECTIVE DATE" shall mean the effective date of the Senior Secured
Refinancing Documents.
"EMPLOYMENT AGREEMENT(s)" shall have the meaning specified in
Section 3.
"NOTE(s)" shall have the meaning specified in Section 2.
"ORIGINAL NOTES" shall mean (i) those two certain Convertible
Subordinated Promissory Notes, due 2011, dated June 29, 2001, each in the
original principal amount of One Million Five Hundred Thousand Dollars
($1,500,000.00) and (ii) those two certain Convertible Subordinated Promissory
Notes, due 2011, dated July 2, 2001, each in the original principal amount of
Three Million Five Hundred Thousand Dollars ($3,500,000.00).
"PURCHASE AGREEMENT" shall mean that certain Purchase Agreement between
the Company and the Noteholders, dated as of March 9, 2001.
"SENIOR SECURED REFINANCING DOCUMENTS" shall mean senior secured loan
documents contemplated by (i) that certain Credit Agreement, dated as of June 7,
2004 among the Company, as borrower, JPMorgan Chase Bank, as administrative
lender, and the lenders signatory thereto, and (ii) that certain Term Loan
Agreement dated as of June 7, 2004 among the Company, as borrower, Guggenheim
Corporate Funding, LLC, as administrative lender, and the lenders signatory
thereto including, without limitation, in each case, any intercreditor agreement
or subordination agreement required to be executed and delivered by the
Noteholders in connection with the execution and delivery of the Senior Secured
Refinancing Documents.
"STOCK OPTIONS" shall mean the two Stock Options granted to the
Noteholders in connection with the employment of the Noteholders, dated March 9,
2001, to purchase an aggregate of 2,240,000 shares of common stock of the
Company.
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"TRANSACTION DOCUMENTS" means this Agreement, the Notes, the Employment
Agreements, the Stock Options and the Purchase Agreement, each as amended
pursuant hereto.
2. AMENDMENT OF NOTES. At the Closing, the Noteholders shall surrender
the Original Notes to the Company for cancellation, and the Company shall
execute and deliver to the Noteholders the Amended and Restated Convertible
Subordinated Promissory Notes in the form attached hereto as EXHIBIT A, to be
effective as of the Effective Date. Such Amended and Restated Convertible
Subordinated Promissory Notes are referred to herein individually as a "Note"
and collectively as the "Notes." In accordance with the terms of the Notes, on
the Effective Date the Company shall pay in cash to the Noteholders the amount
of unpaid interest accrued on the outstanding principal of the Original Notes up
to and including the Effective Date, including accrued interest at the rate set
by the Original Notes during an Event of Default (as defined in the Original
Notes).
3. EMPLOYMENT AGREEMENTS. At the Closing, the Company and the
Noteholders shall execute and deliver the Employment Agreements in the form
attached hereto as EXHIBIT B, to be effective as of April 1, 2004. Such
Employment Agreements are referred to herein individually as an "Employment
Agreement" and collectively as the "Employment Agreements."
4. AMENDMENT OF PURCHASE AGREEMENT. At the Closing, the Company and the
Noteholders shall execute and deliver a First Amendment to the Purchase
Agreement in the form attached hereto as EXHIBIT C, to be effective as of the
Effective Date.
5. EXERCISE OF STOCK OPTIONS. (a) If the Closing occurs, then from and
after the Effective Date, the Noteholders shall jointly and severally limit
their exercise of the Stock Options such that the number of shares of Common
Stock issued upon any exercise(s) of the Stock Options does not exceed, in the
aggregate, the Net Treasury Shares Available (as hereinafter defined) unless and
until sufficient additional shares are listed with the New York Stock Exchange
for issuance upon exercise of the Stock Options. "Net Treasury Shares Available"
means (x) the number of shares of Common Stock then held by the Company in
treasury, minus (y) the number of shares of Common Stock issuable or issued
after the Effective Date under the Nonemployee Director Phantom Stock Plan, and
minus (z) the number of shares of Common Stock issuable or issued upon
conversion of the Notes, calculated assuming the lowest conversion price stated
in the Notes.
(b) If the Closing occurs, then from and after the Effective Date, the
Company shall (i) use its commercially reasonable best efforts, including the
solicitation of shareholder approval, if necessary in the opinion of its
counsel, to list, within twelve (12) months after the Effective Date, on the New
York Stock Exchange additional shares of Common Stock equal to the number of
shares by which the aggregate number of shares of Common Stock acquirable by the
Noteholders under the Stock Options exceeds the Net Treasury Shares Available;
and (ii) reserve all shares of Common Stock held by the Company in treasury
solely for issuance pursuant to (x) the Nonemployee Director Phantom Stock Plan,
(y) the Notes, upon exercise by the Noteholders of their conversion rights
thereunder, assuming the lowest conversion price stated in the Notes, and (z)
the Stock Options, except to the extent the Company lists with the New York
Stock Exchange additional shares of Common Stock to permit full conversion of
the Notes into Common Stock, assuming the lowest conversion price stated in the
Notes, and full exercise of the Stock Options. If the Closing occurs, then from
and after the Effective Date, the Company shall not cancel, sell or otherwise
dispose of any shares of Common Stock held by the Company in treasury except to
the extent
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the Company lists with the New York Stock Exchange a number of additional shares
of Common Stock sufficient to permit full conversion of the Notes into Common
Stock, assuming the lowest conversion price stated in the Notes, and full
exercise of the Stock Options.
6. CLOSING. The execution and delivery of the Notes, the Employment
Agreements and the First Amendment to the Purchase Agreement, as contemplated
herein (the "Closing") will take place at the offices of the Company at 0000
X.X. Xxxx 000, Xxx Xxxxxxx, Xxxxx, at 10:00 a.m., local time, on the Effective
Date, or on such other date as mutually agreed to by the parties hereto.
7. CONDITIONS TO EFFECTIVENESS. (a) All obligations of the Company
under this Agreement shall be subject to (i) the full execution and delivery by
the Company and all other parties thereto of Senior Secured Refinancing
Documents satisfactory, in form and substance, to the Company; and (ii) the
Noteholders shall have performed and complied with all covenants and obligations
that this Agreement requires the Noteholders to perform or comply with at or
prior to Closing.
(b) All obligations of the Noteholders under this Agreement shall be
subject to (i) the full execution and delivery by the Company and all other
parties thereto of Senior Secured Refinancing Documents satisfactory, in form
and substance, to the Noteholders; and (ii) the Company shall have performed and
complied with all covenants and obligations that this Agreement requires the
Company to perform or comply with at or prior to Closing.
8. TERMINATION. By notice given prior to or at the Closing, this
Agreement may be terminated (i) by the Company if any condition in Section 7(a)
has not been satisfied as of the Effective Date; (ii) by the Noteholders if any
condition in Section 7(b) has not been satisfied as of the Effective Date; or
(iii) by mutual written consent of the Company and the Noteholders. Each party's
right of termination under this Section is in addition to any other rights it
may have under this Agreement or otherwise, and the exercise of such right of
termination will not be an election of remedies. If this Agreement is terminated
pursuant to this Section, all obligations of the parties under this Agreement
will terminate.
9. ATTORNEY FEES. The Company shall pay reasonable attorney's fees
charged to the Noteholders by Fulbright & Xxxxxxxx, L.L.P. in connection with
the negotiation, execution and performance of this Agreement, up to, but not
exceeding Fifty Thousand Dollars ($50,000.00).
10. NO WAIVER; MODIFICATION IN WRITING. No failure or delay on the part
of the Company or a Noteholder in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. The
provisions 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 without the written consent of the
Company, on the one hand, and Noteholders or their permitted assigns, on the
other hand, provided that notice of any such waiver shall be given to each party
hereto as set forth below. Any amendment, supplement or modification of or to
any provision of this Agreement, or any waiver of any provision of this
Agreement, shall be effective only in the specific instance and for the specific
purpose for which made or given. Except where notice is specifically required by
this Agreement, no notice to or demand on any party hereto in any case shall
entitle the other party to any other or further notice or demand in similar or
other circumstances.
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11. SPECIFIC PERFORMANCE. The parties recognize that in the event the
Company or Noteholders should refuse to perform under the provisions of this
Agreement or any other Transaction Document, monetary damages alone will not be
adequate. Noteholders or the Company, as the case may be, shall therefore be
entitled, in addition to any other remedies which may be available, including
money damages, to obtain specific performance of the terms of this Agreement. In
the event of any action to enforce this Agreement or any other Transaction
Document specifically, the Company and Noteholders hereby waive the defense that
there is an adequate remedy at law.
12. SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal, or incapable of being enforced by any rule of applicable law,
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated herein are not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal, or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated herein are
consummated as originally contemplated to the fullest extent possible.
13. PARTIES IN INTEREST. This Agreement shall be binding upon and,
except as provided below, inure solely to the benefit of each party hereto and
their successors and assigns, and nothing in this Agreement, express or implied,
is intended to confer upon any other person any rights or remedies of any nature
whatsoever under or by reason of this Agreement.
14. Notices. ALL NOTICES AND OTHER COMMUNICATIONS HEREUNDER SHALL BE IN
WRITING AND SHALL BE DEEMED GIVEN IF DELIVERED PERSONALLY, TELECOPIED OR MAILED
BY REGISTERED OR CERTIFIED MAIL (RETURN RECEIPT REQUESTED), OR SENT BY FEDERAL
EXPRESS OR OTHER RECOGNIZED OVERNIGHT COURIER, TO THE PARTIES AT THE FOLLOWING
ADDRESSES (OR AT SUCH OTHER ADDRESS FOR A PARTY AS SHALL BE SPECIFIED BY LIKE
NOTICE):
If to Noteholders: Xxxxxx X. Xxxxxx and Xxxxxxxxxxx X. Xxxxxx
000 Xxxx
Xxxxxxx, Xxxxx 00000
with a copy to: Xxxxx Xxxxxxxxxxx
000 Xxxxxxx Xxxx.
Xxxxxxx, Xxxxx 00000
and Fulbright & Xxxxxxxx, L.L.P.
0000 XxXxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000-0000
Attention: Xxxxxxx X. Still
If to the Company: Xxxx'x, Inc.
0000 Xxxxxxxxx Xxxx 000
Xxx Xxxxxxx, Xxxxx 00000-0000
Attention: Chairman of the Board
with a copy to: Xxxxxxxxxx Xxxxxxx Xxxxxx & Xxxxxx Inc.
000 X. Xx. Xxxx'x Xxxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxx 00000
Attention: Xxxx X. Xxxxxx, Xx.
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Any of the above addresses may be changed at any time by notice given
as provided above; provided, however, that any such notice of change of address
shall be effective only upon receipt. All notices, requests or instructions
given in accordance herewith shall be deemed received on the date of delivery,
if hand delivered, on the date of receipt, if telecopied, three Business Days
after the date of mailing, if mailed by registered or certified mail, return
receipt requested, and one Business Day after the date of sending, if sent by
Federal Express or other recognized overnight courier.
15. COUNTERPARTS. This Agreement may be executed and delivered
(including by facsimile transmission) in one or more counterparts, all of which
shall be considered one and the same agreement and shall become effective when
one or more counterparts have been signed by each of the parties and delivered
to the other parties, it being understood that all parties need not sign the
same counterpart.
16. ENTIRE AGREEMENT. This Agreement (which term shall be deemed to
include the Exhibits hereto and the other certificates, documents and
instruments delivered hereunder) and the other Transaction Documents constitute
the entire agreement of the parties hereto and supersede all prior agreements
and understandings, both written and oral, among the parties with respect to the
subject matter hereof. There are no representations or warranties, agreements,
or covenants other than those expressly set forth in this Agreement and the
other Transaction Documents.
17. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO ANY
CONFLICTS OF LAW PROVISIONS.
18. PUBLIC ANNOUNCEMENTS. The Company, on the one hand, and
Noteholders, on the other, shall consult with each other before issuing any
press release or otherwise making any public statements with respect to this
Agreement or the transactions contemplated hereby, except for statements
required by Law or by any listing agreements with or rules of any national
securities exchange or the National Association of Securities Dealers, Inc., or
made in disclosures reasonably determined as required to be filed pursuant to
the Securities Act or the Exchange Act.
19. HEADINGS. The headings of this Agreement are for convenience of
reference only and are not part of the substance of this Agreement.
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IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement or has caused this Agreement to be executed by its duly authorized
officer as of the date first written above.
XXXX'X, INC.
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Xxxxxx Xxx, III
Chairman of the Board
NOTEHOLDERS:
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Xxxxxxxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
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