AMENDMENT NO. 1 TO VOTING AGREEMENT
This AMENDMENT NO. 1 TO VOTING AGREEMENT (this "Agreement"),
dated as of January __, 1998 to be effective as of December 31,
1997, is between and among XXXXXX X. XXXXX, an individual with an
office at 0000 Xxxxxx Xxxx, Xxxxxxxx, Xxxx 00000 ("Xxxxx"), XXXXXX
HOLDING COMPANY, LTD., an Ohio limited liability company with an
office at 0000 Xxxxxx Xxxx, Xxxxxxxx, Xxxx 00000 ("Xxxxxx"), and
XXXXXXX EQUITY FUND I, L.L.C., a Georgia limited liability company
with an office at Xxx Xxxxxxxxxx Xxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx
00000 ("Xxxxxxx").
WITNESSETH:
WHEREAS, Xxxxx and Xxxxxx (collectively, the "Xxxxxx Parties")
and Xxxxxxx beneficially own shares of the Common Stock, par value
$.01 per share (the "Stock"), of Crown NorthCorp, Inc., a Delaware
corporation (the "Company"); and
WHEREAS, the parties desire that Xxxxxxx purchase one share of
the Company' Series AA Convertible Preferred Stock, par value $.01
par share (the "Series AA Preferred Stock"), on the date hereof, and
in order to induce Xxxxxxx to agree to purchase the Series AA
Preferred Stock, the Xxxxxx Parties are willing to agree to vote
their shares of Common Stock as set forth herein; and
WHEREAS, Xxxxxxx desires that each of the Xxxxxx Parties agrees
to vote its shares in accordance with the provisions of paragraph F
of the Certificate of Designation establishing the Series AA
Preferred Stock, as filed with the Secretary of State of the State
of Delaware on January 21, 1998 (the "Certificate of Designation"),
in order more fully to effectuate certain provisions of the
Certificate of Designation whereby Xxxxxxx is entitled to designate
one or more persons to serve as directors of the Company for a
certain period;
NOW, THEREFORE, in consideration of the foregoing and for other
good and valuable consideration, the adequacy, sufficiency, and
receipt of which are hereby acknowledged, the parties agree as
follows:
SECTION 1. DEFINED TERMS. Capitalized terms used herein but
not otherwise defined herein shall have the meaning ascribed thereto
in the Original Agreement.
SECTION 2. AMENDMENT OF SECTION 2 OF THE ORIGINAL AGREEMENT.
Section 2 of the Original Agreement is hereby amended in its entity
to read in its entirety as follows:
"SECTION 2. VOTING AGREEMENT OF THE XXXXXX PARTIES. In
addition to, and not in limitation of, Section 3 and 4 hereof,
during the Corporate Governance Period, each of the Xxxxxx Parties,
severally and not jointly, agrees:
(a) To vote all shares of securities issued by the
Company and entitled to vote in the election of directors
("Board Voting Securities") beneficially owned by him or it for
the election as a director of the Company of such nominees for
election as a director of the Company as Xxxxxxx is entitled to
designate for nomination as such pursuant to the Stock Purchase
Agreement or pursuant to paragraph F of the Certificate of
Designation establishing the Company's Series AA Convertible
Preferred Stock, par value $.01 per share (the "Series AA
Preferred Stock"), as filed with the Secretary of State of the
State of Delaware on January 21, 1998 (the "Certificate of
Designation");
(b) To cause (x) each of the members of Xxxxx'x immediate
family, (y) each entity controlled by any Xxxxxx Party, and (z)
each trust of which Xxxxx is a grantor (collectively, the
"Xxxxx Affiliates"), to vote all Board Voting Securities
beneficially owned by him, her, or it for the election as a
director of the Company of such nominees for election as a
director of the Company as Xxxxxxx is entitled to designate for
nomination as such pursuant to the Stock Purchase Agreement or
pursuant to paragraph F of the Certificate of Designation;
(c) In the event a director of the Company so designated
for nomination by Xxxxxxx ceases to be a director of the
Company for any reason before his or her term as such expires,
to vote all shares of Board Voting Securities beneficially
owned by him, her or it in favor of another individual
designated for nomination by Xxxxxxx for election as a director
of the Company to the extent Xxxxxxx is then entitled to
designate such other individual for nomination for election as
a director of the Company pursuant to the Stock Purchase
Agreement or pursuant to paragraph F of the Certificate of
Designation; and
(d) In the event a director of the Company so designated
for nomination by Xxxxxxx ceases to be a director of the
Company for any reason before his or her term expires, to cause
each of the Xxxxx Affiliates to vote all shares of Board Voting
Securities owned by him, her or it in favor of another
individual designated for nomination by Xxxxxxx for election as
a director of the Company to the extent Xxxxxxx is then
entitled to designate such other individual for nomination for
election as a director of the Company pursuant to the Stock
Purchase Agreement or pursuant to paragraph F of the
Certificate of Designation.
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Notwithstanding the foregoing, however, to the extent that the
Xxxxxx Parties and Xxxxx Affiliates collectively do not possess the
sole power to vote or direct the voting of any such Board Voting
Securities from time to time (the shares as to which the Xxxxxx
Parties and Xxxxx Affiliates do not so possess such voting power
being referred to herein as "Non-Exclusive Board Shares"), they
shall be obligated to use their reasonable best efforts to cause
such Non-Exclusive Board Shares to be voted in compliance with the
foregoing."
SECTION 3. INSERTION OF NEW SECTION 3 IN THE ORIGINAL AGREEMENT.
The following provision is hereby inserted as Section 3 of the
Original Agreement (provided that the existing Section 3 of
the Original Agreement, all subsequent Sections thereof, and all
cross references thereto in the Original Agreement shall be
renumbered accordingly:
"SECTION 3. ADDITIONAL VOTING AGREEMENT OF THE XXXXXX PARTIES.
In addition to, and not in limitation of, Sections 2 and 4 hereof,
if the Series AA Preferred Stock is outstanding on June 30, 1998,
has not been satisfied in full before June 30, 1998, and has not
been sold, assigned, transferred, or otherwise conveyed by Xxxxxxx
to a Person (as defined below) that is not a Xxxxxxx Affiliate on or
before June 30, 1998, then during the Pre-Trigger Period (as defined
below), if any, each of the Xxxxxx Parties, severally and not
jointly, agrees:
(a) (i) To vote all shares of securities issued by the
Company ("General Voting Securities") beneficially owned
by him or it as and in the manner directed by Xxxxxxx on
any matter submitted o the shareholders of the Company for
a vote to the fullest extent that such securities are
entitled to vote thereon, and (ii) in respect of the
General Voting Securities beneficially owned by him or it,
to execute and deliver consents in writing to any actions
which may lawfully be taken by the stockholders of the
Company without a meeting, as and in manner directed by
Xxxxxxx; and
(b) (i) To cause the Xxxxx Affiliates to vote all General
Voting Securities beneficially owned by him, her, or it as
and in the manner directed by Xxxxxxx on any matter
submitted to the shareholders of the Company for a vote to
the fullest extent that such securities are entitled to
vote thereon, and (ii) to cause the Xxxxx Affiliates, in
respect of the General Voting Securities beneficially
owned by him, her, or it, to execute and deliver consents
in writing to any actions which may lawfully be taken by
the stockholders of the Company without a meeting, as and
in the manner directed by Xxxxxxx.
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Notwithstanding the foregoing, however, to the extent that the
Xxxxxx Parties and Xxxxx Affiliates collectively do not possess the
sole power to vote or direct the voting of any such General Voting
Securities from time to time or to execute and deliver written
consents with respect thereto (the shares as to which the Xxxxxx
Parties and Xxxxx Affiliates do not so possess such voting power
being referred to herein as the "Non-Exclusive General Shares"),
they shall be obligated to use their reasonable best efforts to
cause such Non-Exclusive General Shares to be voted, or written
consents in respect thereof to be executed and delivered, in
compliance with the foregoing. For purposes of this Agreement, the
term "Pre-Trigger Period" means the period commencing on June 30,
1998 and continuing until the earlier of (i) the time that the
Series AA Preferred Stock is redeemed, is satisfied in full, is no
longer outstanding, or is sold, assigned, transferred, or otherwise
conveyed by Xxxxxxx to a Person that is not a Xxxxxxx Affiliate, and
(ii) such time as both of the following events have occurred: (A)
the initial public offering of the Crown Hybrid Mortgage REIT has
been consummated, or another fund opportunity as contemplated by
Section 3.3(a) of the Stock Purchase Agreement has been completed,
and (B) the Company's average commercial loan origination volume for
the then preceding three months equals at least $16.7 million per
month. As used herein, the term "Xxxxxxx Affiliate" shall mean any
Person Controlling (as hereinafter defined), Controlled by (as
hereinafter defined), or under common Control (as hereinafter
defined) with, Xxxxxxx. As used in this Agreement, at any time of
determination, (i) one Person is "Controlling" another if such
Person then possesses the exclusive power, directly or indirectly,
to direct or cause the direction of the management or policies of
the subject Person, (ii) one Person is "Controlled" by another
Person if such other Person then possesses the exclusive power,
directly or indirectly, to direct or cause the direction of the
management or policies of the subject Person, through the ownership
of voting securities, by contract, or otherwise, unless such power
is solely the result of an official position with such subject
Person, and (iii) one exclusive power, directly or indirectly, to
direct or cause the direction of the management or policies of the
subject Person and such other Person, through the ownership of
voting securities, by contract, or otherwise, unless such power is
solely the result of an official position with such Person. As used
in this Agreement, the term "Person" means any individual or
entity."
SECTION 4. INSERTION OF NEW SECTION 4 IN THE ORIGINAL AGREEMENT.
The following provision is hereby inserted as Section 4 of the
Original Agreement (provided that the existing Section 4 of the
Original Agreement, all subsequent Sections thereof, and all
references thereto in the Original Agreement, shall be renumbered
accordingly):
"SECTION 4. ADDITIONAL AGREEMENT RELATING TO CHANGE OF CONTROL.
In addition to, and not in limitation of, Sections 2 and 3 hereof,
for so long, and only for so long, as (i) the Series AA Preferred
Stock is outstanding or has not been satisfied in full, and (ii)
Xxxxxxx or any Xxxxxxx Affiliate is the owner and holder of record
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of all of the Series AA Preferred Stock, each of the Xxxxxx Parties,
severally and not jointly, agrees:
(a) (i) Not to vote any General Voting Securities
beneficially owned by him or it in favor of any
transaction (or multiple related transactions) which, to
the actual knowledge of Xxxxx or Xxxxxx at that time,
would result in any Person who is not then a Permitted
Control Person (as hereinafter defined) to acquire Control
of the Company, and (ii) subject to the remaining
provisions of this Section 4, not to voluntarily sell,
assign, transfer, convey, or otherwise alienate any
General Voting Securities beneficially owned by him or in
connection with any transaction (or multiple related
transactions) which, to the actual knowledge of Xxxxx or
Xxxxxx at that time, would result in any Person who is not
then a Permitted Control Person to acquire Control of the
Corporation, in each case unless the Company (y)
voluntarily redeems all of the Series AA Preferred Stock
pursuant to Section E of the Certificate of Designation
prior to or concurrently with the consummation of the
first of such transactions to be consummated that confers
Control of the Company on such Person, or (z) calls the
Series AA Preferred Stock for redemption, and the Series
AA Preferred Stock is converted during the pertinent
Redemption Period (as defined in the Certificate of
Designation) prior to or concurrently with the
consummation of the first of such transactions to be
consummated that confers Control of the Company on such
Person; and
(b) (i) To cause the Xxxxx Affiliates not to vote any General
Voting Securities beneficially owned by him, her or it in
favor of any transaction (or multiple related
transactions) which, to the actual knowledge of Xxxxx or
Xxxxxx at that time, would result in any Person who is not
then a Permitted Control Person to acquire Control of the
Company, and (ii) subject to the remaining provisions of
this Section 4, to cause the Xxxxx Affiliates not to
voluntarily sell, assign, transfer, convey, or otherwise
alienate any General Voting Securities beneficially owned
by him, her, or it, in connection with any transaction (or
multiple related transactions) which, to the actual
knowledge of Xxxxx or Xxxxxx at that time, would result in
any Person who is not then a Permitted Control Person to
acquire Control of the Company, in each case unless the
Company (x) voluntarily redeems all of the Series AA
Preferred Stock pursuant to Section E of the Certificate
of Designation prior to or concurrently with the first of
such transactions to be consummated that confers Control
of the Company on such Person, or (y) calls the Series AA
Preferred Stock for redemption, and the Series AA
Preferred Stock is converted during the pertinent
Redemption Period prior to or concurrently with the first
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of such transactions to be consummated that confers
Control of the Company on such Person.
Notwithstanding any provision of this Agreement to the
contrary, however, the parties hereto agree as follows:
(i) The parties acknowledge that certain of the General Voting
Securities currently are pledged, hypothecated, or
otherwise encumbered on the date thereof. The parties
agree that each of such pledges, hypothecations, and
encumbrances, as amended, modified, or superseded at any
time and from time to time, are permitted notwithstanding
the other provisions of this Section 4, and that any
foreclosure upon, assignment of, payment of any judgment
with, or levy or execution or levy upon, any of such
General Voting Securities pursuant to any such pledge,
hypothecation, or encumbrance shall not constitute a
breach of this Section 4.
(ii) Each of the Xxxxxx Parties and the Xxxxx Affiliates shall
be entitled to pledge, hypothecate, or otherwise encumber
all or any portion of the General Voting Securities on and
after the date hereof to secure the repayment of any
indebtedness of any kind or nature whatsoever on or after
the date hereof, and the parties agree that each of such
pledges, hypothecations, and encumbrances shall be
permitted notwithstanding the other provisions of this
Section 4 and that any foreclosure upon, assignment of,
payment of any judgment with, or levy or execution of levy
upon, any such General Voting Securities pursuant to any
such pledge, hypothecation, or encumbrance shall not
constitute a breach of this Section 4.
(iii) The passing of the ownership, beneficial or
otherwise, of any such General Voting Securities upon the
death of any individual to that individual's heirs,
executors, creditors, or personal representatives shall
not constitute a violation of this Section 4.
(iv) To the extent that the Xxxxxx Parties and the Xxxxx
Affiliates collectively do not possess the sole power to
vote or direct the voting of any such General Voting
Securities (the shares as to which the Xxxxxx Parties and
Xxxxx Affiliates do not so possess such voting and
dispositive power being referred to herein as the "Non-
Exclusive Control General Shares"), they shall be
obligated to use their reasonable best efforts to cause
such Non-Exclusive Control General Shares to be voted,
held, and disposed of in compliance with the foregoing.
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As used therein, the term "Permitted Control Person" shall mean
one or more of any of the following persons: Xxxxxxx, any Xxxxxxx
Affiliate, any Xxxxxx Party, any Xxxxx Affiliate, and any other
Person who, by written agreement of the parties hereto is designated
as a Permitted Control Person for purposes of this Agreement."
SECTION 5. AMENDMENT OF SECTION 5 OF THE ORIGINAL AGREEMENT.
Section 5 of the Original Agreement is hereby amended in its
entirety to read in its entirety as follows:
"SECTION 5. LEGENDS. The Xxxxxx Parties and Xxxxxxx will, and
the Xxxxxx Parties will cause the Xxxxx Affiliates to, and Xxxxxxx
will cause the Xxxxxxx Affiliates to, deliver certificates
representing Voting Securities beneficially owned by them to the
Company for imprinting with the following legend (which legend shall
be removed, with respect to any of such Voting Securities, upon the
earlier of (i) the sale, assignment, or other transfer of such
Voting Securities to a Person not subject to the purview of this
Agreement, and (ii) the expiration of this Agreement), in each case
on or before the date that is the last to occur of (x) 30 days from
the date of this Agreement, and (y) their acquisition of beneficial
ownership of such Voting Securities:
"The voting securities represented by this certificate are
subject to restrictions on voting, as provided in a Voting
Agreement, dated as of March 7, 1997, between and among Xxxxxxx
Equity Fund I, L.L.C., Xxxxxx Holding Company, Ltd., and Xxxxxx
X. Xxxxx, as amended, a copy of which is on file with the
Secretary of the Company."
Notwithstanding the foregoing, however, Xxxxxxx will be
obligated to utilize its reasonable best efforts to cause the
beneficial owners of the Non-Exclusive Xxxxxxx Shares to comply with
this Section 5, and the Xxxxxx Parties shall be obligated to utilize
their respective reasonable best efforts to cause the beneficial
owners of the Non-Exclusive Board Shares, the Non-Exclusive General
Shares, and the Non-Exclusive Control General Shares to comply with
this Section 5."
SECTION 6. SECRETARY TO RETAIN COPY. A copy of this Agreement
shall be filed with the Secretary of the Company.
SECTION 7. FURTHER ACTIONS. At any time and from time to time
each party agrees, at its or his expense, to take such actions and
to execute and deliver such documents as may be reasonably necessary
to effectuate the purposes of this Agreement.
SECTION 8. AVAILABILITY OF EQUITABLE REMEDIES. Since a breach
of the provisions of this Agreement could not adequately be
compensated by money damages, any party shall be entitled, in
addition to any other right or remedy available to him, to an
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injunction restraining such breach or a threatened breach and to
specific performance of any such provision of this Agreement, and in
either case no bond or other security shall be required in
connection therewith, and the parties hereby consent to such
injunction and to the ordering of specific performance.
SECTION 9. MODIFICATION. This Agreement sets forth the entire
understanding of the parties with respect to the subject matter
hereof, supersedes all existing agreements among them concerning
such subject matter, and may be modified only by a written
instrument duly executed by each party.
SECTION 10. NOTICES. Any notice or other communication
required or permitted to be given hereunder shall be in writing and
shall be mailed by certified mail, return receipt requested or
delivered against receipt to the party to whom it is to be given at
the address of such party set forth in the preamble to this
Agreement or at such other address as the other parties hereto shall
have been notified in writing pursuant hereto. Except as otherwise
specifically provided in this Agreement, any notice given by
certified mail shall be deemed given at the time of certification
thereof except for a notice changing a party's address which shall
be deemed given at the time of receipt thereof.
SECTION 11. WAIVER. Any waiver by any party of a breach of
any provisions of this Agreement shall not operate as or be
construed to be a waiver of any other breach of such provision or of
any breach of any other provision of this Agreement. The failure of
a party to insist upon strict adherence to any term of this
Agreement on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. Any
waiver must be in writing.
SECTION 12. BINDING EFFECT. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto
and the respective successors and assigns of the corporate parties
hereto and the respective assigns, heirs, and personal
representatives of the individual parties hereto.
SECTION 13. NO THIRD PARTY BENEFICIARIES. This Agreement does
not create, and shall not be construed as creating, any rights
enforceable by any person not party to this Agreement.
SECTION 14. SEPARABILITY. If any provision of this Agreement
is invalid, illegal, or unenforceable, the balance of this Agreement
shall remain in effect, and if any provision is inapplicable to any
person or circumstance, it shall nevertheless remain applicable to
all other persons and circumstances.
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SECTION 15. HEADINGS. The headings in this Agreement are
solely for convenience of reference and shall be given no effect in
the construction or interpretation of this Agreement.
SECTION 16. PRONOUNS. Any masculine personal pronoun shall be
considered to mean the corresponding feminine or neuter personal
pronoun, as the context requires.
SECTION 17. COUNTERPARTS; GOVERNING LAW. This Agreement may
be executed in any number of counterparts, each of which shall be
deemed an original, but all of which together shall constitute one
and the same instrument. It shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving
effect to the conflict of law principles thereof.
SECTION 18. REPRESENTATIONS AND WARRANTIES OF XXXXXX. Xxxxxx
hereby represents and warrants to Xxxxxxx that:
(i) It is a limited liability company duly
organized, validly existing, and in good standing under
the laws of the State of Ohio, with full limited liability
company power and authority to conduct its business as
currently conducted; and
(ii) Assuming the due authorization, execution,
and delivery of this Agreement by the other parties
hereto, this Agreement constitutes its legal, valid, and
binding obligation, enforceable against it in accordance
with its terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, moratorium,
or other laws affecting creditors' rights generally and by
the availability of equitable remedies.
SECTION 19. RATIFICATION. Each of the parties hereby
confirms, ratifies, and agrees that the Original Agreement, as
amended hereby, continues to be in full force and effect, as amended
hereby.
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IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first written above.
XXXXXX HOLDING COMPANY, LTD.
By:________________________________
Name: Xxxxxx X. Xxxxx
Title: Managing Member
____________________________________
XXXXXX X. XXXXX
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