1
Exhibit 99.4
Xxxx.xxx, Inc.
January 8, 2001
Federal Partners, L.P.
x/x Xxx Xxxxx Xxxxxxx, Inc.
Xxx Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx X. Xxxx
Ladies and Gentlemen:
Reference is made to the Note Purchase Agreement dated as of the date hereof
among Xxxx.xxx, Inc., a Delaware corporation ("Xxxx.xxx" or the "Company"), you,
the other Purchasers parties thereto and certain other parties (the "Purchase
Agreement") and the other Transaction Agreements (as defined therein).
Capitalized terms used herein shall have the respective meanings ascribed to
such terms in the Purchase Agreement or the other Transaction Agreements.
In consideration of the Transaction Agreements, Xxxx.xxx agrees with you as
follows:
1. Board of Directors Designee. From and after the date hereof, for so long as
Federal Partners, L.P. ("Federal Partners") and its affiliates (or such other
accounts for which The Xxxxx Estates, Inc. provides management services) hold at
least 3,000,000 shares of Class A common stock of the Company on a fully diluted
basis (including the shares issuable upon conversion of the Notes and shares
issued in payment of interest on the Notes), such number to be appropriately
adjusted in the event of a stock split, stock dividend, stock combination or
recapitalization or other event having similar effect (the "Minimum Amount"),
Federal Partners shall be entitled to designate one person as a director of the
Company. In such event, the Company shall (i) take all actions necessary to
ensure the election to the Board of Directors of the representative designated
by Federal Partners (the "FP Designee"), including but not limited to
increasing, if necessary, the size of the Board of Directors and taking all
necessary corporate action to permit the election by the Board of Directors of
the FP Designee promptly after such designation, and (ii) at all times
thereafter to (x) include the FP Designee among Xxxx.xxx's nominees for election
to the Board of Directors and (y) use its best efforts to have the FP Designee
elected by the stockholders. In lieu of designating a person as a director of
the Company, Federal Partners may at any time during the period that it has the
right to so designate a director designate an observer to all meetings of the
Board of Directors and to receive all information furnished to the directors,
subject to conventional confidentiality restrictions.
2. Terms and Conditions.
The FP Designee shall serve as a director on the same terms and conditions as at
least one of the non-management directors of Xxxx.xxx.
2
3. Removal. If Federal Partners requests that the FP Designee elected as a
director be removed (with or without cause), by written notice to Xxxx.xxx, the
Company shall take all actions necessary to effect such removal upon such
request.
4. Vacancies. In the event that a vacancy is created on the Board of Directors
at any time by the death, disability, retirement, resignation or removal (with
or without cause) of an FP Designee, Federal Partners may designate a new FP
Designee to fill the vacancy.
5. Termination. The covenants set forth in this agreement shall terminate and be
of no further force or effect upon the earlier of (i) the date on which Federal
Partners and its affiliates (or such other accounts for which The Xxxxx Estates,
Inc. provides management services) hold less than the Minimum Amount and (ii)
the consummation of a "Change of Control" and the repayment in full of the
Notes, together with all accrued and unpaid interest thereon. As used herein, a
Change of Control means a merger or consolidation of Xxxx.xxx with or into
another Person, or a sale of all or substantially all of the assets of Xxxx.xxx
to another Person, and the shareholders of Xxxx.xxx immediately before such
transaction do not own securities of the surviving, resulting or transferee
entity representing a majority of the voting power of such entity or any entity
controlling such entity immediately after such transaction.
Very truly yours,
XXXX.XXX, INC.
By: /s/ Xxxxxx Xxxxxxxx
-------------------
Xxxxxx Xxxxxxxx
Chief Executive Officer
2
