EXHIBIT B
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STOCK PURCHASE AGREEMENT
BY AND BETWEEN
KBK CAPITAL CORPORATION
AND
XXXXXX COMMERCIAL FINANCE, L.L.C.
OCTOBER 21, 1999
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TABLE OF CONTENTS
ARTICLE I SALE AND PURCHASE OF STOCK; CLOSING...................................... 1
1.1 Sale and Purchase of Initial Shares................................ 1
1.2 Sale and Purchase of Deferred Shares............................... 1
1.3 Purchase of Additional Shares...................................... 1
1.4 Purchase Price..................................................... 2
1.5 Closing............................................................ 2
1.6 Initial Closing Deliveries......................................... 2
1.7 Subsequent Closing Deliveries...................................... 3
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SELLER................................. 3
2.1 Organization, Existence and Good Standing.......................... 3
2.2 Authority.......................................................... 3
2.3 Title.............................................................. 4
2.4 Consents and Approvals; No Violation............................... 4
2.5 Other Obligations.................................................. 4
2.6 Access to Information.............................................. 4
2.7 Disclosure......................................................... 4
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.......................... 4
3.1 Organization, Existence and Good Standing.......................... 4
3.2 Authority.......................................................... 4
3.3 Consents and Approvals; No Violation............................... 5
ARTICLE IV ADDITIONAL AGREEMENTS.................................................... 5
4.1 Legality........................................................... 5
4.2 Prior Approval by Bank............................................. 5
4.3 Voting of Deferred Shares.......................................... 5
ARTICLE V MISCELLANEOUS............................................................ 5
5.1 Nature and Survival of Representations, Warranties and Covenants... 5
5.2 Amendment and Modification......................................... 5
5.3 Waiver; Consents................................................... 5
5.4 Further Assurances................................................. 6
5.5 Notices............................................................ 6
5.6 Assignment......................................................... 6
5.7 Governing Law...................................................... 7
5.8 Service............................................................ 7
5.9 Counterparts....................................................... 7
5.10 Interpretation..................................................... 7
5.11 Entire Agreement................................................... 7
5.12 Attorneys' Fees.................................................... 7
5.13 Expenses........................................................... 7
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is entered into as of
October 21, 1999, by and between Xxxxxx Commercial Finance, L.L.C. ("Seller")
and KBK Capital Corporation (the "Purchaser").
RECITALS
WHEREAS, Seller is the owner of 483,795 shares (the "Stock") of Common
Stock, par value $.01 per share, of the Purchaser;
WHEREAS, the Purchaser desires to acquire from Seller, and Seller desires
to sell to the Purchaser, the Stock;
WHEREAS, Seller is making certain representations, warranties, covenants
and indemnities herein as an inducement for the Purchaser to enter into this
Agreement; and
WHEREAS, capitalized terms not otherwise defined herein shall have the
meanings set forth in Exhibit A.
NOW, THEREFORE, in consideration of the respective representations,
warranties and covenants contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
ARTICLE I
SALE AND PURCHASE OF STOCK; CLOSING
1.1 SALE AND PURCHASE OF INITIAL SHARES. Subject to the terms and
conditions of this Agreement, Seller does hereby sell, assign, transfer and
deliver to the Purchaser, and the Purchaser does hereby purchase and acquire
from Seller an aggregate of 100,000 shares of the Stock (the "Initial Shares").
1.2 SALE AND PURCHASE OF DEFERRED SHARES. Subject to the terms and
conditions of this Agreement, Seller hereby agrees to sell, assign, transfer and
deliver to the Purchaser, and the Purchaser hereby agrees to purchase and
acquire from Seller an aggregate of 383,795 shares of the Stock in the amounts
and on the dates set forth on Exhibit B (the "Deferred Shares").
1.3 PURCHASE OF ADDITIONAL SHARES. At each Subsequent Closing (as
hereinafter defined), the Purchaser shall have the option, in its sole
discretion, to purchase a greater number of shares of Stock than that set forth
on Exhibit B with respect to the date of such Subsequent Closing (the
"Accelerated Amount"). The purchase price for the Accelerated Amount shall be
the same as that set forth on Exhibit B for the shares of Stock to be purchased
on such Subsequent Closing. If such greater number of shares is purchased, the
number of the remaining shares to be purchased at each Subsequent Closing
thereafter will be reduced on a pro rata basis, such that the aggregate number
of shares of Stock purchased by the Purchaser pursuant to this Agreement is
483,795.
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1.4 PURCHASE PRICE. The cash purchase price for the Initial Shares shall
be $500,000 which shall be payable by the wire transfer of immediately available
funds to an account designated by Seller (the "Initial Payment"). The purchase
price for the Deferred Shares shall be as set forth on Exhibit B and shall be
payable by wire transfer to an account designated by Seller (the "Deferred
Payments"). The Initial Payment and the Deferred Payments shall collectively be
referred to herein as the "Purchase Price."
1.5 CLOSING. The closing of the sale and purchase of the Initial Shares
(the "Initial Closing") shall take place at the offices of KBK Capital
Corporation, 301 Commerce Street, 0000 Xxxx Xxxxxx XX, Xxxx Xxxxx, Xxxxx 00000
on the date hereof. The closings of the sales and purchases of the Deferred
Shares (each a "Subsequent Closing" and, collectively, the "Subsequent
Closings") shall take place at the offices of KBK Capital Corporation, 301
Commerce Street, 0000 Xxxx Xxxxxx XX, Xxxx Xxxxx, Xxxxx 00000 on the dates set
forth on Exhibit B.
1.6 INITIAL CLOSING DELIVERIES.
(a) At the Initial Closing, Seller shall deliver or cause to be
delivered to the Purchaser:
(i) certificates representing the Initial Shares, duly endorsed
for transfer to the Purchaser, which shall transfer to the Purchaser good
and valid title to the Stock, free and clear of all Encumbrances;
(ii) certificates, dated as of a date no earlier than 10 days
before the Initial Closing, duly issued by the appropriate governmental
authority in _____ showing that Seller is in existence and in good standing
and authorized to do business;
(iii) unanimous written consents of the managers and members of
Seller, authorizing the transactions contemplated by this Agreement;
(iv) an Escrow Agreement in substantially the form of Exhibit C
hereto;
(v) a Release of the Purchaser (executed by Seller and each of
its members) in substantially the form of Exhibit D hereto;
(vi) a Voting Agreement and Irrevocable Proxy in substantially
the form of Exhibit E hereto; and
(vii) such other documents, as may be required by this Agreement
or reasonably requested by the Purchaser.
(b) At the Initial Closing, the Purchaser shall deliver to Seller
(i) the Initial Payment; and
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(ii) a certificate, executed by the Purchaser and dated as of the
date of the Initial Closing, to the effect that the Purchaser has received
the prior approval of Bank One, Texas, N.A.
1.7 SUBSEQUENT CLOSING DELIVERIES.
(a) At each Subsequent Closing, Seller shall deliver or cause to be
delivered to the Purchaser:
(i) certificates representing such Deferred Shares to be
transferred to the Purchaser, duly endorsed for transfer to the Purchaser,
which shall transfer to the Purchaser good and valid title to the Stock,
free and clear of all Encumbrances; and
(ii) a certificate, executed by Seller and dated as of the date
of the Subsequent Closing, to the effect that the representations and
warranties of Seller contained in this Agreement are true, correct and
complete as of such date.
(b) At each Subsequent Closing, the Purchaser shall deliver to Seller:
(i) the appropriate Deferred Payment as set forth on Exhibit B;
and
(ii) a certificate, executed by the Purchaser and dated as of the
date of the Subsequent Closing, to the effect that the representations and
warranties of the Purchaser contained in this Agreement are true, correct
and complete as of such date.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents and warrants to the Purchaser as follows:
2.1 ORGANIZATION, EXISTENCE AND GOOD STANDING. Seller is a limited
liability company duly organized, validly existing and in good standing under
the laws of the state of Louisiana and each has full power and authority to
carry on its business as now being conducted, to own or lease and operate its
properties and assets, and to perform all its obligations under the agreements
and instruments to which it is a party or by which it is bound. True, correct
and complete copies of the Articles of Organization (certified as of a recent
date by the Secretary of State of Louisiana) and the Operating Agreement
(certified as of the date hereof by the Seller) of Seller, with amendments
thereto through the date of this Agreement (collectively, the "Organizational
Documents"), have been delivered by Seller to the Purchaser.
2.2 AUTHORITY. Seller has the requisite capacity, power and authority to
execute and deliver this Agreement, to perform its obligations hereunder and to
consummate the transactions contemplated hereby. Seller's execution and
delivery of this Agreement, the performance of its obligations hereunder, and
the consummation of the transactions contemplated hereby have been duly and
validly authorized and approved by the managers and members of Seller. This
Agreement has been duly and validly executed and delivered by Seller, and this
Agreement constitutes the legal, valid and binding agreement of Seller,
enforceable against it in accordance with its terms.
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2.3 TITLE. Seller has good and valid title to the Stock, free and clear of
all Encumbrances or adverse claims of any type whatsoever. Seller is not a party
to any option, warrant, purchase right or other contract or commitment that
could require Seller to sell, transfer or otherwise dispose of any of the Stock.
2.4 CONSENTS AND APPROVALS; NO VIOLATION. No consent, notice or approval
of any third party is necessary in connection with Seller's execution and
delivery of this Agreement or the consummation of the transactions contemplated
hereby. The execution and delivery of this Agreement, the consummation of the
transactions contemplated hereby, and the compliance by Seller with any of the
provisions hereof will not (i) conflict with or violate any provision of the
Organizational Documents of Seller, (ii) result in a violation or breach of, or
constitute (with or without due notice or lapse of time or both) a default (or
give rise to any right of termination, cancellation or acceleration) under, any
of the terms, conditions or provisions of any note, contract, agreement,
commitment, bond, mortgage, indenture, license, lease, pledge agreement or other
instrument or obligation to which Seller is a party or by which Seller may be
bound, (iii) violate or conflict with any law, regulation, judgment, order,
writ, injunction, decree or other legal document binding upon Seller, or (iv)
result in, or require, the creation or imposition of, any Encumbrance upon the
Stock.
2.5 OTHER OBLIGATIONS. As of the date hereof, except for the obligations
of the Purchaser created by this Agreement, the Purchaser does not owe any
indebtedness or have any other obligation of any kind or nature whatsoever to
Seller or any of its members.
2.6 ACCESS TO INFORMATION. Seller hereby acknowledges, represents and
warrants that its representatives and members have been afforded access to all
of the books, records and premises of the Purchaser and such representatives and
members have examined the same or caused the same to be examined to the extent
they deem necessary or appropriate such that Seller and its members do not
desire further information or data concerning the Purchaser. Seller hereby
acknowledges, represents and warrants that it has independently concluded that
the Purchase Price of the Shares is acceptable and that it has not relied on the
estimations or opinions of the Purchaser with respect to such value.
2.7 DISCLOSURE. No representation or warranty of Seller contained in this
Agreement contains any untrue statement or omits to state a material fact
necessary in order to make the statements herein or therein, in light of the
circumstances under which they were made, not misleading.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to Seller as follows:
3.1 ORGANIZATION, EXISTENCE AND GOOD STANDING. The Purchaser is a
corporation duly organized, validly existing and in good standing under the laws
of the state of Delaware.
3.2 AUTHORITY. The Purchaser has full corporate power and authority to
execute and deliver this Agreement, to perform its obligations hereunder, and to
consummate the transactions contemplated hereby. The Purchaser's execution and
delivery of this Agreement, the
4
performance of its obligations hereunder, and the consummation of the
transactions contemplated hereby have been duly and validly authorized and
approved by the board of directors of the Purchaser. This Agreement has been
duly and validly executed and delivered by the Purchaser and constitutes the
legal, valid and binding agreement of the Purchaser enforceable against the
Purchaser in accordance with its terms.
3.3 CONSENTS AND APPROVALS; NO VIOLATION. Neither the execution and
delivery of this Agreement, the consummation of the transactions contemplated
hereby, nor the compliance by the Purchaser with any of the provisions hereof
will, as of the date of the Initial Closing, (i) conflict with or violate any
provision of the Certificate of Incorporation or Bylaws of the Purchaser, (ii)
result in a material violation or material breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, any of the terms,
conditions or provisions of any material note, contract, agreement, commitment,
bond, mortgage, indenture, license, lease, pledge agreement or other instrument
or obligation to which the Purchaser is a party or by which the Purchaser or any
of its properties or assets may be bound, (iii) violate or conflict with any
law, regulation, judgment, order, writ, injunction, decree or other legal
document binding upon Purchaser, or (iv) result in, or require, the creation or
imposition of, any Encumbrance upon the Stock.
ARTICLE IV
ADDITIONAL AGREEMENTS
4.1 LEGALITY. Purchaser and Seller agree that Purchaser shall have no
obligation to purchase and acquire from Seller any shares of the Stock pursuant
to this Agreement if such purchase and acquisition would not be in compliance
with applicable laws, including, but not limited to, the applicable provisions
of the Delaware General Corporation Law.
4.2 VOTING OF DEFERRED SHARES. Seller hereby agrees to vote all of the
Deferred Shares in accordance with the recommendations of management of the
Purchaser and to timely instruct the Escrow Agent (as such term is defined in
the Escrow Agreement) as to such vote.
ARTICLE V
MISCELLANEOUS
5.1 NATURE AND SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. All
representations, warranties and covenants of Seller and Purchaser set forth
herein shall survive the Initial Closing indefinitely.
5.2 AMENDMENT AND MODIFICATION. This Agreement may be amended, modified,
terminated, rescinded or supplemented only by written agreement of the parties
hereto.
5.3 WAIVER; CONSENTS. The rights and remedies of the parties to this
Agreement are cumulative and not alternative. Any failure of a party to comply
with any obligation, covenant, agreement or condition herein may be waived by
each party affected thereby only by a written instrument signed by the party
granting such waiver. No waiver, or failure to insist upon strict compliance, by
any party of any condition or any breach of any obligation, term, covenant,
representation, warranty or agreement contained in this Agreement, in any one or
more instances, shall be construed to be a waiver of, or estoppel with respect
to, any other condition or any other
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breach of the same or any other obligation, term, covenant, representation,
warranty or agreement. Whenever this Agreement requires or permits consent by or
on behalf of any party hereto, such consent shall be given in writing in a
manner consistent with the requirements for a waiver.
5.4 FURTHER ASSURANCES. The parties hereto agree (i) to furnish upon
request to each other such further information, (ii) to execute and deliver to
each other such other documents, and (iii) to do such other acts and things, all
as the other party hereto may at any time reasonably request, for the purpose of
carrying out the intent of this Agreement and the documents referred to herein.
5.5 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given when (i) delivered
personally, (ii) sent by telecopier (with receipt confirmed), provided that a
copy is mailed by registered or certified mail, return receipt requested, or
(iii) received by the addressee, if sent by Express Mail, Federal Express or
other express delivery service (receipt requested) or by registered or certified
mail, return receipt requested, in each case to the other party at the following
addresses and telecopier numbers (or to such other address or telecopier number
for a party as shall be specified by like notice; provided that notices of a
change of address or telecopier number shall be effective only upon receipt
thereof):
if to Seller, to: Xxxxxx Commercial Finance, L.L.C.
c/o Xxxxxx X. Xxxxxx
P. O. Xxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
with a copy to: Xxxxx X. Xxxxxx
P. O. Box 51869
Xxxxxxxxx, Xxxxxxxxx 00000
Fax No.: (000) 000-0000
if to the Purchaser, to: Xx. Xxxxxx X. XxXxx
KBK Capital Corporation
2200 City Center II
000 Xxxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
with a copy to: Xx. Xxxx X. Xxxxx
Xxxxx Xxxxxxx & Xxxx LLP
0000 Xxxxx Xxxxx
000 Xxxxxx
Xxxxxxx, Xxxxx 00000-0000
Fax No.: (000) 000-0000
5.6 ASSIGNMENT. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns. This Agreement is not intended to and shall
not confer upon any person other than the parties any rights or remedies
hereunder or with respect hereto.
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5.7 GOVERNING LAW. This Agreement shall be governed by the laws of the
State of Texas (regardless of the laws that might otherwise govern under
applicable principles of conflicts of law) as to all matters, including but not
limited to matters of validity, construction, effect, performance and remedies.
5.8 SERVICE. Any process against the Purchaser or Seller in, or in
connection with, any suit, action or proceeding arising out of or relating to
this Agreement or any of the transactions contemplated by this Agreement may be
served personally or by certified mail at the address set forth in Section 5.5
with the same effect as though served on it or him personally.
5.9 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
5.10 INTERPRETATION. The article and section headings contained in this
Agreement are solely for the purpose of reference, are not part of the agreement
of the parties and shall not in any way affect the meaning or interpretation of
this Agreement.
5.11 ENTIRE AGREEMENT. This Agreement, including exhibits hereto, and the
documents and instruments referred to herein, embodies the entire agreement and
understanding of the parties hereto in respect of the subject matter contained
herein. There are no restrictions, promises, representations, warranties,
covenants, or undertakings other than those expressly set forth or referred to
herein
5.12 ATTORNEYS' FEES. In the event any party hereto institutes a proceeding
or other action against any other party hereto for a claim arising out of or to
enforce this Agreement, the parties agree that the judge in any such proceeding
or action shall be entitled to determine the extent to which any party shall pay
the reasonable attorneys' fees incurred by the other party in connection with
such proceeding or action, which determination shall take into consideration the
outcome of such proceeding or action and such other factors as the judge may
determine to be equitable in the circumstances.
5.13 EXPENSES. All costs and expenses incurred in connection with the
transactions contemplated by this Agreement shall be paid by the party incurring
such costs and expenses.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to
be executed on its behalf as of the date first above written.
KBK CAPITAL CORPORATION
By: /s/ XXXXXX X. XXXXX
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Name: Xxxxxx X. XxXxx
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Title: Chairman of the Board and Chief
-------------------------------
Executive Officer
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XXXXXX COMMERCIAL FINANCE, L.L.C.
By: /s/ XXXXXX XXXXXX
----------------------------------
Name: Xxxxxx Xxxxxx
-------------------------------
Title: Managing Member
-------------------------------
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EXHIBIT A
DEFINITIONS
The following terms shall have the meanings specified or referred to below
whether or not capitalized when used in this Agreement.
"Affiliate" means, with respect to a specified Person, (a) any Entity of
which such Person is an executive officer, director, partner, trustee or other
fiduciary or is directly or indirectly the beneficial owner of 20% or more of
any class of equity security thereof or other financial interest therein; (b) if
such Person is an individual, any relative or spouse of such individual, or any
relative of such spouse (such relative being related to the individual in
question within the second degree) and any Entity of which any such relative,
spouse, or relative of spouse is an executive officer, director, partner,
trustee or other fiduciary or is directly or indirectly the beneficial owner of
20% or more of any class of equity security thereof or other financial interest
therein; or (c) any Person that directly, or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with the
Person specified. For purposes of this definition, "executive officer" means
the president, any vice president in charge of a principal business unit,
division or function such as sales, administration, research and development, or
finance, and any other officer, employee or other Person who performs a policy
making function or has the same duties as those of a president or vice
president. For purposes of this definition, "control" (including "controlling",
"controlled by" and "under common control with") means the possession, direct or
indirect, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise.
"Encumbrance" means any lien, pledge, hypothecation, charge, mortgage, deed
of trust, security interest, encumbrance, equity, trust, equitable interest,
claim, easement, right-of-way, servitude, right of possession, lease tenancy,
license, encroachment, burden, intrusion, covenant, infringement, interference,
proxy, option, right of first refusal, community property interest, legend,
defect, impediment, exception, condition, restriction, reservation, limitation,
impairment, imperfection of title, restriction on or condition to the voting of
any security, restriction on the transfer of any security or other asset,
restriction on the receipt of any income derived from any security or other
asset, and restriction on the possession, use, exercise or transfer of any other
attribute of ownership, whether based on or arising from common law,
constitutional provision, statute or contract.
"Entity" means any company, corporation, limited partnership, joint
venture, joint stock association, estate, trust, cooperative, foundation, union,
syndicate, league, consortium, coalition, committee, society, firm or other
enterprise, association, organization or entity of any nature, other than a
governmental authority.
"Person" means any individual, Entity or governmental authority.
A-1
EXHIBIT B*
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PAYMENT DATE** NUMBER OF SHARES OF STOCK PRICE PER SHARE
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December 31, 1999 55,000 $5.08
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March 31, 2000 55,000 $5.15
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June 30, 2000 55,000 $5.23
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September 30, 2000 55,000 $5.30
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December 31, 2000 55,000 $5.38
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March 31, 2001 55,000 $5.45
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June 30, 2001 53,795 $5.53
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TOTAL 383,795
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* Subject to any required action by the Purchaser's directors and
stockholders, the above schedule shall be proportionately adjusted for any
increase or decrease in the number of issued shares of the common stock of the
Purchaser resulting from a subdivision or consolidation of shares or the payment
of a stock dividend (but only on the common stock of the Purchaser), a stock
split, a reverse stock split, or any other increase or decrease in the number of
such shares effected without receipt of consideration by the Purchaser.
** If the Payment Date is not a business day, the Subsequent Closing to be
held on such Payment Date shall occur on the next following business day.
B-1
EXHIBIT C
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (this "Escrow Agreement") is made on this the ___ day
of _____________, 1999, by and among KBK Capital Corporation ("Purchaser"),
Xxxxxx Commercial Finance, L.L.C. ("Seller"), and Whitney National Bank ("Escrow
Agent").
RECITALS:
WHEREAS, the Purchaser and Seller have entered into that certain Stock
Purchase Agreement of even date herewith (the "Stock Purchase Agreement")
pursuant to which Purchaser agreed to acquire an aggregate of 483,795 shares of
the Purchaser's common stock, par value $.01 per share ("Common Stock");
WHEREAS, the Stock Purchase Agreement provides that Seller shall deliver to
the Purchaser this Escrow Agreement at the Initial Closing;
WHEREAS, Escrow Agent has agreed to act hereunder on the terms and
conditions set forth herein; and
WHEREAS, capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Stock Purchase Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and obligations
set forth below, the parties hereto hereby agree as follows:
ARTICLE I
ESCROW
1.1 Deposit of Deferred Shares. On the date of the Initial Closing and
concurrently with the execution of this Escrow Agreement, Purchaser has
deposited with the Escrow Agent the Deferred Shares and instruments of transfer
duly executed by the Seller in blank, with signatures guaranteed. The
certificates representing the Deferred Shares shall be in the denominations set
forth on Exhibit A hereto. The certificates representing the Deferred Shares
are issued in the name of Seller, and are being delivered to the Escrow Agent
at the office address for the Escrow Agent as set forth in Section 3.1 of this
Escrow Agreement. The parties acknowledge that the Escrow Agent shall hold the
Deferred Shares in trust, for the purposes set forth herein, and shall in no
event be (or be deemed to be) the beneficial owner of the Deferred Shares.
1.2 Receipt by Escrow Agent. Escrow Agent acknowledges receipt of the
Deferred Shares and agrees to hold the Deferred Shares in escrow pursuant to
this Escrow Agreement.
C-1
1.3 Beneficial Ownership of Deferred Shares. The records of the Escrow
Agent shall identify the ownership of the Deferred Shares by the Seller.
Subject to the terms of this Escrow Agreement, the Seller is and shall be the
sole owner of the Deferred Shares, and, subject to the terms of this Escrow
Agreement, shall have complete power and authority over the Deferred Shares,
including the right to vote and receive regular cash dividends; provided,
however, that the Seller shall not have the right to dispose of any portion of
the Deferred Shares during the term of this Escrow Agreement; and provided,
further, that the Seller shall not have any right to shares of Common Stock
issued as a stock dividend or a stock split or any non-cash distribution or any
extraordinary distributions, which shares and distributions shall become a part
of the Deferred Shares. The Escrow Agent shall send, or cause to be sent, to
the Seller a copy of the proxy solicitation material for each annual and special
meeting of shareholders of Purchaser, together with a form requesting
confidential instructions to the Escrow Agent on how to vote the shares of
Common Stock held hereunder for the benefit of the Seller. The Escrow Agent
shall vote each such share of Common Stock as so instructed. In the absence of
timely instructions from the Seller, the Escrow Agent will not vote the shares
of Common Stock held for the Seller. Subject to the terms of this Escrow
Agreement, the Escrow Agent shall send, or cause to be sent, to the Seller any
regular cash dividends distributed with respect to the shares of Common Stock
held hereunder for the benefit of the Seller.
1.4 Transfer of Deferred Shares. With the exception of an interpleader
action pursuant to Section 2.2 hereof or as may be directed by a court of
competent jurisdiction, the Deferred Shares shall be transferred to the
Purchaser only upon receipt by the Escrow Agent of a Deferred Payment, and shall
be released in accordance with the schedule set forth on Exhibit A; provided,
however, that if the Purchaser opts to purchase a greater number of shares of
Common Stock than that set forth on Exhibit A pursuant to Section 1.3 of the
Stock Purchase Agreement and delivers to the Escrow Agent payment for such
shares as set forth in Section 1.3 of the Stock Purchase Agreement, the Escrow
Agent shall transfer such additional Deferred Shares to the Purchaser. If such
greater number of shares is purchased, the number of the remaining shares to be
purchased at each Subsequent Closing will be reduced on a pro rata basis, such
that the aggregate number of shares of Common Stock purchased by the Purchaser
is 483,795.
1.5 Transfer of Deferred Shares Upon Failure of Deferred Payment. In the
event any Deferred Payment is not received by Escrow Agent on the applicable
Subsequent Closing and Deferred Payment is not made by the Purchaser in full
within 10 business days following receipt of notice by the Purchaser from the
Seller of nonreceipt thereof, the Escrow Agent shall deliver to Seller all
shares of Common Stock or other property held in escrow pursuant to this Escrow
Agreement.
1.6 Investment of Funds. When cash dividends, Deferred Payment or cash is
received by Escrow Agent pursuant to this Escrow Agreement, Escrow Agent shall
deposit or invest such amounts for the benefit of Seller in Treasury Obligations
Institutional Shares Money Market Fund. Administrative fees may be accepted by
Whitney National Bank in its capacity as Escrow
C-2
Agent from mutual funds companies as the result of investments made with such
companies. Such fees are not and shall not constitute compensation due to Escrow
Agent under Section 2.4 of this Escrow Agreement and shall not otherwise be paid
into the account.
1.7 Transfer of Funds to Seller. As soon as practicable following the
receipt of cash dividends, Deferred Payment or cash, the Escrow Agent shall
wire transfer such funds, together with the investment earnings thereon pursuant
to Section 1.6 to Seller as follows:
Hibernia National Bank
Bank Route # 000000000
Account # 2080042321
Seller may change its wire transfer instructions by providing Escrow Agent
with notice complying with the provisions of Section 3.1 hereof.
ARTICLE II
ESCROW AGENT
2.1 Responsibilities of Escrow Agent. The Seller and Purchaser agree that
Escrow Agent shall have no responsibility except for the safekeeping and
handling of the Deferred Shares deposited with Escrow Agent pursuant to this
Escrow Agreement. Additionally, Escrow Agent shall not be liable for any
depreciation in or change of the value of the Deferred Shares deposited with
Escrow Agent hereunder. Nor shall Escrow Agent be liable for any act or thing
done or caused to be done by it under or pertaining to this Escrow Agreement or
the Deferred Shares deposited with it pursuant to this Escrow Agreement, except
for the negligence or willful misconduct of Escrow Agent; and in the event of
any conflicting demands made upon Escrow Agent, he may withhold performance
under instructions contained in this Escrow Agreement until such conflicting
demands are withdrawn or until the rights of the respective parties shall have
been settled by a court of competent jurisdiction.
2.2 Right of Interpleader. Should any controversy arise involving the
parties hereto or any of them or any other person, firm or entity with respect
to this Escrow Agreement, or should a substitute escrow agent fail to be
designated as provided in Section 2.6 hereof, or if Escrow Agent should be in
doubt as to what action to take, Escrow Agent shall have the right, but not the
obligation, either to (a) withhold delivery of the Deferred Shares or the taking
of any other action hereunder until the controversy is resolved, the conflicting
demands are withdrawn or its doubt is resolved, in any event to the satisfaction
of Escrow Agent, and Escrow Agent shall not in any event be or become liable
for its refusal or failure to act during such period and/or (b) institute a
petition for interpleader in any state or federal district court in either East
Baton Rouge or Calcasieu Parishes in the state of Louisiana to determine the
rights of the parties hereto. Should a petition for interpleader be instituted,
or should Escrow Agent be threatened with litigation or become involved in
litigation in any manner whatsoever in connection with this
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Escrow Agreement, Seller hereby agrees to reimburse Escrow Agent for his
attorneys' fees and any and all other expenses, losses, costs and damages
incurred by Escrow Agent in connection with or resulting from such threatened or
actual litigation prior to any disbursement hereunder.
2.3 Indemnification. Seller hereby agrees to indemnify the Escrow Agent,
and his partners, employees and agents (each herein called an "Indemnified
Party") against, and hold each Indemnified Party harmless from, any and all
expenses, including, without limitation, attorneys' fees and court costs,
losses, costs, damages and claims, including, but not limited to, costs of
investigation and litigation suffered or incurred by any Indemnified Party in
connection with or arising from or out of this Escrow Agreement, except such
acts or omissions as may result from the negligence or willful misconduct of
such Indemnified Party.
2.4 Compensation and Reimbursement of Expenses. Seller hereby agrees to
pay the fees, in accordance with Exhibit B, and expenses of Escrow Agent for his
services hereunder and to pay all expenses incurred by Escrow Agent in
connection with the performance of his duties and enforcement of its rights
hereunder and otherwise in connection with the preparation, operation,
administration and enforcement of this Escrow Agreement, including, without
limitation, reasonable attorneys' fees and related expenses incurred by Escrow
Agent, if any. Upon the Initial Closing, the Seller will pay the Escrow Agent
its fees as estimated for the term of this Escrow Agreement, provided, however,
that any unearned portion of such fees shall be refunded to the Seller upon
termination of this Escrow Agreement.
2.5 Resignation of Escrow Agent. Escrow Agent may resign as Escrow Agent
under this Escrow Agreement by giving written notice to the Purchaser and Seller
in accordance with the terms of this Escrow Agreement at least twenty (20) days
prior to the effective date of such resignation. Thereafter, Escrow Agent shall
deliver any remaining items held pursuant to this Escrow Agreement upon the
joint written and signed order of the Seller and Purchaser. If no such order is
received by Escrow Agent within twenty (20) days after the giving of such
notice, Escrow Agent is authorized and empowered to deposit all of same into the
registry of the United States District Court for the Northern District of Texas,
Fort Worth Division or, in the event that federal jurisdiction does not pertain,
in the courts of the state of Texas located in Tarrant County, Texas.
2.6 Removal of Escrow Agent. The Seller and Purchaser, acting jointly,
may remove Escrow Agent, with or without cause, and appoint a substitute escrow
agent or otherwise designate the disposition of the Deferred Shares without
other formality than giving written notice to Escrow Agent at Escrow Agent's
address set forth below, in which event Escrow Agent shall deliver the Deferred
Shares held by Escrow Agent hereunder in accordance with the joint written and
signed instructions of the Seller and Purchaser, and shall thereupon be deemed
to be removed as of the date designated in such notice, or if no date is
designated, as of the date such delivery is made.
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ARTICLE III
MISCELLANEOUS
3.1 Notice. Any notice or other communication provided or required to
be given hereunder shall be in writing and shall be given by personal delivery
or by certified mail, return receipt requested. All notices hereunder shall be
addressed to the person to receive such notice at the address set forth below
and shall be delivered to them at such address. Notices given by personal
delivery shall be deemed given and received when received at the proper address
stated herein. Notices given by certified mail shall be deemed given and
received when deposited with the U.S. Postal Service, postage prepaid. The
parties hereto may change their respective addresses for the receipt of notice
hereunder by giving the other parties hereto written notice of a change of
address for such purposes provided that such new address is located in the
United States of America. The address of the respective parties hereto for
notices hereunder are as follows:
if to Seller, to: Xxxxxx Commercial Finance, L.L.C.
c/o Xxxxxx X. Xxxxxx
P. O. Xxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
with a copy to: Xxxxx X. Xxxxxx
P. O. Box 51869
Xxxxxxxxx, Xxxxxxxxx 00000
Fax No.: (000) 000-0000
if to the Purchaser, to: Xx. Xxxxxx X. XxXxx
KBK Capital Corporation
2200 City Center II
000 Xxxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
with a copy to: Xx. Xxxx X. Xxxxx
Xxxxx Xxxxxxx & Xxxx LLP
0000 Xxxxx Xxxxx
000 Xxxxxx
Xxxxxxx, Xxxxx 00000-0000
Fax No.: (000) 000-0000
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If to Escrow Agent, to: Whitney National Bank Trust Division
Attention: Xxxx X. Xxxxx, Xx.
000 Xx. Xxxxxxx Xxxxxx, Xxx. 000
Xxx Xxxxxxx, Xxxxxxxxx 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
3.2 Reconciliation with Agreement. To the extent any of the terms and
provisions of this Escrow Agreement are contrary to or in addition to the terms
and provisions of the Stock Purchase Agreement, the Stock Purchase Agreement
shall be deemed to be hereby modified and amended in accordance with the terms
and provisions hereof. The Stock Purchase Agreement shall not be further
amended without the joinder or consent of all parties to this Escrow Agreement.
3.3 No Oral Modification. This Escrow Agreement may not be modified,
amended or altered except by an Escrow Agreement in writing signed by Purchaser,
the Seller and Escrow Agent.
3.4 Governing Law. The substantive laws of the State of Louisiana shall
govern the validity, construction, enforcement and interpretation of this Escrow
Agreement. Venue of any case or controversy arising under or pursuant to this
Escrow Agreement shall lie in the in any state or federal district court in
either East Baton Rouge or Calcasieu Parishes in the state of Louisiana.
3.5 Severability. If any covenant or provision of this Escrow Agreement
shall be held illegal, invalid or unenforceable under present or future laws
effective during the term of this Escrow Agreement, then and in that event, it
is the intention of the parties hereto that the remainder of this Escrow
Agreement shall not be affected thereby, and that this Escrow Agreement shall
otherwise continue in full force and effect. It is the further intention of the
parties that in lieu of each covenant or provision of this Escrow Agreement that
is held illegal, invalid, or unenforceable, there be added as a part hereof a
clause or provision as similar in terms to such illegal, invalid or
unenforceable clause or provision as may be possible and be legal, valid and
enforceable.
3.6 Entirety. This Escrow Agreement embodies the entire Escrow Agreement
between the parties, and supersedes all prior escrow agreements and
understandings, if any, relating to the subject matter hereof.
3.7 Binding Effect and Assignment. The terms of this Escrow Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors, assigns and legal representatives, provided, however,
that neither party hereto may, without the prior written consent of the other,
assign any rights, powers, duties, or obligations hereunder; and
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further provided, however, that this Escrow Agreement shall not inure to the
benefit of any party other than the parties to this Escrow Agreement.
3.8 Headings. Section headings are for convenience of reference only and
shall in no way affect the interpretation of this Escrow Agreement.
3.9 Counterparts. This Escrow Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
Escrow Agreement, and any of the parties hereto may execute this Escrow
Agreement by signing any such counterpart.
3.10 Time of the Essence. Time is of the essence of this Escrow
Agreement.
3.11 Term. The term of this Escrow Agreement shall commence upon the date
hereof, and shall continue in effect until all of the Deferred Shares shall have
been distributed hereunder, retransfer to Seller pursuant to Section 1.5, or
pursuant to the final order of a court of competent jurisdiction. The
provisions of Sections 2.3 and 2.4 hereof shall survive such termination.
[The remainder of this page intentionally left blank]
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EXECUTED as of the date first above written.
KBK CAPITAL CORPORATION
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
XXXXXX COMMERCIAL FINANCE, L.L.C.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
WHITNEY NATIONAL BANK
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
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EXHIBIT A*
PAYMENT DATE** Number of Shares of Stock Price per Share
------------------------------------------------------------------------
December 31, 1999 55,000 $5.08
------------------------------------------------------------------------
March 31, 2000 55,000 $5.15
------------------------------------------------------------------------
June 30, 2000 55,000 $5.23
------------------------------------------------------------------------
September 30, 2000 55,000 $5.30
------------------------------------------------------------------------
December 31, 2000 55,000 $5.38
------------------------------------------------------------------------
March 31, 2001 55,000 $5.45
------------------------------------------------------------------------
June 30, 2001 53,795 $5.53
------------------------------------------------------------------------
------------------------------------------------------------------------
TOTAL 383,795
------------------------------------------------------------------------
* Subject to any required action by the Purchaser's directors and
stockholders, the above schedule shall be proportionately adjusted for any
increase or decrease in the number of issued shares of the Common Stock
resulting from a subdivision or consolidation of shares or the payment of a
stock dividend (but only on the Common Stock), a stock split, a reverse stock
split, or any other increase or decrease in the number of such shares effected
without receipt of consideration by the Purchaser.
** If the Payment Date is not a business day, the Subsequent Closing to be
held on such Payment Date shall occur on the next following business day.
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EXHIBIT D
RELEASE OF CLAIMS
THIS RELEASE OF CLAIMS ("Release") dated the ___ day of ________________,
1999, is executed and delivered by the undersigned to KBK Capital Corporation, a
Delaware corporation (the "Purchaser").
WHEREAS, the Purchaser and Xxxxxx Commercial Finance, L.L.C., a Louisiana
limited liability company (the "Seller") have entered into that certain Stock
Purchase Agreement of even date herewith (the "Agreement"), pursuant to which
the Seller is selling and the Purchaser is purchasing an aggregate of 483,795
shares of the common stock of the Purchaser;
WHEREAS, the Purchaser has required as a condition to such transactions
that the undersigned execute and deliver this Release to confirm the absence of
any claims by the undersigned against the Purchaser;
NOW, THEREFORE, in consideration of the premises contained herein and ten
dollars and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the undersigned hereby agree as follows:
Section 1. Release. The undersigned hereby RELEASE and FOREVER DISCHARGE
the Purchaser from all manners of action, causes of action, suits, debts, sums
of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, premises, variances, trespasses, damages, judgments,
executions, claims and demands whatsoever in law or in equity which the
undersigned ever had, now has, or hereafter can, shall or may have against the
Purchaser, in respect of any and all agreements and obligations incurred on or
prior to the date hereof, or in respect of any event occurring or circumstances
existing on or prior to the date hereof; provided, however, that the Purchaser
shall not be released from any of its contractual obligations or liabilities to
the undersigned arising under the Agreement or any written agreement, instrument
or document entered into pursuant to or in connection with the Agreement.
Section 2. Successors. This Release shall be binding upon the undersigned
and their respective heirs, devisees, administrators, executors, personal
representatives, successors and assigns and shall inure to the benefit of the
Purchaser and its successors and assigns.
Section 3. Governing Law. This Release shall be governed by and construed
in accordance with the laws of the State of Texas, without giving effect to
Texas principles of conflicts of law.
Section 4. Counterparts. This Release may be executed in several
counterparts, each of which shall be deemed to be an original and all of which
shall constitute one and the same instrument.
Section 5. Modification. This Release may be modified only by a written
instrument executed by the undersigned and the Purchaser.
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IN WITNESS WHEREOF, the undersigned have executed this Release effective as
of the date first above written.
XXXXXX COMMERCIAL FINANCE, L.L.C.
By:
----------------------------------
Name:
---------------------------------
Title:
--------------------------------
--------------------------------------
Xxxxxx X. Xxxxxx
--------------------------------------
Xxxxxxx X. Xxxxxx
--------------------------------------
E. Xxxxx Xxxxx
--------------------------------------
Xxxxxxx X. Xxxxxx
--------------------------------------
Xxxxxx X. Xxxxxx
--------------------------------------
Xxxxx X. Xxxxxxxx
XXXXXX CHILDREN'S TRUST
By:
----------------------------------
Xxxxxxx X. Xxxxxx, Trustee
COASTAL, INC.
By:
----------------------------------
Xxxxxxx X. Xxxxxx, President
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STATE OF LOUISIANA (S)
(S)
XXXXXXX OF LAFAYETTE (S)
This instrument was acknowledged before me on _____________, 1999 by
____________________, the ________________ of Xxxxxx Commercial Finance, L.L.C.
Notary Public in and for the
State of Louisiana
--------------------------------------
Notary's Name Typed or Printed
My Commission Expires:
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EXHIBIT E
VOTING AGREEMENT AND IRREVOCABLE PROXY
This Voting Agreement and Irrevocable Proxy (this "Agreement") dated as of
______________, 1999 is executed by and between KBK Capital Corporation ("KBK")
and Xxxxxx Commercial Finance, L.L.C., as the "Stockholder";
WHEREAS, KBK and the Stockholder have executed that certain Stock Purchase
Agreement dated as of even date herewith (the "Stock Purchase Agreement")
whereby the Stockholder is selling to KBK an aggregate of 483,795 of shares of
the common stock of KBK;
WHEREAS, the Stockholder is required pursuant to the terms of the Stock
Purchase Agreement to deliver this Agreement to KBK at the Initial Closing; and
WHEREAS, capitalized terms not defined in this Agreement shall have the
meanings ascribed to them in the Stock Purchase Agreement;
NOW THEREFORE, the parties hereto agree as follows:
1. The Stockholder hereby represents and warrants to KBK that it has the
exclusive right to vote the Deferred Shares. The Stockholder hereby agrees to
vote all of the Deferred Shares in accordance with the recommendations of
management of KBK.
2. In order better to effect the provisions of Section 1, the Stockholder
hereby revokes any previously executed proxies and hereby constitutes and
appoints [Xxxxxx X. XxXxx] (the "Proxy Holder"), with full power of
substitution, his true and lawful proxy and attorney-in-fact to vote the
Deferred Shares as indicated in Section 1.
3. The Stockholder hereby covenants and agrees that until this Agreement
is terminated in accordance with its terms, the Stockholder will not, and will
not agree to, directly or indirectly, sell, transfer, assign, pledge,
hypothecate, cause to be redeemed or otherwise dispose of any of the Deferred
Shares or grant any proxy or interest in or with respect to any such Deferred
Shares or deposit such Deferred Shares into a voting trust or enter into another
voting agreement or arrangement with respect to such Deferred Shares except as
contemplated by this Agreement or the Stock Purchase Agreement.
4. This proxy shall be limited strictly to the power to vote the Deferred
Shares in the manner set forth in Section 2 and shall not extend to any other
matters.
5. The Stockholder acknowledges that KBK is relying on this Agreement in
undertaking actions necessary for the consummation of the transactions
contemplated by the Stock Purchase Agreement and that the proxy granted hereby
is coupled with an interest and is irrevocable to the full extent permitted by
applicable law. The Stockholder acknowledges that the performance of this
Agreement is intended to benefit KBK.
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6. The irrevocable proxy granted pursuant hereto shall continue in effect
until the earlier to occur of (i) the termination of the Escrow Agreement or
(ii) the termination of the Stock Purchase Agreement.
7. The vote of the Proxy Holder shall control in any conflict between its
vote of the Deferred Shares and a vote by the Stockholder of the Deferred
Shares, and KBK agrees to recognize the vote of the Proxy Holder instead of the
vote of the Stockholder in the event the Stockholder does not vote as set forth
in Section 1 hereof.
8. This Agreement may be modified, amended, altered or supplemented with
respect to the Stockholder only upon the execution and delivery of a written
agreement executed by KBK and the Stockholder.
9. This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original but all of which shall
constitute one and the same instrument.
10. This Agreement, together with the Stock Purchase Agreement and the
agreements contemplated thereby, embody the entire agreement and understanding
of the parties hereto in respect to the subject matter contained herein. This
Agreement supersedes all prior agreements and understandings among the parties
with respect to such subject matter contained herein.
11. All notices, requests, demands and other communications required or
permitted hereby shall be in writing and shall be deemed to have been duly given
if delivered by hand or mail, certified or registered mail (return receipt
requested) with postage prepaid to the addresses of the parties hereto set forth
below or to such other address as any party may have furnished to the others in
writing in accordance herewith:
if to Stockholder, to: Xxxxxx Commercial Finance, L.L.C.
c/o Xxxxxx X. Xxxxxx
P. O. Xxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
with a copy to: Xxxxx X. Xxxxxx
P. O. Box 51869
Xxxxxxxxx, Xxxxxxxxx 00000
Fax No.: (000) 000-0000
if to KBK, to: Xx. Xxxxxx X. XxXxx
KBK Capital Corporation
2200 City Center II
000 Xxxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000
Fax No.: (000) 000-0000
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with a copy to: Xx. Xxxx X. Xxxxx
Xxxxx Xxxxxxx & Xxxx LLP
0000 Xxxxx Xxxxx
000 Xxxxxx
Xxxxxxx, Xxxxx 00000-0000
Fax No.: (000) 000-0000
12. This Agreement and the relations among the parties hereto arising from
this Agreement shall be governed by and construed in accordance with the laws of
the State of Texas.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date above written.
KBK CAPITAL CORPORATION
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
XXXXXX COMMERCIAL FINANCE, L.L.C.
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
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