1
EXHIBIT 4
2
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 HARBERT EQUITY FUND I, L.L.C., a Georgia limited liability
company with an office at Xxx Xxxxxxxxxx Xxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx
00000 ("Harbert").
W I T N E S S E T H :
---------------------
WHEREAS, Xxxxx and Xxxxxx (collectively, the "Xxxxxx Parties") and
Harbert 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 hereto previously entered into that certain Voting
Agreement, dated as of March 7, 1997 (the "Original Agreement"); and
WHEREAS, the parties desire that Xxxxxxx purchase one share of the
Company's Series AA Convertible Preferred Stock, par value $.01 per 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 entirety to read in its
entirety as follows:
"SECTION 2. VOTING AGREEMENT OF THE XXXXXX PARTIES. In addition to, and
not in limitation of, Sections 3 and 4 hereof, during the Corporate Governance
Period, each of the Xxxxxx Parties, severally and not jointly, agrees:
3
(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.
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.
4
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 to 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 the 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.
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 "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
5
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, whether through the ownership of voting securities, by contract, or
otherwise, unless such power is solely the result of an official position with
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 Person is under common "Control" with another Person if
one third party then possesses the 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 AGREEMENTS 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 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 owed 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 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 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
6
(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 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 hereof. 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 of 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
of 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.
7
(iv) 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 (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.
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.
8
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 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
provision 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 a 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.
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.
9
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.
10
IN WITNESS WHEREOF, the parties have duly executed this
Agreement as of the date first written above.
XXXXXX HOLDING COMPANY, LTD.
By: /s/ Xxxxxx X. Xxxxx
----------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Member
/s/ Xxxxxx X. Xxxxx
-------------------------------
XXXXXX X.XXXXX
11
HARBERT EQUITY FUND I, L.L.C.
BY: XXXXXXX MANAGEMENT CORPORATION,
MANAGER
By: /s/ Xxxxxxx X. Xxxx
----------------------------
Name: Xxxxxxx X. Xxxx
Title: Executive Vice President
