STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT (this "Agreement"), dated as of June 2, 1999,
between Xxxxxxxx Xxxxx Co., a Utah corporation (the "Company"), and Knowledge
Capital Investment Group, a Texas general partnership (the "Purchaser" and
together with its Permitted Transferees, the "Investor").
A. The Company and Purchaser have entered into a Stock Purchase
Agreement, dated May 11, 1999 (as amended from time to time, the "SPA"),
pursuant to which, among other things, on the terms and subject to the
conditions thereof, Purchaser will acquire certain shares of Series A Preferred
Stock of the Company (the "Series A Preferred") that are convertible into common
stock of the Company ("Common Stock" and, together with the Series A Preferred,
the "Securities").
B. The Company and Purchaser desire to make certain provisions in
respect of their relationship.
NOW, THEREFORE, in consideration of the foregoing, the parties
hereto agree as follows:
I. DEFINITIONS
1.1 Definitions. Capitalized terms used herein but not defined have
the meaning assigned to them in the SPA. In addition to the terms defined
elsewhere herein, as used herein, the following terms have the following
meanings when used herein with initial capital letters:
(a) "Affiliate" of any Person means any other Person, that, directly
or indirectly through one or more intermediaries, controls or is controlled by,
or is under common control with, such Person; and, for the purposes of this
definition only, "control" (including the terms "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, policies or activities of a Person whether through the ownership of
securities, by contract or agency or otherwise.
(b) "Assumption Agreement" means a writing in substantially the form
of Exhibit A hereto.
(c) A Person will be deemed the "beneficial owner" of, and will be
deemed to "beneficially own", and will be deemed to have "beneficial ownership"
of:
(i) any securities that such Person or any of such Person's
Affiliates is deemed to "beneficially own" within the meaning of
Rule 13d-3 under the Exchange Act, as in effect on the date of this
Agreement; and
(ii) any securities (the "underlying securities") that such
Person or any of such Person's Affiliates or Associates has the
right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement,
arrangement or understanding (written or oral), or upon the exercise
of conversion rights, exchange rights, rights, warrants or options,
or otherwise (it being understood that such Person will also be
deemed to be the beneficial owner of the securities convertible into
or exchangeable for the underlying securities).
(d) "Board" means the Board of Directors of the Company.
(e) "Board Approval" means the approval of a majority of the members
of the Board who (a) are not officers or employees of the Company or any of its
Affiliates and (b) have not been designated for election to the Board by
Purchaser pursuant to Article III.
(f) "Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
(g) "Initial Purchaser Shares" means the number of shares equal to
the shares of Series A Preferred purchased by Purchaser pursuant to the SPA plus
the Series A Preferred equivalent of any shares of Common Stock received by
Purchaser
2
upon conversion of the Series A Preferred so purchased (which equivalent number
of shares of Series A Preferred will be equal to the product of (i) the total
number of shares of Common Stock, if any, into which any such Series A Preferred
has been converted, (ii) multiplied by the conversion price in effect at the
time of conversion, and (iii) divided by $100).
(h) "Person" means an individual, a corporation, a partnership, an
association, a trust or other entity or organization, including without
limitation a government or political subdivision or an agency or instrumentality
thereof.
(i) "Permitted Acquisition" means any acquisition of securities
pursuant to or as contemplated by the SPA, including without limitation pursuant
to the conversion of the Series A Preferred, or Section 2.1 of this Agreement
and any additional acquisition of Securities that does not increase Purchaser's
beneficial ownership of Common Stock by more than 10% in any 12 consecutive
month period.
(j) "Permitted Transferees" means any Person to whom Securities are
Transferred in a Transfer not in violation of this Agreement and who is required
to, and does, enter into an Assumption Agreement, and includes any Person to
whom a Permitted Transferee of any Investor (or a Permitted Transferee of a
Permitted Transferee) so further Transfers shares of Common Stock and who is
required to, and does, become bound by the terms of this Agreement.
(k) "Public Offering" means the sale of shares of any class of the
Common Stock to the public pursuant to an effective registration statement
(other than a registration statement on Form S-4 or S-8 or any similar or
successor form) filed under the Securities Act.
(l) "Registration Rights Agreement" means the Registration Rights
Agreement, dated as of the date hereof, between Purchaser and the Company and
any other registration rights agreement entered into in accordance with Article
V.
(m) "Restricted Securities" means any Voting Securities and any
other securities convertible into, exchangeable for or exercisable for Voting
Securities (whether immediately or otherwise), except any securities acquired
pursuant to a Permitted Acquisition.
3
(n) "Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
(o) "Total Voting Power" means, at any time, the aggregate number of
votes, which may then be cast by all holders of outstanding Voting Securities in
the election of directors of the Company.
(p) "Transfer" means a transfer, sale, assignment, pledge,
hypothecation or other disposition, whether directly or indirectly pursuant to
the creation of a derivative security, the grant of an option or other right,
the imposition of a restriction on disposition or voting or transfer by
operation of law. Notwithstanding the foregoing, "Transfer" does not include any
change of control of Purchaser or a successor of Purchaser.
(q) "Voting Securities" means the Common Stock and the Series A
Preferred (on an as-converted basis) and all other securities of the Company
entitled to vote generally in the election of directors of the Company, except
to the extent such voting rights are dependent upon the non-payment of
dividends, events of default or bankruptcy or other events not in the ordinary
course of business.
4
II. STANDSTILL
2.1. Acquisition of Restricted Securities. Without prior Board
Approval, no Investor will purchase or otherwise acquire beneficial ownership of
any Restricted Securities if after such acquisition the Investors would have, in
the aggregate, beneficial ownership of 25% or more of the Total Voting Power
(the "25% Threshold"), provided, however, that the foregoing restriction will
not apply to any acquisition of Restricted Securities (i) pursuant to a rights
offering (other than the rights offering of up to 750,000 additional shares of
Series A Preferred contemplated by the SPA) made to all holders of Common Stock
by the Company (including without limitation any standby underwriting or similar
arrangements relating thereto) pursuant to Board Approval, (ii) that is approved
prior to such acquisition by a majority of the members of the Board that are not
Purchaser Designees or Affiliates or Associates of Investor or by the holders of
a majority of the Total Voting Power, (iii) purchases of Common Stock upon
exercise of conversion rights under any Series A Preferred, (iv) the acquisition
of beneficial ownership of additional Series A Preferred pursuant to the terms
thereof, and (v) in a Permitted Acquisition or any other transaction or series
of transactions permitted or contemplated by this Agreement or the SPA.
2.2. Other Restrictions. Without prior Board Approval, except as
otherwise permitted hereunder, no Investor will do any of the following:
(a) solicit proxies from other shareholders of the Company in
opposition to a recommendation of the Board for any matter to be considered at
any meeting of the shareholders of the Company, except matters on which a class
vote of Series A Preferred is required or as permitted by this Agreement;
(b) knowingly form, join or participate in or encourage the
formation of a "group" (within the meaning of Section 13(d)(3) of the Exchange
Act) with respect to any Voting Securities of the Company, other than a group
consisting solely of Affiliates of Purchaser or the Company; or
(c) deposit any Voting Securities of the Company into a voting trust
or subject any such Voting Securities to any arrangement or agreement with
respect to the voting thereof, other than any such trust, arrangement or
agreement (i) the only
5
parties to, or beneficiaries of, which are Affiliates of an Investor; and (ii)
the terms of which do not require or expressly permit any party thereto to act
in a manner inconsistent with this Agreement.
2.3. No Breach. No Investor will be deemed to have breached the
terms of Section 2.1 above if Voting Securities beneficially owned by the
Investors exceed the percentage limitation set forth in Section 2.1 due to any
reduction in Total Voting Power or other action by the Company or due to any
Investor's acquisition of Securities pursuant to a Permitted Acquisition.
III. BOARD REPRESENTATION; CONSULTATION
3.1. Nomination and Voting. (a) Simultaneously herewith, the Company
will elect three designees of Purchaser to the Board ("Purchaser Designees", one
of whom will be named Chairman of the Board and each of which will be elected to
a different class of directors to the extent the Board is divided into classes.
The designee to be so named will be (i) Xxxxxx X. Xxxxxxx, (ii) if Xx. Xxxxxxx
is unable or unwilling to serve, either Xxxxxx X. XxXxxxxx or Xxxxxx X. Xxxxxx
(as Purchaser designates), or (iii) if none of them is able or willing to serve,
a nominee of Purchaser reasonably acceptable to the Company. The Company, at
each meeting of stockholders of the Company at which directors are elected, will
cause to be nominated for election as directors of the Company such number of
persons determined in accordance with Section 3.1(c) who shall each be
designated by Purchaser. The Company will solicit proxies from its stockholders
for such nominees, vote all management proxies in favor of such nominees, except
for such proxies that specifically indicate to the contrary and otherwise use
its best efforts to cause such nominees to be elected to the Board as herein
contemplated.
(b) If any Purchaser Designee ceases to be a director of the
Company, the Company will promptly upon the request of Purchaser cause a person
designated by Purchaser to replace such director.
(c) The number of Purchaser Designees will be such number no greater
than three as Purchaser may from time to time designate, one of whom will be the
Chairman of the Board.
6
(d) The Company covenants that the total number of seats on the
Board (including any vacant seats) will in no event exceed 15.
(e) At all times after the date hereof, the Company shall ensure
that at least one Purchaser Designee is a member of each committee of the Board
other than the nominating committee.
(f) Persons elected to the Board by holders of the Series A
Preferred pursuant to Section 4(d) of the Company's Certificate of Designations
for the Series A Preferred will be deemed to be designees of Purchaser for
purposes of this Section 3.1.
3.2. Director Fees. Designees of Purchaser will not be entitled to
receive fees from the Company for their service as directors for any period
during which II Management, L.L.C. receives a fee pursuant to the Monitoring
Agreement, dated as of the date hereof, between the Company and II Management,
L.L.C. (as amended from time to time).
3.3. Consultation. Purchaser will have the right to consult with the
Company, including its principal officers, and to participate in the drawing up
of any recommendation or Company position, prior to its presentation to the
Board of Directors (if applicable) or implementation, regarding the following:
(a) the appointment and/or termination of the chief executive officer,
chief operating officer, president and chief financial officer, or
any person or persons fulfilling similar duties;
(b) the remuneration, both cash and non-cash, and other benefits of the
officers and of any managers of the Company with annual salaries in
excess of $100,000;
(c) the appointment and/or termination of the Company's auditors and
accountants;
(d) the annual operating and capital budgets of the Company;
7
(e) any deviation from the approved budgets referred to in paragraph (d)
by more than 20 percent on any line item or 10 percent on the total
budget; and
(f) the Company's annual or long range strategic plans which incorporate
specific business strategies, operating agenda, investment and
disposition objectives, or capitalization and funding strategies.
The foregoing rights are in addition to any voting or other rights granted to
Purchaser by any other document or agreement or by any law, rule or regulation.
3.4. Access. The Company will, and will cause its subsidiaries and
each of the Company's and its subsidiaries' officers, directors, employees,
agents, representatives, accountants and counsel to: (a) afford the members,
officers, employees and authorized agents, accountants, counsel, financing
sources and representatives of Purchaser reasonable access, during normal
business hours and without unreasonable interference with business operations,
to the offices, properties, other facilities, books and records of the Company
and each subsidiary and to those officers, directors, employees, agents,
accountants and counsel of the Company and of each Subsidiary who have any
knowledge relating to the Company or any Subsidiary and (b) furnish to the
members, officers, employees and authorized agents, accountants, counsel,
financing sources and representatives of Purchaser, such additional financial
and operating data and other information regarding the assets, properties and
goodwill of the Company and its subsidiaries (or legible copies thereof) as
Purchaser may from time to time reasonably request.
IV. TRANSFER OF SECURITIES
4.1 Transferability. (a) Any Investor may Transfer all or any part
of the Securities (i) if Section 4.2 is not applicable thereto, to any Person
who duly executes and delivers an Assumption Agreement, (ii) if such Transfer is
permitted or otherwise not prohibited by Section 4.2, to any Person, and (iii)
without compliance with Section 4.2, (A) to any of their respective Affiliates
or investors who duly execute and deliver to the Company an Assumption
Agreement, (B) pursuant to a Public Offering or a transaction effected on the
New York Stock
8
Exchange, or (C) to a "qualified institutional buyer" (as defined in Rule 144A
of the Securities Act); provided, however, no Transfer will be permitted (other
than pursuant to a Public Offering) pursuant to clauses (ii) and (iii)(A), (B)
or (C) unless in connection therewith the Company has been furnished an opinion
of such Investor's counsel (which counsel shall be reasonably acceptable to the
Company, provided that any law firm having at least 100 lawyers, including
associates and partners, shall be deemed acceptable, "Counsel") to the effect
that such Transfer is exempt from or not subject to the registration
requirements of Section 5 of the Securities Act, and (D) to a bank or other
lender to secure indebtedness for borrowed money (either as a pledge or upon
realization thereof).
(b) In the event of any purported Transfer by any Investor of any
Security not permitted by Section 4.1, such purported Transfer will be void and
of no effect and the Company will not give effect to such Transfer.
(c) Each certificate representing Securities issued to any Investor
will bear a legend on the face thereof substantially to the following effect
(with such additions thereto or changes therein as the Company may be advised by
counsel are required by law (the "Legend"):
"THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
A STOCKHOLDERS' AGREEMENT BETWEEN THE COMPANY, AND [INVESTOR], A COPY OF
WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY. NO TRANSFER, SALE,
ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE MAY BE MADE EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF SUCH STOCKHOLDERS' AGREEMENT."
"THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 AND MAY NOT BE TRANSFERRED OR
OTHERWISE DISPOSED OF UNLESS THEY HAVE BEEN REGISTERED UNDER THAT ACT OR
ANY OTHER APPLICABLE LAW OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE."
The Legend will be removed by the Company by the delivery of substitute
certificates without such Legend in the event of (i) a Transfer permitted by
Section 4.1 and in which the Transferee is not required to enter into an
Assumption Agreement or (ii) the
9
termination of this Article IV pursuant to the terms of this Agreement,
provided, however, that the second paragraph of such Legend will only be removed
if at such time a legal opinion from counsel to the Transferee shall have been
obtained to the effect that such legend is no longer required for purposes of
applicable securities laws. In connection with the foregoing, the Company agrees
that, if the Company is required to file reports under the Exchange Act, for so
long as and to the extent necessary to permit any Investor to sell the
Securities pursuant to Rule 144, the Company will use its reasonable best
efforts to file, on a timely basis, all reports required to be filed with the
SEC by it pursuant to Section 13 of the Exchange Act, furnish to the Investors
upon request a written statement as to whether the Company has complied with
such reporting requirements during the 12 months preceding any proposed sale
under Rule 144 and otherwise use its reasonable efforts to permit such sales
pursuant to Rule 144.
4.2. Right of First Offer. (a) From the date hereof until the third
anniversary of the date hereof (the "ROFO Period"), prior to any Investor
effecting a Transfer other than a Transfer described in Section 4.1(a)(ii)(a
"Third-Party Sale"), such Investor (the "Offering Stockholder") will deliver to
the Company a written Notice (an "Offer Notice") specifying the amount of
consideration (the "Offer Price") for which the Offering Stockholder proposes to
sell the Securities to be offered in such Third-Party Sale (the "Offered
Stock").
(b) Prior to effecting a Third-Party Sale, the Offering Stockholder
will negotiate with the Company in good faith concerning the possible sale to
the Company of the Securities proposed or otherwise intended to be sold in a
Third Party Sale for a period of 3 calendar days following the date on which the
Company receives the Offer Notice. If the Company delivers to the Offering
Stockholder a written Notice (an "Acceptance Notice") within such 3 calendar day
period (such 3 calendar day period being referred to herein as the "ROFO
Acceptance Period") stating that the Company is willing to purchase all of the
Offered Stock for the Offer Price and on the other terms set forth in the Offer
Notice, the Offering Stockholder will sell all of the Offered Stock to the
Company, and the Company will purchase such Offered Stock from the Offering
Stockholder, on the proposed terms and subject to the conditions set forth
below.
10
(c) The consummation of any purchase of the Offered Stock by the
Company pursuant to this Section 4.2 (the "ROFO Closing") will occur no more
than 20 calendar days following the delivery of the Acceptance Notice (such 20
calendar day period being referred to herein as the "ROFO Closing Period") at
10:00 a.m. (Eastern Time) at the offices of Xxxxx, Day, Xxxxxx & Xxxxx at 000
Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other time of day and
place as may be mutually agreed upon by the Offering Stockholder and the
Company. At the ROFO Closing, (i) the Company will deliver to the Offering
Stockholder by certified or official bank check or wire transfer to an account
designated by the Offering Stockholder an amount in immediately available funds
equal to the Offer Price, (ii) the Offering Stockholder will deliver one or more
certificates evidencing the Offered Stock, together with such other duly
executed instruments or documents (executed by the Offering Stockholder) as may
be reasonably requested by the Company to acquire the Offered Stock free and
clear of any and all claims, liens, pledges, charges, encumbrances, security
interests, options, trusts, commitments and other restrictions of any kind
whatsoever (collectively, "Encumbrances"), except for Encumbrances created by
this agreement, federal or state securities laws or the Company or as specified
in the Offer Notice ("Permitted Encumbrances"), and (iii) the Offering
Stockholder will be deemed to represent and warrant to the Company that, upon
the ROFO Closing, the Offering Stockholder will convey and the Company will
acquire the entire record and beneficial ownership of, and good and valid title
to, the Offered Stock, free and clear of any and all Encumbrances, except for
Permitted Encumbrances.
(d) If no Acceptance Notice relating to the proposed Third-Party
Sale is delivered to the Offering Stockholder prior to the expiration of the
ROFO Acceptance Period, or an Acceptance Notice is so delivered to the Offering
Stockholder but the ROFO Closing fails to occur prior to the expiration of the
ROFO Closing Period (unless the Company was ready, willing and able prior to the
expiration of the ROFO Closing Period to consummate the transactions to be
consummated by the Company at the ROFO Closing), the Offering Stockholder may
consummate the Third-Party Sale, but only (i) during the 180 calendar day period
immediately following the expiration of the ROFO Acceptance Period (in the event
that no Acceptance Notice was timely delivered to the Offering Stockholder) or
the 180 calendar day period immediately following the expiration of the ROFO
Closing Period (in the event that an Acceptance Notice was timely delivered to
the Offering
11
Stockholder but the ROFO Closing failed timely to occur) and (ii) at a gross
price at least equal to the Offer Price.
(e) For purposes of this Section 4.2, the value of any consideration
other than cash that is payable or receivable in the Third Party Sale will be as
determined by the Board in good faith.
V. REGISTRATION RIGHTS
Upon consummation of any Transfer of Securities constituting 5% or
more of the Initial Purchaser Shares by an Investor (other than a Transfer in a
Public Offering) that is either (a) permitted by this Agreement or (b)
consummated after the third anniversary of the date hereof, the Company and the
Transferee thereof will enter into a registration rights agreement substantially
in the form of the Registration Rights Agreement, dated as of the date hereof,
between Purchaser and the Company with such modifications thereto as are
acceptable to such Transferee and the Transferring Investor and do not
materially increase the Company's obligations thereunder (excluding the effects
of multiple parties).
VI. TERMINATION
6.1. Termination. The provisions of this Agreement specified below
will terminate, and be of no further force or effect (other than with respect to
prior breaches), as follows:
(a) Articles II and III will terminate (but in the case of
subparagraph (ii) through (vi), only as to the Investor that has given the
notice contemplated thereby), upon the earliest to occur of the following dates
or events:
(i) ten years after the date hereof;
(ii) notice that an Investor has determined to terminate this
Agreement effective as of a date stated in such notice, at any time
following the announcement by any person, entity or group (other than an
Investor) that it intends to commence a tender offer for or otherwise
acquire Voting Securities if, after the completion of such proposed tender
offer or acquisition, such person, entity or group,
12
together with all persons and entities controlling, controlled by or under
common control (or in a group with it), would own 20% or more of the Total
Voting Power;
(iii) notice that an Investor has determined to terminate this
Agreement effective as of a date stated in such notice, at any time
following the acquisition by any person, entity or group of 20% or more of
the Total Voting Power or the filing by any person, entity or group (other
than an Investor) of any document with a governmental agency (including
without limitation a Schedule 13D with the Securities and Exchange
Commission or a notification under the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvement Act) to the effect that such person, entity or group intends
or contemplates acquiring Voting Securities, if after the completion of
such proposed acquisition such person, entity or group, together with all
persons and entities controlling, controlled by or under common control or
in a group with it, would own 20% or more of the Total Voting Power;
(iv) notice that an Investor has determined to terminate this
Agreement effective as of a date stated in such notice, at any time
following the execution, approval by the Board or announcement of an
agreement, agreement in principle or proposal (whether or not subject to
approval by the Board or other corporate action) that provides for or
involves (A) the merger of the Company with or into any other entity, or
(B) the sale of all or any significant part of the assets of the Company,
(C) the reorganization or liquidation of the Company, or (D) any similar
transaction or event that is subject to approval by the stockholders of
the Company;
(v) notice that an Investor has determined to terminate this
Agreement effective as of a date stated in such notice at any time
following the failure by the Board or the Company to observe any of the
provisions of this Agreement hereof which breach has continued for at
least five calendar days after notice thereof to the Company from
Purchaser;
(vi) notice that an Investor has determined to terminate this
Agreement following either (A) the failure of the shareholders of the
Company to elect any director
13
designated under this Agreement by an Investor, (B) the removal of any
such recommended director from the Board, (C) the failure of the Board to
replace any director designated by an Investor with a person designated by
an Investor, or (D) the failure of the Board to effect without
unreasonable delay and maintain the committee appointments required under
Section 3.1(e); and
(vii) at such time as Purchaser, together with its Affiliates and
Associates, beneficially owns less than 50% of the Initial Purchaser
Shares;
(c) Article IV will terminate on the third anniversary of the date
of this Agreement;
(d) Article V will terminate at such time as all of the Registration
Rights Agreements have terminated, in accordance with its terms;
(e) Article VII will terminate at such time as no Investor owns
shares of Series A Preferred;
(f) Any portion or all of this Agreement will terminate and be of no
further force and effect upon a written agreement of the parties to that effect;
and
(g) All other Sections of this Agreement will terminate at such time
as all other Sections of this Agreement and all Registration Rights Agreements
have terminated.
VII. AVAILABILITY OF TREASURY STOCK; NYSE LISTING
The Company will at all times retain and keep available for issuance
the number of shares of Common Stock as are currently held by it in its treasury
(each of which shall have been previously listed for trading on the New York
Stock Exchange). The Company will not voluntarily take any action that could
reasonably be expected to cause the Common Stock not to be listed for trading on
the New York Stock Exchange.
VIII. MISCELLANEOUS
8.1. Specific Performance. The parties agree that any breach by any
of them of any provision of this Agreement would
14
irreparably injure the Company or Purchaser, as the case may be, and that money
damages would be an inadequate remedy therefor. Accordingly, the parties agree
that the other parties will be entitled to one or more injunctions enjoining any
such breach and requiring specific performance of this Agreement and consent to
the entry thereof, in addition to any other remedy to which such other parties
are entitled at law or in equity, provided, however, that in the event the
Company breaches or is unable to perform (even if legally excused therefrom)
Section 3.1, the obligations of Purchaser under Article II hereof will terminate
without further action but the Company will have no liability for damages as a
result thereof.
8.2. Notices. All notices, requests and other communications to
either party hereunder will be in writing (including telecopy or similar
writing) and will be given,
if to the Company, to:
Xxxxxxxx Xxxxx Co.
0000 Xxxx Xxxxxxx Xxxxxxxxx
Xxxx Xxxx Xxxx, Xxxx 00000-0000
Attention: Xxx X. Xxxxxxxxxxx
Fax: (000) 000-0000
with a copy to:
Xxxx Xxxxxxxx Xxxxx Xxx & Xxxxxxxx, P.C.
X.X. Xxx 00000
Xxxx Xxxx Xxxx, Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx
Fax: (000) 000-0000
If to any member of Purchaser, to:
Knowledge Capital Investment Group
c/o The Hampstead Group
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Fax: (000) 000-0000
15
with a copy to:
Xxxxx, Day, Xxxxxx & Xxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Fax: (000) 000-0000
or such other address or telecopier number as such party may hereafter specify
for the purpose by notice to the other party hereto. Each such notice, request
or other communication shall be effective when delivered at the address
specified in this Section 8.2.
8.3. Amendments: No Waivers. (a) Any provision of this Agreement may
be amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by the parties hereto, or in the case of a
waiver, by the party against whom the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power
or privilege hereunder will operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided will be cumulative and not exclusive of any rights or remedies provided
by law.
8.4. Expenses. Except as otherwise provided herein or in the SPA,
all costs and expenses incurred in connection with this Agreement will be paid
by the party incurring such cost or expense.
8.5. Successors and Assigns. The provisions of this Agreement will
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns, provided, however, that none of the parties
may assign, delegate or otherwise transfer any of their rights or obligations
under this Agreement without the written consent of the other parties hereto,
except that Purchaser may assign delegate or otherwise transfer any of its
rights hereunder to any of its Affiliates which commits to the Company in
writing to be bound by the terms hereof (but no assignment or transfer shall
relieve Purchaser of its obligations hereunder) and upon such assignment or
transfer references to Purchaser herein will be deemed to include any such
16
Affiliate. Neither this Agreement nor any provision hereof is intended to confer
upon any Person other than the parties hereto any rights or remedies hereunder.
8.6. Counterparts; Effectiveness. This Agreement may be signed in
any number of counterparts, each of which will be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
This Agreement will become effective when each party hereto will have received a
counterpart hereof signed by the other party hereto.
8.7. Entire Agreement. This Agreement, the SPA and the documents
contemplated thereby (and all schedules and exhibits thereto) constitute the
entire agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements, understandings and negotiations, both written
and oral, between the parties with respect thereto. No representation,
inducement, promise, understanding, condition or warranty not set forth herein
or therein has been made or relied upon by any of the parties hereto.
8.8. Governing Law. This Agreement shall be construed in accordance
with and governed by the laws of the State of Texas, without giving effect to
the principles of conflict of laws thereof.
17
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
XXXXXXXX XXXXX CO.
By: /s/ Xxx Xxxxxxxx
------------------------------------
Name: Xxx Xxxxxxxx
Title: Chief Executive Officer
KNOWLEDGE CAPITAL INVESTMENT GROUP
By: /s/ Xxxxxxx Xxxxxxxxxxx
------------------------------------
Xxxxxxx X. XxxxXxxxxxx
Duly Authorized
18
EXHIBIT A
to
Stockholders Agreement
FORM OF ASSUMPTION AGREEMENT
ASSUMPTION AGREEMENT (this "Agreement"), dated as of __________, by
__________ ("Transferee") in favor of Xxxxxxxx Xxxxx Co., a Utah corporation
(the "Company").
RECITAL
A. The Company and Knowledge Capital Investment Group are parties to a
Stockholders' Agreement, dated as of May 11, 1999, (the "Stockholders
Agreement");
B. As contemplated by the Stockholders Agreement, concurrently herewith
the Company and Transferee have entered into a Registration Rights Agreement.
NOW THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
agree as follows:
1. Transferee hereby acknowledges receipt from [__________] ("Transferor")
of __________ shares of [Series A Preferred/Common Stock] and will, and hereby
agrees to, become a party to, and be bound by, to the same extent as Transferor,
the terms of the Stockholders Agreement, provided, however, that Article III of
the Stockholders Agreement will not be applicable to Transferee, and Transferee
will have no rights or obligations thereunder. Capitalized terms used and not
otherwise defined herein shall have the meaning ascribed to them in the
Stockholders Agreement.
2. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of Utah, without giving effect to the principles of
conflict of laws hereto.
3. This Agreement may be executed in any number of counterparts, each of
which shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument.
19
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement or
caused this Agreement to be executed on its behalf as of the date first written
above.
[TRANSFEREE]
By:___________________________
Name:
Title:
[TRANSFEROR]
By:___________________________
Name:
Title:
Agreed and Accepted:
XXXXXXXX XXXXX CO.
By:____________________________
Name:_______________________
Title:______________________
20
