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EXHIBIT E
August 18, 1997
Xxx X. Xxxxxxx, III
Xxxxxxx X. Xxxxx
Xxxxx, Xxxxxxx & Co., Inc.
000 X. Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
Re: That certain Withdrawal Agreement, dated as of July 5, 1996, among
Xxxxx, Xxxxxxx & Co., Inc., a Texas corporation ("BF"), Xxxxxxx X.
Xxxxx, Xxx X. Xxxxxxx XXX, Xxxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx, Xx.,
Xxxxxx Group Employee Partners and Xxxxxx Group Incorporated, as
amended by that certain letter agreement dated February 26, 1997
(collectively, the "Withdrawal Agreement")
Gentlemen:
Reference is made to the Withdrawal Agreement described above. All defined
terms in this letter shall, if not otherwise defined herein, have the meaning
given to them in the Withdrawal Agreement.
It is our mutual intent that BF complete its repurchase of my prior
ownership in BF. To effect such repurchase, concurrently with the execution and
delivery of this Agreement, BF shall (i) deliver to me immediately available
funds in the amount of $2,050,000, and (ii) execute and deliver a Promissory
Note payable to me in the principal amount of $2,050,000 in the form attached
hereto as Exhibit A (the "Note"). In addition, concurrently herewith BF shall
execute and deliver a Pledge Agreement (the "Pledge Agreement") in the form of
Exhibit B hereto and deliver to me warrants (the "Warrants") representing the
right to purchase 113,158 shares of Common Stock of Spinnaker Industries, Inc.,
a Delaware corporation ("Spinnaker"), and 113,158 shares of Class A Common Stock
of Spinnaker, both of which are registered in the name of BF, along with duly
executed assignments relating thereto with signatures guaranteed on each
assignment. In addition, concurrently herewith BF shall execute UCC-1 financing
statements in the form attached hereto as Exhibit C. The $2,050,000 cash
payment shall be delivered by either cashier's check or by wire transfer (such
that the wire is received by me today). On or prior to September 20, 1997, BF
shall substitute, as collateral, 113,158 shares of Common Stock of Spinnaker and
113,158 shares of Class A Common Stock of Spinnaker (collectively, the "Shares")
(such amounts to be adjusted for events such as stock dividends, splits, reverse
splits, recapitalizations and the like).
If BF does not pay all amounts due pursuant to the terms set forth in the
Note, I shall be entitled to retain the Collateral (as defined in the Pledge
Agreement). If BF substitutes the Shares as Collateral for the Warrants and if
I retain the Collateral (as described in the immediately preceding sentence), I
will be required to pay BF (i) an amount (the "Warrant Exercise Amount")
determined by multiplying the number of shares with respect to which I foreclose
by the per share exercise price paid by BF upon exercise of the Subject Warrant
(such amount to be adjusted for events such as stock dividends, splits, reverse
splits, recapitalizations and the like) plus (ii) an amount of interest
determined as if BF had lent me the Warrant Exercise Price on the day it
substituted Shares as Collateral for the Warrants (such interest rate to be
5.72% per annum, compounded monthly). At my election, I may, in lieu of
delivering cash pursuant to the
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preceding sentence, deliver shares of Spinnaker stock valued at a price of
$10.3915 per share (such amount to be adjusted for events such as stock
dividends, splits, reverse splits, recapitalizations and the like).
Subsequent sales of Shares received by me upon foreclosure shall be subject
to BF's right of first refusal in the manner and to the extent described in the
Withdrawal Agreement.
It is our intent that the provisions of this letter amend the Withdrawal
Agreement for the purposes set forth herein. Accordingly I have requested the
parties to the Withdrawal Agreement, other than you, to evidence their consent
to the foregoing as well.
Please acknowledge your agreement with the foregoing by signing in the
space provided below.
Very truly yours,
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Acknowledged and Accepted as
of the 18th day of August 1997
/s/ Xxx X. Xxxxxxx XXX
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Xxx X. Xxxxxxx, III
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Xxxxx, Xxxxxxx & Co., Inc. (formerly
Xxxxx, Xxxxxxx, Xxxxxx & Co., Inc.)
By: /s/ Xxx X. Xxxxxxx XXX
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The following persons, being parties to the
Withdrawal Agreement, hereby acknowledge their
consent to the foregoing:
Xxxxxx Group Employee Partners
By: Xxxxxx Group Incorporated, Managing General Partner
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, Chairman
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Xxxxxx Group Incorporated
By: /s/ Xxxxxxx X. Xxxxxx, Chairman
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Xxxxxxx X. Xxxxxx, Chairman
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx, Xx.
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EXHIBIT A TO LETTER AGREEMENT
PROMISSORY NOTE
August 18, 1997
Xxxxx, Xxxxxxx & Co., Inc., a Texas corporation (the "Maker"), for value
received, hereby promises to pay to the order of Xxxxxxx X. Xxxxxx (the
"Payee"), at the time and in the manner hereinafter provided, the principal sum
of Two Million and Fifty Thousand Dollars ($2,050,000), together with interest
computed thereon at the rate hereinafter provided. This Note shall be payable
at the office of the Payee or at such other address as the holder of this Note
shall from time to time designate.
The outstanding principal amount of this Note shall bear interest from the
date hereof until the due date at the rate of five and seventy-two hundreths
percent (5.72%) per annum, compounded monthly. The principal amount of this
Note and accrued interest thereon shall be due and payable on January 15, 1998.
All sums of principal and interest past due under the terms of this Note
shall bear interest at a per annum interest rate equal to the lesser of eighteen
percent (18%) per annum or the maximum rate allowed by law from the due date
thereof until paid.
In the event of default hereunder and this Note is placed in the hands of
an attorney for collection (whether or not suit is filed), or if this Note is
collected by suit or legal proceedings or through bankruptcy proceedings, the
Maker agrees to pay in addition to all sums then due hereon, including principal
and interest, all expenses of collection, including, without limitation,
reasonable attorneys' fees.
This Note may be prepaid in whole or in part from time to time, without
premium or penalty. Each prepayment of principal shall be accompanied by an
amount equal to the accrued interest on the principal amount prepaid to the date
of such prepayment.
If default is made in any payment of this Note or in the observance of any
covenant in this Note or in the Pledge Agreement (hereinafter defined), then the
holder of this Note may at any time, at such holder's option, by written notice
to Maker declare the entire principal balance and accrued but unpaid interest
hereunder to be due and payable, whereupon the same shall forthwith mature and
become due and payable without presentment, demand, protest or notice, all of
which are hereby waived. If Maker shall (a) apply for or consent to the
appointment of a receiver, trustee, intervenor, custodian or liquidator of Maker
or of all or a substantial part of its assets, (b) file a voluntary petition for
bankruptcy or admit in writing that Maker is unable to pay its debts as they
become due, (c) within sixty days after the commencement of any proceeding
against Maker seeking reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or future statute,
law or regulation, such proceeding shall not have been dismissed or, within
sixty days after the appointment without the consent or acquiescence of Maker or
of any trustee, receiver or liquidator of Maker or of all or any substantial
part of its properties, such appointment shall not have been vacated, (d) make a
general assignment for the benefit of creditors, (e) file a petition or answer
seeking reorganization or an arrangement with creditors or to take advantage of
any bankruptcy or
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insolvency laws, or (f) take other action for the purpose of effecting any of
the foregoing, then the entire principal balance and accrued but unpaid
interest shall at once become due and payable.
The Maker and any and all sureties, guarantors and endorsers of this Note
and all other parties now or hereafter liable hereon, severally waive grace,
demand, presentment for payment, notice of dishonor, protest and notice of
protest, notice of intention to accelerate, notice of acceleration, any other
notice and diligence in collecting and bringing suit against any party hereto
and agree (i) to all extensions and partial payments, with or without notice,
before or after maturity, (ii) to any substitution, exchange or release of any
security now or hereafter given for this Note, (iii) to the release of any party
primarily or secondarily liable hereon, and (iv) that it will not be necessary
for the holder hereof, in order to enforce payment of this Note, to first
institute or exhaust such holder's remedies against the Maker or any other party
liable therefor or against any security for this Note. No delay on the part of
the Payee in exercising any power or right under this Note shall operate as a
waiver of such power or right, nor shall any single or partial exercise of any
power of right preclude further exercise of that power or right.
A security interest in the shares of capital stock of Spinnaker Industries,
Inc. and/or warrants to purchase shares of capital stock of Spinnaker
Industries, Inc. has been granted by Maker to the Payee to secure the payment of
this Note pursuant to the terms and conditions of that certain Pledge Agreement
(the "Pledge Agreement") from Maker to Payee of even date herewith and to secure
the payment of any costs and expenses incurred by the Payee in the collection
and enforcement hereof.
The Maker shall have no personal liability to pay the indebtedness
evidenced by this Note or any accrued interest on this Note. The holder of this
Note shall look solely to the collateral described in the Pledge Agreement in
satisfaction of the indebtedness evidenced by this Note and any accrued interest
on this Note.
The Maker understands that this Note may be pledged to secure certain
obligations of the Payee and hereby consents to any such pledge.
All agreements between the Maker and the holder hereof, whether now
existing or hereafter arising and whether written or oral, are hereby expressly
limited so that in no contingency or event whatsoever, whether by reason of
acceleration of the maturity hereof, or otherwise, shall the amount paid, or
agreed to be paid, to the holder hereof for the use, forbearance or detention of
the funds advanced pursuant to this Note, or otherwise, or for the payment or
performance of any covenant or obligation contained herein or in any other
document or instrument evidencing, securing or pertaining to this Note exceed
the maximum amount permissible under applicable law. If from any circumstances
whatsoever fulfillment of any provision hereof or any other document or
instrument exceeds the maximum amount of interest prescribed by law, then IPSO
FACTO, the obligation to be fulfilled shall be reduced to the limit of such
validity, and if from any such circumstances the holder hereof shall ever
receive anything of value deemed interest by applicable law, which would exceed
interest at the highest lawful rate, such amount which would be excessive
interest shall be applied to the reduction of the unpaid principal balance of
this Note or on account of any other principal indebtedness of the Maker to the
holder hereof, and not to the payment of interest, or if such excessive interest
exceeds the unpaid principal balance of this Note and such other indebtedness,
such excess shall be refunded to the Maker. All sums paid, or agreed to be
paid, by the Maker for the use, forbearance or detention of the indebtedness of
the Maker to the holder of this Note shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full
term of such indebtedness until payment in full so that the actual rate of
interest on account of such indebtedness is uniform throughout
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the term hereof. The terms and provisions of this paragraph shall control and
supersede every other provision of all agreements between the Maker and the
holder hereof.
This Note shall be governed by and construed in accordance with the laws of
the State of Texas.
All references to the Maker herein shall, and shall be deemed to, include
its successors and permitted assigns, and all covenants, stipulations, promises
and agreements contained herein by or on behalf of the Maker shall be binding
upon its successors and permitted assigns, whether so expressed or not.
XXXXX, XXXXXXX & CO., INC.
By: /s/ Xxx X. Xxxxxxx XXX
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Name: Xxx X. Xxxxxxx
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Title: President
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EXHIBIT B TO LETTER AGREEMENT
(SEE EXHIBIT F TO THIS SCHEDULE 13D)
