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EXHIBIT 10.72
PUT AND CALL AGREEMENT
This Put and Call Agreement ("Agreement") is entered into by ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & Sucharow, L.L.P., a New York limited liability partnership
("▇▇▇▇▇▇▇▇"), ▇▇▇▇▇▇▇▇▇ Industries, Inc., a Delaware corporation ("Company"),
and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ (collectively "▇▇▇▇▇▇▇▇▇").
▇▇▇▇▇▇▇▇ is entering into this Agreement in its representative capacity as agent
for the Class Members and Lead Counsel (as these terms are defined in the
Stipulation, as defined below), and the terms of this Agreement shall be binding
on the Class Members and Lead Counsel.
WHEREAS, Company and other persons have agreed to a settlement of STI
Classic Fund, et al. ▇. ▇▇▇▇▇▇▇▇▇ Industries, Inc., et. al., Cause No.
3-96-C-V-0823-R in the United States District Court For The Northern District Of
Texas, Dallas Division and in SunTrust Bank, Atlanta, et. al. ▇. ▇▇▇▇▇▇▇▇▇
Industries, Inc., et. al., Cause No. 96-02952-C-68 in the District Court, 68th
Judicial District, Dallas County, Texas (the "Litigation"), as same is more
particularly described in a Stipulation of Settlement as filed in the
Litigation, reference to which is hereby made for all purposes (the
"Stipulation");
WHEREAS, pursuant to the terms of the Stipulation, Company has agreed
to issue 200,000 shares of its common stock, $0.01 par value (the "Common
Stock") at the time and on the terms as set forth in the Stipulation;
WHEREAS, ▇▇▇▇▇▇▇▇ has agreed to grant Company and ▇▇▇▇▇▇▇▇▇ an option
to purchase the Common Stock on the terms herein described;
WHEREAS, ▇▇▇▇▇▇▇▇ has also agreed to grant Company and ▇▇▇▇▇▇▇▇▇ a
right of first refusal in the event the Common Stock is offered for sale during
the term of this Agreement; and
WHEREAS, Company and ▇▇▇▇▇▇▇▇▇ have agreed that ▇▇▇▇▇▇▇▇ shall have the
right to require Company and ▇▇▇▇▇▇▇▇▇ to purchase the Common Stock on the terms
herein described;
NOW, THEREFORE, in consideration for the mutual covenants and
agreements herein contained, Company, ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ agree as follows:
ARTICLE I
PUT, CALL, AND RIGHT OF FIRST REFUSAL
1.01 GRANT OF PUT. Company and ▇▇▇▇▇▇▇▇▇, jointly and severally, hereby
grant to ▇▇▇▇▇▇▇▇ the right and option for ▇▇▇▇▇▇▇▇ to require Company and
▇▇▇▇▇▇▇▇▇ to purchase the Common Stock in whole, but not in part, on the terms
and conditions herein set forth in this ARTICLE I (the "Put").
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1.02 GRANT OF CALL. ▇▇▇▇▇▇▇▇ hereby irrevocably grants to Company and
▇▇▇▇▇▇▇▇▇ the right and option to buy from ▇▇▇▇▇▇▇▇ the Common Stock in whole,
but not in part, on the terms herein set forth in this ARTICLE I (the "Call").
1.03 GRANT OF RIGHT OF FIRST REFUSAL. ▇▇▇▇▇▇▇▇ hereby irrevocably
grants to Company and ▇▇▇▇▇▇▇▇▇ a right of first refusal in the event of a
proposed sale or any other type of transfer of the Common Stock (the "Right of
First Refusal"). If ▇▇▇▇▇▇▇▇ reaches an agreement for the sale or transfer of
the Common Stock before the Expiration Date (as defined below), it shall provide
written notice of the terms of the proposed transaction as provided for in
SECTION 3.01. The terms of this Right of First Refusal shall be the same as
those being offered to ▇▇▇▇▇▇▇▇ for the Common Stock, except that Company and
▇▇▇▇▇▇▇▇▇ shall have five (5) weekdays after receipt of the written notice in
which to elect to exercise the Right of First Refusal.
1.04 PURCHASE PRICE OF PUT AND CALL.
(a) PUT PURCHASE PRICE. The purchase price of the Put (the
"Put Purchase Price") shall be equal to the One Dollar ($1.00) per share.
(b) CALL PURCHASE PRICE.
(1) Subject to the provisions of subsection (2)
below, the purchase price of the Call (the "Call Purchase Price") shall be Two
Dollars ($2.00) per share.
(2) If a Qualified Public Offering or a Change in
Control (as defined below) is agreed to by Company within three hundred
sixty-five (365) days immediately following the Call Closing (as defined below)
(the "Look Back Period") at a price per share of Common Stock greater than the
Call Purchase Price (the excess being referred to as the "Difference"), Company
and/or ▇▇▇▇▇▇▇▇▇ shall pay to ▇▇▇▇▇▇▇▇ the amount obtained by multiplying the
number of shares of Common Stock that were purchased at the Call Closing by the
Difference. This amount shall be paid to ▇▇▇▇▇▇▇▇ within fifteen (15) days
immediately following the closing of the Qualified Public Offering or Change in
Control, as the case may be. If a Qualified Public Offering or a Change in
Control is agreed to, but not closed, by Company within the 365 day period, the
announced transaction must be closed within one hundred twenty (120) days after
the end of the 365 day period in order for the provisions of this subsection to
be applicable.
1.05 TERM OF PUT, CALL, AND RIGHT OF FIRST REFUSAL. The Put and Call
are each exercisable at any time before the end of one (1) year following the
Effective Date (as defined in the Stipulation). The Right of First Refusal shall
be effective for one (1) year following the Effective Date. For purposes of this
Agreement, the end of these one (1) periods is referred to as the Expiration
Date.
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1.06 METHOD OF EXERCISE.
(a) NOTICE OF EXERCISE. The Put may be exercised by delivery
of written notice to Company and ▇▇▇▇▇▇▇▇▇ in the manner and at the addresses in
SECTION 3.01 before the Expiration Date. The Call may be exercised by delivery
of written notice to ▇▇▇▇▇▇▇▇ in the manner and at the addresses in SECTION 3.01
before the Expiration Date.
(b) PUT CLOSING; CALL CLOSING. In the event of the exercise of
the Put or the Call, the purchase and sale of the Common Stock will be closed
(the "Put Closing" or the "Call Closing" as appropriate) within fifteen (15)
days following the exercise of the Put or the Call, as the case may be. The
Closing shall be held at the offices of Company or at such other place as may be
mutually agreed upon in writing by the parties hereto.
(c) PAYMENT. The Put Purchase Price or the Call Purchase
Price, as applicable, shall be paid by cash or by certified or cashier's check
at the Closing. If the Difference provided for in SECTION 1.04(b)(2) becomes
payable to ▇▇▇▇▇▇▇▇ after the Call Closing, it shall be paid by cash or by
certified or cashier's check within fifteen (15) days after the closing of the
Change in Control Transaction or Qualified Public Offering.
1.07 LETTER OF CREDIT. The obligation of Company and ▇▇▇▇▇▇▇▇▇ to
purchase the Common Stock in the event of ▇▇▇▇▇▇▇▇'▇ exercise of the Put shall
be secured by an irrevocable bank letter of credit in favor of ▇▇▇▇▇▇▇▇ in the
amount of $200,000. This letter of credit shall be in such form as reasonably
satisfactory to the parties, and it shall be delivered to ▇▇▇▇▇▇▇▇ on or before
the Effective Date. If the letter of credit initially delivered to ▇▇▇▇▇▇▇▇ is
for a period of time that ends before twenty (20) days after the Expiration
Date, Company and ▇▇▇▇▇▇▇▇▇ shall be required to deliver a new letter of credit
to ▇▇▇▇▇▇▇▇ on or before five (5) banking days before the expiration of the
preceding letter of credit, but with the commencement date of the new letter of
credit being on the expiration of the preceding letter of credit.
1.08 CHANGE IN CONTROL. A "Change in Control" means the acquisition of
beneficial ownership within the meaning of Rule 13d-3 under the Securities
Exchange Act of 1934, as amended ("Beneficial Ownership"), of an aggregate of
more than fifty percent (50%) of the voting power of Company's outstanding
voting securities by any person or group (as such term is used in Rule 13d-5
under such Act) whose Beneficial Ownership is less than ten percent (10%) of the
voting power of Company's outstanding voting securities on the date hereof.
1.09 QUALIFIED PUBLIC OFFERING. A "Qualified Public Offering" means an
underwritten public offering covering the sale of Common Stock in Company in
which the gross proceeds to Company are at least Five Million Dollars
($5,000,000).
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ARTICLE II
REPRESENTATIONS, WARRANTIES, COVENANTS
AND AGREEMENTS
2.01 WARRANTIES AND REPRESENTATIONS OF COMPANY. Company and ▇▇▇▇▇▇▇▇▇,
as applicable, warrant and represent to ▇▇▇▇▇▇▇▇ as follows:
(a) CORPORATE STATUS AND AUTHORIZATION. Company is a
corporation duly organized, validly existing and in good standing under the laws
of the state of Delaware and has the corporate power and authority to own and
operate its properties, to carry on its business as now conducted and to enter
into and to perform its obligations under this Agreement. Company has the power
and authority to execute, deliver and perform this Agreement.
(b) NO CONFLICTS OR CONSENTS. Neither the execution and
delivery of this Agreement nor the performance by Company or ▇▇▇▇▇▇▇▇▇ of its
obligations hereunder will contravene or materially conflict with any provision
of law, statute or regulation to which either is subject, or any judgment,
license, order or permit applicable to either, or any indenture, loan agreement,
mortgage, deed of trust, or other agreement or instrument to which either is a
party or by which either may be bound, or to which either may be subject, or
violate any provision of the charter or bylaws of Company. No consent, approval,
authorization or order of any court or governmental authority or third party is
required in connection with the execution and delivery by Company or ▇▇▇▇▇▇▇▇▇
of this Agreement or to perform the obligations contemplated hereby.
(c) VALIDITY AND BINDING EFFECT. This Agreement is the legal,
valid and binding obligation of Company and ▇▇▇▇▇▇▇▇▇, enforceable in accordance
with its terms, subject to limitations imposed by bankruptcy, insolvency,
moratorium or other similar laws affecting the rights of creditors generally or
the application of general equitable principles.
(d) CAPITALIZATION. As of the date of this Agreement, the
authorized capital stock of Company consists solely of 20,000,000 shares of
stock of which 4,400,210 shares ($0.01 par value) are issued and outstanding and
31,595 shares ($0.01 par value) are held as treasury stock. All of such
outstanding shares of stock are validly issued, fully paid and nonassessable and
have not been issued in violation of any preemptive rights of any person.
2.02 WARRANTIES AND REPRESENTATIONS OF ▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇ represents
and warrants to Company and ▇▇▇▇▇▇▇▇▇ as follows:
(a) PARTNERSHIP STATUS AND AUTHORIZATION. ▇▇▇▇▇▇▇▇ is a
limited liability partnership duly organized, validly existing and in good
standing under the laws of the state of New York and has the requisite power and
authority to own and operate its properties, to carry on its business as now
conducted and to enter into and to perform its obligations under this Agreement.
▇▇▇▇▇▇▇▇ has the power and
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authority to execute, deliver and perform this Agreement on behalf of the Lead
Counsel and Class Members.
(b) VALIDITY AND BINDING EFFECT. This Agreement is the legal,
valid and binding obligation of the Lead Counsel and Class Members, enforceable
in accordance with its terms, subject to limitations imposed by bankruptcy,
insolvency, moratorium or other similar laws affecting the rights of creditors
generally or the application of general equitable principles.
(c) VOTING AND DISPOSITIVE CONTROL. From the time of the
delivery of the Common Stock to ▇▇▇▇▇▇▇▇ until the Expiration Date, ▇▇▇▇▇▇▇▇
shall hold the sole voting, investment and dispositive powers relating to the
Common Stock. This requirement shall terminate before the Expiration Date in the
event of a sale or other transfer of the Common Stock pursuant to the terms of
this Agreement.
(d) RECEIPT OF INFORMATION. ▇▇▇▇▇▇▇▇ believes that it has
received all the information ▇▇▇▇▇▇▇▇ considers necessary or appropriate for
deciding whether to accept the Common Stock in the settlement of the Litigation.
(e) RESTRICTIONS ON TRANSFER. ▇▇▇▇▇▇▇▇ agrees that it will not
transfer any of the Common Stock to any person before the Expiration Date
without the written consent of Company and ▇▇▇▇▇▇▇▇▇; provided, however, that
this restriction shall not apply if:
(1) ▇▇▇▇▇▇▇▇ transfers the Common Stock after
▇▇▇▇▇▇▇▇▇ and Company fail to comply with the Put provisions of this Agreement;
or
(2) ▇▇▇▇▇▇▇▇ transfers the Common Stock after
▇▇▇▇▇▇▇▇▇ and Company elect to not exercise their Right of First Refusal
(f) LEGENDS. Each certificate evidencing the Common Stock will
be endorsed with the legend set forth below:
"THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT
TO THE TERMS OF A PUT AND CALL AGREEMENT BETWEEN THE HOLDER OF THESE
SHARES AND THE COMPANY."
ARTICLE III
MISCELLANEOUS
3.01 NOTICE. Any notice required or permitted by any party to this
Agreement shall be in writing and may be delivered personally to the party being
given notice or to the person in charge of the office of the party being given
such notice or by certified mail, return receipt requested, at the party's
address indicated below. Any notice will be effective upon delivery in the case
of personal delivery or three (3) weekdays after deposit in the mail, postage
prepaid, in the case of delivery by mail. The names and
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addresses of persons to receive notice as stated in this Section may be changed
by notice given in accordance with this Section. The addresses of the parties
are as follows:
COMPANY: ▇▇▇▇▇▇▇▇▇ Industries, Inc.
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
With Copy to: ▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, L.L.P.
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇: Goodkind, Labaton, Rudoff & Sucharow, LLP
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Telephone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
3.02 FURTHER ACTIONS. At any time and from time to time, each party
agrees, without further consideration, to take such actions and to execute and
deliver such documents as may be reasonably necessary to effect the purposes of
this Agreement.
3.03 MODIFICATION. This Agreement shall not be varied, altered,
modified, changed or in any way amended except by an instrument in writing
executed by all parties hereto.
3.04 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall constitute one and the same instrument.
3.05 APPLICATION OF TEXAS LAW. The validity and effect of this
Agreement shall be governed by and construed and enforced in accordance with the
laws of the state of Texas (without reference to the laws of another
jurisdiction). The venue for all actions relating to this Agreement shall be in
the United States District Court for the
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Northern District of Texas, Dallas Division or, if same is improper, in a Texas
District Court sitting in Dallas County, Texas.
This Agreement is signed by each party on the dates set forth below. If
the Common Stock is delivered to ▇▇▇▇▇▇▇▇ in accordance with the Stipulation,
this Agreement shall be effective on the Effective Date.
COMPANY: ▇▇▇▇▇▇▇▇▇ INDUSTRIES INC.
By:
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, CEO
▇▇▇▇▇▇▇▇▇:
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇: GOODKIND, LABATON, RUDOFF
& SUCHAROW, LLP
By:
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Name:
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Title: As Agent for Lead Counsel
and Class Members
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