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EXHIBIT 10.24
SECURITIES PURCHASE AND STOCKHOLDERS' AGREEMENT, dated as of
May 28, 1997, among THE ▇.▇. ▇▇▇▇▇▇▇ COMPANY, INC., a North Carolina corporation
(the "Company"), and each management stockholder named on the signature pages
hereto (a "Purchaser" and, collectively, the "Purchasers").
Introduction
The Company desires to issue and sell to each Purchaser, and
each Purchaser desires to purchase from the Company, that number of shares (the
"Shares") of the Company's common stock, par value $.01 per share (the "Common
Stock"), set forth in a letter dated May 20, 1997 (the "Letter") from the
Company to such Purchaser.
On May 7, 1997, (i) the Company and its wholly owned
subsidiary, ▇▇▇▇▇▇ & Winston, Inc. ("Winston"), entered into a Loan and Security
Agreement with BankBoston, N.A., pursuant to which up to $65.0 million in
indebtedness may be extended to the Company and Winston (the "Senior
Financing"), (ii) the Company issued senior subordinated notes in the principal
amount of $16.0 million pursuant to a Senior Subordinated Note and Warrant
Purchase Agreement with The 1818 Mezzanine Fund, L.P. (the "Senior Subordinated
Financing"), (iii) the Company issued warrants (the "Warrants") in connection
with the Senior Subordinated Financing exercisable for approximately 20% of the
shares of Common Stock outstanding. and (iv) the Company issued shares of Series
A Cumulative Redeemable Preferred Stock and shares of Series B Cumulative
Redeemable Preferred Stock (collectively, the "Preferred Stock") to The
Kelly-Springfield Tire Company.
In addition to the terms of the issuance, sale and purchase
of the Shares, the Company and the Purchasers desire to set forth herein certain
matters regarding the continued ownership of the Shares by the Purchasers.
For good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
Purchase and Sale
SECTION 1.1. Purchase and Sale of Common Stock. The Company
hereby issues and sells to each Purchaser, and each Purchaser hereby acquires
from the Company, on the date hereof, that number of Shares set forth in the
Letter to such Purchaser for a purchase price of $1.10 per Share (the "Purchase
Price"), in cash, payable by wire transfer of immediately available funds to an
account heretofore designated to the Purchaser by the Company, by certified bank
check or money order payable to the Company, or pursuant to the terms of a
promissory note in the form attached to this Agreement as Exhibit A. The Shares
shall have the respective rights and preferences of other shares of Common Stock
as set forth in the Company's
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Amended and Restated Articles of Incorporation, a copy of which is attached to
this Agreement as Exhibit B.
SECTION 1.2. Delivery of Certificates. The Company is hereby
issuing and selling to each Purchaser such Purchaser's Shares by delivering to
such Purchaser a duly executed certificate or certificates representing the
Shares registered in the name of such Purchaser, with appropriate issue stamps,
if any, affixed at the expense of the Company, free and clear of all security
interests, liens, pledges, charges, options, rights of first refusal, mortgages,
indentures, security agreements or other claims, encumbrances, agreements,
arrangements or commitments of any kind or character, whether written or oral
and whether or not relating in any way to credit or the borrowing of money
("Claims"), and the Purchaser is hereby purchasing the Shares for the Purchase
Price applicable thereto.
ARTICLE II
Representations and Warranties of the Company
The Company represents and warrants to the Purchasers as
follows:
SECTION 2.1. Organization Standing and Power. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of North Carolina.
SECTION 2.2. Authority; Binding Agreements. The Company has
all requisite corporate power and authority to enter into this Agreement and to
consummate the transactions contemplated hereby. The execution and delivery of
this Agreement by the Company and the consummation of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
necessary corporate action on the part of the Company. This Agreement has been
duly executed and delivered by the Company and constitutes the valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms.
SECTION 2.3. Conflicts; Consents. The execution and delivery
by the Company of this Agreement and the consummation of the transactions
contemplated hereby and compliance by the Company with any of the provisions
hereof do not and will not (i) conflict with or result in a breach of the
articles of incorporation, by-laws or other constitutive documents of the
Company, (ii) conflict with or result in a default (or give rise to any right of
termination, cancellation or acceleration) under any of the provisions of any
note, bond, lease, mortgage, indenture, or any license, franchise, permit,
agreement or other instrument or obligation to which the Company is a party, or
by which the Company or any of the Company's properties or assets may be bound
or affected, except for such conflicts, breaches or defaults as to which
requisite waivers or consents have been obtained, (iii) violate any law,
statute, rule or regulation or order, writ, injunction or decree applicable to
the Company or any of the Company's properties or assets or (iv) result in the
creation or imposition of any Claim upon any of the Company's properties or
assets. No consent or approval by, or notification of or filing with, any person
is required in connection with the execution, delivery and performance by the
Company of this Agreement and the consummation of the transactions contemplated
hereby.
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SECTION 2.4. Capitalization. As of the date hereof, the
authorized capital stock of the Company consists of 10,000,000 shares of Common
Stock, 7,000 shares of Series A Cumulative Redeemable Preferred Stock, par value
$.01 per share, and 4,500 shares of Series B Cumulative Redeemable Preferred
Stock, par value $.01 per share, and as of the date hereof, all of such
securities are issued and outstanding except for 6,304,000 shares of Common
Stock authorized but not issued. All such shares of capital stock of the Company
have been duly authorized and are fully paid and non-assessable. Except for (i)
977,590 shares of Common Stock reserved for issuance upon exercise of the
Warrants and (ii) 265,000 shares of Common Stock reserved for issuance under the
Company's 1997 Stock Option Plan (the "Option Plan"), there are no shares of
capital stock of the Company reserved for issuance. Except for options granted
under the Option Plan and for the Warrants, there are no options, warrants or
other rights to purchase shares of capital stock or other securities of the
Company or Winston, nor is the Company or Winston obligated in any manner to
issue shares of its capital stock or other securities.
ARTICLE III
Representations and Warranties of the Purchasers
Each of the Purchasers severally represents and warrants to
the Company as follows:
SECTION 3.1. Capacity; Binding Agreements. Such Purchaser has
all requisite capacity to enter into this Agreement and to consummate the
transactions contemplated hereby. This Agreement has been duly executed and
delivered by such Purchaser, and constitutes the valid and binding obligation of
such Purchaser, enforceable against such Purchaser in accordance with its terms.
SECTION 3.2. Conflicts; Consents. The execution and delivery
by such Purchaser of this Agreement, the consummation of the transactions
contemplated hereby and compliance by such Purchaser with any of the provisions
hereof do not and will not (i) conflict with or result in a default (or give
rise to any right of termination, cancellation or acceleration) under any of the
provisions of any note, bond, lease, mortgage, indenture, or any license,
franchise, permit, agreement or other instrument or obligation to which such
Purchaser is a party, or by which such Purchaser or any of such Purchaser's
properties or assets may be bound or affected, except for such conflicts,
breaches or defaults as to which requisite waivers or consents have been
obtained, (ii) violate any law, statute, rule or regulation or order, writ,
injunction or decree applicable to such Purchaser or any of such Purchaser's
properties or assets or (iii) result in the creation or imposition of any Claim
upon any of such Purchaser's properties or assets.
SECTION 3.3. Purchase for Own Account. (a) The Shares to be
acquired by such Purchaser pursuant to this Agreement are being acquired for his
own account and the Purchaser has no intention of distributing or reselling such
securities or any part thereof in any transaction that would be in violation of
the securities laws of the United States of America, or any state thereof. If
such Purchaser should in the future decide to dispose of any of the Shares, such
Purchaser understands and agrees that he may do so only in compliance with this
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Agreement and with the Securities Act of 1933 (the "Securities Act") and
applicable state securities laws, as then in effect, and that stop-transfer
instructions to that effect, where applicable, will be in effect with respect to
such securities. If such Purchaser should decide to dispose of any Shares, such
Purchaser, if requested by the Company, will have the obligation in connection
with such disposition, at such Purchaser's expense, of delivering an opinion of
counsel of recognized standing in securities law in connection with such
disposition to the effect that the proposed disposition of the Shares will not
be in violation of the Securities Act or any applicable state securities laws
and, assuming such opinion is required and is otherwise appropriate in form and
substance under the circumstances, the Company will accept, and will recommend
to any applicable transfer agent or trustee for such securities that it accept,
such opinion.
(b) Such Purchaser agrees to the imprinting, so long as
required by law, of a legend on certificates representing all of the Shares to
the following effect:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED, QUALIFIED, APPROVED OR DISAPPROVED UNDER THE SECURITIES ACT OF 1933
OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION TO THE REGISTRATION
REQUIREMENTS OF SUCH ACT OR SUCH LAWS AND NEITHER THE UNITED STATES SECURITIES
AND EXCHANGE COMMISSION NOR ANY OTHER FEDERAL OR STATE REGULATORY AUTHORITY HAS
PASSED ON OR ENDORSED THE MERITS OF THESE SECURITIES. THE TRANSFER OF ANY
SECURITIES REPRESENTED BY THIS CERTIFICATE IS FURTHER LIMITED BY THE PROVISIONS
OF THE SECURITIES PURCHASE AND STOCKHOLDERS' AGREEMENT AMONG THE ▇.▇. ▇▇▇▇▇▇▇
COMPANY, INC. AND THE MANAGEMENT STOCKHOLDERS IDENTIFIED THEREIN, A COPY OF
WHICH IS ON FILE AT THE EXECUTIVE OFFICE OF THE COMPANY."
SECTION 3.4. Nature of Purchaser. Such Purchaser acknowledges
that the offer and sale of the Shares is intended to be exempt from registration
under the Securities Act. Such Purchaser is (i) a director, president, vice
president in charge of a principal business unit, division or function or other
officer of the Company who performs a policy making function for the Company,
(ii) an individual with a net worth, or joint net worth with such Purchaser's
spouse, at the date hereof in excess of $1,000,000, (iii) an individual with an
income in excess of $200,000 in each of the two most recent years or joint
income with such Purchaser's spouse in excess of $300,000 in each of those years
and has a reasonable expectation of reaching the same income level in the
current year or (iv) an individual who has appointed a "purchaser
representative" as described in Section to act as such Purchaser's
representative to assist such Purchaser in evaluating the purchase of the
Shares. Such Purchaser has such knowledge and experience in financial and
business matters so that he is capable of evaluating the relative merits and
risks of purchasing the Shares. Such Purchaser has adequate means of providing
for his current
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economic needs and possible personal contingencies, has no need for liquidity in
his investment in the Company and is able financially to bear the risks of such
investment.
SECTION 3.5. Information. All documents, records and books
pertaining to the investment in the Shares and requested by such Purchaser or
his purchaser representative, if any, have been made available or delivered to
such Purchaser. Such Purchaser has had an opportunity to discuss the Company's
business, management and financial affairs with the Company's management and to
ask questions of and receive answers from the Company concerning such matters.
All such questions, if any, have been answered to the full satisfaction of such
Purchaser and his purchaser representative, if any, and such Purchaser has
received all information about the Company which such Purchaser or his purchaser
representative, if any, desires, including information which such Purchaser or
representative deems necessary to verify the accuracy of information the Company
has furnished to such Purchaser.
ARTICLE IV
Transferability of Shares
SECTION 4.1. Stock Transfer Restrictions. None of the
Purchasers shall sell, assign, pledge, give away or otherwise transfer (a
"Transfer") any Shares except in accordance with the procedures set forth in
this Agreement. Any attempted Transfer of Shares not permitted by this Agreement
shall be null and void, and the Company shall not in any way give effect to any
such Transfer. Any proposed Transfer of Shares shall be null and void, and the
Company shall not in any way give effect to any such Transfer, unless the
transferee of such Shares who is not, immediately prior to such Transfer, a
Purchaser shall agree in writing to be bound by and comply with the provisions
of this Agreement.
SECTION 4.2. Termination of Employment. (a) Transfers upon
Termination for Cause. If the Company shall terminate a Purchaser's employment
for "Cause" or a Purchaser shall terminate his employment with the Company other
than for "Good Reason" (as such terms are defined below), the Company shall have
the right, commencing on the date of such termination and continuing until the
first anniversary thereof, to purchase all of such Purchaser's Shares at the
Repurchase Price applicable thereto; provided that if and to the extent that,
prior to such first anniversary, the Company is prohibited under the terms of
any loan agreement or note for borrowed money from making such repurchase to the
full extent it would otherwise do so, the Company shall have the right to
purchase such Shares until the expiration of 45 days after such first
anniversary. For purposes of this Section 4.2, "Company" shall include Winston
with respect to a Purchaser employed directly by Winston.
For purposes of this Agreement,
"Cause", with respect to any Purchaser, has the meaning set
forth in the employment agreement, if any, then in effect between the Company
and such Purchaser or, in the absence of such an agreement, shall mean (i) such
Purchaser's conviction of, or plea of guilty or nolo contendere to a felony,
(ii) such Purchaser's gross negligence in the performance of his employment
services to the Company, which is not corrected within 15 business days after
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written notice, (iii) such Purchaser's knowingly dishonest act, or knowing bad
faith or willful misconduct in the performance of such services to the material
detriment of the Company, which is not corrected within 15 business days after
written notice, or (iv) such Purchaser's other material breach of his
obligations as an employee or officer of the Company which is not corrected
within a reasonable period of time (determined in light of the cure appropriate
to such material breach, but in no event less than 15 business days) after
written notice.
"Good Reason", with respect to any Purchaser, has the meaning
set forth in the employment agreement, if any, then in effect between the
Company and such Purchaser or, in the absence of such an agreement, shall mean
(i) the failure of the Company to pay any undisputed amount due to such
Purchaser in connection with his employment by the Company or a substantial
diminution in benefits provided pursuant to such employment, (ii) a substantial
diminution in the status, position and responsibilities of such Purchaser that
is not instituted to all senior management of the Company or (iii) the Company
requiring the Employee to be based at any office or location that requires a
relocation or commute greater than 50 miles from the office or location to which
such Purchaser is currently assigned.
"Repurchase Price" means, with respect to each Share owned by
any Purchaser, the greater of (i) the Purchase Price applicable thereto and (ii)
the quotient obtained by dividing the Net Equity Value by the total number of
shares of Common Stock outstanding on the date of termination of such
Purchaser's employment (on a fully diluted basis, after assuming the issuance of
shares of Common Stock pursuant to the exercise of in-the-money options granted
under the Option Plan and in-the-money Warrants). "Net Equity Value" means the
sum of (x) 6 times the Company's EBITDA (as calculated in accordance with the
Loan and Security Agreement dated May 7, 1997 among the Company, Winston, the
financial institutions identified therein and BankBoston, N.A., as agent) for
the 12 full calendar months immediately preceding the date on which such
termination shall have occurred, plus (y) the aggregate exercise price of all
options granted under the Option Plan and all Warrants, which exercise price at
the date such termination shall have occurred does not exceed (on a per share
basis) the per share market value of the Common Stock, less (z) the aggregate
amount of principal of and interest on (in the case of debt) and liquidation
value of (in the case of capital stock) the Senior Financing, Senior
Subordinated Financing and Preferred Stock outstanding as of the date of such
termination.
(b) Termination other than for Cause. If the Company shall
terminate a Purchaser's employment other than for Cause or a Purchaser shall
terminate his employment with the Company for Good Reason, such Purchaser shall
have the right, commencing on the date of such termination and continuing until
the first anniversary thereof, to require the Company to purchase all of such
Purchaser's Shares at the Repurchase Price applicable thereto; provided that if
and to the extent that, prior to such first anniversary, the Company is
prohibited under the terms of any loan agreement or note for borrowed money from
purchasing such Shares to the extent so required by a Purchaser, the Company
shall not be obligated to make such purchase until it is no longer prohibited
from doing so, in which case payment shall be made promptly after the removal of
such prohibition. In the event the option is not exercised, the Company shall
have the right, commencing on the first anniversary and continuing until the
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second anniversary thereof, to purchase all of such Purchaser's Shares at the
Repurchase Price applicable thereto.
(c) Termination or Repurchase upon Death. If a Purchaser's
employment with the Company shall terminate due to such Purchaser's death, or,
following any other termination of employment by the Company, a Purchaser shall
die, the Company shall have the right to purchase, and such Purchaser's
descendants shall have the right to require the Company to purchase, all of such
Purchaser's Shares at the Repurchase Price applicable thereto, commencing on the
date of death of such Purchaser and continuing until the first anniversary
thereof; provided that if and to the extent that, prior to such first
anniversary, the Company is prohibited under the terms of any loan agreement or
note for borrowed money from purchasing such Shares to the extent so required by
a Purchaser's descendants, the Company shall not be obligated to make such
purchase until it is no longer prohibited from doing so, in which case payment
shall be made promptly after the removal of such prohibition.
(d) Delivery of Payment. The Company or the Purchaser, as the
case may be, shall notify the other of such party's exercise of its rights under
this Section 4.2 by giving written notice of such exercise at least 10 and not
more than 30 days before the date established by such electing party for such
purchase or sell, as the case may be. On the date so designated, the Company
shall deliver the appropriate Repurchase Price to such Purchaser by certified
check or money order and such Purchaser shall deliver the certificates
evidencing the Shares being purchased, duly endorsed for transfer as the Company
may direct, and free and clear of any Claim. If any Shares evidenced by a
certificate so surrendered are not being purchased pursuant to the terms hereof,
the Company shall promptly issue to such Purchaser a replacement certificate
evidencing the Shares not so purchased.
SECTION 4.3. Transfers Among Management or to Descendants. (a)
Any Purchaser may, so long as any right has not been exercised with respect to
such Shares pursuant to Section 4.2, Transfer any Shares to another Purchaser or
other management employee of the Company or Winston who acquires shares of
Common Stock after the date hereof pursuant to an exercise of any option under
the Option Plan or pursuant to a purchase agreement substantially in the form of
this Agreement (a "Management Employee"). Any Purchaser may Transfer by will or
the laws of descent and distribution any Shares to such Purchaser's descendants.
Such transfers shall be effective only if the transferee agrees to be bound by
the terms of this Agreement.
SECTION 4.4. Right of First Refusal. With respect to any
Shares that the Company had the right to purchase pursuant to Section 4.2(a) or
Section 4.2(c) but failed to so purchase prior to the expiration of the one-year
period referred to therein (as the same may be extended due to the Company's
inability to purchase such Shares as described therein), the following
provisions shall apply.
(a) If a Purchaser desires to Transfer any such Shares (other
than pursuant to Section 4.3), such Purchaser shall deliver to the Company and
the other Purchasers and Management Employees a written notice, which shall be
irrevocable for a period of 45 days after
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delivery, offering all of such Shares to the Company and the other Purchasers
and Management Employees at the purchase price and on the terms specified in the
written notice. The Company shall have the first right and option, for a period
of 30 days after delivery of such written notice, to purchase all (but not part)
of such Shares at the purchase price and on the terms specified in the notice.
Such acceptance shall be made by delivering a written notice to such
transferring Purchaser within such 30-day period.
(b) If the Company fails to accept such offer, then upon the
earlier of the expiration of such 30-day period or upon the receipt of a written
rejection of such offer from the Company, the other Purchasers and Management
Employees (as a group) shall have the second right and option, until 15 days
after the expiration of the 30-day period, to purchase on a pro rata basis with
all other Purchasers and Management Employees so electing all (but not part) of
such Shares offered at the purchase price and on the terms specified in the
notice. Such acceptance shall be made by delivering a written notice to the
transferring Purchaser within the 15-day period.
(c) If the Company and the other Purchasers and Management
Employees do not elect to purchase the Shares so offered, then the transferring
Purchaser may Transfer all (but not part) of such Shares at a price not less
than the price, and on terms not more favorable to the transferee of such Shares
than the terms, stated in the original written notice of intention to sell, at
any time within 15 days after the expiration of the period in which the other
Purchasers and Management Employees could elect to purchase such Shares. If such
Shares are not sold by the transferring Purchaser during such 15-day period, the
right of the transferring Purchaser to sell such Shares shall expire and the
rights and obligations set forth in this Section 4.4 shall be reinstated with
respect to such Shares.
SECTION 4.5. Lock-up Agreements. If the Company proposes to
register under the Securities Act any of its Common Stock for sale to the
public, each Purchaser shall enter into such agreement (a "Lock-up Agreement")
as may be requested by the underwriters of such registered offering, pursuant to
which Lock-up Agreement such Purchaser shall refrain from selling any Shares
during the period of distribution of Common Stock by such underwriters and for a
period of up to 180 days following the effective date of such registration.
ARTICLE V
Miscellaneous
SECTION 5.1. Option Shares; Dividends; Reclassifications. If,
subsequent to the date hereof, any shares of Common Stock are issued to a
Purchaser pursuant to the exercise of any option (including options granted
under the Option Plan), warrant or other security convertible into or
exercisable for shares of Common Stock, or any shares or other securities are
issued with respect to, or in exchange for, any of the Shares by reason of any
reincorporation, stock dividend, stock split, consolidation of shares,
reclassification or consolidation involving the Company, such shares of Common
Stock and such other shares or securities shall be deemed to be Shares for all
purposes of this Agreement.
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SECTION 5.2. Survival of Provisions; Termination. (a) All of
the representations, warranties and covenants made herein and each of the
provisions of this Agreement shall, except as otherwise expressly set forth
herein, survive the execution and delivery of this Agreement, any investigation
by or on behalf of the Purchasers, the acceptance of the Shares and payment
therefor or the termination of this Agreement.
(b) This Agreement shall terminate upon the earliest to occur
of the (i) issuance by the Company or sale by the shareholders of the Company to
the public on a Form S-1 under the Securities Act of shares of Common Stock
representing at least 40% of the Common Stock outstanding after such issuance or
sale, (ii) tenth anniversary of the date of this Agreement and (iii) written
consent of all of the Purchasers, the Management Employees and the Company. Upon
such a termination, all rights and obligations shall terminate, except the
Purchasers' obligations under Section 4.5 with respect to a Lock-up Agreement
entered into in connection with a public offering referred to in the foregoing
clause (i), if applicable.
SECTION 5.3. Notices. All notices, demands and other
communications provided for or permitted hereunder shall be made in writing and
shall be by registered or certified first-class mail, return receipt requested,
telecopier, courier services or personal delivery to the following addresses, or
to such other addresses as shall be designated from time to time by a party in
accordance with this Section 5.3:
(a) if to the Company:
The ▇.▇. ▇▇▇▇▇▇▇ Company, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
P.O. Box 837
Lincolnton, North Carolina 28093-0837
Attention: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telecopier No.: (▇▇▇) ▇▇▇-▇▇▇▇
(b) if to a Purchaser, at the address set forth opposite such
Purchaser's name on the signature pages hereof.
All such notices and communications shall be deemed to have been duly given:
when delivered by hand, if personally delivered; one business day after delivery
to a courier, if delivered by commercial overnight courier service; five
business days after being deposited in the mail, postage prepaid, if mailed; and
when receipt is acknowledged, if telecopied.
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SECTION 5.4. Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the successors and permitted assigns
of the parties hereto. The provisions of Article IV also shall inure to the
benefit of and be enforceable by the Management Employees. A Purchaser may
assign its rights hereunder only in conjunction with, and to a transferee of, a
Transfer permitted pursuant to the terms of Article IV, and any such assignee
shall be deemed to be a "Purchaser" for purposes of this Agreement. The Company
may not assign any of its rights or obligations hereunder without the consent of
Purchasers holding a majority of the Shares outstanding; provided that any
successor by merger or consolidation of the Company or similar transaction shall
be bound by and benefit from the terms hereof as if named as the Company
hereunder.
SECTION 5.5. Amendment and Waiver. No failure or delay on the
part of the Company or the Purchasers in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy. No waiver
of or consent to any departure by the Company or the Purchasers from any
provision of this Agreement shall be effective unless signed in writing by the
party entitled to the benefit thereof; provided that notice of any such waiver
shall be given to each party hereto as set forth herein. Except as otherwise
provided herein, no amendment, modification or termination of any provision of
this Agreement shall be effective unless signed in writing by or on behalf of
the Company and Purchasers holding at least a majority of the Shares issued and
outstanding; provided that the provisions of Section 5.2(b) and of this sentence
shall not be amended or waived without the written consent of all of the
Purchasers and the Company.
Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this Agreement, and
any consent to any departure by the Company or the Purchasers from the terms of
any provision of this Agreement, shall be effective only in the specific
instance and for the specific purpose for which made or given. Except where
notice is specifically required by this Agreement, no notice to or demand on the
Company or the Purchasers in any case shall entitle the Company or the
Purchasers to any other or further notice or demand in similar or other
circumstances.
SECTION 5.6. Purchaser Representative. If the Purchaser has
been represented by a purchaser representative in connection with his investment
in the Shares, in evaluating the Purchaser's investment in the Shares the
Purchaser has been advised by such purchaser representative as to the merits and
risks of the investment in general and the suitability of the investment for the
Purchaser in particular, and the purchaser representative has disclosed in
writing any material relationship, actual or contemplated, between the purchaser
representative and any entity connected to the transactions contemplated hereby,
or affiliate of any such entity, and any compensation received or to be received
as a result of such relationship.
SECTION 5.7. Counterparts. This Agreement may be executed in
any number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
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SECTION 5.8. Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
SECTION 5.9. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
SECTION 5.10. Severability. If any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable in any respect for any reason, the
validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired,
unless the provisions held invalid, illegal or unenforceable shall substantially
impair the benefits of the remaining provisions hereof.
SECTION 5.11. Entire Agreement. This Agreement, together with
the exhibits hereto and the terms of the Common Stock, is intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein and therein. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to herein or therein. This Agreement, together with the exhibits
hereto and the Common Stock, supersede all prior agreements and understandings
among the parties with respect to such subject matter.
SECTION 5.12. Expenses. Each party to this Agreement shall
each bear its or his own costs incurred in connection with the negotiation,
execution and delivery and enforcement of this Agreement, including the fees and
expenses of lawyers, financial advisors and accountants.
SECTION 5.13. Certain Definitions and Rules of Interpretation.
Except as otherwise expressly provided in this Agreement, the following rules of
interpretation apply to this Agreement: (i) the singular includes the plural and
the plural includes the singular; (ii) "or" and "any" are not exclusive and
"include" and "including" are not limiting; (iii) a reference to any agreement
or other contract includes permitted supplements and amendments; (iv) a
reference to a law includes any amendment or modification to such law and any
rules or regulations issued thereunder; (v) a reference to a person includes its
permitted successors and assigns; (vi) a reference to GAAP or generally accepted
accounting principles refers to United States generally accepted accounting
principles; and (vii) a reference in this Agreement to an Article, Section or
Exhibit is to the Article, Section or Exhibit of this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this
Securities Purchase and Stockholders' Agreement to be executed and delivered as
of the date first above written.
THE ▇. ▇. ▇▇▇▇▇▇▇ COMPANY, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President & CEO
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Address for Notices: Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. BONBURG
----------------------------
Address for Notices: Name: ▇▇▇▇▇▇ ▇. Bonburg
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Address for Notices: Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
----------------------------
Address for Notices: Name: J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ROOF
----------------------------
Address for Notices: Name: ▇▇▇▇▇▇ ▇. Roof
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------
Address for Notices: Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇
▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------
Address for Notices: Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇ ▇▇.
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
---------------------------
Address for Notices: Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇ ▇▇▇▇▇▇
---------------------------
Address for Notices: Name: ▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
--------------------------
Address for Notices: Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
/s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------
Address for Notices: Name: J. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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