EXHIBIT 10.4
STOCK PURCHASE AGREEMENT
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THIS STOCK PURCHASE AGREEMENT ("Agreement"), effective as of this 19th day
of April, 2001, is entered into by, between and among TRANSIT GROUP, INC., a
Florida corporation, (hereinafter referred to as the "Company") and XXXXXXX X.
XXXXXX, a resident of the State of Alabama, XXXXXX X. XXXXXX, XXXXXXX X. XXXXXX,
XXXXXXX XXXXXX and XXXXXXX X. XXXXXX, each a resident of the State of Florida
(hereinafter referred to collectively as "Sellers", or individually as "Seller")
and T. XXXXX XXXXX, a Florida resident ("Xxxxx").
WHEREAS, Sellers are the owners of record of 726,609 shares of the common
capital stock of the Company (the "Stock") which are subject to purchase by the
Company and/or Xxxxx pursuant to Section 2.9 of that certain Agreement and Plan
of Reorganization dated August 15, 1997 (the "Reorganization Agreement) and that
certain Stock Purchase Agreement dated August 29, 1997 (the "Stock Purchase
Agreement");
WHEREAS, the Sellers have exercised their rights to require the Company and
Xxxxx to purchase the Stock, and the Sellers, the Company and Xxxxx have reached
a further agreement with respect to the terms thereof, all on the terms and
conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and legal
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Sale and Purchase of Stock. Subject to the terms and conditions
hereof, each of the Sellers herewith irrevocably agrees to sell to the Company,
and the Company herewith irrevocably agrees to purchase from the Sellers, the
Stock owned by Sellers (the "Purchased Shares") for the consideration set forth
herein and in accordance with allocations set forth in Schedule A attached
hereto. (The obligations of the parties hereto are not contingent or dependent
upon the financial condition of the Company, whether the Company is in
bankruptcy or reorganization (under any law),whether the Company is in existence
or not as a corporation or other entity (active or otherwise), nor are the
obligations contingent or dependent in any way upon the current value or future
value of the stock being transferred.) The aggregate purchase price for the
Purchased Shares shall be the amount equal to Two Million Six Hundred Fifteen
Thousand Seven Hundred Ninety Four dollars ($2,615,794.00) (the "Purchase
Price"). The Purchase Price shall be paid in thirty monthly installments, as set
forth below, and shall bear interest as provided in Section 3 hereof. Upon
receipt of each payment of principal and interest each month from the Company as
set forth below in Schedule A, each of the Sellers shall deliver to the Company
for cancellation the number of Purchased Shares set forth beside such Seller's
name on Schedule A hereto.
Xxxxxxx Xxxxxxx Xxxxxx and the Company hereby acknowledge that
Xxxxxxx Xxxxxxx Xxxxxx has simultaneously herewith returned 138,889 shares of
Stock to the Company in consideration of the Company's forgiveness of all
principal and interest accrued under his
Promissory Note to the Company in the original principal amount of $500,000 and
therefore, the obligations of the Company and Xxxxx, and the Purchase Price
stated above, have been reduced by such amount, and the Company and Xxxxx have
no further obligations to Xxxxxxx Xxxxxxx Xxxxxx with respect to the put rights
provided for in the Reorganization Agreement and the Stock Purchase Agreement.
The Parties further acknowledge that the allocations, calculations and
provisions hereof differ from and thereby supersede the provisions of the
Reorganization Agreement and Stock Purchase Agreement, and agree that upon
payment in full of the Purchase Price and interest thereon in the manner set
forth herein, any and all rights of the Sellers to require either Xxxxx or the
Company to redeem any of their shares of common stock of the Company will be
satisfied in full and thereby terminate.
2. Payment of Purchase Price. The Purchase Price and interest
accrued thereon shall be paid in monthly installments at such times and in such
amounts as follows:
On April 15, 2001 and on the 15th day of each month thereafter until and
including August 15, 2003, the Company shall pay to Sellers an aggregate
amount equal to One Hundred Thousand dollars ($100,000.00). On September
15, 2003, the Company shall pay to Sellers an aggregate amount equal to
Eighty Three Thousand Four Hundred Eighty dollars and Eighty Six cents
($83,480.86). Such payments shall be made in advance, rather than in
arrears, and allocated as set forth on Schedule A hereto.
The Company shall have the right to prepay any or all installments in whole
or in part at any time without premium or penalty. Any prepayment in part
shall reduce the amount of the next installment due hereunder. The Company
shall be obligated to prepay the Purchase Price to the extent of any net
proceeds received by the Company in any stock offering by the Company
subsequent to the date hereof.
3. Interest. Interest shall accrue on the outstanding Purchase
Price hereof, at a constant rate per annum equal to ten and one-half percent
(10.5%). Said interest payments shall be paid monthly together with the
principal amount of the Purchase Price in the manner and amounts set forth in
Section 2 above.
4. Partial Release of Xxxxx Obligation. Each of the Sellers hereby
agrees that notwithstanding anything to the contrary in the Reorganization
Agreement and Stock Purchase Agreement, on and after the date hereof, the
obligations of Xxxxx to repurchase the Stock from the Sellers thereunder (i)
shall be limited to $1,800,000 and shall be further reduced by the principal
amount of each installment payment by the Company of the Purchase Price after
such payments have reduced the Purchase Price to $1,800,000 and (ii) Xxxxx is
hereby unconditionally released from any obligation whatsoever on any amounts
above $1,800,000 and on such reductions. Except for the releases and reductions
(which shall also be for the benefit of Xxxxx' affiliates) provided for in this
paragraph 4, nothing in this Agreement shall alter Xxxxx' put obligations under
the Reorganization Agreement and Stock Purchase Agreement (it being understood
that Xxxxx is not responsible for the obligations of the Company hereunder). So
long as the Company is current in its payment obligations provided for herein,
the Sellers agree not to attempt to enforce the put obligations of Xxxxx under
the Reorganization Agreement and the Stock Purchase Agreement. Notwithstanding
anything herein to the contrary, the put obligation
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of Xxxxx under the Reorganization Agreement and the Stock Purchase Agreement
will not expire as provided therein before the latest to occur of either (i) the
receipt by the Sellers from the Company, Xxxxx or upon any other sale of shares
subject to the provisions of Section 2.9 of the Reorganization Agreement of an
aggregate principal amount of $1,800,000, or (ii) the original expiration date
provided for in Section 2.9 of the Reorganization Agreement, except that such
put obligation shall expire on or prior to August 29, 2004.
5. Representations and Warranties of Sellers. Each of the Sellers
represents and warrants to the Company at the time of the execution of this
Agreement and at the time of the transfer of the Purchased Shares (the
"Closing") as follows:
(a) Each share certificate for the Purchased Shares is and
will be delivered by Sellers to the Company, properly endorsed by Seller in
blank or accompanied by a duly executed stock power of attorney, in either case
with signature guaranteed, for transfer to the Company on the books and records
of the Company.
(b) The Sellers have the power and authority to transfer the
Purchased Shares, there are no restrictions on such transfer, and the Sellers
are the owners of record of the Purchased Shares and have good and marketable
title to the Purchased Shares, free and clear of any and all liens, pledges,
hypothecations or any other encumbrances whatsoever.
(c) No consent or approval of any person, entity, or
government or regulatory authority is necessary for the consummation of the
transaction described in this Agreement.
(d) The amount of gross proceeds from the sale of any shares
originally subject to the provisions of Section 2.9 of the Reorganization
Agreement by any Seller (or a trust for the benefit of the children of such
Seller) has been applied to reduce the amount of the obligation under the
Reorganization Agreement or Stock Purchase Agreement to the extent required by
the third paragraph of Section 2.9 of the Reorganization Agreement. Each of the
Sellers (other than Xxxxxxx Xxxxxxx Xxxxxx) agree that the number of shares
which any Seller (other than Xxxxxxx Xxxxxxx Xxxxxx) may require Xxxxx or the
Company to redeem shall be reduced by the dollar amount of the gross proceeds
resulting from any sale by such Seller (including sales by a trust for the
benefit of the children of such Seller, but excluding sales of the Company's
Series B Convertible Preferred Stock and the common stock issuable upon the
conversion thereof) of shares of the Company's common stock at any time prior to
the expiration of the Company's and Xxxxx' put obligation.
6. Indemnification.
(a) The Sellers shall jointly and severally indemnify and
hold the Company harmless against any and all claims, demands, actions,
investigations, costs (including reasonable attorneys' fees), judgments and
executions against the Company arising from: (i) any breach of Sellers'
representations and warranties hereunder; (ii) any breach by Sellers of this
Agreement; and/or (iii) the enforcement by the Company of this indemnity.
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(b) The Sellers shall jointly and severally indemnify and
hold Xxxxx harmless against any and all claims, demands, actions,
investigations, costs (but not including any attorneys' fees), judgments and
executions against Xxxxx arising from: (i) any breach of Sellers'
representations and warranties hereunder; and/or (ii) the enforcement by Xxxxx
of this indemnity. Nothing in this Section 6(b) shall require the Sellers to
indemnify Xxxxx against attorneys' fees.
7. Covenants of the Company.
(a) Simultaneously with the execution of this Agreement, in
consideration of the mutual covenants contained herein, the Company agrees to
issue 300,000 shares of its Series B Convertible Preferred Stock to the Sellers,
with each Seller receiving 60,000 of said shares.
(b) The Company shall not place, nor permit its subsidiaries
to place, any additional mortgages other than those outstanding on the date
hereof or in connection with the refinancing of the indebtedness secured by such
existing liens on the real property owned by Transit Group Transportation, LLC
in Groveland, Florida which was acquired by the Company in connection with the
Reorganization Agreement.
(c) The Company and Sellers shall amend the Employment
Agreements by and between the Company and the Sellers, as appropriate, so that
each such Employment Agreement shall have substantially the same terms and
conditions, including the duration thereof, as the Employment Agreements between
the Company and Xxxxxxx X. Xxxxxx and Xxxxxx X. Xxxxxx.
(d) Until payment in full of the Purchase Price, and
provided that the Company's Huntsville, Alabama facility remains open and meets
the EBITDAR expectations of the Company's management, the employment of Xxxx
Xxxxxx and Xxxx Xxxxxx shall not be terminated by the Company other than for
cause.
(e) The Company shall make the following payments in a
timely manner:
i) The payments to Xxxxxxx Xxxxxx Management,
Inc. including payments for the generator and
the phone system used at the Company's
Groveland, Florida facility;
ii) Rent or lease payments to PACT Leasing in
California, to Wisconsin Pacific and to
Xxxxxxx X. Xxxxxx in Madison, Alabama;
iii) Payroll obligation of the Xxxxxxx Xxxxxx Group
division of Transit Group Transportation, LLC
as to the Sellers;
iv) Payments under the promissory notes made by
the Company and held by Xxxxxxx X. Xxxxxx,
Xxxxxx X. Xxxxxx, Xxxxxxx X. Xxxxxx, Xxxxxxx
X. Xxxxxx and Xxxxxxx Xxxxxx;
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v) Reimbursement of all expenses, including
automobile expenses, to the Sellers as
required under their respective employment
agreements with Transit Group Transportation,
LLC;
vi) Premiums on certain life insurance policies on
the lives of Xxxxxxx X. Xxxxxx, Xxxxxx X.
Xxxxxx, Xxxxxxx X. Xxxxxx and Xxxxxxx X.
Xxxxxx; and
vii) Payment of amounts deducted from the salaries
of Xxxxxxx X. Xxxxxx, Xxxxxx X. Xxxxxx,
Xxxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxx to the
Xxxxxxx Xxxxxx Irrevocable Trust.
8. Further Assurances. The Sellers from time to time after the date
hereof, at the request of the Company or Xxxxx and without further
consideration, shall promptly take such actions as may be required to remove any
and all liens on and encumbrances to the title of the Purchased Shares which
arose prior to the transfer thereof pursuant to this Agreement, and to otherwise
more effectively transfer to the Company or Xxxxx of good and marketable title
to the Purchased Shares, free and clear of any and all liens, claims and
encumbrances.
9. Miscellaneous. This Agreement contains the entire understanding
between the parties hereto with respect to the matters contained herein, the
purpose of which is to implement and amend the provisions of Section 2.9 of the
Reorganization Agreement, which shall remain in full force and effect and
unchanged, except as expressly hereby modified. This Agreement shall be governed
by and construed in accordance with the laws of the State of Florida. Sections
4, 5, 6 and 7 shall survive the purchase and sale of the Purchased Shares as set
forth herein. This Agreement shall be binding upon each of the parties hereto
and their respective successors, heirs and assigns. The captions are for
convenience only and shall not affect interpretation herein.
10. Notices. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
given when (a) delivered by hand (with written confirmation of receipt), (b)
sent by telecopier (with written confirmation of receipt), provided that a copy
is mailed by registered mail, return receipt requested, or (c) when received by
the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested), in each case to the appropriate addresses and telecopier
numbers set forth below (or to such other addresses and telecopier numbers as a
party may designate by notice to other parties):
Sellers: Xxxxxx X. Xxxxxx
0000 Xxxxxx Xxxx Xxxx
Xxxxxxxxx, Xxxxxxx 00000
Xxxxxxx X. Xxxxxx
00000 Xxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
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Xxxxxxx Xxxxxx
00000 Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxx 00000
Xxxxxxx X. Xxxxxx
00000 Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxx 00000
Xxxxxxx X. Xxxxxx
00000 Xxxxxxxxxxx Xxxx
Xxxxxx, Xxxxxxx 00000
With a
copy to: Xxxxxxx X. Xxxxxx, Esquire
000 X Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile (000) 000-0000
Xxxxx: T. Xxxxx Xxxxx
0000 Xxx Xxxxx Xxxxxxxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Facsimile (000) 000-0000
With a
Copy to: Xxxxxx Xxxxxxxx, Esquire
LeBoeuf, Lamb, Xxxxxx & XxxXxx, LLP
00 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxxxx, Xxxxxxx 00000-0000
Facsimile (000) 000-0000
Company: Transit Group, Inc.
Overlook III
Suite 1740
0000 Xxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
With a
copy to: G. Xxxxxx Xxxxxxx, Esquire
Womble, Carlyle, Xxxxxxxxx & Rice, PLLC
One Atlantic Center, Suite 3500
0000 X. Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile (000) 000-0000
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11. Attorney's Fees. In the event that any legal action is
instituted by the Company against the Seller or the Seller against the Company
to enforce the terms of this Agreement, the prevailing party shall be entitled
to its attorney's fees, costs and expenses incurred in connection with said
action, which shall include reasonable attorneys' fees through the appellate
process.
12. Default. In the event any installment payment or interest
payment pursuant to paragraphs two (2) and three (3) hereof or any other payment
pursuant to paragraph 7(e) is not made within ten (10) days of the due date
thereof, and such default shall continue for five (5) days after receipt by the
Company of Notice of Default given pursuant to paragraph ten (10) hereof, then
all remaining unpaid amounts due pursuant to paragraphs two (2) and three (3)
hereof shall be accelerated and shall become immediately due and payable in
full.
13. Change of Control of the Company. In the event the Company
completes (A) any sale, lease, exchange or other transfer of all or
substantially all of the property and assets of the Company, (B) any merger or
consolidation which the holders of the voting securities of the Company
immediately prior thereto own less than a majority of the outstanding voting
securities of the surviving entity immediately following such transaction or
100% of the issued and outstanding stock of the Company is sold in a transaction
or series of transactions, then all remaining unpaid amounts due pursuant to
paragraphs 2 and 3 hereof shall be accelerated and shall become immediately due
and payable.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties have hereunto affixed their hands
and seals as of the date first above written.
COMPANY:
TRANSIT GROUP, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, President
XXXXX:
/s/ T. Xxxxx Xxxxx
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T. Xxxxx Xxxxx
SELLERS:
/s/ Xxxxxxx X. Xxxxxx
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XXXXXXX X. XXXXXX
/s/ Xxxxxx X. Xxxxxx
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XXXXXX X. XXXXXX
/s/ Xxxxxxx X. Xxxxxx
-----------------------------------------------
XXXXXXX X. XXXXXX
/s/ Xxxxxxx Xxxxxx
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XXXXXXX XXXXXX
/s/ Xxxxxxx X. Xxxxxx
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XXXXXXX X. XXXXXX
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