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EXHIBIT 1
STATE OF NORTH CAROLINA REDEMPTION AGREEMENT
COUNTY OF CATAWBA
THIS REDEMPTION AGREEMENT, dated as of August 27, 1997, among Xxxxx X.
Xxxxxxxxx, a resident of Martinsville, Virginia (herein "Shareholder") and RSH
Management, Inc., a North Carolina corporation (herein "RSH") and HERTH
Management, Inc., a North Carolina corporation (herein "HERTH"). RSH and HERTH
are sometimes referred to collectively herein as the "Corporations."
WITNESSETH:
WHEREAS, Shareholder is the owner of One Hundred Eleven Thousand One
(111,001) shares (the "Shares") of common stock of RSH; and
WHEREAS, Shareholder desires to sell and RSH desires to redeem all
shares of stock of RSH owned by Shareholder in accordance with the terms of this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, the parties agree as follows:
1. Purchase of Stock. At Closing (as defined below), Shareholder
shall sell, assign, transfer and deliver to RSH, and RSH shall accept and
redeem the Shares.
2. Redemption Price/Terms of Payment. The redemption price for the
Shares shall be Two Hundred Fifty Thousand and No/100 Dollars ($250,000.00).
Payment shall be by delivery at Closing of a promissory note from RSH in the
form attached as Exhibit A and guaranteed by HERTH as the parent of RSH and the
individuals joining herein (the "Guarantors").
3. Representations and Warranties of Shareholder. Shareholder
represents and warrants to RSH as follows:
(a) Title to Shares: Shareholder is the owner of the Shares,
free and clear of any liens, encumbrances, and charges, and
has full power to sell and transfer the Shares.
(b) Authority. The Shareholder has full right, power, capacity
and authority to enter into this Agreement and to perform his
obligations under this Agreement. This Agreement is legal,
valid and binding upon the Shareholder and is enforceable
against him in accordance with its terms. Neither the
execution and delivery of this Agreement nor the consummation
by the Shareholder of the transactions contemplated herein
violates or will
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violate, or conflicts with or will conflict with or
constitutes a default under, any contract, commitment, lease,
agreement, understanding, arrangement, or restriction of any
kind to which the Shareholder is a party, or by which the
Shareholder or his properties may be bound.
(c) Litigation; Impairment. There are no legal proceedings
pending against or threatened against the Shareholder, which,
if adversely determined, could, in any respect, prevent or
impair the ability of the Shareholder to perform the
obligations of the Shareholder under this Agreement. No
matters (individually or in the aggregate) exist, or (so far
as the Shareholder can foresee) may reasonably be expected to
exist which prevent or impair the ability of the Shareholder
to perform his obligations under this Agreement.
(d) Disclosure. No representation or warranty made by the
Shareholder in this Agreement contains any untrue statement of
a material fact, or omits to state a material fact with
respect to the required subject matter thereof which is
necessary to prevent any such information contained therein in
the aggregate from being materially misleading.
(e) WS Partners. The Shareholder does not have any direct or
beneficial interest in WS Partners, a North Carolina
partnership, and to his knowledge, WS Partners was dissolved
and all assets and liabilities thereof collapsed and
transferred into RSH.
4. Representations and Warranties of RSH. RSH represents and
warrants to Shareholder as follows:
(a) Authority. RSH has full right, power, capacity and
authority to enter into this Agreement and to perform the
obligations of RSH under this Agreement. This Agreement is a
legal, valid and binding obligation of RSH and is enforceable
against RSH in accordance with its terms. Neither the
execution and delivery of this Agreement by RSH, nor the
consummation by RSH of the transactions contemplated herein
violates or will violate, or conflicts with or will conflict
with, or constitutes a default under, any contract,
commitment, lease, agreement, understanding, arrangement,
restriction of any kind to which RSH is a party, or by which
RSH or its properties may be bound.
(b) Litigation; Impairment. There are no legal proceedings
pending against or threatened against RSH, which, if adversely
determined, could, in any respect,
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prevent or impair the ability of RSH to perform the
obligations of RSH under this Agreement. No matters
(individually or in the aggregate) exist, or (so far as RSH
can foresee) may reasonably be expected to exist which prevent
or impair the ability of RSH to perform its obligation under
this Agreement.
(c) Disclosure. No representation or warranty made by RSH in
this Agreement contains any untrue statement of material fact,
or omits to state a material fact with respect to the required
subject matter thereof which is necessary to prevent any such
information contained therein in the aggregate from being
materially misleading.
(d) Principals. The principals of RSH are involved in the
executive management of WSMP, Inc. ("WSMP") and/or RSH and
HERTH.
5. Capacity. The Shareholder acknowledges that he is not an
officer or director of RSH.
6. Disclosure. The stock registry of HERTH and RSH reflects:
(i) that HERTH is the parent corporation of RSH and owns 8,139,930 shares of
validly issued and non-accessible RSH shares of the total outstanding 8,668,699
common shares of RSH, and (ii) that the shareholders of the Corporations are as
set forth on Exhibit B attached. The stock registry of WSMP reflects that the
Corporations own validly issued and registered shares in WSMP as follows: HERTH
(300,923) and RSH (918,312). Each party does acknowledge that the Corporations
have taken certain action due to debt and financing considerations with regard
to the WSMP shares, including various intercompany loans between HERTH and RSH,
stock issuances by RSH in cancellation of indebtedness due HERTH, and outside
loans through and guaranteed by the various shareholders and related parties of
the Corporations which has affected the existing corporate structure and
ownership of shares of HERTH and RSH. RSH further represents and warrants that
the heavy debt structure of the Corporations as a result of acquiring and
carrying the investment of the Corporations in the WSMP shares has created and
continues to create a substantial cash flow burden on the Corporations. RSH
further represents and warrants that as a result of such burden that management
of the Corporations has in the past and continues in the present to actively
pursue negotiations for the disposition of the WSMP shares owned by HERTH and
RSH. RSH represents that management of WSMP is continually reviewing various
options including corporate restructures and mergers which may substantially
increase the value of WSMP shares held by its shareholders. RSH further
represents that management of HERTH and RSH is continually reviewing options to
dispose and liquidate the shares of WSMP held by the Corporations with the
expressed intent to do so within the near future in order to eliminate the WSMP
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acquisition debt burdens on HERTH and RSH. Although there are occasional
expressions of intent and interest in, and preliminary discussions in regard to,
the block of WSMP shares held by RSH and HERTH, RSH warrants and represents that
no definitive agreement is pending or outstanding with regard to the disposition
of such shares owned by the Corporations. However, it is RSH's intent that
management of the respective Corporations will continue to solicit and seek
opportunities to dispose of the WSMP shares, and at a price in excess of current
market value, in order to retire the aforesaid debts. It is a principal purpose
of this acquisition to afford RSH in conjunction with its principals the
opportunity to further consolidate control of HERTH and RSH in order to
facilitate such disposition of the WSMP shares. The Shareholder hereby
acknowledges and understands that it is the intent of the principal shareholders
of RSH and HERTH to consolidate control of the Corporations for the primary
purpose of facilitating the disposition of the WSMP shares controlled by the
Corporations, said disposition intended to be at a level in excess of the
current market value.
7. Release/Hold Harmless. Effective as of Closing, and as an inducement
to RSH to enter into this transaction, and in consideration of the transaction
contemplated herein, and other consideration of legal sufficiency, the receipt
of which is hereby acknowledged, the undersigned Shareholder, for himself, his
heirs and assigns, does release and forever discharge RSH and HERTH, their
respective officers, directors, agents, and shareholders, from all liabilities,
claims, demands, shareholder or derivative actions, and charges of every nature,
including attorneys fees, whatsoever in law or in equity, which the Shareholder,
his heirs or assigns, can, shall, or may have by any reason or transaction or
act or omission, whether authorized or unauthorized, prior to the date hereof,
provided, nothing herein shall be deemed a release of HERTH or RSH from any
rights of contribution, subrogation, or indemnity due to the Shareholder as a
result of being a guarantor of any of the obligations or liabilities of the
Corporations.
The Corporations expressly agree to assume, indemnify and hold harmless
the Shareholder from any liability or obligation of the Corporations of which
the Shareholder is an endorser, co-obligor, or guarantor, and from any liability
or obligation of any nature, known or unknown, growing out of his having been a
shareholder, partner, director, officer, or employee of RSH Management, Inc., WS
Partners, WSMP, Inc. or any affiliate thereof.
8. Confidentiality. The terms and conditions of this Agreement shall be
kept confidential by the parties and their representatives unless disclosure is
required by a law or order of any governmental agency, provided, that prior to
any forced disclosure, the disclosing party shall provide written notice to the
other party to provide the other party with the opportunity to contest such
disclosure or to apply for an injunction restraining
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the disclosure, in whole or in part. Nothing herein shall be construed as
prohibiting the nondisclosing party from pursuing any other available remedy for
such breach or threatened breach of this provision, including without
limitation, the recovery of damages. For purposes of this provision,
"representatives" means attorneys, accountants, bankers, appraisers, advisers or
other consultants engaged by any of the parties hereto for the purpose of giving
advice or counsel with regard to this Agreement.
9. Closing. Such closing of the transaction described herein (the
"Closing") shall take place at such time and place as the parties may mutually
agree on or before August 27, 1997.
(a) Shareholder shall deliver the Shares with stock powers
attached sufficient to transfer title on the books of RSH.
(b) RSH shall deliver the payment due at Closing and referred
to in Section 2.
10. Miscellaneous.
(a) Survival of Representations and Warranties. All
representations, warranties, releases, covenants and agreement
made in this Agreement, or in the certificates or instruments
delivered pursuant hereto, or in connection herewith shall
survive the Closing.
(b) Time of the Essence; Extensions. Time is of the essence in
the performance of this Agreement. The parties hereto may,
solely by written agreement, extend the time for the
performance of any of the obligations or other acts of the
parties hereto; provided, however, no party hereunder shall
have any obligation whatsoever to grant any extension. Any
agreement on the part of a party for any such extension,
modification or waiver shall be validly and sufficiently given
and authorized for the purpose of this Agreement only if given
in writing appropriately signed by such party and delivered to
the other party hereto.
(c) Entire Agreement; Amendment. This Agreement contains the
entire agreement between the parties relating to the subject
matter hereof and supersedes any prior agreement, arrangement,
and understanding between the parties regarding the subject
matter hereof. No representation, warranty, covenant,
obligation, promise, inducement, or statement of intention has
been made which is not expressed in this Agreement. This
Agreement may be amended or changed only by written instrument
duly executed by the parties, and any alleged amendment or
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change which is not so documented shall not be effective
as to the parties.
(d) Captions. The section and subsection headings appearing in
this Agreement are for convenience of reference only and are
not intended to any extent, or for any purpose, to limit or
define the text of any section or subsection hereof.
(e) Specific Performance. The parties hereto acknowledge that
the subject matter of this Agreement is unique and is not
susceptible to an adequate remedy at law. It is therefore
expressly agreed that upon the failure of either party to
perform, enforcement of this Agreement may be had under the
laws of equity in the manner of specific performance.
(f) Multiple Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall be an original,
but all of which shall constitute but one instrument.
(g) Benefit and Survival of Rights. This Agreement and any
amendments, alterations, modifications, additions or
qualifications hereto relating shall be binding upon and inure
to the benefit of the parties to this Agreement, their
legatees, devisees, personal and legal representatives,
successors and/or assigns.
(h) Further Assurances. Each party hereto covenants and agrees
that, from time to time after the Closing, it shall deliver
such instruments and take such other action as may be
reasonably necessary to perfect the transactions contemplated
hereunder.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed in accordance with law, all as of the day and year first above written.
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SHAREHOLDER:
Xxxx X. Xxxxxxxx Xxxxx X. Xxxxxxxxx (SEAL)
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Witness Xxxxx X. Xxxxxxxxx
RSH:
RSH MANAGEMENT, INC.
By: Xxxxx X. Xxxxxxxxxx, Xx.
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Xxxxx X. Xxxxxxxxxx, Xx.,
President
ATTEST:
Xxxxx X. Xxxxxxxxx
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Asst. Secretary
(CORPORATE SEAL)
HERTH MANAGEMENT, INC.
By: Xxxxx X. Xxxxxxxxxx, Xx.
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Xxxxx X. Xxxxxxxxxx, Xx.,
President
ATTEST:
Xxxxx X. Xxxxxxxxx
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Asst. Secretary
(CORPORATE SEAL)
GUARANTORS:
Xxxxx X. Xxxxxxxxxx, Xx. (SEAL)
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Xxxxx X. Xxxxxxxxxx, Xx.
Xxxxx X. Xxxxxxxxx (SEAL)
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Xxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxx (SEAL)
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Xxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxx (SEAL)
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Xxxxx X. Xxxxxx
Xxxxx X. Xxxxx (SEAL)
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Xxxxx X. Xxxxx
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