EXHIBIT 10.5
STATE OF NORTH CAROLINA
STOCKHOLDERS' AGREEMENT
COUNTY OF MECKLENBURG
THIS STOCKHOLDERS' AGREEMENT (the "Agreement") is executed effective as
of the 29th day of May, 1997, between and among XXXXXX X. XXXXXXX, a resident of
the State of North Carolina ("Xxxxxxx"), XXXXXX X. XXXXXX, a resident of the
State of North Carolina ("Xxxxxx"), XXXXXXX X. XXXXX, a resident of the State of
Virginia ("Antis"), (Xxxxxxx, Xxxxxx and Xxxxx hereinafter sometimes referred to
jointly as the "Stockholders" and singularly as "Stockholder"), and HLM OF NORTH
CAROLINA, P.C., a North Carolina professional corporation with its principal
office in Mecklenburg County, North Carolina (the "Corporation").
W I T N E S S E T H:
WHEREAS, Xxxxxxx is a certified public accountant duly licensed by the
State of North Carolina, and owns one-third (1/3) of the issued and outstanding
common stock of the Corporation (the "Xxxxxxx Shares"); and
WHEREAS, Xxxxxx is an architect duly licensed by the North Carolina
Board of Architects, and owns one-third (1/3) of the issued and outstanding
common stock of the Corporation (the "Xxxxxx Shares"); and
WHEREAS, Antis is an engineer duly licensed by the North Carolina State
Board of Registration for Professional Engineers and Land Surveyors, and owns
one-third (1/3) of the issued and outstanding common stock of the Corporation
(the "Antis Shares"); and
WHEREAS, the Xxxxxxx Shares, the Xxxxxx Shares and the Antis Shares
collectively constitute all of the currently issued and outstanding common stock
of the Corporation (the Xxxxxxx Shares, the Xxxxxx Shares and the Antis Shares
being sometimes referred to individually and collectively hereinafter as the
"Stock"); and
WHEREAS, the Stockholders believe it to be for their best interests and
for the best interests of the Corporation to provide for the purchase by the
Corporation of a Stockholder's Stock upon his death; and
WHEREAS, the Stockholders believe it to be for their best interests and
for the best interests of the Corporation to restrict the transferability of the
Stock as provided in this Agreement; and
WHEREAS, the Stockholders believe it to be for their best interests and
for the best interests of the Corporation that the
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Corporation have the ability to call the Stock of the Stockholders as provided
in this Agreement; and
WHEREAS, the Stockholders believe it to be for their best interests and
for the best interests of the Corporation that the Stockholders act with unity
with respect to all matters of the Corporation which are submitted to the
Stockholders for approval, both in their capacity as stockholders and as
Directors of the Corporation.
NOW, THEREFORE, in consideration of the premises and the mutual
promises of the parties hereto and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Stock Transfer Restrictions. The Stockholders agree that no shares
of the Stock shall be transferred except pursuant to and in compliance with the
provisions of this Agreement. Transfers made in contravention hereof shall be
void and shall not be recognized by the Corporation. No Stockholder may pledge
or encumber all or any portion of the Stock without the prior written approval
of the Corporation.
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2. Obligatory Purchase Upon Death. Upon the death of a Stockholder, the
Corporation shall purchase, and the personal representative of the decedent's
estate shall sell to the Corporation, all of the Stock owned by the deceased
Stockholder at the time of his death, at such price as is determined in
accordance with the provisions of Paragraph 5 and upon the terms and conditions
of Paragraph 6 hereof. In the alternative, the deceased Stockholder's personal
representative may propose a sale of the decedent's Stock to one (1) or more
third parties, subject to the Corporation's approval thereof as provided in
Paragraph 3 hereof.
3. Third Party Transfers.
(a) Notice of Intent to Transfer. No Stockholder may sell,
pledge, give, or otherwise transfer (collectively, "Transfer") any or
all of his Stock to any third party, whether voluntarily or
involuntarily, without first obtaining the Corporation's written
approval of such transfer. In the event a Stockholder desires to
Transfer any or all of his Stock to a third party, he shall first
provide the Corporation with written notice of such proposed Transfer,
delivered in the manner provided herein (the "Transfer Notice"), naming
the proposed third party
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transferee and all transfer terms, including, without way of
limitation, any proposed purchase price and terms.
(b) Approval or Denial of Proposed Transfer. The Corporation
shall have the absolute discretion to approve or deny all or any part
of any proposed Transfer (a "Stock Transfer"). The Corporation's
approval or denial of a proposed Transfer shall be communicated in
writing to the Stockholder proposing such Transfer within thirty (30)
days following the Corporation's receipt of the Transfer Notice.
(c) Purchase by Corporation. In the event the Corporation
denies or fails to approve as provided above a proposed Transfer to a
third party of all or any portion of a Stockholder's Stock, then the
Corporation shall purchase such Stock at such price as is determined in
accordance with the provisions of Paragraph 5 and upon the terms and
conditions of Paragraph 6 hereof.
4. Corporation's Right to Call. The Corporation shall have the right at
any time to purchase ("Call") all, but not less than all, of the Stock then
owned by any or all of the Stockholders, at such purchase price as is determined
in accordance with the provisions of Paragraph 5 and upon the terms and
conditions of
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Paragraph 6 hereof. The Corporation shall exercise its right to Call (a "Stock
Call") a Stockholder's Stock by way of written notice to such Stockholder (the
"Call Notice"), delivered in the manner provided herein.
5. Purchase Price. The purchase price per share with respect to any and
all purchases by the Corporation of a Stockholder's Stock hereunder shall be the
Stockholder's adjusted cost basis per share of such Stock, as determined by the
Corporation in its sole discretion (the "Purchase Price").
6. Payment of Purchase Price.
(a) Closing. The closing (the "Closing") for the purchase of
the Stock of a Stockholder disposing of the same under this Agreement
shall occur within sixty (60) days after (i) the qualification of such
Stockholder's personal representative, in the event of a purchase
following a Stockholder's death (but in no event later than one (1)
year following the date of death), (ii) the delivery date of a
Stockholder's Transfer Notice, in the event of a purchase following the
Corporation's denial of or failure to approve a proposed Transfer by
such Stockholder, or (iii) the delivery date of a Call Notice, in the
event of a Call by the Corporation.
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(b) Delivery of Promissory Note. At the option of the
Corporation, the Purchase Price shall be paid in good funds at the
Closing or by the delivery of the Corporation's promissory note in the
amount of the Purchase Price for such Stock, payable to the order of
the selling Stockholder or his estate, as the case may be (the
"Purchase Note"). The Purchase Note shall be due and payable in sixty
(60) consecutive, equal, monthly installments, together with interest
at the minimum annual rate allowable under the provisions of the
Internal Revenue Code then in effect to prevent imputed interest,
original issue discount or unstated interest. The first such
installment of the Purchase Note shall be due thirty (30) days from the
date of Closing and the remaining installments shall be due on the same
date of each month thereafter until principal and interest shall be
fully paid. The Purchase Note shall be prepayable at any time and from
time to time in whole or in part, without penalty or unaccrued
interest, at the option of the Corporation.
(c) Transfer of Title. Upon receipt of the Purchase Note, the
selling Stockholder or his personal representative, as the case may be,
shall deliver to the
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Corporation the certificate(s) for the purchased Stock and such other
instruments as are necessary and proper to transfer full and complete
title thereto and said selling Stockholder or his estate shall
thereafter have no further interest in the Corporation.
7. Assignment of Rights to HLM Design, Inc. The parties acknowledge
that it is in the parties' best interests that certain of the Corporation's
administrative and managerial functions be performed by an outside managerial
entity with established expertise in the Corporation's fields of endeavor, and
that toward such end the Corporation has entered into a Management and Services
Agreement with HLM Design, Inc., a Delaware corporation ("HLM Design") for the
provision of such services. The parties further acknowledge and agree that in
order to assure consistency and continuity in the management of the
Corporation's business and affairs, that with respect to all matters pertaining
to the initiation of Stock Calls or the approval or denial of proposed Stock
Transfers, the Corporation shall in all cases act in accordance with the written
recommendations of HLM Design.
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8. Endorsement on Certificates. Upon the execution of this Agreement,
the certificates of Stock subject hereto shall be surrendered to the Corporation
and endorsed as follows:
"This certificate is transferable only upon compliance with
the provisions of a Stockholders' Agreement dated as of the
29th day of May, 1997, between and among the Corporation and
certain of its stockholders, a copy of which is on file in the
office of the Secretary of the Corporation."
After endorsement, the certificates shall be returned to the
Stockholders, who shall, subject to the terms of this Agreement, be entitled to
exercise all rights of ownership of such Stock.
9. Unity in Voting. The Stockholders each agree that with respect to
all matters which are submitted to stockholder vote (and, to the extent that all
or any of the three Stockholders serve in the capacity of Directors, then also
with respect to all matters which are submitted to Director vote), prior to
casting any vote with respect to any such matter, the Stockholders shall first
notify one another of their respective voting intentions. No Stockholder shall
be permitted to abstain from voting unless required by the provisions of the
Corporation's bylaws or applicable law, such as, for example, in the event of a
conflict of interest. In the event the Stockholders are not in unanimous
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agreement with respect to any particular matter to be voted upon, then the vote
of two-thirds (2/3) of the Stockholders shall be deemed to be the agreed upon
vote of all of the Stockholders, and the Stockholder who is not in agreement
with the other two (2) shall nevertheless cast all of his votes in unity
therewith.
10. Termination. This Agreement shall terminate upon the occurrence of
any of the following events:
(a) Cessation of the Corporation's business;
(b) Bankruptcy, receivership or dissolution of the
Corporation; or
(c) The voluntary agreement of all parties who are then bound
by the terms hereof.
Upon the termination of this Agreement, each Stockholder shall
surrender to the Corporation the certificates for his Stock and the Corporation
shall issue to such Stockholder, in lieu thereof, new certificates for an equal
number of shares without the endorsement set forth in Paragraph 8 hereof.
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11. Notices. All notices, offers and acceptances or rejections thereof
required to be given hereunder, shall be given by certified mail to the parties
hereto at the addresses listed below, or at such other address as may be stated
from time to time, and shall be deemed delivered upon deposit in the United
States mail, postage prepaid:
To the
Corporation: HLM of North Carolina, P.C.
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX 00000
ATTN: Xxxxxx X. Xxxxxxx
With a Copy to: Xxxxxxx X. Xxxx, Esq.
Xxxxxxxxx Xxxxxx Xxxxxx & Xxxxxx, P.A.
0000 Xxxxxxxxx Xxxxx
000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
To Xxxxxxx: Xxxxxx X. Xxxxxxx
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
To Xxxxxx: Xxxxxx X. Xxxxxx
00000 Xxxxxxx Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
To Antis: Xxxxxxx X. Xxxxx
0000 Xxxxxxxxxxx Xxxx
Xxxxxx, XX 00000
12. Binding Effect. This Agreement shall be binding not only upon the
parties hereto, but also upon their heirs,
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executors, personal representatives, successors and/or permitted assigns; and
the parties hereby agree for themselves and their heirs, executors, personal
representatives, successors and/or permitted assigns, to execute any instruments
and to perform any acts which may be necessary or proper to carry out the
purposes of this Agreement. This Agreement may be amended or modified only by a
unanimous vote of all parties then bound hereunder.
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13. Applicable Law. This Agreement shall be governed by
the laws of the State of North Carolina and constitutes the
entire agreement between the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed and sealed, effective as of the day and year first above written.
/s/ Xxxxxx X. Xxxxxxx
____________________________(SEAL)
XXXXXX X. XXXXXXX
/s/ Xxxxxx X. Xxxxxx (SEAL)
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XXXXXX X. XXXXXX
/s/ Xxxxxxx X. Xxxxx (SEAL)
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XXXXXXX X. XXXXX
HLM OF NORTH CAROLINA, P.C.
By: /s/ Xxxxxx X. Xxxxxx
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President
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