1
EXHIBIT 4(e)
STOCK PURCHASE AND STANDSTILL AGREEMENT
STOCK PURCHASE AND STANDSTILL AGREEMENT dated as of March 22, 1999,
among Solidus, LLC, a Tennessee limited liability company (the "Purchaser"), and
▇. ▇▇▇▇▇▇▇▇▇'▇ Corporation, a Tennessee corporation (the "Company").
The Company wishes to sell to the Purchaser, and the Purchaser wishes
to purchase from the Company, 1,086,266 authorized and unissued shares (the
"Shares") of Common Stock, $.05 par value, of the Company (the "Common Stock").
The parties hereto agree as follows:
ARTICLE I. STOCK PURCHASE
1. On the terms and subject to the conditions herein set forth, the
Company will issue and sell the Shares to the Purchaser for an aggregate cash
purchase price of $4,073,497.50, payable to the Company in immediately available
funds.
2. The Company represents and warrants to the Purchaser as follows:
(A) The Company has been duly formed and is validly existing
as a corporation under the laws of the State of Tennessee;
(B) The Company has full legal right, power and authority to
enter into this Agreement and to issue, sell and deliver the Shares to
the Purchaser. Upon payment therefor in accordance with the terms of
this Agreement, the Shares will be duly authorized, validly issued,
fully paid and nonassessable.
(C) The Company and its Board of Directors have approved the
acquisition of the Shares by Purchaser for purposes of T.C.A.
ss. 48-103-205(1).
(D) The Company and its Disinterested Directors have approved
the acquisition of the Shares by Purchaser for purposes of Article 29
of the Company's Bylaws.
(E) The Company and its Board of Directors have duly adopted
the Amendment to the Rights Agreement set forth as Exhibit A hereto.
(F) Within five days following the closing, the Company will
file a registration statement relating to an offering to its common
shareholders pursuant to which the holder of each share shall be
granted the nontransferable right to purchase 0.2 share of the
Company's Common Stock at $3.75 per share for each share owned on April
5, 1999.
2
3. The Purchaser represents and warrants to the Company:
(A) It is purchasing the Shares for investment only and not
with a view to the distribution thereof.
(B) It will not exercise the rights received by it in the
Company's offering referred to in Paragraph 2 (F) with respect to the
Shares acquired pursuant to this Agreement.
ARTICLE II. STANDSTILL AGREEMENT
For purposes of this Article: "Purchaser" means Solidus, LLC, a
Tennessee limited liability company, its affiliates, its subsidiaries, and other
corporations, entities and persons under its direct or indirect control or under
common control or acting on its behalf or in concert with it; and "Voting
Securities" means Common Stock and any other securities of the Company entitled
to vote generally for the election of directors.
1. The Purchaser covenants and agrees as follows:
(A) For a period beginning on the date of this Agreement and
ending on the seventh anniversary date hereof, the Purchaser will not,
without the prior consent of the Company's Board of Directors
specifically expressed in a resolution adopted by a majority of the
directors of the Company who are not employees, directors or designees
of the Purchaser:
(1) acquire, directly or indirectly, by purchase or
otherwise, any Voting Securities, if after such acquisition
the Purchaser would hold beneficially or of record in the
aggregate more than 33.0% of the Voting Securities then
outstanding;
(2) solicit proxies with respect to Voting Securities
under any circumstances; provided however, that this
prohibition shall not apply to a solicitation made by the
Company's Board of Directors if an affiliate or designee of
the Purchaser is a member of the Company's Board of Directors;
(3) deposit any Voting Securities in a voting trust
or any similar arrangement; or
(4) sell, transfer or otherwise dispose of any Voting
Securities, except:
(a) to the Company or to any person,
corporation, entity or group approved by the Company;
or
(b) to any affiliate, subsidiary or entity
under the direct or indirect
2
3
control of, or under common control with, the
Purchaser.
(B) The restrictions set forth in Paragraph (A) (1) and (A)
(2) hereof shall terminate if:
(1) At any time, any corporation, entity, person or
group (other than the Company) makes a tender or exchange
offer to holders of Voting Securities which, if successful,
would result in such person holding in excess of 10% of the
outstanding Voting Securities. For purposes of this Paragraph
(B) (1) a tender or exchange offer shall be deemed to have
been made when (but not before) offering documents are first
published, sent or given to holders of Voting Securities.
(2) At any time, any corporation, entity, person or
group other than the Purchaser files:
(a) A notice under Section 7A of the ▇▇▇▇▇▇▇
Act relating to the intention to acquire more than
15% of the outstanding Voting Securities, or
(b) a Schedule 13D under the Securities
Exchange Act of 1934 (the "Exchange Act") relating to
the acquisition of more than 10% of the outstanding
Voting Securities.
(3) At any time the Company proposes, authorizes or
adopts a merger, consolidation, sale of all or substantially
all its assets or other transaction or series of transactions
pursuant to which shareholders of the Company would receive
for their shares securities of one or more entities or cash or
property or some combination thereof; provided, however, that
this subparagraph (3) shall not apply to a plan of complete
liquidation adopted by the shareholders of the Company.
(4) During any period of two consecutive years,
individuals who at the beginning of any such two-year period
constituted the Board of Directors of the Company cease to
constitute at least a majority thereof. However, if the
election, or nomination for election by the Company's
shareholders, of a director of the Company first elected
during such period was approved by a vote of at least
two-thirds of the directors of the Company then still in
office who were directors of the Company at the beginning of
such period, then such new director will be treated as if he
were an individual who served at the beginning of the two-year
period for purposes of the determination made in the preceding
sentence.
3
4
2. The Company covenants and agrees as follows:
(A) The Company will not interpose any objection or take any
legal action as a plaintiff in connection with the acquisition by the
Purchaser of up to 33.0% of the Voting Securities.
(B) The Company agrees to give the Purchaser prompt notice of
the receipt of (i) any written notice from any corporation, entity,
person or group couched in such terms as to put the Company reasonably
on notice of the likelihood that such corporation, entity, person or
group will seek to acquire more than 10% of the outstanding Voting
Securities, (ii) any notice under Section 7A of the ▇▇▇▇▇▇▇ Act and
(iii) any Schedule 13D under the Exchange Act.
3. (A) The Purchaser agrees to the placement on the
certificate(s) representing any Voting Securities owned by the
Purchaser of the following legend:
"The shares represented by this certificate or any certificate
issued in exchange therefor are subject to restrictions on
sale or transfer as set forth in a certain agreement dated
March 22, 1999, between the holder hereof and ▇. ▇▇▇▇▇▇▇▇▇'▇
Corporation."
4. It is agreed that each party shall be entitled to an inunction
or injunctions to prevent breaches of this Agreement and to specifically enforce
the terms and provisions thereof in any action instituted in any court of the
United States or any state thereof having subject matter jurisdiction, in
addition to any other remedy to which such party may be entitled, at law or in
equity.
ARTICLE III. GENERAL.
1. This Agreement may not be assigned by any party hereto.
2. This Agreement may be executed in counterparts and each such
counterpart shall be deemed to be an original instrument.
3. This Agreement, including the exhibits and other documents referred
to herein or delivered pursuant hereto, contains the entire understanding of the
parties with respect to its subject matter. This Agreement supersedes all prior
agreements and understandings between the parties with respect to its subject
matter.
4. This Agreement shall be governed by and construed in accordance with
the laws of the State of Tennessee.
4
5
SOLIDUS, LLC
By: /s/ E. ▇▇▇▇▇▇ ▇▇▇▇▇▇, Chief Manager
---------------------------------------
▇. ▇▇▇▇▇▇▇▇▇'▇ CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ ▇▇, President & CEO
---------------------------------------
5
