1
EXHIBIT 10 (g)
SHARE REPURCHASE AND NON-COMPETITION AGREEMENT
THIS AGREEMENT is made as of this 1st day of February, 1998, by and
among XXXXX XXXXXXX ("Seller"), and SEL-DRUM IMAGING CORPORATION ("SDIC") and
SEL-DRUM INTERNATIONAL, INC. ("Sel-Drum"), a Colorado corporation with a
principal place of business at 000 Xxxxxxx Xxxxxx, Xxxxxxx, Xxx Xxxx 00000-0000
(Sel-Drum and SDIC are sometimes collectively referred to as the "Corporation"
or the "Group").
W I T N E S E T H
WHEREAS, Seller wishes to have certain shares of Common Stock in
Sel-Drum repurchased upon the terms and conditions set forth in this Agreement;
and
WHEREAS, the parties desire to enter into such other agreements as are
necessary as the result of the repurchase of Seller's interests;
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants hereinafter contained, the parties to this Agreement agree as follows:
1. REPURCHASE
(a) REPURCHASE OF SHARES. Upon the terms and conditions
hereinafter set forth, Seller will transfer and deliver to the Corporation
certificates representing 345,000 shares of Common Stock owned by Seller (the
"Shares"), all duly endorsed, or with stock powers duly executed and attached,
and the Corporation shall repurchase the Shares from Seller all pursuant to the
following Schedule:
(i) On August 1, 1998, Sel-Drum shall repurchase 100,000
shares of Common Stock held by Seller at $1.00 per share. If prior to August 1,
1998, a third-party purchases all or part of such shares from Seller at a price
of $1.00 per share or less, the Company shall be obligated only to make up the
difference between $100,000 ($1.00 x 100,000 shares) and the dollars paid to
Seller from such third-party purchaser.
(ii) Between August 1, 1998 and 1:00 p.m. Eastern Standard
Time August 1, 2000, the Company may purchase (but is not obligated to do
so) up to an additional 245,000 shares at $1.00 per share. If between August 1,
1998 and 1:00 p.m. Eastern Standard Time August 1, 2000 a third-party purchases
all or a part of the 245,000 shares remaining at a price of $1.00 per share or
less, the Company shall be obligated only to make up the difference between
$245,000 ($1.00 x 245,000 shares) and the dollars paid to Seller from such
third-party purchaser.
(iii) Between 1:01 p.m. Eastern Standard Time August 1,
2000 and August 1, 2001, any of the remaining 245,000 shares shall be purchased
by the Company at $2.00 per share. If prior to August 1, 2001 a third-party
purchases all or a part of the
2
remaining shares, the Company shall be obligated only to make up the difference
between the $2.00 per share price multiplied by the remaining shares and the
price paid by the third party for the remaining shares multiplied by the
remaining shares.
2. SELLER'S REPRESENTATIONS AND WARRANTIES
(a) STOCK OWNERSHIP. As of the date of this Agreement, Seller is
the lawful owner of record and beneficially of all of the Shares, free and clear
of all pledges, liens, encumbrances, claims, security interests and other
charges of any nature whatsoever, including without limitation any agreements,
subscriptions, options, warrants, calls, commitments or rights of any character
granting to any person, corporation or other entity any interest in, or right to
acquire from Seller at any time, or upon the happening of any stated event, any
shares of the outstanding capital stock of the Corporation owned by Seller.
Seller has the full legal power, authority and capacity required by law to
transfer and deliver the Shares of the Corporation in accordance with this
Agreement free and clear of all pledges, liens, encumbrances, claims, security
interests and other charges of any nature whatsoever.
(b) VALIDITY OF CONTEMPLATED TRANSACTION. Neither the execution
and delivery of this Agreement by Seller nor his consummation of the
transactions contemplated hereby will contravene or violate, be in conflict with
or result in the breach (with or without the giving of notice or lapse of time,
or both), of any term, condition, or provision of any note agreement,
instrument, indenture, contract, lease, agreement or other document or
understanding (written or oral) to which Seller is a party or by which he or any
of his properties or assets, including the Shares, may be bound or affected.
3. NON-COMPETE OF SELLER.
(a) During the continuance of this Agreement and for a period of
two years thereafter, the Seller shall not be directly or indirectly, engaged,
concerned or interested in any capacity in any other trade, business or
occupation or shall Seller be directly or indirectly engaged, nor shall Seller
be engaged in any business, occupation or other trade which competes with the
Company directly or indirectly, except:
(i) as the owner of securities which are held for
investment only, which are listed on a recognized stock exchange, and which do
not exceed five percent (5%) in nominal value of the securities of that class
("Approved Ownership"); or
(ii) with the prior written consent of the Company. A
request for such written consent shall include the detail of any proposed
concern and/or interest.
(b) During the term of the employment of the Seller with the
Company and at all times thereafter, the Seller shall keep confidential and
shall not at any time use, for his own or another's advantage or disclose to any
person, firm or company any trade secrets, business methods or confidential
information concerning the business, financial status or affairs of the
Company or any company in the Group, including but not limited to,
3
customer or supplier lists, trade processes or materials, price lists, pricing,
costings, new product or business plans ("Confidential Information") which may
have come to the Seller's knowledge during his employment hereunder provided,
however, this restriction shall not prevent:
(i) any disclosure or use authorized by the Board,
required by law, or made to enable the Seller to perform his duties hereunder,
or
(ii) the use of the personal skills of the Seller in any
business in which he may be lawfully engaged, subject to the terms of this
Paragraph 3, after termination of this Agreement; or
(iii) the use of Confidential Information that is in or
comes into the public domain in any way without breach of this Agreement by the
Seller.
(c) During the term of this Agreement and for the period ending
two (2) years after the actual date of termination of employment ("Covenant
Period"), the Seller shall not, whether alone or jointly with another, and
whether directly or indirectly, solicit or endeavor to entice away, knowingly
offer employment to, knowingly employ, or offer or conclude any contract for
services with, any person who is employed by the Company or any company in the
Group at the date of the termination of the Seller's employment and who has been
employed in skilled or managerial work at any time during the period of one (1)
year preceding the date of the termination of the Seller's employment by the
Company or any company in the Group.
4. CORPORATION'S REPRESENTATIONS AND WARRANTIES
(a) SEL-DRUM REPRESENTATIONS AND WARRANTIES. Sel-Drum represents
and warrants to Seller as follows:
(i) The corporation is a corporation duly incorporated,
validly existing and in good standing under the laws of the jurisdiction in
which it is incorporated and has all necessary corporate power, and is duly
authorized to carry out the transactions contemplated by this Agreement.
(ii) The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby will not violate or
conflict with any provisions of the Certificate of Incorporation or the By-laws
of either corporation or violate any order, judgment, award, decree or contract
or agreement of any kind or nature to which the Corporation is a party or is
subject.
(iii) The corporation has taken all action required by
law, its Certificate of Incorporation and its By-laws, or otherwise, to
authorize and approve the execution, delivery and performance of this Agreement.
- 3 -
4
(iv) The corporation has sufficient surplus as of the date
hereof so that payment can be made without violating any Corporate Law of any
jurisdiction requiring that Sellers' interest be redeemed only out of surplus.
5. CLOSING
Unless otherwise agreed upon in writing by the parties hereto,
the Closing shall take place on August 1, 1998 and each subsequent date as may
be agreed to by the parties at the Canadian offices of Sel-Drum International,
Inc., 0000 Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx X0X 0X0 (the "Closing").
6. CONDITIONS TO CLOSING. Prior to any of the closings contemplated by
this Agreement, the following conditions shall be satisfied:
(a) the Company shall receive the written consent of any or all
third parties, including but not limited to, the written consent of the National
Bank of Canada or any other lender; and
(b) the transactions shall not be violative of any of the United
States securities laws or the corporate laws of the state in which Sel-Drum is
incorporated.
(c) the Company shall have a sufficient financial structure such
that any of the closings contemplated by the Agreement shall not materially
affect the Company's debt to earnings ratio, all as determined by the Company's
independent certified public accountants.
7. REGISTRATION OF SELLER'S SHARES IF SOLD TO THIRD PARTY. If Seller
finds a purchaser for Seller's shares, the Company shall use reasonable efforts
to register such transaction with the United States Securities and Exchange
Commission.
8. MISCELLANEOUS
(a) FURTHER ASSURANCES. Each party shall cooperate with the
others, take such further action, and execute and deliver such further
documents, as may be reasonably requested by the other parties in order to carry
out the terms and purposes of this Agreement.
(b) SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. The
several representations, warranties and covenants of the parties herein
contained, and the provisions hereof by which their terms are to be performed
after the date hereof, shall survive the execution and delivery of this
Agreement and shall be effective regardless of any investigation which may have
been or may be made at the time by or on behalf of the party to whom such
representations, warranties, covenants and agreements are made.
(c) AMENDMENT AND WAIVER. This Agreement may be amended only by a
writing executed by all of the parties hereto. No waiver of compliance with any
provision or condition hereof, and no consent provided for herein, shall be
effective unless evidenced by
- 4 -
5
an instrument in writing duly executed by the parties sought to be charged
therewith. No failure on the part of any party to exercise, and no delay in
exercising, any of its rights hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise by any party of any rights preclude any
other or future exercise thereof or the exercise of any other right.
(d) ASSIGNMENT. No party shall assign or attempt to assign any of
its rights or obligations under this Agreement without the prior written consent
of each of the other parties hereto.
(e) BINDING EFFECT. Subject to the provisions of (d) above, this
Agreement shall be binding upon and shall inure to the benefit of the parties
and their respective successors and assigns. This Agreement creates no rights of
any nature in any party not a party hereto.
(f) GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed entirely within such state and without
regard to principles of conflicts of laws.
(g) EFFECT OF AGREEMENT. This Agreement, and those other
agreements and documents to be executed at closing pursuant to the terms of this
Agreement, set forth the entire understanding of the parties, and supersedes any
and all prior agreements, arrangements and understandings, whether written or
oral, relating to the subject matter hereof.
(h) HEADINGS; COUNTERPARTS. The section headings of this
Agreement are for convenience of reference only and do not form a part hereof,
and do not in any way modify, interpret or construe the intention of the
parties. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
(i) NOTICES. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given if delivered personally
or sent by registered or certified mail, return receipt requested, postage
prepaid or to such other address as any party shall have specified by notice in
writing to the holder.
If to the Seller: Xxxxx Xxxxxxx
Sel-Drum International, Inc.
0000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx X0X 0X0
- 5 -
6
If to Sel-Drum Sel-Drum International, Inc.
or SDIC: 0000 Xxxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxxx X. Xxxxxx, President
with copies to: Xxxx & XxXxxxx
Barrister & Solicitors
X.X. Xxx 000
Xxxxxxxx, Xxxxxxx X0X 0X0
Attention: Messrs. Xxxxx X. Xxxx/Xxxx X. Xxxxxxx
Xxxxxx, Xxxxxxx & Xxxxx LLP
000 Xxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000-0000
Attn.: Xxxxx X. Xxxxxxx, Esq.
(j) EXPENSES. Each of the parties hereto shall pay its or his own
respective expenses, including but not limited to legal and accounting expenses,
associated with the transactions contemplated hereby.
9. TERMINATION. This Agreement shall terminate as follows: (i) by
written consent of all of the parties; (ii) upon a sale to a third party or a
repurchase by the Company of all of the shares held by Seller; (iii) by the
Company if the Seller's employment is terminated by Seller; or (iv) by the
Company if the Seller's employment is terminated by the Company "for cause"
pursuant to the Employment Contract. Any termination of this Agreement shall
release the parties of all obligations hereunder except Paragraph 3 which shall
survive by its terms.
- 6 -
7
IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
date above first written.
/s/ Xxxxx Xxxxxxx
------------------------------------
Xxxxx Xxxxxxx, Seller
SEL-DRUM INTERNATIONAL, INC.
By: /s/ Xxxxx Xxxxxxxx
--------------------------------
Xxxxx Xxxxxxxx, Chairman
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx, President
SEL-DRUM IMAGING CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Xxxxxxx X. Xxxxxx
President
- 7 -
