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EXHIBIT 2(k)(viii)
PUT AND CALL AGREEMENT
THIS PUT AND CALL AGREEMENT is made this 30th day of August, 1995,
between NETTECH, INC., a North Carolina corporation (the "Company"); and
SOUTHEAST INTERACTIVE TECHNOLOGY FUND I, LLC, a North Carolina limited
liability company (the "Investor").
WHEREAS, pursuant to the terms of a Series A Preferred Stock Purchase
Agreement of even date herewith the Investor has purchased 250,000 shares of
the Company's Series A Preferred Stock, no par value per share (the "Stock");
and
WHEREAS, in the absence of a public market for the Company's capital
stock in which the Investor could sell the shares of the Stock or the Common
Stock to be issued upon conversion of the Stock, and due to the potential lack
of an offer to purchase such shares by means of an acquisition from or through
a third party not a party to the aforesaid Stock Purchase Agreement, the
Investor would be unable to dispose of its shares; and
WHEREAS, the Investor has purchased the Stock for investment purposes
and not for resale and is a passive investor not actively involved in the
Company's day-to-day management as are its principals, and is not receiving
compensation for such day-to-day management services as are its principals; and
WHEREAS, it may be in the best interest of the Investor to dispose of
the Stock to the Company, and it may be in the best interest of the Company,
under favorable conditions, to purchase the Stock from the Investor;
NOW, THEREFORE, in consideration of the investments being made by the
Investor and of the covenants and promises contained herein, the parties agree
as follows:
1. Option to Put or Call.
(a) At any time after the fifth (5th) anniversary of the date
hereof (such period following the fifth anniversary of the date hereof referred
to as the "Exercise Period"), the Investor may require the Company to purchase
(the "Put"), or the Company may require the Investor to sell (the "Call"), in
the manner described in section 2 below, any or all of the Stock held by the
Investor.
(b) The Put or Call shall be exercised by notice in writing given
by the party exercising the Put or Call to the other party during the Exercise
Period as set forth above. Closing shall take place at the time specified in
the notice, which shall be no more than 120 and no less than 90 days following
the date of
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notice; provided that in the event of a Call, Investor may elect, at any time
within 30 days following the date of notice of the Call, to convert the Stock
to common stock of the Company, and if Investor elects to convert to common
stock within such 30 day period, the Call shall be null and void with respect
to such converted Stock.
2. Price. The price at which each share of the Stock shall be
purchased by the Owners upon the exercise of the Put or Call shall initially be
$3.00 per share, with such price to increase by ten percent (10%) annually each
year on the anniversary date of this Agreement over the price for the previous
year beginning on the sixth (6th) anniversary date of this Agreement, subject
to adjustment for stock splits, stock dividends and recapitalizations. The
price shall be determined as of the closing date specified in the notice of Put
or Call, not the date of the notice of exercise.
3. Payment Following Exercise of Put or Call
(a) Upon exercise of the Put, the purchase price for Stock subject
to the Put will be payable as follows: Either (i) in cash at closing or, (ii)
upon election of the Company, a minimum of ten percent (10%) of the purchase
price shall be paid in cash at closing, with the balance represented by a
promissory note in the amount of the balance of the purchase price, such
promissory note to bear interest at ten percent (10%) per annum, with principal
payable in twelve equal quarterly payments due on the first day of each
calendar quarter, beginning with the first such date to occur after the
closing, together with all accrued but unpaid interest as of such payment dates
until the promissory note is paid in full (the promissory note may be prepaid
at any time). In the event the Company elects to pay over time, the Investor
shall retain a security interest in the Shares to secure payment of the
promissory note and the Company shall execute a security or pledge agreement
and such other documents or instruments as are reasonably required in order to
grant and perfect such security interest.
(b) Upon exercise of the Call, the purchase price for Stock
subject to the Call will be payable in cash, and payment shall be made against
delivery by the Investor to the Company of the share certificates representing
the Stock being purchased at the time of the payment of the purchase price.
4. Capital Changes; Sale of Common Stock. The Put and Call shall
apply to any securities into or for which the Stock is converted or exchanged,
or which are issued with respect thereto, as a result of any stock dividend,
stock split, recapitalization, reorganization, combination of shares, merger,
consolidation or
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otherwise, with appropriate adjustments to the price at which such securities
shall be repurchased to eliminate the effect of such capital change; provided
that this Agreement shall terminate with respect to any Stock (other than Stock
for which a notice of Call has been given and no notice of conversion has been
given within the applicable thirty day period) which has been converted into
common stock of the Company, either automatically or upon election of the
Investor as provided in the Articles of Incorporation of the Company.
5. Termination. This Agreement shall terminate and be of no
further force or effect upon the effective date of a registration statement
filed by the Company under the Securities Act covering the Company's first
public offering of Common Stock (an "IPO") in which the selling price (before
deducting commissions and expenses) is at least $3.00 per share or a merger of
the Company after which the shareholders of the Company immediately prior to
the merger hold less than fifty percent (50%) of the outstanding capital stock
of the surviving corporation and in which the consideration received by the
holders of the Stock is at least $3.00 per share.
6. General. The respective rights and obligations of the parties
hereto apply to the parties so named herein and to their respective heirs,
personal representatives, successors and assigns.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
NETTECH, INC.
By: _________________________________
Xxxxxxx X. Xxxxxx, President
SOUTHEAST INTERACTIVE TECHNOLOGY FUND I, LLC
By:__________________________________
, Manager
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