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EXHIBIT 2
STATE OF NORTH CAROLINA REDEMPTION AGREEMENT
COUNTY OF CATAWBA
THIS REDEMPTION AGREEMENT, dated as of September 22, 1997, among Xxxxxx
Xxxxxx, III, a resident of North Carolina (herein "Xxxxxx") and Xxxxxx Xxxxxx,
XX (herein "Shareholder") and RSH Management, Inc., a North Carolina corporation
(herein "RSH") and HERTH Management, Inc., a North Carolina corporation (herein
"HERTH"). Xxxxxx and Shareholder are sometimes referred to collectively herein
as "Conveying Parties."
WITNESSETH:
WHEREAS, Shareholder is the owner of Two Hundred Fifty-Eight Thousand
Nine Hundred Sixty-Three (258,963) shares (the "Shares") of common stock of RSH
(having received said shares by way of gift from Xxxxxx); 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 Five Hundred Fifteen Thousand and No/100 Dollars
($515,000.00). 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.
3. Representations and Warranties of Conveying Parties. Conveying
Parties represent and warrant 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 Conveying Parties have full right, power,
capacity and authority to enter into this Agreement and to
perform their obligations under this Agreement. This Agreement
is legal, valid and binding upon the Conveying Parties and is
enforceable against them in accordance with its terms. Neither
the execution and delivery of this Agreement nor the
consummation by
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Conveying Parties 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, or restriction
of any kind to which either of the Conveying Parties is a
party, or by which either of the Conveying Parties or their
properties may be bound.
(c) Litigation; Impairment. There are no legal proceedings
pending against or threatened against the Conveying Parties,
which, if adversely determined, could, in any respect, prevent
or impair the ability of the Conveying Parties to perform the
obligations of the Conveying Parties under this Agreement. No
matters (individually or in the aggregate) exist, or so far as
the Conveying Parties can foresee may reasonably be expected
to exist which prevent or impair the ability of the Conveying
Parties to perform their obligations under this Agreement.
(d) Disclosure. No representation or warranty made by the
Conveying Parties 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 Conveying Parties do not have any direct
or beneficial interest in WS Partners, a North Carolina
partnership, and to their 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,
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which, if adversely determined, could, in any respect, 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. For purposes herein, RSH and HERTH are sometimes
referred to collectively as the "Corporations".
5. Capacity. The Conveying Parties acknowledge that neither of
them is 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 8,557,698 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 Conveying Parties hereby
acknowledge and understand 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 Conveying Parties,
for themselves, their heirs and assigns, do 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 Conveying Parties, their 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 Conveying Parties 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 Conveying Parties from any liability or obligation of the Corporations of
which either of the Conveying Parties is an endorser, co-obligor, or guarantor.
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 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.
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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. Assignment of Options. In consideration of Ten Dollars
($10.00) and other valuable consideration paid by RSH, receipt of which is
hereby acknowledged, and as a material inducement for RSH to enter into this
Agreement, Xxxxxx does hereby sell, transfer and assign to RSH and HERTH all
right, title and interest in any and all options, if any, of Xxxxxx to purchase
shares of WSMP, Inc., including but not limited to any option conveyed to Xxxxxx
by way of a Letter Agreement dated April 1, 1992 between Xxxxx X. Xxxxxxxxxx,
Xx. et al.
10. 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 September 22, 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 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
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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 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:
Xxxxxx Xxxxxx XX (SEAL)
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Xxxxxx Xxxxxx, XX
XXXXXX:
Xxxxxx Xxxxxx III (SEAL)
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Xxxxxx Xxxxxx, III
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)
