Exhibit 2.2
STOCKHOLDER'S AGREEMENT
OF
ANGUS CORPORATION
THIS STOCKHOLDER'S AGREEMENT is made and entered into to be effective the
31st day of July, 1997, by and among Angus Corporation, a Delaware corporation
(the "Corporation"); Xxxxx Xxxx ("Xxxx"), individually and as trustee,
residing at 0000 Xxxxxxxx Xxxxxxx, Xx Xxxxx, Xxxxxxxxxx; C. Xxxxxxx Xxxxxxxx
("Xxxxxxxx"), residing at 0000 Xx Xxxx Xxxxxxxxx, Xxxxx 000, Xx Xxxx,
Xxxxxxxxxx 00000; D & B Asset Management ("D&B"), a General Partnership
located at 0000 Xx Xxxxxx Xxxx, Xxxxx 000-000, Xxxxxxxx, Xxxxxxxxxx 00000, and
Xxxxxx X. Xxxxxxx ("Xxxxxxx"), the managing partner of D&B, with reference to
the following facts:
RECITALS
A. Asset Retrieval Services, Inc. ("ARS") has entered into an Agreement and
Plan of Reorganization (the "Plan") with the Corporation pursuant to which
shares of Common Stock of ARS have been exchanged for Shares at the rate of
16.6 Shares for each share of ARS Common Stock (the "Exchange Rate").
X. Xxxx is the original holder of all of the 371,429 founding shares of
ARS, and had orally agreed to transfer certain shares of ARS set forth in
Column 1 below subject to the terms set forth in this Agreement. Xxxx has
exchanged the ARS shares for shares and has directed the Corporation to issue
the Shares received in the Exchange in the denominations listed in Column 2.
Xxxx has indicated to the Corporation he will deliver certificates for such
Shares to each other Stockholder upon execution of this Agreement by the
respective Stockholder.
1 2
ARS Corporation
Name Shares Shares
--------------------------- ------------------ ----------------------
Xxxxxxxx 100,286 1,664,748
D&B 100,286 1,664,748
Xxxxx Xxxx, trustee for
Xxxx Xxxxxxxxx 37,142 616,557
133,715 shares of Common Stock of ARS, equivalent to 2,219,669 Shares
of the Corporation, are being retained by Xxxx. In addition, ARS is offering
up to 200,000 shares in a private offering at $5.00 per share, of which 25,456
shares have been sold and 174,544 shares are reserved for issuance to the
Stockholders; 422,570 Shares will be issuable to persons who have subscribed
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to date in the ARS offering; 2,897,430 Shares are reserved for issuance to
future subscribers in the ARS offering who may exchange their ARS Shares for
Corporation Shares at the Exchange Rate; and 10,014,278 Shares are reserved
for issuance by the Board of Directors of the Corporation for such lawful
consideration as the Board may determine.
C. The parties hereto, other than the Corporation, are the Original
Stockholders desire to insure the continuity of the business of the
Corporation and to promote their mutual interests and the interests of the
Corporation by imposing reasonable restrictions on, and making certain
arrangements with respect to, the disposition of the shares of the Corporation
held by them.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual covenants hereinafter contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
For the purposes of this Agreement, the following terms shall have
the meanings indicated:
1.1 Agreed Value. "Agreed Value" shall mean the sum of (a) twelve
(12) times the average per quarter Earnings of the previous four (4) fiscal
quarters or such number of quarters as the Corporation shall have been in
business if less than four (4), plus (b) eight (8) times the average per
quarter Earnings of the next preceding eight (8) quarters or, if less than
eight (8) quarters, such number of preceding quarters as the Corporation and
Preferred Shares issued and outstanding.
1.2 Dispose Of. "Dispose Of" shall mean sell, assign, transfer, grant
an option with respect to, pledge, hypothecate, make gifts of or in any manner
whatsoever dispose of or encumber, whether voluntarily, involuntarily or by
operation of law.
1.3 Earnings. "Earnings" shall mean the net profit of the
Corporation, as compiled by the Corporation in the manner used for preparation
of its federal income tax return, prior to the accrual of corporate level
income taxes, In the event that Earnings shall be reviewed or audited by
independent certified public accountants, the net profit as so reviewed or
audited and approved by such accountant shall be used. In the event that the
provisions of this Agreement require that Earnings be determined for a period
other than a period considered by such accountants, the Earnings as certified
by such accountants shall be considered to have been earned equally in each
quarter of such period. In the event that Earnings shall be required to e
determined as of the end of any period other than a period which ends at the
end of a fiscal year, the Earnings for that portion of such period since the
end of the most recently ended fiscal year shall be approved by independent
certified public accountants with the same degree of professional review, if
any, as applied to the financial statements of the Corporation as of such most
recent fiscal year.
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1.4 Permitted Transferees. "Permitted Transferees" shall mean the
persons, other than the Corporation or the Original Stockholders, who may
become transferees of Shares by reason of any disposition made pursuant to
Paragraph 3.2 hereof.
1.5 Market Value. "Market Value" shall mean the average closing price
of the Company's Common Stock on the principal exchange on which such
securities are traded (inclusive of the NASDAQ Stock Market for this purpose)
for the five (5) trading days immediately prior to the date as of which such
determination is made. In the event that no such trading has been reported.
Market Value shall be deemed to be the Agreed Value.
1.6 Shares. "Share" or "Shares" shall mean the capital stock of the
Corporation as presently constituted and any stock or other securities of the
Corporation hereafter issued in respect of such capital stock by reason of any
merger, consolidation, sale of assets, stock dividend, stock subdivision or
combination , reclassification, reorganization, recapitalization or otherwise.
1.7 Stockholder. As used in this Agreement, "Stockholder" shall mean
any person, other than the Corporation, who is or becomes a party to this
Agreement, notwithstanding that persons not signatory to this Agreement may
acquire common stock of the Corporation through a public offering or
otherwise. Original Stockholder shall mean Lotz, Freeland, and D&B or any
other Stockholder designated as such by the Original Stockholders.
1.8 Termination. "Termination" shall mean the discharge, with or
without cause, or the voluntary resignation or withdrawal of a party to this
Agreement, other than the Corporation, who is then receiving or accruing
salary or other compensation from the Corporation for personal services,
whether as an employee or consultant, full time or part time, and whether or
not pursuant to any employment or consulting contract. The term "Cause" shall
be as defined in such party's employment or consulting agreement with the
Corporation, as the case may be, if any. In any event, Cause shall include a
breach of this Agreement. It is contemplated that nothing contained herein
shall be deemed to create any such employment or consulting contract nor to
imply any obligation on the part of the Corporation to employ, engage or
compensate any such person. For purposes of this Paragraph 1.8, the
Termination of Xxxxxx X. Xxxxxxx ("Xxxxxxx") shall be deemed to be the
Termination of D&B. It is anticipated that Lotz, Freeland, and Xxxxxxx will
devote substantial time and effort to Corporation business in general and
will, in particular, provide those services as set forth in Article VIII.
1.9 Total Permanent Disability. "Total Permanent Disability" shall
mean a Stockholder's inability to perform the material duties of the position
he or she holds with the Corporation and for which he or she is reasonably
fitted by training, education or experience, and from which condition recovery
is unlikely, in the written opinion addressed to the Corporation of one or
more practicing physicians licensed to practice medicine in the state in which
such Stockholder resides (other than a physician Stockholder or any physician
with whom he or she is professionally associated). For purposes of this
paragraph 1.9, The Total Permanent Disability of Xxxxxxx shall be deemed to be
the Total Permanent Disability of D&B.
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ARTICLE II
TERM OF AGREEMENT
This Agreement and all restrictions on the Shares created hereby
shall commence on the date hereof and shall terminate without further action
on the fist occurrence of any of the following events:
2.1 Single Stockholder. A single Stockholder becoming the owner of
all of the outstanding Shares which are then subject to this Agreement.
2.2 Written Agreement. The execution by the Corporation and
Stockholders owning more than two-thirds of the outstanding Shares then
subject to this Agreement of a written instrument which terminates this
Agreement.
2.3 Dissolution. The liquidation and dissolution of the Corporation.
2.4 Temporal Limitation. At the close of business on July 31, 1998.
ARTICLE III
TRANSFER RESTRICTIONS
3.1 Restrictions on Transfer. No Stockholder shall Dispose Of any
Shares, except as expressly permitted by, and in compliance with, the terms
and previsions of this Agreement. Any other purported disposition shall be
void.
3.2 Permitted Transfer. Notwithstanding the provisions of Paragraph
3.1 above, any Stockholder may, at any time and from time to time, Dispose Of
any Shares (a) to the Corporation, (b) to any one or more of the other
Stockholders, and (c) to any other person with the prior written consent of
each of the other Stockholders; provided that the Shares subject to any such
disposition shall be and remain subject to all of the terms and provisions of
this Agreement and provided further that it shall be a condition to any such
disposition that concurrently therewith (i) the Corporation and each of the
other Stockholders shall be notified in writing of the number of shares
Disposed Of, the name and address of each transferee or donee thereof and the
date and manner of such disposition, and (ii) each transferee or donee who is
not a party to this Agreement shall become a party to this Agreement and agree
in writing to e bound by all the terms an provisions of this Agreement in the
same manner as the transferror or donor Stockholder was bound.
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ARTICLE IV
TERMINATION, TOTAL PERMANENT DISABILITY,
DIVORCE OR DEATH OF A Stockholder
4.1 Corporation Right of First Refusal. In the event of the
Termination, Total Permanent Disability or death of an Original Stockholder,
the Corporation shall have the first right and option, but not the obligation,
to purchase from the Original Stockholder, or from his or her guardian,
conservator or other legal representatives or from the estate of the deceased
Stockholder, as the case may be, and from his Permitted Transferees, all or a
portion of the Shares held by them at a price per Share equal to the Market
Value (but in any event no less than $.25 per share) as of the date of such
Termination. Total Permanent Disability or death and upon the other terms and
conditions set forth herein, with payment to be made in accordance with the
provisions of Article VII, provided the Corporation gives written notice to
such Stockholder and/or such legal representatives and Permitted Transferees
of its election to purchase such Shares within ninety (90) days after the date
of such Termination, Disability or death, which notice shall also specify the
number of Shares to be purchased by the Corporation. Upon exercise of such
right and option, the Corporation shall, subject to the provisions of Article
VI, become obligated to purchase, and such legal representatives and
Permitted Transferees shall become obligated to sell, the number of Shares
stated in the Corporation's notice. If the foregoing option is not exercised
within the time permitted for the exercise thereof, then said option shall
automatically expire and lapse.
4.2 Stockholder's Right to Purchase/Agreed or Market Value. If the
Corporation does not elect, as provided in Paragraph 4.1, to purchase all of
the Shares held by the legal representatives of the deceased, Terminated or
Disabled Stockholder and his Permitted Transferees, then each of the other
Stockholders shall have the second right and option, but not the obligation,
to purchase that portion of such Shares that the Corporation has not elected
to purchase at a price per Share equal to the value at which the Company had
such option and upon the other terms and conditions set forth herein, with
payment to be made in accordance with the provisions of Article VII. Such
second option by the other Stockholders shall be in the proportion that the
number of Shares owned by each bears to the total number of Shares owned by
all of the other Stockholders, with successive proration among those other
Stockholders desiring to exercise the second option, or in such different
proportions as the other Stockholders desiring to exercise the second option
may agree among themselves. Each Stockholder who elects to purchase Shares as
provided in this Paragraph 4.2 shall give written notice to such legal
representatives and/or permitted Transferees, as the case may be, of his
exercise of such second option within ninety (90) days after the expiration of
the ninety (90) day period referred to in Paragraph 4.1, which notice shall
also specify the number of Shares which such Stockholder giving the notice
elects to purchase. Upon exercise of such right and option, the Stockholders
exercising the same shall become obligated to sell, the number of Shares
stated in the Stockholder's notice. If the foregoing option is not exercised
within the time permitted for the exercise thereof, then said option shall
automatically expire and lapse.
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4.3 First Option of Spouse After Marital Dissolution/Agreed Value. In
the event that Xxxxxxx or Xxxxxxxx marry and such marriage is subsequently
dissolved, they shall notify the Corporation and the other Stockholders of
such dissolution within thirty (30) days following the entry of the order of
dissolution. Such Stockholder shall have the first right and option, but not
obligation, to purchase from his spouse all or a portion of the Shares held by
such spouse as her separate or community property, if any, at a price per
share equal to the Market Value on the date of he entry of the order of
dissolution, with payment to be made in accordance with the provisions of
Article VII, provided such Stockholder gives written notice to his spouse of
his election to purchase such Shards within ninety (90) days after the date of
entry of the decree of dissolution, which notice shall also specify the number
of Shares to be purchased by such Stockholder. Upon exercise of such right and
option, such Stockholder shall become obligated to purchase, and such spouse
shall become obligated to sell, the number of Shares stated in such
Stockholder's notice. If the foregoing option is not exercised within the time
permitted for the exercise thereof, then said option shall automatically
expire and lapse.
4.4 Second Option of Corporation After Marital Dissolution. If such
Stockholder does not elect, as provided in Paragraph 4.3, to purchase all of
the Shares held by his spouse, then the Corporation shall have the second
right and option, but not the obligation, to purchase that portion of such
Shares that such Stockholder has not elected to purchase at the price per
Share equal to the Market Value on the date of the entry of the dissolution
order and upon the other terms and conditions set forth herein, with payment
to be made in accordance with the provisions of Article VII, provided the
Corporation gives written notice to such spouse of its elections to purchase
such Shares within sixty (60) days after the expiration of the ninety (90) day
period referred to in Paragraph 4.3, which notice shall also specify the
number of Shares to be purchased by the Corporation. Upon exercise of such
right and option, the Corporation shall, subject to the provisions of Article
VI, become obligated to sell, the number of Shares stated in the Corporation's
notice. If the foregoing option is not exercised within the time permitted for
the exercise thereof, then said option shall automatically expire and lapse.
4.5 Third Option of Other Stockholders After Marital Dissolution. If the
Corporation does not elect, as provided in Paragraph 4.4, to purchase all of
the Shares that such Stockholder has not elected to purchase, then each of the
other Stockholders shall have the third right and option, but not the
obligation, to purchase that portion of such Shares that neither such
Stockholder nor the Corporation has elected to purchase, at the price per
Share equal to the Market Value on the date of the entry of the dissolution
order and upon the other terms and conditions set forth herein, with payment
to be made in accordance with the provisions of Article VII. Such third option
by the other Stockholders shall be in the proportion that the number of Shares
owned by each bears to the total number of Shares owned by all or he other
Stockholder, with successive proration among those other Stockholders desiring
to exercise the third option, or in such different proportions as the other
Stockholders desiring to exercise the third option may agree among themselves.
Each Stockholder who elects to purchase Shares as provided in this Paragraph
4.5 shall give written notice to such spouse of his exercise of such third
option within thirty (30) days after the expiration of the sixty (60) day
period referred to Paragraph 4.4,
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which notice shall also specify the number of Shares which such Stockholder
giving the notice elects to purchase. Upon exercise of such right and option,
the Stockholders exercising the same shall become obligated to purchase, and
such spouse shall become obligated to sell, the number of Shares stated in the
Stockholder's notice. If the foregoing option is not exercised within the time
permitted for the exercise thereof, then said option shall automatically
expire and lapse.
ARTICLE V
RIGHT OF FIRST REFUSAL
5.1 Corporation Right of First Refusal. If at any time after the date
hereof any Stockholder desires to Dispose Of any or all Shares held by him,
other than as permitted pursuant to Paragraph 3.2, such Stockholder (the
"Offering Stockholder") shall first be required to obtain a bona fide written
offer from a third party for the purchase for cash of all or such part of his
Shares. Such Stockholder shall then give a written notice (the "Notice") to
the Corporation and the other Stockholders (a) advising them that he or she
has obtained a bona fide offer in writing for the purchase of all or a
specified number of his Shares (the "Offered Shares"), which offer he or she
is ready and willing to accept, (b) stating the name and address of the
proposed purchaser and describing the principal occupation or business of the
proposed purchaser and (c) enclosing a true copy of the bona fide offer,
signed by the proposed purchaser, containing the price, terms and conditions
of the propose purchase, The Corporation shall have the first option, but not
the obligation, to purchase all or, subject to Paragraph 5.4, a portion of
the Offered Shares at the price and upon the terms and conditions as specified
in the bona fide offer enclosed with the Notice, provided the Corporation
gives written notice to the Offering Stockholder of its election to purchase
within thirty (30) days after the Corporation receives the Notice. The notice
from the Corporation shall specify the number of Offered Shares to be
purchased pursuant to the exercise of such option.
5.2 Stockholder's Right to Purchase. If the Corporation does not
elect, as provided in Paragraph 5.1, to purchase all of the Offered Shares,
then each of the other Stockholders shall have the second right and option,
but not the obligation, to purchase from the Offering Stockholder that part of
the Offered Shares that the Corporation has not elected to purchase at a price
and upon the same terms and conditions as specified in the boa fide offering
enclosed with the Notice. Such second option by the other Stockholders shall
be in the proportion that the number of Shares owned by all of the
non-offering Stockholders, with successive proration among those other
Stockholders desiring to exercise the second option, or in such different
proportions as the other Stockholders desiring to exercise the second option
may agree among themselves. Each Stockholder who elects to purchase Offered
Shares as provided in this Paragraph 5.2 shall give written notice of such
election to the Offering Stockholder and to the other Stockholders within
sixty (60) days after the receipt of the Notice by the Corporation. Each such
notice shall specify the number of Offered Shares which the Stockholder giving
the notice elects to purchase.
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5.3 Obligation to Sell. The Corporation and each Stockholder giving
such notice of election to purchase pursuant to Paragraph 5.1 or 5.2,
respectively, shall be obligated severally and not jointly to purchase from
the Offering Stockholder and the Offering Stockholder, provided the
Corporation, such other Stockholders, or a combination of the Corporation and
such other Stockholders elect to purchase all of the Offered Shares, shall be
obligated to sell to the Corporation, such other Stockholders, or the
Corporation and such other Stockholder, as the case may be , the number of
Offered Shares stated therein, at the price and upon the terms and conditions
determined pursuant to Paragraphs 5.1 and 5.2.
5.4 Permitted Transfer Upon Failure to Buy All Shares. If an Offering
Stockholder gives Notice as provided in Paragraph 5.1 and the Corporation and
the other Stockholders do not elect, pursuant to Paragraphs 5.1 and 5.2, to
purchase all of the Offered Shares, then the Offered Shares may be sold,
subject to any applicable securities laws, during the thirty (30) day period
following the expiration of the option period set forth above to the proposed
purchaser designated in the Offering Stockholder's Notice at a price no lower
than the price and on terms no more favorable to the proposed purchase than
those set forth in the Notice; provided, however, that (a) the shares subject
to any such sale shall be and remain subject to all of he terms and provisions
of this Agreement; and (b) the purchase thereof shall agree in writing to be
legally bound hereby in the same manner as the offering Stockholder was bound.
If, however, the Offering Stockholder does not complete such sale within said
thirty (30) day period, no such Shares shall thereafter be Disposed Of without
first being re-offered to the Corporation and the other Stockholders in
accordance with the foregoing provisions of this Article V.
5.5 No Pre-emptive Right. Notwithstanding any provision in this
Agreement to the contrary, this Agreement does not confer upon any Stockholder a
pre-emptive right to subscribe for or purchase Shares of the Corporation.
ARTICLE VI
LIMITATION ON PURCHASES BY CORPORATION
Notwithstanding any other provision of this Agreement, the
Corporation shall not have the obligation or right to purchase any Shares
except out of funds legally available therefor. If, at the time the
Corporation is obligated or desires to purchase any Shares pursuant to Articles
III, IV, or V, it shall have insufficient retained earnings or shall other
wise be unable to comply with applicable laws relating to the purchase by a
corporation of its own Shares, all Stockholders each hereby agree to vote
their Shares to take such corporate action, to the fullest extent permitted by
law, as shall be necessary to permit such purchase, including but not limited
to, such action as may be permitted by law to reduce the capital of the
Corporation or to revalue its assets so as to increase its surplus to the
extent necessary to permit the Corporation to purchase all or as many of the
Shares it is obligated or desires to purchase.
ARTICLE VII
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FALLBACK METHOD OF PAYMENT AND CLOSING
7.1 Applicability of Fallback Terms and Conditions. In the absence of
an agreement or agreements to the contrary which would suffice otherwise as an
amendment or amendments to this Agreement, the terms and conditions of any
Dispostiion of Shares shall be determined in accordance wit the provisions of
this Article VII.
7.2 Terms and Conditions. In the absence of an agreement to the
contrary in a form which would suffice otherwise suffice as an amendment to
this Agreement, the Corporation and each Stockholder, if any, purchasing
Shares pursuant to Articles IV or V ("Buyer") shall pay for such Shares as
follows:
7.2.1 Payment of Down Payment. On the Closing Date
(hereinafter defined in Paragraph 7.4), the seller of the Shares shall receive
in cash or by certified, bank or cashiers check(s) payable to the order of
such seller, an amount equal to the greater of (i) the Down Payment
(hereinafter defined in Subparagraph 7.2.4) or (ii) in the case of a purchase
by the Corporation under Paragraph 4.1 such seller's "proportionate share" of
the total death benefits, if any, paid or payable to the Corporation under all
life insurance policies covering the life of the deceased Stockholder of which
the Corporation was or is the owner and beneficiary, provided that the amount
payable to such seller by the Corporation shall not exceed the purchase price
of the Shares being sold by such seller to the Corporation. The term
"proportionate share" shall mean an amount equal to that proportion of the
total death benefits paid or payable as aforesaid which the number of Shares
being sold by such seller to the Corporation bears to the total number of
Shares owned by the deceased Stockholder and his or her Permitted Transferees
at the time of his or her death.
7.2.2 Payment of Remainder of Purchase Price. On the Closing
Date, the Buyer shall deliver to the seller of the Shares a negotiable
promissory note payable to the order of such seller in the principal amount
equal to the balance, if any, of the purchase price for the Shares being sold
by such seller to the Buyer. Each such promissory note (hereinafter called a
"Note") shall (i) be dated as of the Closing Date, (ii) bear interest at the
rate per annum of, and which shall vary with, the prime lending rate then
offered by Bank of America from the Closing Date, (iii) be payable in
consecutive monthly installments of principal and interest so as to fully
amortize the Note over the Term (hereinafter defined in Subparagraph 7.2.4),
(iv) be prepayable at the option of the Buyer, at any time in whole or from
time to time in part, without penalty or premium, (v) contain an acceleration
clause permitting the holder to declare the remaining balance due and payable
in the event of default in the payment of any installment of principal or
interest for more than five (5) days after the same is due and (vi) contain a
provision for the payment of attorneys' fee in the event the holder refers the
note to an attorney for collection, whether or not suit is brought thereon,
and (vii) be secured by a pledge of the Shares sold.
7.2.3 Effect of Third Party Offer. In the case of a purchase
under Article V at the price and upon the terms offered by a third party, the
price and terms of payment shall be governed by the third party offer.
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7.2.4 Down Payment/Term/Effective Evaluation. For purposes
of Paragraph 7.2, the initial payment (the "Down Payment") to be made to the
selling Stockholder and the term (the "Term") over which the remainder of the
purchase price shall be paid are dependent upon the "Effective Valuation",
which shall b equal to the purchase price per Shares to the selling
Stockholder multiplied by the total number of issued and outstanding Shares as
follows:
a. If the Effective Valuation is more than One Million
Dollars ($1,000,000.00), the Down Payment shall be fifty percent (50%) of the
total purchase price and the Term shall be three (3) years.
b. If the Effective Valuation is more than One Million
Dollars ($1,000,000.00) and less than or equal to Two Million Dollars
($2,000,000.00), the Down Payment hall be forty percent (40%) of the total
purchase price and the Term shall be four (4) years.
c. If the Effective Valuation is more than Two Million
Dollars ($2,000,000.00) and less than or equal to Five Million Dollars
($5,000,000.00), the Down Payment shall be thirty percent (30%) of the total
purchase price and the Term shall be five (5) years.
d. If the Effective Valuation is more than Five Million
Dollars ($5,000,000.00) and less than or equal to Ten Million Dollars
($10,000,000.00), the Down Payment shall be twenty percent (20%) of the total
purchase percent price and the Term shall be five (5) years.
e. If the Effective Valuation is more than Ten Million
Dollars ($10,000,000.00), the Down Payment shall be ten percent (10%) of the
total purchase price and the Term shall be six (6) years.
7.3 Corporation Right of Offset. Notwithstanding any other
provision of this Agreement, the Corporation may offset from the purchase
price paid by it for any Shares under this Agreement the liquidated portion of
any amount owed to the Corporation by the selling Stockholder whose Shares are
being purchased by the Corporation.
7.4 Time and Place of Closing. The closing of any purchase
and sale of Shares pursuant to this Agreement (the "Closing") shall take place
at 10:00 am, local time, on the forty-fifth (45th) business day after the date
of giving written notice of election under Article IV or V, at the principal
office of the Corporation, or at such different time , date or place as the
parties to such purchase and sale agree in writing. The day of any such
Closing is herein called the "Closing Date".
7.5 Closing Documents. At any Closing under this Agreement,
the following instruments and documents shall be executed and delivered:
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7.51 Selling Stockholder Delivery. The selling Stockholder
shall deliver to the Buyer the stock certificates representing the Shares
being purchased and sold, free and clear of any and all security interests,
liens, pledges, adverse claims, shareholders' agreements, voting trusts,
preemptive rights and other encumbrances, other than those created by this
Agreement, and duly endorsed for transfer to the Buyer or accompanied by stock
powers duly endorsed for transfer tax stamps, if required, affixed thereto or
payment therefor provided for.
7.52 Buyer's Payment. The Buyer shall make payment for the
Shares purchased and sold pursuant to Paragraph 7.2.
7.53 Resignation of Selling Officer or Director. Any selling
Stockholder who shall be an officer and/or a director of the Corporation
shall, unless he or she will remain a Stockholder of he Corporation, deliver
to the Corporation his or her written resignation as such officer and/or
director effective on the Closing Date.
7.54 Other Documents. Any and all other documents and
instruments which may be reasonably required by any party to such purchase and
sale in order to carry out the intent and purposes of this Agreement.
ARTICLE VIII
OPERATIONS; PROXY
8.1 Ratification: Rights of First Refusal. The Stockholders shall
cause the Corporation to complete the formalities necessary to ratify the acts
undertaken for and on behalf of the Corporation in furtherance of the plans set
forth in the Recitals and shall thereafter pursue in good faith the objectives
set forth therein. The Corporation shall have the right of first review for
the period of 72 hours and the right for a period of 72 hours to enter into a
contract to purchase and close a contract to purchase any portfolio of loans
of which any of the Stockholders or Xxxxxxx become aware during the term of
this Agreement.
8.2 Directors. The Stockholders shall vote their Shares to elect the
following as directors of the Corporation:
Xxxxx Xxxx
C. Xxxxxxx Xxxxxxxx
Xxxxxx X. Xxxxxxx
In the event that holders of the Corporation's stock other than parties to
this Agreement vote at any election of directors, the Stockholders agree to
vote their shares so that Xxxx is elected a director in preference to Xxxxxxxx
and Xxxxxxxx is elected a director in preference to Xxxxxxx.
Officers. Provided any two of the directors specified in Paragraph
8.2 are elected, the following persons shall be appointed to the offices
indicated:
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Xxxxx Xxxx President and Chief Executive
Officer
C. Xxxxxxx Xxxxxxxx Vice President-Acquisition
Xxxxxx X. Xxxxxxx Vice President-Operations
The Chief Financial Office and Secretary of the Corporation shall be elected
from nominees proposed by Xxxx. This Paragraph 8.3 shall not be construed to
restrict the right of the Corporation to terminate any officer or employee for
cause nor to require the election of a person who has terminated his or her
employment with the Corporation voluntarily or who is Totally Permanently
Disabled.
8.4 Corporate Actions. Notwithstanding any provisions of the Bylaws
to the contrary, the following actions shall require the written consent of
the holders of not less than seventy-five percent of the issued and
outstanding Shares of the Corporation subject to this Agreement.
a. Amendment of the Certificate of Incorporation or Bylaws
of the Corporation;
b. Approval of a merger of the Corporation or sale of
substantially all of the assets of the Corporation in a single transaction or
related series of transactions;
c. Entry into an agreement with an entity, other than ARAF
or Asset Retrieval Management Services, Inc, affiliated with, or controlled by
one of the Stockholders or, regardless of the size of the transaction, entry
into an agreement with such an entity if the consideration to be transferred
by the Corporation is greater than that which would pass in an arms-length
transaction of a similar type with an unrelated third party;
d. Amendment to this Agreement;
e. Voluntary dissolution of the Corporation.
8.5 Banking. All checks written on accounts of the Corporation shall
require the signature of Xxxx and either Xxxxxxx or Xxxxxxxx or their
delegates, except that Xxxx may make disbursement on his signature alone for
individual amounts of less than Two Thousand Five Hundred Dollars ($2,500) to
payees other than to himself. Xxxxxxx and Xxxxxxxx agree to sign checks for
Xxxx'x monthly management fee within 24 hours of presentment and to sign other
checks in a timely manner.
8.6 Commitments of Founding Individuals. Both Xxxxxxxx and Xxxxxxx
individually agree to provide the following to the Corporation without further
consideration without approval of all parties to this Agreement other than
reimbursement for reasonable out of pocket costs and agree further that failure
so to provide such services shall be a material breach of this Agreement
sufficient for Termination:
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a. Make available to the Corporation databases of
purchasers and sellers of portfolios which are available to them;
b. Make reasonable efforts to identify and make available
for consideration by the Corporation portfolios of receivables which have
characteristics within those established by the Corporation as acceptable to it;
c. Be personally available to meet with investors and
market makers and to attend seminars and trade shows relevant to the business of
the Corporation.
d. Provide timely evaluations of portfolios available
for acquisition as and when appropriate;
e. Provide or assist the Corporation in obtaining and
setting the guidelines, policies and procedures which comprise programs for
the acquisition, disposition and collection of receivables similar to those
employed by the Credit Store; and
f. Establish a credit card reissuance and balance transfer
program in cooperation with Access America of Florida or other comparable
organization in the business of issuing credit cards within 60 days of this
Agreement.
8.7 Directors and Officers Insurance. The Corporation will seek a
policy of directors' and officers' liability insurance and errors and
omissions insurance providing for liability coverage of not less than
$1,000,000 and purchase such coverage if it can be obtained at a reasonable
premium.
ARTICLE IX
SHARE CERTIFICATES
9.1 Restrictive Legends. The parties each agree to cause a legend, in
the form set forth below, to be conspicuously noted on the face of all
certificates (or on the reverse thereof with a conspicuous reference thereto
on the face) representing Shares presently owned by them or which may
hereafter be issued to them during the term of this Agreement:
TRANSFER OF THE SHARES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
CERTAIN RESTRICTIONS AND CONDITIONS SPECIFIED IN AN AGREEMENT ENTERED
INTO BY THE CORPORATION AND ITS STOCKHOLDERS, DATED AS OF JULY 31,
1997, A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE
CORPORATION.
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9.2 Restrictions on Issuance of New Certificates. The parties shall
not permit the issuance of any Shares to any Stockholder, or to any of their
respective transferees, unless the foregoing legends, as applicable, shall be
conspicuously noted as aforesaid, and shall not permit the transfer on the
Corporation's records of any such Shares, except upon presentation to the
Corporation of satisfactory proof of compliance with the provisions of this
Agreement.
9.3 Copy of Agreement. A copy of this Agreement shall at all times be
kept in the principal office of the Corporation.
ARTICLE X
MISCELLANEOUS
10.1 Duty of Loyalty and Good Faith; Cooperation. The Stockholders
and Xxxxxxx duty of loyalty to this Corporation in all matters affecting this
Corporation's interest and are obligated to act in good faith in dealing with
the Corporation and each other. The parties shall each execute and deliver or
cause to be executed and delivered such further instruments and documents and
shall take such other action as may be reasonably required to more effectively
carry out the intent and purposes of this Agreement and the objectives of the
Corporation as set forth in the Recitals. Notwithstanding any other provisions
of this Agreement or of the Operating Agreement for ARAF, any opportunity to
acquire a portfolio of distressed loans or credit card receivables of which
any of the parties or Xxxxxxx becomes aware shall be presented first to the
Corporation.
10.2 Binding Effect. This Agreement shall be binding upon and inure
to the benefit of the Corporation and its successors and the Stockholders and
their respective transferees, estates, heirs, distributees, successors in
interest, assigns and legal representatives. The Stockholders, by executing
this Agreement, direct their legal representatives to open their estates
promptly in the courts of proper jurisdiction and to execute, procure and
deliver all documents, including but not limited to, appropriate court orders,
letters testamentary or letters of administration and estate and inheritance
tax waivers, as may be required to carry out the provisions of this Agreement.
10.3 Entire Agreement. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter hereof, and
there are no terms other than contained herein. This Agreement cannot be
changed or terminated orally.
10.4 Governing Law. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Delaware.
10.5 Severability. This Agreement is intended to be performed in
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules, and regulations. If any provision of this Agreement or the
application thereof to any person or circumstance shall, for any reason and to
any extent, be invalid or unenforceable, the remainder of the Agreement and
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the application of such provisions to other persons or circumstances shall not
be affected thereby, but rather shall be enforced to the greatest extent
permitted by law.
10.6 Equitable Remedies. Notwithstanding any other provision of this
Agreement, the parties agree that the Shares cannot be readily purchased, sold
or evaluated in the open market, that they have a unique and special value and
that the Stockholders would be irreparably damaged if the provisions of this
Agreement were not capable of being specifically enforced. Accordingly, the
parties agree that the provisions of this Agreement shall be specifically
enforceable, that any disposition of Shares in violation of any provision of
this Agreement may be enjoined or restrained and that such equitable relief
shall not in any way limit or deny any other remedy which the Corporation or
the Stockholders may have under this Agreement or at law.
10.7 Notices. All notices, offers, statements and other
communications provided for by this Agreement shall be in writing and shall be
deemed to have been given when personally delivered to the party to which
notice is given or upon receipt after mailing, postage prepaid, by registered
or certified mail, return receipt requested, addressed to the party to which
notice is given at its, his or her address written below or at its, his or her
address set forth in a notice given by such party in accordance with the
provisions hereof. Any notice required or permitted to be given, pursuant to
the provisions of the Act, the Certificate of Incorporation of the
Corporation or this Agreement, shall be effective as of the date personally
delivered, or if sent by mail, on the date deposited with United States Postal
Service, prepaid and addressed to the intended receiver at his last known
address as shown in the records of the Corporation.
10.8 Waiver. No waiver of any breach of any provision or condition of
this Agreement to be performed by any party hereto shall be deemed a waiver of
a breach of a similar or dissimilar provision or condition at the same time or
any prior or subsequent time or of the provisions or condition itself.
10.9 Interpretation. Whenever the context so indicates, the use
herein of (a) words in the singular number include the plural, and in the
plural include the singular, and (b) words of any gender, masculine, feminine,
or neuter, shall include all genders.
10.10 Attorney's Fees. In the event of any litigated controversy,
claim or dispute between or among any of the parties hereto arising out of or
relating to this Agreement or the breach thereof, the prevailing party or
parties shall be entitled to recover from the losing party or parties
reasonable expenses, attorneys' fees and costs.
10.11 Legal Counsel. Each Stockholder hereto acknowledges that he has
had an opportunity to seek and consult with independent legal and investment
counsel with respect to legal and investment consequences to him or her
arising from or connected with this Agreement and has freely and voluntarily
entered into this Agreement with knowledge of the legal consequences of such
action, including substantial restrictions on the transfer and marketability
of his interest in the Corporation, which in many instances lowers the value
of a Stockholder's interest. The parties to this Agreement further acknowledge
that this Agreement has been
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reviewed by Hand & Hand, a law corporation, an attorney (the "Law Firm"), on
behalf of the Corporation. There is an inherent potential for conflicts of
interest among the parties to this Agreement because this Agreement
establishes the rights and obligations of each of the parties to this
Agreement. Due to such potential conflicts of interest, the Law Firm has
advised and hereby advised each of the parties that it would be in their
interest to obtain the services of their own independent legal counsel to
review this document. Notwithstanding the fact that the Law Firm has prepared
this Agreement and has provided legal advice to Xxxx in preparation of this
Agreement and in related matters, the parties hereby waive as evidenced by the
execution of this Agreement any potential conflicts of interest that may arise
as a result of the above actions by the Law Firm.
10.12 Headings. The descriptive headings of the several sections or
paragraphs of this Agreement are inserted for the convenience of reference
only and do not define, describe or limit the scope or intent of this
Agreement or any of the terms hereof. The headings in ths Agreement are
inserted for convenience of reference only and are not to be used in
construing or interpreting any of the previsions of this Agreement.
10.13 Counterparts. 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. This Agreement may be
executed in any number of counterparts, each of which shall be deemed to be an
original, but all of which, together, shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
to be effective on the day and year first above written.
CORPORATION: ANGUS CORPORATION
a Delaware corporation
Dated: July 31, 1997 By: /s/ Xxxxx Xxxx
----------------------
Xxxxx Xxxx, President
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CONTINUATION OF SIGNATURES TO STOCKHOLDER AGREEMENT OF ANGUS CORPORATION WITH
IT'S ORIGINAL STOCKHOLDERS
STOCKHOLDERS:
Dated: July 31, 1997 /s/ Xxxxx Xxxx
---------------------------------------
XXXXX XXXX, Individually and as Trustee
Dated: July 31, 1997 /s/ C. Xxxxxxx Xxxxxxxx
---------------------------------------
C. XXXXXXX XXXXXXXX
Dated: July 31, 1997 D & B ASSET MANAGEMENT
a General Partnership
Dated: July 31, 1997 By: /s/ Xxxxxx X. Xxxxxxx
------------------------------
Xxxxxx X. Xxxxxxx
Managing Partner
Dated: July 31, 1997 /s/ Xxxxxx X. Xxxxxxx
---------------------------------------
XXXXXX X. XXXXXXX
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