Exhibit 10.2
AMENDED AND RESTATED
CORPORATE BUY-SELL AGREEMENT
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Parties: ▇▇▇▇▇▇ ▇▇▇▇▇ Corp., a New York corporation ("Corporation")
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▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., individually and for the benefit of ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇; ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
for the benefit of ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇; J. ▇▇▇▇▇ ▇▇▇▇▇▇, individually and for the benefit of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇; ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.; ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
individually and for the benefit of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇; ▇▇▇▇ ▇.
▇▇▇▇▇▇; ▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and for the benefit of ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., ▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇;
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, individually and for the benefit of ▇▇▇▇▇▇
▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇; ▇▇▇▇▇▇▇ ▇▇▇, individually and for the
benefit of ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇, and ▇▇▇▇▇ ▇▇▇; ▇▇▇▇▇▇▇ ▇▇▇, ▇▇.; ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇;
▇▇▇▇▇▇▇▇▇ ▇▇▇; ▇▇▇▇▇▇ ▇. ▇▇▇; ▇▇▇▇▇▇▇ ▇▇▇; ▇▇▇▇▇▇▇ ▇▇▇, III; and
▇▇▇▇▇▇▇ ▇▇▇ (each individually an "Owner" and collectively
"Owners")
Date: As of October 25, 1985
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Background: Owners own or hold certain shares of the issued and outstanding
---------- capital stock of Corporation, as stated on Exhibit A to this
Agreement. Pursuant to an agreement dated October 25, 1985, the
Parties imposed certain restrictions on themselves and on Owners'
stock of Corporation in order to promote their mutual interests
and to provide for the continuity of management of Corporation;
the Parties desire to amend and restate the Agreement.
INTENDING TO BE LEGALLY BOUND, and in consideration of the mutual
agreements stated below, the parties agree as follows:
SECTION 1: DEFINED TERMS
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1.1 "Permitted Transferee" means any lineal descendant of ▇▇▇ ▇. ▇▇▇▇▇▇,
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Sr. and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, any trust for the benefit of any such lineal
descendant provided that at least one trustee of such trust at all times must be
▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. or a lineal descendent of ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, or any trust for the benefit of a spouse of any lineal descendant of ▇▇▇
▇. ▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ provided that at least one trustee of such
trust at all times must be ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. or a lineal descendent of ▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇. Additionally, transfers to a lineal
descendant of ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ who has not attained age
21, may be made to the spouse of a lineal descendant of ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. and
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ as custodian under a Uniform Transfers to Minors Act.
1.2 "Stock" means any share of any class of capital stock of corporation
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which is now or hereafter owned or held, beneficially or as trustee or
custodian, by any Owner. Shares of voting Stock and shares of non-voting Stock
shall be treated the same for all purposes of this Agreement.
1.3 "Person" means any individual, partnership, corporation,
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association, trust, estate, custodianship, government, or other entity.
1.4 "Transfer" means any method, direct or indirect, absolute or
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conditional, voluntary or involuntary, of selling, assigning, transferring,
disposing of, parting with, pledging, encumbering, giving, bequeathing or
abandoning all or any interest in property.
1.5 "Owner" means each of the individual parties to this Agreement and
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each other individual who becomes a party to this Agreement as an Owner, whether
under Section 2.3, 3.1, 3.2 or 5.1 or otherwise, for as long as such individual
owns or holds any Stock.
SECTION 2: GENERAL RESTRICTIONS
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2.1 Transfers. No share of Stock shall be Transferred to any Person
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except in accordance with the provisions of this Agreement.
2.2 Issuance. No share of Stock or other equity security of Corporation
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or security convertible or exchangeable into stock or an equity security of the
corporation shall be issued or sold by Corporation to any Person who does not
first agree in writing to become a party to and be bound by this Agreement as an
Owner.
2.3 Stock Held in Trust or Custodianship. Any Stock held by trustee or
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custodian for the benefit of any Person,whether under a State's Uniform Gift to
Minors Act or otherwise, shall be treated as owned by such trustee or custodian
as an Owner for purposes of this Agreement. When any person for whom shares are
held in trust or custodianship reaches the age of majority, or when shares are
distributed to such person, the Corporation shall request that such person
become a party to this Agreement as an Owner, by signing an amendment in the
form of Exhibit B to this Agreement; no such person shall have any rights as a
shareholder of Corporation until such person has signed such amendment. Upon
signing of any such amendment, the signatory thereof shall become a party to
this Agreement as an Owner, without any further action or consent by any of the
parties hereto.
SECTION 3: PERMITTED TRANSFERS
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3.1 Lifetime Transfers. Subject to Section 12 hereof, any Owner may at
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any time and from time to time make lifetime Transfers of any share of Stock,
provided that (a) the transferee is a Permitted Transferee, (b) the Permitted
Transferee (if not already a party to this Agreement) agrees in writing to
become a party to and be bound by this Agreement as an Owner, by signing an
amendment in the form of Exhibit B to this Agreement, which shall have the same
effect as amendments signed in accordance with Section 2.3, and (c) Corporation
and the other Owners receive notice of the Transfer.
3.2 Testamentary Transfers. Subject to Section 12 hereof, any Owner may
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make testamentary Transfers of any share of Stock, provided that (a) the
transferee is a Permitted Transferee, and (b) the Permitted Transferee (if not
already a party to this Agreement) agrees in writing to become a party to and be
bound by this Agreement as an Owner, by signing an amendment in the form of
Exhibit B to this Agreement, which shall have the same effect as amendments
signed in accordance with Section 2.3. Upon the death of any Owner, any shares
of his Stock which are subject to testamentary Transfers permitted under this
Section 3.2 shall not be considered to be owned by him on the date of his death,
but shall instead be considered to be owned by the Permitted Transferee as of
that date and accordingly shall not be subject to the option or the mandatory
purchase under Section 5.1.
SECTION 4: TRIGGERING EVENTS
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4.1 Definition. The following events are "Triggering Events" with
respect to the Owner to whom the event relates (sometimes referred to as an
"Affected Owner"):
(a) The receipt by an Owner (sometimes referred to as a "Selling
Owner") of a bona fide written offer by a Person other than a Permitted
Transferee, acceptable to him, to acquire all, but not less than all, of his
Stock ("Offer"). It is expressly understood that the receipt by an Owner of an
offer to acquire less than all of his Stock shall not constitute a Triggering
Event, and, except in the case of an offer from a Permitted Transferee, that
such offer may not be accepted by such Owner.
(b) The death of an individual Owner (sometimes referred to as a
"Deceased Owner").
(c) The commencement of bankruptcy or similar proceedings by an
Owner, the commencement of bankruptcy or similar proceedings against an Owner
which are not terminated within 120 days after commencement, the appointment of
a bankruptcy or other judicial representative for an Owner, his Stock or any
material part of his properties, provided that any such appointment which was
involuntary is not terminated within 120 days, the attachment of, execution
against, levy upon or other seizure of the Stock of an Owner (other than an
attachment solely for jurisdictional purposes) unless and only as long as
Corporation's counsel determines that the same is being contested in good faith,
an assignment by an Owner for the benefit of creditors, an admission by an Owner
in writing of his inability to pay his debts as they become due, or the
attempted rejection of this Agreement by a bankruptcy or other judicial
representative who succeeds to the Stock of an Owner.
(d) The Transfer or attempted Transfer by an Owner or any party
acting on behalf of an Owner of any of his Stock in violation of any provision
of this Agreement, or any material breach by an Owner of any provision of this
Agreement.
4.2 Notice of Occurrence. Within 15 days after the occurrence of any
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Triggering Event, the Affected Owner (or his personal representative) shall give
notice of the occurrence ("Notice") to Corporation and the other Owners
(sometimes referred to as "Remaining Owners"). Failure to give the Notice shall
neither prevent nor relieve any of the parties from exercising their rights or
satisfying their obligations under this Agreement, and any other party to this
Agreement may at any time give the Notice on behalf of the Affected Owner (or
his legal or personal representative). If the Affected Owner is a Selling
Owner, then the Notice shall include a copy of the Offer stating the name of the
offeror ("Offeror") and the price ("Offer Price") and other terms ("Offer
Terms") of the Offer.
SECTION 5: OPTIONAL AND MANDATORY PURCHASES
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5.1 Upon the occurrence of any Triggering Event:
(a) Option to Corporation. Corporation shall have the option to
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purchase all or any shares of the Stock owned by the Affected Owner on the date
the Triggering Event occurred, for the Purchase Price (as defined in Section 8)
and on the Payment Terms (as defined in Section 9), by giving notice, within 60
days after the date of the Notice, to the Affected Owner (or his personal
representative) and to the Remaining Owners of the exercise of its option.
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(b) Option to Remaining Owners. The Remaining Owners shall have the
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option to purchase all or any shares of the Affected Owner's Stock ("Remaining
Stock") that was not purchased by Corporation in accordance with Section 5.1(a),
for the Purchase Price and on the Payment Terms. Each Remaining Owner shall
have the option to purchase his proportionate share (calculated by dividing the
number of shares of Stock owned by him by the total number of shares of Stock
owned by all Remaining Owners) of the Remaining Stock by giving notice, within
90 days after the date of the Notice, to the Affected Owner (or his personal
representative), Corporation, and the other Remaining Owners of the exercise of
his option. If any Remaining Owner does not purchase his entire proportionate
share of the Remaining Stock, then the other Remaining Owners shall have the
option to purchase the balance, in such proportions as they may agree, by giving
notice, within 120 days after the date of the Notice, to the Affected Owner (or
his personal representative) and Corporation.
(c) Mandatory Purchase by Corporation. If the Affected Owner is a
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Deceased Owner, then Corporation shall purchase and the Deceased Owner's
personal representative shall sell all of the Deceased Owner's Stock that was
not purchased in accordance with Section 5.1(a) or Section 5.1(b), for the
Purchase Price and on the Payment Terms. If Corporation is prohibited by law or
agreement from purchasing and paying for any such Stock, then the Remaining
Owners shall use their reasonable best efforts to remedy that situation provided
that the Remaining Owners shall not be required to contribute capital or loan
funds to remedy the situation. If that situation cannot be remedied within 180
days after the Triggering Event occurred, then, at the end of that 180-day
period, Corporation's obligation to purchase and pay for any such Stock shall be
assumed proportionately by the Remaining Owners.
(d) Selling Owner's Right to Sell. If the Affected Owner is a
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Selling Owner, then, unless he otherwise agrees, no exercise of any option under
this Section 5.1 shall be effective unless an option or options to purchase all,
and not less than all, of the Selling Owner's Stock are exercised in accordance
with this Section 5.1. If an option or options to purchase all of the Selling
Owner's Stock are not exercised under this Section 5.1, then the Selling Owner
may, within 180 days after the date of the Notice, sell his Stock to the
Offeror, provided that (i) all, and not less than all, of his Stock is sold to
the Offeror for the Offer price and on the Offer Terms, and (ii) the Offeror
agrees in writing to become a party to and be bound by this Agreement as an
Owner, by signing an amendment in the form of Exhibit B to this Agreement, which
shall have the same effect as amendments signed in accordance with Section 2.3.
5.2 Testamentary Seller Option. Upon the occurrence of a testamentary
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Transfer to a Permitted Transferee, for a period of 270 days after the Transfer,
the Permitted Transferee shall have the option (the "Testamentary Seller
Option"), and the Corporation shall be required to purchase, for the Purchase
Price and on the Payment Terms, all or any part of the Stock that was acquired
in such testamentary Transfer which the Permitted Transferee elects to sell. The
Permitted Transferee who sells pursuant to this Section is referred to
hereinafter as a "Testamentary Seller." Testamentary Seller shall exercise the
Testamentary Seller Option by providing notice of such exercise ("Testamentary
Seller Option Exercise") within 270 days of the testamentary Transfer. If
Corporation is prohibited by law or agreement from purchasing and paying for any
such Stock, then the Owners shall use their reasonable best efforts to remedy
that situation provided that the Owners shall not be required to contribute
capital or loan funds to remedy the situation. If that situation cannot be
remedied within 180 days after the Testamentary Seller Option Exercise, then, at
the end of that 180-day period, Corporation's obligation to purchase and pay for
any such Stock shall be assumed proportionately by the Owners.
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SECTION 6: DATE OF DELIVERY
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6.1 Definition. "Date of Delivery" means any mutually agreeable date
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within 180 days after the date of the Notice or Testamentary Seller Option
Exercise as the case may be or, if the parties are unable to agree, the 180th
day after the date of the Notice or Testamentary Seller Option Exercise as the
case may be (or, if such 180th day falls on a weekend or legal holiday, the
first business day thereafter).
6.2 Deliverables. If an option or options to purchase all or any of
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an Affected Owner's Stock have been exercised under Section 5, or if Corporation
is required to purchase the Affected Owner's or Testamentary Seller's Stock
under Section 5, then, on the Date of Delivery:
(a) The Affected Owner (or his personal representative) or
Testamentary Seller shall deliver to Corporation (at its then principal office)
the certificates for such Stock, duly endorsed for Transfer or with duly
executed assignments separate from certificate attached.
(b) If the Affected Owner is not a Deceased Owner, the Affected
Owner shall, unless otherwise instructed by Corporation, deliver to Corporation
(at its then principal office) his duly signed resignation as a director and
officer of Corporation, as applicable.
6.3 Failure to Deliver. If an Affected Owner (or his personal
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representative) or Testamentary Seller does not assign, transfer and deliver his
Stock, or does not submit his resignation, as required by this Section 6, then
each officer of Corporation shall have the right to perform such actions in the
name of and on behalf of the Affected Owner (or his personal representative) or
Testamentary Seller. Each Owner hereby grants to each officer of Corporation
(as the same may change from time to time) an irrevocable power to make
assignments and transfers on corporation's records and to sign resignations in
accordance with this Section 6.
SECTION 7: AGREED VALUE
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7.1 Initial Value. The parties acknowledge their agreement that the
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fair market value of one share of Stock on the date of this Amendment and
Restatement is $4,500.00 ("Agreed Value"). The Agreed Value of each share of
Stock shall in all events be equal.
7.2 Periodic Adjustments. At least annually, the Corporation shall
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select a qualified third party appraiser (which may include the Corporation's
regular accounting firm) to determine the "Fair Market Value" of the Corporation
("Periodic Adjustment"). "Fair Market Value" shall equal the amount which a
willing buyer would be willing to pay to purchase, and which the sellers would
be willing to accept to sell, all of the stock of the Company assuming that the
buyer is not under compunction to purchase and the Corporation is not under
compunction to sell. Upon receipt of such determination, the Agreed Value will
be adjusted to equal the Fair Market Value divided by the number of shares
outstanding and discounted to reflect the sale of a minority interest in the
Corporation. The appropriate minority discount shall be determined by the third
party appraiser selected in accordance with the terms of this Section 7.2. The
Agreed Value as redetermined from time to time may be evidenced by a certificate
in the form of Exhibit C to this Agreement ("Certificate of Agreed Value");
provided that the failure of any Owner to execute a Certificate of Agreed Value
shall not affect the Periodic Adjustment. In the event that no such appraisal
has been obtained within 12 months of the date upon which Purchase
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Price is determined under Section 8, the seller of such Stock can demand that
the Corporation obtain such an appraisal of value as of the pertinent date under
Section 8 as soon as practicable prior to the sale of such Stock pursuant to
Section 5.1 or Section 5.2 hereof, which appraisal will be the basis for the
Agreed Value for such Stock. In the event of demand for an appraisal under this
section, the Seller and the Corporation shall mutually agree on the third party
appraiser who will conduct the appraisal; if the Seller and the Corporation
cannot agree on a third party appraiser, each will select an appraiser and such
appraisers shall select the appraiser who will conduct the appraisal. The cost
of such appraisal shall be borne by the Corporation. If an appraisal under this
provision is required prior to the purchase of Stock, the Date of Delivery will
be a mutually agreeable date within 90 days of the receipt of such appraisal or,
if the parties are unable to agree, the 90th day after the date of the Notice or
Testamentary Seller Option Exercise as the case may be (or, if such 90th day
falls on a weekend or legal holiday, the first business day thereafter).
7.3 Other Adjustments. Appropriate adjustments to the Agreed Value
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shall be made to take into account any purchase, redemption, issuance or sale of
stock by corporation, any stock dividend or distribution by Corporation, or any
split-up, combination of shares, recapitalization or reorganization involving
Corporation which occurs after the date of this Amendment and Restatement or the
date of the most recent Periodic Adjustment, whichever is later.
SECTION 8: PURCHASE PRICE
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8.1 Affected Owner Purchase Price. As used in this Agreement, the
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"Purchase Price" of any Stock owned by an Affected Owner means:
(a) Deceased Owner. If the Affected Owner is a Deceased Owner, the
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Agreed Value (in effect on the date the Triggering Event occurred) multiplied by
the number of shares of such Stock.
(b) Selling Owner. If the Affected Owner is a Selling Owner, either
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the price calculated in accordance with Section 8.1(a) as if the Selling Owner
were a Deceased Owner, or the Offer Price (as defined in Section 4.2), at the
purchaser's option.
(c) Other Affected Owners. If the Affected Owner is not a Deceased
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Owner or a Selling Owner, 75% of the Purchase Price calculated in accordance
with Section 8.1(a) as if the Affected Owner were a Deceased Owner.
8.2 Testamentary Seller Purchase Price. As used in this Agreement,
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the "Purchase Price" of any Stock owned by a Testamentary Seller means the
Agreed Value on the date of the testamentary Transfer (which shall be the date
of the death of the transferor to such Testamentary Seller) multiplied by the
number of shares of Stock.
SECTION 9: PAYMENT TERMS
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As used in this Agreement, "Payment Terms" means the following terms:
9.1 Pay-Out. Except as otherwise provided in this Section 9, the
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Purchase Price shall be paid in 40 equal consecutive quarterly installments
beginning three months after the Date of Delivery, together
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with interest on the outstanding principal balance accruing from the Date of
Delivery at the minimum annual rate then necessary to avoid the application of
the imputed interest provisions of the Internal Revenue Code of 1986, as
amended, or if no imputed interest provisions are applicable, at the rate of 8%
per annum. This indebtedness shall be evidenced by a nonnegotiable promissory
note, in the form of Exhibit D to this Agreement, which shall be duly executed
by the purchaser and delivered to the Affected Owner (or his personal
representative) or Testamentary Seller on the Date of Delivery.
9.2 Insurance. Notwithstanding Section 9.1, if the Affected Owner is
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a Deceased Owner or dies during the pay-out period, and Corporation and/or one
or more Remaining Owners receive proceeds of any life insurance policies on the
Affected Owner which are listed on Exhibit E to this Agreement, then, within 30
days after receipt of any such proceeds, the full amount thereof shall be paid
to the personal representative of the Affected Owner, up to but not exceeding
the total Purchase Price or the then outstanding principal balance of the
Purchase Price. All such payments shall be applied on account of the Purchase
Price and the balance due, if any, shall be paid as provided under Section 9.1.
If the Corporation and/or one or more remaining Owners receive
proceeds of any life insurance policies on the transferor to any Testamentary
Seller which are listed on Exhibit E to this Agreement, then within 30 days
after receipt of any such proceeds the full amount thereof shall be paid to the
Testamentary Seller up to but not exceeding the total purchase price or then
outstanding balance of the Purchase Price. All such payments shall be applied
on account of the Purchase Price and the balance due, if any, shall be paid as
provided under Section 9.1.
9.3 Small Purchase Price. If the Purchase Price is less than
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$10,000, then it shall be paid in full on the Date of Delivery.
9.4 Selling Owners. If the Affected Owner is a Selling Owner and the
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purchaser elects (in accordance with Section 8.2) to have the Purchase Price be
the Offer Price, then the Purchase Price shall be paid on the Offer Terms (as
defined in Section 4.2).
9.5 Indebtedness. Any indebtedness of the Affected Owner or
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Testamentary Seller to Corporation and/or any Remaining Owners shall be
liquidated by the application to such indebtedness of such portion of the
Purchase Price as is necessary, beginning with the first installment. Any
indebtedness of Corporation and/or any Remaining Owners to the Affected Owner or
Testamentary Seller shall be added to the Purchase Price and payable therewith
on the terms stated in this Section 9.
9.6 Restrictions Pending Full Payment. For as long as any Stock
---------------------------------
purchased under this Agreement has not been paid for in full, Corporation shall
not cause or permit any of the following, except with the prior written consent
of the Person to whom the unpaid portion of the Purchase Price is payable, which
consent shall not be unreasonably withheld:
(a) The sale or issuance of any new stock or other securities of
Corporation, other than a public offering under federal securities law.
(b) The dissolution, liquidation or other termination of
Corporation.
(c) The discontinuance of the normal operations of Corporation with
intention to dissolve or liquidate.
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(d) The sale, assignment or other disposition of all or
substantially all of the assets of Corporation.
(e) The merger or consolidation of Corporation with any unrelated
Person, or any other reorganization involving Corporation and any unrelated
Person.
SECTION 10: INSURANCE
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10.1 Insurance Subject to Agreement. Corporation and any Owner may
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purchase life insurance policies on any Owner for the purpose of funding or
partially funding the purchase of the Stock of the insured Owner under this
Agreement. The Owners shall cooperate with Corporation and each other in any
manner reasonably necessary to obtain such insurance coverage, including without
limitation preparing applications and submitting to physical examinations. All
insurance policies to be subject to this Agreement must be listed on Exhibit E
to this Agreement. If two or more Owners agree to maintain policies on each
other and to list the policies on Exhibit E, then no such policy shall be
deleted from Exhibit E unless all such Owners agree to the deletion or unless
the Owner insured thereunder no longer owns any Stock. Otherwise, any party may
at any time add to or delete from Exhibit E any policy owned by him, by giving
notice to the other parties of the addition or deletion.
10.2 Claims. If any party maintains insurance for the purpose of
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funding or partially funding the purchase of Stock under this Agreement, then
such party shall promptly submit all applications for benefits to the
appropriate insurers after the occurrence of any insurable incident relating to
this Agreement. Notwithstanding the provisions of Section 9, if any party is
unable to meet the Payment Terms due to a delay in receiving any such benefits
for a reason not within such party's reasonable control, then the Payment Terms
shall be extended for a period of up to 90 days until such benefits are
received.
SECTION 11: OTHER PROVISIONS
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11.1 Endorsements. Each certificate of Stock shall be endorsed as
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follows:
ALL SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN
AGREEMENT OR AGREEMENTS CONTAINING RESTRICTIONS UPON TRANSFERS,
COPIES OF WHICH ARE ON FILE AT THE CORPORATION'S PRINCIPAL OFFICE
AND WILL BE PROVIDED TO THE HOLDER HEREOF UPON WRITTEN REQUEST.
11.2 Notices. All notices, consents and other communications required or
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permitted under this Agreement shall be in writing, and shall be (a) delivered
personally, (b) mailed by first class certified mail, postage prepaid, return
receipt requested, or (c) sent by a nationally recognized express courier
service, postage or delivery charges prepaid, to the Owners at their respective
addresses stated on Exhibit A to this Agreement or to Corporation at its
principal office. Any party may change its address for notices by giving notice
of a new address to each other party in accordance with this Section 11.2.
11.3 Further Assurances. Each party shall sign and deliver such documents
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as any other party reasonably requests in order to carry out the purposes of
this Agreement.
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11.4 Entire Agreement. This Agreement (together with the Exhibits to
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this Agreement) constitutes the entire agreement among the parties with respect
to its subject matter and supersedes all earlier and contemporaneous oral and
written communications and agreements with respect to the same subject matter.
Without limiting the foregoing, the parties hereby terminate, effective
immediately, any and all existing buy-sell, shareholders or similar agreements
to which any or all of them are parties to the extent any such agreement governs
any Stock. This Agreement shall not be amended except as provided in Sections
2.3, 3.1, 3.2, 5.1(d) and 7.2, or in a written document signed by parties
holding 75% of the Corporation's Class A shares and 75% of the Corporation's
Class B shares.
11.5 Parties Bound. This Agreement shall bind, benefit and be
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enforceable by or against each Owner and his heirs, legal and personal
representatives, estate, beneficiaries and assigns, and Corporation and its
successors and assigns.
11.6 Counterparts. This Agreement may be executed in counterparts, all
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of which together shall constitute one agreement.
11.7 Governing Law and Construction. This Agreement shall be governed by
------------------------------
Pennsylvania law. The gender and number of words used in this Agreement shall
be interchangeable as the context requires or permits. Section headings are for
convenience only, do not constitute a part of this Agreement, and shall not
affect the interpretation of this Agreement. The invalidity of any of the
provisions of this Agreement shall not affect the validity of the other
provisions. This Agreement shall supersede any prior Agreement between the
parties hereto relative to the transfer of Stock.
11.8 Voting Limitations. In the event that Shares are held in trust or
------------------
custodianship, in any vote of stockholders of the Corporation such shares may be
voted only by a trustee or custodian who is ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. or a lineal
descendant of ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇.
11.9 Neutral Construction. The parties have negotiated this Agreement and
--------------------
all of the terms and conditions contained in this Agreement in good faith and at
arms' length. No term, condition, or provision contained in this Agreement shall
be construed against any party or in favor of any party (i) because such party
or such party's counsel drafted, revised, commented upon, or did not comment
upon, such term, condition, or provision; or (ii) because of any presumption as
to any inequality of bargaining power between or among the parties. Furthermore,
all terms, conditions, and provisions contained in this Agreement shall be
construed and interpreted in a manner which is consistent with all other terms,
conditions, and provisions contained in this Agreement.
11.10 Termination upon Public Offering. The provisions of this
--------------------------------
agreement, other than the obligations existing under Sections 9.1 and 12.5,
shall terminate upon the closing of a public offering of the Company's shares
registered under the Securities Act of 1933, as amended.
SECTION 12: SUBCHAPTER S PROVISIONS
------------------------------------
12.1 Definition. "Subchapter S" means the provisions of Section 1361 et
---------- --
seq. of the Internal Revenue Code of 1986, as amended (the "IRC"), and any
---
regulations, rulings and opinions thereunder, along with any successor
provisions, regulations, rulings and opinions as may be applicable to Subchapter
S corporations.
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12.2 Restriction on Transfers. Notwithstanding the provisions of Section
------------------------
3 or any other provisions of this Agreement, no Owner shall Transfer any share
of Stock to any Person if such Transfer would cause, directly or indirectly,
Corporation's Subchapter S election to terminate. Transfers prohibited under
this Section 12.2 include, without limitation, Transfers (a) to any Person which
would cause the Corporation to have more than 35 shareholders, (b) to any
nonresident alien, (c) to any Person not permitted to be a shareholder of a
Subchapter S corporation under the IRC, or (d) to any Person which would in any
other way cause a termination of the Corporation's Subchapter S election.
12.3 Representations. Each Owner represents and warrants to each other
---------------
Owner that his or her will and other estate planning documents and techniques do
not and will not provide for any Transfer of Stock in violation of Section 12.2
or any other provision of this Agreement.
12.4 Void Transfer. Corporation shall not record in its books or
-------------
otherwise recognize any purported or intended Transfer of Stock, whether by
operation of law or otherwise, and such purported or intended Transfer shall be
null, void and of no force or effect, if in the opinion of counsel to
Corporation it is to a transferee whose status as a shareholder of Corporation
would cause, directly or indirectly, the termination of Corporation's S
election.
12.5 Indemnification for Breach. If an Owner's breach of any provision of
--------------------------
this Agreement causes Corporation's Subchapter S election to terminate, such
Owner (the "Indemnitor") shall indemnify each nonbreaching Owner (the
"Indemnitee") for the Indemnitee's loss, during the period in which Corporation
is ineligible to make a Subchapter S election, of any Federal, state and local
income tax benefits resulting from the termination, including all items of
income, loss, deduction, and credit ("Tax Items") which would have been passed
to such Indemnitee but for the termination, and for any distributions not made
by Corporation to the Indemnitee as a result of the termination. For the
purposes of this Section 12.5, Federal, state and local income tax benefits mean
the excess of (a) the Indemnitee's share of Federal, state and local income
taxes on Corporation's dividend distributions, assuming such distributions are
made by Corporation, over (b) the Indemnitee's share of Federal, state and local
income taxes that would have been imposed on Corporation as a Subchapter S
corporation if it had the same Tax Items that it had as a C corporation, plus
the amount of Federal, state and local income taxes that the Indemnitee would
have paid on the Tax Items which would have been passed through to him or her
had Corporation been a Subchapter S corporation.
12.6 Dividend Payments. The Board of Directors of Corporation will
-----------------
declare dividends from time to time in order to enable the Owners to pay all
Federal, state and local taxes on their shares of Corporation's taxable income.
Such dividends will be declared in amounts sufficient to enable the Owners to
pay such taxes as if all of the Owners were subject to tax at the highest
marginal income tax rates then in effect and, thereafter, in proportion to their
shareholdings in Corporation.
12.7 Termination of Owner's Interest. In the event that any Owner
-------------------------------
terminates his or her interest in the Corporation during a taxable year, and in
the event that the Board of Directors votes to so recommend, each of the Owners
hereby agrees to elect to allocate the taxable income of the Corporation for
such year as if the taxable year consisted of two taxable years, as provided in
Section 1377(a)(2) of the IRC.
WITNESS THE DUE EXECUTION AND DELIVERY HEREOF ON THE 19th DAY OF
July, 1996.
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▇▇▇▇▇▇ ▇▇▇▇▇ Corp.
/s/ ▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. /s/ Eve Bullitt ▇▇▇▇▇▇
By: -------------------------------------------- ----------------------------
▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., individually and for the Eve Bullitt ▇▇▇▇▇▇, for the
benefit of ▇▇▇▇ ▇▇▇▇▇▇, benefit of ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇
▇▇▇▇▇▇
/s/ J. ▇▇▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
-------------------------------------------- ----------------------------
J. ▇▇▇▇▇ ▇▇▇▇▇▇, individually and for the ▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
benefit of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------------- ----------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, individually and for the ▇▇▇▇ ▇. ▇▇▇▇▇▇
benefit of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------- ----------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, individually and for the ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
benefit of ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇., individually and for the
▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇ benefit of ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇, ▇▇.
-------------------------------------------- ----------------------------
▇▇▇▇▇▇▇ ▇▇▇, individually and for the benefit ▇▇▇▇▇▇▇ ▇▇▇, ▇▇.
of ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇, and ▇▇▇▇▇ ▇▇▇
/s/ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ /s/ ▇▇▇▇▇▇▇▇▇ ▇▇▇
-------------------------------------------- ----------------------------
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇ /s/ ▇▇▇▇▇▇▇ ▇▇▇
-------------------------------------------- ----------------------------
▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇▇▇, III /s/ ▇▇▇▇▇▇▇ ▇▇▇
-------------------------------------------- ----------------------------
▇▇▇▇▇▇▇ ▇▇▇, III ▇▇▇▇▇▇▇ ▇▇▇
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