SCHEDULE 3.2C
FORM OF REPURCHASE AND GUARANTEE AGREEMENT
REPURCHASE AND GUARANTEE AGREEMENT
This Agreement is made this day of November, 1996 by and
between Dynatec International, Inc. ("Dynatec"), a Utah corporation, and Nordic
Industries, Inc. ("Nordic"), a Texas corporation.
RECITALS
WHEREAS, Dynatec, Nordic, and others have entered into an Asset
Purchase Agreement (the "APA"), whereby Nordic Technologies, Inc.
("Technologies"), a Utah corporation, as the wholly owned subsidiary of Dynatec,
will acquire the principal assets of Nordic-Lites, Inc., a Texas corporation,
and undertake the business of the manufacture and sale of flashlight products;
WHEREAS, pursuant to the APA, Nordic (as one of the current
shareholders of the Nordic-Lites, Inc.), is to receive 305,000 shares of the
common stock of Dynatec; and
WHEREAS, Dynatec and Nordic have agreed to provide Nordic with
certain assurances as to the amount of proceeds that Nordic will derive from the
acquisition of the Dynatec stock;
NOW, FOR good and valuable consideration, the receipt of which is
hereby acknowledged, the parties agree as follows:
AGREEMENT
1. CATEGORIES OF SHARES. The Dynatec common stock received by Nordic
shall be divided into three categories. The first category of shares consists
of 50,000 shares of common stock which are subject to the guarantee provisions
of paragraph three below, and are hereafter referred to as the "Guarantee
Shares". The second category of Dynatec shares consists of 150,000 shares which
are to be registered with the SEC pursuant to paragraph 2.1(d) of the APA, and
are hereafter referred to as the "Registered Shares". The remaining 105,000
Dynatec shares are hereafter referred to as the "Unregistered Shares". Both the
Guarantee Shares and the Registered Shares are to be registered by Dynatec
pursuant to paragraph 2.1(d) of the APA. The Registered Shares and the
Unregistered Shares are subject to the
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repurchase provisions of this Agreement as set forth in paragraphs three and
four below, and are collectively referred to hereafter as the "Repurchase
Shares".
2. PAYMENT REGARDING GUARANTEE SHARES. It is the stated purpose of
Nordic that it intends to sell the Guarantee Shares at the earliest possible
time during the first fifteen (15) months after the execution of this
Agreement. To the extent that the aggregate sales price of the Guarantee
Shares is less than $250,000 (prior to taking into consideration commissions
of sale), Dynatec will pay to Nordic, within thirty (30) days of written
notice of the final sale of all Guarantee Shares, the difference between
$250,000 and the lesser aggregate sales price. All sales of the Guarantee
Shares shall be made subject to the terms of this paragraph, and in one of
the following categories of transactions; (a) brokers' transactions as
defined in Rule 144 promulgated by the Securities and Exchange Commission;
(b) in sales "at the market" on NASDAQ; (c) in block trades in which the
broker or dealer so engaged will attempt to sell the shares as agent but may
position and resell a portion of the block as principal to facilitate the
transaction; (d) in brokerage transactions in which the broker solicits
purchasers, provided the sales price is not less than $5.00 per share; or (e)
in privately negotiated transactions between Nordic and private purchasers,
provided the sales price is not less than $5.00 per share. Nordic shall use
its best efforts and act in good faith in selling the Guarantee Shares in
order to secure the best possible price upon the sale of the Guarantee
Shares. Nordic shall offer any of the Guarantee Shares to Dynatec at the
price of $5.00 a share, if any broker proposes to sell such shares for less
than $5.00 per share.
3. SINKING FUND. From the time of the Closing (as defined in the
APA), Dynatec will direct and ensure that Technologies will place ten (10%)
percent of the invoiced sales price received by Technologies on the sale of all
flashlight products of Technologies in an interest bearing account (the "Sinking
Fund"). These funds will be accumulated in the Sinking Fund until such time as
an aggregate of $500,000 has been placed into the fund. Dynatec and other
parties, at the direction of Dynatec, may contribute cash to the Sinking Fund to
assist in attaining the $500,000 maximum. The cash placed in the Sinking Fund
shall be used to purchase the Repurchased Shares on the Repurchase Dates, as
described in paragraph four below. Upon the purchase of all remaining
Repurchase Shares held by Nordic, or upon the cancellation of the Repurchase
Right, as provided in paragraph five below, the balance of any funds remaining
in the Sinking Fund will be released to Technologies to be used for its business
purposes, or returned to the parties or entities that made such funds available.
4. REPURCHASE OF SHARES. Until the cancellation under paragraph five
of the Repurchase Right described in this paragraph, Nordic shall sell
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to Dynatec, and Dynatec shall buy, any or all of the Repurchase Shares, first
out of the Registered Shares (and when such shares have been purchased
hereunder or transferred to third parties by Nordic), then out of the
Unregistered Shares. The purchase price for the Repurchase Shares shall be
$2.50 per share. However, Dynatec shall have no obligation to purchase any
shares unless there are sufficient funds in the Sinking Fund referred to in
paragraph three above to purchase the Repurchase Shares. In the event that
Nordic transfers any of the Repurchase Shares to any other person or entity,
no Repurchase Right will remain attached to such shares. It is the intention
of the parties that only Nordic and Dynatec may exercise the rights provided
herein, and that Dynatec may not repurchase shares from any transferee of
Nordic. The first repurchase of shares shall take place on the first
business day six (6) months after the execution of this Agreement.
Subsequent repurchases shall take place on the first business day each three
months thereafter, until such time as Nordic no longer owns any of the
Repurchase Shares. Each day on which a repurchase shall take place shall be
known as a "Repurchase Date". On the first Repurchase date, Dynatec may not
purchase more than 125,000 of the Repurchase Shares. On the second
Repurchase date, the total of Dynatec's purchases on the first and second
Repurchase Dates may not exceed 125,000 of the Repurchase Shares. Not less
than thirty (30) days prior to a Repurchase Date, Dynatec will give written
notice (the "Repurchase Notice") to Nordic of the amount of cash then on
hand in the Sinking Fund, and shall compute the number of shares which will
be purchased on the Repurchase Date based upon the amount of funds referenced
in the notice.
5. CANCELLATION OF REPURCHASE RIGHT. Upon receiving the Repurchase
Notice from Dynatec, Nordic shall have twenty (20) days in which Nordic may give
written notice that it has elected to terminate the Repurchase Right set forth
in paragraph four of this Agreement, and the provisions of paragraph four shall
thereafter be null and void as to all Repurchase Shares which Nordic owns as of
the date that it gave notice of its election to terminate the Repurchase Right.
6. NUMERICAL LIMITATION ON SALES. The parties agree that none of the
shares referred to in this Agreement may be sold by Nordic for a period of six
months from the date of this Agreement. For the eighteen months thereafter (and
except for any Repurchase Shares purchased by funds from the Sinking Fund),
Nordic will not sell more than 40,000 shares in any three month period.
7. ARBITRATION. Any dispute, controversy or claim arising out of or
in connection with or relating to this Agreement, or any breach or alleged
breach thereof shall, as the exclusive method for resolution, be determined and
settled by arbitration in Salt Lake City, Utah, pursuant to the Commercial
Arbitration Rules
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then in effect of the American Arbitration Association. Any award rendered
shall be final and conclusive upon the parties and a judgment thereon may be
entered in the highest court or the forum, state or federal, having
jurisdiction, and shall include an award in favor of the prevailing party to
pay all reasonable costs and attorneys' fees incurred by the prevailing party
as well as the cost of the arbitration.
8. MISCELLANEOUS PROVISIONS
8.1 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
among the parties and supersedes all prior contemporaneous agreements and
understandings of the parties with respect to the subject matter hereof.
8.2. NOTICES. Unless otherwise provided herein, any notice, demand,
or communication required or permitted to be given pursuant to any provision of
this Agreement shall be deemed to have been sufficiently given or served for all
purposes if delivered personally to the party or to an executive officer of the
party to whom the same is directed or, if sent, by registered or certified mail,
postage prepaid, addressed to the party at the address set forth below, or to
such other address as the party may from time to time specify by written notice
to the other party in accordance with this paragraph. Except as otherwise
provided herein, any such notice shall be deemed to be given three business days
after the date on which the same was deposited in the United States mail,
addressed and sent as aforesaid.
Nordic Industries, Inc.
0000 Xxxxxxx Xxxxxx
Xxxx Xxxxx, Xxxxx 00000
with copy to: Xxxxxx X. Xxxxx
2200 One Galleria Tower
00000 Xxxx Xxxx, X.X. 00
Xxxxxx, Xxxxx 00000-0000
Dynatec International, Inc.
0000 Xxxx Xxxxx Xxxxx Xxxxx
Xxxx Xxxx Xxxx, Xxxx 00000
with copy to: Xxxxx X. Xxxx
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx Xxxx, Xxxx 00000
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8.3. APPLICATION OF UTAH LAW. This Agreement shall be construed and
enforced in accordance with the laws of the State of Utah.
8.4. CONSTRUCTION. Whenever the singular number is used in this
Agreement and when required by the context, the same shall include the plural,
and the masculine gender shall include the feminine and neuter genders and vice
versa.
8.5. HEADINGS. The headings in this Agreement are inserted for
convenience only and are in no way intended to describe, interpret, define, or
limit the scope, extent or intent of this Agreement or any provision thereof.
8.6. WAIVERS. The failure of any party to seek redress for violation
of or to insist upon the strict performance of any covenant or condition of this
Agreement shall not prevent a subsequent act, which would have originally
constituted a violation, from having the effect of an original violation.
8.7. RIGHTS AND REMEDIES CUMULATIVE. The rights and remedies
provided by this Agreement are cumulative and the use of any one right or remedy
by any party shall not preclude or waive the right to use any or all other
remedies. Said rights and remedies are given in addition to any other rights
the parties may have by law, statute, ordinance or otherwise.
8.8. SEVERABILITY. If any provision of this Agreement or the
application thereof to any person or circumstance shall be invalid, illegal or
unenforceable to any extent, the remainder of this Agreement and the application
of such provision to other persons or circumstances shall not be affected, and
such provision shall be enforceable to the fullest extend permitted by law.
8.9. SUCCESSORS AND ASSIGNS. Except as otherwise specifically
provided herein, this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
8.10. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same instrument.
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IN WITNESS WHEREOF, the undersigned parties have executed this
Agreement as of the date first written above.
DYNATEC INTERNATIONAL, INC., NORDIC INDUSTRIES, INC.
a Utah corporation
By______________________________ By______________________________
Its: Its:
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SCHEDULE 6.10B
INDIVIDUALS TO SIGN PROPRIETARY
INFORMATION AGREEMENTS
Xxxx X. Xxxxx
Xxxx X. Xxxxxx
Xxxxxx X. Xxxxxxxx
Xxxxx X. XxXxxxx
Xxx XxXxxx
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