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Exhibit 2.2
STOCK AGREEMENT
DATED AS OF MAY 18, 1998
BETWEEN
CABLE LINK, INC.,
PC & PARTS, INC.
AND
XXXXX XXXXXX
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS.......................................................1
Section 1.1. Definitions.................................................1
ARTICLE II TERMS OF OPTION..................................................4
Section 2.1. Purchase of Shares..........................................4
Section 2.2. Payment.....................................................4
ARTICLE III RIGHTS AND OBLIGATIONS WITH RESPECT TO TRANSFER.................4
Section 3.1. General Restrictions........................................4
Section 3.2. Restrictive Legend..........................................5
Section 3.3. Rights of First Refusal.....................................5
Section 3.4. Tag-along Rights............................................7
Section 3.5 Improper Transfer...........................................9
Section 3.6 Change in Control...........................................9
Section 3.7. Disposition Upon Death of Executive.........................9
Section 3.8. Termination................................................10
Section 3.9. Drag-Along Rights..........................................10
ARTICLE IV REGISTRATION RIGHTS.............................................10
Section 4.1. Piggy-Back Registration...................................10
Section 4.2. Reduction of Offering.....................................11
Section 4.3. Registration Procedures...................................11
Section 4.4. Registration Expenses.....................................13
Section 4.5. Indemnification by Auro...................................13
Section 4.6. Indemnification by Executive..............................14
Section 4.7. Conduct of Indemnification Proceedings....................14
Section 4.8. Contribution..............................................15
Section 4.9. Participation in Underwritten Registrations...............16
Section 4.10. Current and Periodic Reports..............................16
Section 4.11. Holdback Agreements.......................................16
ARTICLE V MISCELLANEOUS....................................................17
Section 5.1. Headings..................................................17
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Section 5.2. No Inconsistent Agreements................................17
Section 5.3. Entire Agreement; Amendments; No Waivers..................17
Section 5.4. Notices...................................................17
Section 5.5. Applicable Law............................................17
Section 5.6. Severability..............................................18
Section 5.7. Successors, Assigns, Transferees..........................18
Section 5.8. Counterparts; Effectiveness...............................18
Section 5.9. Fees and Expenses.........................................18
Section 5.10. Remedies..................................................18
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STOCK AGREEMENT
THIS STOCK AGREEMENT (the "Agreement"), dated as of May 18, 1998, is
made by and among CABLE LINK, INC., an Ohio corporation ("CLI"), PC & PARTS,
INC., an Ohio corporation doing business as Auro Computer Systems ("Auro") and
XXXXX XXXXXX, an individual residing in Westerville, Ohio ("Executive").
WHEREAS, Executive and CLI are acquiring the Shares, as hereinafter
defined; and
WHEREAS, the parties hereto desire to set forth certain provisions
regarding the disposition of the Shares, and other matters;
NOW THEREFORE, the parties hereto, intending to be legally bound, agree
as follows:
ARTICLE I
DEFINITIONS
Section 1.1. DEFINITIONS. The following terms, as used herein, have the
following meanings:
"Adverse Claim" means, with respect to any property or asset, any lien,
pledge, charge, security interest, encumbrance or other claim of any kind in
respect of such property or asset.
"Affiliate", as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, such
Person. For purposes of this definition, "control" (including, with correlative
meaning, the terms "controlling", "controlled by" and "under common control
with"), as applied to any Person, means the possession, directly or indirectly,
of the power to direct or cause the direction of the management and policies of
such Person, whether through the ownership of voting securities, by contract or
otherwise.
"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in the City of Columbus, Ohio are authorized by law to
close.
"Competitor" means any Person which competes, directly or indirectly,
with any operations of Auro, as such operations exist on the date of
determination.
"Convertible Securities" means securities convertible into or
exchangeable for Auro equity securities.
"Duly Endorsed" means duly endorsed in blank by the Person or Persons
in whose name a stock certificate is registered or accompanied by a duly
executed stock assignment separate from the certificate with the signature(s)
thereon guaranteed by a commercial bank or trust company or a member of a
national securities exchange or of the National Association of Securities
Dealers, Inc.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles.
"Permitted Transferee" means the spouse or lineal descendants of
Executive, or a trust for the benefit of same, or any partnership or limited
liability company controlled by Executive.
"Person" shall mean and include an individual, a partnership, a joint
venture, a corporation, a limited liability company, a trust, an unincorporated
organization and a government or other department or agency thereof.
"Public Offering" means any primary or secondary public offering of
Shares pursuant to an effective registration statement under the Securities Act
other than pursuant to a registration statement on Form S-4 or Form S-8 or any
successor or similar form.
"Qualified Public Offering" means an underwritten Public Offering of
Shares of Auro or any successor thereto.
"Registrable Securities" means the Shares held by Executive and his
Permitted Transferees and any capital stock for which such Shares are exchanged
or into which it is converted; provided that such securities shall cease to be
Registrable Securities when (a) a registration statement relating to such
securities shall have been declared effective by the SEC, and such securities
shall have been disposed of pursuant to such effective registration statement,
or (b) such securities are sold under circumstances in which all of the
applicable conditions of Rule 144 (or any similar provisions then in effect)
under the Securities Act are met or such Shares may be sold pursuant to Rule
144(k).
"Registrable Stock" means the Shares held by shareholders of Auro other
than Executive or his Permitted Transferees and any capital stock for which such
Shares are exchanged or into which it is converted; provided that such
securities shall cease to be "Registrable Stock" when (a) a registration
statement relating to such securities shall have been declared effective by the
SEC, and such securities shall have been disposed of pursuant to such effective
registration statement, or (b) such securities are sold under circumstances in
which all of the applicable conditions of Rule 144 (or any similar provisions
then in effect) under the Securities Act are met or such Shares may be sold
pursuant to Rule 144(k).
"Rule 144" means Rule 144 promulgated under the Securities Act.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means the "common" shares of Auro, without par value.
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"Third Party" means a prospective purchaser of Shares from Executive in
an arm's-length transaction where such purchaser is not Auro or an Affiliate of
Auro.
"Underwriter" means a securities dealer who purchases any Registrable
Securities as a principal in connection with a distribution of such Registrable
Securities and not as part of such dealer's market-making activities.
"Voting Securities" means any class or series of capital stock and any
bond, debenture or other obligation of Auro having the right to vote generally
on matters voted on by the shareholders of Auro.
(b) Each of the following terms is defined in the Section
opposite such term:
TERM SECTION
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Determination Date 3.3(d)
Indemnified Party 4.7
Indemnifying Party 4.7
Inspectors 4.3(g)
Maximum Offering Size 4.2(a)
Obligations 2.2
Offer 3.3(a)
Offer Notice 3.3(a)
Offer Price 3.3(a)
Offered Stock 3.3(a)
Other Party 3.3(b)
Piggy-Back Registration 4.1
Ratio 2.1
Records 4.3(g)
Sale Date 3.4(a)(iii)
Sale or Merger 3.9
Seller 3.3(a)
Stock Purchase Agreement 2.1
Tag-along Notice 3.4(a)(ii)
Tag-along Notice Date 3.4(a)(i)
Tag-along Notice Period 3.4(a)(ii)
Tag-along Offer 3.4(a)(i)
Tag-along Offer Notice 3.4(a)(i)
Tag-along Purchaser 3.4(a)(i)
Tag-along Ratio 3.4(b)
Transfer 3.1(a)
Transferee 3.1(a)
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ARTICLE II
TERMS OF ACQUISITION OF SHARES
SECTION 2.1. PURCHASE OF SHARES. Executive and CLI agree to use
reasonable efforts in good faith to acquire the issued and outstanding Shares
with Executive contributing $100,000 in exchange for a percentage (the "Ratio")
of the Shares determined by multiplying the total number of Shares by a
fraction, the numerator of which is $100,000, and the denominator is the sum of
$200,000 plus the aggregate purchase price for the Shares, as the same may be
adjusted pursuant to Section 1.7(b) of that certain Stock Purchase Agreement
dated of even date herewith among Auro, CLI, Executive and the shareholders of
Auro (the "Stock Purchase Agreement"), and CLI contributing the balance of the
consideration (up to $1,120,000) for the balance of the Shares.
SECTION 2.2. EXPENSES. Executive shall be responsible for the Ratio of
all auditing fees and expenses incurred in connection with the acquisition of
Auro (the "Obligations"), net of all amounts received by CLI and Executive
pursuant to Section 1.7(c) of the Stock Purchase Agreement. Nothing contained in
Section 7.10 of the Stock Purchase and Non-Compete Agreement shall expand the
Obligations of Executive. Auro will be responsible for paying or reimbursing
Executive and CLI for all legal fees and expenses incurred in connection with
the acquisition of Auro, except that Executive shall be solely responsible for
all legal fees and expenses incurred by counsel for Executive in negotiating and
reviewing Executive's employment agreement with Auro. Notwithstanding anything
contained in the Stock Purchase Agreement to the contrary, the parties hereto
agree that (a) any liabilities which may arise under Section 5.1 of the Stock
Purchase Agreement shall be primarily the responsibility of Auro, and (b)
nothing contained in Section 7.10 of the Stock Purchase Agreement shall expand
the obligations of Executive with respect to expenses for which he is
responsible.
ARTICLE III
RIGHTS AND OBLIGATIONS WITH
RESPECT TO TRANSFER
SECTION 3.1. GENERAL RESTRICTIONS.
(a) Neither Executive nor CLI shall, directly or indirectly,
transfer, sell, assign, pledge, hypothecate, encumber or otherwise dispose of
any Shares owned by him or it to any Person (any such act being referred to as a
"Transfer", with the term "Transferee" to mean any transferee in a Transfer),
except (i) in compliance with all applicable federal and state securities laws
and (ii) as expressly permitted by this Agreement.
(b) Notwithstanding any other provision of this Agreement to
the contrary, either Executive or CLI may at any time Transfer any or all Shares
owned by him or it to one or more Permitted Transferees, and any such Permitted
Transferee may at any time Transfer any or all of such Shares to one or more
other Permitted Transferees so long as in each such case (i) such Permitted
Transferee shall have agreed in writing to be bound (through execution of an
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agreement substantially in the form of Exhibit C hereto) by the terms of this
Agreement applicable to the transferor and (ii) the Transfer to such Permitted
Transferee is not in violation of any applicable federal or state securities
laws. Any such Transfer shall not relieve the transferor of any liability under
this Agreement whether occurring before or after such Transfer, and such
transferor shall remain liable for any breach of this Agreement or Exhibit C by
such Permitted Transferee.
SECTION 3.2. RESTRICTIVE LEGEND.
(a) For so long as this Agreement remains in effect, each
certificate representing Shares owned by CLI, Executive or their Permitted
Transferees shall include a legend in substantially the following form:
THE TRANSFER OF THIS SECURITY HAS NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE
SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD EXCEPT IN
COMPLIANCE THEREWITH. THIS SECURITY IS SUBJECT TO ADDITIONAL
RESTRICTIONS ON TRANSFER AS SET FORTH IN AN AGREEMENT, DATED
AS OF MAY 18, 1998, A COPY OF WHICH WILL BE MAILED TO A
SHAREHOLDER OF THE ISSUER WITHOUT CHARGE WITHIN FIVE DAYS
AFTER RECEIPT OF WRITTEN REQUEST THEREFOR.
(b) If any Shares cease to be Registrable Securities, Auro
shall, upon written request of either Executive or CLI, issue to the requesting
party or its Permitted Transferees a new certificate evidencing such Shares
without the first sentence of the legend required by Section 3.2(a) endorsed
thereon. If any Shares cease to be subject to any restrictions on Transfer set
forth in this Agreement, Auro shall, upon the written request of either
Executive or CLI, issue to the requesting party or its Permitted Transferees a
new certificate evidencing such Shares without the second sentence of the legend
required by Section 3.2(a) endorsed thereon.
SECTION 3.3. RIGHTS OF FIRST REFUSAL.
(a) Neither Executive nor CLI will Transfer any Shares, other
than pursuant to Section 3.1(b), without first giving Auro and the other party
hereto prior notice thereof (an "Offer Notice") and the opportunity (as
hereinafter provided) to purchase all but not less than all such Shares (the
"Offered Stock") at a cash price (the "Offer Price"), which, prior to the first
Public Offering, shall be equal to the sum of the amount of any cash plus the
fair market value of any other consideration offered by the prospective
purchaser or other transferee pursuant to a bona fide offer to purchase. The
Offer Notice shall constitute an offer (the "Offer") by the party sending the
Offer Notice (the "Seller") to sell the Offered Stock at the Offer Price and
shall state the identity of the purchaser or Transferee and the terms of the
proposed Transfer.
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(b) The Offer may be accepted within 30 days of receipt by
Auro of the Offer Notice and, if accepted, such acceptance shall constitute
Auro's binding agreement to purchase the Offered Stock by the later of (i) the
date 15 days after such acceptance or (ii) the date by which the prospective
purchaser or Transferee would have been obligated to purchase the Offered Stock.
If Auro does not accept, the other party hereto (the "Other Party") may accept
the Offer within 45 days of receipt by the Other Party of the Offer Notice and
if accepted, such acceptance shall constitute the Other Party's binding
agreement to purchase the Offered Stock by the later of (i) the date 30 days
after such acceptance or (ii) the date by which the prospective purchaser or
Transferee would have been obligated to purchase the Offered Stock. If the Offer
is not accepted or the Offered Stock is not purchased as contemplated above, the
Seller may Transfer the Offered Stock to such prospective purchaser or
Transferee at a price not less than the Offer Price and on substantially the
same terms as described in the Offer Notice. If the Transfer to such prospective
purchaser or Transferee is not consummated as contemplated above within 30 days
after the expiration of the 45-day offer period or earlier irrevocable rejection
of the Offer or failure to purchase the Offered Stock after acceptance of the
Offer, no Transfer may be made by Seller without again complying with this
Section 3.3. Notwithstanding the foregoing, if the purchase and sale of the
Offered Stock is subject to any prior regulatory approval, the time periods
specified above within which such purchase and sale must be consummated shall be
extended until the expiration of five Business Days after all such approvals
shall have been received.
(c) If the consideration offered by the prospective purchaser
or Transferee includes non-cash consideration, Seller and the Other Party shall
negotiate in good faith with a view to agreeing upon the fair market value of
such non-cash consideration. If, despite such good faith negotiations, Seller
and the Other Party are unable to agree on such fair market value within 15 days
following receipt by Auro and the Other Party of the Offer Notice, each of
Seller and the Other Party shall, at its own expense, retain an investment
banking firm of national reputation to determine such fair market value. If such
two investment banking firms do not make substantially similar determinations
and neither determination is acceptable to both Seller and the Other Party, then
such investment banking firms shall, at the equally shared expense of Seller and
the Other Party, retain a third investment banking firm of national reputation
to select between the two determinations, which selection shall be binding upon
each party. If a determination under this subsection (c) is required, the
deadline for acceptance provided for in this Section 3.3 shall be postponed
until the expiration of five Business Days after the date of such determination.
(d) On and after the date of the first Public Offering, the
Offer Price shall be (i) if the Shares are listed or admitted to trading on a
national securities exchange or The Nasdaq National Market, the per Share
closing price regular way on the principal national securities exchange or The
Nasdaq National Market on which the Shares are listed or admitted to trading on
the 15th Business Day following the date on which the Offer Notice was received
by Auro, or, if no closing price can be determined for such date, the most
recent date prior to such date for which such price can reasonably be
ascertained (the "Determination Date"), or (ii) if the Shares are not listed or
admitted to trading on a national securities exchange or The Nasdaq National
Market, the mean between the representative bid and asked per Share prices in
the over-the-counter market at the closing on the Determination Date, as
reported by The Nasdaq Stock
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Market or if the Shares are not then quoted by The Nasdaq Stock Market as
furnished by any market maker selected by Auro, or if no such prices can be
determined for such date, the most recent date prior to such date for which such
prices can be determined. Within two Business Days after the Determination Date,
Auro shall notify Seller and the Other Party whether or not Auro intends to
purchase the Offered Stock at the Offered Price. If Auro elects not to purchase
the Offered Stock, the Other Party shall within four Business days after the
Determination Date notify Seller and Auro whether or not the Other Party intends
to purchase the Offered Stock at the Offered Price. The party electing to
purchase the Offered Stock shall deliver the Offer Price by certified check or
wired funds against delivery of the Duly Endorsed certificates for the Offered
Shares within six Business Days of the Determination Date. If both Auro and the
Other Party elect not to purchase the Offered Stock, Seller shall be free to
sell the Offered Stock during the period of 30 days following the Determination
Date. Any Shares not sold during such period shall again be subject to the terms
of this Agreement.
SECTION 3.4. TAG-ALONG RIGHTS.
(a) (i) Except as provided in Section 3.4(e), if CLI proposes
to sell or otherwise dispose of a majority of the issued and outstanding Shares
to any Third Party (a "Tag-along Purchaser") pursuant to a bona fide offer to
purchase (a "Tag-along Offer"), CLI shall provide written notice (the "Tag-along
Offer Notice") of such Tag-along Offer to Auro and Executive (the effective date
of such notice being the "Tag-along Notice Date") in the manner set forth in
this Section 3.4. The Tag-along Offer Notice shall identify the Tag-along
Purchaser, the Tag-along Ratio (as defined below), the consideration per Share
and other material terms and conditions of the Tag-along Offer and, in the case
of a Tag-along Offer in which the consideration payable for Shares consists in
part or in whole of consideration other than cash, such information relating to
such consideration as Executive may reasonably request as being necessary for
Executive to evaluate such non-cash consideration, it being understood that such
request shall not obligate CLI to deliver any information to Executive not
provided to CLI by the Tag-along Purchaser. For purposes of this Section 3.4,
the term "Executive" includes the Permitted Transferees of Executive.
(ii) Executive shall have the right, exercisable as set
forth below, to accept the Tag-along Offer for up to the number of Shares
determined pursuant to Section 3.4(b). The consideration per Share paid to
Executive shall be not less than the highest price paid per share to CLI in
respect of its Shares. If Executive desires to accept the Tag-along Offer,
Executive shall provide CLI with written revocable notice (a "Tag-along Notice")
(specifying, subject to Section 3.4(b), the number of Shares which Executive
desires to sell) within 45 days after the Tag-along Notice Date, and shall
simultaneously provide a copy of such Tag-along Notice to Auro. Such Tag-along
Notice may be withdrawn or modified at any time until the expiration of 45 days
after the Tag-along Notice Date (the "Tag-along Notice Period"). At the
expiration of the Tag-along Notice Period, the most recent Tag-along Notice
shall become irrevocable and binding, and shall constitute an irrevocable
acceptance of the Tag-along Offer by Executive for the Shares specified therein.
(iii) As soon as practicable after the expiration of the
Tag-along Notice Period, CLI shall notify Auro and Executive, if Executive has
delivered a Tag-along Notice, of the
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number of Shares Executive is obligated to sell or otherwise dispose of pursuant
to the Tag-along Offer, such number to be calculated in accordance with Section
3.4(b). CLI shall notify Auro and Executive of the proposed date of any sale
("Sale Date") pursuant to this Section 3.4 not less than five days prior to the
Sale Date, and Executive shall deliver to CLI the Duly Endorsed certificate or
certificates representing the Shares to be sold or otherwise disposed of
pursuant to such offer, together with a limited power-of-attorney authorizing
CLI to sell or otherwise dispose of such Shares pursuant to the terms of the
Tag-along Offer and all other documents required to be executed in connection
with such Tag-along Offer, not less than two days prior to the Sale Date.
(b) Executive shall have the right to sell, pursuant to any
Tag-along Offer, a number of Shares less than or equal to the product of the
total number of Shares offered to be sold by CLI or offered to be purchased by
the Tag-along Purchaser as set forth in such Tag-along Offer multiplied by a
fraction (the "Tag-along Ratio"), the numerator of which is the number of Shares
then held by Executive and the denominator of which shall be an amount equal to
the total number of Shares then held by Executive and CLI. The number of Shares
sold by Executive in a Tag-along Offer shall be equal to the lesser of the
number of Shares calculated pursuant to the formula set forth in this Section
3.4(b) and the number of Shares specified in Executive's Tag-along Notice in
respect of such Tag-along Offer. If, at the termination of the Tag-along Notice
Period, Executive shall not have accepted the Tag-along Offer, Executive will be
deemed to have waived any and all of his rights under this Section 3.4 with
respect to the sale or other disposition of any of his Shares pursuant to such
Tag-along Offer and no Shares held by Executive will be included in such
Tag-along Offer.
(c) Within one Business Day after the consummation of the sale
or other disposition of the Shares pursuant to the Tag-along Offer, CLI shall
notify Executive, shall remit to Executive, if Executive had sent a Tag-along
Notice, the total sales price specified in the Tag-along Offer Notice of the
Shares sold or otherwise disposed of pursuant thereto, and shall furnish such
other evidence of such sale (including the time of completion) and the terms
thereof as may be reasonably requested by Executive.
(d) Notwithstanding anything contained in this Section 3.4,
there shall be no liability on the part of CLI to Executive if the sale of
Shares pursuant to Section 3.4(c) is not consummated for whatever reason.
Whether to effect a sale of Shares pursuant to this Section 3.4 by CLI is in the
sole and absolute discretion of CLI.
(e) Executive shall be required to bear his proportionate
share of any escrows, holdbacks, liabilities or adjustments in purchase price
under the terms of the purchase agreement relating to such Tag-along Offer;
PROVIDED that the amount borne by Executive shall not exceed the net proceeds
received by Executive for the Shares sold by him pursuant to such Tag-along
Offer.
SECTION 3.5. IMPROPER TRANSFER. Any attempt to Transfer any Shares not
in compliance with this Agreement shall be null and void and neither Auro nor
any transfer agent of Auro shall register, or otherwise recognize in Auro's
stock records, any such improper Transfer.
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SECTION 3.6. CHANGE IN CONTROL. If at any time Xxx Xxxxxx is no longer
the Chairman of the Board of CLI and no longer has the ability to control the
selection of nominees for directors of CLI (a "change in control"), Executive
may, within 30 days of such change in control, send a notice to CLI of his
intention to require CLI to purchase all (but not less than all) of the Shares
then owned by Executive and his Permitted Transferees indicating the price which
Executive believes to be the fair market value of a Share. If CLI accepts the
price set forth by Executive, CLI shall purchase such Shares within 45 days
after receipt of such notice. If CLI does not accept such price, then the
provisions of Section 3.3(c) shall govern the determination of the fair market
price of a Share and CLI shall purchase such Shares within 45 days after the
determination of the fair market value of a Share. At the closing, if the
aggregate purchase price for the Shares is in excess of $250,000, then that part
of the purchase price which is in excess of $250,000 shall be paid in three
consecutive equal annual installments of principal and interest commencing on
the first anniversary of the closing of the purchase at a rate equal to the
interest rate charged CLI by its main financing institution, against delivery of
the Duly Endorsed certificates representing the Shares to be sold free of any
Adverse Claims.
SECTION 3.7. DISPOSITION UPON DEATH OF EXECUTIVE.
3.7.1. (a) Upon the death of Executive, CLI shall purchase all
of the Shares owned by Executive and his Permitted Transferees.
(b) The purchase price of all Shares being so purchased
shall be (i) if the purchase occurs after the first Public Offering, determined
in accordance with the provisions of Section 3.3.(d), or (ii) otherwise
determined in accordance with the provisions of Section 3.3(c) with the legal
representative of the estate of Executive representing Executive.
(c) CLI may choose to obtain life insurance on the life
of Executive in order to fund part or all of this obligation in the event of
Executive's death, and Executive agrees to do or cause to be done all things
reasonably requested by CLI in order to obtain such insurance.
3.7.2. If CLI owns an insurance policy on the life of
Executive, then 100% of the net proceeds of such policy shall be paid over to
the estate of Executive. In the event there is no insurance policy or that such
proceeds are less than 50% of the purchase price, an amount equal to 50% of the
purchase price less the amount of such net proceeds, if any, shall be paid at
the closing against delivery of the Duly Endorsed certificates representing the
Shares to be sold free of any Adverse Claims, and the balance of the purchase
price shall be paid in three consecutive equal annual installments of principal
and interest commencing on the first anniversary of the closing of the purchase
at a rate equal to the interest rate charged CLI by its main financing
institution; provided that if the balance of the purchase price is less than
$250,000, the balance shall be paid at the closing.
3.7.3. The obligation of CLI to pay the purchase price in
accordance with the provisions of this Agreement is also subject to any
restrictions and limitations imposed (i) by applicable law and/or (ii) by any
agreement giving rise to actual or contingent indebtedness to which CLI is a
party. To avoid violating the limitations imposed by the preceding sentence,
CLI
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may suspend payments of installments of the purchase price or any part
thereof until it can continue payments without violating those restrictions and
limitations. Unless prohibited by law, interest shall continue to accrue at the
interest rate set forth during such period and, unless prohibited by law or such
agreements, shall be paid during such period and CLI shall resume payment of
both regularly scheduled payments and arrearages as soon as it can do so and to
the full extent that it can do so without exceeding the limits established by
this Section or by law. Upon such resumption, CLI shall first make payment of
any arrearages owed hereunder in the order in which the arrearages occurred and
then make regularly scheduled payments. The obligation of CLI to pay the balance
of the purchase price shall be evidenced by a note in the form of Exhibit 3.
SECTION 3.8. TERMINATION. The provisions of Sections 3.4, 3.6, 3.7 and
3.9 shall terminate and be of no further force and effect from and after the
date of the closing of a Public Offering.
SECTION 3.9. DRAG-ALONG RIGHTS. If, at any time prior to the date of
closing of a Public Offering, CLI desires to all of its Shares to a third party,
or that Auro enter into a plan of merger or consolidation or a plan of Share
exchange with another entity, or that Auro enter into an agreement for a sale,
lease or exchange of all, or substantially all, of the property and assets of
Auro other than in the ordinary course of business (collectively "Sale or
Merger"), then Executive will take all steps reasonably necessary to fully
cooperate in and complete such Sale or Merger, including the sale of his Shares
and those of his Permitted Transferees at the per share price agreed to between
CLI or Auro, as the case may be, and the purchaser of such Shares, provided that
the per share price is the same for all Shares. Notwithstanding the foregoing,
nothing in this Section 3.9 nor any actions of Executive pursuant to this
Section 3.9 shall constitute a waiver of Executive's right to dissent pursuant
to Section 1701.85 of the Ohio Revised Code, as amended from time to time.
ARTICLE IV
REGISTRATION RIGHTS
SECTION 4.1. PIGGY-BACK REGISTRATION. If Auro proposes to file a
registration statement under the Securities Act with respect to an offering of
its Registrable Securities (a) for its own account (other than a registration
statement on Form S-4 or S-8 (or any substitute form that may be adopted by the
SEC)), or (b) for the account of any holders of its capital stock, then Auro
shall give written notice of such proposed filing to Executive as soon as
practicable (but in any event not less than 20 days before the anticipated
filing date), and such notice shall offer Executive the opportunity to register
any and all Registrable Securities owned by Executive. If Executive wishes to
register securities of the same class or series as Auro or such holders, such
registration shall be on the same terms and conditions as the registration of
Auro's or such holders' securities (a "Piggy-Back Registration").
SECTION 4.2. REDUCTION OF OFFERING. If a registration pursuant to
Section 4.1 involves an underwritten Public Offering and the managing
Underwriter advises Auro that, in its view, the
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number of Shares which Auro and the selling shareholders intend to include in
such registration exceeds the Maximum Offering Size, Auro will include in such
registration, in the following priority, up to the Maximum Offering Size:
(a) first, so much of the Shares proposed to be registered by
Auro as would not cause the offering to exceed the largest number of Shares
which can be sold without having an adverse effect on such offering, including
the price at which such Shares can be sold (the "Maximum Offering Size"); and
(b) second, all Registrable Stock requested to be included in
such registration statement by any shareholder pursuant to Section 4.1 or
otherwise (allocated, if necessary for the offering not to exceed the Maximum
Offering Size, pro rata among such Persons on the basis of the relative number
of shares of Registrable Stock requested to be so included).
SECTION 4.3. REGISTRATION PROCEDURES. Whenever Auro is required to
effect the registration of Registrable Securities pursuant to Section 4.1
hereof, Auro will use reasonable efforts in good faith to effect the
registration and the sale of such Registrable Securities in accordance with the
intended method of disposition thereof as quickly as practicable, and in
connection with any such registration request:
(a) Auro will as expeditiously as possible prepare and file
with the SEC a registration statement on any form for which Auro then qualifies
or which counsel for Auro shall deem appropriate and which form shall be
available for the sale of the Registrable Securities to be registered thereunder
in accordance with the intended method of distribution thereof, and use
reasonable efforts in good faith to cause such filed registration statement to
become and remain effective for a period of not less than 120 days.
(b) Auro will, if requested, prior to filing a registration
statement or prospectus or any amendment or supplement thereto, furnish to
Executive and each Underwriter, if any, drafts of such documents proposed to be
filed, and thereafter furnish to Executive and such Underwriter, if any, such
number of copies of such registration statement, each amendment and supplement
thereto (in each case including all exhibits thereto and documents incorporated
by reference therein), the prospectus included in such registration statement
(including each preliminary prospectus) and such other documents as Executive or
such Underwriter may reasonably request in order to facilitate the sale of the
Registrable Securities.
(c) After the filing of the registration statement, Auro will
promptly notify Executive of any stop order issued or threatened by the SEC and
take all reasonable actions required to prevent the entry of such stop order or
to remove it if entered.
(d) Auro will use reasonable efforts in good faith to (i)
register or qualify the Registrable Securities under such other securities or
blue sky laws of such jurisdictions in the United States as Executive reasonably
(in light of their intended plan of distribution) requests and (ii) cause such
Registrable Securities to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of Auro and do any and all other acts and things that
may be reasonably necessary or
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advisable to enable Executive to consummate the disposition of his Registrable
Securities; PROVIDED, that Auro will not be required to (A) qualify generally to
do business in any jurisdiction where it would not otherwise be required to
qualify but for this paragraph (d), (B) subject itself to taxation in any such
jurisdiction other than taxation arising with respect to the registration of
securities or (C) consent to general service of process in any such
jurisdiction.
(e) At any time when a prospectus relating to the sale of
Registrable Securities is required to be delivered under the Securities Act,
Auro will immediately notify Executive of the occurrence of an event requiring
the preparation of a supplement or amendment to such prospectus so that, as
thereafter delivered to the purchasers of such Registrable Securities, such
prospectus will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading and promptly make available to Executive and
the Underwriters any such supplement or amendment. Executive agrees that, upon
receipt of any notice from Auro of the happening of any event of the kind
described in the preceding sentence, Executive will forthwith discontinue the
offer and sale of Registrable Securities pursuant to the registration statement
covering such Registrable Securities until receipt of the copies of such
supplemented or amended prospectus and, if so directed by Auro, Executive will
deliver to Auro all copies, other than permanent file copies then in the
possession of Executive, of the most recent prospectus covering such Registrable
Securities at the time of receipt of such notice. In the event Auro shall give
such notice, Auro shall extend the period during which such registration
statement shall be maintained effective as provided in Section 4.3(a) hereof by
the number of days during the period from and including the date of the giving
of such notice to the date when Auro shall make available to Executive such
supplemented or amended prospectus.
(f) Auro will enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as are
reasonably required in order to expedite or facilitate the disposition of such
Registrable Securities.
(g) Auro will make available for inspection by Executive and
any Underwriter participating in any disposition pursuant to a registration
statement being filed by Auro pursuant to this Article IV, any attorney,
accountant or other professional retained by Executive or Underwriter
(collectively, the "Inspectors"), all financial and other records, pertinent
corporate documents and properties of Auro (collectively, the "Records") as
shall be reasonably requested by any such Person, and cause Auro's officers,
directors and employees to supply all information reasonably requested by any
Inspectors in connection with such registration statement.
(h) Auro will furnish to Executive and to each Underwriter, if
any, a signed counterpart, addressed to Executive or such Underwriter, of (i) an
opinion or opinions of counsel to Auro and (ii) a comfort letter or comfort
letters from Auro's independent public accountants, each in customary form and
covering such matters as are customarily covered by opinions and comfort
letters, as Executive or the managing Underwriter therefor reasonably request.
(i) Auro will otherwise use reasonable efforts in good faith
to comply with all applicable rules and regulations of the SEC, and make
available to its security holders, as soon as reasonably practicable, an
earnings statement covering a period of 12 months, beginning within
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three months after the effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of the
Securities Act.
(j) Auro will use reasonable efforts in good faith to cause
all such Registrable Securities to be listed on each securities exchange on
which similar securities issued by Auro are then listed.
(k) Auro may require Executive, and Executive agrees, to
furnish promptly in writing to Auro such information regarding Executive, the
plan of distribution of the Registrable Securities and other information as Auro
may from time to time reasonably request or as may be legally required in
connection with such registration.
SECTION 4.4. REGISTRATION EXPENSES. In connection with any registration
made or requested to be made pursuant to this Article IV, Executive shall be
responsible for the fees and expenses of his counsel, the underwriter's
commissions attributable to any Shares being sold by Executive, and any
incremental expenses incurred by Auro attributable to the inclusion in the
registration of Shares of Executive.
SECTION 4.5. INDEMNIFICATION BY AURO. Auro agrees to indemnify and hold
harmless Executive and his agents, from and against any and all losses, claims,
damages, liabilities and expenses caused by any untrue statement or alleged
untrue statement of a material fact contained in any registration statement or
prospectus relating to the Registrable Securities (as amended or supplemented if
Auro shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses are caused by any such untrue statement or
omission or alleged untrue statement or omission based upon information
furnished in writing to Auro by or on behalf of Executive expressly for use
therein; PROVIDED that with respect to any untrue statement or omission or
alleged untrue statement or omission made in any preliminary prospectus, or in
any prospectus, as the case may be, the indemnity agreement contained in this
paragraph shall not apply to the extent that any such loss, claim, damage,
liability or expense results from the fact that a current copy of the
preliminary prospectus (or, in the case of a prospectus, the prospectus as
amended or supplemented) was not sent or given to the Person asserting any such
loss, claim, damage, liability or expense at or prior to the written
confirmation of the sale of the Registrable Stock to such Person if it is
determined that Auro has provided such prospectus and it was the responsibility
of Executive to provide such Person with a current copy of the prospectus (or
such amended or supplemented prospectus, as the case may be) and such current
copy of the prospectus (or such amended or supplemented prospectus, as the case
may be) would have cured the defect giving rise to such loss, claim, damage,
liability or expense. Auro also agrees to indemnify any Underwriter of the
Registrable Securities, its officers and directors and each Person who controls
such underwriters on substantially the same basis as that of the indemnification
of Executive provided in this Section 4.5.
SECTION 4.6. INDEMNIFICATION BY EXECUTIVE. Executive agrees to
indemnify and hold harmless Auro, its officers, directors and agents and each
Person, if any, who controls Auro within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act
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to the same extent as the foregoing indemnity from Auro to Executive, but only
with reference to information related to Executive furnished in writing by or on
behalf of Executive expressly for use in any registration statement or
prospectus relating to the Registrable Securities, or any amendment or
supplement thereto, or any preliminary prospectus. Executive also agrees to
indemnify and hold harmless Underwriters of the Registrable Securities, their
officers and directors and each Person who controls such Underwriters on
substantially the same basis as that of the indemnification of Auro provided in
this Section 4.6.
SECTION 4.7. CONDUCT OF INDEMNIFICATION PROCEEDINGS. In case any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
Section 4.5 or 4.6, such Person (the "Indemnified Party") shall promptly notify
the Person against whom such indemnity may be sought (the "Indemnifying Party")
in writing and the Indemnifying Party upon request of the Indemnified Party
shall retain counsel reasonably satisfactory to the Indemnified Party to
represent the Indemnified Party and any others the Indemnifying Party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to the proceeding; PROVIDED that the failure of any Indemnified
Party so to notify the Indemnifying Party shall not relieve the Indemnifying
Party of its obligations hereunder except to the extent that the Indemnifying
Party is materially prejudiced by such failure to notify. In any such
proceeding, any Indemnified Party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Party unless (a) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (b) the
named parties to any such proceeding (including any impleaded parties) include
both the Indemnified Party and the Indemnifying Party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the Indemnifying Party
shall not, in connection with any proceeding or related proceedings in the same
jurisdiction, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Indemnified Parties, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm for the
Indemnified Parties, such firm shall be designated in writing by the Indemnified
Parties. The Indemnifying Party shall not be liable for any settlement of any
proceeding effected without its consent, but if settled with such consent, or if
there be a final judgment for the plaintiff, the Indemnifying Party shall
indemnify and hold harmless such Indemnified Parties from and against any loss
or liability (to the extent stated above) by reason of such settlement or
judgment. Notwithstanding the foregoing sentence, if at any time an Indemnified
Party shall have requested an Indemnifying Party to reimburse the Indemnified
Party for fees and expenses of counsel as contemplated by the third sentence of
this paragraph, the Indemnifying Party agrees that it shall be liable for any
settlement of any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 Business Days after receipt by such
Indemnifying Party of the aforesaid request and (ii) such Indemnifying Party
shall not have reimbursed the Indemnified Party in accordance with such request
prior to the date of such settlement, unless the Indemnifying Party has
contested such reimbursement obligation and provides reasonable assurances that
such payment can be made upon resolution of such dispute. No Indemnifying Party
shall, without the prior written consent of the Indemnified Party, effect any
settlement of any pending or threatened proceeding in respect of which any
Indemnified Party is or could have been a party and indemnity could have been
sought hereunder
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by such Indemnified Party, unless such settlement (A) includes an unconditional
release of such Indemnified Party from all liability arising out of such
proceeding and (B) provides that such Indemnified Party does not admit any fault
or guilt with respect to the subject matter of such proceeding.
SECTION 4.8. CONTRIBUTION. (a) If the indemnification provided for
herein is for any reason unavailable to the Indemnified Parties in respect of
any losses, claims, damages or liabilities referred to herein, then each such
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages or liabilities (i) as between Auro and Executive
on the one hand and the Underwriters on the other, in such proportion as is
appropriate to reflect the relative benefits received by Auro and Executive on
the one hand and the Underwriters on the other from the offering of the
securities, or if such allocation is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits but also
the relative fault of Auro and Executive on the one hand and of the Underwriters
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages or liabilities, as well as any other relevant
equitable considerations and (ii) as between Auro on the one hand and Executive
on the other, in such proportion as is appropriate to reflect the relative fault
of Auro and of Executive in connection with such statements or omissions, as
well as any other relevant equitable considerations. The relative benefits
received by Auro and Executive on the one hand and the Underwriters on the other
shall be deemed to be in the same proportion as the total proceeds from the
offering (net of underwriting discounts and commissions but before deducting
expenses) received by Auro and Executive bear to the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the prospectus. The relative fault of
Auro and Executive on the one hand and of the Underwriters on the other shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by Auro and Executive or by the
Underwriters. The relative fault of Auro on the one hand and Executive on the
other shall be determined by reference to, among other things, whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by such party,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(b) Auro and Executive agree that it would not be just and
equitable if contribution pursuant to this Section 4.8 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 4.8, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages which
such Underwriter has otherwise been required to pay
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by reason of such untrue or alleged untrue statement or omission or alleged
omission, and Executive shall not be required to contribute any amount in excess
of the amount by which the total price at which the Registrable Securities of
Executive were offered to the public (less underwriters' discounts and
commissions) exceeds the amount of any damages which Executive has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation.
SECTION 4.9. PARTICIPATION IN UNDERWRITTEN REGISTRATIONS. Executive may
not participate in any underwritten registration hereunder unless Executive (a)
agrees to sell Executive's securities on the basis provided in any underwriting
arrangements approved by the Persons entitled hereunder to approve such
arrangements and (b) completes and executes all questionnaires, powers of
attorney, indemnities, underwriting agreements and other documents reasonably
required under the terms of such underwriting arrangements and these
registration rights.
SECTION 4.10. CURRENT AND PERIODIC REPORTS. Auro covenants that it will
file all reports required to be filed by it under the Securities Act and the
Exchange Act. Upon the request of Executive, Auro will deliver to Executive a
written statement as to whether it has complied with such requirements.
SECTION 4.11. HOLDBACK AGREEMENTS. If and to the extent requested by
Auro, in the case of a non-underwritten Public Offering, and if and to the
extent requested by the managing Underwriter or Underwriters, in the case of an
underwritten Public Offering, Executive agrees not to effect, except as part of
such registration, any public sale or distribution of the Shares being
registered or a similar security of Auro, or any securities convertible into or
exchangeable or exercisable for such securities, including a sale pursuant to
Rule 144, during the 14 days prior to, and during the 120-day period beginning
on, the effective date of such registration statement.
ARTICLE V
MISCELLANEOUS
SECTION 5.1. HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not control or affect the meaning or
construction of any provisions hereof.
SECTION 5.2. NO INCONSISTENT AGREEMENTS. Auro is not a party to and
will not hereafter enter into any agreement with respect to its securities which
is inconsistent with, or otherwise grant rights superior to, the rights granted
to Executive under this Agreement without first obtaining the written consent of
Executive, which consent will not be unreasonably withheld.
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SECTION 5.3. ENTIRE AGREEMENT; AMENDMENTS; NO WAIVERS.
(a) This Agreement and the other instruments and agreements
referred to herein embody the entire agreement of the parties hereto with
respect to the subject matter hereof and supersede all prior agreements with
respect thereto. This Agreement may be amended but only in a writing signed by
CLI, Executive and Auro. Any provision hereof may be waived but only in a
writing signed by the party against which such waiver is sought to be enforced.
(b) No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.
SECTION 5.4. NOTICES. Any notice, request, instruction or other
document to be given hereunder by any party hereto to another party hereto shall
be in writing (including telecopies or similar writing) and shall be given to
such party at its address, or telecopier number set forth on its signature page
or, in the case of a Transfer, to the address, or telecopier number of the party
executing the written agreement pursuant to Section 3.1 hereof, or to such other
address as the party to whom notice is to be given may provide in a written
notice to the party giving such notice, a copy of which written notice shall be
on file with the Secretary of Auro. Each such notice, request or other
communication shall be effective (a) if given by telecopy, when such telecopy is
transmitted to the telex or telecopy number specified in its signature page and
the appropriate answerback or confirmation, as the case may be, is received, (b)
if given by mail, 72 hours after such communication is deposited in the mails
with first class postage prepaid addressed as aforesaid or (c) if given by any
other means, when delivered at the address specified in this Section 5.4.
SECTION 5.5. APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Ohio, without regard to
conflicts of law principles.
SECTION 5.6. SEVERABILITY. The invalidity or unenforceability of any
provisions of this Agreement in any jurisdiction shall not affect the validity,
legality or enforceability of the remainder of this Agreement in such
jurisdiction or the validity, legality or enforceability of this Agreement,
including any such provision, in any other jurisdiction, it being intended that
all rights and obligations of the parties hereunder shall be enforceable to the
fullest extent permitted by law.
SECTION 5.7. SUCCESSORS, ASSIGNS, TRANSFEREES.
(a) The provisions of this Agreement shall be binding upon and
accrue to the benefit of the parties hereto and their respective heirs,
successors and permitted assigns. Neither this Agreement nor any provisions
hereof shall be construed so as to confer any right or benefit upon any Person
other than the parties to this Agreement and their respective successors and
permitted assigns.
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(b) This Agreement shall not be assignable or otherwise
transferable by any party hereto, except that any Person acquiring Shares who is
required by the terms of this Agreement to become a party hereto shall execute
and deliver to Auro an agreement to be bound by this Agreement (substantially in
the form of Exhibit C) and shall thenceforth be bound by the terms hereof (other
than Article IV).
SECTION 5.8. COUNTERPARTS; EFFECTIVENESS. This Agreement may be
executed in any number of counterparts, each of which shall be an original with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
SECTION 5.9. FEES AND EXPENSES. All fees and expenses incurred by any
party hereto in connection with the preparation of this Agreement and the
transactions contemplated hereby and all matters related thereto shall be borne
by the party incurring such fees or expenses except as otherwise specifically
set forth herein.
SECTION 5.10. REMEDIES. The parties hereby acknowledge that money
damages would not be adequate compensation for the damages that a party would
suffer by reason of a failure of any other party to perform any of the
obligations of this Agreement. Therefore, each party hereto agrees that specific
performance is the only appropriate remedy under this Agreement and hereby
waives the claim or defense that any other party has an adequate remedy at law.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
PC & PARTS, INC.
Addresses:
000 Xxxxxxx Xxxxxx By:
Xxxxxxxx, Xxxx 00000 ------------------------------------
Name: Xxx Xxxxxx
Title: Chairman of the Board
000 Xxxxxxxx Xxxxxx ----------------------------------------
Xxxxxxxxxxx, Xxxx 00000 Xxxxx Xxxxxx
CABLE LINK, INC.
000 Xxxxxxx Xxxxxx By:
Xxxxxxxx, Xxxx 00000 -------------------------------------
Xxx Xxxxxx, Chairman of the Board
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Exhibit 3
PROMISSORY NOTE
$_______________ _________, 19__
FOR VALUE RECEIVED, the undersigned, Cable Link, Inc., an Ohio
corporation (the "Maker"), hereby unconditionally promises to pay to the order
of Xxxxx Xxxxxx or his estate (the "Payee") at the principal business office of
the Payee or at such other place as the Payee or other holder hereof may from
time to time designate in writing, in lawful money of the United States of
America, the principal amount of ____________________ Dollars ($__________),
together with interest on the unpaid principal balance hereunder at a rate of
interest as hereinafter set forth. The entire unpaid principal balance, together
with accrued interest thereon, will be due and payable as hereinafter provided.
Section 1. PRINCIPAL AND INTEREST.
1.1. INTEREST RATE. This Note shall bear interest on the unpaid
principal balance hereunder from the date hereof until paid in full at an annual
fluctuating rate of interest equal to the rate announced by __________ ("Bank")
as its prime rate, which rate shall change as and when such prime rate of Bank
changes (the "Interest Rate"). In the event that the unpaid principal balance or
any part thereof, together with all interest accrued thereon, is not paid on
demand when due, then such unpaid principal balance and interest shall bear
interest at a rate equal to the Interest Rate plus three percent.
1.2. PAYMENT OF INTEREST. Interest shall be due and payable in
quarterly installments starting on ________ __, 19__ and on the last day of each
calendar quarter thereafter until this Note is paid in full.
1.3. REPAYMENT OF PRINCIPAL. The principal of this Note shall be
payable in three equal annual consecutive payments of $___________ commencing on
the first anniversary of the date of this Note.
Section 2. PREPAYMENTS. The Maker shall have the privilege of prepaying
all or any part of this Note at any time without notice or any prepayment
penalty.
Section 3. WAIVER. The undersigned and each indorser of this Note
hereby waives presentment, demand or notice of demand, protest and dishonor in
connection with the enforcement of this Note.
Section 4. DEFAULT, ACCELERATION. Upon the failure to make any payment
hereunder as and when due, which failure remains uncured for more than 10 days
thereafter, the Payee shall have the right, without further notice to the Maker,
to declare the then outstanding principal balance of this Note, together with
all interest accrued thereon, immediately due and payable.
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Section 5. GOVERNING LAW. This Note shall be governed by and construed
in accordance with the laws of the State of Ohio.
Section 6. EXPENSES. If this Note is collected by suit, through probate
or bankruptcy court, or by any other judicial proceedings, or if this Note is
not paid at maturity, howsoever such maturity may be brought about, and is
placed in the hands of an attorney for collection, then the undersigned promises
to pay all legal fees, paralegal fees, costs and expenses incurred in connection
therewith.
Section 7. CONSENT TO JURISDICTION. The undersigned hereby consents to
the jurisdiction of the Courts of the State of Ohio located in Columbus, Ohio
and the United States District Court for the Southern District of Ohio for all
purposes in connection with this Note and further consents that any process or
notice of motion therewith may be served by certified or registered mail or
personal service, provided a reasonable time for appearance is allowed.
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EXHIBIT C
FORM OF AGREEMENT TO BE BOUND
[DATE]
PC & PARTS, INC.
Dear Sirs:
Reference is made to the Stock Agreement dated as of May 18, 1998 (the
"Agreement"), among PC & Parts, Inc. ("Auro"), Cable Link, Inc. and Xxxxx
Xxxxxx.
In consideration of the covenants and agreements contained in the
Agreement and the transfer of the common stock, without par value, of Auro to
the undersigned by Xx. Xxxxxx, the undersigned hereby confirms and agrees to be
bound by all of the provisions thereof.
This letter shall be construed and enforced in accordance with the laws
of the State of Ohio.
Very truly yours,
---------------------------------------
[Transferee]
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