Exhibit 10.41
SECURITIES REDEMPTION AGREEMENT
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THIS SECURITIES REDEMPTION AGREEMENT (this "Agreement") is made as of
this 24th day of March, 1998 between NORTH ATLANTIC TRADING COMPANY, INC., a
Delaware corporation (the "Company"), XXXXXXXX ENTERPRISES, INC., a North
Carolina corporation (the "Redeeming Shareholder"), and Xxxxxxx Xxxxxxxx, an
individual residing in Winfield, Alabama ("Xxxxxxxx").
STATEMENT OF PURPOSE
A. The Company is a party to that certain Agreement dated October 29,
1997 between National Tobacco Company, L.P. ("National Tobacco"), the Company
and Xxxxxxxx regarding Xxxxxxxx'x resignation as an employee of National Tobacco
as amended by that certain First Amendment to the Agreement dated January 30,
1998 between National Tobacco, the Company and Xxxxxxxx (the "Resignation
Agreement"), and the parties hereto intend that this Agreement amend, replace
and supersede Section 5 of the Resignation Agreement.
X. Xxxxxxxx is the sole shareholder of all the outstanding capital
stock of the Redeeming Shareholder which in turn owns 47,138 shares of the
Company's issued and outstanding shares of common stock, $0.01 par value per
share (the "Common Stock");
C. The Company desires to redeem and purchase, and the Redeeming
Shareholder desires to sell to the Company, 10,100 shares of Common Stock (the
"Redeemed Shares"), all upon the terms and conditions more particularly
described herein; and
D. The Company desires to receive, and the Redeeming Shareholder
desires to grant, a right of first refusal regarding the remaining 37,038 shares
of Common Stock (the "Remaining Shares"), all upon the terms and conditions
described herein;
AGREEMENT
NOW, THEREFORE, in consideration of the premises, covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Company and the
Redeeming Shareholder mutually agree as follows:
1. PURCHASE AND SALE OF REDEEMED SHARES.
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(A) PURCHASE AND SALE. Upon the terms and subject to the conditions
hereinafter set forth, the Redeeming Shareholder agrees to sell, transfer and
deliver to the Company, and the Company agrees to redeem and purchase from the
Redeeming Shareholder, the Redeemed Shares, free and clear of all liens,
encumbrances and claims.
(B) PURCHASE PRICE. In consideration of the sale, transfer and delivery
to the Company by the Redeeming Shareholder of the Redeemed Shares, the Company
shall pay to the Redeeming Shareholder the sum of $404,000.00 (the "Purchase
Price"). In addition to the Purchase Price, the Company shall pay to the
Redeeming Shareholder a contract amendment fee of $4,600.00. At the Closing (as
defined below), the Company shall deliver to the Redeeming Shareholder the
Purchase Price which shall be paid by wire transfer of immediately available
funds to an account or accounts designated in writing by the Redeeming
Shareholder.
(C) CLOSING DATE. The closing of the redemption of the Redeemed Shares
(herein referred to as the "Closing") and all other transactions contemplated
hereby shall take place at the principal offices of the Company located at 000
Xxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 on or before March 24, 1998, or at
such other place and at such other time and date as may be mutually agreed upon
in writing by the Company and the Redeeming Shareholder. The date of the Closing
is referred to in this Agreement as the "Closing Date".
2. REPRESENTATIONS AND WARRANTIES OF THE REDEEMING SHAREHOLDER. The
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Redeeming Shareholder hereby represents and warrants to the Company as follows:
(A) AUTHORITY. It is a corporation validly existing and in good
standing under the laws of the State of North Carolina. It has full right, power
and authority: (i) to execute and deliver this Agreement; (ii) to perform its
obligations under this Agreement; and (iii) to sell, transfer, assign and
deliver to the Company full title to the Redeemed Shares pursuant to this
Agreement. This Agreement has been duly executed and delivered by the Redeeming
Shareholder and constitutes a legal, valid and binding agreement enforceable
against the Redeeming Shareholder in accordance with its terms.
(B) TITLE. It is the sole record and beneficial owner of the Redeemed
Shares, and it holds good and valid title thereto, free and clear of all manner
of liens, pledges, charges, encumbrances, agreements, rights and interests and
claims of all others whatsoever and subject to no restriction. Assuming the
consummation of the transactions contemplated by this Agreement, the Company
will acquire good and valid title to the Shares and will be the full, absolute,
legal and beneficial owner of the Redeemed Shares, free and clear of all liens,
encumbrances, charges, agreements, rights, interests and claims of all others
whatsoever and subject to no restrictions, other than pursuant to the
Stockholders' Agreement (as defined below).
(C) NO CONFLICTS. The execution, delivery and performance of this
Agreement by the Redeeming Shareholder of the transactions contemplated hereby
do not and will not conflict with or result in any breach of any of the
provisions of, constitute a default under, or result in a violation of, (i) the
Redeeming Shareholder's charter or bylaws, (ii) any agreement, indenture, trust
or instrument to which the Redeeming Shareholder is a party or by which the
Redeeming Shareholder is bound or affected or (iii) any law, statute, rule or
regulation to which the Redeeming Shareholder is subject.
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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
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(A) AUTHORITY. The Company hereby represents and warrants that it is a
corporation validly existing and in good standing under the laws of the State of
Delaware. It has full right, power and authority: (i) to execute and deliver
this Agreement and (ii) to perform its obligations under this Agreement. This
Agreement has been duly executed and delivered by the Company and constitutes a
legal, valid and binding agreement enforceable against the Company in accordance
with its terms.
(B) NO CONFLICTS. The Company represents and warrants that the
execution, delivery and performance of this Agreement by the Company of the
transactions contemplated hereby do not and will not conflict with or result in
any breach of any of the provisions of, constitute a default under, or result in
a violation of, (i) the Company's charter or bylaws, (ii) any agreement,
indenture, trust or instrument to which the Company is a party or by which the
Company is bound or affected or (iii) any law, statute, rule or regulation to
which the Company is subject.
4. CONDITIONS TO THE COMPANY'S OBLIGATIONS. Each and every obligation
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of the Company hereunder to be performed at or before the Closing, shall be
subject to the satisfaction, at or before the Closing, of each of the following
conditions, unless waived in writing by the Company:
(A) The Redeeming Shareholder shall sell, transfer and deliver the
Redeemed Shares to the Company in accordance with the terms hereof;
(B) The representations and warranties of the Redeeming Shareholder
contained in Section 2 shall be true and correct in all respects at and as of
the Closing Date as though then made. In addition, the Redeeming Shareholder
shall have performed in all material respects all covenants and agreements
contained herein required to be performed by the Redeeming Shareholder prior to
the Closing.
(C) The Company shall have received the following Closing documents, in
form and substance satisfactory to the Company, and all of which shall, except
as specified below, be fully executed originals:
(i) Certificates of the Secretary of State of the jurisdiction
of incorporation of the Redeeming Shareholder as to the good standing
of the Redeeming Shareholder as of a date on or about the Closing Date;
(ii) Certificate, dated as of the Closing Date, of the
president and secretary of the Redeeming Shareholder, stating that all
of the conditions specified in Section 4(b) have been fully satisfied
with respect to the Redeeming Shareholder;
(iii) Copies of resolutions of the board of directors and
shareholders of the Redeeming Shareholder authorizing the transactions
contemplated by this Agreement, which resolutions shall have been
certified by the president of the Redeeming Shareholder to be true and
correct; and
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(iv) Any and all other documents, stock powers, powers of
attorney, certificates, resignations and assurances which may be
reasonably requested by the Company in connection with the redemption.
5. CONDITIONS TO THE REDEEMING SHAREHOLDER'S OBLIGATIONS. Each and
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every obligation of the Redeeming Shareholder hereunder to be performed at or
before the Closing, shall be subject to the satisfaction, at or before the
Closing, of the Company delivering the Purchase Price to the Redeeming
Shareholder.
6. RIGHT OF FIRST REFUSAL.
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(A) OFFER TO SELL REMAINING SHARES. If the Redeeming Shareholder shall
desire to sell all or any of the Remaining Shares at any time following the date
hereof, it must first receive a bona fide written offer from a third party
prospective purchaser to purchase all or part of the Remaining Shares and then
deliver to the Company a written notice ("Notice") containing the following
information:
(i) The name and address of the prospective purchaser of the
Remaining Shares;
(ii) The number of Remaining Shares that the Redeeming
Shareholder desires to sell to the prospective purchaser;
(iii) The price being offered to the Redeeming Shareholder,
the terms of payment and any other terms and conditions of such offer;
(iv) Evidence that the prospective purchaser has the financial
resources to complete the proposed transaction as may be reasonably
requested by the Company; and
(v) The proposed closing date for the transaction shall be
within not less than 30 nor more than 90 days after the date of
delivery of the Notice. For a period of 60 days after the giving of the
Notice by the Redeeming Shareholder, the Company or its designee shall
have the option, exercisable in whole or in part, by notice in writing
to the Redeeming Shareholder to purchase the Remaining Shares that are
proposed to be sold at the price and upon the terms and conditions set
forth in the Notice. A failure by the Company to give written notice of
exercise during such period shall be deemed a rejection by the Company
of its option to purchase.
(B) NON-CASH CONSIDERATION FOR SHARES. If any consideration to be
received by a Redeeming Shareholder from a prospective purchaser of its
Remaining Shares is property other than cash, then the price per share for such
Remaining Shares shall be measured to that extent by the fair market value
(determined as hereinafter provided) of such non-cash consideration. If non-cash
consideration has been offered to the Redeeming Shareholder, the Company may
deliver to the Redeeming Shareholder, in payment of the non-cash portion of the
purchase price for the Shares proposed to be sold, an amount of cash equal to
the fair market value of the non-cash consideration that has been offered to the
Redeeming Shareholder. For purposes hereof, the fair market value of non-cash
consideration shall in each case be agreed upon by the
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Redeeming Shareholder and the Company, or, in the absence of such agreement,
such fair market value shall be determined by an appraisal thereof by an
independent qualified appraiser who shall be mutually agreed to by the Company
and the Redeeming Shareholder. The result of any appraisal conducted hereunder
shall be binding on all parties, and the cost of any such appraisal shall be
borne equally by the parties hereto. Any closing provided for herein may be
extended for such reasonable period of time as may be necessary in order for a
required appraisal to be completed.
(C) CLOSINGS. If the Company shall exercise its right of first refusal
pursuant to this Section 6, the closing of the purchase and sale transaction
shall be held at the principal office of the Company located at 000 Xxxx Xxxxxx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or, in the event the address of the principal
office changes, such new address, on a date designated by the Company, which
date in no event shall be later than 90 days after the Redeeming Shareholder
delivers the Notice to the Company.
(D) RIGHT TO TRANSFER. If the Company does not elect to purchase all of
the Remaining Shares that a Redeeming Shareholder desires to sell, the Redeeming
Shareholder shall have the right to sell within 30 days following such failure
to elect by the Company all, but not less than all, of the Remaining Shares
covered by the bona fide offer to the prospective purchaser named in the Notice;
provided, that the sale is made in strict accordance with the terms of the sale
set forth in the Notice. In addition, as a condition to any such sale, the
purchaser of the Remaining Shares must agree in writing that it, its heirs,
successors and assigns, shall be subject to and bound by the provisions of this
Agreement and the Stockholders' Agreement (as defined below). Any Remaining
Shares not sold within such 30-day period shall again be subject to this Section
6 in connection with any proposed sale thereof.
7. RIGHT TO CALL REMAINING SHARES. Except as set forth below, the
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Company hereby waives its right to repurchase the Remaining Shares pursuant to
Sections 4.2 and 4.3 of the Exchange and Stockholders' Agreement dated June 25,
1997 between the Company, certain other parties and the Redeeming Shareholder
(the "Stockholders' Agreement"). In the event that, at any time following the
termination of the Consulting Term (as defined in that certain Consulting
Agreement dated as of October 29, 1997 between National Tobacco and Xxxxxxxx
(the "Consulting Agreement")), Xxxxxxxx engages in the marketing, distribution
or sale of smokeless tobacco products in the United States on behalf of any
competitor of the Company, either as an employee or indirectly as a consultant
or stockholder (other than as a holder of less than five percent (5%) of the
stock of a publicly traded company), the Company shall have the right to
repurchase all shares of common stock of the Company then held by the Redeeming
Shareholder in accordance with the terms and procedures set forth in Sections
4.2 and 4.3 of the Stockholders' Agreement without regard to the 180-day time
limitation set forth in Sections 4.2 and 4.3 of the Stockholders' Agreement.
Prior to making any transfer of any of the Remaining Shares (by gift, bequest,
devise or otherwise) other than pursuant to Section 6 hereof, the Company agrees
that, as a condition to such transfer, the transferee of any of the Remaining
Shares must agree in writing that it, its heirs, successors and assigns, shall
cause the transferee to be subject to and bound by the provisions of this
Agreement and the Stockholders' Agreement.
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8. GENERAL.
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(A) FEES AND EXPENSES. The Company agrees to reimburse the Redeeming
Shareholder and Xxxxxxxx for all reasonable costs and out-of-pocket expenses in
an amount not to exceed $3,500, including reasonable attorneys' fees and
expenses, incurred in connection with the preparation, execution and delivery of
this Agreement and other related documentation.
(B) INDEMNIFICATION.
(i) BY THE REDEEMING SHAREHOLDER AND XXXXXXXX. Each of the
Redeeming Shareholder and Xxxxxxxx, jointly and severally, hereby
agrees to indemnify and hold harmless the Company and its officers,
directors, employees, representatives, agents, successors and assigns
from any and all damages, liability, losses, costs and expenses
(including reasonable attorneys' fees) which may be incurred by reason
of the Redeeming Shareholder's or Xxxxxxxx'x failure to fulfill any of
the terms, covenants and conditions contained herein or by reason of
the Redeeming Shareholder's or Xxxxxxxx'x breach of any of the
representations, warranties and covenants contained herein.
(ii) BY THE COMPANY. The Company hereby agrees to indemnify
and hold harmless the Redeeming Shareholder and its officers,
directors, employees, representatives, agents, successors and assigns
from any and all damages, liability, losses, costs and expenses
(including reasonable attorneys' fees) which may be incurred by reason
of the Company's failure to fulfill any of the terms, covenants and
conditions contained herein or by reason of the Company's breach of any
of the representations, warranties and covenants contained herein.
(C) ENTIRE AGREEMENT. This Agreement contains the entire understanding
and agreement of the parties hereto with respect to the subject matter hereof,
and supersedes and replaces Section 5 of the Resignation Agreement, and there
are no restrictions, representations, warranties, covenants or undertakings of
the parties hereto except those expressly set forth in this Agreement.
Notwithstanding the foregoing, this Agreement does not amend, replace or
supersede in any way the remaining sections of the Resignation Agreement, the
Consulting Agreement or the Release Agreement dated as of October 29, 1997
between National Tobacco and the Redeeming Shareholder.
(D) FURTHER ASSURANCES. The parties hereto each agree to execute such
other instruments, documents or agreements as may be reasonably necessary or
desirable for the implementation of this Agreement and the consummation of the
transactions contemplated hereby.
(E) SECTION HEADINGS. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(F) GOVERNING LAW. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of New York, without
giving effect to the provisions, policies or principles thereof respecting
conflict or choice of laws.
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(G) SEVERABILITY. If at any time subsequent to the date of this
Agreement, any provision of this Agreement shall be held by any court of
competent jurisdiction to be illegal, void or unenforceable, such provision
shall be of no force or effect but the illegality or unenforceability of such
provision shall have no effect upon or impair the enforceability of any other
provision.
(H) COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute but one and the same agreement.
(I) NO THIRD PARTY BENEFICIARIES. This Agreement shall be binding upon
and inure solely to the benefit of the parties hereto and their permitted
assigns and nothing herein, express or implied, is intended to or shall confer
upon any other person or entity any legal or equitable right, benefit or remedy
of any nature whatsoever under or by reason of this Agreement.
(J) NOTICES AND ADDRESSES. All notices, requests, demands and other
communications called for or contemplated hereunder shall be in writing and
shall be deemed duly given or made: (i) when delivered in person; (ii) one (1)
business day after delivered via reputable overnight courier service or
guaranteed next day service; or (iii) when transmitted by wire or by electronic
message transmission addressed to the parties at the following addresses, or at
such other address as the parties may designate by written notice in the manner
aforesaid:
If to the Company: North Atlantic Trading Company, Inc.
000 Xxxx Xxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President
Facsimile No.: (000) 000-0000
With a copy to (which Fennebresque, Clark, Xxxxxxxx & Hay
shall not constitute NationsBank Corporate Center
notice): 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 28202-4011
Attention: Xxxx X. Xxxxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
If to the Redeeming Xx. Xxxxxxx Xxxxxxxx
Shareholder and/or 00000 Xxxxxxx 000
Xxxxxxxx: Xxxxxxxx, Xxxxxxx 00000
Facsimile No.: (000) 000-0000
With a copy to (which Ganz Xxxxxxxxx & Xxxx
shall not constitute 0000 Xxxxx Xxxxxx
notice): Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx X. Xxxxxxxxx, Esq.
Facsimile No.: (000) 000-0000
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IN WITNESS WHEREOF, the parties have executed this Agreement under seal
as of the date specified above.
NORTH ATLANTIC TRADING COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxx, Xx.
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Name: Xxxxxx X. Xxxxx, Xx.
Title: Chief Executive Officer
XXXXXXXX ENTERPRISES, INC.
By: /s/ Xxxxxxx Xxxxxxxx
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Name: Xxxxxxx Xxxxxxxx
Title: President
/s/ Xxxxxxx Xxxxxxxx
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Xxxxxxx Xxxxxxxx
The undersigned, Xxxx X. Xxxxxxxx, the spouse of Xxxxxxx Xxxxxxxx
hereby acknowledges and agrees to the provisions of this Agreement.
/s/ Xxxx X. Xxxxxxxx
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Xxxx X. Xxxxxxxx
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