EXHIBIT 10.5
AGREEMENT
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THIS AGREEMENT is made and entered into as of the 14th day
of April, 2000, by and between THERMOVIEW INDUSTRIES, INC., a
Delaware corporation ("ThermoView") and XXXXXX X. XXXXXX
("Xxxxxx").
PRELIMINARY STATEMENTS
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As of January 1, 1999, ThermoView acquired all of the
outstanding shares of capital stock of Xxxxxx Construction, Inc.,
a Missouri corporation, Castle Associates, Inc., a Missouri
corporation and Showplace Home Improvements, Inc., a Missouri
corporation, pursuant to a certain Stock Purchase Agreement (the
"Stock Agreement"), dated December 22, 1998, between ThermoView
and Xxxxxx.
Under the terms of the Stock Agreement, Xxxxxx is entitled
to receive post-closing earn-out payments (the "Earn-out
Payments"), if earned, on December 31, 1999, December 31, 2000
and December 31, 2001. As of December 31, 1999, ThermoView owed
Xxxxxx xxxx payments of approximately $6,500,000.00 (the "Year
One Earn-out Payment") under the terms of the Stock Agreement
pursuant to the earn-out provision.
ThermoView has paid $1,000,000.00 of the Year One Earn-out
Payment in cash to Xxxxxx.
ThermoView desires to make the remainder of the Year One
Earn-out Payment in ThermoView 12% Cumulative Series D Preferred
Stock with a stated value of $5.00 (the "Preferred Stock") in
lieu of cash and Xxxxxx desires to accept the Preferred Stock in
consideration of the remainder of the Year One Earn-out Payment.
The terms and conditions of the Preferred Stock are further
described in the Certificate of Designation, attached hereto as
EXHIBIT A and incorporated herein by reference (the
"Certificate").
NOW, THEREFORE, in consideration of these preliminary
statements and the mutual promises contained herein, and for
other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. TRANSFERS AND EXCHANGES. ThermoView hereby agrees upon
execution hereof (i) to transfer to Xxxxxx 1,113,500 shares of
Preferred Stock, (ii) to effect execution of and to deliver to
Xxxxxx the amendment to Xxxxxx' Noncompetition Agreement attached
hereto as Exhibit D, the amendment to the Lease for 00000
Xxxxxxxxx Xxxxx, Xxxxx Xxxx, Xxxxxxxx attached hereto as Exhibit
E and the amendment to Furniture and Fixture Lease attached
hereto as Exhibit F, (iii) to deliver to Xxxxxx in exchange for
Xxxxxx' delivery to ThermoView of the Promissory Note attached
hereto as Exhibit G and the Stock Pledge Agreement attached
hereto as Exhibit H the sum of $1,500,000 in cash (by cashier's
check or wire transfer per Xxxxxx' directions), and Xxxxxx hereby
agrees to accept all of the foregoing in exchange for any and all
amounts due to Xxxxxx by ThermoView pursuant to the Year One Earn-
out Payment under the Stock Agreement. The delivery of the
certificate for the Preferred Stock to Xxxxxx shall occur within
fifteen (15) business days.
2. REPRESENTATIONS AND WARRANTIES OF THERMOVIEW. In order
to induce Xxxxxx to enter into this Agreement and to accept the
Preferred Stock, the Company hereby represents and warrants to
Xxxxxx that:
2.1 ORGANIZATION AND STANDING; ARTICLES AND BYLAWS.
ThermoView is duly incorporated, validly existing and in good
standing under the laws of the State of Delaware. ThermoView has
full corporate power and authority to own its properties and
carry on its business as it is currently being conducted by
ThermoView and as is currently proposed to be conducted by
ThermoView. ThermoView is duly licensed or qualified to transact
business as a foreign corporation and is in good standing in all
other jurisdictions in which the nature of the business
transacted by it or the character of the properties owned or
leased by it requires such licensing or qualification, except
where the failure to be so qualified will not have a material
adverse effect on ThermoView.
2.2 CORPORATE POWER AND AUTHORITY. ThermoView has
full corporate power and authority to enter into this Agreement,
the amendments to agreements referred to in Section 1 above and
the transactions contemplated hereby, issue the Preferred Stock
and carry out and perform its obligations under the terms of this
Agreement and the Exhibits attached hereto.
2.3 VALID ISSUANCE. The Preferred Stock upon receipt
by Xxxxxx will be duly authorized and validly issued, fully paid
and nonassessable and owned of record and beneficially by Xxxxxx
free of any liens or encumbrances, and will have been offered,
issued, sold and delivered by ThermoView in compliance with
applicable federal and state securities laws, assuming the truth
and accuracy of Xxxxxx' representations and warranties set forth
in Section 5 hereof.
2.4 AUTHORIZATION; NO CONFLICTS. All corporate action
on the part of ThermoView, its directors and shareholders
necessary for the authorization, execution, delivery and
performance by ThermoView of this Agreement and the Exhibits
attached hereto, and the consummation of the transactions
contemplated herein and for the authorization, offer, issuance,
sale and delivery of the Preferred Stock has been taken. This
Agreement is the valid and binding obligation of ThermoView,
enforceable in accordance with its terms, subject to laws of
general application relating to bankruptcy, insolvency and the
relief of debtors. The execution, delivery and performance by
ThermoView of this Agreement and compliance herewith and the
offer, issuance, sale and delivery of the Preferred Stock will
not, assuming the truth and accuracy of the Xxxxxx'
representations and warranties set forth in Section 3 hereof,
result in any violation of and will not conflict with, or result
in any breach of any of the terms of, or constitute a default
under, any provision of federal or state law to which ThermoView
is subject, the Articles or the Bylaws, as amended as of the
Closing Date, or any mortgage, indenture, agreement, instrument,
judgment, decree, order, rule or regulation or other restriction
to which ThermoView is a party or by which it is bound. No
shareholder of ThermoView has any preemptive rights or rights of
first refusal by reason of the issuance of the Preferred Stock,
or such shareholder has waived any such rights in writing.
2.5 FINANCIAL INFORMATION. The audited financial
statements of ThermoView (including the notes thereto) as of
December 31, 1999 and for the year then ended, present fairly the
financial position and results of operations of ThermoView at the
date and for the period to
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which they relate, have been prepared in accordance with
generally accepted accounting principles consistently applied
throughout the periods indicated, and show all material
liabilities, absolute or contingent, of ThermoView required to be
recorded thereon in accordance with generally accepted accounting
principles.
2.6 CONSENTS. All consents, approvals, orders or
authorizations of, or registrations, qualifications,
designations, declarations or filings with, any federal or state
governmental authority (including under the "blue sky" laws of
any such state governmental authority), any party to a contract
to which ThermoView is bound or any other third party, required
on the part of ThermoView, in connection with the consummation of
the transactions contemplated by this Agreement, shall have been
obtained prior to, and will be effective as of, the issuance of
the Preferred Stock, other than any notice filing required to be
made after the Closing Date pursuant to Regulation D under the
Securities Act of 1933 (the "1933 Act") and any applicable "blue
sky" laws.
2.7 ISSUANCE TAXES. All taxes imposed upon ThermoView
by law as a result of the issuance, sale and delivery of the
shares of Preferred Stock shall have been fully paid, and all
laws imposing such taxes shall have been or will be fully
complied with, on or prior to the issuance of the Preferred
Stock.
2.8 OFFERING. Neither ThermoView nor anyone
authorized to act on its behalf has taken an action that will
cause the issuance, sale and delivery of the Preferred Stock as
contemplated by this Agreement (assuming the truth and accuracy
of the representations and warranties of Xxxxxx set forth in
Section 5 hereof) to constitute a violation of the 1933 Act or
any applicable state securities laws.
2.9 COMPLIANCE. ThermoView is not in violation of any
term of its Articles or Bylaws as amended. ThermoView is not in
violation of any term of any law, judgment, decree, order, rule
or regulation to which ThermoView is subject and a violation of
which would have a material adverse effect on the condition,
financial or otherwise, or operations of ThermoView.
2.10 LOANS TO OTHER PERSONS. Neither ThermoView nor a
subsidiary of ThermoView is obligated or committed to make any
loan or advance to any person or entity, except for loans or
advances to employees or customers in the ordinary course of
business, consistent with past practice.
2.11 BOOKS AND RECORDS. The books of account, stock
record books, minute books, bank accounts and other corporate
records of ThermoView are true, correct and complete and have
been maintained in accordance with good business practices.
2.12 INSURANCE. ThermoView and each subsidiary of
ThermoView maintains insurance which is customary in its industry
and which ThermoView reasonably believes is commercially
reasonable given the risks involved in the business conducted by
ThermoView.
2.13 DISCLOSURE. Neither this Agreement, nor any
certificate or statement furnished to the Xxxxxx by ThermoView
pursuant to this Agreement, contains any untrue
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statement of a material fact, and none of this Agreement, such
certificates or statements omits to state a material fact
necessary in order to make the statements contained herein or
therein not misleading in the light of the circumstances under
which they were made.
2.14 ENVIRONMENTAL AND SAFETY LAWS. Neither ThermoView
nor a subsidiary of ThermoView is in violation of any applicable
statute, law or regulation relating to the environment or
occupational health and safety, which violations, either singly
or in the aggregate, would have a material adverse effect on
ThermoView's or such subsidiary's business, and no material
expenditures are or will be required in order to comply with any
such statute, law or regulation.
3. FULL SATISFACTION. Subject to the validity of the
representations and warranties of ThermoView set forth in Section
2 above, Xxxxxx hereby acknowledges that his receipt of the
$1,000,000 cash payment, the 1,113,500 shares of Preferred Stock
and the other items recited in Section 1 above, will be in full
and complete satisfaction of the obligation owed to Xxxxxx by
ThermoView for the Year One Earn-out Payment.
4. NO AMENDMENT OR TERMINATION. Nothing contained in this
Agreement shall amend or terminate any obligations of ThermoView
to make any and all other Earn-out Payments, if earned, under the
terms of the Stock Agreement.
5. XXXXXX' REPRESENTATIONS AND WARRANTIES. Xxxxxx hereby
represents and warrants to ThermoView as follows:
(1) INVESTMENT INTENT. Xxxxxx is acquiring the
Preferred Stock for his own account and not with a present
view to or for distributing or reselling the Preferred Stock
in violation of the Securities Act of 1933, as amended (the
"Securities Act"). Xxxxxx agrees that such shares of
Preferred Stock may not be sold, transferred, offered for
sale, pledged, hypothecated or otherwise disposed of without
registration under the Securities Act, except pursuant to an
exemption available under the Securities Act. Xxxxxx will
not sell, offer to sell or solicit offers to buy any of the
shares of Preferred Stock in violation of the Securities Act
or any securities act of any state. Xxxxxx understands that
the shares of Preferred Stock have not been registered under
federal or any state securities laws.
(2) XXXXXX' STATUS. Xxxxxx is (i) an "accredited
investor" as defined in Rule 501 of the Securities Act and
(ii) has such knowledge, sophistication and experience in
business and financial matters so as to be capable of
evaluating the merits and risks of the prospective
investment in the Preferred Stock.
(3) RELIANCE. Xxxxxx understands and acknowledges
that (i) the Preferred Stock is being offered and sold to
Xxxxxx without registration under the Securities Act in a
private placement that is exempt from the registration
provisions of the Securities Act under Section 4(2) of the
Securities Act or Regulation D promulgated thereunder or
other applicable federal and state securities laws and (ii)
the availability of such exemptions depends in part on, and
ThermoView will rely upon the accuracy and truthfulness of,
the representations set forth in this Section 4 and Xxxxxx
consents to such reliance.
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(4) INFORMATION. Xxxxxx and his advisors, if any,
have been furnished with all materials relating to the
business, finances and operations of ThermoView and
materials relating to the offer and sale of the Preferred
Stock, including the Certificate, which have been requested
by Xxxxxx or his advisors. Xxxxxx and his advisors, if any,
have been afforded the opportunity to ask questions of
ThermoView. Xxxxxx acknowledges receipt of the ThermoView
prospectus dated December 2, 1999 (the "Prospectus") and
that ThermoView will deliver a copy of its most recent Form
10-K filing with the Securities and Exchange Commission as
soon as it becomes publicly available. Xxxxxx understands
that his investment in the Preferred Stock involves a
significant degree of risk, some of which risks associated
with the investment in the Preferred Stock are set forth in
EXHIBIT B, attached hereto and incorporated herein by
reference, and in the Prospectus.
(5) PLEDGE EXCEPTION. Xxxxxx shall only be permitted
to pledge the Preferred Stock to the extent contemplated in
Section 1 hereof.
6. MISCELLANEOUS.
(1) NOTICES. All notices, requests, consents and
other communications hereunder shall be in writing, shall be
addressed to the receiving party's address set forth below
or to such other address as a party may designate by notice
hereunder, and shall be either (i) delivered by hand,
(ii) made by telex, telecopy or facsimile transmission,
(iii) sent by overnight courier, or (iv) sent by certified
mail, return receipt requested, postage prepaid.
If to ThermoView:
ThermoView Industries, Inc.
0000 Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxx X. Xxxxxxxx, President
Fax No. (000) 000-0000
With a copy to:
Xxxxxx & Xxxxxxxx
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxxxx, Xx., Esq.
Fax No. (000) 000-0000
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If to Xxxxxx:
Xxxxxx X. Xxxxxx
00000 Xxxx Xxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxx 00000
Fax No. (000) 000-0000
With a copy to:
Blitz, Bardgett & Deutsch, L.C.
000 Xxxxx Xxxxxxx, Xxxxx 000
Xx. Xxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxx, Esq.
Fax No. (000) 000-0000
All notices, requests, consents and other
communications hereunder shall be deemed to have been
received either (i) if by hand, at the time of the delivery
thereof to the receiving party at the address of such party
set forth above, (ii) if made by telecopy or facsimile
transmission, at the time that receipt thereof has been
acknowledged by electronic confirmation or otherwise,
(iii) if sent by overnight courier, on the next business day
following the day such notice is delivered to the courier
service, or (iv) if sent by certified mail, on the fifth
business day following the day such mailing is made.
(2) ENTIRE AGREEMENT. This Agreement embodies the
entire agreement and understanding between the parties
hereto with respect to the Year One Earn-out Payment and
supersedes all prior oral or written agreements and
understandings relating to the Year One Earn-out Payment.
No statement, representation, warranty, covenant or
agreement of any kind not expressly set forth in this
Agreement shall affect, or be used to interpret, change or
restrict, the express terms and provisions of this
Agreement.
(3) MODIFICATIONS AND AMENDMENTS. The terms and
provisions of this Agreement may be modified or amended only
by written agreement executed by all parties hereto.
(4) BENEFIT. This Agreement shall be binding on the
parties hereto and shall inure to the benefit of the parties
hereto and the respective successors and permitted assigns
of each party hereto. Nothing in this Agreement shall be
construed to create any rights or obligations except among
the parties hereto, and no person or entity shall be
regarded as a third-party beneficiary of this Agreement.
(5) GOVERNING LAW. This Agreement and the rights and
obligations of the parties hereunder shall be construed in
accordance with and governed by the law of the State of
Missouri, without giving effect to the conflict of law
principles thereof.
(6) SEVERABILITY. In the event that any court of
competent jurisdiction shall determine that any provision,
or any portion thereof, contained in this Agreement shall be
unreasonable or unenforceable in any respect, then such
provision shall be deemed limited to the extent that such
court deems it reasonable and enforceable, and as so limited
shall remain in full force and effect. In the event that
such court shall deem any
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such provision, or portion thereof, wholly unenforceable,
the remaining provisions of this Agreement shall
nevertheless remain in full force and effect.
(7) HEADINGS AND CAPTIONS. The headings and captions
of the various subdivisions of this Agreement are for
convenience of reference only and shall in no way modify, or
affect the meaning or construction of any of the terms or
provisions hereof.
(8) COUNTERPARTS. This Agreement may be executed in
one or more counterparts, and by different parties hereto on
separate counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and
the same instrument.
IN WITNESS WHEREOF, ThermoView has caused this Agreement to
be executed by its duly authorized officer and Xxxxxx has
executed this Agreement all as of the date first above written.
THERMOVIEW INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxx
-------------------------------
Title: President
/s/ Xxxxxx X. Xxxxxx
----------------------------------
XXXXXX X. XXXXXX
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EXHIBIT A
CERTIFICATE OF DESIGNATION
CERTIFICATE OF THE VOTING POWERS, DESIGNATIONS, PREFERENCES
AND RELATIVE, PARTICIPATING, OPTIONAL OR OTHER
SPECIAL RIGHTS, AND QUALIFICATIONS, LIMITATIONS OR
RESTRICTIONS THEREOF, OF 12% SERIES D CUMULATIVE
PREFERRED STOCK
OF
THERMOVIEW INDUSTRIES, INC.
PURSUANT TO SECTION 151 OF THE GENERAL CORPORATION LAW
OF THE STATE OF DELAWARE
Pursuant to Section 141(f) of the General Corporation Law of
the State of Delaware (the "DGCL"), the Board of Directors of
ThermoView Industries, Inc., a Delaware corporation (the
"Company"), hereby unanimously consents to, adopts and ratifies
the following resolution:
RESOLVED, that pursuant to the authority expressly
granted to and vested in the Board of Directors of the
Company by the provisions of Section 4.2 of Article IV
of the Restated Certificate of Incorporation of the
Company (the "Restated Certificate of Incorporation"),
and Section 151(g) of the DGCL, such Board of Directors
hereby creates, from the 50,000,000 authorized shares
of Preferred Stock, par value $.001 per share (the
"Preferred Stock"), of the Company authorized to be
issued pursuant to the Restated Certificate of
Incorporation, a series of Preferred Stock, and hereby
fixes by this certificate of designation (this
"Certificate of Designation") the voting powers,
designations, preferences and relative, participating,
optional or other special rights, and qualifications,
limitations or restrictions thereof, of the shares of
such series as follows:
The series of Preferred Stock hereby
established shall consist of 1,500,000 shares
designated as "12% Cumulative Series D
Preferred Stock" (hereinafter called the
"Series D Preferred Stock"), which shall have
a stated value of $5.00 per share. The
relative rights, preferences and limitations
of such series shall be as follows:
12% CUMULATIVE SERIES D PREFERRED STOCK
(1) RANKING. The Series D Preferred Stock will, with
respect to payment of dividends and amounts upon liquidation,
dissolution or winding up, rank (i) senior to the Common Stock of
the Company, $.001 par value (the "Common Stock") and to shares
of all other series of Preferred Stock issued by the Company the
terms of which specifically provide that the capital stock of
such series rank junior to such Series D Preferred Stock with
respect to dividend rights or distributions upon dissolution of
the Company ("Junior Stock"); (ii) on a parity with (a) all
shares of the Company's 6.6% Cumulative Convertible Series C
Preferred Stock and (b) the shares of all capital stock issued by
the Company whether or not the dividend rates, dividend payment
dates, or redemption or liquidation prices per share thereof
shall be different from those of the Series D Preferred Stock, if
the holders of stock of such class or series shall be entitled by
the terms thereof to the receipt of dividends or of amounts
distributable upon liquidation, dissolution or winding up, as the
case may be, in proportion to their respective dividend rates or
liquidation prices, without preference or priority of one over
the other as between the holders of such stock and the holders of
shares of Series D Preferred Stock (collectively (a) and (b)
being "Parity Stock"); and (iii) junior to all capital stock
issued by the Company the terms of which specifically provide
that the shares rank senior to the Series D Preferred Stock with
respect to dividends and distributions upon dissolution of the
Company ("Senior Stock").
(2) DIVIDENDS.
(a) Holders of shares of Series D Preferred Stock will
be entitled to receive, when, as and if declared by the Board of
Directors of the Company and only with the consent of PNC Bank,
N.A. or any successor lender thereto, out of funds of the Company
legally available for payment, subject to the prior and superior
rights of Senior Stock, but pari passu with Parity Stock, and in
preference to Junior Stock, cumulative cash dividends at the rate
per annum of $0.60 per share of Series D Preferred Stock.
Dividends on the Series D Preferred Stock will be payable
quarterly in arrears on the last calendar day of April, July,
October and January of each year, commencing July 31, 2000 (and
in the case of any accumulated and unpaid dividends not paid on
the corresponding dividend payment date, at such additional times
and for such interim periods, if any, as determined by the Board
of Directors). Each such dividend will be payable to holders of
record as they appear on the stock records of the Company at the
close of business on such record dates, not more than 60 days nor
less than 10 days preceding the payment dates thereof, as shall
be fixed by the Board of Directors of the Company. Dividends
will accrue from the date of the original issuance of the Series
D Preferred Stock. Dividends will be cumulative from such date,
whether or not in any dividend period or periods there shall be
funds of the Company legally available for the payment of such
dividends. Accumulations of dividends on shares of Series D
Preferred Stock will not bear interest. Dividends payable on the
Series D Preferred Stock for any period greater or less than a
full dividend period will be computed on the basis of actual
days. Dividends payable on the Series D Preferred Stock for each
full dividend period will be computed by dividing the annual
dividend rate by four.
(b) Except as provided in the next sentence, no
dividend will be declared or paid on any Parity Stock unless full
cumulative dividends have been declared and paid or are
contemporaneously declared and funds sufficient for payment set
aside on the Series D Preferred Stock for all prior dividend
periods. If accrued dividends on the Series D Preferred Stock
for all prior periods have not been paid in full, then any
dividends declared on the Series D Preferred Stock for any
dividend period and on any Parity Stock will be declared ratably
in proportion to accumulated and unpaid dividends on the Series D
Preferred Stock and such Parity Stock.
(c) So long as the shares of the Series D Preferred
Stock shall be outstanding, unless (i) full cumulative dividends
shall have been paid or declared and set apart for payment on all
outstanding shares of the Series D Preferred Stock and any Parity
Stock, (ii) sufficient funds have been paid or set apart for the
payment of the dividend for the current dividend period with
respect to the Series D Preferred Stock and any Parity Stock and
(iii) the Company is not in default or in arrears with respect to
the mandatory or optional redemption or mandatory repurchase or
other mandatory retirement of, or with respect to any sinking or
other analogous fund for, the Series D Preferred Stock or any
Parity Stock, the Company may not declare any dividends on any
Junior Stock, or make any payment on account of, or set apart
money for, the purchase, redemption or other retirement of, or
for a sinking or other analogous fund for, any shares of Junior
Stock or make any distribution in respect thereof, whether in
cash or property or in obligations or stock of the Company, other
than (x) Junior Stock which is neither convertible into, nor
exchangeable or exercisable for, any securities of the Company
other than Junior Stock, or (y) Common Stock acquired in
connection with the cashless exercise of options under employee
incentive or benefit plans of the Company or any subsidiary or
any other redemption or purchase or other acquisition of Common
Stock made in the ordinary course of business, which has been
approved by the Board of Directors of the Company, for the
purpose of any employee incentive or benefit plan of the Company.
The limitations in this paragraph do not restrict the Company's
ability to take the actions in this paragraph with respect to any
Parity Stock. As used in this subparagraph (c), the term
"dividend" with respect to Junior Stock does not include
dividends payable solely in shares of Junior Stock on Junior
Stock, or in options, warrants on rights to holders of Junior
Stock to subscribe for or purchase any Junior Stock.
(3) REDEMPTION.
(a) The shares of Series D Preferred Stock will be
redeemable at the option of the Company in whole or in part, for
cash or for such number of shares of Common Stock as equals the
Liquidation Preference (defined hereinafter in paragraph (4)) of
the Series D Preferred Stock to be redeemed (without regard to
accumulated and unpaid dividends) as of the opening of business
on the date set for such redemption. In order to exercise its
redemption option, the Company must notify the holders of record
of its Series D Preferred Stock in writing (the "Conditions
Satisfaction Notice") prior to the opening of business on the
second trading day after the conditions in the preceding
sentences have, from time to time, been satisfied.
(b) Notice of redemption (the "Redemption Notice")
will be given by mail to the holders of the Series D Preferred
Stock not less than 30 nor more than 60 days prior to the date
selected by the Company to redeem the Series D Preferred Stock.
The Redemption Notice shall be deemed to have been given when
deposited in the United States mail, first-class mail, postage
prepaid, whether or not such notice is actually received. The
Company's right to exercise its redemption option will not be
affected by changes in the closing price of the
Common Stock following such 30-day period. If fewer than all of
the shares of Series D Preferred Stock are to be redeemed, the
shares to be redeemed shall be selected by lot or pro rata or in
some other equitable manner determined by the Board of Directors
of the Company; provided, however, that the Company shall not be
required to effect the redemption in any manner that results in
additional fractional shares being outstanding. If full
cumulative dividends on the outstanding shares of Series D
Preferred Stock shall not have been paid or declared and set
apart for payment for all regular dividend payment dates to and
including the last dividend payment date prior to the date fixed
for redemption, the Corporation shall not call for redemption any
shares of Series D Preferred Stock unless all such shares then
outstanding are called for simultaneous redemption.
(c) On the redemption date, the Company must pay, in
cash, on each share of Series D Preferred Stock to be redeemed
any accumulated and unpaid dividends through the redemption date.
In the case of a redemption date falling after a dividend payment
record date and prior to the related payment date, the holders of
the Series D Preferred Stock at the close of business on such
record date will be entitled to receive the dividend payable on
such shares on the corresponding dividend payment date,
notwithstanding the redemption of such shares following such
dividend payment record date. Except as provided for in the
preceding sentence, no payment or allowance will be made for
accumulated and unpaid dividends on any shares of Series D
Preferred Stock called for redemption or on the shares of Common
Stock issuable upon such redemption.
(d) On and after the date fixed for redemption,
provided that the Company has made available at the office of its
registrar and transfer agent a sufficient number of shares of
Common Stock and an amount of cash to effect the redemption,
dividends will cease to accrue on the Series D Preferred Stock
called for redemption (except that, in the case of a redemption
date after a dividend payment record date and prior to the
related dividend payment date, holders of Series D Preferred
Stock on the dividend payment record date will be entitled on
such dividend payment date to receive the dividend payable on
such shares), such shares shall be cancelled and shall no longer
be deemed to be outstanding and all rights of the holders of such
shares of Series D Preferred Stock shall cease except the right
to receive the shares of Common Stock upon such redemption and
any cash payable upon such redemption, without interest from the
date of such redemption. Such cancelled shares shall be restored
to the status of authorized but unissued shares of Preferred
Stock, without designation as to series, and may thereafter be
issued but not as shares of Series D Preferred Stock. At the
close of business on the redemption date upon surrender in
accordance with such notice of the certificates representing any
such shares (properly endorsed or assigned for transfer, if the
Board of Directors of the Company shall so require and the notice
shall so state), each holder of Series D Preferred Stock (unless
the Company defaults in the delivery of the shares of Common
Stock or cash) will be, without any further action, deemed a
holder of the number of shares of Common Stock for which such
Series D Preferred Stock is redeemable.
(e) Fractional shares of Common Stock are not to be
issued upon redemption of the Series D Preferred Stock, but, in
lieu thereof, the Company will pay a cash adjustment based on the
current market price of the Common Stock on the day prior to the
redemption date. If fewer than all the shares represented by any
such certificate are redeemed, a new certificate shall be issued
representing the unredeemed shares of Series D Preferred Stock
without cost to the holder thereof.
(f) Any shares or cash set aside by the Company
pursuant to subparagraph (e) and unclaimed at the end of three
years from the date fixed for redemption shall revert to the
Company.
(g) Subject to applicable law and the limitation on
purchases when dividends on the Series D Preferred Stock are in
arrears, the Company may, at any time and from time to time,
purchase any shares of the Series D Preferred Stock by tender or
by private agreement.
(4) LIQUIDATION PREFERENCE.
(a) The holders of shares of Series D Preferred Stock
will be entitled to receive in the event of any liquidation,
dissolution or winding up of the Company, whether voluntary or
involuntary, $5.00 per share of Series D Preferred Stock (the
"Liquidation Preference"), plus an amount per share of Series D
Preferred Stock equal to all dividends (whether or not earned or
declared) accumulated and unpaid thereon to the date of final
distribution to such holders, and no more. If, upon any
liquidation, dissolution or winding up of the Company, the assets
of the Company, or proceeds thereof, distributable among the
holders of the Series D Preferred Stock are insufficient to pay
in full the liquidation preference with respect to the Series D
Preferred Stock and any other Parity Stock, then such assets, or
the proceeds thereof, will be distributed among the holders of
Series D Preferred Stock and any such Parity Stock ratably in
accordance with the respective amounts which would be payable on
such Series D Preferred Stock and any such Parity Stock if all
amounts payable thereon were paid in full.
(b) Neither a consolidation or merger of the Company
with or into another corporation, nor a sale, lease or transfer
of all or substantially all of the Company's assets will be
considered a liquidation, dissolution or winding up, voluntary or
involuntary, of the Company.
(5) VOTING RIGHTS. Except as may be required by applicable
law from time to time, the holders of shares of Series D
Preferred Stock will have no voting rights.
(6) SINKING FUND. The Series D Preferred Stock shall not
be entitled to any mandatory redemption or prepayment (except on
liquidation, dissolution or winding up of the affairs of the
Company) or to the benefit of any sinking fund.
WITNESS THE SIGNATURE of the undersigned who is the Chairman
of the Board and Chief Executive Officer of ThermoView
Industries, Inc. as of this day of April, 2000.
----
---------------------------------
Xxxxxxx X. Xxxxxxxx
EXHIBIT B
RISK FACTORS
PRIOR TO MAKING AN INVESTMENT DECISION, A PROSPECTIVE
PURCHASER OF THE 12% CUMULATIVE SERIES D PREFERRED STOCK OFFERED
HEREBY SHOULD EVALUATE THE FOLLOWING RISK FACTORS INCLUDING THOSE
IN THE THERMOVIEW PROSPECTUS, DATED DECEMBER 2, 1999.
SERIES D PREFERRED STOCK
There can be no assurance that ThermoView's continuing
losses or consolidated earnings, if ever, in the future will be
sufficient to cover its combined fixed charges and dividends on
(i) the 12% Series D Cumulative Preferred Stock alone, or (ii)
its 9.6% Series C Convertible Preferred Stock and the Series D
Preferred Stock.
ABSENCE OF TRADING MARKET FOR SERIES D PREFERRED STOCK
There is no public market for the Series C Preferred
Stock and Series D Preferred Stock and ThermoView does not
anticipate that any public market will develop in the future.
However, the Series C Preferred Stock is convertible into Common
Stock at a conversion price, subject to adjustment in certain
circumstances of $15.00 per share of Common Stock (initially
equivalent to a conversion rate of 66 2/3 shares of stock per
share of Series C Preferred Stock). The Series D Preferred Stock
has no such conversion feature. The ThermoView Common Stock
trades on the American Stock Exchange, so a public market does
exist for the Common Stock. Without the ability to convert the
Series D Preferred Stock into Common Stock or have a market
available to sell the Series D Preferred Stock, the holders of
the Series D Preferred Stock may not be able to liquidate their
investment at any time.
RESTRICTION OF PAYMENT OF CASH DIVIDENDS ON SERIES D
PREFERRED STOCK
Pursuant to ThermoView's current line of credit with
its principal secured lender and documentation related to
financings with other parties, it may not pay dividends on its
Common Stock until all obligations thereunder have been paid in
full and on the Series D Preferred Stock until satisfaction of
all covenants under the line of credit and other financings.
ThermoView cannot provide any assurance that it will be able to
satisfy these covenants so as to pay quarterly the dividends due
on the Series D Preferred Stock. Considering that ThermoView has
in the past received waivers from its lenders for non-compliance
with its covenants, a history exists that non-compliance with its
loan or other covenants may occur in the future. Accordingly,
it is possible that ThermoView may not be able to pay any
dividends due on its Series D Preferred Stock.
LITIGATION
On March 3, 2000, Pro Futures Bridge Capital Fund, L.P. and
Pro Futures Bridge Capital Fund, L.P. filed an action titled PRO
FUTURES BRIDGE CAPITAL FUND, L.P. V. THERMOVIEW INDUSTRIES, INC.,
ET AL., Civil Action No. 00CV0559 (Colo. Dist. Ct., March 3,
2000) alleging breach of contract, common law fraud, fraudulent
misstatements and omissions in connection with the sale of
securities, negligent misrepresentations and breach of fiduciary
duty. These claims are in connection with (i) the mandatory
conversion of the ThermoView 10% Series A Convertible Preferred
Stock, held by the two funds, into ThermoView Common Stock upon
completion of the ThermoView public offering in December 1999,
and (ii) purchases by the two funds of ThermoView Common Stock
from ThermoView stockholders. The funds are seeking (a)
rescission of their purchases of the Series A Preferred Stock in
the amount of $3,250,000 plus interest and (b) unspecified
damages in connection with their purchases of the ThermoView
Common Stock. Although ThermoView believes that the claims are
without merit and intends to vigorously defend the suit, an
adverse outcome in this action could have a material adverse
effect on the financial position or results of operations of
ThermoView.
EXHIBIT C
[INTENTIONALLY OMITTED]
EXHIBIT D
AMENDMENT TO NONCOMPETITION AGREEMENT
-------------------------------------
THIS AMENDMENT TO NONCOMPETITION AGREEMENT (the "Amendment")
is made and entered into as of the 14th day of April, 2000, by
and between ThermoView Industries, Inc., a Delaware corporation
("ThermoView"), and Xxxxxx X. Xxxxxx (the "Shareholder").
PREMISES:
The Shareholder and ThermoView entered into a Noncompetition
Agreement dated as of January 1, 1999 (the "Noncompetition
Agreement").
The parties desire to amend the Noncompetition Agreement,
but only to the extent, and subject to the terms and conditions
set forth in this Amendment.
NOW, THEREFORE, in consideration of the foregoing premises
and the mutual covenants and agreements contained herein and for
other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1
---------
Definition of Terms
-------------------
Terms used herein with their initial letters capitalized and
not otherwise defined herein shall have the meanings given to
such terms in the Noncompetition Agreement.
ARTICLE 2
---------
Amendments to Noncompetition Agreement
--------------------------------------
The Noncompetition Agreement is hereby amended in the
following respects:
2.1 ADDITION TO SECTION 1.2. A new paragraph is hereby
added at the end of Section 1.2 of the Noncompetition Agreement,
which paragraph shall provide in its entirety as follows:
"Notwithstanding anything in this Agreement to the contrary:
(a) if ThermoView has not redeemed all of the
1,113,500 shares of ThermoView's 12% Cumulative Series
D Preferred Stock issued to the Shareholder pursuant to
an Agreement dated April 14, 2000, by and between
ThermoView (the "Shareholder's Series D Stock") by
October 14, 2001, then this Agreement, including,
without limitation the Noncompete Period, shall
forthwith terminate, become null and void and of no
further force or effect; or,
(b) if ThermoView has not redeemed at least fifty
percent of the Shareholder's Series D Preferred Stock
by to April 14, 2001, and caused the
holder of the Promissory Note dated April 14, 2000,
made by the Shareholder payable to the order of
Founders Group, LLC, to extend its maturity date to
October 14, 2001, then this Agreement, including,
without limitation the Noncompete Period, shall
forthwith terminate, become null and void and of no
further force or effect; or,
(c) if ThermoView has not paid in full all of the
accrued dividends to the Shareholder on account of the
Series D Preferred Stock by April 14, 2001, then this
Agreement, including, without limitation the Noncompete
Period, shall forthwith terminate, become null and void
and of no further force or effect."
ARTICLE 3
---------
Acknowledgment and Ratification
-------------------------------
3.1 RATIFICATION. Except as expressly amended by this
Amendment, the Noncompetition Agreement is and shall be
unchanged, and all of the terms, provisions, covenants and
agreements thereof or thereto shall remain and continue in full
force and effect and are hereby ratified, reaffirmed and
confirmed by the Shareholder and ThermoView in all respects on
and as of the effective date of this Amendment.
ARTICLE 4
---------
General Provisions
------------------
4.1 GOVERNING LAW. The laws of the State of Missouri shall
govern the construction of this Amendment and the rights and
remedies and duties of the parties hereto.
4.2 SECTION HEADINGS. The section headings contained in
this Amendment have been inserted solely for convenience of
reference, and shall not be construed as part of this Amendment.
4.3 COUNTERPARTS. This Amendment may be signed by each
party hereto upon a separate copy, in which event all of said
copies shall constitute a single counterpart to this Amendment.
This Amendment may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of which
together shall constitute but one and the same instrument. It
shall not be necessary, in making proof of this Amendment, to
produce or account for more than one such counterpart.
IN TESTIMONY WHEREOF, ThermoView has caused its duly
authorized representative to execute and deliver, and the
Shareholder has executed and delivered, this Amendment, effective
as of the day and year first above written.
ThermoView Industries, Inc.
BY:
------------------------------
TITLE:
---------------------------
---------------------------------
Xxxxxx X. Xxxxxx
EXHIBIT E
AMENDMENT TO TRIPLE NET LEASE AGREEMENT
---------------------------------------
THIS AMENDMENT TO THAT CERTAIN TRIPLE NET LEASE AGREEMENT
(the "Amendment") is made and entered into as of the day of
---
April, 2000, by and between Xxxxxx Construction, Inc., a Missouri
corporation ("Tenant"), and 00000 Xxxxxxxxx Xxxxx, LLC, a
Missouri limited liability company ("Landlord").
PREMISES:
The parties desire to amend the terms pursuant to which
Tenant leases certain Premises situated at 00000 Xxxxxxxxx Xxxxx,
Xxxxx Xxxx, Xxxxxxxx.
ThermoView Industries, Inc., a Delaware corporation
("ThermoView"), the owner of Tenant, has requested Xxxxxx X.
Xxxxxx (the "Shareholder"), an affiliate of Landlord, to exchange
certain amounts owed to the Shareholder by ThermoView for
1,113,500 shares of the ThermoView's 12% Cumulative Series D
Preferred Stock, and the Shareholder has requested that as part
of the consideration for such exchange Tenant and Landlord agree
to amend the Lease, but only to the extent, and subject to the
terms and conditions set forth in this Amendment.
NOW, THEREFORE, in consideration of the foregoing premises
and the mutual covenants and agreements contained herein and for
other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1
---------
Definition of Terms
-------------------
[Intentionally omitted]
ARTICLE 2
---------
Amendments to Lease
-------------------
Such lease is hereby amended in the following respects:
2.1 ADDITION THERETO. A new paragraph is hereby added at
the end of such lease, which new paragraph shall provide in its
entirety as follows:
"Notwithstanding anything in this Lease to the contrary,
until such time as ThermoView Industries, Inc., a Delaware
corporation ("ThermoView") has redeemed all of the 1,113,500
shares of ThermoView's 12% Cumulative Series D Preferred
Stock issued to Xxxxxx X. Xxxxxx (the "Shareholder")
pursuant to an Agreement dated April 14, 2000, by and
between ThermoView and the Shareholder (the "Shareholder's
Series D Stock"), Landlord shall have the right and power to
terminate this Lease by delivering a written notice to
Tenant specifying a termination date at the end of the month
following the month in which such notice was delivered, and
upon Tenant's receipt of such notice the term of this Lease
shall be deemed to have expired on such termination date."
ARTICLE 3
---------
Acknowledgment and Ratification
-------------------------------
3.1 RATIFICATION. Except as expressly amended by this
Amendment, such lease is and shall be unchanged, and all of the
terms, provisions, covenants and agreements thereof or thereto
shall remain and continue in full force and effect, and are
hereby ratified, reaffirmed and confirmed by the parties. The
parties acknowledge that the Landlord, to the extent not a party
to this Amendment, under such lease is a third party beneficiary
of this Amendment.
ARTICLE 4
---------
General Provisions
------------------
4.1 GOVERNING LAW. The laws of the State of Missouri shall
govern the construction of this Amendment and the rights and
remedies and duties of the parties hereto.
4.2 SECTION HEADINGS. The section headings contained in
this Amendment have been inserted solely for convenience of
reference, and shall not be construed as part of this Amendment.
4.3 COUNTERPARTS. This Amendment may be signed by each
party hereto upon a separate copy, in which event all of said
copies shall constitute a single counterpart to this Amendment.
This Amendment may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of which
together shall constitute but one and the same instrument. It
shall not be necessary, in making proof of this Amendment, to
produce or account for more than one such counterpart.
IN TESTIMONY WHEREOF, the Tenant has caused its duly
authorized representative to execute and deliver, and the
Landlord has executed and delivered, this Amendment, effective as
of the day and year first above written.
00000 Xxxxxxxxx Xxxxx, LLC Xxxxxx Construction, Inc.
BY: BY:
--------------------------- ---------------------------
TITLE: TITLE:
------------------------ ------------------------
------------------------------
Xxxxxx X. Xxxxxx
EXHIBIT F
AMENDMENT TO FURNITURE AND FIXTURE LEASE
----------------------------------------
THIS AMENDMENT TO THAT CERTAIN FURNITURE AND FIXTURE LEASE
(the "Amendment") is made and entered into as of the 14th day of
April, 2000, by and between Xxxxxx Construction, Inc., a Missouri
corporation ("Lessee"), and Investors Property Holding I, LLC, a
Missouri limited liability company ("Lessor").
PREMISES:
The parties entered into a Furniture and Fixture Lease dated
January 1, 1999, (the "Lease") in connection with Lessee's lease
of the Premises situated at 00000 Xxxxxxxxx Xxxxx, Xxxxx Xxxx,
Xxxxxxxx.
ThermoView Industries, Inc., a Delaware corporation
("ThermoView"), the owner of Lessee, has requested Xxxxxx X.
Xxxxxx (the "Shareholder"), an affiliate of Lessor, to exchange
certain amounts owed to the Shareholder by ThermoView for
1,113,500 shares of the ThermoView's 12% Cumulative Series D
Preferred Stock, and the Shareholder has requested that as part
of the consideration for such exchange Lessee and Lessor agree to
amend the Lease, but only to the extent, and subject to the terms
and conditions set forth in this Amendment.
NOW, THEREFORE, in consideration of the foregoing premises
and the mutual covenants and agreements contained herein and for
other good and valuable consideration, the receipt and adequacy
of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1
---------
Definition of Terms
-------------------
Terms used herein with their initial letters capitalized and
not otherwise defined herein shall have the meanings given to
such terms in the Lease.
ARTICLE 2
---------
Amendments to Lease
-------------------
The Lease is hereby amended in the following respects:
2.1 ADDITION TO SECTION 2. A new Section 2.D. is hereby
added at the end of Section 2 of the Lease, which Section 2.D
shall provide in its entirety as follows:
"D. Notwithstanding anything in this Lease to the contrary,
until such time as ThermoView Industries, Inc., a Delaware
corporation ("ThermoView") has redeemed all
of the 1,113,500 shares of ThermoView's 12% Cumulative
Series D Preferred Stock issued to Xxxxxx X. Xxxxxx (the
"Shareholder") pursuant to an Agreement dated April 14,
2000, by and between ThermoView and the Shareholder (the
"Shareholder's Series D Stock"), Lessor shall have the right
and power to terminate this Lease by delivering a written
notice to Lessee specifying a termination date at the end of
the month following the month in which such notice was
delivered, and upon Lessee's receipt of such notice the term
of this Lease shall be deemed to have expired on such
termination date."
ARTICLE 3
---------
Acknowledgment and Ratification
-------------------------------
3.1 RATIFICATION. Except as expressly amended by this
Amendment, the Lease is and shall be unchanged, and all of the
terms, provisions, covenants and agreements thereof or thereto
shall remain and continue in full force and effect, and are
hereby ratified, reaffirmed and confirmed by Lessee and Lessor in
all respects on and as of the effective date of this Amendment.
ARTICLE 4
---------
General Provisions
------------------
4.1 GOVERNING LAW. The laws of the State of Missouri shall
govern the construction of this Amendment and the rights and
remedies and duties of the parties hereto.
4.2 SECTION HEADINGS. The section headings contained in
this Amendment have been inserted solely for convenience of
reference, and shall not be construed as part of this Amendment.
4.3 COUNTERPARTS. This Amendment may be signed by each
party hereto upon a separate copy, in which event all of said
copies shall constitute a single counterpart to this Amendment.
This Amendment may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of which
together shall constitute but one and the same instrument. It
shall not be necessary, in making proof of this Amendment, to
produce or account for more than one such counterpart.
IN TESTIMONY WHEREOF, the Lessee has caused its duly
authorized representative to execute and deliver, and the Lessor
has executed and delivered, this Amendment, effective as of the
day and year first above written.
Investors Property Holding I, LLC Xxxxxx Construction, Inc.
BY: BY:
--------------------------- --------------------------
TITLE: TITLE:
------------------------ -----------------------
EXHIBIT G
PROMISSORY NOTE
---------------
$1,500,000.00 Louisville, Kentucky
April 14, 2000
FOR VALUE RECEIVED, the undersigned, Xxxxxx X. Xxxxxx
("Borrower"), an individual and a resident of St. Louis County,
Missouri, having a business address at 00000 Xxxxxxxxx Xxxxx,
Xxxxx Xxxx Xxxxxxxx 00000, promises to pay to the order of
Founders Group, LLC (the "Lender"), a Kentucky limited liability
company having an address at 0000-X Xxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxx 00000, Attention: Xx. Xxxxxxx Xxxxxxxx, the principal
sum of ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000.00),
together with interest on the principal of this Note from time to
time outstanding. Principal and interest are payable in lawful
currency of the United States.
The Borrower's obligations under this Note are secured by a
Stock Pledge Agreement of even date (the "Stock Pledge
Agreement"), pursuant to which the Borrower has pledged to the
Lender certain stock (the "Stock"), as more particularly
described in the Stock Pledge Agreement. If and when any shares
of the Stock are redeemed, sold or otherwise transferred, the
Borrower shall immediately make a payment under this Note, in an
amount equal to (a) all accrued but unpaid interest, plus (b) the
product of:
(i) the then-outstanding principal balance of this
Note, multiplied by
(ii) the quotient of (A) the number of shares of Stock
redeemed, sold or transferred, divided by (B) the total
number of shares of Stock pledged to the Lender.
For example, if fifty percent of the Stock pledged to the Lender
were redeemed, then this Note would require that the Borrower
immediately make a prepayment in an amount equal to (a) all
accrued interest, plus (b) fifty percent of the then-outstanding
principal balance of this Note. Each such payment shall be due
and payable in full immediately upon the occurrence of such
redemption, sale or transfer, without notice or demand of any
kind. Additionally, any provisions of this Note to the contrary
notwithstanding, all principal of and interest accruing on this
Note shall be due and payable in full on April 14, 2001 (the
"Maturity Date").
Interest on this Note shall accrue from the date of this
Note until the entire principal balance of and all accrued
interest on this Note have been paid in full. This Note shall
bear interest at a rate of twelve percent (12.0%) per annum. All
interest shall be computed over an assumed month of thirty days
and an assumed year of three hundred and sixty (360) days and
over the actual number of days elapsed. Any provision of this
Note to the contrary notwithstanding, on the Maturity Date, all
unpaid principal and all accrued but unpaid interest then
outstanding shall be due and payable in full.
This Note may be prepaid by the Borrower in whole or in
part, without premium or penalty, at any time, provided that no
such prepayment shall relieve the Borrower from the obligation to
make the payments of principal and interest called for in this
Note until such time
as this Note is paid in full. All payments on this Note shall be
applied first to accrued charges under this Note, second to
unpaid interest, and then to unpaid principal.
All payments hereunder shall be paid to the Lender in
immediately available funds at 0000-X Xxxx Xxxx, Xxxxxxxxxx,
Xxxxxxxx 00000, Attention: Xxxxxxx Xxxxxxxx, or to such other
person and at such other place as may be designated in a writing
sent to the Borrower by the holder hereof. If any principal of,
or interest on, this Note is not paid within ten (10) days
following the date such payment becomes due and payable, such
overdue principal and, to the extent permitted by applicable law,
overdue interest, shall bear interest from the due date (whether
stated or by acceleration) until paid at a rate (the "Default
Rate") equal to fourteen percent (14.0%). Additionally, if the
Borrower fails to make any payment of principal, interest or
other amount due pursuant to the provisions of this Note within
ten (10) calendar days after such amount becomes due and payable,
the Borrower shall pay to the Lender a late fee equal to the
greater of two percent (2.0%) of the amount of such payment or
Twenty-Five Dollars ($25.00). The charging and/or collection of
any such late charge shall not in any way be deemed a waiver of
(i) any rights of the holder to declare a default, or (ii) any of
the holder's rights arising thereby or hereunder.
Any security interest granted by Borrower to the Lender in
any collateral, real or personal, whether by way of mortgage,
security agreement, assignment, pledge, hypothecation or
otherwise to secure this Note shall also secure all amendments,
renewals, extensions, or modifications hereof. Failure of the
holder of this Note to exercise any of its rights and remedies
shall not constitute a waiver of the right to exercise the same
at that or any other time. All rights and remedies of the holder
hereof for default hereunder shall be cumulative to the greatest
extent permitted by law. This Note is secured as provided in the
Pledge Agreement. The occurrence of an Event of Default under
the Pledge Agreement shall constitute a default under this Note.
Upon the occurrence of a default under this Note, the outstanding
principal balance of, and all accrued but unpaid interest on,
this Note shall become immediately due and payable in full, this
Note shall thereafter bear interest at the Default Rate, and the
Lender may exercise any rights and remedies available to the
Lender under this Note, the Pledge Agreement, at law or in
equity.
If there is any default under this Note and this Note is
placed in the hands of an attorney for collection or is collected
through any suit, including but not limited to any bankruptcy
court, the Borrower promises to pay to the holder hereof its
reasonable attorneys' fees and court costs incurred in collecting
or attempting to collect, or securing or attempting to secure,
this Note, or enforcing or attempting to enforce the holder's
right in any collateral securing this Note, to the extent allowed
by law.
All parties hereto, whether makers, endorsers, sureties,
guarantors, or otherwise, hereby waive all acts on the part of
the holder otherwise required in fixing the liabilities of
sureties, including, among other acts, presentment, demand,
notice of dishonor, protest, notice of nonpayment and all other
notice and further waive all legal diligence to enforce
collection. The Lender may, with or without notice to any other
party, (1) extend the time for payment of either principal or
interest from time to time, (2) release or discharge any party
liable on this Note, (3) suspend or release the right to enforce
this Note with respect to any person, (4) change, exchange or
release any property in which the Lender or any other holder of
this Note has any interest securing this Note, (5) justifiably or
otherwise impair any collateral securing this Note or
suspend or release the right to enforce against such collateral,
and (6) call for and accept additional collateral. The Lender
shall not be under an obligation to exercise any of its rights
hereunder, and no failure to do so or delay in doing so shall
waive or impair any rights or remedies which the Lender may
otherwise have. In case this Note shall be transferred, the
transferee shall be entitled to all rights secured to the Lender
hereunder.
Time is of the essence in the payment of this Note.
This Note has been delivered in, and shall be governed by
and construed in accordance with the laws of, the Commonwealth of
Kentucky. The Borrower irrevocably consents to the exclusive
jurisdiction of the Jefferson County, Kentucky Circuit Court and
the United States District Court for the Western District of
Kentucky, and agrees that all process may be served by any
nationally-recognized overnight courier to the Borrower at the
address indicated above. Service so made will be deemed to have
been made upon receipt by the Borrower. Borrower further agrees
that nothing contained in this Note is intended to, or shall,
prevent the Lender from bringing any action, enforcing any award
or judgment or exercising any rights against the Borrower or any
of his property in any other county, state, foreign or domestic
jurisdiction. The Borrower agrees that the foregoing courts
offer the most convenience forum for the Borrower and the Lender
and waivers any objection to venue or based upon the
inconvenience of the foregoing forum.
This Note is delivered in connection with a Stock Pledge
Agreement of even date between the Borrower and the Lender (the
"Stock Pledge Agreement") and is secured by a perfected pledge of
certain stock pursuant to the Stock Pledge Agreement. Reference
is made to the Stock Pledge Agreement for a statements of terms
and provisions relevant to this Note but not contained herein,
provided, however, that neither reference herein to the Stock
Pledge Agreement nor to any provision thereof shall impair the
absolute and unconditional obligation of the Borrower to pay the
principal of and interest on this Note when and as due. ANY
PROVISION OF THIS NOTE AND/OR THE STOCK PLEDGE AGREEMENT TO THE
CONTRARY NOTWITHSTANDING, EXCEPT IN THE CASE OF FRAUDULENT OR
WILLFUL MISCONDUCT ON THE PART OF THE BORROWER IN CONNECTION WITH
HIS EXECUTION, DELIVERY OR PERFORMANCE OF THE STOCK PLEDGE
AGREEMENT, THE HOLDER OF THIS NOTE SHALL HAVE NO CLAIM OR RIGHT
TO PROCEED AGAINST THE BORROWER FOR ANY DEFICIENCY OR OTHER SUM
OWING ON ACCOUNT OF THE INDEBTEDNESS EVIDENCED BY THIS NOTE, AND
THE HOLDER HEREOF BY ITS ACCEPTANCE OF THIS NOTE AGREES TO LOOK
SOLELY TO THE ASSETS PLEDGED PURSUANT TO THE STOCK PURCHASE
AGREEMENT FOR PAYMENT OF SUCH INDEBTEDNESS; PROVIDED, HOWEVER,
THAT NOTHING HEREIN CONTAINED SHALL LIMIT, RESTRICT OR IMPAIR THE
RIGHT OF THE HOLDER OF THIS NOTE TO FORECLOSE UPON OR OTHERWISE
RECOVER UPON ANY PLEDGES, LIENS OR SECURITY INTERESTS GRANTED
PURSUANT TO THE STOCK PLEDGE AGREEMENT.
-----------------------------------
Xxxxxx X. Xxxxxx
EXHIBIT H
STOCK PLEDGE AGREEMENT
----------------------
THIS STOCK PLEDGE AGREEMENT, made and entered into as of the
14th day of April, 2000, by and between (i) Xxxxxx X. Xxxxxx (the
"Stockholder"), an individual and a resident of St. Louis County,
Missouri; and (ii) Founders Group, LLC (the "Lender"), a Kentucky
limited liability company.
PREMISES:
---------
The Stockholder owns One Million One Hundred Thirteen
Thousand Five Hundred (1,113,500) of the outstanding shares of
Series D Preferred Stock of ThermoView Industries, Inc. (the
"Stock").
Simultaneously with the execution of this Stock Pledge
Agreement, the Stockholder is making a Promissory Note (the
"Note") payable to the order of the Lender, pursuant to which the
Lender will make a One Million Five Hundred Thousand Dollar
($1,500,000) loan (the "Loan") available to the Stockholder.
To induce the Lender to make the Loan, the Stockholder has
agreed to pledge all of the Stock to secure its obligations under
the Note.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements herein contained, and for other
good and valuable consideration, the parties hereto hereby
covenant, agree, represent and warrant as follows:
1. DEPOSIT AND PLEDGE OF SHARES. Contemporaneously with
the execution of this Stock Pledge Agreement, the Stockholder has
deposited and hereby pledges and assigns to the Lender, and
grants to the Lender a security interest in, the Stock, such
Stock being represented by Certificate No. 1, standing in the
Stockholder's name, with a duly executed stock power attached
thereto. All new shares of capital stock or securities created
in respect to the Stock, whether by stock split, stock dividend,
merger, consolidation or otherwise, that the Stockholder may
hereafter acquire, shall be delivered by the Stockholder to, and
shall be held by, the Lender subject to the terms, provisions and
conditions of this Stock Pledge Agreement, and the term "Stock"
as used herein shall be deemed to include all such new shares of
securities.
2. OBLIGATIONS SECURED. All Stock pledged pursuant to
this Agreement shall be held by the Lender as security for
(i) the due and punctual payment of all amounts payable by the
Stockholder pursuant to the Note, and (ii) the due and punctual
performance and observance of all other agreements, covenants,
obligations, warranties and representations of the Stockholder as
set forth in this Stock Pledge Agreement (collectively, the
"Secured Obligations").
3. VOTING AND OWNERSHIP OF SHARES. So long as no Event of
Default occurs hereunder or under the Note (and upon the
occurrence of an Event of Default, then following the cure of
such Event of Default), the Stockholder shall be entitled to vote
the Stock, but only for purposes not inconsistent with the
covenants, obligations and conditions contained in this Stock
Pledge Agreement. Immediately upon the occurrence of any "Event
of Default", as hereinafter defined, and for so long as such
Event of Default continues, the Lender shall be entitled to
exercise all voting rights and privileges whatsoever with respect
to the Stock, and to that end the Stockholder hereby appoints the
Lender as its proxy and attorney-in-fact for purposes of voting
the Stock, and this appointment shall be deemed coupled with an
interest and is and shall be irrevocable until all of the
Stockholder's obligations to the Lender have been fully and
finally paid. All persons whatsoever shall be conclusively
entitled to rely upon the Lender's oral or written certification
that it is entitled to vote the Stock hereunder. The Stockholder
shall execute and deliver to the Lender any additional proxies
and powers of attorney that the Lender may desire in order to
vote more effectively the Stock in its own name. Upon the
occurrence of any Event of Default hereunder and for so long as
such Event of Default continues, the Lender may (but shall not be
obligated to) vote the Stock.
4. PAYMENTS OF DIVIDENDS AND NEW SHARES. During the
period that the Stock is being held as security hereunder:
(a) The Stockholder shall not, without the prior
written consent of the Lender, vote the Stock in favor of
allowing ThermoView Industries, Inc., to pay any partial or
complete liquidating distributions; and
(b) The Stockholder shall not, without the prior
written consent of the Lender, vote the Stock in favor of
allowing ThermoView Industries, Inc., to issue any additional
shares or options,subscription rights, warrants or other
instruments with respect to the Stock.
5. STATUS OF STOCK. The Stockholder hereby represents and
warrants to the Lender that the Stock is validly issued and
outstanding, fully paid and nonassessable; that the Stockholder
is the registered owner of the Stock, free and clear of all
liens, charges, equities and encumbrances; and that Stockholder
has the full power and authority to pledge the Stock to the
Lender pursuant to this Stock Pledge Agreement. Stockholder
covenants and agrees that none of the Stock shall be sold,
transferred, or assigned without the Lender's prior written
consent, which consent may be arbitrarily withheld so long as
this Stock Pledge Agreement is in effect.
6. MAINTENANCE OF PRIORITY OF PLEDGE. The Stockholder
shall be liable for and shall from time to time pay and discharge
all taxes, assessments and governmental charges imposed upon the
Stock by federal, state or local authority, the liens of which
would or might be held prior to the right of the Lender in and to
the Stock. The Stockholder shall not, at any time while this
Stock Pledge Agreement is in effect, do or suffer any act or
thing whereby the rights of the Lender in the Stock would or
might be impaired. The Stockholder shall execute and deliver
such further documents and take such further actions as may be
reasonably required to confirm the rights of the Lender in and to
the Stock or otherwise to effectuate the intention of this Stock
Pledge Agreement.
7. EVENTS OF DEFAULT. Each of the following shall be
deemed an "Event(s) of Default" hereunder:
(a) Any default occurs in the payment of interest or
principal or other sums due with respect to the Secured
Obligations, when the same are due and payable in accordance with
their respective terms (provided, that any required notices have
been given and any applicable grace periods have expired); or
(b) A breach of any kind whatsoever occurs under the
terms of this Stock Pledge Agreement or any covenant, warranty,
representation or agreement made by the Stockholder herein, or in
connection herewith, shall be broken or proven to be untrue at
any time (provided, that any required notices have been given and
any applicable grace periods have expired).
8. REMEDIES UPON EVENT OF DEFAULT. Upon the occurrence of
any Event of Default, as referred to in Section 7 hereof, and for
so long as such Event of Default continues, the Lender shall have
the following rights and remedies, in addition to all other
rights and remedies provided at law or in equity, all of which
shall be cumulative and may be exercised from time to time,
either successively or concurrently, either by itself or through
a court or courts of appropriate jurisdiction:
(a) The Lender may exercise its rights as proxy and
attorney-in-fact pursuant to Section 3 hereof to exercise all
voting rights and privileges granted to shareholders of
ThermoView Industries, Inc.
(b) The Lender may exercise all rights of a secured
party under the Uniform Commercial Code and all other applicable
laws.
(c) The Lender may take such steps as may be necessary
to cause all or any portion of the Stock as it, in its sole
discretion, deems necessary or desirable to be transferred into
the Lender's name or into the name of the Lender's nominee on the
books of ThermoView Industries, Inc., and following such
transfer, the Lender may exercise all rights granted to holders
of shares of Series D Preferred Stock of ThermoView Industries,
Inc., under its Certificate of Incorporation and By-laws, and
applicable law, including without limitation, the right to
arrange a bona fide sale of the Stock or any portion thereof
within a reasonable time at a public sale or sales or at a
private sale or sales or to vote the Stock in favor of the
declaration of a dividend in kind.
In the event that a sale or sales of the Stock is
determined necessary in the Lender's sole discretion, the Lender
will give notice to the Stockholder and grant the Stockholder a
reasonable time (as determined by the Lender, giving
consideration to the Stockholder's and ThermoView Industries,
Inc.'s then existing financial condition) either to purchase the
Stock or to arrange for a purchase of the Stock by another person
who has such knowledge and experience concerning the financial
affairs of the Stockholder and ThermoView Industries, Inc., that
registration of the Stock under any federal or state securities
laws is not deemed necessary or advisable in the opinion of the
Lender's counsel before such sale, for an amount not less than
all the Secured Obligations then due and
payable. In the event such a sale satisfactory to the Lender
cannot be arranged, then the Lender may take such steps as may be
necessary to effect either a public sale of the Stock or a sale
of the Stock not involving a public offering within the meaning
of the regulations of the Securities and Exchange Commission, at
the cost and expense of the Stockholder. In either event, the
Lender may sell the Stock, or any portion thereof, from time to
time, upon not less than ten (10) days prior written notice to
the Stockholder of the time and place of sale (which notice the
Stockholder hereby agrees is commercially reasonable), for cash
or for future delivery, the Stockholder hereby waiving all
rights, if any, of marshaling the Stock and other security for
the payment of the Obligations. At such sale or sales, the
Lender may bid for and acquire the Stock or any portion thereof
free from any further redemption rights of the Stockholder, and
in lieu of paying cash therefor, may make settlement for the
selling price of the Stock or part thereof by crediting upon the
payment of the Secured Obligations the net selling price of the
Stock, after deducting all of the Lender's reasonable costs and
expenses of every kind and nature therefrom, including the
Lender's reasonable attorneys' fee incurred in connection with
realizing upon the Stock, provided the same is not prohibited by
applicable law.
In the case of any sale by the Lender of the Stock, or
any portion thereof, on credit or for future delivery, which may
be elected at the option and in the complete discretion of the
Lender, the Stock so sold may, at the Lender's option, either be
delivered to the purchaser or retained by the Lender until the
selling price is paid by the purchaser, but in either event the
Lender shall incur no liability in case of failure of the
purchaser to take up and pay for the Stock so sold. In case of
any such failure, such Stock may be sold again by the Lender in
the manner provided in this paragraph.
After deducting all its reasonable costs and expenses
of every kind, including without limitation, legal and accounting
fees incident to a registration of the stock under the Securities
Act of 1933 or any rule or rules adopted pursuant thereto or
under the securities (Blue Sky) laws of any state or incident to
a public or private offering in connection with the sale of the
Stock, the Lender shall apply the residue of the proceeds of the
sale or sales of the Stock to the Secured Obligations in the
order or priority selected by the Lender. The Lender shall not
incur any liability as a result of the sale of the Stock at any
private sale or sales, and the
Stockholder hereby waives any claim arising by reason of the fact
that the price or prices for which the Stock, or any portion
thereof, is sold at such private sale or sales is less than the
price which would have been obtained at a public sale or sales or
is less than the amount due on the Note, even if the Lender
accepts the first offer received and does not offer the Stock, or
any portion thereof, to more than one offeree. The Stockholder
shall remain liable for any deficiency remaining due with respect
to the Secured Obligations. The Lender will account to the
Stockholder for any surplus resulting from such sale or sales
within sixty (60) days following the Lender's receipt of final
payment in cash.
9. NOTICES. All notices, elections, requests, demands and
other communications hereunder shall be in writing and shall be
given at the time delivered or deposited in the United States
mails, certified or registered mail, postage prepaid, return
receipt requested, or sent by telex or telecopy, addressed to the
parties as follows (or to such other person or place of which any
party hereto shall have given written notice to the other):
If to the Lender: Founders Group, LLC
0000-X Xxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attn: Xx. Xxxxxxx Xxxxxxxx
If to the Stockholder: Xxxxxx X. Xxxxxx
00000 Xxxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxx 00000
The address of any party for any purpose may be changed at
any time and from time to time in the manner provided for in this
Section 9 and shall be the most recent such address furnished in
writing to the other party. A notice shall be deemed to have
been given when dispatched, if by telex or telecopy, addressed as
aforesaid (or to such other designated address), or if by mail on
the third Business Day after it is enclosed in an envelope,
addressed to the party to be notified at the address stated above
(or to such other designated address), properly stamped, sealed
and deposited in the United States mail.
10. GOVERNING LAW. THE LAWS OF THE COMMONWEALTH OF
KENTUCKY SHALL GOVERN THE CONSTRUCTION OF THIS STOCK PLEDGE
AGREEMENT AND THE RIGHTS AND REMEDIES AND DUTIES OF THE PARTIES
HEREUNDER.
11. SUCCESSORS AND ASSIGNS. This Stock Pledge Agreement
shall bind the Stockholder, its successors and assigns, and shall
inure to the benefit of the Lender, its successors and assigns.
12. TIME OF ESSENCE. Time shall be of the essence in the
performance of the Stockholder's obligations hereunder.
13. WAIVER OF TRIAL BY JURY. Each of the parties hereto
waives all right to trial by jury in any action or proceeding to
enforce or defend his or its rights under this Agreement and/or
the Note.
IN WITNESS WHEREOF, the parties hereto have caused their
duly authorized representatives to duly execute and deliver this
Stock Pledge Agreement on the dates set forth opposite their
respective signatures, but effective as of the date first above
written.
The "Stockholder"
Xxxxxx X. Xxxxxx
By:
--------------------------------
Title:
-----------------------------
The "Lender"
Founders Group, LLC
By:
--------------------------------
Title:
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