CONTRIBUTION AGREEMENT
CONTRIBUTION AGREEMENT (Agreement) dated May 20, 2001 among Xxxxx Holdings
of North Carolina, Inc., a North Carolina corporation (the Company), American
Home Building Corporation, an Ohio corporation (American Home) and the parties
listed in AnnexI hereto under Management Contributors (the Management
Contributors) and Stockholder Contributors (the Stockholder Contributors). The
Management Contributors and the Stockholder Contributors may be referred to
herein collectively as the Contributors.
RECITALS
The Company intends to enter into an Agreement and Plan of Merger, dated as
of May8,2001 (the Merger Agreement) with Casco International, Inc., a Delaware
corporation (Casco), and Xxxxx Acquisition of North Carolina, Inc., a North
Carolina corporation, pursuant to which Xxxxx Acquisition, Inc. will be merged
into Casco, Casco will become a wholly owned subsidiary of the Company, and all
outstanding shares of common stock of Casco, par value $0.01 per share (the
Casco Common) except those held by the Company will be cancelled and converted
automatically into the right to receive the Cash Merger Consideration described
in the Merger Agreement.
The Contributors own shares of Casco Common and wish to contribute their
shares of Casco Common to the Company in exchange for shares of common stock of
the Company, as provided herein.
In consideration of the mutual covenants, agreements, representations and
warranties contained herein, the Company and the Contributors hereby agree as
follows:
ARTICLE 1
CONTRIBUTION OF CASCO COMMON AND MANAGEMENT
OPTIONS IN EXCHANGE FOR COMPANY COMMON; COMPANY
COMMON TO BE ISSUED TO AMERICAN HOME
Section 1.01. Contribution of Casco Common in Exchange for Company
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Common; Company Common to be Issued to American Home.
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(a) Casco Common. Subject to the terms and conditions of this Agreement, on
the Closing Date (as hereinafter defined) in a single overall plan and
transaction each Contributor shall contribute to the Company the respective
amounts of shares of Casco Common appearing opposite the name of such
Contributor in AnnexI hereto, and the Company shall issue and deliver to each
such Contributor the number of shares of the Companys common stock, par value
$.001per share (Company Common), appearing opposite such Contributors name in
AnnexI hereto. Each Contributor shall receive one share of Company Common for
each share of Casco Common.
(b) The shares of Company Common to be delivered to the Contributors
hereunder pursuant to this Section 1.01 are herein called the Shares. No
fractional shares of Company Common will be issued in exchange for the Shares.
Contributors contributing shares of Casco Common will be paid a cash adjustment,
based on the foregoing purchase price and valuation, for any fractional shares
that would otherwise be issuable.
Section 1.02. Company Common to be issued to American Home Subject to the
terms and conditions of this Agreement, on the Closing Date (as defined herein)
as part of the same single overall plan and transaction, the Company shall issue
to American Home that number of shares of Company Common such that immediately
following the Closing American Home shall own 50% of the total issued and
outstanding shares of Company Common. The shares of Company Common issuable to
American Home shall be issued in exchange for payment to the Company in cash of
the aggregate par value of the Company Common issued to American Home.
Section 1.03. Closing Date. If this Agreement is not terminated pursuant to
Section 5.08 hereof, the closing of the transfers and exchanges described in
Section1.01 shall take place immediately prior to the Effective Time of the
Merger (as defined in the Merger Agreement) at 10:00 a.m. at the offices of
Xxxxx & Xxx Xxxxx PLLC, 000 X. Xxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000, or at such other time and place as the Company and the
Contributors may mutually agree, such time being herein called the Closing Date.
Section 1.04. Certain Tax Matters. American Home and the Contributors
hereto shall, for all federal, state and local income tax purposes, treat the
transactions effected pursuant to Section1.01 as collectively constituting a
transaction under Section351 of the Internal Revenue Code of 1986, as amended
(the Code), in which American Home and the Contributors transfer property to the
Company in exchange for stock in the Company and immediately after the exchange
American Home and the Contributors are in control (as defined in Section368(c)
of the Code) of the Company. However, it is understood and agreed that none of
the Company, American Home or any Contributor or any of their respective
affiliates is making any representation or warranty to any other party to this
Agreement as to whether or not the transactions described in Section1.01 will
collectively constitute a transaction in which American Home and the Contributor
will not recognize gain or loss under Section351 of the Code or any similar
provision of state or local law.
ARTICLE 2
REPRESENTATIONS AND
WARRANTIES OF THE COMPANY
The Company represents and warrants to each Contributor as follows:
Section 2.01. Organization, Power, etc. The Company is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of North Carolina. The Company has the corporate power and authority to execute
and deliver this Agreement, to perform its obligations hereunder and thereunder,
and to issue and deliver the Shares.
Section 2.02. Authorization of Agreements, etc. The execution, delivery and
performance of this Agreement, and the issuance and delivery of Shares by the
Company have been duly authorized by all requisite corporate action and do not
violate any provision of law or the Articles of Incorporation or Bylaws of the
Company.
Section 2.03. Validity. This Agreement has been duly executed and delivered
by the Company, and, subject to due execution and delivery by the other parties
hereto, constitutes, a valid and legally binding obligation of the Company,
enforceable against the Company in accordance with its respective terms, except
as enforceability may be limited by bankruptcy or other laws affecting creditors
rights generally and by limitations on the availability of equitable remedies
and except as rights to indemnity may be limited by public policy or law.
Section 2.04. Authorized Capital Stock. (a) The authorized capital stock of
the Company consists of 5,000,000shares of Company Common and 500,000 shares of
preferred stock, par value $0.001 per Share. As of the date hereof, 1,000 shares
of Company Common have been issued and no shares of preferred stock of the
Company have been issued.
(b) Except for the reservation by the Company of 15% of the Company Common
outstanding immediately after the Closing Date for the purpose of funding
equity-based incentive plans for key employees of the Company and Casco, no
subscription, warrant, option, convertible security or other right (contingent
or other) to purchase or acquire any shares of the capital stock of the Company
is authorized or outstanding and there is no commitment of the Company to issue
any shares, warrants, options or other such rights.
(c) Upon issuance, the Shares will be duly authorized, validly issued,
fully paid and nonassessable.
Section 2.05. Activities. Since its formation, the Company has engaged in
no activities and has incurred no obligations or liabilities, except those
incident to its formation and the consummation of the transactions contemplated
by the Merger Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
OF THE CONTRIBUTORS
Each Contributor, severally and not jointly, represents and warrants to the
Company and to each other Contributor as follows:
Section 3.01. Power. Such Contributor has individual, corporate, limited
liability company or partnership power and authority, as the case may be, and is
qualified to execute and deliver this Agreement and to perform such Contributors
obligations hereunder. This Contribution Agreement is valid, binding and
enforceable against the Contributor in accordance with its terms.
Section 3.02. Authorization of Agreement etc. The execution, delivery and
performance by such Contributor of this Agreement and the acquisition by such
Contributor of the Shares being acquired by such Contributor hereunder have been
duly authorized by all requisite action on the part of such Contributor, and
will not violate any provision of law, any order of any court or other agency of
government applicable to such Contributor, any governing instrument of such
Contributor, or any provision of any indenture, agreement, trust or other
instrument by which such Contributor or any of such Contributors properties or
assets are bound, or conflict with, result in a breach of or constitute (with
due notice or lapse of time or both) a default under any such indenture,
agreement, trust or other instrument, or result in the creation or imposition of
any lien, charge or encumbrance of any nature whatsoever upon any of the
properties or assets of such Contributor.
Section 3.03. Validity. This Agreement has been duly executed and delivered
by such Contributor and constitutes the valid and legally binding obligation of
such Contributor, enforceable against such Contributor in accordance with its
terms, except as enforceability may be limited by bankruptcy or other laws
affecting the enforcement of creditors rights generally and by limitations on
the availability of equitable remedies.
Section 3.04. Casco Common. All shares of Casco Common to be delivered by
such Contributor pursuant to this Agreement are owned by such Contributor
beneficially and, upon transfer to the Company pursuant to this Agreement, will
be free and clear of any and all pledges, security interests, liens, charges or
other encumbrances of any nature whatsoever.
Section 3.05. Investment Representation. (a) The Contributor understands
that the Company Common subscribed for hereunder have not been, and will not be,
registered under the Securities Act of 1933, as amended (the Securities Act) or
any state securities laws, and are being offered and sold privately in reliance
upon the exemptions provided by the Securities Act and regulations promulgated
thereunder as such relate to the private placement of securities. The
Contributor represents and warrants that the Company Common will be acquired by
the Contributor solely for the account of the Contributor, for investment
purposes only and not with a view to the distribution thereof. The Contributor
represents and warrants that the Contributor an accredited investor as that term
is defined in Rule 501(a) under the Securities Act, is a sophisticated investor
with such knowledge and experience in business and financial matters as will
enable the Contributor to evaluate the merits and risks of investment in the
Company, is able to bear the economic risk and lack of liquidity of an
investment in the Company and is able to bear the risk of loss of its entire
investment in the Company.
(b) The Contributor is not relying on the Company with respect to the
economic considerations of the undersigned relating to this investment. In
regard to such considerations, the undersigned has relied on the advice of, or
has consulted with, only its own advisors.
(c) The Contributor may not and will not sell or otherwise transfer the
Company Common without registration under the Securities Act or an exemption
therefrom and fully understands and agrees that he or she must bear the economic
risk of his or her purchase for an indefinite period of time. The Contributor
understands that any certificate evidencing such Company Common will bear a
legend to the effect of the foregoing.
(d) The Contributor recognizes that the Company has no operating history
and that an investment in the shares is speculative and involves a number of
significant risks. Contributor confirms that Contributor has no need for
liquidity in Contributors investment in the Company. Contributor has been
advised and acknowledges that there is currently no active public or private
trading market for the Company Common, and no active public or private trading
market for the Company Common may develop. Having made Contributors own
evaluation of the risks associated with this investment, Contributor has been
advised and Contributor is aware that Contributor must bear the economic risks
of an investment in the Company Common, including the risk of the total loss of
such investment, indefinitely.
(e) The Contributor has read a copy of the offering letter from Xxxxxxx X.
Xxxxx, the President of the Company, and the exhibits included with it and the
information referred to therein (collectively, the Offering Materials) and the
Contributor has relied on nothing other than the Offering Materials in deciding
whether to make an investment in the Company. In addition, the Contributor
acknowledges that the Contributor has been given the opportunity to ask
questions and receive satisfactory answers concerning the terms and conditions
of the offering and obtain additional information in order to evaluate the
merits and risks of an investment in the Company and to verify the accuracy of
the information contained in the Offering Materials.
(f) The Contributor hereby agrees to indemnify and hold harmless the
Company from and against any and all losses, claims, damages, expenses and
liabilities relating to or arising out of any breach of any representation,
warranty, covenant or undertaking made by or on behalf of the Contributor
herein.
ARTICLE 4
VOTING AGREEMENTS AND APPOINTMENT OF CONTRIBUTORS' AGENT
Section 4.01. Voting Agreement. Each Contributor, severally and not
jointly, hereby agrees that, from and after the date hereof and until this
Agreement shall have terminated in accordance with Section 5.08 hereof, at any
meeting of the holders of Casco Common, however called, or in connection with
any written consent of the holders of Casco Common, such Contributor shall vote
(or cause to be voted) such Contributors shares of Casco Common (i) in favor of
adoption and approval of the Merger Agreement and the Merger and the approval of
the terms thereof and each of the other actions contemplated by the Merger
Agreement and this Agreement and (ii) except as otherwise agreed to by the
Company, against the following actions (other than the Merger and the
transactions contemplated by the Merger Agreement): (A) any extraordinary
corporate transaction, such as a merger, consolidation or other business
combination involving Casco; (B) a sale, lease or transfer of a material amount
of assets of Casco, or a reorganization, recapitalization, dissolution or
liquidation of Casco; (C) (1) any change in a majority of the persons who
constitute the Board of Directors of Casco; (2) any material amendment to Cascos
certificate of incorporation or by-laws; or (3) any other action involving Casco
which has the effect of impeding, interfering with, delaying, postponing or
impairing (A) the ability of Casco to consummate the Merger or (B) the
transactions contemplated by this Agreement and the Merger Agreement. Such
Contributor shall not enter into any agreement or understanding with any person
or entity prior to the termination of this Agreement to vote in any manner
inconsistent herewith.
Section 4.02 Grant of Irrevocable Proxy. Each Stockholder Contributor
hereby constitutes and appoints Xxxxxxx X. Xxxxx and S. Xxxxxx Xxxxx, and each
of them, as his, her or its proxy with full power of substitution, for or on
his, her or its behalf, to attend the special meeting of the stockholders of
Casco called to vote on the approval of the Merger Agreement and the Merger (the
Special Meeting) and to vote and execute consents with respect to all shares of
Casco Common owned by such Stockholder Contributor, as fully and to the same
extent as such Stockholder Contributor might do himself, herself or itself. This
proxy is irrevocable and coupled with an interest, having been executed in
connection with the execution and delivery of this Agreement. This appointment
of proxy shall continue in full force and effect until one day after the date of
the Special Meeting or the earlier termination of this Agreement.
Section 4.03. Contributors Agent. By their respective signatures hereto,
the Stockholder Contributors hereby acknowledge and appoint Xxxxxxx X. Xxxxx as
their Contributors Agent hereunder solely for the purpose of effecting the
exchange of Shares described in Section 1.01 on the register of Casco. The
Stockholder Contributors hereto agree that an instruction or other act of the
Contributors Agent given to the transfer agent to transfer the Shares of a
Contributor to the Company shall constitute an instruction or other act of the
Stockholder Contributors and shall be final, binding and conclusive upon the
Stockholder Contributors. The Stockholder Contributors hereto agree that the
transfer agent may rely upon any instruction or other act of the Contributors
Agent as being the instruction or other act of the Stockholder Contributors.
ARTICLE 5
MISCELLANEOUS
Section 5.01. Survival of Agreements. All covenants, agreements,
representations and warranties contained herein shall survive the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby.
Section 5.02. Fees and Expenses. The Company shall pay or cause to be paid,
whether or not the transactions contemplated hereby are consummated, all
reasonable costs and expenses arising in connection with the preparation,
execution, administration and enforcement of, and the preservation of rights
under, this Agreement, incurred by the Company. The Company shall also pay all
reasonable expenses of the Management Contributors in connection with the
transactions contemplated hereby (including, without limitation, the fees and
expenses of counsel for such Management Contributors). All expenses of
Contributors other than the Management Contributors in connection with the
transactions contemplated hereby shall be borne respectively by the Contributor
incurring such expense.
Section 5.03. Notices. All notices, consents and other communications
hereunder (i)shall be in writing, (ii)shall be addressed to the parties as
indicated below, unless notified in writing of a change in address, and
(iii)shall be deemed to have been given either when (w)personally delivered to
the recipient, (x)sent to the recipient by a nationally recognized express
courier service (charges prepaid), (y)mailed by certified or registered mail,
return receipt requested and postage prepaid, or (z)sent by facsimile to the
recipient followed by the sending of a copy of such notice in a manner described
above, as follows:
(a) if to the Company to it at:
Xxxxx Holdings of North Carolina, Inc.
00000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Mr. Xxxxxxx Xxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Xxxxx & Xxx Xxxxx PLLC
000 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Xxxxxx Xxxxxxx, III
Facsimile: (000) 000-0000
(b) if to any Contributor, to him, her or it at the address as shown on
AnnexI.
Section 5.04. Assignability. Neither this Agreement nor any of the parties
rights hereunder shall be assignable by any party hereto without the prior
written consent of the other parties hereto.
Section 5.05. Entire Agreement. This Agreement, the Exhibit and the Annex
hereto, the Ancillary Agreements and all other documents executed on the Closing
Date in connection herewith and with the Merger Agreement, constitute the entire
Agreement of the parties with respect to the subject matter hereof and may not
be modified or amended except in writing.
Section 5.06. Law Governing. This Agreement shall be governed by and
construed in accordance with the laws of the State of North Carolina.
Section 5.07. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 5.08. Termination. This Agreement shall terminate automatically
upon the termination of the Merger Agreement in accordance with its terms. In
addition, this Agreement may be terminated at any time prior to the Closing Date
if:
(a) by mutual written consent of the Company and the unanimous consent of
the Stockholder Contributors;
(b) by the Company with respect to any Stockholder Contributor if such
Contributor has breached any representation, warranty, or covenant contained in
this Agreement in any material respect, the breaching party has been notified of
such breach and the breach cannot be or has not been cured within 15 days after
the giving of such notice.
(c) by the unanimous action of the Stockholder Contributor if the Company
has breached any representation, warranty, or covenant contained in this
Agreement in any material respect, the Company has been notified of such breach
and the breach cannot be or has not been cured within 15 days after the giving
of such notice.
Section 5.09. Effect of Termination. If this Agreement is terminated
pursuant to Section 5.08, this Agreement shall become void and of no effect with
no liability on the part of any party, except that nothing herein shall relieve
any party of liability for any breach of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
XXXXX HOLDINGS OF NORTH CAROLINA, INC.
By: /s/ S. Xxxxxx Xxxxx
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Name: S. Xxxxxx Xxxxx
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Title:
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CONTRIBUTORS:
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
By: /s/ S. Xxxxxx Xxxxx
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S. Xxxxxx Xxxxx
X. X. Xxxxx & Co., Inc.
By: /s/ Xxxxxx X. Xxxxx, Xx.
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Xxxxxx X. Xxxxx, Xx.
President and
Chief Executive Officer
By: /s/ Xxxxxxx Xxxxxx
--------------------
Xxxxxxx Xxxxxx
By: /s/ Xx. Xxxx Xxxxxx
--------------------
Xx. Xxxx Xxxxxx
By: /s/ Xxxxxxx X. Xxxx
--------------------
Xxxxxxx X. Xxxx
By: /s/ Xxx Xxxxxx
--------------------
Xxx Xxxxxx
By: /s/ Xxxxxxx X. Xxxx
--------------------
Xxxxxxx X. Xxxx
By: /s/ Xxxxxxx Xxxxx
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Xxxxxxx Xxxxx
AMERICAN HOME BUILDING CORPORATION
By: /s/ S. Xxxxxx Xxxxx
Its: President
ANNEX I
CONTRIBUTORS
MANAGEMENT CONTRIBUTORS NO. OF SHARES
Xxxxxxx X. Xxxxx
S. Xxxxxx Xxxxx
Xxxx Xxxx
Xxxxxxx Xxxxx
Xxx Xxxxxx
Xxxxx Xxxx
each c/o:
Xxxxxxx Xxxxx
00000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
STOCKHOLDER CONTRIBUTORS
X. X. Xxxxx & Co., Inc.
c/o:
Xxxxxx X. Xxxxx, Xx.
X. X. Xxxxx & Co., Inc.
0 Xxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx Xxxxxx
___________________
___________________
___________________
Xx. Xxxx Xxxxxx
___________________
___________________
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