Attached files
Exhibit 10.2
STOCK REPURCHASE
AGREEMENT
STOCK
REPURCHASE AGREEMENT (this “Agreement”) made and entered
into as of December 23, 2009 by and between the Charleston Basics, Inc., a
Delaware corporation (the “Company”) and Collins Timber
Company LLC, an Oregon limited liability company (the “Selling Shareholder”). The
Company and the Selling Shareholder are referred to herein individually as a
“Party” and,
collectively, as the “Parties.”
WHEREAS,
pursuant to that certain Agreement and Plan of Merger dated as of date hereof
(the “Merger
Agreement”), by and among the Company, Paneltech Products, Inc. a
Delaware corporation and wholly owned subsidiary of the Company (“Paneltech Products”), and
Paneltech International, L.L.C., a Washington limited liability company (“Paneltech International”), Paneltech
International merged with and into Paneltech Products (the “Merger”) and each membership
unit of Paneltech International was exchanged for 4,597.53254 shares of common
stock, $0.0001 par value, of the Company (the “Common Stock”).
WHEREAS,
contemporaneously with Company’s entry into the Merger Agreement or shortly
thereafter, the Company has entered, or will enter, into securities purchase
agreements (the “Securities
Purchase Agreements”), with certain investors party thereto (the “Investors”) pursuant to which
the Company has sold or will sell, and the Investors have acquired or will
acquire, shares of preferred stock (the “Preferred Stock”) and common
stock purchase warrants (the “Warrants”) of the Company
convertible into or exercisable for Common Stock, in a financing of up to $3
million that may occur in two stages, the first such closing referred to as the
Initial Closing (as defined in the Securities Purchase Agreements) and the
second such closing referred to as the Secondary Closing (as defined in the
Securities Purchase Agreements) (the “Offering”);
WHEREAS, the
Selling Shareholder desires to sell to the Company, and the Company desires to
use proceeds from the Offering to repurchase, all upon the terms and subject to
the conditions set forth in this Agreement, Thirteen Million Seven Hundred
Seventy Two Thousand Five Hundred Fifty (13,772,550) shares of Common Stock (the
“Shares”), which the
Selling Shareholder received pursuant to the Merger Agreement in exchange for
certain of the Selling Shareholder’s membership interests in Paneltech
International; and
WHEREAS, upon
the repurchase of the Shares by the Company, the Selling Shareholder will
continue to hold Eight Million One Hundred Seventy Nine Thousand Six Hundred
Fifty-Seven (8,179,657)
shares of Common Stock (the “Retained Shares”),
representing approximately 10.00% of the issued and outstanding shares of the
Company’s Common Stock (including the Preferred Stock on an as-converted basis)
upon the successful completion of a full $3 million Offering.
NOW,
THEREFORE, in consideration of the premises and of the mutual covenants and
agreements of the Parties herein contained, the Parties hereby agree as
follows:
1
1. Sale of
Shares.
1.1 Repurchase and Sale of
Shares. On and subject to the terms and conditions of this
Agreement, the Company agrees to repurchase from the Selling Shareholder; and
the Selling Shareholder agrees to sell to the Company, all of the Selling
Shareholder’s right, title and interest in and to the Shares, free and clear of
all liens, claims and encumbrances for the consideration specified below in
Section 1.2.
1.2 Purchase
Price. The aggregate purchase price for the Shares is Seven
Hundred Fifty Thousand dollars ($750,000), as may be adjusted as provided in the
Note, (the “Purchase Price”) payable
as follows:
(i) Three
Hundred Seventy Five Thousand dollars ($375,000) of the Purchase Price payable
by wire transfer of immediately available funds to the account designated by the
Selling Shareholder on Exhibit A hereto at
the Closing (as defined below); and
(ii) Three
Hundred Seventy Five Thousand dollars ($375,000) of the Purchase Price payable
in the form of a promissory note, bearing interest at the prime rate from time
to time in effect as published in the Wall Street Journal (the “Note”) attached hereto as
Exhibit B
(which portion of the Purchase Price shall be subject to increase to $625,000 as
provided in the Note).
Except
for the portion of the Purchase Price to be paid in the form of the Note, the
Selling Shareholder acknowledges and agrees that it, and none of its directors,
officers, employees, representatives, managers or members, is either owed or
entitled to any additional compensation or consideration from the Company,
Paneltech International or Paneltech Products or any of their respective
directors, officers, employees, agents, managers, members, representatives or
shareholders with respect to the repurchase and sale of the Shares. The Selling
Shareholder further acknowledges and agrees that from and after the Closing Date
(as defined below), it and its directors, officers, employees, representatives,
managers or members shall only be entitled to the payment of principal and
interest on the Note in accordance with the terms thereof and the Selling
Shareholder and its directors, officers, employees, representatives, managers or
members shall not have any right, title or interest in the Shares or in any
dividends in respect thereof.
1.3 Payment of the
Note. As provided in the Note, the Outside Maturity Date of
the Note is August 1, 2010. The Note is payable on or before such
date as provided therein.
1.4 The
Closing. The closing of the purchase and sale of the Shares
contemplated by this Agreement (the “Closing”) shall take place at
the offices of Olshan Grundman Frome Rosenzweig & Wolosky LLP; Park Avenue
Tower, 65 East 55th Street, New York, New York 10022, or at such other place or
in such other manner (including by electronic means) as the Company and the
Selling Shareholder shall mutually agree. The Closing shall occur
contemporaneously with or immediately following the Initial Closing (the date on
which the Closing occurs, the “Closing Date”). The
Closing shall be deemed to have occurred as of 11:59 p.m. on the Closing
Date.
1.5 Closing Deliverables.
At the Closing (a) the Selling Shareholder shall deliver to the Company (i) a
certificate representing the Shares (if issued) and (ii) an irrevocable stock
power executed by the Selling Shareholder transferring the Shares to the Company
against receipt by the Selling Shareholder of the Note and the cash portion of
the Purchase Price pursuant to Section 1.2; and (b) the Company shall deliver to
the Selling Shareholder (i) by wire transfer, the cash portion of the Purchase
Price pursuant to Section 1.2 and (ii) the executed Note.
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2. Representations, Warranties
and Covenants of the Selling Shareholder. The Selling
Shareholder represents, warrants and covenants to the Company as
follows:
2.1 Ownership of
Shares. The Selling Shareholder is the sole legal and
beneficial owner of the Shares, and upon transfer of the Shares to the Company
hereunder the Company will acquire good, valid and marketable title to the
Shares free and clear of any and all, liens, claims, pledges, options, proxies,
voting agreements, charges or encumbrances of any kind. The Selling
Shareholder has the sole and absolute right and power to sell, assign and
transfer the Shares as provided in this Agreement. The Selling
Shareholder does not own any capital stock (or other securities convertible or
exercisable into or exchangeable for capital stock) of the Company other than
the Shares and the Retained Shares and the Selling Shareholder is not a party to
any option, warrant, purchase right, or other contract or commitment (other than
this Agreement) that could require the Selling Shareholder to sell, transfer, or
otherwise dispose of any capital stock of the Company.
2.2 Authority and
Enforceability. The Selling Shareholder has all requisite
power, legal capacity and authority to enter into this Agreement and to assume
and perform its obligations hereunder. This Agreement has been duly
executed and delivered by the Selling Shareholder and constitutes the legal,
valid and binding obligation of the Selling Shareholder, enforceable against the
Selling Shareholder in accordance with its terms, subject to (i) applicable
bankruptcy, insolvency, reorganization and moratorium laws and other laws of
general application affecting the enforcement of creditors' rights and (ii) the
fact that equitable remedies or relief (including, without limitation, the
remedy of specific performance) are subject to the discretion of the court from
which such relief may be sought.
2.3 Claims. There
are no actions, suits, proceedings or claims pending or, to the knowledge of the
Selling Shareholder, threatened with respect to or in any manner affecting the
sale of the Shares by the Selling Shareholder to the Company.
2.4 Approvals. To
the knowledge of the Selling Shareholder, no action, approval, consent,
authorization, notice or filing on the part of the Selling Shareholder,
including, but not limited to, any action, approval, consent or authorization by
or notice to or filing with any governmental or quasi-governmental agency,
commission, board, bureau or instrumentality, is necessary or required as to the
Selling Shareholder in order to permit the sale and transfer of the Shares in
accordance with this Agreement.
2.5 No Breach of Law or
Contract. Neither the execution and the delivery of this
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any domestic or foreign, federal, state or local statute, law,
ordinance, rule, administrative interpretation, regulation, order, writ,
injunction, decree or other restriction of any governmental authority to which
the Selling Shareholder is subject, (ii) violate, conflict with, result in a
breach of, constitute a default under, result in the acceleration of, create in
any party the right to accelerate, terminate, modify, or cancel, or require any
notice under any agreement, contract, lease, license, instrument, or other
arrangement to which the Selling Shareholder is a party or by which the Selling
Shareholder is bound or to which the Selling Shareholder’s assets are subject or
(iii) result in the imposition or creation of any lien, claim or encumbrance
upon or with respect to any of the Shares.
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2.6 Brokers. The
Selling Shareholder does not have any liability or obligation to pay any fees or
commissions to any broker, finder, or agent with respect to the transactions
contemplated by this Agreement.
2.7 Valuation. The
Selling Shareholder acknowledges (a) that on an as converted basis, the amount
per share paid under the terms of the Offering is greater than the price per
share price reflected in this Agreement (b) that an appointee of the Selling
Shareholder was a director of Paneltech International prior to the Merger and
was subsequently appointed a director of the Company and (c) that the Selling
Shareholder performed its own valuation of the Shares, without reliance on the
Company, and assumes all risk of any error or judgment with respect to the
computation relating to that valuation. The Selling Shareholder
understands and acknowledges that the Selling Shareholder and the Company may
have differing views of the current and likely future value of the
Shares. The Selling Shareholder further acknowledges that neither the
Company nor any members of the Company’s management, is making or has made any
statement, representation or warranty to the Selling Shareholder concerning the
fairness or adequacy of the consideration given or received under this Agreement
or the current or likely future value of the Shares.
2.8 Sophistication. The
Selling Shareholder (a) is a sophisticated seller with respect to the Shares,
(b) has adequate information concerning the Shares, (c) has adequate information
concerning the business and financial condition of the Company and any
affiliates of the Company, (d) has conducted, to the extent it deemed necessary,
an independent investigation of such matters as, in its judgment, is necessary
for it to make an informed decision with respect to the sale by it of the Shares
pursuant to this Agreement, and (e) has not relied upon the Company or Paneltech
International or any members of the Company’s or Paneltech International’s
management, for any investigation into, assessment of, or evaluation with
respect to the current or future value of the Shares, and has not relied upon
any statement made by the Company or Paneltech International or any members of
the Company’s or Paneltech International’s management in determining whether to
enter into this Agreement upon the terms and conditions set forth
herein.
2.9 Reliance. The
foregoing representations and warranties are made by the Selling Shareholder
with the knowledge and expectation that the Company is reasonably relying upon
them.
3. Representations and
Warranties of the Company. The Company represents and warrants
to the Selling Shareholder as follows:
3.1 Authority and
Enforceability. The Company has all requisite power, legal
capacity and authority to enter into this Agreement and to assume and perform
its obligations hereunder. This Agreement has been duly executed and
delivered by the Company and constitutes the legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its terms,
subject to (i) applicable bankruptcy, insolvency, reorganization and moratorium
laws and other laws of general application affecting the enforcement of
creditors' rights and (ii) the fact that equitable remedies or relief
(including, without limitation, the remedy of specific performance) are subject
to the discretion of the court from which such relief may be
sought.
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3.2 Claims. There
are no actions, suits, proceedings or claims pending or, to the knowledge of the
Company, threatened with respect to or in any manner affecting the sale of the
Shares by the Selling Shareholder to the Company.
3.3 Approvals. No
action, approval, consent, authorization, notice or filing, including, but not
limited to, any action, approval, consent or authorization by or notice to or
filing with any governmental or quasi-governmental agency, commission, board,
bureau or instrumentality, is necessary or required as to the Company in order
to permit the sale and transfer of the Shares in accordance with this
Agreement.
4. Specific
Disclaimers. The Selling Shareholder specifically disclaims
any claim for any interest in the profits, losses, cash or other assets of the
Company, Paneltech International or Paneltech Products or from the future value
of the Company attributable to the Shares. The Selling Shareholder
acknowledges that following the Closing Date, the Company may re-issue the
Shares as treasury shares or sell new shares of the Company’s Common Stock for a
higher price per share (or issue or grant securities convertible or exercisable
into or exchangeable for Common Stock for a higher price per share on an as
converted basis) than the Selling Shareholder is or will be receiving pursuant
to this Agreement, and the Selling Shareholder shall have no interest whatsoever
therein nor any claim relating thereto.
5. Conditions to Obligation to
Close.
5.1 Conditions to Obligation of
the Company. The obligation of the Company to consummate the
transactions to be performed by it in connection with the Closing is subject to
satisfaction of the following conditions:
(i) the
representations and warranties of the Selling Shareholder set forth in Section 2
hereof shall be true and correct in all material respects, at and as of the date
of this Agreement and the Closing Date;
(ii) there
shall not have been entered a preliminary or permanent injunction, temporary
restraining order or other judicial or administrative order or decree in any
jurisdiction, the effect of which would (i) prevent consummation of the
transactions contemplated by this Agreement, or (ii) cause the transactions
contemplated by this Agreement to be rescinded following consummation (and no
such injunction or order shall be in effect), nor shall any law or order which
would have any of the foregoing effects have been enacted or promulgated by any
governmental authority to which the Company or the Selling Shareholder is
subject; and
(iii) the
Selling Shareholder shall have delivered a certificate representing the Shares
and an irrevocable stock power pursuant to Section 1.6.
The
Company may, in its sole and absolute discretion, waive any condition to the
Company’s obligation specified in this Section 5.1 by execution of a
writing so stating at or prior to the Closing.
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5.2 Conditions to Obligations of
the Selling Shareholder. The obligations of the Selling
Shareholder to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following
conditions:
(i) the
representations and warranties of the Company set forth in Section 3 above
shall be true and correct in all material respects, at and as of the date of
this Agreement and the Closing Date;
(ii) there
shall not have been entered a preliminary or permanent injunction, temporary
restraining order or other judicial or administrative order or decree in any
jurisdiction, the effect of which would (i) prevent consummation of the
transactions contemplated by this Agreement, or (ii) cause the transactions
contemplated by this Agreement to be rescinded following consummation (and no
such injunction or order shall be in effect), nor shall any law or order which
would have any of the foregoing effects have been enacted or promulgated by any
governmental authority to which the Company or the Selling Shareholder is
subject; and
(iii) the
Company shall have paid the cash portion of the Purchase Price in accordance
with Section 1.2(i) and shall have executed and delivered the Note in
respect of the remainder of the Purchase Price in accordance with
Section 1.2(ii).
The
Selling Shareholder may, in its sole and absolute discretion, waive any
condition to the Selling Shareholder’s obligations specified in this Section 5.2
by execution of a writing so stating at or prior to the Closing.
6. Extension;
Waiver. At any time prior to the Closing any Party may
(i) extend the time for the performance of any of the obligations or other
acts of the other Party, (ii) waive any inaccuracies in the representations
and warranties made to such Party contained herein, or (iii) waive, in
whole or in part, compliance with any of the agreements or conditions for the
benefit of such Party contained herein. Any agreement on the part of
a Party to any such extension or waiver shall be valid only if set forth in an
instrument in writing signed on behalf of such Party.
7. General
Provisions.
7.1 Entire Agreement; Amendment
and Waiver. Except as set forth herein, no representations or
warranties have been made to the Company by the Selling Shareholder or to the
Selling Shareholder by the Company and, in purchasing and selling the Shares,
neither the Company nor the Selling Shareholder is relying upon any
representations other than those specifically contained herein. This
Agreement constitutes the entire agreement between the Parties with respect to
the subject matter contained herein and supersedes all prior oral or written
agreements, if any, between the Parties with respect to such subject matter and,
except as otherwise expressly provided herein, is not intended to confer upon
any other person any rights or remedies hereunder. Any amendments
hereto or modifications hereof must be made in writing and executed by each of
the Parties. Any failure by the Selling Shareholder or the Company to
enforce any rights hereunder shall not be deemed a waiver of such
rights.
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7.2 Governing
Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware without giving effect to
conflict of laws principles.
7.3 Consent to
Jurisdiction. Each of the Parties hereby irrevocably submits
to the exclusive jurisdiction of any federal or state court in New York County,
State of New York, with respect to any and all disputes between the Parties
arising out of or relating to this Agreement or any other document or instrument
referred to herein or any of the transactions contemplated hereby or
thereby. To the extent permitted by applicable law, each of the
Parties hereby waives and agrees not to assert by way of motion, as a defense or
otherwise, in any such suit, action or proceeding any claim that the suit,
action or proceeding is brought in an inconvenient forum, that the venue of the
suit, action or proceeding is improper, or that matters relating to this
Agreement or any other document or instrument referred to herein may not be
litigated in or by such courts.
7.4 Specific
Performance. Each of the Parties acknowledges and agrees that
the other Party would be damaged irreparably in the event any of the provisions
of this Agreement are not performed in accordance with their specific terms or
otherwise are breached. Accordingly, each of the Parties agrees that
the other Party shall be entitled to an injunction or injunctions to prevent
breaches of the provisions of this Agreement and to enforce specifically this
Agreement and the terms and provisions hereof in addition to any other remedy to
which they may be entitled at law or in equity.
7.5 Waiver of Jury
Trial. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
IRREVOCABLY WAIVES, AND AGREES TO CAUSE ITS AFFILIATES TO WAIVE, ALL RIGHT TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
7.6 Binding Effect;
Assignment. This Agreement and the various rights and
obligations arising hereunder shall inure to the benefit of and be binding upon
the Selling Shareholder and the Company and their respective successors and
permitted assigns. Neither Party may assign all or any portion of its
rights, interests or obligations hereunder to any person or entity without the
prior approval of the other Party, except that the Company may assign this
Agreement to an acquirer of all or substantially all its business or operations,
provided that the acquirer agrees in writing or by operation of law to assume
all obligations of the Company under this Agreement.
7.7 Expenses. All
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the Party incurring such costs
and expenses.
7.8 Headings. The
headings or captions contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this
Agreement.
7.9 Further
Assurances. Each of the Parties shall, without further
consideration, execute and deliver to the other Party such instruments of
transfer and shall perform such other actions as such Party may reasonably
request to carry out the transactions contemplated hereby.
7.10 Selling Shareholder’s
Entitlement to Representative on Board of Company. Until such
time as the Note has been paid in full, the Selling Shareholder shall be
entitled to have a representative selected by the Selling Shareholder elected to
and serving on the Board of Directors of the Company.
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7.11 Notices. All
notices, requests, consents and other communications hereunder to any Party
shall be in writing and shall be delivered personally, sent via nationally
recognized courier, mailed by certified or registered mail, return receipt
requested, postage prepaid, or sent by receipted telecopy transmission,
addressed as follows:
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If
to the Company, to:
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Charleston
Basics, Inc.
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2999
John Stevens Way
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Hoquiam,
WA 98550
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Attn: Scott
Olmstead
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Telecopy
No: 360.532.0295
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with
a copy to:
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Olshan
Grundman Frome Rosenzweig & Wolosky
LLP
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Park
Avenue Tower
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65
East 55th Street
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New
York, NY 10022
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Attn:
Robert L. Frome
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and:
Kenneth A. Schlesinger
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Telecopy
No: 212-451-2222
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If
to the Selling Shareholder, to:
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Collins
Timber Company LLC
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1618
SW First Avenue, Suite 500
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Portland,
OR 97201
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Telecopy
No: (503) 227-5349
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with
a copy to:
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Stoel
Rives LLP
900 SW
Fifth Avenue, Suite 2600
Portland,
OR 97204
Attn: Mark
A. Norby
Telecopy
No: (503) 220-2480
provided,
however, that each Party may change the address to which notices are to be
delivered or mailed to such Party by giving notice thereof to the other Party in
accordance with this Section. Notices shall be deemed to be given (a)
if delivered personally, on the date of delivery, (b) if sent by nationally
recognized courier, on the first business day following the date of dispatch,
(c) if mailed, on the third business day following the date of the mailing, and
(d) if sent by receipted telecopy transmission, on the date sent provided a copy
of such notice is also sent simultaneously by any other means permitted
hereunder.
7.12 Counterparts; Signature
Pages; Copies. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument, and may be executed by
delivery of an executed signature page hereto, and a telecopy or photocopy of an
executed counterpart of or signature page to this Agreement shall be given the
same effect as the original.
7.13 Counsel. Each
Party has been represented, or had or was informed of the opportunity to be
represented, by its own counsel in connection with the negotiation and
preparation of this Agreement and, consequently, each Party hereby waives the
application of any rule of law that would otherwise be applicable in connection
with the interpretation of this Agreement, including but not limited to any rule
of law to the effect that any provision of this Agreement shall be interpreted
or construed against the Party whose counsel drafted that
provision.
[Signatures
appear on the following page.]
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IN
WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the
day and year first above written.
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COMPANY:
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CHARLESTON
BASICS, INC.
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By:
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/s/ Leroy Nott | |
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Name: Leroy
Nott
Title: President
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SELLING
SHAREHOLDER:
COLLINS
TIMBER COMPANY LLC
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By:
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/s/ Eric Schooler | |
9
Exhibit
A
Selling
Shareholder Wire Instructions
10
Exhibit
B
CHARLESTON
BASICS, INC.
Non-Negotiable
Promissory Note
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December
23, 2009
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$375,000*
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*subject to increase to
$625,000 as provided
herein
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FOR VALUE RECEIVED, the
undersigned, Charleston Basics, Inc., having an office and principal place of
business at 2999 John Stevens Way, Hoquiam, WA 98550, promises to pay to Collins
Timber Company LLC, an Oregon limited liability company (the “Holder”), the principal sum of
Three Hundred Seventy-Five Thousand Dollars ($375,000) (or, if adjusted pursuant
to the terms below, Six Hundred Twenty-Five Thousand Dollars ($625,000)) on or
before on August 1, 2010 (the “Outside Maturity Date”) in
accordance with the following:
(a) In
the event that the proceeds received by the Company upon closing the second half
of Company’s current private offering (the “Secondary Closing”), are at
least equal to $1,500,000, the Company shall repay the entire outstanding
principal amount of the Note, and all accrued and unpaid interest thereon,
within 10 days following the date of the Secondary Closing, but in any event not
later than July 31, 2010.
(b) In
the event that the proceeds from the Secondary Closing are less than $1,500,000,
or if the Secondary Closing has not occurred on or before July 21, 2010, the
Company shall pay the outstanding principal amount on the Note, and any accrued
but unpaid interest thereon, at any time on or prior to July 31,
2010.
(c) In
the event that the outstanding principal amount of the Note and accrued interest
thereon have not been paid in full on or before July 31, 2010, then the
outstanding principal amount, including all interest accrued thereon through
July 31, 2010, shall be adjusted to cause the principal amount of this Note to
equal $625,000 (less the aggregate principal amount previously paid, if any) and
such adjusted principal amount shall be due and payable on the Outside Maturity
Date.
The
undersigned also promises to pay interest on the unpaid principal amount hereof,
at a floating rate equal to the prime rate in effect on the first business day
of each month amounts hereunder are owing, as published in the Wall Street
Journal (the “Prescribed
Rate”), until all amounts owing under this Note (including, if
applicable, any increased principal under clause (c) above) have been paid in
full. Interest shall be calculated on the basis of a 360 day year for
the actual number of days elapsed. All payments hereunder shall be
payable in immediately available funds in lawful money of the United States of
America.
The
undersigned may, at any time and from time to time, prepay this Note, in whole
or in part, without premium or penalty. All prepayments shall be
accompanied by accrued interest on the principal amount being prepaid to the
date of prepayment.
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Upon the
occurrence and continuance of any of the following (each an “Event of Default”): (a)
default in the payment when due of any amount hereunder and the continuation of
such default unremedied for a period of 10 business days following delivery of
written notice of such default to the undersigned; (b) filing by or against the
undersigned of a petition commencing any proceeding under any bankruptcy,
reorganization, rearrangement, readjustment of debt, dissolution or liquidation
law or statute of any jurisdiction, now or hereafter in effect; (c) the
undersigned making an assignment for the benefit of creditors; (d) the making of
a petition or application to any tribunal for the appointment of a custodian,
receiver or trustee for the undersigned or for a substantial part of its assets;
(e) entry of any judgment or order of attachment, injunction or governmental tax
lien or levy issued against the undersigned or against any property of the
undersigned; (f) consent by the undersigned to assume, suffer or allow to exist
any lien, mortgage, assignment or other encumbrance on any of its assets, or (g)
the failure of the undersigned to pay or perform any of its obligations under
the Stock Repurchase Agreement (as each is defined below) and the continuation
of such failure for a period of 10 business days following delivery of written
notice of such default to the undersigned, then this Note shall at the sole
option of the Holder, become due and payable without notice or demand; provided,
however, if an Event of Default described in clause (b), clause (c) or clause
(d) above occurs as a result of a voluntary act of the undersigned, this Note
shall automatically become due and payable; and provided, further, if an Event
of Default described in clause (b) or clause (d) occurs involuntarily and is not
consented to or acquiesced in by the undersigned, and any such proceeding
continues undismissed and unstayed or any such appointment continues
undischarged for a period of 60 days, this Note shall automatically become due
and payable.
This Note
is delivered pursuant to a Stock Repurchase Agreement dated the date hereof
between the undersigned and the Holder (the “Stock Repurchase
Agreement”).
The
Holder shall not, by any act, delay, omission or otherwise, be deemed to have
waived any of its rights and/or remedies hereunder. No change,
amendment, modification, termination, waiver, or discharge, in whole or in part,
of any provision of this Note shall be effective unless in writing and signed by
the Holder, and if so given by the Holder, shall be effective only in the
specific instance in which given.
This Note
shall be governed by and construed in accordance with the laws of the State of
Delaware without giving effect to principles of conflict or choice of
laws.
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THE
UNDERSIGNED HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF ANY
FEDERAL OR STATE COURT IN NEW YORK COUNTY, STATE OF NEW YORK, IN ANY ACTION,
SUIT OR PROCEEDING BROUGHT AGAINST IT AND RELATED TO OR IN CONNECTION WITH THIS
NOTE OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY. TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THE UNDERSIGNED HEREBY WAIVES AND AGREES NOT TO
ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH SUIT, ACTION OR
PROCEEDING ANY CLAIM THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN
INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS
IMPROPER, OR THAT THIS NOTE OR ANY OTHER DOCUMENT OR INSTRUMENT REFERRED TO
HEREIN MAY NOT BE LITIGATED IN OR BY SUCH COURTS.
At no
time shall the rate of interest charged under this Note exceed the maximum rate
of interest permitted under applicable law. If at any time the
Prescribed Rate shall exceed such maximum rate, and thereafter the Prescribed
Rate is below such maximum rate, then the Prescribed Rate shall be increased to
the maximum rate for such period of time as is required so that the total amount
of interest received by the Holder is that which would have been received by the
Holder but for the first sentence of this paragraph.
In the
event any one or more provisions contained in this Note should be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
This Note
shall bind the respective successors, permitted assigns, heirs and
representatives of the undersigned. This Note shall not be assigned
by the undersigned without the Holders prior written consent. This Note is not
assignable or transferable by the Holder.
IN WITNESS WHEREOF, the
undersigned has duly executed this Note the day and year first above
written.
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CHARLESTON
BASICS, INC.
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By:
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/s/ Leroy Nott | |
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Name:
Leroy Nott
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Title:
President
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