EXHIBIT 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement (the “Agreement”) by and between Amplex Electric, Inc., an Ohio corporation (the “Company”), and Mark Radabaugh (“Executive”), is hereby entered into and effective as of June 15, 2024.
RECITALS
The Company desires to assure itself of the services of the Executive upon the completion (the “Closing”) of the transactions contemplated by that certain Stock Purchase Agreement (the “Purchase Agreement”), dated as of May 1, 2024, by and among Nicholas Financial Inc. (“NICK”), the Company, and certain other parties thereto and thereafter on the terms herein provided by entering into this Agreement.
The Executive desires to provide services to the Company on the terms herein provided, and if the Closing does not occur, this Agreement shall be void ab initio and terminate and be of no force or effect.
Therefore, in consideration of the mutual promises, terms, covenants and conditions set forth herein and the performance of each, it is hereby agreed as follows:
AGREEMENTS
(a)The Company hereby employs Executive in the position of Chief Executive Officer. Executive shall have those responsibilities, duties and authorities reasonably consistent with such position, including those as may be reasonably established by the Company’s Board of Directors (the “Board”). If requested by the Board, Executive shall also serve as the Chief Executive Officer of any entity controlled by the Company (each, a “Company Member” and taken together with the Company, the “Company Group”). Without limitation, Executive hereby accepts this employment upon the terms and conditions contained herein and agrees to devote his full business time, attention and efforts to promote and further the business of the Company and the Company Group, acknowledging that during such employment he shall not become engaged in any other business activity pursued for gain, profit or other pecuniary advantage without the prior consent of the Board, which shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, Executive (i) may engage in charitable, civic, fraternal and community affairs and educational, professional and/or trade industry association activities, (ii) manage Executive’s personal passive investments, (iii) with prior written notice to the Board, serve on the boards of directors of no more than two (2) non-profit organizations, (iv) participate in the organizations or entities listed on Schedule A and, (v) with the prior written approval of the Board, serve on the boards of directors of for-profit companies; provided, that, any such activities in items (i) through (v) do not interfere in any material respect, either individually or in the aggregate, with the performance of Executive’s duties under this Agreement or create a potential business or fiduciary conflict.
(b)Executive shall faithfully adhere to, execute and fulfill all legal policies lawfully established by the Board.
(c)The Executive, if so appointed to the Board, agrees to serve as a member of the Board of Directors (or equivalent body) of the Company and any Company Member without additional compensation until the earlier of Executive’s resignation, death or removal. Except as provided in any governing documents of the Company or any shareholder agreement, Executive acknowledges and agrees that if he no longer is employed by the Company or any member of the Company Group as the Chief Executive Officer, he shall immediately tender his resignation from each applicable board seat of the Company Group.
2.Compensation. For all services rendered by Executive in any capacity required hereunder, the Company shall compensate Executive as follows:
(a)Base Salary. During the Term (as defined herein), Executive shall be paid a base salary at the rate of $170,032.00 per year (the “Base Salary”), pro-rated for any partial calendar year worked, and paid in accordance with the customary payroll practices of the Company. Any increases in the Base Salary shall be determined by the Board.
(b)Bonus. During the Term (as defined herein), Executive shall be eligible to (i) receive cash bonuses in the discretion of the Board and (ii) participate in the Company’s quarterly bonus program as in effect from time to time (the “Bonus Program”). Executive’s right to receive a bonus for any fiscal quarter is conditioned on Executive continuing to be employed by the Company as of the payment date of such bonus or as otherwise set forth in the Bonus Program.
(c)Benefits. Executive shall be entitled to receive additional benefits from the Company in such form and to such extent as specified below:
(i)Payment of such premiums (or such portion thereof as is provided by the Company’s plans for its senior executives generally) for coverage for Executive and his dependents under health, hospitalization, dental, life and other insurance plans that the Company may have in effect from time to time, on the same terms generally provided to other senior executives from time to time.
(ii)Reimbursement for all reasonable out-of-pocket business and travel expenses incurred by the Executive in connection with Executive’s performance of his duties hereunder. All reimbursable expenses shall be appropriately documented in reasonable detail by Executive upon submission of any request for reimbursement, and in a format and manner consistent with the Company’s expense reporting policy in effect from time to time.
(iii)The Company shall provide Executive with other executive perquisites as may be available to or deemed appropriate for Executive by the Board and shall allow Executive to participate in all other Company-wide executive benefits, including, without limitation, any 401(k) plan, long-term incentive plan, equity incentive plan, share purchase programs, or other similar benefit plans on the same terms as may be made available generally to other senior executives of the Company Group. Such benefit plans may include equity incentive plans of NICK.
(iv)During the Term, Executive shall be entitled to paid vacation in accordance with the Company’s vacation policies, as in effect from time to time. Holidays shall be provided in accordance with the Company policy, as in effect from time to time.
(d)No Other Compensation or Benefits; Payment. The compensation and benefits specified in this Section 2 shall be in lieu of any and all other compensation and benefits on account of Executive’s employment. Payment of all compensation and benefits to Executive hereunder shall be made in accordance with the relevant Company policies in effect from time to time, including normal payroll practices (but not less frequently than monthly), and shall be subject to all applicable employment and withholding taxes.
(e)Cessation of Employment. In the event Executive shall cease to be employed by the Company for any reason, then Executive’s compensation and benefits shall cease on the date of such event, except as otherwise provided in this Agreement or applicable law or terms of such benefit programs.
(a)Executive shall not, during the period of his employment by or with the Company and for the Applicable Period (defined below), for himself or on behalf of or in conjunction with any other person, persons, company, partnership, corporation or business of whatever nature:
(i)Engage with, become employed by, manage, invest in or render services to any entity anywhere in (i) the State of Ohio, (ii) the State of Michigan, or (iii) or any other location in which the Company has operations during the Term (or has taken substantial steps during the Term toward commencing operations) engaged in the business of: (x) providing broadband or fixed-wireless services; or (y) any other business line or service the Company or any Company Member in which the Executive did business and had personal contact on the date hereof or at any time during the Term (the “Business”); provided that, notwithstanding the foregoing, Executive shall not be prohibited from passively owning less than five percent (5%) of the outstanding securities of any person or entity whose securities are traded on a national securities exchange (each, a “Nominal Interest”);
(ii)directly or indirectly hire, employ, engage, solicit or seek the employment or engagement of, any employee then or at any time within the prior twelve (12) months employed by any Company Member, or solicit or induce any person to leave their employ with any Company Member or in any manner work for or with Executive or any organization or entity in which Executive has an interest or with which Executive is associated; provided that the foregoing restriction shall not prohibit (a) any solicitation or hiring of any person who has not been employed by the Company for at least 12 months, (b) solicitation of any person pursuant to, or as a result of, any public advertisement or posting or other form of general solicitation that is not specifically directed at employees of the Company or the Business, or (c) solicitation or hiring of any person by any company or other entity in which Executive simply holds a Nominal Interest;
(iii)obtain or solicit or provide, or attempt in any manner to obtain or solicit or provide, goods or services to any customer of the Company or the Company Group, if such provision of goods or services or related activities are or could be competitive with the Business; or
(iv)attempt to induce any supplier or vendor of the Company or the Company Group to cease being a supplier or vendor of the Company or the Company Group.
For the purposes of this Agreement, the term “Applicable Period” shall mean a period equal to twelve (12) months after the Term (or any extension thereof).
(b)Because of the difficulty of measuring economic losses to the Company Group as a result of a breach of the foregoing covenant, and because of the immediate and irreparable damage that could be caused to the Company or any Company Member for which it would have no other adequate remedy, Executive agrees that the foregoing covenant may be enforced by the Company in the event of breach by him, by injunctions and restraining orders.
(c)It is agreed by the parties that the foregoing covenants in this Section 3 impose a reasonable restraint on Executive in light of the activities, business and plans of the Company on the date of the execution of this Agreement.
(d)Notwithstanding any of the foregoing, if any applicable law shall reduce the Applicable Period during which Executive shall be prohibited from engaging in any competitive activity described in Section 3(a) hereof, the “Applicable Period” for which Executive shall be prohibited pursuant to Section 3(a) hereof shall be deemed the maximum time permitted by law.
4.Term; Termination; Rights on Termination. The term of this Agreement shall begin on the date hereof and continue for a period of two (2) years until terminated by the parties hereto in accordance with this Agreement (the “Initial Period”). The Term of this Agreement shall be automatically renewable, without further act of the parties, for any number of successive and consecutive twelve (12) month periods (each a “Renewal Period”), provided, however, that neither the Initial Period nor any Renewal Period shall be renewed if either the Company or Executive, not later than sixty (60) days prior to the end of the Initial Period or any Renewal Period, whichever is applicable, notifies the other of the non-renewal of this Agreement. The Initial Period and any Renewal Periods are jointly referred to herein as the “Term”. Executive’s employment may be terminated in any one of the following ways:
(a)Death. The death of Executive shall immediately terminate Executive’s employment under this Agreement with no severance or other compensation due to Executive’s estate, except for any unpaid Base Salary earned through the date of his death, a pro-rated portion of Executive’s quarterly bonus through the date of his death, any earned and unused vacation (to the extent payable in accordance with the benefits policies of the Company in effect at the time of Executive’s death), and any expenses for which reimbursement would be due under the terms of this Agreement.
(b)Disability. If Executive experiences a Disability (as defined below), Executive’s employment under this Agreement may be terminated by the Company upon thirty (30) days’ written notice if Executive is unable to resume substantially his full time duties at the conclusion of such notice period. For purposes hereof, “Disability” means Executive has been deemed disabled for purposes of any group or individual disability policy paid for by the Company that is in effect at the time of such disability, and if no such policy is in effect, if, as a result of Executive’s incapacity due to physical or mental illness, Executive shall have been unable to perform his duties hereunder on a substantially full-time basis for four (4) consecutive months. Executive’s compensation during any period of Disability prior to the effective date of such termination shall be the amounts normally
payable to him in accordance with his then current annual Base Salary, reduced by the amounts of disability pay, if any, paid to Executive under any Company disability program. Executive shall not be entitled to any further compensation from the Company for any period subsequent to the effective date of such termination, except for pay or benefits, if any, in accordance with then existing severance policies of the Company and the severance terms of Company benefit plans generally available to employees of the Company, a pro-rated portion of Executive’s quarterly bonus through the date of termination, any earned and unused vacation (to the extent payable in accordance with the benefits policies of the Company in effect at the time of Executive’s Disability), and any expenses for which reimbursement would be due under the terms of this Agreement.
(c)Termination by Company.
(i)For Cause. The Company may terminate Executive’s employment under this Agreement immediately upon written notice to Executive for cause (“Cause”), which means: (i) the indictment or conviction of Executive for a felony and/or crime of moral turpitude (or a plea of guilty or no contest by Executive to any of the foregoing); (ii) Executive’s breach of fiduciary duty to the Company or any Company Member; (iii) any material breach or material violation of this Agreement, if Executive has first been given written notice of the breach or violation and, if curable, Executive does not cure such conduct within thirty (30) days of such notification; (iv) Executive engaging in any willful misconduct or gross negligence which is injurious to the Company or any member of the Company Group, if Executive has first been given written notice of the misconduct or gross negligence and, if curable, Executive does not cure such conduct within thirty (30) days of such notification; (v) Executive engaging in any fraudulent conduct, including without limitation embezzlement or misappropriation of funds or the use by Executive of his position for an improper or undisclosed personal benefit; (vi) Executive’s diversion of a corporate opportunity for his own personal gain; or (vii) Executive’s willful and repeated failure or refusal to materially follow the lawful and reasonable instructions of the Board, if such failure or refusal continues for a period of ten (10) business days after the Company provides Executive with written notice stating the instructions which Executive has failed or refused to follow. In the event of a termination for Cause, as enumerated above, Executive shall be entitled to receive any unpaid Base Salary through the date of termination, any earned and unused vacation (to the extent payable in accordance with the benefits policies of the Company in effect at the time of Executive’s termination), and any expenses for which reimbursement would be due under the terms of this Agreement, but Executive shall have no right to any then unpaid bonus relating to the year in which Cause occurs (whether or not earned) or any Severance Pay (as defined herein).
(ii)Without Cause. In addition to the provisions of Section 4(c)(i), the Company may terminate Executive’s employment under this Agreement at any time upon thirty (30) days prior written notice to Executive. In the event of such a termination, Executive shall receive any unpaid Base Salary, a pro-rated portion of Executive’s quarterly bonus through the date of his termination, any earned and unused vacation (to the extent payable in accordance with the benefits policies of the Company in effect at the time of Executive’s termination), and any expenses for which reimbursement would be due under the terms of this Agreement. In addition, the Company shall pay Executive, subject to the Executive executing a general release in a form reasonably satisfactory to the Company (a “General Release”) of all claims and rights Executive
may have against the Company or any Company Member, and their respective officers, directors, managers, and executives relating solely to Executive’s employment and/or termination (but not with respect to any claims Executive may have as a shareholder of the Company, under the Purchase Agreement, or any Transaction Agreement (as defined in the Purchase Agreement)), an amount equal to six (6) months of the Base Salary at the annual rate being paid at the date of termination of employment, in periodic installments in accordance with the Company’s regular payroll practices in effect from time to time (“Severance Pay”). Subject to Section 14, the payments of Severance Pay hereunder shall commence on the first regular pay day immediately following the later of the termination date or the date such General Release is executed and is no longer subject to revocation.
(d)Termination by Executive.
(i) Without Good Reason. The Executive may terminate his employment under this Agreement without Good Reason upon sixty (60) days’ notice to the Company. In the event of such a termination, Executive shall have the right to receive any unpaid Base Salary, any earned and unused vacation (to the extent payable in accordance with the benefits policies of the Company in effect at the time of Executive’s termination), and any expenses for which reimbursement would be due under the terms of this Agreement, but Executive shall have no right to any unearned pro-rated bonus or any Severance Pay.
(ii)With Good Reason. The Executive may resign from the Executive’s employment with Good Reason (as defined below). In the event of such a resignation, Executive shall receive any unpaid Base Salary, a pro-rated portion of Executive’s quarterly bonus through the date of his termination, any earned and unused vacation (to the extent payable in accordance with the benefits policies of the Company in effect at the time of Executive’s termination), any expenses for which reimbursement would be due under the terms of this Agreement, and subject to Executive executing a General Release, Severance Pay.
For purposes of this Agreement, the Executive shall have “Good Reason” to resign from his employment hereunder upon the occurrence of any of the following without Executive’s written consent:
(i) any material adverse change in Executive’s employment title;
(ii) a reduction in Executive’s Base Salary, other than a reduction in Executive’s Base Salary commensurate with a reduction that applies generally to the other employees of the Company;
(iii) a relocation of more than 50 miles required by the Company or any Company Member as a condition of continued employment from Executive’s then current primary place of employment; or
(iv) any material breach by the Company or any Company Member of the terms of this Agreement;
provided, that in each case, the Executive will only have “Good Reason” for resignation if (A) Executive delivered written notice to the Company indicating in reasonable detail the facts and circumstances alleged to provide a basis for such Good Reason (the “Good Reason Notice”), and (B) the Company fails to cure such circumstances within thirty (30) days of the date of delivery of such Good Reason Notice.
(e)Payment Through Termination. Except as otherwise provided herein, upon termination of Executive’s employment under this Agreement for any reason provided above in this Section 4, Executive shall be entitled to receive all Base Salary earned and all benefits and reimbursements due through the effective date of termination. All other rights and obligations under this Agreement shall cease as of the effective date of termination, except that Executive’s and the Company’s obligations, as applicable, under Sections 3, 5, 6, 7, 8, 9, 10, 16 and 17 shall survive such termination in accordance with their terms.
5.Inventions; Confidential Information and Trade Secrets.
(a)Executive shall disclose promptly to the Company any and all significant conceptions and ideas for inventions, improvements and valuable discoveries, whether patentable or not, which are conceived or made by Executive, solely or jointly with another, during the period of employment and which are related to the business or activities of the Company Group and which Executive conceives as a result of his employment by the Company in furtherance of Company business. Executive hereby assigns and agrees to assign all his interests therein to the Company or its nominee. Executive agrees that all such materials which he develops or conceives and/or documents during such period shall be deemed works made-for-hire for the Company within the meaning of the copyright laws of the United States or any similar or analogous law or statute of any other jurisdiction and accordingly, the Company shall be the sole and exclusive owner for all purposes for the distribution, exhibition, advertising and exploitation of such materials or any part of them in all media and by all means now known or which may hereafter be devised, throughout the universe in perpetuity. Executive agrees that in furtherance of the foregoing, he shall disclose, deliver and assign to the Company all such conceptions, ideas, improvements and discoveries and shall execute all such documents, including patent and copyright applications, as the Company reasonably shall deem necessary to further document the Company’s ownership rights therein and to provide the Company the full and complete benefit thereof. Should any arbitrator or court of competent jurisdiction ever hold that the materials derived from Executive’s contributions to the Company do not constitute works made-for-hire, Executive hereby irrevocably assigns to the Company, and agrees that the Company shall be the sole and exclusive owner of, all right, title and interest in and to all such materials, including the copyrights and any other proprietary rights arising therefrom. Executive reserves no rights with respect to any such materials, and hereby acknowledges the adequacy and sufficiency of the compensation paid and to be paid by the Company to Executive for the materials and the contributions he will make to the development of any such information or materials. Executive agrees to cooperate with all lawful efforts of the Company Group at the Company’s sole expense to protect the Company Group’s rights in and to any or all of such information and materials and will at the request and sole expense of the Company execute any and all instruments or documents reasonably necessary or desirable in order to register, establish, acquire, prosecute, maintain, perfect or defend the Company Group’s rights in and to such information materials.
(b)Executive acknowledges and agrees that all Confidential Information (as defined below), Trade Secrets (as defined below) and other property delivered to Executive by or on behalf of the Company Group or its representatives, vendors or customers which pertain to the
business of the Company Group shall be and remain the property of the Company or any other entity in the Company Group, as applicable. Executive agrees that he shall at all times (1) maintain strictly the confidentiality of and shall not disclose any such Confidential Information or Trade Secrets other than in connection with his employment by the Company and (2) not use the Confidential Information or Trade Secrets for any purposes other than in connection with his employment by the Company, unless disclosure is required by law, subpoena, court order or in connection with any legal proceeding.
For purposes hereof, the parties agree that “Confidential Information” means and includes without limitation: (1) all business or financial information, plans, processes and strategies, market research and analyses, projections, financing arrangements, consulting and sales methods and techniques, expansion plans, forecasts and forecast assumptions, business practices, operations and procedures, marketing and merchandising information, distribution techniques, customer information and other business information, including records, designs, patents, technology, business plans, financial statements, manuals, memoranda, lists and other documentation respecting the Company Group that the Company Group considers confidential and proprietary and takes reasonable action to protect from disclosure; (2) all information and materials which are proprietary and confidential to a third party and which have been provided to the Company Group by such third party for the Company Group’s use; and (3) all information derived from the foregoing. Confidential Information shall not include information and materials that are already, or otherwise become, known by or generally available to the public, other than as a result of an act or omission by Executive in breach of the provisions of this Agreement or any other applicable agreement between Executive and the Company.
For purposes hereof, the term “Trade Secret” shall have the meaning given in the Delaware enactment of the Uniform Trade Secrets Act, and shall include, without limitation, the whole or any portion or phase of any scientific or technical information, design, process, formula, concept, data organization, manual, other system documentation, or any improvement of any thereof, in any case that is valuable and secret (in the sense that it is not generally known to the Company’s competitors).
6.Return of Company Property; Termination of Employment. At such time, as Executive’s employment with the Company is terminated (other than upon death and, in the case of Disability, if able), he shall be required to participate in an exit interview at the Company’s headquarters for the purpose of assuring a proper termination of his employment and his obligations hereunder provided that such interview may be held before, on or after the actual date of such termination. On or before the actual date of such termination (other than upon death or Disability), Executive shall return to the Company all records, materials and other physical objects relating to his employment with the Company and owned or provided to him by the Company or any entity in the Company Group, including, without limitation, all Company credit cards, cell phones, computers and access keys and all materials relating to, containing or derived from any Trade Secrets or Confidential Information. In the case of death or any Disability that impairs Executive’s ability to satisfy the foregoing, the Company shall work with Executive’s estate or representatives to satisfy the foregoing.
7.No Prior Agreements. Executive hereby represents and warrants to the Company that the execution of this Agreement by Executive and his employment by the Company and the performance of his duties hereunder will not violate or constitute a breach of any agreement with a former employer, client or any other person or entity. Further, Executive agrees to indemnify the Company Group for, and hold the Company Group harmless from, and against, all claims, including, but not limited to, reasonable attorneys’ fees and expenses of investigation, by any such third party that such third party may now have or may hereafter come to have against the Company Group based
upon or arising out of any employment agreement, non-competition agreement, invention or secrecy agreement or similar agreement between Executive and such third party.
8.Non-Disparagement. Each of Executive, on the one hand, and the Company and each other Company Member and their respective affiliates, on the other hand, agrees not to issue, circulate, publish or utter any false or disparaging statements about the other party or any of their respective affiliates, officers, directors, parents, executives, products or services, and each such party agrees not to issue, circulate, publish or utter any false or disparaging statements about the other. Notwithstanding the foregoing, nothing in this Agreement shall preclude a party (a) from making any truthful statements required or compelled by legal process, applicable laws or regulations, including without limitation disclosure to a governmental or regulatory entity or a law enforcement agency conducting an investigation, hearing or inquiry, or (b) from making any statement or otherwise engaging in any conduct in connection with enforcing such party’s rights or defending any claim under this Agreement or any other agreement between the parties.
9.Director and Officer Insurance. The Company shall maintain in full force and effect directors’ and officers’ liability insurance in reasonably sufficient amounts as determined by the Board against all risks usually insured against for executives employed by similar privately held businesses.
10.Binding Effect; Assignment. This Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective heirs, legal representatives, successors and assigns. Executive understands that he has been selected for employment by the Company on the basis of his personal qualifications, experience and skills. Executive agrees, therefore, that he cannot assign all or any portion of his performance under this Agreement. The Company may assign its rights hereunder and delegate its obligations hereunder to a successor in interest to the Company’s business, whether by merger, sale of assets or otherwise.
11.Complete Agreement. This Agreement is not a promise of future employment. Executive has no oral representations, understandings or agreements with the Company or any of its officers, directors or representatives covering the same subject matter as this Agreement. This written Agreement and the documents executed in connection with Section 2(d) above, are the final, complete and exclusive statement and expression of the agreement between the Company and Executive regarding the subject matter contained herein and of all the terms of this Agreement; it cannot be varied, contradicted or supplemented by evidence of any prior or contemporaneous oral or written agreements and any such prior agreements are hereby superseded by this Agreement.
12.Notice. Whenever any notice is required hereunder, it shall be given in writing addressed as follows:
To the Company:
Nicholas Financial, Inc.
26133 US 19 North, Suite 300
Clearwater, Florida 33763
Attention: Jeff Royal, Chairman
E-mail: jroyal@dundeebanking.com
With a copy to:
Kutak Rock LLP
The Omaha Building
1650 Farnam Street
Omaha, Nebraska 68102
Attention: Anthony D. Scioli
Email: anthony.scioli@kutakrock.com
To Executive:
Mark Radabuagh
2670 Middleton Pike
Luckey, Ohio 43443
Notice shall be deemed given and effective three (3) days after the deposit in the U.S. mail of a written notice addressed as above and sent first class mail, certified, return receipt requested, or on the date transmitted if sent by email or facsimile on a business day, or on the next business day following the date transmitted if sent by email or facsimile on a day other than a business day, or on the date actually received, if delivered by hand, whichever is earlier. Either party may change the address for notice by notifying the other party of such change in accordance with this Section 12.
13.Severability; Headings. It is the intention of the parties that the provisions herein shall be enforceable to the fullest extent permitted under applicable law, and that the unenforceability of any provision or provisions hereof, or any portion thereof, shall not render unenforceable or otherwise impair any other provisions or portions thereof. If any provision of this Agreement is determined by a court of competent jurisdiction to be unenforceable, void or invalid in whole or in part, this Agreement shall be deemed amended to delete or modify, as necessary, the offending provisions or portions thereof and to alter the bounds thereof, including specifically, any time, place and manner restrictions contained in any of the restrictive covenants contained herein, in order to render it valid and enforceable. In any event, the balance of this Agreement shall be enforced to the fullest extent possible without regard to such unenforceable, void or invalid provisions or part thereof. The Section headings herein are for reference purposes only and are not intended in any way to describe, interpret, define or limit the extent or intent of the Agreement or of any part hereof.
14.Section 409A Compliance.
(a)If Executive is a “specified employee” within the meaning of section 409A(a)(2)(B)(i) of the Internal Revenue Code of 1986, as amended (the “Code”), at the time of his termination of employment, any benefit payable under this Agreement that is considered “nonqualified deferred compensation” under Code Section 409A that is provided to Executive on account of his separation from service shall be paid no earlier than six months after his separation from service (or, if earlier, his death), and any amount that otherwise would have been paid during this six-month period will be paid in a lump sum on first business day of the seventh month following the month in which his separation from service occurs.
(b)Any payments to be made under this Agreement upon a termination of the Executive’s employment by the Company for Cause or without Cause, or as a result of the Executive’s voluntary termination of employment, shall only be made if such termination of employment constitutes a “separation from service” under Code Section 409A.
(c)Payments and benefits triggered by Executive’s “separation from service” from the Company shall be made or initiated, as applicable, within 60 days following such separation from service.
(d)If Executive experiences a “separation from service” from the Company and the 60-day period following such separation from service begins in one calendar year and ends in a second calendar year (a “Crossover 60-Day Period”), and if there are any payments subject to Code Section 409A due Executive as a result of such separation from service that are: (i) conditioned on Executive executing and not revoking a release of claims and (ii) otherwise due to be paid during the portion of the Crossover 60-Day Period that falls within the first year, then such payments will be delayed and paid in a lump sum during the portion of the Crossover 60-Day Period that falls within the second year; provided such release of claims becomes effective and irrevocable during the Crossover 60-Day Period, if at all.
(e)For purposes of Section 409A, each installment payment provided under this Agreement shall be treated as a separate payment.
(f)To the extent required by Code Section 409A, each reimbursement or in-kind benefit provided under this Agreement shall be provided in accordance with the following: (i) the amount of expenses eligible for reimbursement, or in-kind benefits provided, during each calendar year cannot affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year; (ii) any reimbursement of an eligible expense shall be paid to Executive on or before the last day of the calendar year following the calendar year in which the expense was incurred; and (iii) any right to reimbursements or in-kind benefits under this Agreement shall not be subject to liquidation or exchange for another benefit.
(g)This Agreement shall be interpreted to avoid any additional tax under Section 409A. If any payment or benefit cannot be provided or made at the time specified herein without incurring sanctions under Section 409A, then such benefit or payment shall be provided in full at the earliest time thereafter when such sanctions will not be imposed.
15.Party Actions. Each party acknowledges that in any action by the other party to enforce the provisions of this Agreement, including without limitation Sections 3, 5, 6, 7, 8, 9 or 15 of this Agreement, claims asserted by the first party against the other arising out of employment with the Company or otherwise shall not constitute a defense to enforcement of any obligations hereunder.
16.Consent to Jurisdiction. Each party hereto irrevocably agrees that any unresolved dispute or controversy arising under or in connection with this Agreement shall be brought only to the exclusive jurisdiction of the courts of the State of Ohio located in Columbus, Ohio or the federal courts located in the United States District Court for the District of Ohio, and each party hereby consents to the jurisdiction of such courts (and of the appropriate appellate courts therefrom) in any such action and irrevocably waives, to the fullest extent permitted by law, any objection that it or he may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding that is brought in any such court has been brought in an inconvenient forum.
17.Governing Law. This Agreement shall be deemed executed and delivered in and in all respects be construed according to the laws of the State of Ohio without reference to its conflicts of laws provisions.
18.Counterparts. This Agreement may be executed in any number of counterparts and any party hereto may execute any such counterpart, each of which when executed and delivered shall be deemed to be an original and all of which counterparts taken together shall constitute but one and the same instrument. This Agreement shall become binding when one or more counterparts taken together shall have been executed and delivered (which deliveries may be made electronically by facsimile or by email of a PDF or otherwise) by the parties, and each such electronic delivery shall be deemed to be effective as an original. Each of the undersigned signatories represents that he has full power and authority to enter into and deliver this Agreement and that such signatory’s principal shall be bound hereby.
19.Modifications. This Agreement may not be changed, waived, discharged or terminated orally, but only by an instrument in writing signed by the party against which enforcement of such change, waiver, discharge or termination is sought, or his or its duly authorized representative or officer. No waiver by Executive or the Company of any breach of any provision hereof will be deemed a waiver of any prior or subsequent breach of the same or any other provision. The failure of Executive or the Company to exercise any right provided herein will not be deemed on any subsequent occasions to be a waiver of any right granted hereunder to either of them.
20. EXECUTIVE ACKNOWLEDGES THAT, BEFORE SIGNING THIS AGREEMENT, HE WAS GIVEN AN OPPORTUNITY TO READ IT, CAREFULLY EVALUATE IT, AND ASK ANY QUESTIONS HE MAY HAVE HAD REGARDING IT OR ITS PROVISIONS. EXECUTIVE ALSO ACKNOWLEDGES THAT HE HAD THE RIGHT TO HAVE THIS AGREEMENT REVIEWED BY AN ATTORNEY OF HIS CHOOSING, THAT THE COMPANY GAVE HIM A REASONABLE PERIOD OF TIME TO DO SO IF HE SO WISHED. EXECUTIVE FURTHER ACKNOWLEDGES THAT HE IS NOT BOUND BY ANY AGREEMENT WHICH WOULD PREVENT HIM FROM PERFORMING HIS DUTIES AS SET FORTH HEREIN, NOR DOES HE KNOW OF ANY OTHER REASON WHY HE WOULD NOT BE ABLE TO PERFORM HIS DUTIES AS SET FORTH HEREIN.
[signature page follows]
IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement as of the day and year first above written.
COMPANY:
Amplex Electric, Inc.
By:_/s/ Jeff Royal____________________________
Name: Jeff Royal
Title: Chairman
EXECUTIVE:
_/s/ Mark Radabaugh___________________________
Mark Radabaugh
SCHEDULE A
1.Eastwood Education Foundation
2.Troy Township Joint Economic Development Division
3.Wireless Internet Service Provider Association – Political Action Committee
5.RedBug Properties, Ltd.
EXHIBIT 10.2
PUT/CALL AGREEMENT
This PUT/CALL AGREEMENT (this “Agreement”) is dated as of June 15, 2024 (this “Effective Date”) by and between Nicholas Financial, Inc., a Delaware corporation (“NICK”), Amplex Holdings, Inc., a Delaware corporation (“Amplex Holdings”), and Mark R. Radabaugh (“MR Holder”).
RECITALS
WHEREAS, NICK, MR Holder, Dale B. Beckmann and Amplex Electric, Inc. (“Amplex”) entered into a Share Purchase Agreement, dated May 1, 2024 (the “SPA”), pursuant to which NICK acquired, as of the Closing (as defined in the SPA), 10,710 shares of common stock, no par value per share, of Amplex, which constituted fifty-one percent (51%) of all of the issued and outstanding shares of common stock of Amplex immediately prior to the Closing;
WHEREAS, concurrent with Closing (as defined in the SPA), NICK has (i) converted the Outstanding NICK Debt (as defined in the SPA) into 421 shares of common stock of Amplex at the Share Purchase Price (as that term is defined in the SPA), and (ii) purchased 1,674 shares of Common Stock of Amplex at the Share Purchase Price for an aggregate purchase price of $3,000,0000 (collectively the “Additional NICK Closing Stock”);
WHEREAS, concurrent with Closing, (i) MR Holder contributed 421 shares of common stock of Amplex to Amplex pursuant to the terms of the SPA (the “Amplex Contribution”) and (ii) thereafter, MR Holder and NICK each contributed their shares in Amplex for shares in Amplex Holdings (the “Holdings Contribution,” collectively with the Amplex Contribution the “Contribution”), so that immediately following the Contribution and taking into account the Additional NICK Closing Stock, Amplex Holdings holds 100% of the shares of Amplex stock, NICK holds 12,804 shares of common stock, par value $0.0001 per share of Amplex Holdings (the “Common Stock”) which constitutes 56.47% of the issued and outstanding shares of Common Stock of Amplex Holdings, and MR Holder holds 9,869 shares of Common Stock of Amplex Holdings, which constitutes 43.53% of the issued and outstanding shares of Common Stock of Amplex Holdings immediately following the Contribution and taking into account the Additional NICK Closing Stock;
WHEREAS, NICK and MR Holder have agreed that, under certain circumstances, NICK will have the option to compel MR Holder to sell to NICK the Call Shares (as defined below); and
WHEREAS, NICK and MR Holder have agreed that, under certain circumstances, MR Holder will have the option to compel NICK to purchase from MR Holder the Put Shares (as defined below);
NOW, THEREFORE, in consideration of the mutual covenants and promises set forth in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows.
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SECTION 1.01. Definitions. Each capitalized term not otherwise defined in this Agreement will have the meaning provided for it in the SPA. In addition to the capitalized terms defined in the SPA and elsewhere in this Agreement, the following capitalized terms have the meanings set forth below:
“Adjusted EBITDA” means for any period the sum of EBITDA for such period minus the Average Maintenance CapEx plus or minus (as applicable) the Agreed Adjustments, calculated consistent with the line items and methodology used to calculate the Closing Adjusted EBITDA and as further set forth on Annex A.
“Agreed Adjustments” means certain adjustments to EBITDA for non-recurring costs and expenses and one-time unusual revenues that are mutually agreed upon by NICK and MR Holder pursuant to Section 6.04 for the purposes of calculating the Purchase Price under this Agreement. Agreed Adjustments are intended to include the same type of adjustments as those identified on Annex A and those made in calculating the Closing Adjusted EBITDA, reflecting strategic expenses made by Amplex Holdings and its subsidiaries in one period that benefit future periods.
“Agreed Budgets” means the operating budgets for Amplex Holdings and its subsidiaries agreed upon by NICK and MR Holder for the Measurement Years pursuant to Section 6.02(a).
“Average Maintenance CapEx” means (a) for calculating the Closing Adjusted EBITDA, $260,000 or (b) for calculating Adjusted EBITDA for subsequent periods, the trailing twelve months for the applicable period based on the accounts and methodology (including the percentage allocations for each account) as identified and described on Schedule I attached hereto, or as otherwise agreed.
“Call Shares” means the number of shares of Common Stock of Amplex Holdings identified by NICK in a Call Option Notice to MR Holder that NICK desires to purchase, not to exceed the Maximum Call Shares.
“Closing Adjusted EBITDA” means the Adjusted EBITDA of Amplex Holdings and its subsidiaries for the last three calendar months immediately prior to the Closing Date multiplied by four (4), as finally determined pursuant to Section 6.01.
“Closing Multiple” means the amount equal to: (a) the Closing Valuation divided by (b) the Closing Adjusted EBITDA, as finally determined pursuant to Section 6.01.
“Closing Valuation” means an amount equal to the sum of: Base Purchase Price of $37,500,000.00 minus the Loss of Subscribers Adjustment plus the FTTH Capital Expenditure Adjustment.
“Dispute Notice” means a Call Dispute Notice, Closing Notice, Metric Dispute Notice, or Put Dispute Notice, as applicable.
“EBITDA” means, for any period, the net income of Amplex Holdings and its subsidiaries before interest, taxes, depreciation, and amortization, calculated consistent with the line items and methodology used to calculate the Closing Adjusted EBITDA and as further set forth on Annex A.
“EBITDA Performance Metric” means the Adjusted EBITDA for Amplex Holdings and its subsidiaries for each Measurement Year is equal to or greater than 90% of the Target Adjusted EBITDA for the applicable Measurement Year.
“Exercise Price” means an amount equal to the (a) Closing Multiple multiplied by (b) the Adjusted EBITDA for the three calendar months immediately prior to the date of the Option Closing multiplied by four (4).
“Maximum Call Shares” means as of the date of the Closing of a Call Option that number of shares of Common Stock of Amplex Holdings owned by MR Holder calculated as follows:
80% = (X+Y)/A, where
X = Call Shares
Y = the number of shares of Common Stock of Amplex Holdings owned by NICK as of the date of the Option Closing
A = Outstanding Amplex Holdings Shares immediately prior to the Option Closing
“Measurement Year” means each twelve-month period ended December 31, 2027 and December 31, 2028, individually, and “Measurement Years” means both of them collectively, as the context may require.
“Notice” means a Call Option Notice, Closing Notice, Metric Notice, or a Put Option Notice, as applicable.
“Noticed Item” means: (a) with respect to a Call Option Notice, the Purchase Price set forth in the Call Option Notice; (b) with respect to a Closing Notice, the Closing Adjusted EBITDA or Closing Multiple set forth in the Closing Notice; (c) with respect to a Metric Notice, the Target Adjusted EBITDA set forth in the Metric Notice; and (d) with respect to a Put Option Notice, the Purchase Price set forth in the Put Option Notice or achievement of the EBITDA Performance Metric, as applicable.
“Outstanding Amplex Holdings Shares” means the total issued and outstanding shares of Common Stock of Amplex Holdings held by NICK and MR Holder as of the applicable date.
“Party” means any one of the parties to this Agreement, individually, and “Parties” means all of them collectively, as the context may require.
“Per Share Purchase Price” means the Exercise Price divided by the Outstanding Amplex Holdings Shares as of the date of the Option Closing.
“Purchase Price” means the Per Share Purchase Price multiplied by the number of shares of Common Stock of Amplex Holdings purchased pursuant to the Put Option or Call Option, as applicable.
“Put Shares” means the number of shares of Common Stock of Amplex Holdings identified by MR Holder in a Put Option Notice to NICK that MR Holder desires to sell.
“Target Adjusted EBITDA” means the projected Adjusted EBITDA for Amplex Holdings and its subsidiaries for each Measurement Year calculated based on the Agreed Budgets and determined pursuant to Section 6.03.
SECTION 2.01. Term. This Agreement shall commence as of the Closing Date (as defined in the SPA) and continue until the earlier of (a) the fifteenth anniversary of the Closing Date or (b) such time that all options hereunder have been exercised or expired (the “Term”).
SECTION 3.01 Call Option.
(a)MR Holder hereby grants to NICK a onetime option (the “Call Option”) to buy from MR Holder, and to compel MR Holder to sell to NICK, the Call Shares at such time, pursuant to the following terms and conditions:
(i)The Call Option shall become exercisable on not less than twenty (20) days prior written notice by NICK to MR Holder (the “Call Option Notice”) at any time following the second anniversary of the Closing Date, but prior to the fifth anniversary of the Closing Date (the “Call Period”). The Call Option shall expire on the fifth anniversary of the Closing Date.
(ii)The aggregate purchase price for the Call Shares upon exercise of the Call Option shall be the Purchase Price.
(iii)The Call Option Notice shall include NICK’s good faith calculation of the Purchase Price, along with supporting documentation used in preparation of the calculation of the Purchase Price. If MR Holder disputes the calculation of the Purchase Price included in the Call Option Notice, then MR Holder shall within twenty (20) days of receipt of the Call Option Notice provide written notice, including supporting documentation and with reasonable detail, to NICK of his calculation of the Purchase Price (the “Call Dispute Notice”). During such twenty
(20) day period, NICK shall respond to any questions MR Holder, his accountants and other advisors may have regarding the Call Option Notice. Section 6.05 shall apply following delivery of a Call Dispute Notice. If MR Holder fails to deliver a Call Dispute Notice within such twenty (20) day period, MR Holder will be deemed to have agreed to the Purchase Price set forth in the Put Option Notice, and such Purchase Price will be final and binding.
(iv)Payment of the Purchase Price for the Call Shares shall be made by wire transfer of immediately available funds at the Option Closing to one or more accounts designated by MR Holder in writing to NICK at least two (2) Business Days prior to the Option Closing.
(v)Each of NICK, on the one hand, and MR Holder, on the other hand, shall prepare and deliver to the other, in accordance with Section 7.04 hereof, a schedule (each a “Schedule”) of disclosures, as contemplated by Annex B and Annex C attached hereto, respectively, as promptly as practicable (but in no event more than seven (7) days) after receipt of the Call Option Notice.
(vi)The Parties agree and acknowledge that their respective obligations to consummate the transactions contemplated by this Section 3.01(a) are subject to the satisfaction of all applicable conditions set forth in Article V or the waiver thereof by the Party entitled to the benefit of the applicable conditions.
(a)NICK hereby grants to MR Holder one or more options (each a “Put Option” and collectively the “Put Options” and, collectively with the Call Option, the “Options”) to sell to NICK, and to compel NICK to purchase from MR Holder, the Put Shares for the Purchase Price pursuant to the following terms and conditions:
(i)The Put Options shall become exercisable on not less than ninety (90) days prior written notice by MR Holder to NICK (a “Put Option Notice”) at any time following the fifth anniversary of the Closing Date and prior to the fifteenth anniversary of the Closing Date (the “Put Period”), subject to the following conditions:
(A) If MR Holder is terminated for Cause (as defined in his Employment Agreement (as defined in the SPA), as then in effect), MR Holder shall not have any right to exercise any Put Option, or otherwise take any action that would result in an Option Closing, during the period commencing on the date of such termination through and including the date that is the one-year anniversary of such date of termination.
(B) MR Holder shall not have any right to exercise any Put Option, or otherwise take any action that would result in an Option Closing, if as a result of such Option Closing MR Holder would no longer own at least 158 shares of Common Stock of Amplex Holdings, which number is subject to appropriate adjustment for any stock splits, stock dividends, combinations, recapitalizations and the like, until:
(1)if MR Holder has ceased to serve as the Chief Executive Officer of Amplex or will cease to serve as the Chief
Executive Officer of Amplex as of the Option Closing, the earlier of (x) the date a successor acceptable to the Board of Directors of NICK or Amplex, as determined by NICK (the “Board”), has been appointed to serve as the Chief Executive Officer (or interim Chief Executive Officer of Amplex or substantially similar title) or (y) the date that is eighteen (18) months after the date MR Holder ceased to serve as the Chief Executive Officer of Amplex.
(2)if MR Holder continues to serve as the Chief Executive Officer of Amplex, the date the Board has identified a presumptive successor Chief Executive Officer of Amplex.
(C) So long as MR Holder is the Chief Executive Officer of Amplex from the Closing Date through the fifth anniversary of the Closing Date, the Put Options are only exercisable during the Put Period if the EBITDA Performance Metric has been achieved.
(D) If MR Holder ceases to serve as the Chief Executive Officer of Amplex at any time prior to the fifth anniversary of the Closing Date, the EBITDA Performance Metric condition shall not apply to exercise a Put Option.
(E) MR Holder may exercise the Put Options one or more times during the Put Period; provided, that MR Holder may only exercise a Put Option once per twelve month period and for no less than 1,000 shares of Common Stock of Amplex Holdings (subject to adjustment for any stock split, stock dividend, recapitalization, merger, consolidation, or similar event) per exercise or, if less than 1,000 shares then remain, all the Put Shares that then remain in their entirety.
(ii)The aggregate purchase price for the Put Shares upon exercise of a Put Option shall be the Purchase Price.
(iii)The Put Option Notice shall include MR Holder’s good faith calculation of the Purchase Price, along with supporting documentation used in preparation of the calculation of the Purchase Price. If NICK disputes (A) that the EBITDA Performance Metric has been achieved, if applicable, (B) the satisfaction of the conditions set forth in Section 3.02(a)(i), or (C) the calculation of the Purchase Price included in the Put Option Notice, then NICK shall within twenty (20) days of receipt of the Put Option Notice provide written notice, including supporting documentation and with reasonable detail, to MR Holder of its (I) determination as to whether or not the EBITDA Performance Metric has been achieved, if applicable, (II) determination as to whether or not the applicable condition has been satisfied, or (III) calculation of the Purchase Price (the “Put Dispute Notice”). During such twenty (20) day period, MR Holder shall respond to any questions NICK, its accountants and other advisors may have regarding the Put Option Notice. Section 6.05 shall apply following delivery of a Put Dispute Notice. If NICK fails to deliver a Put Dispute Notice within such twenty (20) day period, the EBITDA Performance
Metric, as applicable, will be deemed achieved and NICK will be deemed to have agreed to the Purchase Price set forth in the Put Option Notice, and such Purchase Price will be final and binding.
(iv)Payment of the Purchase Price for the Put Shares shall be made by wire transfer of immediately available funds at the Option Closing to one or more accounts designated by MR Holder in writing to NICK at least two (2) Business Days prior to the Option Closing or, at the election of NICK, by delivery of a secured promissory note by NICK for payment of the Purchase Price to MR Holder in substantially the form attached hereto as Annex D containing at a minimum the terms set forth therein.
(v)Each of NICK, on the one hand, and MR Holder, on the other hand, shall prepare and deliver to the other, in accordance with Section 7.04 hereof, a Schedule of disclosures, as contemplated by Annex B and Annex C attached hereto, respectively, as promptly as practicable (but in no event more than seven (7) days) after receipt of the Put Option Notice.
(vi)The Parties agree and acknowledge that their respective obligations to consummate the transactions contemplated by this Section 3.02(a) are subject to the satisfaction of all applicable conditions set forth in Article V or the waiver thereof by the Party entitled to the benefit of the applicable conditions.
SECTION 3.03 Transfer Taxes. The Parties agree that all transfer, documentary, sales, use, stamp, registration, value added and other such Taxes imposed in connection with the exercise of any option hereunder shall be borne in equal proportions by (a) NICK, and (b) MR Holder, provided that, for purposes of clarity, any related income, profits or other such Taxes shall be borne solely by the Party receiving such income, profits or other gain.
SECTION 3.04 Option Closing.
(a)Any purchase and sale of the Put Shares or Call Shares pursuant to Section 3.01 or 3.02, as the case may be (each an “Option Closing”), shall take place at 10:00 a.m. Central Time by the electronic exchange of documents on a date to be agreed in writing among the Parties; provided, that such date is no later than twenty (20) days after the date on which all of the conditions to the Option Closing set forth in Article V hereof shall be fulfilled or waived (other than those conditions that by their terms are to be satisfied at the Closing, but subject to the satisfaction of such conditions at the Closing). All proceedings to be taken and all documents to be executed and delivered by the Parties at the Closing shall be deemed to have been taken and executed simultaneously and no proceedings shall be deemed to have been taken nor documents executed or delivered until all have been so taken, executed and delivered.
(b)All Put Shares or Call Shares, as the case may be, to be transferred at an Option Closing shall be delivered with full title and free and clear of any Liens other than those set forth in any of Amplex Holdings’ Organizational Documents.
(c)At an Option Closing, each of NICK and MR Holder shall execute and deliver such documents, instruments and agreements as may be necessary, in the reasonable discretion of NICK or MR Holder, to effectuate the transfers contemplated by this Agreement, including without limitation a written purchase and sale agreement between the Parties with
customary terms and provisions for such a transaction including only the representations and warranties set forth in Annex B and Annex C. Each of the Parties shall, from time to time after the Option Closing, at the request of NICK or MR Holder, as the case may be, and without further consideration, execute and deliver, or cause any one or more of its Affiliates (as defined in the SPA) to execute and deliver, further instruments of transfer and assignment and take such other action as NICK or MR Holder, as the case may be, may reasonably require more effectively to transfer and assign to, and vest in, the transferee, the Put Shares or Call Shares, as the case may be, to be transferred hereunder and otherwise satisfy the obligations of the Parties hereunder.
COVENANTS
SECTION 4.01 Regulatory Matters; Third Party Consents. Upon the exercise of any option pursuant to Section 3.01 or 3.02 hereof, the Parties shall cooperate with each other and use Commercially Reasonable Efforts promptly to prepare and file all necessary documentation, to effect all necessary applications, notices, petitions and filings, to obtain as promptly as practicable all necessary registrations, permits, consents, approvals, waivers and authorizations of all third Persons and Governmental Entities and to satisfy all conditions to the obligations to any Person to consummate the transactions contemplated by this Agreement. If any required consent of or waiver by any third Person (excluding any Governmental Entity) is not obtained prior to an Option Closing, the Parties, each without cost, expense or liability to the other, shall cooperate in good faith to seek an alternative arrangement to achieve the results intended.
SECTION 4.02 Restrictions on Transfer. MR Holder shall not sell, assign, transfer, exchange, devise, pledge, hypothecate, encumber or otherwise alienate or dispose of (each, a “Transfer”) all or any of the shares of Common Stock of Amplex Holdings owned by MR Holder as of the date hereof that are subject to the Call Option (including without limitation any securities issued upon any stock split, stock dividend, recapitalization, merger, consolidation, or similar event) (such shares from time to time that are subject to the Call Option, the “Restricted Shares”) until the earlier expiration or exercise of the Call Option, or any right or interest therein, whether voluntarily or involuntarily, by operation of law, court order, foreclosure, marital property division or otherwise, except (a) in compliance with all applicable U.S. federal and state and foreign securities Laws and (b) in accordance with this Agreement. If any Transfer of the Restricted Shares is made or attempted contrary to the provisions of this Agreement, NICK shall have the right to purchase such Restricted Shares from MR Holder or his transferee at any time before or after the purported Transfer, whether during the Call Period or not, subject to and on the terms as provided in this Agreement. In addition, if MR Holder becomes obligated to sell the Restricted Shares hereunder (and is not otherwise disputing such sale in good faith) and fails to deliver such Restricted Shares to NICK in accordance with the terms of this Agreement, NICK may, at its option, in addition to all other remedies it may have, send to MR Holder by certified mail, return receipt requested, the purchase price for such Restricted Shares as is herein specified. Thereupon, (i) Amplex Holdings shall, and NICK shall cause Amplex Holdings to, cancel on its books the certificate or certificates representing such Restricted Shares sold hereunder; (ii) all of MR Holder’s rights in and to such Restricted Shares shall terminate; and (iii) MR Holder shall indemnify and hold harmless NICK, Amplex Holdings and their respective Affiliates for any Losses (as defined in the SPA) that any of them may sustain or incur by reason of any claim made with respect to the certificate or certificates representing such Restricted Shares. Further, in
addition to any other legal or equitable remedies either Party may have, a Party may enforce its rights under this Agreement by action(s) for specific performance, to the extent permitted by law, or may obtain a temporary and/or permanent injunction restraining any such Transfer (no bond or other security shall be required in connection with such action). Amplex Holdings shall, and NICK may cause Amplex Holdings to, refuse to recognize any purported transferee in violation of this Agreement as a stockholder of Amplex Holdings, and Amplex Holdings shall, and NICK may cause Amplex Holdings to, continue to treat the MR Holder as a stockholder of Amplex Holdings for all purposes, including without limitation for purposes of dividend and voting rights, until all applicable provisions of this Agreement have been complied with. The remedies provided herein are cumulative and not exclusive of any other remedies provided herein or by law.
SECTION 4.03 Legends. Amplex Holdings shall, and NICK will cause Amplex Holdings to, issue all certificates or other instruments representing the Restricted Shares (including without limitation any securities issued upon any stock split, stock dividend, recapitalization, merger, consolidation, or similar event) and to which the provisions of this Agreement apply to be endorsed conspicuously on the face thereof with legends in substantially in the following forms:
“The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Act”), or any state securities laws and may not be sold, pledged, hypothecated, transferred or otherwise disposed of in the absence of an effective registration statement covering these securities under the Act and all applicable state securities laws or an opinion of counsel (concurred in by counsel to the Company) that registration is not required under the Act or under applicable state securities laws.”
“The securities represented by this certificate are subject to restrictions on transfer and certain other agreements set forth in a Put/Call Agreement dated as of June 17, 2024 by and between the Company and Mark R. Radabaugh, a copy of which is available for inspection at the offices of the Company or may be made available upon request.”
SECTION 4.04 Permitted Transfers. Notwithstanding anything to the contrary contained herein, the following transactions are exempt from the Transfer restrictions contained in this Article IV: MR Holder’s Transfer of any or all of the Restricted Shares (a) held either during his lifetime or on death by will or intestacy to his immediate family or (b) to any custodian or trustee for the account of MR Holder or MR Holder’s immediate family or (c) to any corporation, limited partnership or limited liability company of which the controlling stockholder(s), general partner(s) or member(s) are either MR Holder or members of MR Holder’s immediate family or (d) any trust exclusively for the account of MR Holder or MR Holder’s immediate family (each a “Permitted Transfer”, with each recipient of Restricted Shares in a Permitted Transfer being a “Permitted Transferee”). “Immediate family” as used herein means a spouse, lineal descendant, father, mother, brother, or sister of MR Holder. In the case of each Permitted Transfer, the Permitted Transferee will receive and hold such Restricted Shares subject to the provisions of this Article IV and any other restrictions and obligations set forth in this Agreement and any other agreement to which the Restricted Shares may then be subject with such changes in the terms hereof and thereof as the Board shall determine in good faith are necessary as a result of the change in holder of the Restricted Shares from MR Holder to the Permitted Transferee, and, as conditions precedent to the effectiveness of such Permitted Transfer, such Permitted Transferee will acknowledge the same in writing by executing a counterpart, joinder or other instrument of
adherence to this Agreement and to any other applicable agreement with respect to the Restricted Shares then in effect, each in a form reasonably acceptable to the Board, and there will be no further Transfer of such Restricted Shares except in accordance with this Article IV and the other provisions of this Agreement and any other applicable agreement.
SECTION 4.05. Other Agreements. During the Term, neither MR Holder, Amplex Holdings nor NICK shall, and NICK shall not permit or cause Amplex Holdings to, take any action or enter into any agreement or arrangement of any nature that limits, restricts, prohibits or otherwise hinders the transactions contemplated hereunder, including, but not limited to, any agreement that requires consent prior to either Party exercising any rights provided to such Party under this Agreement, without the prior written consent of MR Holder or NICK, as applicable, such consent to be given or withheld in such Party’s sole discretion.
CONDITIONS
SECTION 5.01 Mutual Conditions. The obligation of the MR Holder, on the one hand, and NICK, on the other hand, to effect the transactions contemplated by this Agreement shall be subject to the condition that no Order issued by any court or agency of competent jurisdiction or other legal restraint or prohibition preventing or materially delaying the consummation of the transactions contemplated by this Agreement shall be in effect, that no Action initiated by any Governmental Entity seeking an injunction shall be pending and that no Law or Order shall have been enacted, entered, promulgated or enforced by any Governmental Entity which prohibits, restricts or makes illegal consummation of the transactions contemplated hereby.
SECTION 5.02 Conditions to NICK’s Obligations. The obligations of NICK to effect the transactions contemplated by Article III hereof shall be subject to the following conditions, any one or more of which may be waived in whole or in part in writing by NICK:
(a)each of the representations and warranties of MR Holder set forth in Annex B to this Agreement that are not qualified as to materiality shall be true and correct in all material respects on and as of the date on which any Party exercises any of the Options set forth in this Agreement and on and as of the date of any Option Closing with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects), and each of the representations and warranties of MR Holder set forth in Annex B to this Agreement that are qualified as to materiality shall be true and correct in all respects on and as of the date on which any Party exercises any of the Options set forth in this Agreement and on and as of the date of any Option Closing with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects);
(b)MR Holder shall have performed and complied in all material respects with all agreements, covenants, obligations and conditions required by this Agreement to be performed or complied with by such Person at or prior to the Option Closing;
(c)MR Holder shall have delivered to NICK a certificate dated as of the Option Closing and signed by MR Holder confirming the satisfaction of the applicable conditions contained in paragraphs (a) and (b) of this Section 5.02;
(d)MR Holder shall have delivered to NICK evidence of transfer to NICK of the Put Shares or Call Shares, as applicable, including to the extent the same are certificated, certificates (or, if such certificate cannot be located by MR Holder, an indemnity in favor of NICK in mutually agreed form) duly endorsed in blank or accompanied by stock transfer powers evidencing transfer to NICK of such Put Shares or Call Shares, as applicable, or appointing NICK or its nominee as attorney for such transfer;
(e)MR Holder shall have made or obtained all requisite regulatory notifications or approvals and consents of third parties due from MR Holder, in form and substance reasonably satisfactory to NICK; and
(f)any disclosures provided by MR Holder in the Schedule of disclosures, as contemplated by Annex B attached hereto shall be satisfactory to NICK in its sole discretion.
SECTION 5.03 Conditions to MR Holder’s Obligations. The obligations of MR Holder to effect the transactions contemplated by Article III hereof shall be subject to the following conditions, any one or more of which may be waived in whole or in part in writing by MR Holder:
(a)each of the representations and warranties of NICK set forth in Annex C to this Agreement that are not qualified as to materiality shall be true and correct in all material respects on and as of the date on which any Party exercises any of the Options set forth in this Agreement and on and as of the date of any Option Closing with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects), and each of the representations and warranties of NICK set forth in Annex C to this Agreement that are qualified as to materiality shall be true and correct in all respects on and as of the date on which any Party exercises any of the Options set forth in this Agreement and on and as of the date of any Option Closing with the same effect as though made at and as of such date (except those representations and warranties that address matters only as of a specified date, the accuracy of which shall be determined as of that specified date in all respects);
(b)NICK shall have performed and complied in all material respects with all agreements, covenants, obligations and conditions required by this Agreement to be performed or complied with by NICK at or prior to the Option Closing;
(c)NICK shall have delivered to MR Holder a certificate, dated as of the Option Closing, from a senior officer of NICK confirming the satisfaction of the conditions contained in paragraphs (a) and (b) of this Section 5.03;
(d)NICK shall have made or obtained all requisite regulatory notifications or approvals and consents of third parties due from NICK, in form and substance reasonably satisfactory to MR Holder; and
(e)any disclosures provided by NICK in the Schedule of disclosures, as contemplated by Annex C attached hereto shall be satisfactory to MR Holder in his sole discretion.
ARTICLE VI
FINANCIAL MATTERS; DISPUTES
SECTION 6.01 Determination of Closing Items. Within ninety (90) days after the Closing Date, MR Holder shall provide in writing to NICK his calculation of the Closing Adjusted EBITDA and the Closing Multiple (the “Closing Notice”). If NICK disputes the calculation of the Closing Adjusted EBITDA or the Closing Multiple in the Closing Notice, then NICK shall within twenty (20) days of receipt of the Closing Notice provide written notice, including supporting documentation and with reasonable detail, to MR Holder of its calculation of the Closing Adjusted EBITDA and the Closing Multiple (the “Closing Dispute Notice”). Section 6.05 shall apply following delivery of a Closing Dispute Notice.
SECTION 6.02 Budgets; Financial Statements.
(a)Budget Process. During the Term, the Parties shall cause Amplex Holdings and its subsidiaries to deliver annually to each of the Parties at least sixty (60) days prior to the end of a fiscal year a proposed operating budget for the following fiscal year for Amplex Holdings and its subsidiaries. The operating budget for Amplex Holdings and its subsidiaries for each Measurement Year shall be subject to review and reasonable approval by each of NICK and MR Holder. If the Parties are unable to agree upon a budget for a Measurement Year by the 45th day following the beginning of such Measurement Year, then the prior year’s budget shall constitute the budget for such Measurement Year, as applicable. Unless otherwise agreed by the Parties, during the Measurement Years, the Parties will cause Amplex Holdings and its subsidiaries to operate materially in accordance with the Agreed Budgets.
(b)Financial Statements. During the Term, the Parties shall cause Amplex Holdings and its subsidiaries to deliver to each of the Parties (the “Financial Statements”):
(i)within thirty (30) days of the end of each month, an unaudited consolidated balance sheet of Amplex Holdings and its subsidiaries for, and as of, the end of such month, an unaudited consolidated statement of operations, prepared in accordance with GAAP, in reasonable detail with comparisons of the financial results against Amplex Holdings and its subsidiaries’ budget for that financial period and Amplex Holdings and its subsidiaries’ financial results for the corresponding period of the previous year, and an updated capitalization table as of the date of such statements; and
(ii)within forty five (45) days after the end of each fiscal quarter, unaudited consolidated statements of income or operations of Amplex Holdings and its subsidiaries for such quarterly period, and unaudited consolidated balance sheets of Amplex Holdings and its subsidiaries as of the end of such quarterly period, setting forth comparisons to the corresponding period in the preceding fiscal period, and all such statements shall be prepared
in accordance with GAAP, consistently applied (except for normal year-end audit adjustments for recurring accruals and the absence of footnotes with respect thereto).
(c)Books and Records. During the Term, the Parties shall cause Amplex Holdings and its subsidiaries to maintain its books and records and prepare the Financial Statements in a manner to allow calculation of Adjusted EBITDA in a manner substantially similar to the manner in which Closing Adjusted EBITDA is calculated.
SECTION 6.03 Determination of Target Adjusted EBITDA. Within thirty (30) days after determination of the Agreed Budgets as provided in Section 6.02, MR Holder shall provide in writing to NICK his calculation of the Target Adjusted EBITDA based on the Agreed Budgets (the “Metric Notice”). If NICK disputes the calculation of the Target Adjusted EBITDA in the Metric Notice, then NICK shall within twenty (20) days of receipt of the Metric Notice provide written notice, including supporting documentation and with reasonable detail, to MR Holder of its, calculation of the Target Adjusted EBITDA (the “Metric Dispute Notice”). Section 6.05 shall apply following delivery of a Metric Dispute Notice.
SECTION 6.04 Agreed Adjustments. From time to time during the Term, each Party may propose to the other Party adjustments to the calculation of EBITDA hereunder for non-recurring costs and expenses and one-time unusual revenues with an explanation for the rationale for such proposed adjustments. Each Party agrees to review such proposed adjustments in good faith and will reasonably consent to such proposed adjustments. All proposed adjustments mutually agreed upon by the Parties shall constitute the “Agreed Adjustments.” If a Party does not agree with a proposed adjustment, the Party shall provide written notice to the proposing Party with an explanation for the rationale for such rejection. NICK and MR Holder agree to meet within fifteen (15) days after notice of a rejection of a proposed adjustment in order to negotiate in good faith the proposed adjustment or an alternative thereto. Agreed Adjustments are intended to include the type of adjustments made in calculating the Closing Adjusted EBITDA and reflected on Annex A.
SECTION 6.05 Dispute Resolution. If NICK and MR Holder agree in writing as to the resolution of any objection in a Dispute Notice, the Noticed Item set forth in the Notice and (with any such changes as may be agreed upon) shall be final and binding. NICK and MR Holder agree to negotiate in good faith to attempt to resolve any such objections in a Dispute Notice, provided that NICK, on the one hand, and MR Holder, on the other hand, shall each have the right, at any time, by written notice to the other, unilaterally to terminate all negotiations with respect to such objections or changes. Not later than thirty (30) days after either MR Holder or NICK shall have terminated such negotiations, then MR Holder and NICK shall submit the remaining issues in dispute to an impartial nationally or regionally recognized firm of independent certified public accountants (provided that neither MR Holder nor NICK nor any of their respective Affiliates shall have utilized the services of such firm in the five (5) years prior to the date of the Dispute Notice), selected by the mutual written agreement of MR Holder and NICK (the “Independent Accountant”). The Independent Accountant shall have sole authority to determine any and all substantive and procedural matters pertaining to the resolution of the dispute between MR Holder and NICK arising under this Section 6.05; provided, however, that the Independent Accountant shall only review those unresolved items and amounts specifically set forth in and objected to in the Dispute Notice, and the Independent Accountant’s determination of each disputed amount shall
be no more than the highest amount claimed by either MR Holder or NICK, nor less than the lowest amount claimed by either MR Holder or NICK, in each case with respect to such disputed amount. MR Holder and NICK shall cooperate with the Independent Accountant in all respects, including providing the Independent Accountant with appropriate supporting documentation used in preparation and review of their calculations of the Noticed Item. The Independent Accountant shall, within thirty (30) days following its selection, deliver to the Parties a written report determining the proper treatment of the disputed items. The determination of the disputed amounts in the calculations of the Noticed Item by the Independent Accountant shall be final and binding upon the Parties hereto, absent manifest error. The costs and expenses of the Independent Accountant shall be borne by the Parties in inverse proportion as they may prevail on the matters resolved by the Independent Accountant, which proportionate allocation shall be calculated on an aggregate basis based on the relative dollar values of the amounts in dispute and shall be determined by the Independent Accountant at the time the determination is rendered on the merits of the matters submitted to the Independent Accountant.
MISCELLANEOUS
SECTION 7.01 Governing Law. THIS AGREEMENT, THE LEGAL RELATIONS BETWEEN THE PARTIES AND THE ADJUDICATION AND THE ENFORCEMENT THEREOF, SHALL BE GOVERNED BY AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF.
SECTION 7.02 Jurisdiction; Waiver of Jury Trial and Certain Damages. All actions arising under or relating to this Agreement shall be brought exclusively in the United States District Court for the District of Delaware or in any State court in the State of Delaware and having subject matter jurisdiction over such matters, and each of the Parties hereto consents and agrees to personal jurisdiction, and waives any objection as to the venue, of such courts for purposes of such action. Process in any such suit, action or proceeding may be served on any Party anywhere in the world, whether within or without the jurisdiction of any such court. Without limiting the foregoing, each Party agrees that notice to such Party as provided in Section 7.04 shall be deemed effective service of process on such Party. The parties to this Agreement agree to waive any right to a jury trial as to all disputes and any right to seek INDIRECT, CONSEQUENTIAL OR punitive damages INCLUDING, WITHOUT LIMITATION, LOST PROFITS, UNLESS, AND ONLY TO THE EXTENT, ANY SUCH AMOUNTS ARE INCURRED AS A THIRD PARTY CLAIM.
SECTION 7.03 Captions. The Article and Section captions used in this Agreement are for reference purposes only and will not in any way affect the meaning or interpretation of this Agreement.
SECTION 7.04 Notice. All notices and other communications under this Agreement will be in writing and will be deemed to have been duly given when (a) personally delivered (with written confirmation of receipt); (b) on the next Business Day after the date sent for next Business Day delivery by Federal Express or other nationally recognized overnight courier (receipt requested); (c) on the date sent by email of a .pdf document (with confirmation of transmission),
if sent on a Business Day during the normal business hours of the recipient, or on the next Business Day, if sent on a non-Business Day or on a Business Day but after the normal business hours of the recipient; or (d) on the third (3rd) day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid, as follows:
if to NICK, Amplex Holdings or Amplex:
Nicholas Financial, Inc.
26133 US 19 North, Suite 300
Clearwater, Florida 33763
Attention: Jeff Royal, Chairman
E-mail: jroyal@dundeebanking.com
with copies to:
Kutak Rock LLP
The Omaha Building
1650 Farnam Street
Omaha, NE 68102
Attention: Anthony D. Scioli
Email: anthony.scioli@kutakrock.com
if to MR Holder:
Mark R. Radabaugh
22690 Pemberville Rd
Luckey, Ohio 43443
E-mail: mark@amplex.net
with copies to:
Wilkinson Barker Knauer
2138 W. 32nd Ave, Suite 300
Denver, CO 80211
Attention: Amy K. Fliam
Email: afliam@wbklaw.com
or to such other addresses as may be provided by the Parties from time to time by notice in accordance with this Section.
SECTION 7.05 Assignment. No Party may assign its rights or obligations under this Agreement without the prior written consent of the other, except in accordance with the provisions of Section 4.04. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective heirs, executors, personal representatives, successors and permitted assigns and shall be binding upon any Person to whom any Restricted Shares are Transferred (even if in violation of the provisions of this Agreement) and the heirs, executors, personal representatives, successors and assigns of such Person. No provision of this Agreement shall be construed to
provide a benefit to any Party hereto who no longer owns any shares of capital stock of Amplex Holdings, other than a right to receive a required payment with respect thereto.
SECTION 7.06 Counterparts. This Agreement may be executed in any number of counterparts, each of which will be an original and all of which taken together will constitute one instrument, it being understood that all of the Parties need not sign the same counterpart. Delivery of an executed signature page of this Agreement by facsimile or other electronic image scan transmission shall be effective as delivery of an original manually executed counterpart of this Agreement for all purposes.
SECTION 7.07 Entire Agreement. This Agreement, its Annexes, the SPA and the other documents referred to in this Agreement contain the entire understanding of the Parties with respect to the subject matter contained herein and therein. This Agreement, its Annexes, the SPA and such other documents supersede all prior agreements and understandings among the Parties with respect to such subject matter.
SECTION 7.08 Amendments and Waivers. This Agreement may not be amended, altered or modified except by a written instrument executed by the Parties. Each Party may, by an instrument in writing signed on behalf of such Party, waive compliance by any other Party with any term or provision of this Agreement that such other Party was or is obligated to comply with or perform. No failure or delay by any Party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.
SECTION 7.09 Interpretation. When a reference is made in this Agreement to a Section or Annex, such reference shall be to a Section of or Annex to this Agreement unless otherwise indicated. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Whenever the words “include,” “includes,” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms and the singular form of nouns and pronouns shall include the plural and vice versa. The phrases “the date of this Agreement,” “the date hereof” and terms of similar import, unless the context otherwise requires, shall be deemed to refer to the date set forth in the first paragraph of this Agreement. Unless otherwise indicated as a Business Day, the word “day” means a calendar day. Capitalized terms will have the meanings specified, applicable to both singular and plural forms, for all purposes of this Agreement. The Parties have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties and no presumption or burden of proof shall arise favoring or disfavoring any Party by virtue of the authorship of any of the provisions of this Agreement. The Parties intend that each representation, warranty, and covenant contained herein shall have independent significance.
SECTION 7.10 Severability. Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such
invalidity or unenforceability without rendering invalid or unenforceable the remaining terms and provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad as to be unenforceable, the provision shall be interpreted to be only so broad as is enforceable.
SECTION 7.11 Expenses. Other than the expenses of the Independent Accountant, each of the Parties shall bear the costs of his or its compliance with this Agreement.
[Remainder of Page Intentionally Left Blank.]
IN WITNESS WHEREOF, the Parties hereto have caused this Put/Call Agreement to be executed as of the Effective Date.
NICK:
NICHOLAS FINANCIAL, INC.
By: /s/ Jeff Royal
Name: Jeff Royal
Title: Chairman
AMPLEX HOLDINGS:
AMPLEX HOLDINGS, INC.
By: __/s/ Jeff Royal____________________________
Name: Jeff Royal
Title: Chairman
MR HOLDER:
/s/ Mark R. Radabaugh
MARK R. RADABAUGH
ANNEX A
Closing Adjusted EBITDA
An example of the calculation of the Closing Adjusted EBITDA is set forth below.
1
A-
4888-7933-3785.10 IF " DOCVARIABLE "SWDocIDLocation" " = "1" " DOCPROPERTY "SWDocID" 250319042v.10" ""
Agreed Adjustments:
•Costs and expenses related to regulatory consulting/employee (e.g., federal or state funding)
•Transaction costs and expenses related to acquisitions
•Transaction costs and expenses related to financings
•Costs and expenses related to strategic initiatives
•Allocated portion of services provided to Amplex Holdings and its subsidiaries by NICK. Generally, the Parties expect that the calculation of EBITDA will not include any asset, liability, or corporate or administrative overhead of or related to NICK or its Affiliates (provided neither Amplex nor its subsidiaries will be considered an Affiliate of NICK for these purposes) except as otherwise agreed upon by the Parties.
2
A-
4888-7933-3785.10 IF " DOCVARIABLE "SWDocIDLocation" " = "1" " DOCPROPERTY "SWDocID" 250319042v.10" ""
ANNEX B
Representations and Warranties of MR Holder
Except as set forth in writing in a Schedule timely delivered to NICK in connection with the exercise of an Option in compliance with the terms of the Put/Call Agreement (the “Agreement”) to which this Annex B is attached (each capitalized term not otherwise defined in the Annexes to the Agreement will have the meaning provided for it in the Agreement), by reference to the appropriate section, subsection or clause of this Annex B (the disclosure in such Schedule of any fact, circumstance or other event for any purpose shall constitute disclosure for all purposes, but only to the extent the relevance of such information to another section, subsection or clause is reasonably apparent in the section, subsection or clause of such Schedule on which such information is disclosed), MR Holder hereby represents and warrants to NICK, as of the date on which any Party exercises an Option set forth in the Agreement and on and as of the date of the applicable Option Closing, as follows:
1.01 Authority; No Violation; Consents.
(a) MR Holder has the full power, authority, and capacity to consummate the Option Closing and, to own and hold the [Put Shares/Call Shares] to be transferred to NICK by MR Holder hereunder.
(b) The consummation by MR Holder of the Option Closing will not (i) violate, conflict with, or result in a breach of any provisions of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration (which has not been expressly waived) under, any Contract to which MR Holder is a party or by which MR Holder or his [Put Shares/Call Shares] is bound or result in the creation of any Lien on the [Put Shares/Call Shares]; or (ii) violate any applicable Law.
(c) Each notice to, filing with, authorization of, exemption by, or consent or approval of, any Governmental Entity or any other third Person necessary for the consummation by MR Holder of the Option Closing is set forth on Schedule 1.01(c)(1) to this Annex B. Except as set forth on Schedule 1.01(c)(2) to this Annex B, no notice to, filing with, authorization of, exemption by, or consent or approval of, any Governmental Entity or other third Person that has not been obtained or made is necessary for the consummation by MR Holder of any of the transactions contemplated by this Agreement or the consummation of the Option Closing.
1.02 Title.
(a)MR Holder is the direct beneficial and record owner of, and has good and marketable title to, the [Put Shares/Call Shares] free and clear of all Liens other than those arising pursuant to Amplex Holdings’ Organizational Documents or applicable securities Laws. At the Option Closing, MR Holder will transfer to NICK all of the [Put Shares/Call Shares] free and clear of any Liens or adverse claims other than those arising pursuant to Amplex Holdings’ Organizational Documents or applicable securities Laws.
(b)Other than pursuant to this Agreement, Amplex Holdings’ Organizational Documents and as set forth on Schedule 1.02 to this Annex B, the [Put Shares/Call Shares] are not subject to any voting trust agreement or any Contract restricting or otherwise relating to the voting, dividend rights or disposition of such [Put Shares/Call Shares] and no Person has any outstanding or authorized option, warrant or other right relating to the sale or voting of such [Put Shares/Call Shares] or pursuant to which (i) MR Holder is or may become obligated to issue, sell, transfer or otherwise dispose of, redeem or acquire any such [Put Shares/Call Shares] or (ii) MR Holder has granted, or may be obligated to grant, a right to participate in the profits of Amplex Holdings.
1.03 No Actions, Suits or Proceedings. MR Holder is not a party to or bound by any, and there are no, Actions of any nature pending or, to the knowledge of MR Holder, threatened against MR Holder or any of his properties, assets or Affiliates, that challenge the validity or legality of consummation of the Option Closing or which seek to prevent the consummation of the Option Closing.
ANNEX C
Representations and Warranties of NICK
Except as set forth in writing in a Schedule timely delivered to MR Holder in connection with the exercise of an Option in compliance with the terms of the Put/Call Agreement (the “Agreement”) to which this Annex C is attached (each capitalized term not otherwise defined in the Annexes to the Agreement will have the meaning provided for it in the Agreement), by reference to the appropriate section, subsection or clause of this Annex C (the disclosure in such Schedule of any fact, circumstance or other event for any purpose shall constitute disclosure for all purposes, but only to the extent the relevance of such information to another section, subsection or clause is reasonably apparent in the section, subsection or clause of such Schedule on which such information is disclosed), NICK hereby represents and warrants to MR Holder, as of the date on which any Party exercises an Option set forth in the Agreement and on and as of the date of the applicable Option Closing, as follows:
1.01 Organization. NICK is validly existing and in good standing under the laws of the State of Delaware. NICK has all requisite corporate power and authority to carry on its business as it is now being conducted, to own, lease and operate all of its properties and assets, and is duly licensed or qualified to do business in each jurisdiction in which the nature of the business conducted by it or the character or location of the properties and assets owned, leased or operated by it makes such qualification or licensing necessary except for those jurisdictions where the failure to be so qualified or licensed would not, individually or in the aggregate, have a material adverse effect.
1.02 Authority; No Violation; Consents.
(a) NICK has all requisite corporate power, right and authority to consummate the Option Closing. The consummation of the Option Closing has been duly and validly approved by all requisite action on the part of NICK and no other proceedings on the part of NICK are necessary to consummate the Option Closing.
(b) The consummation by NICK of the Option Closing will not (i) violate, conflict with, or result in a breach of any provisions of, or constitute a default (or an event which, with notice or lapse of time or both, would constitute a default) under, or result in the termination of, or accelerate the performance required by, or result in a right of termination or acceleration (which has not been expressly waived), any Contract to which NICK is a party, (ii) violate any applicable Law, or (iii) violate any provision of the Organizational Documents of NICK.
(c) Each notice to, filing with, authorization of, exemption by, or consent or approval of, any Governmental Entity or any other third Person necessary for the consummation by NICK of the Option Closing is set forth on Schedule 1.02(c)(1) to this Annex C. Except as set forth on Schedule 1.02(c)(2) to this Annex C, no notice to, filing with, authorization of, exemption by, or consent or approval of, any Governmental Entity or other third Person that has not been obtained or made is necessary for the consummation by NICK of any of the transactions contemplated by this Agreement or the consummation of the Option Closing.
1.03 No Actions, Suits or Proceedings. NICK is not a party to or bound by any, and there are no, Actions of any nature pending or, to the knowledge of NICK, threatened against NICK or any of its subsidiaries, properties, assets, directors, officers, employees or Affiliates, that challenge the validity or legality of consummation of the Option Closing or which seek to prevent the consummation of the Option Closing.
ANNEX D
Form of Promissory Note and Pledge Agreement
SCHEDULE I
Average Maintenance CapEx
|
|
Account |
% Allocation |
|
|
Fixed Assets: |
|
Plant in Service |
|
14201 Wireless CPE - Post 10/2019 |
100% |
14300 MRS Equipment |
10% |
14940 Tower Site Network Equipment |
100% |
14950 Wireless AP/BH |
100% |
15100 Core Network |
15% |
15201 Automobiles - Post FYE 2022 |
20% |
15510 Towers |
100% |
EXHIBIT 10.3
STOCKHOLDERS AGREEMENT
THIS STOCKHOLDERS AGREEMENT (this “Agreement”), is made as of June 15, 2024, by and among Amplex Holdings, Inc., a Delaware corporation (the “Company”), Nicholas Financial, Inc., a Delaware corporation (“NICK”), and Mark R. Radabaugh (“MR Holder”), and any other Persons (as defined below) who become Stockholders (as defined below).
RECITALS
WHEREAS, NICK, MR Holder and Dale B. Beckmann are parties to that certain Share Purchase Agreement, date as of May 1, 2024 (the “Purchase Agreement”), pursuant to which NICK has agreed to purchase certain shares of capital stock of Amplex Electric, Inc. (“Amplex”) from MR Holder and Mr. Beckmann;
WHEREAS, concurrent with Closing (as defined in the Purchase Agreement), NICK has (i) converted the Outstanding NICK Debt (as defined in the Purchase Agreement) into 421 shares of common stock of Amplex at the Share Purchase Price (as that term is defined in the Purchase Agreement), and (ii) purchased 1,674 shares of common stock of Amplex at the Share Purchase Price for an aggregate purchase price of $3,000,0000 (collectively the “Additional NICK Closing Stock”);
WHEREAS, concurrent with Closing, (i) MR Holder contributed 421 shares of common stock of Amplex to Amplex pursuant to the terms of the Purchase Agreement (the “Amplex Contribution”) and (ii) thereafter, MR Holder and NICK each contributed their shares in Amplex for shares in the Company (the “Holdings Contribution,” collectively with the Amplex Contribution the “Contribution”), so that immediately following the Contribution and taking into account the Additional NICK Closing Stock, the Company holds 100% of the shares of Amplex stock, NICK holds 12,804 shares of Common Stock of the Company which constitutes 56.47% of all of the issued and outstanding shares of Common Stock of the Company, and MR Holder holds 9,869 shares of Common Stock of the Company, which constitutes 43.53% of all of the issued and outstanding shares of Common Stock of the Company immediately following the Contribution and taking into account the Additional NICK Closing Stock
WHEREAS, MR Holder and the Company desire to further induce NICK to purchase additional shares of Capital Stock;
WHEREAS, following the closing of the transactions contemplated in the Purchase Agreement and the Contribution, NICK and MR Holder will be the holders of all of the then outstanding shares of Capital Stock of the Company; and
WHEREAS, the Stockholders desire to promote their mutual interests and the interests of the Company by providing in this Agreement for the terms and conditions governing the transfer of shares of Capital Stock of the Company, the management and operation of the Company, and certain relations and other matters among the Stockholders;
NOW, THEREFORE, in consideration of the covenants and agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby mutually acknowledged, the parties hereto covenant and agree as follows:
1.Definitions. In addition to the capitalized terms defined elsewhere in this Agreement, the following capitalized terms shall have the meanings ascribed to them below.
1.1“Adjusted EBITDA” means for any period the sum of EBITDA for such period minus the Average Maintenance CapEx calculated consistent with the line items and methodology set forth on Schedule B attached hereto.
1.2“Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, Controls, is Controlled by, or is under common Control with such Person.
1.3“Amended Articles” means the Company’s Certificate of Incorporation, as amended and/or restated from time to time.
1.4“Average Maintenance CapEx” means the maintenance capital expenditures for the trailing twelve months for the applicable period based on the accounts and methodology (including the percentage allocations for each account) as identified and described on Schedule C attached hereto, or as otherwise agreed by NICK and MR Holder.
1.5“Board” means the board of directors of the Company.
1.6“Capital Stock” means (a) shares of Common Stock and Preferred Stock (whether now outstanding or hereafter issued in any context), (b) shares of Common Stock issued or issuable upon conversion of Preferred Stock, and (c) shares of Common Stock issued or issuable upon exercise or conversion, as applicable, of stock options, warrants or other convertible securities of the Company, in each case now owned or subsequently acquired by any Stockholder or its successors or permitted transferees or assigns. For purposes of the number of shares of Capital Stock held by a Stockholder (or any other calculation based thereon), any shares of Preferred Stock that may then be outstanding shall be deemed to have been converted into Common Stock at the then‑applicable conversion ratio.
1.7“Common Stock” means shares of Common Stock of the Company, par value $0.0001 per share.
1.8“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a Person (whether through ownership of securities or partnership or other ownership interests, or ownership or control of a general partner, manager, managing member or similar role, by contract or otherwise).
1.9“Deemed Liquidation Event” means (a) a merger, consolidation, statutory conversion, transfer, domestication, or continuance in which (i) the Company is a constituent party or (ii) a subsidiary of the Company is a constituent party and the Company issues shares of its Capital Stock pursuant to such merger, consolidation, statutory conversion, transfer, domestication, or continuance, or (b) (i) the sale, lease, transfer, exclusive license or other disposition, in a single transaction or series of related transactions, by the Company or any subsidiary of the Company of all or substantially all the assets of the Company and its subsidiaries taken as a whole, or (ii) the sale, lease, transfer, exclusive license or other disposition (whether by merger, consolidation, statutory conversion, domestication, continuance or otherwise, and whether in a single transaction or a series of related transactions) of one or more subsidiaries of the Company if substantially all of the assets of the Company and its subsidiaries taken as a whole are held by such subsidiary or subsidiaries, except where such sale, lease, transfer, exclusive license or other disposition is to a wholly owned subsidiary of the Company.
1.10“EBITDA” means, for any period, the net income of the Company and its subsidiaries before interest, taxes, depreciation, and amortization, calculated consistent with the line items and methodology set forth on Schedule B attached hereto.
1.11“Exempted Issuance” means an issuance of Capital Stock that is one of the following: (a) the issuance of Capital Stock under an equity incentive plan to an employee, director, or consultant to the Company, (b) the issuance of Capital Stock pursuant to or in consideration for the acquisition of another Person, business or assets by the Company or any of its ssubsidiaries, whether by purchase of stock, merger, consolidation, purchase of all or substantially all of the assets of such Person or otherwise, that has been approved by the Board, (c) the issuance of Capital Stock in connection with the Company’s initial public offering pursuant to an effective registration statement under the Securities Act (the “IPO”), (d) the issuance of Capital Stock to unaffiliated third-party lenders, including any equipment lessor or real property lessor, (e) the issuance of Capital Stock to unaffiliated suppliers or third party service providers in connection with the provision of goods or services, or (f) the issuance of Capital Stock in connection with a Sale of the Company (as defined in Section 5.1) to an unrelated third party.
1.12“Holding Company Sale” means an indirect Sale of the Company however structured (including through a purchase of Control of a Stockholder that is an entity or a parent of the Company or any of its subsidiaries), in one transaction or a series of related transactions, to a Person or group of Persons pursuant to which such Person or Persons acquire(s) Control of the Company; provided that a Holding Company Sale shall not include a proposed transfer of any capital stock of NICK (for the purposes of this sentence NICK being a public company and shall not include any successors or assigns of NICK).
1.13“New Securities” means, collectively, Capital Stock of the Company, whether or not currently authorized, as well as rights, options, or warrants to purchase such Capital Stock, or securities of any type whatsoever that are, or may become, convertible or exchangeable into or exercisable for such Capital Stock.
1.14“NICK Right of First Refusal” means the right, but not an obligation, of NICK, or its permitted transferees or assigns, to purchase some or all of the Transfer Stock with respect to a Proposed Transfer by MR Holder, on the terms and conditions specified in the Proposed Transfer Notice.
1.15“NICK ROFR Notice” means written notice from NICK notifying MR Holder that NICK intends to exercise its NICK Right of First Refusal as to some or all of the Transfer Stock with respect to any Proposed Transfer.
1.16“Person” means any individual, corporation, partnership, trust, limited liability company, association, or other entity.
1.17“Preferred Stock” means, collectively, all shares of Preferred Stock of the Company that may be issued and outstanding in the future.
1.18“Proposed Transfer” means any assignment, sale, offer to sell, pledge, mortgage, hypothecation, encumbrance, disposition of or any other like transfer or encumbering of any Transfer Stock (or any interest therein) whether directly or indirectly (including, any assignment, sale, offer to sell, pledge, mortgage, hypothecation, encumbrance, disposition of or any other like transfer of an interest in a parent company or any Stockholder that is an entity) proposed by any of the Stockholders; provided that a Proposed Transfer shall not include a proposed transfer of any capital stock of NICK (for the purposes of this sentence NICK being a public company and shall not include any successors or assigns of NICK).
1.19“Proposed Transfer Notice” means written notice from a Stockholder setting forth the terms and conditions of a Proposed Transfer.
1.20“Prospective Transferee” means any Person to whom a Stockholder proposes to make a Proposed Transfer.
1.21“Put/Call Agreement” means that certain Put/Call Agreement dated as of June 15, 2024 by and among the Company, NICK and MR Holder.
1.22“Right of Co-Sale” means the right, but not an obligation, of MR Holder to participate in a Proposed Transfer by NICK on the terms and conditions specified in the Proposed Transfer Notice.
1.23“Securities Act” means the Securities Act of 1933, as amended.
1.24“Stockholders” means the Persons named on Schedule A hereto, each Person to whom the rights of a Stockholder are assigned pursuant to Section 3.1, each Person who hereafter becomes a party to this Agreement pursuant to Section 9.9, and any one of them, as the context may require.
1.25“Transfer Stock” means shares of Capital Stock owned by a Stockholder as of the date hereof, or issued to a Stockholder after the date hereof (including, without limitation, in connection with any stock split, stock dividend, recapitalization, reorganization, or the like).
2.Agreement Among the Company and the Stockholders.
2.1NICK Right of First Refusal.
(a)Grant. Subject to the terms of Section 3 below, MR Holder hereby unconditionally and irrevocably grants to NICK the NICK Right of First Refusal to purchase all, but not less than all, of the Transfer Stock that MR Holder may propose to include in a Proposed Transfer, at the same price and on the same terms and conditions as those offered to the Prospective Transferee.
(b)Notice. If MR Holder proposes to make a Proposed Transfer, he must deliver a Proposed Transfer Notice to NICK not later than 45 days prior to the consummation of such Proposed Transfer. Such Proposed Transfer Notice shall contain the material terms and conditions (including price and form of consideration) of the Proposed Transfer, the identity of the Prospective Transferee and the intended date of the Proposed Transfer. To exercise its NICK Right of First Refusal under this Section 2, NICK must deliver a NICK ROFR Notice to MR Holder within 15 days after delivery of the Proposed Transfer Notice specifying the number of shares of Transfer Stock to be purchased by NICK. In the event of a conflict between this Agreement and the Put/Call Agreement, the Company, NICK and MR Holder acknowledge and agree that the terms of the Put/Call Agreement shall control.
(c)Forfeiture of Rights. Notwithstanding the foregoing, if the total number of shares of Transfer Stock that NICK has agreed to purchase in the NICK ROFR Notice is less than the total number of shares of Transfer Stock set forth in the Proposed Transfer Notice, then NICK shall be deemed to have forfeited any right to purchase any of such Transfer Stock set forth in the Proposed Transfer Notice, and MR Holder shall be free to sell all, but not less than all, of the Transfer Stock set forth in the Proposed Transfer Notice to the Prospective Transferee on terms and conditions substantially similar to (and in no event more favorable than) the terms and conditions set forth in the Proposed Transfer Notice, it being understood and agreed that (i) any such sale or transfer shall be subject to the other terms and restrictions of this Agreement, including, without limitation, the terms and restrictions set forth in Section 9.9(b); (ii) any future Proposed Transfer shall remain subject to the terms and conditions of this Agreement, including this Section 2; and (iii) such sale shall be consummated within 45 days after receipt of the Proposed Transfer Notice by NICK and, if such sale is not consummated within such 45-day period, such sale shall again become subject to the NICK Right of First Refusal on the terms set forth herein.
(d)Consideration; Closing. If the consideration proposed to be paid for the Transfer Stock is in property, services or other non-cash consideration, the fair market value of the consideration
shall be as determined in good faith by the Board and as set forth in the NICK ROFR Notice. If NICK for any reason cannot or does not wish to pay for the Transfer Stock in the same form of non-cash consideration, NICK may pay the cash value equivalent thereof, as determined in good faith by the Board and as set forth in the NICK ROFR Notice. The closing of the purchase of Transfer Stock by NICK shall take place, and all payments from NICK shall have been delivered to MR Holder, by the later of (i) the date specified in the Proposed Transfer Notice as the intended date of the Proposed Transfer; and (ii) 45 days after delivery of the Proposed Transfer Notice.
(a)Exercise of Right. If NICK proposes to make a Proposed Transfer of any Transfer Stock to a Prospective Transferee, MR Holder may elect to exercise its Right of Co-Sale and participate on a pro rata basis in the Proposed Transfer as set forth in Section 2.2(b) below and, subject to Section 2.2(d), otherwise on the same terms and conditions specified in the Proposed Transfer Notice. If NICK proposes to make a Proposed Transfer, it must deliver a Proposed Transfer Notice to MR Holder not later than 45 days prior to the consummation of such Proposed Transfer. Such Proposed Transfer Notice shall contain the material terms and conditions (including price and form of consideration) of the Proposed Transfer, the identity of the Prospective Transferee and the intended date of the Proposed Transfer. If MR Holder desires to exercise its Right of Co-Sale, it must give NICK written notice to that effect within 15 days after the delivery of the Proposed Transfer Notice specifying the number of shares of Transfer Stock to be sold by NICK, and upon giving such notice MR Holder shall be deemed to have effectively exercised the Right of Co-Sale. In the event of a conflict between this Agreement and the Put/Call Agreement, the Company, NICK and MR Holder acknowledge and agree that the terms of the Put/Call Agreement shall control.
(b)Shares Includable. MR Holder may include in the Proposed Transfer all or any part of its Capital Stock equal to the product obtained by multiplying (i) the aggregate number of shares of Transfer Stock subject to the Proposed Transfer by (ii) a fraction, the numerator of which is the number of shares of Transfer Stock owned by MR Holder immediately before consummation of the Proposed Transfer and the denominator of which is the total number of shares of Transfer Stock owned, in the aggregate, by MR Holder and NICK immediately prior to the consummation of the Proposed Transfer. To the extent MR Holder exercises such right of participation in accordance with the terms and conditions set forth herein, the number of shares of Transfer Stock that NICK may sell in the Proposed Transfer shall be correspondingly reduced. To the extent a Proposed Transfer is structured as an indirect Proposed Transfer, (i) “the aggregate number of shares of Transfer Stock subject to the Proposed Transfer” shall be the corresponding percentage of Transfer Stock then held directly and indirectly by NICK being sold in the Proposed Transfer and (ii) MR Holder shall be entitled to sell Transfer Stock to the Prospective Transferee pursuant to the terms of this Section 2.2 regardless of whether NICK is directly selling Transfer Stock to the Prospective Transferee.
(c)Purchase and Sale Agreement. MR Holder and NICK agree that the terms and conditions of any Proposed Transfer in accordance with this Section 2.2 will be memorialized in, and governed by, a written purchase and sale agreement with the Prospective Transferee (the “Purchase and Sale Agreement”) with customary terms and provisions for such a transaction, and MR Holder and NICK further covenant and agree to enter into such Purchase and Sale Agreement as a condition precedent to any sale or other transfer in accordance with this Section 2.2.
(d)Allocation of Consideration. The aggregate consideration payable to MR Holder and NICK shall be allocated based on the number of shares of Transfer Stock sold to the Prospective Transferee by each of MR Holder and NICK as provided in Section 2.2(b).
2.3Effect of Failure to Comply.
(a)Transfer Void; Equitable Relief. Any Proposed Transfer not made in compliance with the requirements of this Agreement shall be null and void ab initio, shall not be recorded on the books of the Company or its transfer agent and shall not be recognized by the Company. Each party hereto acknowledges and agrees that any breach of this Agreement would result in substantial harm to the other parties hereto for which monetary damages alone could not adequately compensate. Therefore, the parties hereto unconditionally and irrevocably agree that any non-breaching party hereto shall be entitled to seek protective orders, injunctive relief and other remedies available at law or in equity (including, without limitation, seeking specific performance or the rescission of purchases, sales and other transfers of Transfer Stock not made in strict compliance with this Agreement).
(b)Violation of First Refusal Right. If MR Holder becomes obligated to sell any Transfer Stock to NICK under this Agreement and fails to deliver such Transfer Stock in accordance with the terms of this Agreement, NICK may, at its option, in addition to all other remedies it may have, send to MR Holder the purchase price for such Transfer Stock as is herein specified and transfer to the name of NICK (or request that the Company effect such transfer in the name of NICK) on the Company’s books any certificates, instruments, or book entry representing the Transfer Stock to be sold.
(c)Violation of Co-Sale Right. If NICK purports to sell any Transfer Stock in contravention of the Right of Co-Sale or if any Prospective Transferee(s) refuse(s) to purchase securities subject to the Right of Co-Sale from MR Holder (a “Prohibited Transfer”), if MR Holder desires to exercise its Right of Co-Sale under Section 2.2 it may, in addition to such remedies as may be available by law, in equity or hereunder, require NICK to purchase from MR Holder the type and number of shares of Transfer Stock that MR Holder would have been entitled to sell to the Prospective Transferee had the Prohibited Transfer been effected in compliance with the terms of Section 2.2. The sale will be made on the same terms and subject to the same conditions as would have applied had NICK not made the Prohibited Transfer, except that the sale (including, without limitation, the delivery of the purchase price) must be made within 90 days after MR Holder learns of the Prohibited Transfer, as opposed to the timeframe proscribed in Section 2.2. NICK shall also reimburse MR Holder for any and all reasonable and documented out-of-pocket fees and expenses, including reasonable legal fees and expenses, incurred pursuant to the exercise or the attempted exercise of MR Holder’s rights under Section 2.2.
2.4Legend. Each certificate, instrument, or book entry representing shares of Transfer Stock held by the Stockholders or issued to any permitted transferee in connection with a transfer permitted by Section 3.1 hereof shall be notated with the following legend:
“THE SALE, PLEDGE, HYPOTHECATION, OR TRANSFER OF THE SECURITIES REPRESENTED HEREBY IS SUBJECT TO, AND IN CERTAIN CASES PROHIBITED BY, THE TERMS AND CONDITIONS OF A CERTAIN STOCKHOLDERS AGREEMENT BY AND AMONG THE CORPORATION AND THE STOCKHOLDERS OF THE CORPORATION. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION.”
3.1Exempt Transfers. Notwithstanding the foregoing or anything to the contrary herein, the provisions of Sections 2.1 and 2.2 shall not apply (a) in the case of a Stockholder that is an entity, upon a transfer by such Stockholder to its stockholders, members, partners or other equity holders or to a direct or indirect wholly owned subsidiary of such Stockholder, or (b) in the case of a Stockholder that is a natural
person, upon a transfer of Transfer Stock by such Stockholder made for bona fide estate planning purposes, either during such person’s lifetime or on death by will or intestacy to such person’s spouse, including any life partner or similar statutorily-recognized domestic partner, child (natural or adopted), or any other direct lineal descendant of such Stockholder (or such person’s spouse, including any life partner or similar statutorily-recognized domestic partner) (all of the foregoing collectively referred to as “family members”), or any custodian or trustee of any trust, partnership, limited liability company or other corporate entity for the benefit of, or the ownership interests of which are owned wholly by such Stockholder or any such family members; provided that in the case of clause(s) (a) or (b), the Stockholder shall deliver prior written notice to the Company of such pledge, gift or transfer and such shares of Transfer Stock shall at all times remain subject to the terms and restrictions set forth in this Agreement and such transferee shall, as a condition to such transfer, deliver a counterpart signature page to this Agreement as confirmation that such transferee shall be bound by all the terms and conditions of this Agreement as a Stockholder (but only with respect to the securities so transferred to the transferee), including the obligations of a Stockholder with respect to Proposed Transfers of such Transfer Stock pursuant to Section 2; and provided further in the case of any transfer pursuant to clause (a) or (b) above, that such transfer is made pursuant to a transaction in which there is no consideration actually paid for such transfer.
4.Voting Provisions Regarding the Board.
4.1Board Composition. Each Stockholder agrees to vote, or cause to be voted, all shares of Transfer Stock owned by such Stockholder, or over which such Stockholder has voting control, from time to time and at all times, in whatever manner as shall be necessary to ensure that at each annual or special meeting of stockholders at which an election of directors is held or pursuant to any written consent of the stockholders, the following persons shall be elected to the Board:
(a)As Directors, at least two persons designated from time to time by NICK, for so long as NICK and its Affiliates (i) continue to beneficially own any shares of Transfer Stock, which individuals as of the date of this Agreement are Jeff Royal and Brendan Keating; and
(b)As a Director, one individual who is designated by MR Holder, for so long as MR Holder holds at least 158 shares of Transfer Stock, which individual as of the date of this Agreement is Mark R. Radabaugh.
For clarity, to the extent that the election of a Director pursuant to any of foregoing clauses (a) and (b) above shall not be applicable, any member of the Board who would otherwise have been designated in accordance with the terms thereof shall instead be voted upon by all the stockholders of the Company entitled to vote thereon in accordance with, and pursuant to, the Amended Articles.
4.2Failure to Designate a Director Candidate; Vacancies. In the absence of any designation from the Person(s) with the right to designate a director as specified above, the individual then serving in such director position shall be reelected if willing to serve unless such individual has been removed as provided herein, and otherwise such Board seat shall remain vacant until filled as provided above. Similarly, in the absence of the requisite approval of the Board and/or the Company’s stockholders, as applicable, of an individual to serve as a director as specified above, the individual then serving in such director position shall be reelected if willing to serve unless such individual has been removed as provided herein, and otherwise such Board seat shall remain vacant until filled as provided above. Any vacancies created by the resignation, removal or death of a director elected pursuant to Section 4.1 shall be filled only pursuant to the provisions of this Section 4.2.
4.3Removal of Board Members. Each Stockholder also agrees to vote, or cause to be voted, all shares of Transfer Stock owned by such Stockholder, or over which such Stockholder has voting control, from time to time and at all times, in whatever manner as shall be necessary to ensure that:
(a)a director elected or serving pursuant to Section 4.1, or reelected pursuant to Section 4.2, shall be promptly removed from office upon the written request of any Person(s) who would be entitled to designate a replacement for such director pursuant to Section 4.1 to remove such director; and
(b)no director elected or serving pursuant to Section 4.1, or reelected pursuant to Section 4.2, may be removed from office unless (i) such removal is made in accordance with Section 4.3(a); or (ii) the applicable subsection of Section 4.1 is no longer in effect pursuant to its terms.
4.4Stockholder Action. All Stockholders agree to execute any written consents required to perform the obligations of this Section 4, and the Company agrees to call a special meeting of stockholders for the purpose of electing, removing or replacing directors upon the written request of any Person entitled to designate a director pursuant to Section 4.1.
4.5No Liability for Election of Designated or Approved Directors. No Stockholder, nor any Affiliate of any Stockholder, shall have any liability as a result of designating or approving a person for election as a director for any act or omission by such designated or approved person in such person’s capacity as a director of the Company, nor shall any Stockholder have any liability as a result of voting for any such designee in accordance with the provisions of this Agreement.
5.1Definitions. A “Sale of the Company” means: (a) a transaction or series of related transactions in which a Person, or a group of related Persons, acquires from stockholders of the Company shares representing more than 50% of the out standing voting power of the Company (a “Stock Sale”); (b) a transaction that qualifies as a Deemed Liquidation Event; or (c) a transaction that qualifies as a Holding Company Sale.
5.2Actions to be Taken. Subject to Section 6, in the event that NICK approves a Sale of the Company (which approval must be in writing and comply with Section 6), specifying that this Section 5 shall apply to such transaction, then, subject to satisfaction of each of the conditions set forth in Section 5.3 below, each Stockholder and the Company hereby agree:
(a)if such transaction requires stockholder approval, with respect to all shares of Transfer Stock that such Stockholder owns or over which such Stockholder otherwise exercises voting power, to vote (in person, by proxy or by action by written consent, as applicable) all shares of Transfer Stock in favor of, and approve, such Sale of the Company (together with any related amendment or restatement to the Amended Articles required to implement such Sale of the Company) and the related definitive agreement(s) pursuant to which the Sale of the Company is to be consummated and to vote in opposition to any and all other proposals that could delay or impair the ability of the Company to consummate such Sale of the Company;
(b)if such transaction is a Stock Sale, to sell the same proportion of shares of Transfer Stock of the Company beneficially held by such Stockholder as is being sold by NICK to the Person to whom NICK proposes to sell its shares of Transfer Stock, and, except as permitted in Section 5.3 below, on the same terms and conditions as the other stockholders of the Company;
(c)to execute and deliver all related documentation and take such other action in support of the Sale of the Company as shall reasonably be requested by the Company or NICK in order to carry out the terms and provision of this Section 5, including, without limitation, (i) executing and delivering instruments of conveyance and transfer, and any purchase agreement, merger agreement, any associated indemnity agreement, any reasonably customary release agreement in the capacity of a securityholder, termination of investment related documents, accredited investor forms, documents evidencing the removal of board designees as power of attorneys or escrow agreement, any associated voting, support, or joinder agreement, consent, waiver, governmental filing, share certificates duly endorsed for transfer (free and clear of impermissible liens, claims and encumbrances), and any similar or related documents and (ii) providing any information reasonably necessary for any public filings with the Securities and Exchange Commission in connection with the Sale of the Company;
(d)not to deposit, and to cause their Affiliates not to deposit, except as provided in this Agreement, any shares of Transfer Stock owned by such party or Affiliate in a voting trust or subject any shares of Transfer Stock to any arrangement or agreement with respect to the voting of such shares, unless specifically requested to do so by the acquirer in connection with the Sale of the Company;
(e)to refrain from (i) exercising any dissenters’ rights or rights of appraisal under applicable law at any time with respect to such Sale of the Company, or (ii) asserting any claim or commencing, joining or participating in any way (including, without limitation, as a member of a class in any action, suit or proceeding challenging the Sale of the Company, this Agreement, consummation of the transactions contemplated in connection with the Sale of the Company or this Agreement), challenging the validity of, or seeking to enjoin the operation of, or the definitive agreement(s) with respect to such Sale of the Company;
(f)if the consideration to be paid in exchange for the shares of Transfer Stock pursuant to this Section 5 includes any securities and due receipt thereof by any Stockholder would require under applicable law (i) the registration or qualification of such securities or of any person as a broker or dealer or agent with respect to such securities; or (ii) the provision to any Stockholder of any information other than such information as a prudent issuer would generally furnish in an offering made solely to “accredited investors” as defined in Regulation D promulgated under the Securities Act, the Company may cause to be paid to any such Stockholder in lieu thereof, against surrender of the shares which would have otherwise been sold by such Stockholder, an amount in cash equal to the fair value (as determined in good faith by the Board) of the securities which such Stockholder would otherwise receive as of the date of the issuance of such securities in exchange for the shares; and
(g)in the event that NICK, in connection with such Sale of the Company, appoints a stockholder representative (the “Stockholder Representative”) with respect to matters affecting the Stockholders under the applicable definitive transaction agreements following consummation of such Sale of the Company, (i) to consent to (A) the appointment of such Stockholder Representative, (B) the establishment of any applicable escrow, expense or similar fund in connection with any indemnification or similar obligations, and (C) the payment of such Stockholder’s pro rata portion (from the applicable escrow or expense fund or otherwise) of any and all reasonable fees and expenses to such Stockholder Representative in connection with such Stockholder Representative’s services and duties in connection with such Sale of the Company and its related service as the representative of the Stockholders, and (ii) not to assert any claim or commence any suit against the Stockholder Representative or any other Stockholder with respect to any action or inaction taken or failed to be taken by the Stockholder Representative, within the scope of the Stockholder Representative’s authority, in connection with its service as the Stockholder Representative, absent gross negligence or willful misconduct.
5.3Conditions. Notwithstanding anything to the contrary set forth herein, a Stockholder will not be required to comply with Section 5.2 above in connection with any proposed Sale of the Company (the “Proposed Sale”), unless:
(a)any representations and warranties to be made by such Stockholder in connection with the Proposed Sale are limited to representations and warranties related to authority, ownership and the ability to convey title to such shares, including, but not limited to, representations and warranties that (i) the Stockholder holds all right, title and interest in and to the shares such Stockholder purports to hold, free and clear of all liens and encumbrances, (ii) the obligations of the Stockholder in connection with the transaction have been duly authorized, if applicable, (iii) the documents to be entered into by the Stockholder have been duly executed by the Stockholder and delivered to the acquirer and are enforceable (subject to customary limitations) against the Stockholder in accordance with their respective terms; and (iv) neither the execution and delivery of documents to be entered into by the Stockholder in connection with the transaction, nor the performance of the Stockholder’s obligations thereunder, will cause a breach or violation of the terms of any agreement (including the Company’s or such Stockholder’s organizational documents) to which the Stockholder is a party, or any law or judgment, order or decree of any court or governmental agency that applies to the Stockholder;
(b)such Stockholder is not required to agree (unless such Stockholder is a Company officer, director, or employee) to any restrictive covenant in connection with the Proposed Sale (including, without limitation, any covenant not to compete or covenant not to solicit customers, employees or suppliers of any party to the Proposed Sale) or any release of claims other than a release in customary form of claims arising solely in such Stockholder’s capacity as a stockholder of the Company;
(c)such Stockholder and its Affiliates are not required to amend, extend or terminate any contractual or other relationship with the Company, the acquirer or their respective Affiliates, except that the Stockholder may be required to agree to terminate the investment-related documents between or among such Stockholder, the Company and/or other stockholders of the Company;
(d)the Stockholder is not liable for the breach of any representation, warranty or covenant made by any other Person in connection with the Proposed Sale, other than the Company (except to the extent that funds may be paid out of an escrow established to cover breach of representations, warranties and covenants of the Company as well as breach by any stockholder of any of identical representations, warranties and covenants provided by all stockholders);
(e)liability shall be limited to such Stockholder’s applicable share (determined based on the respective proceeds payable to each Stockholder in connection with such Proposed Sale in accordance with the provisions of the Amended Articles) of a negotiated aggregate indemnification amount that in no event exceeds the amount of consideration otherwise payable to such Stockholder in connection with such Proposed Sale in such person’s capacity as a stockholder of the Company, except with respect to claims related to fraud by such Stockholder, the liability for which need not be limited as to such Stockholder; and
(f)upon the consummation of the Proposed Sale (i) each holder of each class or series of the Capital Stock of the Company will receive the same form of consideration for their shares of such class or series as is received by other holders in respect of their shares of such same class or series of stock, and if any holders of any Capital Stock of the Company are given a choice as to the form of consideration to be received as a result of the Proposed Sale, all holders of such Capital Stock will be given the same option, and (ii) each holder of Common Stock will receive the same amount of consideration per share of Common Stock as is received by other holders in respect of their shares of Common Stock; provided, however, that, notwithstanding the foregoing provisions of this Section 5.3(f), if the consideration to be
paid in exchange for any shares of the Capital Stock held by the Stockholder pursuant to this Section 5.3(f) includes any securities and due receipt thereof by any Stockholder would require under applicable law (A) the registration or qualification of such securities or of any person as a broker or dealer or agent with respect to such securities; or (B) the provision to any Stockholder of any information other than such information as a prudent issuer would generally furnish in an offering made solely to “accredited investors” as defined in Regulation D promulgated under the Securities Act, the Company may cause to be paid to any such Stockholder in lieu thereof, against surrender of such shares held by the Stockholder, which would have otherwise been sold by such Stockholder, an amount in cash equal to the fair value (as determined in good faith by the Board) of the securities which such Stockholder would otherwise receive as of the date of the issuance of such securities in exchange for the shares held by the Stockholder.
5.4Sale of the Company to an Affiliate. Further, notwithstanding anything to the contrary set forth herein, a Stockholder will not be required to comply with Section 5.2 above in connection with any Proposed Sale the result of which is NICK or its Affiliates will continue to represent, or are converted into or exchanged for shares of capital stock or other equity interests that represent, immediately following such merger, consolidation, statutory conversion, transfer, domestication, or continuance, a majority of the capital stock or other equity interests of (a) the surviving or resulting corporation or other entity; or, (b) if the surviving or resulting corporation or entity is a wholly owned subsidiary of another corporation or entity immediately following such merger, consolidation, statutory conversion, transfer, domestication, or continuance, the parent corporation or other entity of such surviving or resulting corporation or other entity unless the organizational documents of such surviving or resulting corporation or entity, as appropriate, provides that the rights and obligations hereunder continue to apply in accordance with the terms hereof and such surviving or resulting corporation or entity and owners thereof, as applicable, assumes the obligations hereunder.
6.1At any time when MR Holder holds any shares of Transfer Stock, the Company shall not, without the written consent or affirmative vote of each of NICK and MR Holder (in addition to any other vote required by law or pursuant to the Amended Articles), either directly or indirectly whether by amendment, merger, consolidation, domestication, transfer, continuance, recapitalization, reclassification, waiver, statutory conversion, or otherwise effect any of the following acts or transactions (and any such act or transaction that has not been approved by such consent or vote prior to such act or transaction being effected shall be null and void ab initio, and of no force or effect):
(a)create or issue, or obligate itself to issue, shares of any Capital Stock to any Stockholder or any of its Affiliates or reclassify any Transfer Stock held by any Stockholder or any of its Affiliates unless the same ranks junior or pari passu to the Common Stock then held by the Stockholders with respect to rights, preferences and privileges (the “Reclassified Stock”);
(b)cause any direct or indirect subsidiary of the Company to issue, or obligate such subsidiary to issue, any securities to any Stockholder or any of its Affiliates;
(c)issue, or obligate itself to issue, any debt security to any Stockholder or any of its Affiliates or otherwise incur any indebtedness for borrowed money from any Stockholder or any of its Affiliates, or permit any subsidiary to take any such action with respect to any debt security or other indebtedness for borrowed money;
(d)effect a Sale of the Company to any Stockholder or any of its Affiliates the effect of which results in such Stockholder or any of its Affiliates owning all outstanding Transfer Stock held by
any other Stockholders (or otherwise squeezing out any other Stockholders) or which is otherwise not in compliance with the terms of this Agreement;
(e)change the number of votes entitled to be cast by any director or directors on any matter;
(f) purchase or redeem (or permit any subsidiary to purchase or redeem) any Transfer Shares held by any Stockholder or its Affiliates;
(g)pay or declare any dividend or make any distribution on any shares of Reclassified Stock unless a corresponding dividend or distribution is made on the Common Stock at the same time;
(h)liquidate, dissolve or wind-up the business and affairs of the Company or any subsidiary of the Company; or
(i)enter into any agreement, or otherwise commit, to do any of the foregoing.
7.Future Stock Issuances.
7.1Right of First Offer. Subject to the terms and conditions of this Section 7.1 and applicable securities laws, if the Company proposes to offer or sell any New Securities, the Company shall first offer such New Securities to each Stockholder.
(a)The Company shall give notice (the “Offer Notice”) to each Stockholder, stating (i) its bona fide intention to offer such New Securities, (ii) the number of such New Securities to be offered, and (iii) the price and terms, if any, upon which it proposes to offer such New Securities, which such price shall be determined as provided in Section 7.2.
(b)By notification to the Company within 20 days after the Offer Notice is given, each Stockholder may elect to purchase or otherwise acquire, at the price and on the terms specified in the Offer Notice, up to that portion of such New Securities which equals the proportion that the Transfer Stock then held by such Stockholder bears to the total Common Stock of the Company then outstanding (assuming full conversion and/or exercise, as applicable, of all Preferred Stock and any other derivative securities then outstanding). At the expiration of such 20-day period, the Company shall promptly notify each Stockholder that elects to purchase or acquire all the shares available to it (each, a “Fully Exercising Stockholder”) of any other Stockholder’s failure to do likewise. During the ten-day period commencing after the Company has given such notice, each Fully Exercising Stockholder may, by giving notice to the Company, elect to purchase or acquire, in addition to the number of shares specified above, up to that portion of the New Securities for which Stockholders were entitled to subscribe but that were not subscribed for by the Stockholders which is equal to the proportion that the Transfer Stock issued and held by such Fully Exercising Stockholder bears to the Transfer Stock issued and held by all Fully Exercising Stockholders who wish to purchase such unsubscribed shares. The closing of any sale pursuant to this Section 7.1(b) shall occur within the later of 90 days of the date that the Offer Notice is given and the date of initial sale of New Securities pursuant to Section 7.1(c).
(c)If all New Securities referred to in the Offer Notice are not elected to be purchased or acquired as provided in Section 7.1(b), the Company may, during the 90-day period following the expiration of the periods provided in Section 7.1(b), offer and sell the remaining unsubscribed portion of such New Securities to any Person or Persons at a price not less than, and upon terms no more favorable to the offeree than, those specified in the Offer Notice. If the Company does not enter into an agreement for the sale of the New Securities within such period, or if such agreement is not consummated within 30 days
of the execution thereof, the right provided hereunder shall be deemed to be revived and such New Securities shall not be offered unless first reoffered to the Stockholders in accordance with this Section 7.1.
(d)Notwithstanding any provision hereof to the contrary, in lieu of complying with the provisions of this Section 7.1, the Company may elect to give notice to the Stockholders within 30 days after the issuance of New Securities. Such notice shall describe the type, price, and terms of the New Securities. Each Stockholder shall have 20 days from the date notice is given to elect to purchase up to the number of New Securities that would, if purchased by such Stockholder, maintain such Stockholder’s percentage ownership position, calculated as set forth in Section 7.1(b) before giving effect to the issuance of such New Securities.
(e)The right of first offer in this Section 7.1 shall not be applicable to (i) an Exempted Issuance; or (ii) issuance of Additional NICK Closing Stock.
7.2Determination of Price. The price for any issuance of New Securities after the date hereof shall be determined by dividing (A) ten (10) multiplied by the Adjusted EBITDA for the twelve (12) months immediately prior to the date of the Offer Notice, by (B) the number of fully diluted shares of the Company outstanding immediately prior to the date of the Offer Notice.
8.1Financial Statements. During the term of this Agreement the Company shall deliver to each of the Stockholders who continue to hold Transfer Stock (the “Financial Statements”):
(i)within 30 days of the end of each month, an unaudited consolidated balance sheet of the Company and its subsidiaries for, and as of, the end of such month, an unaudited consolidated statement of operations, prepared in accordance with GAAP, in reasonable detail with comparisons of the financial results against the Company and its subsidiaries’ budget for that financial period and the Company and its subsidiaries’ financial results for the corresponding period of the previous year, and an updated capitalization table as of the date of such statements; and
(ii)within 45 days after the end of each fiscal quarter, unaudited consolidated statements of income or operations of the Company and its subsidiaries for such quarterly period, and unaudited consolidated balance sheets of the Company and its subsidiaries as of the end of such quarterly period, setting forth comparisons to the corresponding period in the preceding fiscal period, and all such statements shall be prepared in accordance with GAAP, consistently applied (except for normal year-end audit adjustments for recurring accruals and the absence of footnotes with respect thereto).
9.1Term. This Agreement shall automatically terminate upon the earlier of (a) immediately prior to the consummation of the Company’s IPO, (b) the consummation of a Sale of the Company to an unaffiliated third party and distribution of proceeds to or escrow for the benefit of the Stockholders, and (c) the date upon which MR Holder no longer holds any shares of Transfer Stock, provided that the provisions of Section 5 hereof will continue after the closing of any Sale of the Company to the extent necessary to enforce the provisions of Section 5 with respect to such Sale fof the Company.
9.2Stock Split. All references to numbers of shares in this Agreement shall be appropriately adjusted to reflect any stock dividend, split, combination or other recapitalization affecting the Capital Stock occurring after the date of this Agreement.
9.3Ownership. Each Stockholder represents and warrants that such Stockholder is the sole legal and beneficial owner of the shares of Transfer Stock subject to this Agreement and that no other Person has any interest in such shares (other than a community property interest as to which the holder thereof has acknowledged and agreed in writing to the restrictions and obligations hereunder).
The parties (a) hereby irrevocably and unconditionally submit to the jurisdiction of the state courts of Ohio and to the jurisdiction of the United States District Court for the Northern District of Ohio for the purpose of any suit, action or other proceeding arising out of or based upon this Agreement, (b) agree not to commence any suit, action or other proceeding arising out of or based upon this Agreement except in the state courts of Ohio or the United States District Court for the Northern District of Ohio, and (c) hereby waive, and agree not to assert, by way of motion, as a defense, or otherwise, in any such suit, action or proceeding, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, 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 Agreement or the subject matter hereof may not be enforced in or by such court.
Each of the parties to this Agreement consents to personal jurisdiction for any equitable action sought in the U.S. District Court for the Northern District of Ohio or any court of the State of Ohio having subject matter jurisdiction.
Waiver of Jury Trial: EACH PARTY HEREBY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT, THE OTHER TRANSACTION AGREEMENTS, THE SECURITIES OR THE SUBJECT MATTER HEREOF OR THEREOF. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS, TORT CLAIMS (INCLUDING NEGLIGENCE), BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. THIS SECTION HAS BEEN FULLY DISCUSSED BY EACH OF THE PARTIES HERETO AND THESE PROVISIONS WILL NOT BE SUBJECT TO ANY EXCEPTIONS. EACH PARTY HERETO HEREBY FURTHER WARRANTS AND REPRESENTS THAT SUCH PARTY HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL, AND THAT SUCH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.
(a)All notices and other communications given or made pursuant to this Agreement shall be in writing (including electronic mail as permitted in this Agreement) and shall be deemed effectively given upon the earlier of actual receipt or (i) personal delivery to the party to be notified, (ii) when sent, if sent by electronic mail during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, (iii) five days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (iv) one business day after deposit with a nationally recognized overnight courier, freight prepaid, specifying next business day delivery, with written verification of receipt. All communications shall be sent to the respective parties at their address as set forth on Schedule A hereof or to such email address or address as subsequently modified by written notice given in accordance with this Section 9.5. If notice is given to the Company, it shall be sent to the Company at Nicholas Financial, Inc., 26133 US 19 North, Suite 300 Clearwater, Florida 3763 Attn: Jeff
Royal; and a copy (which copy shall not constitute notice) shall also be sent to Kutak Rock LLP, the Omaha Building, 1650 Farnam Street, Omaha, NE 68102 Attn: Anthony Scioli, anthony.scioli@kutakrock.com.
(b)Consent to Electronic Notice. Each party to this Agreement consents to the delivery of any stockholder notice by electronic mail at the electronic mail address set forth below such party’s name on the Schedules hereto, as updated from time to time by notice to the Company, or as on the books of the Company. To the extent that any notice given by means of electronic mail is returned or undeliverable for any reason, the foregoing consent shall be deemed to have been revoked until a new or corrected electronic mail address has been provided, and such attempted electronic notice shall be ineffective and deemed to not have been given. Each party to this Agreement agrees to promptly notify the Company of any change in its electronic mail address, and that failure to do so shall not affect the foregoing.
9.6Entire Agreement. This Agreement (including the Exhibits and Schedules hereto) together with the Put/Call Agreement constitute the full and entire understanding and agreement among the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between or among any of the parties are expressly canceled.
9.7Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.
9.8Amendment; Waiver and Termination. This Agreement may be amended, modified or terminated (other than pursuant to Section 9.1 above) and the observance of any term hereof may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a written instrument executed by (a) the Company, (b) NICK, and (c) MR Holder. Any amendment, modification, termination or waiver so effected shall be binding upon the Company, the Stockholders and all of their respective successors and permitted assigns whether or not such party, assignee or other shareholder entered into or approved such amendment, modification, termination or waiver. Notwithstanding the foregoing:
(a)the provisions of Section 4.1(a) and this Section 9.8(a) may not be amended, modified, terminated or waived without the written consent of NICK for so long as NICK continues to have rights pursuant to Section 4.1(a); and
(b)the provisions of Section 4.1(b) and this Section 9.8(b) may not be amended, modified, terminated or waived without the written consent of MR Holder for so long as MR Holder continues to have rights pursuant to Section 4.1(b).
The Company shall give prompt written notice of any amendment, modification or termination hereof or waiver hereunder to any party hereto that did not consent in writing to such amendment, modification, termination or waiver. No waivers of or exceptions to any term, condition or provision of this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.
(a)The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and permitted assigns of the parties; provided, however, that the rights to designate members of the Board in Sections 4.1(a)-(b) are nontransferable (and shall not be binding upon or inure to the benefit of successors and assigns) other than pursuant to an amendment effected in accordance with Section 9.8 above. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
(b)Any successor or permitted assignee of any Stockholder, including any Prospective Transferee who purchases shares of Transfer Stock in accordance with the terms hereof, shall deliver to the Company, as a condition to any transfer or assignment, a counterpart signature page hereto pursuant to which such successor or permitted assignee shall confirm their agreement to be subject to and bound by all of the provisions set forth in this Agreement that were applicable to the predecessor or assignor of such successor or permitted assignee.
(c)Except in connection with an assignment by the Company by operation of law to the acquirer of the Company, the rights and obligations of the Company hereunder may not be assigned under any circumstances.
9.10Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.
9.11Manner of Voting. The voting of shares of Transfer Stock pursuant to this Agreement may be effected in person, by proxy, by written consent or in any other manner permitted by applica ble law. For the avoidance of doubt, voting of the shares pursuant to the Agreement need not make explicit reference to the terms of this Agreement.
9.12Governing Law. This Agreement shall be governed by the internal law of the State of Ohio, without regard to conflict of law principles that would result in the application of any law other than the law of the State of Delaware.
9.13Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
9.14Counterparts. 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. Counterparts may be delivered via electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective as originals for all purposes.
9.15Aggregation of Stock. All shares of Transfer Stock held or acquired by Affiliates shall be aggregated together for the purpose of determining the availability of any rights under this Agreement and such Affiliates may apportion such rights as among themselves in any manner they deem appropriate.
9.16Specific Performance. In addition to any and all other remedies that may be available at law in the event of any breach of this Agreement, each Stockholder shall be entitled to specific performance
of the agreements and obligations of the Company and the other Stockholders hereunder and to such other injunction or other equitable relief as may be granted by a court of competent jurisdiction.
9.17Costs of Enforcement. The prevailing party shall be entitled to reasonable attorney’s fees, costs, and necessary disbursements in addition to any other relief to which such party may be entitled.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have executed this Stockholders Agreement as of the date first written above.
COMPANY: AMPLEX HOLDINGS, INC.
By: /s/ Jeff Royal
Name: Jeff Royal
Title: Chairman
STOCKHOLDERS: MR HOLDER:
Signature: /s/ Mark Radabaugh
Name: Mark R. Radabaugh
NICK:
NICHOLAS FINANCIAL, INC.
By: /s/ Jeff Royal
Name: Jeff Royal
Title: Chairman
SCHEDULE A
STOCKHOLDERS
|
Nicholas Financial, Inc. 26133 US 19 North, Suite 300 Clearwater, Florida 33763 Attention: Jeff Royal, Chairman E-mail: jroyal@dundeebanking.com with a copy (which shall not constitute notice) to: Kutak Rock LLP The Omaha Building 1650 Farnam Street Omaha, Nebraska 68102 Attention: Anthony D. Scioli and James Creigh E-mail: anthony.scioli@kutakrock.com and james.creigh@kutakrock.com |
Mark R. Radabaugh 22690 Pemberville Rd Luckey, Ohio 43443 E-mail: mark@amplex.net with a copy (which shall not constitute notice) to: Wilkinson Barker Knauer LLP 2138 W 32nd Avenue, Suite 300 Denver, Colorado 80211 Attention: Amy Fliam E-mail: afliam@wbklaw.com |
SCHEDULE B
ADJUSTED EBITDA
An example of the calculation of the Adjusted EBITDA is set forth below.
SCHEDULE C
AVERAGE MAINTENANCE CAPEX
|
|
Account |
% Allocation |
|
|
Fixed Assets: |
|
Plant in Service |
|
14201 Wireless CPE - Post 10/2019 |
100% |
14300 MRS Equipment |
10% |
14940 Tower Site Network Equipment |
100% |
14950 Wireless AP/BH |
100% |
15100 Core Network |
15% |
15201 Automobiles - Post FYE 2022 |
20% |
15510 Towers |
100% |
EXHIBIT 10.4
NON-COMPETITION AGREEMENT
THIS NON-COMPETITION AGREEMENT (this “Agreement”) is entered into on this 15 day of June, 2024 (the “Effective Date”), by and between Nicholas Financial, Inc., a Delaware corporation (the “Buyer”), and Mark R. Radabaugh (the “Restricted Party”).
WHEREAS, Amplex Electric, Inc., an Ohio corporation (the “Company”), Mark R. Radabaugh, Dale B. Beckmann, and the Buyer have entered into that certain Share Purchase Agreement dated as of May 1, 2024 (the “Purchase Agreement”; all capitalized terms used but not defined in this Agreement shall have the meanings assigned to them in the Purchase Agreement), pursuant to which the Buyer will acquire fifty-one percent (51%) capital stock of the Company, as more specifically set forth in the Purchase Agreement (the “Acquisition”); and
WHEREAS, the Restricted Party is an executive officer, employee and/or an equity holder of the Company; and
WHEREAS, through the Restricted Party’s service with the Company as an employee, director and/or officer and/or through the Restricted Party’s equity ownership of the Company, the Restricted Party has formed relationships with the Company’s customers and has extensive knowledge of the Company’s operations, finances, and marketing; and
WHEREAS, as a result of the Acquisition, and pursuant to the terms of the Purchase Agreement, the Restricted Party acknowledges that the Restricted Party will receive from the Buyer significant direct or indirect financial and other benefits from the purchase of the capital stock of the Company by the Buyer pursuant to the Purchase Agreement; and
WHEREAS, as consideration for the Buyer’s obligation to proceed with the Acquisition, and in order to preserve the value of the business of the Company being acquired by the Buyer after the Acquisition, the Buyer and the Restricted Party are entering into this Agreement and this Agreement shall become effective as of the Closing Date (the “Effective Date”);
NOW, THEREFORE, in consideration of the mutual promises made herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Buyer and the Restricted Party hereby agree as follows:
1.Covenant Not To Compete.
(a) The Restricted Party covenants and agrees that, during the Restricted Period (as defined in Section 5 below), the Restricted Party shall not, without the prior written consent of the Buyer, directly or indirectly, individually or on behalf of or through any Person (as defined below), or as a sole proprietor, consultant, independent contractor, partner, equity holder, employee, director, officer, manager, member, principal, agent or executive of a Person, or in any other capacity or relationship, own, manage, operate, control, participate in, perform services for, or otherwise engage in any business or employment, anywhere in the State of Ohio and Michigan, that is engaged in a Competitive Business (as defined below). For purposes of this Agreement: the
4838-3471-6967.4
4874-0949-3680.4
term “Person” shall mean any individual, corporation, company, limited liability company, partnership, joint venture, association, joint-stock company, trust, unincorporated organization, or federal, state or local governmental, regulatory or other public body, agency or authority (including without limitation self-regulatory organizations), domestic or foreign, or any other entity; and the term “Competitive Business” shall mean the business of broadband or fixed-wireless service.
(b) Notwithstanding Section 1(a), the Restricted Party shall not be prohibited from passively owning less than two percent (2%) of the outstanding securities of any Person whose securities are traded on a national securities exchange; provided, however, that the Restricted Party shall not directly or indirectly provide any service to, or have any other relationship with, such Person other than as a passive holder of such Person’s securities.
(a)The Restricted Party hereby acknowledges that the Restricted Party has had access to and has become familiar with the following, any and all of which constitute confidential information (collectively, the “Confidential Information”), subject to Section 2(c): (i) Trade Secrets concerning the business and affairs of the Company, product specifications, data, know-how, formulae, compositions, processes, designs, sketches, photographs, graphs, drawings, samples, inventions and ideas, past, current and planned research and development, current and planned manufacturing and distribution methods and processes, customer lists, current and anticipated customer requirements, price lists, market studies, business plans, Software, database technologies, systems, structures, architectures, processes, improvements, devices, know-how, discoveries, concepts, methods and information of the Company and any other information, however documented, of the Company that is a trade secret under applicable Law; (ii) information concerning the business and affairs of the Company (which includes, without limitation, the names and backgrounds, contact information, pricing or revenue information associated with any customers, partners or resellers or potential customers, partners or resellers, historical financial statements, financial projections and budgets, historical and projected sales, capital spending budgets and plans, the names and backgrounds of key personnel, contractors, agents, suppliers and potential suppliers, and personnel training and techniques and materials), however documented; and (iii) notes, analyses, compilations, studies, summaries and other material prepared by or for the Company containing or based, in whole or in part, upon any information included in the foregoing.
(b)The Restricted Party agrees not to disclose or use for the Restricted Party’s own account any Confidential Information, whether or not such information is embodied in writing or other physical form, without the Buyer’s prior written consent. The Restricted Party agrees to deliver to the Buyer, at any time as the Buyer may request, all documents, memoranda, notes, plans, records, reports and other documentation, models, components, devices or computer software, whether embodied in a disk or in other electronic or non-electronic form (and all copies, summaries and other derivatives of all of the foregoing), that contain Confidential Information and any other Confidential Information that the Restricted Party may then possess or have under the Restricted Party’s control.
(c)Notwithstanding anything to the contrary, Confidential Information shall not be deemed to include any information or other item identified in Sections 2(a)(i) or (ii) or (iii):
(i) that is or becomes generally known to and available for use by the public other than as a result of (A) the Restricted Party’s disclosure in breach of this Agreement or in breach of any other legal duty or (B) disclosure in breach of any legal duty by any other Person bound by a duty of confidentiality to the Company or the Buyer; or (ii) that is demonstrated by the Restricted Party to be independently developed by the Restricted Party without reference to the Confidential Information and independent of any Company time or expense.
(d)If the Restricted Party is required to provide Confidential Information to any court or government agency pursuant to a written court order, subpoena, regulation or process of law or is otherwise required to provide Confidential Information pursuant to applicable law, the Restricted Party will provide the Buyer with prompt written notice of such requirement and will provide reasonable cooperation with the Buyer in the Buyer’s attempts to protect against or limit the scope of such disclosure. To the fullest extent permitted by law, the Restricted Party will continue to protect as confidential and proprietary all Confidential Information disclosed as contemplated by the preceding sentence.
3. Non-Solicitation of Customers and Suppliers. The Restricted Party covenants and agrees that, during the Restricted Period, the Restricted Party shall not, without the prior written consent of the Buyer, directly or indirectly, individually or on behalf of or through any Person, (a) solicit or divert, or attempt to solicit or divert, any Person from doing business with the Buyer or any of its Affiliates (which, for purposes of this Agreement, shall include the Company), or (b) attempt to induce any such Person to cease being a supplier of the Buyer or any of its Affiliates.
4. Non-Hire of Employees. The Restricted Party covenants and agrees that during the Restricted Period, the Restricted Party shall not, without the prior written consent of the Buyer, directly or indirectly, either individually or on behalf of or through any Person, employ any employees of the Buyer or any of its Affiliates or solicit or encourage any employees of the Buyer or any of its Affiliates to leave the employment with the Buyer or any of its Affiliates; provided, however, that the Restricted Party is not prohibited, directly or indirectly, either individually or on behalf of or through any Person, from (a) employing or soliciting the employment of any Person who is not an employee of the Buyer or any of its Affiliates at the time of such solicitation or employment and (b) employing any Person who was not employed by the Company or any of its pre-Closing Affiliates at the Closing Date who responds to employment advertising of a general or industry-wide nature not directed to any employee of the Buyer or any of its Affiliates.
5. Restricted Period. For purposes of this Agreement, the term “Restricted Period” shall mean the period commencing on the Effective Date and ending on the fourth (4th) anniversary of the Effective Date.
6. Non-Disparagement. The Restricted Party shall not (a) make any written or oral statement that disparages or defames the Buyer, any subsidiary of Buyer, including the Company, or any of their respective employees, officer or directors or (b) publish or disseminate any statements suggesting or accusing the Buyer, any subsidiary of Buyer, including the Company, or any of their respective employees, officer or directors or any misconduct or unlawful behavior, provided, however, that nothing herein shall prohibit the Restricted Party from giving truthful testimony or evidence to a governmental entity, or if properly subpoenaed or otherwise required to do so under applicable Law.
7. Remedies for Breach. Without intending to limit the remedies available to the Buyer, the Restricted Party acknowledges that a breach of any of the covenants contained in this Agreement will result in irreparable injury to the Buyer for which there may be no adequate remedy at law, and that in such case it may not be possible to measure damages for such injuries precisely. As a result, in the event of such a breach or imminent threat thereof, the Buyer shall be entitled to seek to obtain injunctive relief, without the necessity of proving irreparable harm or injury as a result of such breach or threatened breach, restraining the Restricted Party from engaging in activities prohibited hereunder or such other relief as may be required specifically to enforce such covenants. Injunctive relief is not the Buyer’s exclusive remedy. The Buyer may seek monetary damages in lieu of, or in addition to, injunctive relief. Notwithstanding any other provision to the contrary contained herein, the Restricted Period with respect to the Restricted Party shall be tolled during any period of violation, as determined by a court of law, of any of the covenants set forth herein.
8. Independence and Severability. Each of the rights enumerated in this Agreement shall be independent of the others and shall be in addition to and not in lieu of any other rights and remedies available to the Buyer at law or in equity. If any of the covenants contained herein or any part of any of them is hereafter construed or adjudicated to be invalid or unenforceable, the same shall not affect the remainder of the covenant or covenants or rights or remedies, which shall be given full effect without regard to the invalid portions.
9. Reformation. If any of the covenants contained herein are held to be invalid or unenforceable because of the duration of such provisions or the area or scope covered thereby, the Restricted Party agrees that the court making such determination shall have the power to reduce the duration, scope and/or area of such provision to a reasonable duration, scope and/or area and in its reduced form said provision shall then be enforceable.
10. Goodwill. The Restricted Party acknowledges that (a) the goodwill associated with the existing business, customers, and assets of the Company prior to the Acquisition are an integral component of the value of the Company to the Buyer and is reflected in the portion of the consideration in respect of the Acquisition payable to the Restricted Party, and (b) the Restricted Party’s agreement as set forth herein is necessary to preserve the value of the Company following the Acquisition. The Restricted Party also acknowledges that the limitations of time, geography, and scope of activity agreed to in this Agreement are reasonable because, among other things, (i) the Company and the Buyer are engaged in a highly competitive industry, (ii) the Restricted Party has unique access to the trade secrets and know-how of the Company, including without limitation the plans and strategy (and, in particular, the competitive strategy) of the Company, (iii) the Restricted Party is receiving significant consideration in connection with the Acquisition, and (iv) the Restricted Party would be able to obtain suitable and satisfactory employment without violation of this Agreement.
11. Binding Effect and Assignment. This Agreement and all of the provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns, provided that, except as otherwise specifically provided herein, neither this Agreement nor any of the rights, interests or obligations of the parties hereto may be assigned by any of the parties hereto without the prior written consent of the other parties hereto and except that the Buyer, without obtaining the consent of any other party hereto but with notice thereof to
the Restricted Party, shall be entitled to assign this Agreement or all or any of its rights or obligations hereunder to any one or more Affiliates of the Buyer, but no assignment by the Buyer under this Section 11 shall relieve the Buyer of its obligations under this Agreement. Any assignment in violation of the foregoing shall be void.
12. Amendments and Modification. This Agreement may not be modified, amended, altered or supplemented except upon the execution and delivery of a written agreement executed by each of the parties hereto, provided that any provision of this Agreement may be waived, or the time for its performance may be extended, by the party or parties entitled to the benefit thereof by a writing signed by each such party or an authorized representative thereof.
13. Notices. All notices and other communications pursuant to this Agreement shall be in writing and deemed to be sufficient if contained in a written instrument and shall be deemed given (a) upon receipt, if delivered personally, telecopied or emailed, (b) on the next business day, if sent by nationally recognized overnight courier for next day delivery, or (c) on the fifth business day after mailing, if mailed by registered or certified mail (return receipt requested), postage prepaid, to the parties at the following address (or at such other address for a party as shall be specified by like notice in accordance with this Section):
(i) if to the Buyer, to:
Nicholas Financial, Inc.
26133 US 19 North, Suite 300
Clearwater, Florida 33763
Attention: Jeff Royal, Chairman
E-mail: jroyal@dundeebanking.com
With a copy to the Buyer’s counsel (which shall not constitute notice):
Kutak Rock LLP
The Omaha Building
1650 Farnam Street
Omaha, Nebraska 68102
Attention: Anthony D. Scioli and James C. Creigh
E-mail: anthony.scioli@kutakrock.com and james.creigh@kutakrock.com
and (ii) if to the Restricted Party, to the Restricted Party’s address shown below the Restricted Party’s signature on the signature page hereof.
14. Choice of Law. The parties agree that this Agreement shall be governed by and interpreted in accordance with the laws of the State of Delaware, without giving effect to the choice of law provisions thereof.
15. Effectiveness. This Agreement shall be effective from and after the Effective Date.
16. Entire Agreement. This Agreement, together with the documents expressly referred to herein, contain the entire understanding of the parties in respect of the subject matter hereof,
and supersede all prior negotiations and understandings between the parties with respect to such subject matter.
17. Effect of Headings. The section headings are for convenience only and shall not affect the construction or interpretation of this Agreement.
18. Counterparts; Effectiveness. This Agreement may be executed in counterparts, each of which shall be an original, but which together shall constitute one and the same agreement. Facsimile, photostatic and PDF copies of signatures to this Agreement (including without limitation copies received as attachments to electronic mail) shall be deemed to be originals and may be relied upon with the same force and effect as originals.
THE RESTRICTED PARTY HAS CAREFULLY READ AND CONSIDERED THE PROVISIONS OF THIS AGREEMENT AND, HAVING DONE SO, AGREES THAT THE RESTRICTIONS SET FORTH IN THIS AGREEMENT ARE FAIR AND REASONABLE AND ARE REASONABLY REQUIRED FOR THE PROTECTION OF THE BUYER’S INTERESTS. The Restricted Party further agrees that the restrictions set forth in this Agreement do not impair the Restricted Party’s ability to find employment or do business within the field or fields of the Restricted Party’s choice including, without limitation, those areas in which the Restricted Party is doing, will do, or has done business.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
IN WITNESS WHEREOF, the parties hereto have entered into this Non-Competition Agreement with the intent it be effective as of the Effective Date.
RESTRICTED PARTY: BUYER:
NICHOLAS FINANCIAL, INC.
/s/ Mark Radabaugh
Mark R. Radabaugh
By: /s/ Jeff Royal
Address: Name: Jeff Royal
Title: Chairman
Email:
[Signature Page to Non-Competition Agreement]
