STOCK REDEMPTION AGREEMENT
This Stock Redemption Agreement is entered into as of November 15,
1995, by and between S & D FOODS, INC., a California corporation (the
"Corporation"), and XXXX XXXXXXXXX ("Xxxxxxxxx") and XXXXXX XXXXX ("Xxxxx"),
with reference to the following facts:
X. Xxxxxxxxx and Xxxxx each owns 1,000,000 shares of common stock of
the Corporation.
X. Xxxxxxxxx and Xxxxx each desire to sell to the Corporation, and the
Corporation desires to purchase from each of Xxxxxxxxx and Xxxxx, 550,000
shares of the common stock of the Corporation owned by them, pursuant to the
terms and conditions hereof.
NOW, THEREFORE, the parties hereto agree as follows:
1. PURCHASE AND SALE. Effective upon the closing of the private
placement of 1,100,000 shares of common stock for a purchase price of $2.00
per share (the "Private Placement"), Xxxxxxxxx and Xxxxx each shall sell to
the Corporation, and the Corporation shall purchase from each of Xxxxxxxxx
and Xxxxx 160,000 shares of the common stock of the Corporation for the
purchase price indicated in Section 2.a, and immediately thereafter, the
Corporation shall purchase from each of Xxxxxxxxx and Xxxxx 390,000 shares of
the common stock of the Corporation for the purchase price indicated in
Section 2.b (collectively, the "Shares"). Upon the closing of the Private
Placement, Xxxxxxxxx and Xxxxx shall deliver to the Corporation certificates
representing the Shares, duly endorsed to the Corporation or accompanied by
stock assignments, executed by Xxxxxxxxx and Xxxxx, respectively.
2. PURCHASE PRICE AND PAYMENT. The purchase price of the Shares shall
be Two Million Two Hundred Thousand Dollars ($2,200,000), payable as follows:
a. The Corporation shall pay to each of Xxxxxxxxx and Xxxxx Three
Hundred Twenty Thousand Dollars ($320,000) by check upon the closing of the
Private Placement.
b. The Corporation shall execute and deliver to each of Xxxxxxxxx
and Xxxxx the Promissory Notes in the forms attached hereto as Exhibit A,
each in the original principal amounts of Seven Hundred Eighty Thousand
Dollars ($780,000) (the "Promissory Notes"). The Corporation shall pay
Xxxxxxxxx and Xxxxx,
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respectively, the principal amounts under the Promissory Notes upon the
earlier of (i) the date that is two years after the date of the closing of
the Private Placement, or (ii) the closing of any initial public offering of
the Corporation's securities.
3. SEVERABILITY. If any provision of this Agreement is held to be
illegal, invalid, or unenforceable under current or future laws, that
provision shall be fully severable, this Agreement shall be construed and
enforced as if such illegal, invalid, or unenforceable provision had never
composed a part of this Agreement, and the remaining provisions of this
Agreement shall remain in full force and effect and shall not be affected by
the illegal, invalid, or unenforceable provision or by its severance from
this Agreement. Furthermore, in lieu of each such illegal, invalid, or
unenforceable provision, there shall be added automatically as a part of this
Agreement a provision as similar in terms to such illegal, invalid, or
unenforceable provision as may be possible and be legal, valid, and
enforceable, and the Corporation hereby requests the court or any arbitrator
to whom disputes relating to this Agreement are submitted to reform the
otherwise unenforceable covenant in accordance with the preceding provision.
4. CORPORATE DISTRIBUTIONS. Upon the closing of the Private Placement,
the Corporation shall obtain a certificate from its outside CPA indicating
whether the payment under this Agreement complies with Section 500 of the
California Corporations Code and showing the calculations made by them. The
Corporation's outside CPA shall also provide a certificate indicating whether
the payment as of the due date of the Promissory Notes complies with Section
500. In regard to the portion of the payment that does not comply with
Section 500, Xxxxxxxxx and Xxxxx agree to subordinate equal amounts of that
portion owing under the Promissory Notes to the then-existing creditors until
such time as the payment of the Promissory Notes would comply with Section
500, without regard to compliance as of the date of the issuance of the
Promissory Notes.
5. REPRESENTATIONS AND WARRANTIES OF XXXXXXXXX AND XXXXX. Xxxxxxxxx
and Xxxxx represent and warrant that with respect to the shares to be sold by
them under this Agreement that each is the owner of his respective Shares,
beneficially and of record, free and clear of all security interests,
pledges, charges, encumbrances and options.
6. REPRESENTATION AND WARRANTY OF THE CORPORATION. The Corporation
represents and warrants that redemption of the Shares has been duly
authorized by all necessary corporate action on the part of the Corporation.
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7. ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties with respect to the subject matter contained herein.
There are no representations, agreements, arrangements or understandings,
oral or written, between the parties, with respect to such subject matter
which are not fully expressed herein.
8. BINDING AGREEMENT. This Agreement shall be binding on, and shall
inure to the benefit of, the parties to it and their respective heirs, legal
representatives, successors and assigns.
9. GOVERNING LAW. This Agreement shall be construed in accordance
with, and governed by, the laws of the State of California.
10. ATTORNEY'S FEES. If any dispute arises out of the terms of this
Agreement, the prevailing party shall be entitled to recover reasonable
attorney's fees and other costs incurred in connection with that dispute, in
addition to any other relief to which he or it is entitled.
IN WITNESS WHEREOF, the parties hereto have executed this Redemption
Agreement as of the date first written above.
S & D FOODS, INC.,
a California corporation
By: /s/ XXXX XXXXXXXXX
-----------------------------------
Its: President
-----------------------------------
"Corporation"
/s/ XXXX XXXXXXXXX
---------------------------------------
XXXX XXXXXXXXX
"Xxxxxxxxx"
/s/ XXXXXX XXXXX
---------------------------------------
XXXXXX XXXXX
"Xxxxx"
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EXHIBIT A
SECURED PROMISSORY NOTE
$780,000 Xxxxxxxxxx, XX ,0000
-------------
FOR VALUE RECEIVED, the undersigned, S & D FOODS, INC., California
corporation ("Maker"), promises to pay to XXXX XXXXXXXXX ("Payee"), or order,
at ___________________________, California, or at such other place as Payee
may from time to time designate by written notice to Maker, the principal sum
of Seven Hundred Eighty Thousand Dollars ($780,000), without interest charged
thereon.
The principal under this Note shall be due and payable on the earlier of
(i) two years after the date hereof or (ii) the closing of any initial public
offering of Maker's securities. If the payment of the principal amount of
this Note is held to be illegal, This Note may be prepaid, at any time, in
whole or in part, without penalty.
Maker hereby waives presentment, demand for payment, notice of dishonor
and any and all other notices and demands in connection with the delivery,
acceptance, and performance, default, or enforcement of this note, and hereby
consents to any and all extensions of time, renewals, releases of liens,
waivers, or modifications that may be made or granted by Payee to Maker.
In regard to any payment of any portion of the principal amount of this
Note that does not comply with Section 500 of the California Corporations
Code, Payee agrees to subordinate that amount to the then-existing creditors
as of the date when due until such time as the payment of that portion of the
principal amount would comply with Section 500, without regard to compliance
as of the date of the issuance of this Note.
Maker agrees to pay all costs of collection hereof, including reasonable
attorneys' fees. The interpretation and enforcement of this note shall be
governed by California law.
S & D FOODS, INC.,
a California Corporation
By
---------------------------------
Xxxxx Xxxxx, Secretary
"Maker"
EXHIBIT A
SECURED PROMISSORY NOTE
$780,000 Xxxxxxxxxx, XX ,0000
-------------
FOR VALUE RECEIVED, the undersigned, S & D FOODS, INC., California
corporation ("Maker"), promises to pay to XXXXX XXXXX ("Payee"), or order,
at ___________________________, California, or at such other place as Payee
may from time to time designate by written notice to Maker, the principal sum
of Seven Hundred Eighty Thousand Dollars ($780,000), without interest charged
thereon.
The principal under this Note shall be due and payable on the earlier of
(i) two years after the date hereof or (ii) the closing of any initial public
offering of Maker's securities. If the payment of the principal amount of
this Note is held to be illegal, This Note may be prepaid, at any time, in
whole or in part, without penalty.
Maker hereby waives presentment, demand for payment, notice of dishonor
and any and all other notices and demands in connection with the delivery,
acceptance, performance, default, or enforcement of this note, and hereby
consents to any and all extensions of time, renewals, releases of liens,
waivers, or modifications that may be made or granted by Payee to Maker.
In regard to any payment of any portion of the principal amount of this
Note that does not comply with Section 500 of the California Corporations
Code, Payee agrees to subordinate that amount to the then-existing creditors
as of the date when due until such time as the payment of that portion of the
principal amount would comply with Section 500, without regard to compliance
as of the date of the issuance of this Note.
Maker agrees to pay all costs of collection hereof, including reasonable
attorneys' fees. The interpretation and enforcement of this note shall be
governed by California law.
S & D FOODS, INC.,
a California corporation
By
---------------------------------
Xxxx Xxxxxxxxx, President
"Maker"
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