UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) May 15, 2024
NICHOLAS FINANCIAL, INC.
(Exact name of registrant as specified in its Charter)
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Delaware |
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0-26680 |
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59-2506879 |
(State or Other Jurisdiction of Incorporation or Organization) |
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(Commission File Number) |
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(I.R.S. Employer Identification No.) |
26133 US Highway 19 North, Suite 300 Clearwater, Florida |
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33763-2017 |
(Address of Principal Executive Offices) |
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(Zip Code) |
(727) 726-0763
(Registrant’s telephone number, Including area code)
Not applicable
(Former name, former address and former fiscal year, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
Common Stock |
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NICK |
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NASDAQ |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01. Entry into a Material Definitive Agreement.
On June 15, 2024, Nicholas Financial, Inc. (the “Company”) entered into an Employment Agreement, Put-Call Option Agreement, Stockholders Agreement and Non-Competition Agreement with Mark R. Radabaugh, the Chief Executive Officer of its newly-acquired, majority-owned subsidiary Amplex Electric, Inc. ( “Amplex”).
The Employment Agreement provides that Amplex will employ Mr. Radabaugh as its Chief Executive Officer for an initial term of two years at a base salary of $170,032.00. Mr. Radabaugh will also be eligible to receive cash bonuses in the discretion of Amplex’s Board and participate in the Company’s quarterly bonus program as in effect from time to time. Mr. Radabaugh is also subject to customary restrictive covenants. If Mr. Radabaugh is terminated without Cause (as defined in the Employment Agreement) or terminates his employment for Good Reason (as defined in the Employment Agreement), then Mr. Radabaugh will be paid an amount equal to six (6) months of his base salary at the annual rate being paid at the date of termination, in periodic installments in accordance with the Company’s regular payroll practices.
The Put-Call Option Agreement gives the Company the right to acquire up to 80% of Mr. Radabaugh’s remaining equity in the future at a formula-based price. The call option will become exercisable starting on the second anniversary of the closing and will expire on the fifth anniversary of such date. Mr. Radabaugh will also have the right to put his remaining shares to the Company, subject to certain limitations. The put option will become exercisable on the fifth anniversary of the closing and will expire on the 15thanniversary of such date.
The Stockholders Agreement contains customary first refusal, co-sale, drag-along, preemptive and information rights. It also gives Mr. Radabaugh certain protective provisions. The agreement also provides that the Amplex Board will consist of three directors, two of whom will be designated by the Company and one by Mr. Radabaugh.
The Non-Competition Agreement provides that Mr. Radabaugh will notdirectly or indirectly, engage in the business of broadband or fixed-wireless service other than through Amplex. The agreement also contains customary non-disclosure, non-solicit, non-hire and non-disparagement covenants.
The foregoing summaries of the Employment Agreement, Put-Call Option Agreement, Stockholders Agreement and Non-Competition Agreements are qualified in their entireties by reference to the full text of such agreements, copies of which are filed as exhibits hereto.
Item 2.01 Completion of Acquisition or Disposition of Assets
The Acquisition
On June 15, 2024, the Company completed its acquisition (the “Acquisition”) of Amplex Electric, Inc pursuant to the previously announced Share Purchase Agreement, dated as of May 1, 2024, with Mark R. Radabaugh, Dale B. Beckmann and Amplex. As described in the Share Purchase Agreement, upon consummation of the Acquisition, the Company acquired approximately 56.5% of Amplex with Mr. Radabaugh retaining the remaining 43.5% interest. The purchase price was paid in cash. The base purchase price of the Acquisition was $37,500,000, subject to adjustment in accordance with the terms of the Share Purchase Agreement. The transaction was fully funded with the Company’s available cash on hand.
The Share Purchase Agreement was filed as Exhibit 2.1 to the Company’s Current Report on Form 8-K, which was filed with the Securities and Exchange Commission on May 6, 2024.
Amplex Business
Amplex is an Ohio-based provider of rural broadband services to business and residential customers. In connection with the Acquisition, the Company invested additional capital into Amplex, which will be used to finance additional build-out of Amplex’s fiber network in Ohio. Amplex currently has over 9,100 fixed wireless broadband customers, over 9,000 fiber passings and over 3,500 fiber customers. Amplex’s CEO, Mark Radabaugh, will continue to lead Amplex after the closing.
Item 9.01. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
The financial statements required by Item 9.01(a) of Form 8-K, if any, will be filed by amendment no later than 71 calendar days after the date this Current Report on Form 8-K is required to be filed.
(b) Pro Forma Financial Information
The pro forma financial information required by Item 9.01(b) of Form 8-K, if any, will be filed by amendment no later than 71 calendar days after the date this Current Report on Form 8-K is required to be filed.
(d) Exhibits
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, hereunto duly authorized.
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NICHOLAS FINANCIAL, INC. |
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(Registrant) |
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Date: June 21, 2024 |
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/s/ Mike Rost |
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Mike Rost |
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Chief Executive Officer |
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
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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).
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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
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(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.
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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).
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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:
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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.
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[signature page follows]
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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
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SCHEDULE A
4888-8124-4597.3
EXHIBIT 10.2
PUT/CALL AGREEMENT
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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“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.
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“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.
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“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.
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COVENANTS
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“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.”
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CONDITIONS
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MISCELLANEOUS
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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.
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[Remainder of Page Intentionally Left Blank.]
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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 An example of the calculation of the Closing Adjusted EBITDA is set forth below.
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ANNEX A
Closing Adjusted EBITDA
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Agreed Adjustments:
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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.
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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.
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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.
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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.
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ANNEX D
Form of Promissory Note and Pledge Agreement
SCHEDULE I
Average Maintenance CapEx
Account |
% Allocation |
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Fixed Assets: |
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Plant in Service |
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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:
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“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.”
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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.
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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.
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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.
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[Signature Page Follows]
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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
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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
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SCHEDULE B
ADJUSTED EBITDA
An example of the calculation of the Adjusted EBITDA is set forth below.
SCHEDULE C
AVERAGE MAINTENANCE CAPEX
Account |
% Allocation |
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Fixed Assets: |
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Plant in Service |
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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:
(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).
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For purposes of this Agreement: the 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.
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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.
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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.
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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.
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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.]
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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]