Document:

EXHIBIT 10.1

RULE 10B5-1 REPURCHASE PLAN

This Rule 10b5-1 Repurchase Plan, dated September 15, 2008 (this “Repurchase Plan”), is between Omega Flex, Inc., with principal executive offices located at 213 Court St., Suite 701, Middletown, CT, 06457 (the “Issuer”), and Hunter Associates, Inc., with principal executive offices at 436 Seventh Avenue, Koppers Building, Fifth Floor, Pittsburgh, PA,  15219 (“Hunter”).

WHEREAS, on September 10, 2007, the Board of Directors of the Issuer approved a stock repurchase program for the repurchase of shares of the Issuer’s common stock, $0.01 par value per share (the “Common Stock”) for up to $5,000,000, over a period of twenty-four months (the “Repurchase Program”); and

WHEREAS, the Issuer has effected repurchases of 59,824 shares of Common Stock to date for an aggregate of $898,923.00; and 

WHEREAS, the Issuer desires to engage Hunter to effect future repurchases within the safe harbor afforded by Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and in accordance with the terms and conditions set forth in this Repurchase Plan and Hunter desires to be so engaged; 

	
             
 	
            NOW, THEREFORE, the Issuer and Hunter hereby agree as follows:
 

1.            (a)         Subject to the Issuer’s continued compliance with Section 2 hereof, and subject to Section 4, Hunter will effect purchases (each, a “Purchase”) of shares of the Common Stock on each day on which the NASDAQ Global Market (the “NASDAQ”) is open for trading and the Common Stock trades regular way on the NASDAQ at a price not to exceed the price per share determined by the special committee of the Issuer’s board of directors and communicated in writing to Hunter concurrently with this Agreement, up to an aggregate expenditure of $4,101,077 (the “Total Plan
Amount”).

(b)          Hunter may make Purchases in the open market or through privately negotiated transactions.  Hunter shall not make Purchases that are (1) the opening purchase in the consolidated reporting system, and/or (2) executed within 30 minutes of the opening or closing of the applicable daily trading system.  The Issuer agrees not to take any action that would cause Purchases not to comply with Rule 10b5-1 of the Exchange Act.

2.            The Issuer agrees to pay to Hunter a commission of $0.15 per share of Common Stock repurchased pursuant to this Repurchase Plan.  In accordance with Hunter’s customary procedures, Hunter will deposit shares of Common Stock purchased hereunder into an account established by Hunter for the Issuer against payments to Hunter of the purchase price therefore and commissions and other amounts in respect thereof payable pursuant to this Section.  The Issuer will be notified of all transactions pursuant to customary trade confirmations.

3.            (a)         This Repurchase Plan shall become effective on October 13, 2008 and shall terminate upon the first to occur of the following:

	
             
  	
            (1)
 	
            the one year anniversary of the date hereof;
 

(2)          the purchase of the Total Plan Amount pursuant to this Repurchase Plan;

(3)          the end of the second business day following the date of receipt by Hunter of notice of early termination by Issuer of this Agreement substantially in the form of Exhibit A hereto; 

(4)          the end of the second business day following the date of receipt by Issuer of notice of early termination by Hunter of this Agreement substantially in the form of Exhibit B hereto;

(5)          the commencement of any voluntary or involuntary cause or other proceeding seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or similar law or seeking the appointment of a trustee, receiver or other similar official, or the taking of any corporate action by the Issuer to authorize or commence any of the foregoing;

(6)          the public announcement of a tender or exchange offer for the Common Stock or of a merger, acquisition, recapitalization or other similar business combination or transaction as a result of which the Common Stock would be exchanged for or converted into cash, securities or other property; or

	
             
  	
            (7)
 	
            the failure of the Issuer to comply with Section 2 hereof.
 

(b)          The provisions of Sections 2 and 13 of this Repurchase Plan shall survive any termination of this Repurchase Plan.  In addition, the Issuer’s obligation under Section 2 (as same relates to the Issuer’s obligation to compensate Hunter) in respect of any shares of Common Stock purchased prior to any termination hereof shall survive any termination hereof.

4.            The Issuer understands that Hunter may not be able to effect a Purchase due to a market disruption or a legal, regulatory or contractual restriction or internal policy applicable to Hunter or otherwise.  If any Purchase cannot be executed as required by Section 1 due to a market disruption, a legal, regulatory or contractual restriction or internal policy applicable to Hunter or any other event, such Purchase shall be cancelled and shall not be effective pursuant to this Repurchase Plan.  Hunter agrees to effect such Purchase as promptly as practicable after the cessation or termination of such market disruption, applicable restriction or other event.

5.            The Issuer represents and warrants that: (a) the repurchase of Common Stock pursuant to this Repurchase Plan has been duly authorized by the Issuer, is consistent with the Issuer’s publicly announced Repurchase Program and is not prohibited or restricted by any legal regulatory or contractual restriction or undertaking binding on the Issuer; (b) it is not aware of material, nonpublic information with respect to the Issuer or any securities of the Issuer (including the Common Stock); (c) it is entering into this Repurchase Plan in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1 under the Exchange Act or 

 

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other applicable securities laws; and (d) its execution of this Repurchase Plan, and the Purchases contemplated hereby do not and will not violate or conflict with the Issuer’s certificate of incorporation or by-laws or, if applicable, any similar constituent document, or any law, rule, regulation or agreement binding on or applicable to the Issuer or any of its subsidiaries or any of its or their property or assets.  The Issuer shall immediately notify Hunter if the Issuer becomes subject to a legal, regulatory or contractual restriction or undertaking that would prevent Hunter from making Purchases pursuant to this Repurchase Plan and, in such case, the Issuer and Hunter will cooperate to amend or otherwise revise this Repurchase Plan to take into account such legal, regulatory or contractual restriction or undertaking provided that neither party shall be required to take any action that would be
inconsistent with the requirements of Rule 10b5-1.

6.            It is the intent of the parties that this Repurchase Plan comply with the requirements of Rule 10b5-1(c)(1)(i)(B) under the Exchange Act, and this Repurchase Plan shall be interpreted to comply with the requirements thereof.

7.            At the time of the Issuer’s execution of this Repurchase Plan, the Issuer has not entered into a similar agreement with respect to the Common Stock.  The Issuer agrees not to enter into any such agreement while this Repurchase Plan remains in effect.

8.            Except as specifically contemplated hereby, the Issuer shall be solely responsible for compliance with all statutes, rules and regulations applicable to the Issuer and the transactions contemplated hereby, including, without limitation, reporting and filing requirements.

9.            This Repurchase Plan shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania and may be modified or amended only by a writing signed by the parties hereto.

10.          Except as contemplated by Section 3(a)(3) of this Repurchase Plan, the Issuer acknowledges and agrees that it does not have authority, influence or control over any Purchase effected by Hunter pursuant to this Repurchase Plan and the Issuer will not attempt to exercise any authority, influence or control over Purchases.  Notwithstanding any provision contained herein to the contrary, the Issuer may suspend or terminate this Repurchase Plan at any time so long as the determination to suspend or terminate this Repurchase Plan is made in good faith and not as part of a plan or scheme to evade its prohibitions of Rule 10b-5 under the Exchange Act or any other U.S. Securities laws.  Hunter agrees not to seek advice from the Issuer with respect to the manner in
which it effects Purchases under this Repurchase Plan.

11.          The Issuer agrees to indemnify and hold harmless Hunter and its affiliates, principals, officers, directors, employees, agents and representatives against any losses, claims, damages or liabilities, including reasonable legal fees and expenses, arising out of any action or proceeding relating to this Repurchase Plan or any Purchase effected pursuant hereto, except to the extent that any such loss, claim, damage or liability is the result of the negligence or willful misconduct of them to or any of its principals, officers, directors, employees, agents or representatives.  Hunter shall provide to the Issuer proper and timely notice with regard to any such threatened loss, claim, damage or liability.

 

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12.          All notices, requests or restrictions hereunder shall be in writing and delivered personally or sent by registered or certified mail, postage prepaid to the parties at the addresses set forth in the preamble of this Repurchase Plan.

13.          This Repurchase Plan constitutes the entire agreement between the parties hereto with respect to the matters contemplated hereby and no modification hereof shall e effective unless in writing and signed by the party against which it  is sought to be enforced.

14.          This Repurchase Plan may be executed in any number of counterparts, all of which, taken together, shall constitute one and the same agreement.

 

[The rest of this page is intentionally blank.]

 

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                IN WITNESS WHEREOF, the undersigned have signed this Repurchase Plan as of the date first written above.

 

	
             
 	
            OMEGA FLEX, INC.
 
	
             
 	
             
 
	
             
 	
            By: /s/  Kevin R. Hoben__________________
 
	
             
 	
            Name:  Kevin R. Hoben
 
	
             
 	
            Title:    President and Chief Executive Officer
 
	
             
 	
             
 
	
             
 	
             
 
	
             
 	
            HUNTER ASSOCIATES, INC.
 
	
             
 	
             
 
	
             
 	
            By: /s/  David W. Hunter_________________
 
	
             
 	
            Name:  David W. Hunter
 
	
             
 	
            Title:    Chairman
 
	
             
 	
             
 

 

 

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Exhibit A

REQUEST FOR EARLY TERMINATION OF REPURCHASE PLAN

via fax (412) 471-2993

To:  Hunter Associates, Inc.

 

As of the date hereof, Omega Flex, Inc. hereby requests termination of the Repurchase Plan, dated September __, 2008, in good faith and not as part of a plan or scheme to evade the prohibitions of Rule 10b5-1 or other applicable securities laws.

IN WITNESS WHEREOF, the undersigned has signed this Request for Early Termination of Plan as of the date specified below.

 

	
             
 	
            Omega Flex, Inc.
 
	
             
 	
             
 
	
             
 	
            By:______________________________
 
	
             
 	
            Name:
 
	
             
 	
            Title:
 
	
             
 	
             
 
	
            (Date)
 	
             
 

 

 

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Exhibit B

REQUEST FOR EARLY TERMINATION OF REPURCHASE PLAN

via fax (860) 704-6830

To:  Omega Flex, Inc.

 

As of the date hereof, Hunter Associates, Inc. hereby requests termination of the Repurchase Plan, dated September __, 2008.

IN WITNESS WHEREOF, the undersigned has signed this Request for Early Termination of Plan as of the date specified below.

 

	
             
 	
            Hunter Associates, Inc.
 
	
             
 	
             
 
	
             
 	
            By:______________________________
 
	
             
 	
            Name:
 
	
             
 	
            Title:
 
	
             
 	
             
 
	
            (Date)
 	
             
 

 

 

 

 

7exhibit4_5.htm

    
      

      

    

    

      Exhibit
4.5

      

      VESTIN
REALTY MORTGAGE II, INC.

      6149 S.
RAINBOW BLVD.

      LAS
VEGAS, NV 89118

      

      

      November
7, 2008

      

      

      Michael
A. Fralin

      Managing
Director

      Taberna
Capital Management, LLC

      450 Park
Avenue

      Floor
11

      New York,
New York 10022

      

      

      Dear Mr.
Fralin:

      

      

      Reference
is hereby made to that certain Junior Subordinated Indenture, dated as of June
22, 2007, by and between Vestin Realty Mortgage II, Inc. (the “Company”) and The
Bank of New York Mellon Trust Company, National Association (as successor to
JPMorgan Chase Bank, National Association, the “Trustee”) (the
“Indenture”).  All capitalized terms used herein and not defined
herein shall have the meaning ascribed to such terms in the
Indenture.

      

      Section
5.1(c) of the Indenture substantially provides that a “default in the
performance, or breach, of any covenant of the Company under Section 10.9 of
this Indenture and continuance of such default or breach for a period of thirty
(30) days after there has been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of at
least twenty-five percent (25%) in aggregate principal amount of the Outstanding
Securities a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a “Notice of Default” hereunder”
shall constitute an Event of Default.

      

      Pursuant
to Section 10.9 of the Indenture, the Company covenanted that it
would:

      

      (a) not
permit Tangible Net Worth, at any time, to be less than the sum of (i)
$225,000,000
and (ii) 50% of all proceeds of Equity Interests issued by the Company
after the date hereof;

      

      (b) not
permit, at any time, the ratio of (i) EBITDA for the period consisting of the
preceding four (4) fiscal quarters ending on, or most recently ended prior to,
such time to (ii) Interest Expense for such period, to be less than 2.50 to 1;
and

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      

      (c) not
permit, at any time, the ratio of (i) Total Debt to (ii) Tangible Net Worth, to
exceed 0.5 to 1.

      

      (collectively,
the “Original Covenants”)

      

      Based on
the Company’s projections, the Company will breach the covenant set forth in
Section 10.9(a) of the Indenture as of September 30, 2008 and the covenant set
forth in Section 10.9(b) of the Indenture as of December 31,
2008.  Given these facts, the Company requests the relief specified
herein.

      

      Taberna
Capital Management, LLC (“Taberna”) has represented to the Company that, as the
collateral manager for certain collateral debt obligation vehicles that
collectively own and are the Holders of all of the Preferred Securities, it, has
the authority to (on behalf of the Holders of the Preferred Securities) to agree
to the terms of this letter and to perform (or cause to be performed) the
obligations of Taberna hereunder.  In order to avoid a breach or
violation by the Company under Section 10.9, the Company proposes to deposit
with the Trustee the amount of $5,000,000 (the “Reserve”) for the purpose of
securing the obligations of the Company under the Indenture.

      

      The
Reserve shall take the form of one or more letters of credit made in favor of
the Holders of the Preferred Securities in form and substance reasonably
satisfactory to Taberna (each, a “Letter of Credit”).  The Borrower
shall post a Letter of Credit (a) in the amount of $3,750,000 on or before
November 12, 2008 and (b) in the amount of $1,250,000 on or before April 12,
2009.  The
Company agrees that the Letter of Credit shall not be subordinated or subject in
any respect, including in right of payment, to any Senior
Debt.

      

      The
Trustee will call the Letter of Credit in the event of a default and disburse
the Reserve promptly after notice from the Collateral Manager, which notice the
Collateral Manager shall be entitled to deliver upon the occurrence of any event
that with the giving of notice or the passage of time would give rise to an
Event of Default of the Company under the Indenture.  The Reserve
shall be used for the payment of principal or interest in the sole discretion of
Taberna.  In consideration for the above-referenced credit
enhancement, Taberna agrees to modify Section 10.9 of the Indenture
substantially as follows:

      

      From and
after the date here until Maturity the Company shall:

      

      (a) not
permit Tangible Net Worth, at any time, to be less than the lesser of
$150,000,000 or 2.5 times the then outstanding principal balance of Preferred
Securities;

      

      (b) not
permit, at any time, the ratio of (i) EB1TDA for the period consisting of the
preceding four (4) fiscal quarters ending on, or most recently ended prior to,
such time to (ii) Interest Expense for such period, to be less than 1.50 to 1
(“Minimum Coverage”); provided, however, the Minimum Coverage shall be deemed to
be 1.20 to 1 (for one quarter only) for the period ending June 30,
2009.

      

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      Section
10.9(c) shall not be modified.  The “No Call” provisions set forth in
the Indenture together with any prepayment penalties set forth therein shall be
removed.  All notice and cure periods of thirty (30) days or more set
forth in the Indenture shall be hereafter reduced to fifteen (15)
days.

      

      Subject
to a reasonable notice period, the Company will (a) permit Taberna to examine
the books and records of the company and its affiliates, (b) make management
representatives of the company and its affiliates available to Taberna to
discuss such books and records and any other business affairs of the company and
its affiliates, and (c) deliver such other instruments and documents with
respect to the company and its affiliates as Taberna may reasonably
request.

      

      The
Company shall be responsible for all costs and expenses (legal and otherwise),
not to exceed $50,000, incurred by Taberna in connection with the execution of
this letter agreement and any Supplemental Indenture entered into by the parties
hereto (the “Expenses”).  The Company agrees to deposit $50,000 with
Taberna in immediately available funds to cover the Expenses.  Please
confirm your agreement with the foregoing by signing and returning to the
undersigned a duplicate copy of this Agreement.

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        
          	
                  Sincerely,

                
	 
      
	
                  VESTIN
      REALTY MORTGAGE II, INC.

                
	 
      
	
                  By:
      __________________

                
	
                  Name:
      Michael V.
      Shustek

                
	
                  Title:
      President,
      CEO

                

        

      

      

      

      ACCEPTED
AS OF THE DATE FIRST

      WRITTEN:

      

      

      TABERNA
PREFERRED FUNDING VIII, LTD.

      

      TABERNA
PREFERRED FUNDING IX, LTD.

      

      By:           TABERNA
CAPITAL MANAGEMENT,

      LLC, as
Collateral Manager

      

      By:           ______________________________

      Name:
Michael A. Fralin

      Title:
Managing Director

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