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Exhibit A
SECURITIES EXCHANGE AGREEMENT
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THIS SECURITIES EXCHANGE AGREEMENT (the "Agreement") is made and
entered into as of this 23rd day of December, 1996 by and among LONDON PACIFIC
LIFE & ANNUITY COMPANY, a North Carolina stock life insurance company ("London
Pacific"), BERKELEY TECHNOLOGY INVESTMENTS LIMITED, a Jersey, Channel Islands,
corporation ("BTIL"), and ALLIANCE HOLDING CORPORATION, a Delaware corporation
("Alliance").
RECITALS
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A. Alliance entered into that certain Debenture Agreement dated as of
December 15, 1993 (the "Debenture Agreement") with BTIL and Nortek, Inc., a
Delaware corporation, pursuant to which Alliance issued its debenture, dated
December 31, 1993 to BTIL (the "Debenture"). Section 2.5 of the Debenture
Agreement provided that upon certain "Qualifying Events of Liquidity," Alliance
would be obligated to pay to the holder of the Debenture an additional payment
(the "Liquidity Payment"), calculated in the manner specified in such Section
2.5.
B. Alliance and BTIL entered into an Agreement dated as February 28,
1994 (the "1994 Agreement"), pursuant to which, among other things, Alliance
issued to BTIL a Promissory Note, dated February 28, 1994, in the original
principal amount of $225,000 (the "Note").
C. Pursuant to a Transfer Agreement dates as of June 22, 1994 between
BTIL and London Pacific (the "Transfer Agreement"), BTIL transferred to London
Pacific (i) the Note and (ii) the Debenture, except for the entitlement of the
holder of the Debenture to receive the "Liquidity Payment" upon a "Qualifying
Event of Liquidity." Under the Transfer Agreement, London Pacific acquired all
of the rights of BTIL under the 1994 Agreement insofar as it related to the Note
and all of the rights of BTIL under the Debenture and the Debenture Agreement,
except for the right of the holder of the Debenture to receive the "Liquidity
Payment" upon a "Qualifying Event of Liquidity." BTIL retained the right under
the Debenture and the Debenture Agreement to receive the "Liquidity Payment"
upon a "Qualifying Event of Liquidity."
D. Effective October 18, 1996, Alliance effected a transaction in which
its subsidiaries Century Surety Company ("CSC") and Commercial Surety Agency,
Inc., d/b/a Century Surety Underwriters ("CSU"), were merged into newly-created
subsidiaries of International Alliance Services, Inc., a Delaware corporation
(formerly known as Republic Environmental Services, Inc.--hereinafter to be
referred to as "IASI"), Upon the consummation of such mergers, in exchange for
all of its interests in CSC and CSU, Alliance received (i) an aggregate of
14,760,000 shares of the Common Stock of IASI, (ii) warrants to purchase an
additional (a) 1,400,000 of the Common Stock of IASI at $2.625 per share, (b)
1,400,000 shares of the Common Stock of IASI at $3.125 per share,
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and (c) 1,400,000 shares of the Common Stock of IASI at $3.875 per share, and
(iii) a promissory note in the principal amount of $4,000,000.
E. Under the terms of the Agreement and Plan of Merger, dated May 19,
1996, as amended (the "Merger Agreement") Alliance also agreed to execute a
Lock-Up Agreement, dated October 18, 1996, which contains certain contractual
restrictions on its disposition of the IASI Shares received in the mergers.
F. Whereas, BTIL and Alliance disagree as to whether a "Qualifying
Event of Liquidity" has occurred, or if it has occurred, what is the value of
the "Liquidity Payment", and
G. Whereas, BTIL and Alliance have elected to settle the matters as to
a "Qualifying Event of Liquidity" and "Liquidity Payment" and to execute mutual
releases (other than claims arising under this Agreement), and whereas BTIL,
London Pacific and Alliance desire to satisfy, in full, the obligations under
the Debenture and Note, all on the terms and conditions set forth below:
AGREEMENT
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NOW, THEREFORE, in consideration of the premises, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties, intending to be legally bound, hereby agree as
follows:
1. EXCHANGE OF SECURITIES.
(a) TRANSFER OF SECURITIES BY ALLIANCE. Alliance hereby agrees to
exchange, assign and transfer unto BTIL and London Pacific One Million Three
Hundred Seventy Thousand (1,370,000) shares of the Common Stock of IASI (the
"IASI Shares") and warrants (the "IASI Warrants") to purchase Eighty-Five
Thousand (85,000) shares of the Common Stock of IASI at a purchase price of
$3.125 per share, exercisable in whole or part at any time and from time to time
from the date of Delivery (as defined below) of such IASI Warrants until 6:00
p.m., Eastern Daylight Time, on October 17, 1999. The sale or other disposition
by BTIL and/or London Pacific of one-half (Six Hundred Eighty-Five Thousand
(685,000)) of the IASI Shares (the "Initial Lock-Up Shares") shall be subject to
limitations and restrictions until April 18, 1997 (six months after the mergers)
and the remaining 685,000 IASI Shares (the "Second Lock-Up Shares") and the
shares issuable under the IASI Warrants shall be subject to resale restrictions
until October 18, 1998, all in accordance with that certain Lock-Up Agreement of
even date herewith among Alliance, BTIL and London Pacific (the "Lock-Up
Agreement") in the form of EXHIBIT A attached hereto and made a part hereof by
this reference. Notwithstanding the terms of the Lock-up Agreement, either BTIL
or London Pacific, without the consent of Alliance, may transfer the Initial
Lock-up Shares, the Second Lock-up Shares, the IASI Warrants, and the shares
issuable under the IASI Warrants, or any of such securities, to any of their
respective "affiliates", provided such transferees agree, in writing, to be
bound by the terms of the Lock-up Agreement. The term "affiliate" shall have the
meaning prescribed in Rule 405
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promulgated by the Securities and Exchange Commission under the Securities Act
of 1933, as amended.
(b) SALE UNDER REGISTRATION STATEMENT. The Delivery by Alliance of the
IASI Shares and the IASI Warrants under Section 1(a) above is contemplated to be
made pursuant to the prospectus forming a part of Registration Statement No.
333-15413 filed on November 1, 1996 by IASI (the "Registration Statement").
Until the expiration of 48 hours following notice by Alliance to BTIL of the
effectiveness of the Registration Statement, BTIL, on behalf of itself and
London Pacific, can terminate this Agreement by providing written notice of such
termination to Alliance. In the event the Registration Statement is not
effective by January 31, 1997, BTIL can, at its option, either (i) terminate
this Agreement by providing written notice of such termination to Alliance or
(ii) require Alliance to deliver to it, as part as a private transaction exempt
from the registration requirements of the Securities Act of 1933, as amended
(the Securities Act"), the identical number of IASI Shares and IASI Warrants
specified in subsection (a) above, together with an assignment of Alliance's
registration rights as to such shares and warrants
(c) ALLOCATION OF SHARES AND WARRANTS BETWEEN BTIL AND LONDON PACIFIC.
With respect to the securities described in subsection (a) above of this Section
1, at the Delivery, Alliance shall deliver unto London Pacific such number of
IASI Shares, with appropriate executed forms of assignment and transfer, in such
proportion between Initial Lock-Up Shares and Second Lock-Up Shares, as London
Pacific and BTIL shall jointly instruct Alliance on the day immediately
preceding the day of the Delivery. Alliance shall deliver unto BTIL at the
Delivery the remainder of the IASI Shares and all of the IASI Warrants, with
appropriate executed forms of assignment and transfer.
(d) RELINQUISHMENT OF DEBENTURE AND PROMISSORY NOTE BY LONDON PACIFIC
AND BTIL. Upon Delivery of the IASI Shares and IASI Warrants, London Pacific and
BTIL shall accept the IASI Shares and the IASI Warrants transferred by Alliance
pursuant to subsections (a) and (b) above of this Section 1 as payment in full
of all obligations owing by Alliance to London Pacific and BTIL under the Note
and the Debenture, including, without limitation, the entitlement of the holder
of the Debenture to receive the "Liquidity Payment" upon a "Qualifying Event of
Liquidity" under the Debenture Agreement. Upon such Delivery, London Pacific and
BTIL shall relinquish the Promissory Note and the Debenture, each marked "Paid
in Full," to Alliance.
(e) MUTUAL RELEASE. Except as to their respective covenants,
representations, warranties and obligations under this Agreement, (i) Alliance
agrees to fully release, acquit and discharge BTIL, London Pacific and their
respective officers, directors, employees, parents and subsidiaries from and
against any and all actions, causes of actions, claims and demands of whatever
kind or nature, known and unknown, foreseen and unforeseen, suspected and
unsuspected, asserted or unasserted, which Alliance has or may have against them
by reason of any fact, matter or thing through the date of this Agreement, and
(ii) BTIL and London Pacific agree to fully release Alliance and its respective
officers, directors, employees, parents and subsidiaries from and against any
and all actions, causes of actions, claims and demands of whatever kind or
nature, known and unknown, foreseen and unforeseen, suspected and unsuspected,
asserted or unasserted, which BTIL and London Pacific have or may have against
them by reason of any fact, matter or thing through the date of this Agreement.
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2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF ALLIANCE. As a material
inducement to London Pacific and BTIL to enter into this Agreement and
consummate the transactions contemplated hereby, Alliance represents, warrants
and, where applicable, covenants to London Pacific and BTIL as follows:
(a) CORPORATE STATUS. Alliance is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of Ohio.
Alliance has all requisite corporate power and authority to own, lease and
operate its properties and to carry on its business as now conducted. There is
no pending or threatened proceeding for the dissolution, liquidation or
insolvency of Alliance.
(b) CORPORATE POWER AND AUTHORITY. Alliance has the corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder and consummate the transactions contemplated hereby. Alliance has
taken all necessary corporate action to authorize the execution, delivery and
performance of this Agreement and the transactions contemplated hereby.
(c) ENFORCEABILITY. This Agreement has been duly executed and delivered
by Alliance and constitutes a valid, legal and binding obligation of Alliance,
enforceable against Alliance in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and
general equitable principles regardless of whether such enforceability is
considered in a proceeding at law or in equity.
(d) NO VIOLATION. The execution and delivery by Alliance of this
Agreement, the consummation of the transactions contemplated hereby, and the
compliance by Alliance with the terms and provisions hereof, will not: (i)
result in a breach of, or constitute a material default under (with or without
due notice or lapse of time or both), or give rise to any right of termination,
cancellation or acceleration under, or create any obligation to pay money or
otherwise perform a material act pursuant to, any of the terms, conditions, or
provisions of any contract, agreement, promissory note or other instrument to
which Alliance is a party or by which Alliance or a material portion of its
assets or properties may be bound; (ii) conflict with, or result in any breach
of any provision of, the Articles of Incorporation or Bylaws or other governing
instruments of Alliance; (iii) violate any domestic or foreign, federal, state
or local law, rule, regulation, statute or ordinance application to or binding
on Alliance or its properties, or any determination, ruling, decree or judgment
of any arbitrator or a court or any other governmental or quasi-governmental
entity, official or authority having jurisdiction over Alliance or any material
portion of its assets or properties; or (iv) result in the imposition of any
lien or encumbrance upon any of the capital stock, properties or assets of
Alliance.
(e) CONSENTS AND APPROVALS. No consent, approval, waiver or other
action by any person or entity who is not a party to this Agreement or under any
domestic or foreign, federal, state or local law, rule, regulation, statute or
ordinance applicable to or binding on Alliance or is properties is required or
necessary for the execution or delivery by Alliance of this Agreement or the
consummation of the transactions contemplated hereby, or the performance by
Alliance of its obligations hereunder, except (i) such consents, approvals,
waivers or other actions as Alliance has
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already obtained, or (ii) where the failure to obtain such consents, approvals,
waivers or other actions would not prevent or delay the consummation of the
transactions contemplated by this Agreement or otherwise prevent Alliance from
performing its obligations hereunder, or result in the imposition of a material
penalty, tax or other liability on BTIL or London Pacific.
(f) CAPITALIZATION OF IASI. The authorized capital stock of IASI
consists of 100,000,000 shares of common stock, $0.01 per value per share. As of
the date of this Agreement, 30,492,618 shares of the common stock of IASI are
issued and outstanding. Except (i) 16,200,000 shares subject to outstanding
warrants issued in the Merger and the simultaneous stock issuances and (ii)
5,154,632 shares of IASI common stock reserved for issuance under the Company's
employee benefit plans or with respect to other outstanding options and
warrants, to the best of Alliance's knowledge, there are (Y) no rights, options,
warrants, convertible securities, subscription rights or other agreements,
calls, plans, contracts or commitments of any kind relating to the issued and
unissued capital stock of, or other equity interests in, IASI, and (Z) no
contractual obligations of IASI or any of its subsidiaries to repurchase, redeem
or otherwise acquire any shares of the common stock of IASI or any capital stock
of, or any equity interest in, any of its subsidiaries. Notwithstanding the
foregoing, IASI has signed a best efforts placement agreement with Xxxxx &
Company, Inc. with respect to the private placement of 3,500,000 shares and
warrants to purchase at $11 per share an additional 3,500,000 shares
(collectively, the "Units")at $9.00 per Unit.
(g) GOOD AND MARKETABLE TITLE. Upon delivery to BTIL and London Pacific
of the certificates for the IASI Shares and certificates for the IASI Warrants,
BTIL and London Pacific will acquire good, valid and marketable (except for the
provisions of the Lock-Up Agreement) title to and beneficial record ownership of
the IASI Shares and the IASI Warrants. The IASI Shares are validly issued and
outstanding and are fully paid and non-assessable. IASI has reserved 85,000
shares of its common stock for issuance upon the exercise of the IASI Warrants,
and, upon exercise of the IASI Warrants (including, without limitation, payment
in full of the exercise price to IASI), the shares of common stock to be issued
by IASI upon such exercise (the "IASI Warrant Shares") will be validly issued,
fully paid and non-assessable.
(h) REGISTRATION OF SHARES. Assuming the IASI Shares delivered at
Delivery are delivered under the above referenced Registration Statement, then,
subject to the terms of the LockUp Agreement, BTIL and London Pacific may freely
re-sell, transfer or distribute to the public the IASI Shares without liability
under the Securities Act or under the securities or Blue Sky laws of any state
in the United States arising by reason of any failure of registration or
qualification of the IASI Shares. The Registration Statement does not, nor at
the time of its effectiveness will it, contain (i) an untrue statement or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading with respect to the information furnished
therein as to Alliance or with respect to IASI for events occurring on or after
October 17, 1996 or (ii) to the best of Alliance's knowledge, an untrue
statement or omit to state a material fact required to be stated therein or
necessary to make the statements in the Registration Statement relating to IASI
for events prior to October 17, 1996, or relating to any other selling
shareholder, not misleading.
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(i) LISTING OF SHARES. The IASI Shares have been, and the IASI Warrant
Shares, when issued, will be approved for quotation on the NASDAQ National
Market.
(j) BROKERS. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based on any arrangements or
agreements made by or on behalf of Alliance.
3. REPRESENTATIONS AND WARRANTIES OF BTIL. As a material inducement to
Alliance to enter into this Agreement and consummate the transactions
contemplated hereby, BTIL represents and warrants to Alliance as follows:
(a) CORPORATE STATUS. BTIL is a corporation duly incorporated, validly
existing and in good standing under the laws of the Bailiwick of Jersey. BTIL
has all requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now conducted. There is no pending or
threatened proceeding for the dissolution, liquidation or insolvency of BTIL.
(b) CORPORATE POWER AND AUTHORITY. BTIL has the corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder and consummate the transactions contemplated hereby. BTIL has taken
all necessary corporate action to authorize the execution, delivery and
performance of this Agreement and the transactions contemplated hereby.
(c) ENFORCEABILITY. This Agreement has been duly executed and delivered
by BTIL and constitutes a valid, legal and binding obligation of BTIL,
enforceable against BTIL in accordance with its terms, except as may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and general equitable
principles regardless of whether such enforceability is considered in a
proceeding at law or in equity.
(d) NO VIOLATION. The execution and delivery by BTIL of this Agreement,
the consummation of the transactions contemplated hereby, and the compliance by
BTIL with the terms and provisions hereof, will not: (i) result in a breach of,
or constitute a material default under (with or without due notice or lapse of
time or both), or give rise to any right of termination, cancellation or
acceleration under, or create any obligation to pay money or otherwise perform a
material act pursuant to, any of the terms, conditions, or provisions of any
contract, agreement, promissory note or other instrument to which BTIL is a
party or by which BTIL or a material portion of its assets or properties may be
bound; (ii) conflict with, or result in any breach of any provision of, the
Articles of Incorporation or Bylaws or other governing instruments of BTIL;
(iii) violate any domestic or foreign, federal, state or local law, rule,
regulation, statute or ordinance application to or binding on BTIL or its
properties, or any determination, ruling, decree or judgment of any arbitrator
or a court or any other governmental or quasi-governmental entity, official or
authority having jurisdiction over BTIL or any material portion of its assets or
properties; or (iv) result in the imposition of any lien or encumbrance upon any
of the capital stock, properties or assets of BTIL.
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(e) CONSENTS AND APPROVALS. No consent, approval, waiver or other
action by any person or entity who is not a party to this Agreement or under any
domestic or foreign, federal, state or local law, rule, regulation, statute or
ordinance applicable to or binding on BTIL or is properties is required or
necessary for the execution or delivery by BTIL of this Agreement or the
consummation of the transactions contemplated hereby, or the performance by BTIL
of its obligations hereunder, except (i) such consents, approvals, waivers or
other actions as BTIL has already obtained, or (ii) where the failure to obtain
such consents, approvals, waivers or other actions would not prevent or delay
the consummation of the transactions contemplated by this Agreement or otherwise
prevent BTIL from performing its obligations hereunder, or result in the
imposition of a material penalty, tax or other liability on Alliance.
(f) INVESTMENT INTENT. BTIL is acquiring the IASI Shares and the IASI
Warrants solely for the purpose of investment or for the purposes of re-selling
the IASI Shares and IASI Warrant Shares at such times as may be economically
beneficial, as determined in the business judgment of BTIL. BTIL has no
intention of participating in the formulation, determination or direction of the
basic business decisions of IASI.
(g) BROKERS. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based on any arrangements or
agreements made by or on behalf of BTIL.
4. REPRESENTATIONS AND WARRANTIES OF LONDON PACIFIC. As a material
inducement to Alliance to enter into this Agreement and consummate the
transactions contemplated hereby, London Pacific represents and warrants to
Alliance as follows:
(a) CORPORATE STATUS. London Pacific is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of North Carolina. London Pacific has all requisite corporate power and
authority to own, lease and operate its properties and to carry on its business
as now conducted. There is no pending or threatened proceeding for the
dissolution, liquidation or insolvency of London Pacific.
(b) CORPORATE POWER AND AUTHORITY. London Pacific has the corporate
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder and consummate the transactions contemplated hereby.
London Pacific has taken all necessary corporate action to authorize the
execution, delivery and performance of this Agreement and the transactions
contemplated hereby.
(c) ENFORCEABILITY. This Agreement has been duly executed and delivered
by Alliance and constitutes a valid, legal and binding obligation of London
Pacific, enforceable against London Pacific in accordance with its terms, except
as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and general equitable principles regardless of whether such
enforceability is considered in a proceeding at law or in equity.
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(d) NO VIOLATION. The execution and delivery by London Pacific of this
Agreement, the consummation of the transactions contemplated hereby, and the
compliance by London Pacific with the terms and provisions hereof, will not: (i)
result in a breach of, or constitute a material default under (with or without
due notice or lapse of time or both), or give rise to any right of termination,
cancellation or acceleration under, or create any obligation to pay money or
otherwise perform a material act pursuant to, any of the terms, conditions, or
provisions of any contract, agreement, promissory note or other instrument to
which London Pacific is a party or by which London Pacific or a material portion
of its assets or properties may be bound; (ii) conflict with, or result in any
breach of any provision of, the Articles of Incorporation or Bylaws or other
governing instruments of London Pacific; (iii) violate any domestic or foreign,
federal, state or local law, rule, regulation, statute or ordinance application
to or binding on London Pacific or its properties, or any determination, ruling,
decree or judgment of any arbitrator or a court or any other governmental or
quasi-governmental entity, official or authority having jurisdiction over London
Pacific or any material portion of its assets or properties; or (iv) result in
the imposition of any lien or encumbrance upon any of the capital stock,
properties or assets of London Pacific.
(e) CONSENTS AND APPROVALS. No consent, approval, waiver or other
action by any person or entity who is not a party to this Agreement or under any
domestic or foreign, federal, state or local law, rule, regulation, statute or
ordinance applicable to or binding on London Pacific or is properties is
required or necessary for the execution or delivery by London Pacific of this
Agreement or the consummation of the transactions contemplated hereby, or the
performance by London Pacific of its obligations hereunder, except (i) such
consents, approvals, waivers or other actions as London Pacific has already
obtained, or (ii) where the failure to obtain such consents, approvals, waivers
or other actions would not prevent or delay the consummation of the transactions
contemplated by this Agreement or otherwise prevent London Pacific from
performing its obligations hereunder, or result in the imposition of a material
penalty, tax or other liability on Alliance.
(f) INVESTMENT INTENT. London Pacific is acquiring the IASI Shares
solely for the purpose of investment or for the purposes of re-selling the IASI
Shares at such times as may be economically beneficial, as determined in the
business judgment of London Pacific. London Pacific has no intention of
participating in the formulation, determination or direction of the basic
business decisions of IASI.
(g) BROKERS. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based on any arrangements or
agreements made by or on behalf of London Pacific.
5. DEMAND REGISTRATION.
(a) REQUEST FOR REGISTRATION. In the event that Alliance shall receive
from BTIL a written request that IASI effect any registration, qualification or
compliance with respect to all or any portion of the IASI Warrant Shares or, if
applicable, the IASI Shares then held by BTIL (or any affiliate of BTIL),
Alliance will as soon as practicable, cause IASI to use its best efforts, at
Alliance's or IASI's sole cost and expense, to effect all such registrations,
qualifications, and compliances
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(including, without limitation, the execution of an undertaking to file
post-effective amendments, appropriate qualifications under the applicable blue
sky or other state securities laws and appropriate compliance with exemptive
regulations issued under the Securities Act and any other governmental
requirements or regulations) as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of BTIL's IASI
Warrant Shares as are specified in such request.
(b) FILING OF REGISTRATION STATEMENT. Alliance shall cause IASI to file
a registration statement covering IASI Warrant Shares and, if applicable, the
IASI shares so requested to be registered as soon as practical, but in any event
within 90 days, after receipt of the request of BTIL; provided that if IASI
shall furnish to BTIL a certificate signed by the President of IASI stating in
the good faith judgment of the Board of Directors that it would be detrimental
to IASI and its stockholders for such registration statement to be filed at the
date filing would be required and it is therefore essential to defer the filing
of such registration statement, IASI shall have an additional period of not more
than 90 days within which to file such registration statement. Such certificate
and deferral of registration may be given only once in any 360 day period.
(c) LIMITATION ON REQUEST. BTIL shall be entitled to one request for
registration pursuant to this Section 5 if the only shares with registration
rights are the shares issuable upon exercise of the IASI Warrants. If the IASI
Shares received by BTIL and London Pacific were issued in a private transaction,
then BTIL and London Pacific shall have one demand registration statement and an
unlimited number of rights to demand registration under a Form S-3, provided
that only three demands to register on a Form S-3 may be made in any one year
period. BTIL and London Pacific's rights to demand registration with respect to
the IASI Shares shall expire on the fourth anniversary of Delivery; provided
that if the SEC adopts an amendment to Rule 144 shortening the holding period
for permitted sales under clause (k) of Rule 144 from three years to a lesser
period, the registration rights provided herein shall expire one year after the
end of the shortened holding period.
6. CONDITIONS TO DELIVERY.
(a) CONDITIONS TO OBLIGATIONS OF EACH PARTY TO EFFECT THE DELIVERY. The
respective obligations of each party to this Agreement to effect the Delivery of
the IASI Shares and IASI Warrants, and also of the delivery of the Notes and
Debentures, shall be subject to the fulfillment of the condition, which may be
waived, in whole or in part, to the extent permitted by applicable law, that: no
governmental or quasi-governmental entity, official or authority or other agency
or commission or federal or state court of competent jurisdiction shall have
enacted, issued, promulgated, enforced or entered into any statute, rule,
regulation, executive order, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and which materially
restricts, prevents or prohibits consummation of any of the transactions
contemplated by this Agreement; PROVIDED, HOWEVER, that each of the parties to
this Agreement agrees that it will use its best efforts to take, or cause to be
taken all appropriate actions, and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement,
including, without limitation, to obtain all licenses, permits, consents,
approvals, authorizations, qualifications and orders as are
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necessary for the consummation of the transactions contemplated by this
Agreement and to cause any decree, judgment, injunction or other order which
restricts, prevents or prohibits consummation of any of the transactions
contemplated by this Agreement to be vacated and lifted.
(b) CONDITIONS TO THE OBLIGATIONS OF BTIL AND LONDON PACIFIC. The
obligations of BTIL and London Pacific to accept the Delivery of the IASI Shares
and IASI Warrants, and to deliver the Note and Debenture, are also subject to
the following conditions, any and all of which may be waived, in whole or in
part, to the extent permitted by applicable law.
(i) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties of Alliance contained in this Agreement
shall be true and correct in all material respects as of the date of
Delivery as though made on and as of the date of Delivery; and
(ii) AGREEMENT AND COVENANTS. Alliance shall have performed or
complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by Alliance
on or prior to the date of Delivery.
(c) CONDITIONS TO THE OBLIGATIONS OF ALLIANCE. The obligations of
Alliance to proceed with Delivery of the IASI Shares and IASI Warrants and
accept delivery of the Note and Debenture are also subject to the following
conditions, any and all of which may be waived, in whole or in part, to the
extent permitted by applicable law:
(i) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties of BTIL and London Pacific contained in
this Agreement shall be true and correct in all material respects as of
the date of Delivery as though made on and as of the date of Delivery;
and
(ii) AGREEMENT AND COVENANTS. BTIL and London Pacific shall
have performed or complied in all material respects with all agreements
and covenants required by this Agreement to be performed or complied
with by BTIL and London Pacific on or prior to the date of Delivery.
7. DELIVERY.
(a) PLACE AND TIME. The final settlement of the transactions
contemplated by this Agreement (the "Delivery") shall take place at the offices
of Berkeley International Capital Corporation, 000 Xxxxxxxxxx Xxxxxx, Xxxxx
0000, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, on the third business day after London
Pacific shall have notified Alliance that London Pacific shall have satisfied
all of its conditions to the Delivery set forth in Section 6(c) above, or at
such other place and time as the parties may agree.
(b) DELIVERIES AT DELIVERY.
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11
(i) DELIVERIES BY ALLIANCE. At the Delivery, Alliance shall
deliver to London Pacific one or more certificates representing in the
aggregate the IASI Shares being sold, assigned and transferred to
London Pacific by Alliance in such number of shares as shall have been
determined pursuant to Section 1(c) above. At the Delivery, Alliance
shall deliver to BTIL one or more certificates representing in the
aggregate the remainder of the IASI Shares being sold, assigned and
transferred to BTIL by Alliance and one or more certificates
representing the IASI Warrants.
(ii) DELIVERIES BY BTIL AND LONDON PACIFIC. At the Delivery,
BTIL and London Pacific shall deliver to Alliance the Promissory Note
and the Debenture, each marked "Paid in Full."
8. TERMINATION. This Agreement may be terminated, and the transactions
contemplated hereby may be abandoned at any time prior to the Delivery, as
follows: (i) by written agreement of the parties; (ii) by BTIL or London Pacific
if the Delivery has failed to occur on or prior to January 31, 1997, or upon a
breach of any representation, warranty, covenant or agreement on the part of
Alliance set forth in this Agreement, or if any representation or warranty of
Alliance shall have become untrue; or (iii) by Alliance upon a breach of any
representation, warranty, covenant or agreement on the part of BTIL or London
Pacific set forth in this Agreement, or if any representation or warranty of
BTIL or London Pacific shall have become untrue. Any such termination shall be
without prejudice to any claim which any party may have against another party
for breach of this Agreement (or any representations, warranty, covenant or
agreement included herein).
9. ADDITIONAL AGREEMENTS.
(a) FURTHER ASSURANCES; BEST EFFORTS. Each party to this Agreement
shall execute and deliver such additional instruments and other documents and
shall take such further actions as may be necessary or appropriate to
effectuate, carry out and comply with all of the terms of this Agreement and the
transactions contemplated hereby and will use its best efforts to obtain the
satisfaction of the conditions to the Delivery set forth in Section 6 above.
(b) COOPERATION. Each party to this Agreement agrees to cooperate with
the other parties in the preparation and filing of all forms, notifications,
reports and information, if any, required or reasonably deemed advisable
pursuant to any legal requirement or the rules of the NASDAQ National Market in
connection with the transactions contemplated by this Agreement and to use their
respective best efforts to agree jointly on a method to overcome any objections
by any court or any other governmental or quasi-governmental entity, official or
authority to any such transactions.
(c) SEC FILINGS RELATING TO TRANSFER OF SHARES. Each party to this
Agreement shall, at its own expense, file whatever documents with the SEC as may
be necessary or advisable under the Exchange Act and the rules and regulations
promulgated thereunder to report the transfer of IASI Shares and IASI Warrants
as contemplated by this Agreement.
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12
(d) SEC FILINGS RELATING TO IASI. Alliance agrees (i) to cause IASI to
maintain any qualification or approval obtained in connection with the
registration statement referenced in Section 5 for so long as the Registration
Statement remains effective, and amend or supplement registration statement, the
prospectus contained therein or other offering document used in connection
therewith to the extent necessary in order to comply with the Securities Act and
the Exchange Act and (ii) as promptly as practicable to notify BTIL and London
Pacific of the occurrence of an event requiring the preparation of a supplement
or amendment to the registration statement and/or the prospectus contained
therein so that, the registration statement and/or the prospectus contained
therein will not contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and as promptly as practicable make available to BTIL and London
Pacific any such supplement or amendment.
(e) SEC REPORTS AND NASDAQ COMPLIANCE. In the event Alliance makes any
claims against IASI for breaches of the Merger Agreement, as it relates to an
untrue statement of a material fact, or an omission to state a material fact
required to be stated in any SEC or NASDAQ filing, Alliance agrees that BTIL and
London Pacific shall be entitled to share in any recovery by Alliance in the
same proportion that the Shares received by them under this Agreement bears to
the Shares received by Alliance under the Merger Agreement. For purposes of this
subsection (e), shares subject to outstanding warrants shall be counted as
shares issued. The inclusion of this subsection (e) shall not require Alliance
to take any action against IASI, if Alliance, in its sole and absolute
discretion, elects not to take such action.
(f) NOTIFICATION OF CERTAIN MATTERS. Alliance shall give prompt notice
to BTIL and London Pacific, and BTIL and London Pacific shall give prompt notice
to Alliance, of the occurrence or non-occurrence of any event which would likely
cause any representation or warranty contained in this Agreement to be untrue or
inaccurate, or any covenant, condition or agreement contained herein not to be
complied with or satisfied.
(g) PUBLIC ANNOUNCEMENTS. Prior to the Delivery, none of the parties to
this Agreement shall make any public release of information relating to the
matters contemplated by this Agreement except that any party may issue a press
release in form and content agreed to by all the parties to this Agreement upon
the execution of this Agreement and/or upon the Delivery.
(h) SECURITIES TRADING. Each of the parties hereby agrees that between
the date of this Agreement and the Delivery, it will refrain, and will use its
best efforts to cause its officers, directors, shareholders, affiliates,
representatives and agents to refrain from any securities trading activities
with respect to the common stock of IASI.
10. INDEMNIFICATION. Alliance shall indemnify and hold harmless BTIL and London
Pacific against and from any and all losses, damages, liabilities, claims,
charges, actions, proceedings, demands, judgments, settlements, compromises,
costs and expenses (including, without limitation, attorneys' fees and expenses
and the allocated cost and expenses of in-house counsel) or deficiencies
(collectively, "LOSSES") resulting from a breach of a representation, warranty
or covenant by Alliance
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13
and all claims, charges, actions or proceedings (collectively, "PROCEEDINGS")
incident to or arising out of the foregoing. BTIL shall indemnify and hold
harmless Alliance against and from any and all Losses resulting from a breach of
a representation, warranty or covenant by BTIL and all Proceedings incident to
or arising out of the foregoing. London Pacific shall indemnify and hold
harmless Alliance against and from any and all Losses resulting from a breach of
a representation, warranty or covenant by London Pacific and all Proceedings
incident to or arising out of the foregoing.
Any party entitled to indemnification under this Section 9 (an
"INDEMNIFIED PARTY") shall give notice as promptly as reasonably practicable to
each party required to provide indemnification hereunder (an "INDEMNIFYING
PARTY") of any action commenced against or by it in respect of which indemnity
may be sought hereunder, but failure to so notify an Indemnifying Party shall
not relieve such Indemnifying Party from any liability that it may have on
account of this Section 9 so long as such failure shall not have materially
prejudiced the position of the Indemnifying Party. Upon such notification, the
Indemnifying Party shall assume the defense of such action if it is a claim
brought by a third party, and after such assumption the Indemnified Party shall
not be entitled reimbursement of any expenses incurred by it in connection with
such action except as described below. In any such action any Indemnified Party
shall have the right to retain its own counsel, but the fees and expenses of
such counsel shall be at the expense of such Indemnified Party unless (a) the
Indemnifying Party and the Indemnified Party shall have mutually agreed to the
contrary, or (b) the named parties in any such action (including any impleaded
parties) include both the Indemnifying Party and the Indemnified Party and
representation of both parties by the same counsel would be inappropriate due to
actual or potential differing or conflicting interests between them. The
Indemnifying Party shall not be liable for any settlement of any Proceeding
effected without its written consent, which shall not be unreasonably withheld
or delayed by such Indemnifying Party, but if settled with such consent of if
there be final judgment for the plaintiff, the Indemnifying Party shall
indemnify the Indemnified Party against any Loss by reason of such settlement or
judgment.
11. MISCELLANEOUS.
(a) NOTICES. In order to be effective, any notice or other
communication required or permitted hereunder, shall, unless otherwise stated
herein, be in writing and shall be transmitted by messenger, delivery service,
mail, telex, telegram, telecopy or cable at its address set forth below:
If to Alliance: Alliance Corporation
00000 Xxxxx Xxxxxx Xxxx
Xxxxxx Xxxx, Xxxx 00000
Attention: Xx. Xxxxx X. Xxxxx
Telecopier: (000) 000-0000
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14
with a copy to: Xxxx X. Xxxxxx & Associates Co., L.P.A.
0 Xxxxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxx 00000-0000
Attention: Xxxx X. Xxxxxx, Esq.
Telecopier: (000) 000-0000
If to BTIL: Berkeley Technology Investments Limited
Minden House
6 Minden Place
St. Helier, Jersey
Channel Islands
Attention: Mr. Xxx Xxxxx
Telecopier: (000) 00-0-000-000000
with a copy to Berkeley International Capital Corporation
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxxx, Esq.
Telecopier: (000) 000-0000
If to London Pacific: London Pacific Life & Annuity Company
0000 Xxxxxxxxxx Xxxxx
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xx. Xxxxx X. Xxxxxxx
Telecopier: (000) 000-0000
with a copy to: Berkeley International Capital Corporation
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxxx, Esq.
Telecopier: (000) 000-0000
or at such other address as a party shall designate in a written notice to the
other parties hereto given in accordance with this Section 11(a). All notices
and other communications shall be effective (i) if sent by messenger or delivery
service, when delivered; (ii) if sent by mail, five days after having been sent
by certified mail, with return receipt requested; (iii) if sent by telegraph or
cable, when delivered to the telegraph or cable company; or (iv) if sent by
telex or telecopier, when sent. In order to be effective, any notice transmitted
to an address outside the United States of America by any means other than telex
or telecopier shall at the time of transmittal be duplicated by counterpart
telex or telecopier notice.
(b) SURVIVAL. The representations, warranties, covenants and agreements
made herein shall survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby, notwithstanding any
investigation made by any of the parties, or their agents or representatives.
All statements as to factual matters contained in any certificate, exhibit or
other
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15
instrument delivery by or on behalf of any party pursuant hereto or in
connection with the transactions contemplated hereby, except as expressly
provided therein, shall be deemed to be representations and warranties of such
party hereunder as of the date of such certificate, exhibit or schedule.
(c) REMEDIES. Alliance, on the one hand, and London Pacific and BTIL,
on the other hand, acknowledge that the other would not have an adequate remedy
at law for money damages in the event that any of the covenants or agreements of
a party in this Agreement was not performed in accordance with its terms, and it
is therefore agreed that each of Alliance, on the one hand, and London Pacific
and BTIL, on the other hand, in addition to and without limiting any other
remedy or right such party may have, shall have the right to an injunction or
other equitable relief in any court of competent jurisdiction, enjoining any
such breach and enforcing specifically the terms and provisions hereof, and each
of Alliance, on the one hand, and London Pacific and BTIL, on the other hand,
hereby waives any and all defenses such party may have on the ground of lack of
jurisdiction or competence of the court to grant such an injunction or other
equitable relief. All rights, powers and remedies cumulative and not
alternative, and the exercise or beginning of the exercise of any thereof by any
party shall not preclude the simultaneous or later exercise of any other such
right, power or remedy by such party. The failure of any party at any time to
require performance by another party of any provision hereof shall not diminish
the full right to require such performance at any time thereafter. The waiver by
any party of a breach of any provision hereof shall not be a waiver of the
provision itself or any other breach thereof. No failure on the part of any
party to exercise any right or remedy hereunder, and no delay on the part of any
party hereto in exercising any such right or remedy, shall preclude any other or
further exercise thereof or of any other right or remedy.
(d) SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that Alliance may not assign or transfer its rights hereunder or
any interest herein or delegate its duties hereunder without the prior written
consent of London pacific and BTIL. London Pacific and BTIL may assign, grant
participation in, sell, or otherwise transfer some or all of their interest in
any of their rights under this Agreement.
(e) ENTIRE AGREEMENT, AMENDMENT. This Agreement constitutes the entire
agreement among Alliance, BTIL and London Pacific with respect to the subject
matter hereof; supersede all prior or contemporaneous negotiations,
communications, discussions and correspondence concerning the subject matter
hereof; and may be amended or modified only with the written consent of all the
parties hereto.
(f) SEVERABILITY. In the event that any provision of this Agreement, or
the application of such provision to any party or set of circumstances, shall be
determined to be unenforceable to any extent, the remainder of this Agreement,
and the application of such provision to parties or circumstances other than
those as to which it is determined to be unenforceable, shall not be affected
and shall continue to be valid and enforceable to the fullest extent permitted
by law.
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16
(g) GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio exclusive of choice of law
provisions which would direct the application of another jurisdiction's law.
(h) COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which, when so executed, shall be deemed to be an original
and all of which, when taken together, shall constituted but one and the same
agreement.
(i) AMENDMENTS, APPROVALS AND WAIVERS. Whenever the waiver, permit,
consent or approval of any kind by the parties (including, without limitation,
approval of amendments to this Agreement) is required under this Agreement, the
same must be in writing to be binding upon the parties hereto, and the same
shall be effective and binding upon the parties only to the extent set forth in
such writing.
(j) EXPENSES. Except as otherwise provided in this Agreement, the
parties hall pay their own fees and expenses, including their own counsel fees,
incurred in connection with this Agreement or any transaction contemplated
hereby.
(k) CONSTRUCTION. The section headings are provided herein for
convenience of reference only and shall not serve as a basis for interpretation
or construction of this Agreement. Each party hereto agrees that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party shall not be applied in the construction of interpretation of
this Agreement. As used in this Agreement, the words "include" and "including",
and all variations thereof, shall not be deemed to be terms of limitation.
(l) FURTHER ACTION. Each party hereto agrees to perform all further
acts and to execute and deliver or cause to be executed and delivered all
documents, instruments and agreements which may be reasonably necessary to carry
out the intents and purposes of this Agreement or to enable the other party to
enforce any of its rights under this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the day and year first written above.
ALLIANCE: ALLIANCE HOLDING CORPORATION, an Ohio
corporation
By: /S/ XXXXXX X. XXXXXXX
---------------------
Xxxxxx X. XxXxxxx
Its: President
BTIL: BERKELEY TECHNOLOGY INVESTMENTS
LIMITED, a Jersey, Channel Islands, corporation
By: /S/ X.X. XXXXXXXX
-----------------
X.X. Xxxxxxxx
Its: Director
LONDON PACIFIC: LONDON PACIFIC LIFE & ANNUITY
COMPANY, a North Carolina stock life insurance
company
By: /S/ XXXXX X. XXXXXXX
--------------------
Xxxxx X. Xxxxxxx
Its: Vice President and Treasurer
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