EXHIBIT 10.11
STOCK PURCHASE AGREEMENT
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THIS STOCK PURCHASE AGREEMENT is entered into effective this 19th day
of November, 2003, by and among Orion Security Services, Inc., a Virginia
corporation (hereinafter referred "Seller" or "Company") and Xxxxxx X. Xxxxxx,
Xxxxxxxxx Xxxxx, Xx, Xxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxxxxx and Xxxx X. Xxxxxxxx,
being all of the shareholders of Orion Security Services, Inc., (hereinafter
referred to as "Shareholders" or "Stockholders"), and Xxxx.xxx, Inc., a Nevada
corporation (hereinafter "Purchaser").
Recitals.
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A. Seller is engaged in the business of security technology and
maintains and operates it principal place of business in Oakton, Virginia.
B. The authorized capital stock of Seller consists of One Hundred
(100) shares of common stock of which One Hundred (100) shares are currently
issued and outstanding, all owned by Shareholder.
C. Purchaser has tendered an offer to purchase all of Shareholder's
shares of common stock in Seller in exchange for stock in Seller.
D. Stockholders have agreed to accept stock in Purchaser, and
Stockholders and Purchaser desire to confirm the terms under which Shareholders
will sell and Purchaser will buy the Shares.
F. NOW, THEREFORE, in consideration of the mutual representations,
warranties, covenants and agreements contained herein, and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. SALE OF SHARES. On the closing date as hereinafter defined, the
Shareholders agree to sell, assign, transfer, convey and deliver to Purchaser
all right, title and interest in and to the number of shares of common stock of
Seller, set forth opposite his name in the following schedule, and Purchaser
agrees to issue to Shareholders shares of stock of Purchaser free and clear of
all liens, charges, encumbrances, equities, claims and options of any nature,
pursuant to Rule 144 of the Securities Act of 1933 or 1934.
(Common)
Number of
Shares Being
Name of (Common) (Common) Acquired in
Shareholder Number of Shares Number of Shares Exchange for
Shares Owned Being Sold Orion Shares
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Xxxxxx X. Xxxxxx 52 52 26,000,000
Xxxxxxxxx Xxxxx, Xx. 40 40 20,000,000
Xxxx X. Xxxxxxxx 3.6 3.6 1,800,000
Xxxxx X. Xxxxxxxxxx 3.6 3.6 1,800,000
Xxxx X. Xxxxxxxx .8 .8 400,000
2. PURCHASE PRICE.
In lieu of cash consideration, the purchase price shall be paid by
the issuance to Shareholders of Orion 500,000 shares of Xxxx.xxx, Inc. Common
Stock $0.001 for each one (1) share of stock of Orion Security Services, Inc.
3. SURRENDER AND REISSUANCE OF SHARES.
3.1 Prior to or concurrently with the effective date of this
Agreement the prior certificates for the Shares in Orion have been surrendered
and Seller will cause the transfer agent to issue a new certificate for One
Hundred (100) shares of Orion in the name of Xxxx.xxx, Inc., a Nevada
corporation.
3.2 Prior to or concurrent with the effective date of this Agreement,
Purchaser will give instructions to its transfer agent to issue new certificates
of stock, subject to the restrictions of Rule 144 of Securities Act of 1933/1934
as follows:
3.2.1 26,000,000 Shares of Common Stock $0.001 par value to
Xxxxxx X. Xxxxxx;
3.2.2 20,000,000 Shares of Common Stock $0.001 par value to
Xxxxxxxxx Xxxxx, Xx.;
3.2.3 1,800,000 Shares of Common Stock $0.001 par value to
Xxxx X. Xxxxxxxx;
3.2.4 1,800,000 Shares of Common Stock $0.001 par value to
Xxxxx X. Xxxxxxxxxx; and
3.2.5 400,000 Shares of Common Stock, $0.001 par value to
Xxxx X. Xxxxxxxx.
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4. CONDITIONS OF CLOSING. The transaction herein contemplated is expressly
subject to the satisfaction, prior to closing, of the following described
conditions. The failure of any condition to be satisfied at or prior to closing
shall render this Agreement null and void, and all monies or documents
theretofore delivered, shall be returned to their original owner, and all
parties shall be thereupon relieve of all liabilities hereunder.
4.1 APPROVAL BY BOARD OF DIRECTORS OF PURCHASER. The transaction
herein contemplated is subject to the approval of the Board of Directors of the
Purchaser, certified copies of which shall be delivered to the shareholders at
closing. Further, the Board of Directors of the Purchaser will approve as of the
date of this Agreement that Xxxx.xxx and Orion Security Services, Inc. will have
the same Board of Directors members and structure with voting rights pledged and
reverting to the Chairman and CEO subject to and limited only to the termination
clause of the Employment Contract of Xxxxxx X. Xxxxxx attached hereto as Exhibit
1.
4.2 EMPLOYMENT AGREEMENT. The parties hereby agree to the continuing
employment of Xxxxxx X. Xxxxxx as Chairman and CEO of Orion Security Services,
Inc., pursuant to an Employment Contract with Orion, in the form attached hereto
as Exhibit 1, such Contract to be executed and delivered at closing. As a
material part of the consideration of the Employment Contract, the Employee
referenced in this section expressly agrees not to compete with Xxxx.xxx, Inc.
or Orion Security Services, Inc. as more fully set forth in the Employment
Contract attached hereto as Exhibit 1.
4.3 STOCK CERTIFICATES. Prior to closing the Shareholders shall
tender to the Purchaser their respective Stock Certificates, representing their
existing ownership of the Common Stock of Seller, with direction that the
Certificates be reissued to Purchaser at closing. In addition the Shareholders
shall terminate all existing and outstanding employment agreements between them,
or any of them, the Seller and any Buy-Sell agreements or other agreements
creating or establishing a relationship among or between them, or any one more
of them.
5. CONDITIONS PRECEDENT TO SHAREHOLDER'S OBLIGATIONS
5.1 COMPLIANCE BY THE PURCHASER. All of the terms and conditions of
this Agreement to be complied with and performed in all materials respects in
the covenants, responsibilities and warranties made by the Purchaser in this
Agreement shall be correct in all material respects at and as of the Effective
Date with the same force and effect as those such covenants, representations and
warranties, had been made at and as of the Effective Date, except for changes
contemplated by this Agreement. The Purchaser shall have delivered to the
Shareholder a Certificate dated the Effective Date, signed by the President or
Vice-President and the Secretary or Assistant Secretary certifying the
satisfaction of the conditions contained in this Section 5.
5.2 OPINION OF THE PURCHASER'S COUNSEL. The Shareholder shall have
received the most recent SEC filing of Purchaser attached hereto as Exhibit 11
and an opinion from counsel for the Purchaser, dated the Effective Date, in form
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and substance satisfactory to the Shareholders, and their counsel to the effect
that:
5.2.1 The Purchaser is a Nevada corporation, duly
organized, validly existing and in good standing under
the laws of the State of Nevada and has adequate power
and authority, corporate and otherwise, to carry on the
conduct of the business in which it is now engaged and
to own and operate its properties and assets;
5.2.2 The Purchase has full right, power and authority
to enter into this Agreement and to take all corporate
and other actions required to be taken by and on behalf
of the Purchaser to authorize it to carry out the
transactions contemplated by this Agreement and such
action have been duly and properly taken;
5.2.3 This Agreement has been duly executed and
delivered by or on behalf of the Purchaser, and this
Agreement, and all other agreements and documents
signed by the Purchaser, are duly authorized, valid and
legal bind agreements of the Purchaser, enforceable in
accordance with their respective terms;
5.2.4 Under existing provisions of law, no consent,
approval, order, or authorization of, and no
registration, declaration, filing or recording with any
governmental authority is required to be obtained by
the Purchaser in connection with the transaction
contemplated by this Agreement;
5.2.5 So far as is known to such counsel, there is no
action, suit, proceeding or claim and no investigation
by any governmental agency pending or threatened
against the Purchaser which would have a materially
adverse effect on the transactions contemplated by this
Agreement; and
5.2.6 The execution and delivery by the Purchaser of
this Agreement does not and compliance by it with the
terms thereof will not result in any violation of or be
in conflict with or constitute a default under any term
or provision of the charter or by-laws of the Purchaser
or so far is known to such counsel of any law, statute,
governmental regulation, license, judgment, decree,
order, agreement, indenture or other instrument
applicable to the Purchaser.
5.3 LEGAL PROCEEDINGS. No action or proceeding shall have been
commenced against the Purchaser relating to this Agreement or the transactions
contemplated thereby.
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6. CONDITIONS PRECEDENT TO PURCHASER/CYCO'S OBLIGATIONS.
6.1 All of the terms and conditions of this Agreement to be complied
with and performed by the Shareholder or the Company at or before the Effective
Date shall have been complied with and performed in all material respects, and
the representations, warranties, covenants and agreements made by the
Shareholders of the Company in this Agreement shall be correct in all material
respects at and as of the Effective Date with the same force and effect as those
such representations, warranties, covenants and agreements have been made at and
as of the Effective Date, except for changes contemplated by this Agreement. The
Company and the Shareholders shall have delivered to Purchaser a Certificate,
date the Effective Date and signed by the President and by the Secretary of the
Company certifying to the satisfaction of the conditions described in this
Section 6.
6.2 PURCHASER'S ACCEPTANCE OF EXHIBITS.
The Purchaser shall have reviewed the Exhibits attached hereto relevant to Orion
Security Services, Inc., dated the Effective Date, in form and substance
satisfactory to the Company, and its counsel, to the effect that:
6.2.1 The Company is a corporation duly organized,
validly existing and in good standing under the laws of
the State of Virginia, has full corporate power and
authority to carry on and conduct the business in which
it is now engaged, to own and operate its properties
and assets, and is duly authorize to carry on and
conduct such business in those other states where it is
qualified as a foreign corporation;
6.2.2 The authorized capitalization of the Company
consists of One Hundred (100) shares at one dollar
($1.00) par value per share;
6.2.3 The Company has full corporate power and
authority to enter into this Agreement and all
corporate and other proceedings required to be taken by
and/or on behalf of the Company to authorize it to
carry out the transactions contemplated by this
Agreement, have been duly and properly taken;
6.2.4 This Agreement has been duly executed and
delivered by and on behalf of the Company. This
Agreement is a valid and legally binding Agreement of
the Company, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization or
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similar laws now or hereafter in effect, relating to
creditor's rights and except that the remedy of
specific performance and injunctive relief and other
forms of equitable relief may be subject to equitable
defenses and to the discretion of the Court before any
proceeding therefore may be brought.
6.2.5 The execution and delivery by the Company of this
Agreement does not and in compliance by the Company
with the terms thereof, will not result in any
violation of or be in conflict with or constitute a
default under any term or provision of the Charter or
By-laws of the Company or so far as is known to such
counsel of any law, statute, or governmental regulation
or of any license, decree, order, agreement, indenture
or other instrument applicable to the Company, of which
such counsel has knowledge.
6.2.6 Except as set forth on Exhibit 2, so far as is
known to such counsel, there is no legal action, suit,
proceeding or claim and no investigation by any
governmental agency pending or threatened against the
Company or the assets, business or goodwill of the
Company which would have a materially adverse effect on
the financial or other condition, assets, business,
goodwill, or prospects of the Company or upon the
transactions contemplated by this Agreement;
6.2.7 To the best of Counsel's knowledge, under
existing provisions of law, no consent, approval,
order, or authorization of, and no registration,
declaration, filing or recording with any governmental
authority is required to be obtained by the Company in
connection with the transaction contemplated by this
Agreement;
6.3 LEGAL PROCEEDINGS. No action or proceeding shall have been
commenced against the Company relating to this Agreement or the transactions
contemplated thereby except as disclosed on Exhibit 2, attached hereto.
7. REPRESENTATIONS AND WARRANTIES BY SELLER.
7.1 Seller hereby represents and warrants to Purchaser that:
7.1.1 The Company is a corporation duly organized,
validly existing and in good standing under the laws of
the State of Virginia, has full corporate power and
authority to carry on and conduct the business in which
it is now engaged, to own and operate its properties
and assets, and is duly authorize to carry on and
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conduct such business in those other states where it is
qualified as a foreign corporation;
7.1.2 The authorized capitalization of the Company
consists of One Hundred (100) shares at one dollar
($1.00) par value per share;
7.1.3 The Company has full corporate power and
authority to enter into this Agreement and all
corporate and other proceedings required to be taken by
and/or on behalf of the Company to authorize it to
carry out the transactions contemplated by this
Agreement, have been duly and properly taken;
7.1.4 This Agreement has been duly executed and
delivered by and on behalf of the Company. This
Agreement is a valid and legally binding Agreement of
the Company, enforceable in accordance with its terms,
subject to bankruptcy, insolvency, reorganization or
similar laws now or hereafter in effect, relating to
creditor's rights and except that the remedy of
specific performance and injunctive relief and other
forms of equitable relief may be subject to equitable
defenses and to the discretion of the Court before any
proceeding therefore may be brought.
7.1.5 The execution and delivery by the Company of this
Agreement does not and in compliance by the Company
with the terms thereof, will not result in any
violation of or be in conflict with or constitute a
default under any term or provision of the Charter or
By-laws of the Company or so far as is known to such
counsel of any law, statute, or governmental regulation
or of any license, decree, order, agreement, indenture
or other instrument applicable to the Company, of which
such representative or counsel has(ve) knowledge.
7.1.6 Except as set forth on Exhibit 2, there is no
legal action, suit, proceeding or claim and no
investigation by any governmental agency pending or
threatened against the Company or the assets, business
or goodwill of the Company which would have a
materially adverse effect on the financial or other
condition, assets, business, goodwill, or prospects of
the Company or upon the transactions contemplated by
this Agreement;
7.1.7 Seller has the full power, capacity, and
authority to sell, assign, transfer and deliver the
Shares, and to vest in Purchaser good and marketable
title thereto, free and clear of any and all liens,
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encumbrances, options, security interests,
restrictions, or adverse claims, and the execution,
delivery and performance of this Agreement by Seller,
and the closing of the transactions contemplated
herein, will not breach or conflict with any agreement
to which Seller is a party.
7.1.8 Annexed hereto as Exhibits 5 and 6 are 2002
Federal and State Corporation Income Tax Return and
unaudited Financial Statement and associated documents
and 2003 Y-T-D Unaudited Financials and associated
documents through October 31, 2003 for Seller (the
"Financial Statements"). Except as set forth below, the
Financial Statements:
a. Have been prepared in accordance with generally
accepted accounting principals consistently
applied throughout the periods indicated;
b. Set forth all material assets and material
liabilities of Seller, as applicable thereto, as
of the dates indicated;
c. Are true, correct and complete;
d. Are in accordance with the books and records of
Seller; and
e. Fairly, completely, and accurately present the
financial position of Seller, as applicable, at
the dates specified and the results of their
operations for the periods covered. To the best
of Seller's knowledge, there are no liabilities
of the Corporation of any kind or nature, fixed
or contingent, matured or unmatured or otherwise,
which are not fully reflected or reserved against
on the Financial Statements, or any liability or
obligation of any kind or nature arising since
the date of the Financial Statements, other than
those incurred in the ordinary course of business
consistent with past practices.
7.1.9 Seller has filed all foreign, federal, state,
county, and local income, excise, sales, property,
withholding, social security, franchise, license,
information returns and other tax returns and reports
required to have been filed by it to the date hereof.
To the best of Seller's knowledge, each such return is
true, correct and complete, and Seller has paid all
taxes due to any foreign, federal, state, county, local
or other taxing authority with respect to all periods
prior to the date of the Financial Statements required
to have been paid by Seller and create a sufficient
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reserves or made provision for all thereof accrued but
not yet due and payable by them. To the best of
Seller's knowledge, Seller does not have any liability
for any Taxes other than as shown on the Financial
Statements and there is no basis for any additional
claim or assessment other than with respect to
liabilities for Taxes which may have accrued since the
date of the Financial Statements in the ordinary course
of business. To the best of Seller's knowledge, no
government or governmental authority is now asserting
or threatening to assert any deficiency or assessment
for additional Taxes with respect to Seller. For
purposes of this Agreement, "Taxes" means any federal,
state, local or foreign income, gross receipts,
license, payroll, employment, excise, occupation,
franchise, profits, withholding, social security (or
similar), unemployment, disability, real property,
personal property, sales, use, transfer, registration,
or other tax, assessments or amounts of any kind or
nature whatsoever, however, denominated, including any
interest, penalty, fine, or addition thereto.
7.1.10 To the best of Seller's knowledge, Seller is in
compliance with each law, rule, regulation, order and
decree applicable to its business.
7.1.11 To the best of Seller's knowledge, Seller is not
a party to or has any contract, agreement or commitment
of any kind or nature whatsoever, written or oral,
formal or informal, except those listed in Exhibit 4
and 7.
7.1.12 All tangible personal property located at the
regular business office of Seller is the property of
Seller, subject to no liens, encumbrances or claims
except those set forth in Exhibit 8 hereto.
7.1.13 Seller is the owner of and has the full right,
power and authority to use the names of "Orion Security
Services, Inc.," OSSI SatSecure Surveillance," and
"OSSI ComSecure Controller" and the inclusive rights to
use any of these names and/or the technology or
intellectual property which these names represent as
indicated in Exhibits 4 and 7. There are no trade
secrets, customer lists or other data upon which Seller
relies in its business of which Seller is not the
owner.
7.1.14 All of Seller's accounts receivable that are
reflected in the most recent interim financial
statements and aged accounts receivable reports
provided to Purchaser represent valid obligations
arising from sales actually made or services actually
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performed in the ordinary course of Seller's business
and they are not subject to contest, claim or right of
set-off.
7.1.15 All employee benefit plans of Seller are listed
in Exhibit 10 hereto. The plans have been maintained
and administered in compliance with all applicable
legal requirements.
7.1.16 As of the date of closing Seller is in full
compliance with all laws and regulations of any nature
applicable to it or to the conduct of its operations or
business or the ownership or use of any of its assets.
7.1.17 To the knowledge of Seller, Seller is, and all
times prior hereto has been, in full compliance with,
and has not been and is not in violation of or liable
under any environmental laws or regulations applicable
to its operations and assets.
8. COVENANTS AND AGREEMENTS. The Shareholders agree that from and after
the date of this Agreement and until the Closing Date:
8.1 CONDUCT OF THE BUSINESS. Seller agrees that from the date of this
Agreement through and until Closing, except as permitted by this Agreement or
otherwise consented to in writing by Purchaser:
8.1.1 Seller's business shall be conducted only in the
ordinary course of and consistent with the past
practices except that Seller shall take such action as
may be necessary to preserve the Assets and to comply
with the applicable laws, ordinances, regulations and
orders of all governmental agencies and regulatory
authorities;
8.1.2 Seller shall not incur, dispose of, encumber
assign or mortgage any of the Assets;
8.1.3 Seller shall preserve in tact its business
organization and use its best efforts to keep available
the services of its present officers and key employees
and to preserve the good will of those having business
relationships with it.
8.2 ACCESS TO AND PRESERVATION OF BOOKS AND RECORDS At all times
subsequent to Closing, Seller and Purchaser each will permit the other party and
their representatives including, but not limited to, lawyers and accountants,
during normal business hours, to have access to and examine and make copies of
all books, records, files, and documents in its possession which related to the
Assets or this Agreement or the other agreements and instruments referred to in
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this Agreement or which relate to transactions or events occurring subsequent to
the Closing which are related to or arise out of transactions or events relating
to the Closing. Seller shall deliver prior to or at the Closing, all items,
books, records, files, agreements, purchase orders, internal reports, and
materials in Seller's possession relating to the Assets but excluding therefrom
any partnership books, tax returns and similar items of Seller
8.3 PERFORMANCE OF MATERIAL CONTRACTS AND OTHER COMMITMENTS. The
seller shall perform all of its Obligations under contracts relating to the
Assets or its business, including but not limited to the Material Contracts and
other commitments in regard thereto.
8.4 LIABILITIES. Seller agrees to pay and discharge when due all
liabilities and obligations of Seller relating to the Assets including, until
Closing, the Assumed Liabilities. Upon closing, Purchaser agrees to pay and
discharge when due the assumed liabilities listed in Exhibit 11.
8.5 ABSENCE OF CERTAIN CHANGES. As of the Closing Date, there will be
no material adverse change to the Assets or the business of Seller from the
status and condition as it exists as of the effective date of this Agreement,
and Seller shall use its best efforts to preserve the same.
8.6 PAYMENT OF TAXES. Seller will be responsible for and pay all
federal, state and local taxes, including, but not limited to, all income,
earnings and property taxes, relating to Seller prior to the Closing Date.
8.7 SALES, USE AND TRANSFER TAXES. Seller shall be responsible for
and pay sales, use and transfer taxes, if any, payable to the State of Wisconsin
or the State of Virginia any other governmental entity in connection with the
transactions contemplated by this Agreement or the other agreements or
instruments referred to in this Agreement, except as specifically otherwise
provided herein.
8.8 BULK SALES LAWS. Seller agrees to comply with any and all bulk
sales laws and issue any stop orders in connection therewith, that may be
applicable to the transactions contemplated by this Agreement. Seller agrees to
indemnify Purchaser against any claims resulting from Seller's failure to comply
with any such bulk sales laws.
8.9 RIGHTS AGAINST THIRD PARTIES. For any rights or remedies relating
to the Business of Seller which may be enforced after the Closing Date against
third parties and the Purchaser, Purchaser will notify Seller in writing of any
such enforcement which should properly be instituted in the name of Seller, and
Seller will join with Purchaser in enforcing such rights and remedies or enforce
such rights or remedies in Seller's own name at Purchaser's sole cost.
8.10 SELLER'S EMPLOYEES
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8.11.1 Seller shall be solely responsible, and
Purchaser shall have no obligations whatsoever, for any
compensation or other amounts payable to any employee
of Seller, including, but not limited to, bonus,
salary, accrued vacation fringe, pension or profit
sharing benefits, or severance pay payable to any
employee of Seller for any period or relating to
service with Seller at any time prior to the Closing
Date unless such amount is included in the Closing Date
Liabilities.
8.11 REPRESENTATIONS AND WARRANTIES OF SELLER.
8.11.1 The sale of stock pursuant to this Agreement
does not violate any federal or state law or regulation
in regard to the sale of stock.
9. REPRESENTATIONS AND WARRANTIES BY PURCHASER.
9.1 Purchaser has the full power, capacity and authority to issue
shares of its stock in exchange for all of the shares of Orion Security
Services, Inc. and to complete its obligations under this Agreement
9.2 This Agreement constitutes a valid, legal and binding obligation
of the Purchaser.
9.3 Purchaser will make operating capital available to Orion Security
Services, Inc. in the aggregate amount of Five Hundred Thousand Dollars
($500,000.00) commencing within ten (10) days of closing and continuing for a
period of sixty (60) days. This amount will be drawn from Purchaser's existing
line of credit with Cornell Capital. Likewise, Purchaser has a note receivable
from American Indian Cigco of an additional Two Million Eight Hundred Thousand
Dollars ($2,800,000.00), and if necessary, Purchaser agrees to leverage and make
available to the Company against this note required funds as needed and approved
by the Board of Directors up to the amount stated in this Section 9.3.
9.3.1 In consideration of which the Seller, "Orion Security
Services, Inc.", agrees to continue to provide its best efforts and due
diligence to promote for sale its products and services in the computer and
allied security areas to both U.S. Government and U.S. Government regulated
entities.
9.4 A copy of Purchaser's most recent filing with the Securities and
Exchange Commission is attached here as Exhibit 11, and Purchaser represents
that the information contained therein and with review of Purchaser's council is
true and correct.
10. TERMINATION:
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10.1 Anything contained in this Agreement to the contrary
notwithstanding, this Agreement may be terminated in the following manner:
10.1.1 By mutual written consent by the Shareholders
and the Purchaser;
10.1.2 If any condition set forth in Section 9 has not
been met by Purchaser and has not knowingly and
lawfully been waived in writing, Shareholders will give
Notice of Default, in writing, to Purchaser setting
forth the unmet condition. The Purchaser will have
sixty (60) days from the date of the written Notice to
meet the condition. Failure to meet the condition will
result in this Agreement becoming null and void, or,
upon the agreement of Shareholders and Purchaser, will
be renegotiated;
10.1.3 If any condition set forth in Section 7 has not
been met by Shareholders and has not knowingly and
lawfully been waived in writing, Purchaser will give
Notice of Default, in writing, to Shareholders setting
forth the unmet condition. The Purchaser will have
sixty (60) days from the date of the written Notice to
meet the condition. Failure to meet the condition will
result in this Agreement becoming null and void, or,
upon the agreement of Shareholders and Purchaser, will
be renegotiated;
10.1.4 By either the Purchaser or the Shareholders (by
written notice to the other) if the Effective Date
shall not have occurred on or before December 1, 2003,
or to whatever later date as the parties may agree to
in writing.
10.2 EFFECT OF TERMINATION: In the event of the termination and
abandonment of this Agreement pursuant to the provisions of paragraph 12 here
of, the Agreement shall become void and have no effect, without liability on the
part of any of the parties or their directors, officers or stockholders in
respect to this Agreement, except with respect to treatment of confidential
information.
10.3 ALLOCATION OF EXPENSES OF TERMINATION: If the transactions
contemplated by this Agreement are not consummated, Purchaser will pay expenses
and fees incident to the negotiation, preparation and execution of this
Agreement and any other transactions relating to the consummation thereof
including, without limitation, fees of counsel, accountants and other experts
and printing costs.
10.4 SURVIVAL: The respective representations and warranties of the
Shareholders and the Purchaser contained in this Agreement shall survive and not
be extinguished by the consummation of this transaction on the Effective Date.
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11. INDEMNIFICATION.
11.1 The representations, warranties, covenants and agreements given
by the Shareholders, which are contained in this Agreement, shall survive the
Closing Date for a period of two (2) years, and the Shareholders, Xxxxxx X.
Xxxxxx, Xxxxxxxxx Xxxxx, Xx. Xxxx X. Xxxxxxxx, Xxxxx X. Xxxxxxxxxx and Xxxx X.
Xxxxxxxx, jointly and severely agree to indemnify the Purchaser against any
loss, cost, liability, or expense (including without limitation, costs and
expenses of litigation and reasonable attorney fees) incurred by reason of the
incorrectness or breach of their respective representations, warranties,
covenants and agreements contained in this Agreement or given on or prior to the
Closing Date.
11.2 If Purchaser believes that it is entitled to indemnification
hereunder, it shall give notice of such claim to Seller in reasonable detail and
stating the amount (which may be an estimate) of the loss, damage or claim for
which they assert they are entitled to indemnification. If the claim is subject
to challenge Seller may elect to assume the defense of the claim, at its
expense, provided that such defense does not expose Purchaser to additional
potential loss or damage and Seller keeps Purchaser fully informed of the
defense of such claim. If Seller does not elect to assume the defense, or upon
completion of the defense, Seller shall hold Purchaser harmless from the
resulting loss. If Seller and Purchaser disagree over the resolution of any
indemnification demand, it shall be resolved pursuant to arbitration under
Article 14 hereof.
11.3 The representations, warranties, covenants and agreements given
by the Purchaser, which are contained in this Agreement, shall survive the
Closing Date for a period of two (2) years, and Purchaser agrees to indemnify
the Seller against any loss, cost, liability, or expense (including without
limitation, costs and expenses of litigation and reasonable attorney fees)
incurred by reason of the incorrectness or breach of their respective
representations, warranties, covenants and agreements contained in this
Agreement or given on or prior to the Closing Date. This indemnification shall
include any liability for litigation against any of Purchaser's subsidiaries.
This indemnification shall also include any loss, cost, liability or expense
incurred by Xxxx.xxx, Inc., prior to Shareholders becoming shareholders of
Purchaser.
12. REMEDIES UPON DEFAULT. Purchaser and Seller agree that if any of the
representations and warranties made by each to the other prove not to be true,
the parties agree that their respective remedy is to renegotiate the terms of
this Agreement. In the event that the parties are not able to agree upon
satisfactory terms, then and in that event, whatever assets the parties have
exchanged will revert to their previous owner. To the extent Orion Security
Services, Inc. and its Shareholders have surrendered their Stock Certificates,
those Stock Certificates will be returned. In the event that a new Stock
Certificate has been issued in the name of Xxxx.xxx, Inc., a Nevada corporation,
such Stock Certificates shall likewise be returned. Similarly, to the extent
that Stock Certificates in Xxxx.xxx, Inc., a Nevada corporation, may have been
issued to Xxxxxx X. Xxxxxx, Xxxxxxxxx Xxxxx, Xx., Xxxx X. Xxxxxxxx, Xxxxx X.
Xxxxxxxxxx and Xxxx X. Xxxxxxxx, such Stock Certificates shall likewise be
returned by the respective Shareholder to Xxxx.xxx, Inc. In the event that any
Shareholder fails or refuses to return their Stock Certificate, the parties
hereby irrevocable appoint Xxxxxxx X. Xxxxx as their attorney-in-fact to execute
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whatever transfer documents are required to effectuate either a reconveyance
and/or a cancellation of the Stock Certificates which have been wrongfully
retained. The parties mutually agree that their sole recourse against each other
shall be the recovery of the assets and/or stock which was transferred.
13. CLOSING. The Closing for the purchase of the Shares shall occur on or
about November 19, 2003. For a period of ninety (90) days after closing Seller
and Purchaser agree to execute any and all additional documents, and will take
any other required actions, reasonably required, as reasonably necessary to
consummate this transaction.
14. NOTICES. All notices under this Agreement must be in writing. Notice
shall be considered received, delivered and effective three (3) days following
posting when mailed, postage prepaid, by registered or certified United States
mail, return receipt requested, addressed to the party to be notified. If
delivered in person, notice shall be considered received, delivered and
effective the date so delivered. For purposes of notice, the addresses of the
parties, until changed as hereinafter provided, shall be as follows:
Xxxx.xxx, Inc. Xxxxxx X. Xxxxxx
0000 Xxxx Xxxx., XX, Xxxxx X 00000 Xxxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxxxx, XX 00000 Xxxxxx, XX 00000-0000
Xxxx X. Xxxxxxxx Xxxxx X. Xxxxxxxxxx
2431 Xxxxxxxx Hope Blvd. 0000 Xxx Xxx Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000 Xxxxxxxxxx, XX 00000
Xxxx X. Xxxxxxxx Xxxxxxxxx Xxxxx, Xx.
1185 Harbor Oak Dr. 0000 Xxxxxxxxxx, XX
Xxxxxxxxxxx, XX 00000 Xxxxxxxxxxx, XX 00000
Orion Security Services, Inc.
00000 Xxxxxx Xxxxxxxx Xxx.
Xxxxxx, XX 00000-0000
15. ARBITRATION.
15.1 In the event that a dispute should arise concerning the covenant
not to compete and Seller's obligation to maintain confidential information as
set forth in 5.4 above, the parties adopt the following procedure:
15.1.1 Purchaser agree to provide written notice to
Seller of his alleged failure to comply with the
covenant not to compete and to maintain confidential
information. Seller shall have an opportunity to
respond to such allegations.
15
15.1.2 In the event that the parties are unable to
resolve any dispute surrounding the covenant not to
compete and to maintain confidential information,
Purchaser and Seller shall submit such dispute to
arbitration in accordance with the procedures set forth
below. As a separate and independent remedy, however,
Purchaser shall be entitled to seek injunctive relief
in a court of competent jurisdiction to prevent
Seller's breach, or threatened breach, of his covenant
not to compete and to maintain confidential
information.
16. DOCUMENTS AND INSTRUMENTS. The parties agree that they will execute
any and all documents and instruments necessary to effectuate and carry out the
terms and intent of this Agreement. If any party fails to execute and deliver
any such instrument to any other party, this Agreement shall constitute an
actual grant, assignment and conveyance of the property and rights associated
therewith in such manner and with such force and effect as shall be necessary to
effectuate the terms and intent of this Agreement.
17. ENTIRE AGREEMENT. With respect to the transactions described herein,
this Agreement, and the exhibits attached hereto, contain the entire agreement
between the parties with respect to the subject matter hereof and supersedes all
prior agreements, representations, negotiations, statements or proposals related
to those matters set forth herein, including the prior letter of intent.
18. AMENDMENT. This Agreement may be changed only by an amendment in
writing signed by all parties.
19. BINDING AGREEMENT. This Agreement and all the terms and provisions
hereof shall be binding upon and inure to the benefit of the parties, their
heirs, legal representatives, successors and assigns.
20. SURVIVAL. The undertakings, agreements, representations and
acknowledgments of the parties contained herein shall survive the execution of
this Agreement and the closing.
21. SPECIFIC PERFORMANCE. If any party to this Agreement fails to perform
any act required by the terms of this Agreement, then, in addition to all other
remedies available at law, the other parties may institute and maintain a
proceeding to compel the specific performance of this Agreement by the
defaulting party.
22. ATTORNEYS FEES. If any party must resort to legal assistance to
enforce any of the terms or provisions of this Agreement, then, in addition to
any damages, injunction or other relief, all reasonable expenses of the
prevailing party, including, but not limited to, attorneys' fees, shall be
recoverable as costs.
23. VALIDITY. If any provision of this Agreement shall be held invalid,
this shall not affect the validity of the remainder of the Agreement.
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24. CONSTRUCTION AND INTERPRETATION OF TERMS. The titles used in this
Agreement are for convenience only and shall not affect the meaning of the terms
and provisions of this Agreement. Any words herein used in the singular shall
denote the plural as the context so requires and, when used herein in the
plural, shall denote the singular ans the context so requires. Pronouns used
herein, whether masculine, feminine, or neuter, shall be interpreted as the
context so requires.
25. ATTORNEY REVIEW. The parties hereto acknowledge and agree that they
have been advised and had the opportunity to obtain independent counsel to
review this Agreement and the related agreements executed contemporaneously
herewith. This Agreement is the product of arm's length negotiations among the
parties and shall not be construed against any party due to authorship. The
parties acknowledge and agree that they understand all of the terms and
conditions contained herein and in the related documents.
IN WITNESS WHEREOF, the parties have executed this Agreement the day and
year first written above.
SELLER: PURCHASER
Orion Security Services, Inc., XXXX.XXX, INC.,
A Virginia corporation, by: A Nevada corporation, by:
--------------------------------- ---------------------------------
Xxxxxx X. Xxxxxx Xxxxxxx X. Xxxxx
Its President Its Chief Executive Officer
STATE OF ______________)
) ss.
COUNTY OF _____________)
On this ______ day of November, 2003, before me personally appeared XXXXXX
X. XXXXXX, PRESIDENT OF SELLER ORION SECURITY SERVICES, INC., A VIRGINIA
CORPORATION, to me known to be the person described in and who executed the
foregoing Purchase Agreement on behalf of said corporation, and acknowledged
that he executed the same as his free act and deed.
WITNESS my hand and seal the day and year last above written.
----------------------------
Notary Public
My Commission Expires:
---------------------
17
STATE OF ______________ )
) ss.
COUNTY OF ____________ )
On this ______ day of November, 2003, before me personally appeared
XXXXXXX X. XXXXX, CHIEF EXECUTIVE OFFICE OF PURCHASER, XXXX.XXX, INC., A NEVADA
CORPORATION, to me known to be the person described in and who executed the
foregoing Purchase Agreement on behalf of said corporation, and acknowledged
that he executed the same as his free act and deed.
WITNESS my hand and seal the day and year last above written.
----------------------------
Notary Public
My Commission Expires:
---------------------
STATE OF _______________ )
) ss.
COUNTY OF _____________ )
On this ______ day of November, 2003, before me personally appeared
XXXXXXXXX XXXXX, XX., individually, to me known to be the person described in
and who executed the foregoing Purchase Agreement and acknowledged that he
executed the same as his free act and deed.
WITNESS my hand and seal the day and year last above written.
----------------------------
Notary Public
My Commission Expires:
18
---------------------
EXHIBIT 1
EMPLOYMENT CONTRACT
(Xxxxxx X. Xxxxxx)
EXHIBIT 2
SELLER'S PENDING LITIGATION
-None-
EXHIBIT 3
Seller's Corporate Record Book
EXHIBIT 4
Seller's Agreement with Trantec Communications Ltd.
EXHIBIT 5
Seller's 2002 Federal and State Corporation Income Tax Return
and
2002 Unaudited Financials and associated Documents
EXHIBIT 6
Seller's 2003 Y-T-D Unaudited Financials
and
Associated Documents through October 31, 2003
EXHIBIT 7
EXISTING CONTRACTS, AGREEMENTS AND/OR COMMITMENTS
1. Smart Transitions SIS 2003 Purchase Order dated August 5, 2003
2. Draft Agreement with and between MMSC and Orion Security Services, Inc.
3. Telenor "Agent Agreement" with Orion Security Services, Inc.
EXHIBIT 8
PERSONAL PROPERTY
EXHIBIT 9
Assumed Liabilities
1. Consulting Agreement with IDI
2. Purchaser acknowledges that Orion is indebted to Xxxxxx X. Xxxxxx for
accrued salary, outstanding expenses, interest due on loans to Orion by
Demson, and a short-term loan by Demson to Orion and Equipment as listed
in Exhibit 8. This indebtedness shall be memorialized by the issuance of
a Promissory Note from Orion to Demson payable in three (3) equal
installments after the date of closing on total funds due as of December
1, 2003 payable on dates as follows:
December 1, 2003
February 1, 2004
April 1, 2004
EXHIBIT 10
Employee Benefit Plan
Anthem Blue Cross and Blue Shield
EXHIBIT 11
SECURITIES AND EXCHANGE COMMISSION
XXXX.XXX, INC'S MOST RECENT FILING
