Exhibit 10.5
STOCK PURCHASE AGREEMENT
------------------------
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of June
20, 2005 by and between Refac, a Delaware corporation (the "Company"), and Xxxx
Limited, Inc., a corporation formed under the laws of Florida (the
"Purchaser").
WHEREAS, Purchaser desires to purchase 50,000 shares (the "Shares") of
the Company's common stock, par value $.001 per share (the "Common Stock") at
an aggregate price of $246,000 in immediately available funds (the "Purchase
Price") or $4.92 per share in accordance with the terms and provisions of this
Agreement:
NOW, THEREFORE, in consideration of the mutual covenants contained in
this Agreement, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Purchaser hereby
agree as follows:
Section 1. Purchase and Sale of Stock. Upon the terms and subject to
the conditions of this Agreement, on the Closing Date (as defined in Section
2.1 hereof), Purchaser shall purchase from the Company, and the Company shall
issue and sell to Purchaser, the Shares for an aggregate price equal to the
Purchase Price.
Section 2. The Closing.
2.1. The Closing. The issuance, sale and purchase of the Shares
upon the terms and conditions hereof shall take place at a closing (the
"Closing") to be held at the offices of the Company, Xxx Xxxxxx Xxxxx, Xxxxx
000, Xxxx Xxx, Xxx Xxxxxx 00000, at 10:00 a.m. New York City time, on July 18,
2005 or such later date, time and place as may be mutually agreed upon by the
Company and Purchaser. The date on which the Closing actually occurs is
referred to herein as the "Closing Date."
2.2. At the Closing:
(a) Purchaser shall deliver to the Company immediately
available funds in the full amount of the Purchase Price, in accordance with
the following wire transfer instructions:
Refac
ABA routing number - 000000000
Account Number: 2000008780443
Wachovia Bank, NA
Charlotte, North Carolina
(b) The Company shall deliver to Purchaser one or more
certificates representing the Shares, bearing a legend in accordance with
Section 6 hereof.
2.3. Conditions to Closing.
(a) The Company's obligation to complete the purchase and sale
of the Shares is subject to the satisfaction, at or before the Closing of each
of the following conditions, provided that these conditions are for the sole
benefit of the Company and may be waived in writing by the Company at any time
in its sole discretion:
(i) receipt by the Company of immediately available funds in the
full amount of the Purchase Price from Purchaser, in accordance with the wire
transfer instructions set forth in Section 2.2(a) above;
(ii) the approval for listing the Shares, upon notice of issuance, by the
American Stock Exchange; and
(iii) the accuracy in all material respects of the representations and
warranties made by each Purchaser in Section 4 below as of the date
hereof and the Closing Date and the fulfillment in all material
respects of those undertakings of Purchaser to be fulfilled on or
prior to the Closing Date.
(b) Purchaser's obligation to complete the purchase and sale
of the Shares is subject to the satisfaction, at or before the Closing of each
of the following conditions, provided that such conditions are for its sole
benefit and may be waived in writing by Purchaser at any time in Purchaser's
sole discretion:
(i) the Company's delivery to Purchaser of one or more
certificates representing the Shares being purchased by Purchaser;
(ii) the accuracy in all material respects of the
representations and warranties made by the Company in Section 3 below as
of the date hereof and the fulfillment in all material respects of those
undertakings of the Company in this Agreement to be fulfilled on or prior
to the Closing Date;
(iii) no statute, rule, regulation, executive order,
decree, ruling, injunction, action or proceeding shall have been enacted,
entered, promulgated or endorsed by any court or governmental authority of
competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which questions the
validity of, challenges or prohibits the consummation of the transaction
contemplated by this Agreement; and
Section 3. Representations and Warranties of the Company.
The Company hereby represents and warrants to Purchaser as of
the Closing Date as follows:
3.1. Organization and Qualification. The Company is a
corporation duly organized and validly existing in good standing under the laws
of the State of Delaware and is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction in which its ownership
of property or the nature of the business conducted by it makes such
qualification necessary, except to the extent that the failure to be so
qualified or be in good standing would not have a Material Adverse Effect (as
defined below). All of the outstanding shares of capital stock of the Company
are validly issued, fully paid and non-assessable. The Company has no
subsidiaries or other equity interest (other than the marketable securities
disclosed in the "SEC Documents", as hereinafter defined) in any corporation,
partnership, joint venture, limited liability company or other Person (as
defined below).
(a) For the purposes of this Agreement:
(i) "Affiliate" shall mean OptiCare Health Systems, Inc.,
U.S. Vision, Inc, Palisade Capital Management, L.L.C. and Palisade
Concentrated Equity Partnership, L.P.
(ii) "Person" shall mean an individual, corporation,
limited liability company, joint venture, partnership, trust,
unincorporated organization, government or any agency or political
subdivision thereof or any other entity that may be treated as a person
under applicable law.
(iii) "Material Adverse Effect" shall mean any material
adverse effect, or any development that could reasonably be expected to
result in a material adverse effect, on the business, properties, assets,
operations, results of operations or condition (financial or otherwise) of
a Person and its subsidiaries (if any), taken as a whole, or on the
transaction contemplated hereby or on the authority or ability of such
Person to timely perform its obligations under this Agreement.
(iv) "SEC Documents" is defined in Section 3.6 hereof.
3.2. Authorization, Enforcement and Validity. The Company has
the requisite corporate power and authority to enter into and perform its
obligations under this Agreement and to issue the Shares in accordance with the
terms hereof. The execution and delivery by the Company of this Agreement and
the consummation by it of the transaction contemplated hereby have been duly
authorized by the Company's Board of Directors and no further consent or
authorization is required of the Company's Board of Directors. No authorization
or consent by the stockholders of the Company is required for execution and
delivery by the Company of this Agreement and the consummation by it of the
transaction contemplated hereby. Upon execution and delivery, this Agreement,
shall constitute the valid and binding obligation of the Company enforceable
against it in accordance with its terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors' rights.
3.3. Capitalization. The authorized capital stock of the
Company consists of 20,000,000 shares of Common Stock and 1,000,000 shares of
preferred stock, par value $0.001 per share. As of March 31, 2005, (i)
6,993,393 shares of Common Stock are issued and outstanding, (ii) 22,656 shares
of Common Stock are held by the Company in its treasury, (iii) 406,500 shares
of Common Stock are subject to outstanding stock options, (iv) 155,000 shares
are reserved for additional stock options that the Company is authorized to
issue under its 2003 Stock Incentive Plan and (v) no shares of preferred stock
are issued or outstanding. Except as set forth above, no shares of capital
stock or other voting securities of the Company are issued, reserved for
issuance or outstanding. All outstanding shares of the Common Stock are duly
authorized, validly issued, fully paid and non-assessable and, except for a put
option described in the Company's SEC Documents, and are not subject to or
issued in violation of any purchase option, call option, right of first
refusal, preemptive right, subscription right or any similar right under any
provision of the Delaware General Corporation Law, the Company's certificate of
incorporation, by-laws or any contract to which the Company is a party or
otherwise bound. The issuance and sale of the Shares hereunder will not result
in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under such securities.
3.4. Issuance of Shares. The Shares are duly authorized and,
upon issuance in accordance with the terms of this Agreement shall be validly
issued, fully paid and non-assessable, and shall not be subject to preemptive
rights or other similar rights of any other Person.
3.5. No Conflicts. The execution, delivery and performance by
the Company of this Agreement and the consummation of the transaction
contemplated hereby will not (i) result in a violation of the Company's
certificate of incorporation or bylaws; (ii) conflict with, constitute a
default under or give to others any rights of termination, cancellation or
amendment or acceleration of, any material agreement, indenture or instrument
to which the Company is a party; or (iii) result in a violation of any law,
rule, regulation, order, judgment or decree applicable to the Company, except
to the extent that such violation would not have a Material Adverse Effect.
3.6. SEC Documents; Financial Statements. The Company has
filed all documents required to be filed by it prior to the date hereof with
the Securities and Exchange Commission (the "SEC") pursuant to the reporting
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and the Securities Act of 1933, as amended (the "Securities Act") (the
"SEC Documents"). As of the respective dates of filing, each SEC Document
complied in all material respects with the requirements of the Exchange Act and
the rules and regulations of the SEC promulgated thereunder. None of the SEC
Documents, as of the date filed, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading. None of the
statements made in any of the SEC Documents is, or has been, required to be
amended or updated under applicable law (except for such statements as have
been amended or updated in subsequent filings made prior to the date hereof).
As of their respective dates, the financial statements of the Company included
in the SEC Documents complied in all material respects with applicable
accounting requirements and the published rules and regulations of the SEC
applicable with respect thereto. Such financial statements have been prepared
in accordance with U.S. generally accepted accounting principles ("GAAP"),
consistently applied, during the periods involved (except (i) as may be
otherwise indicated in such financial statements or the notes thereto, or (ii)
in the case of unaudited interim statements, to the extent they may not include
footnotes or may be condensed or summary statements) and fairly present the
financial position of the Company as of the dates thereof and the results of
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to immaterial year-end audit adjustments). Except as set
forth in the unaudited financial statements of the Company or the notes thereto
included in the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 2005 filed with the SEC on May 11, 2005, the Company has no
liabilities, contingent or otherwise, other than (i) liabilities incurred in
the ordinary course of business subsequent to the date of such financial
statements and (ii) obligations under contracts and commitments incurred in the
ordinary course of business and not required under GAAP to be reflected in such
financial statements, which liabilities and obligations referred to in clauses
(i) and (ii), individually or in the aggregate, are not material to the
financial condition or operating results of the Company.
3.7. Litigation. There are no actions, suits, arbitrations or
proceedings, including any governmental proceeding, pending, or to the
knowledge of the Company, threatened, against, relating to or affecting the
Company, except as would not have a Material Adverse Effect.
3.8. Absence of Certain Changes. Since December 31, 2004,
there has been no change or development in the business, properties,
operations, financial condition or results of operations of the Company which
could have a Material Adverse Effect, except as disclosed in the Annual Report
on Form 10-K for the fiscal year ended December 31, 2004 and the Quarterly
Report on form 10-Q for the fiscal quarter ended March 31, 2005.
3.9. Brokers or Finders. No broker, investment banker,
financial advisor or other Person is entitled to any broker's, finder's,
financial advisor's or other similar fee or commission in connection with the
transaction contemplated by this Agreement based upon arrangements made by or
on behalf of the Company.
3.10. Solicitation; Other Issuances of Securities. Neither the
Company nor the Affiliates, nor any Person acting on its or their behalf, (i)
has engaged in any form of general solicitation or general advertising (within
the meaning of Regulation D) in connection with the offer or sale of the
Shares, (ii) has, directly or indirectly, made any offers or sales of any
security or solicited any offers to buy any security that would require
registration of the Shares under the Securities Act, or (iii) has issued any
shares of Common Stock or shares of any series of preferred stock or other
securities or instruments convertible into, exchangeable for or otherwise
entitling the holder thereof to acquire shares of Common Stock which would be
integrated with the sale of the Shares to Purchaser for purposes of the
Securities Act or of any applicable stockholder approval provisions, nor will
the Company or the Affiliates take any action or steps that would require
registration of any of the Shares under the Securities Act or cause the
offering of the Shares to be integrated with other offerings. Assuming the
accuracy of the representations and warranties of Purchaser in Section 4
hereof, the offer and sale of the Shares by the Company to Purchaser pursuant
to this Agreement will be exempt from the registration requirements of the
Securities Act.
Section 4. Representations and Warranties of Purchaser.
Purchaser hereby represents and warrants to the Company as of
the Closing Date as follows:
4.1. Organization. Purchaser is an entity duly organized and
validly existing in good standing under the laws of its jurisdiction of
organization.
4.2. Authority, Enforcement and Validity. Purchaser has the
requisite power and authority to enter into this Agreement and to consummate
the transactions contemplated hereby. Purchaser has taken all necessary action
to authorize the execution, delivery and performance of this Agreement and same
constitutes the valid and binding obligation of Purchaser, enforceable against
it in accordance with its terms, except as such enforceability may be limited
by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors' rights and remedies.
4.3. Sufficient Funds. Purchaser will at the Closing have
sufficient immediately available funds in cash to pay the Purchase Price.
4.4. Investment Experience. Purchaser is an accredited
investor within the meaning of Rule 501 of Regulation D promulgated under the
Securities Act, is knowledgeable, sophisticated and experienced in making, and
is qualified to make, decisions with respect to investments in shares
representing an investment decision like that involved in the purchase of the
Shares.
4.5. Investment Intent and Limitation On Dispositions. The
Purchaser is acquiring the Shares for its own account for investment only and
has no intention of selling or distributing any of the Shares or any
arrangement or understanding with any other person or entity regarding the sale
or distribution of the Shares except pursuant to a registration, or an
exemption from registration, under the Securities Act.
4.6. Information and Risk.
(a) The Purchaser has requested, received, reviewed and
considered all information the Purchaser deems relevant in making an informed
decision to purchase the Shares. The Purchaser has had an opportunity to
discuss the Company's business, management and financial affairs with its
management and also had an opportunity to ask questions of officers of the
Company that were answered to Purchaser's satisfaction, provided that such
inquiries do not impair the rights of Purchaser to rely on the representations
and warranties of the Company as set forth in Section 3.
(b) Purchaser acknowledges that it is aware of the pending
discussions between (i) the Company and OptiCare Health Systems, Inc.
("OptiCare"), a public company listed on the American Stock Exchange and (ii)
the Company and U.S. Vision, Inc. ("USV"), a privately held company. The
Company, OptiCare and USV are all controlled by Palisade Concentrated Equity
Partnership, L.P. which beneficially owns approximately 90% of the Company's
outstanding common stock, 88% of USV's outstanding common stock and 84% of
OptiCare's outstanding Common stock (on a fully diluted basis). In both
instances, the terms of acquisition have not been established and the Board of
Directors of the Company has formed a special committee to consider, evaluate
and negotiate such terms and to make a recommendation to it. Purchaser
recognizes that there can be no assurance that the Company will come to
acceptable terms with OptiCare and/or USV or, if it does come to terms, that
these will prove to be beneficial acquisitions for the Company.
(c) Purchaser recognizes that an investment in the Shares
involves a high degree of risk, including a risk of total loss of Purchaser's
investment. Purchaser is able to bear the economic risk of holding the Shares
for an indefinite period, and has knowledge and experience in the financial and
business matters such that it is capable of evaluating the risks of the
investment in the Shares.
(d) Purchaser has, in connection with Purchaser's decision to
purchase Shares, not relied upon any representations or other information
(whether oral or written) with respect to the Company other than as set forth
in Section 3 hereof, and Purchaser has, with respect to all matters relating to
this Agreement and the sale of the Shares, relied solely upon the advice of
Purchaser's own counsel and has not relied upon or consulted counsel to the
Company.
4.7. Disclosures to the Company. Purchaser understands that
the Company is relying on the statements contained herein to establish an
exemption from registration under federal and state securities laws.
4.8. Brokers or Finders. No broker, investment banker,
financial advisor or other person or entity is entitled to any broker's,
finder's, financial advisor's or other similar fee or commission from the
Company in connection with the transactions contemplated hereby based upon
arrangements made by or on behalf of Purchaser.
Section 5. Compliance with the Securities Act.
5.1. Restrictions on Transferability. Purchaser agrees that it
will not effect any disposition of the Shares that would constitute a sale
within the meaning of the Securities Act or pursuant to any applicable state
securities or Blue Sky laws, except pursuant to the requirements of the
Securities Act, including Rule 144 ("Rule 144") promulgated thereunder (in
which case Purchaser will provide the Company with reasonable evidence of its
compliance therewith), or pursuant to a written opinion of legal counsel
reasonably satisfactory to the Company and addressed to the Company to the
effect that registration is not required in connection with the proposed
transfer; whereupon the holder of such Shares shall be entitled to transfer
such securities. Each certificate evidencing the Shares transferred as above
provided shall bear the restrictive legend required by Section 6 hereof.
Purchaser shall cause any proposed transferee of the Shares held by it to agree
to take and hold such Shares subject to the provisions and upon the conditions
specified in this Section 5 if and to the extent that such Shares continue to
be restricted securities in the hands of the transferee.
5.2. Termination of Conditions and Obligations. The conditions
precedent imposed by Section 5.1 above regarding the transferability of the
Shares shall not apply as to any particular number of the Shares covered by an
effective registration statement with respect to such Shares and shall cease
and terminate upon the date on which Purchaser is eligible to sell such Shares
then held by Purchaser without registration by reason of Rule 144 or any other
rule of similar effect.
Section 6. Legend.
(a) Purchaser understands and agrees that each certificate or
other document evidencing any of the Shares shall be endorsed with a legend in
the form set forth below, and Purchaser covenants that Purchaser will not
transfer the shares represented by any such certificate without complying with
the restrictions on transfer described in the legend endorsed on such
certificate and understands that the Company will refuse to register a transfer
of any of the Shares unless the conditions specified in the following legend is
satisfied:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT FOR DISTRIBUTION, AND HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS. EXCEPT AS SPECIFIED IN THIS LEGEND, SUCH SHARES MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED, OR OTHERWISE TRANSFERRED IN
THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH RESPECT THERETO
UNDER SUCH ACT UNLESS SOLD PURSUANT TO RULE 144 OF SUCH ACT OR UNLESS
SUCH SALE, PLEDGE, HYPOTHECATION OR TRANSFER IS OTHERWISE EXEMPT FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY
APPLICABLE STATE SECURITIES LAWS, SUBJECT TO DELIVERY OF A WRITTEN
OPINION OF COUNSEL, REASONABLY SATISFACTORY TO THE COMPANY, TO THE
EFFECT THAT REGISTRATION IS NOT REQUIRED IN CONNECTION WITH SUCH SALE
OR OTHER TRANSFER."
(b) Such certificates shall not contain any legend (i)
following any sale of any such Shares that are sold pursuant to an effective
registration statement or Rule 144, or (ii) if such Shares are eligible for
sale under Rule 144. At such time as a legend is no longer required for certain
Shares, the Company shall promptly following the delivery by a Purchaser to the
Company or the Company's transfer agent of a legended certificate representing
such securities, deliver or cause to be delivered to such Purchaser a
certificate representing such securities that is free from all restrictive and
other legends.
Section 7. Notices.
7.1. All notices, requests, consents and other communications
hereunder shall be in writing, shall be mailed by first-class registered or
certified airmail, confirmed facsimile or nationally recognized overnight
express courier postage prepaid, and shall be addressed as follows:
If to Purchaser, to:
Xxxx Limited, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxx, President
Facsimile: (000) 000-0000
- with a copy to -
Xxxxxxx X. Xxxx
000 Xxxxxxxxx Xxx
Xxxx Xxxxx, XX 00000
Facsimile: (000) 000-0000
If to the Company, to:
REFAC
Xxx Xxxxxx Xxxxx
Xxxxx 000
Xxxx Xxx, XX 00000
Attention: President
Facsimile: (000) 000-0000
- with a copy to -
Xxxxxxx X. Xxxxxx, Esq.
Skadden, Arps, Meagher, Slate & Xxxx LLP
Xxxx Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
or at such other address as the parties each may specify by written notice to
the other.
7.2. Each such notice, request, consent and other
communication shall for all purposes of this Agreement be treated as being
effective or having been given when delivered if delivered personally, upon
receipt of facsimile confirmation if transmitted by facsimile, or, if sent by
mail, at the earlier of its receipt or 72 hours after the same has been
deposited in a regularly maintained receptacle for the deposit of United States
mail, addressed and postage prepaid as aforesaid.
Section 8. Miscellaneous.
8.1. Amendments. Any term of this Agreement may be amended
only with the written consent of the Company and Purchaser.
8.2. Headings. The headings of the various sections of this
Agreement are for convenience of reference only and shall not be deemed to be
part of this Agreement.
8.3. Severability. In the event that any provision in this
Agreement is held to be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions contained
herein shall not in any way be affected or impaired thereby.
8.4. Governing Law and Forum. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York, without
giving effect to any choice of law provisions thereof, and the federal law of
the United States of America. The parties hereto agree to submit to the
exclusive jurisdiction of the federal and state courts of the State of New York
with respect to the interpretation of this Agreement or for the purposes of any
action arising out of or related to this Agreement.
8.5. Counterparts. This Agreement may be executed in two
counterparts, each of which shall constitute an original, and both of which
together shall constitute one and the same instrument. In the event that any
signature is delivered via e-mail or facsimile transmission, such signature
shall create a valid and binding obligation of the party executing (or on whose
behalf such signature is executed) the same with the same force and effect as
if such digital or facsimile signature page were an original hereof.
8.6. Entire Agreement. This Agreement contains the entire
understanding of the parties with respect to the matters covered herein and
supersedes all prior agreements and understandings with respect to such
matters. Except as specifically set forth herein or therein, neither the
Company nor Purchaser makes any representation, warranty, covenant or
undertaking with respect to such matters.
8.7. Expenses. Each party hereto shall pay all costs and
expenses incurred by it in connection with the execution, delivery and
performance of this Agreement, including, but not limited to, fees of legal
counsel.
8.8. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and assigns.
Neither party shall assign this Agreement or any rights or obligations
hereunder without the prior written consent of the other party.
8.9. Further Assurances. Each party shall do and perform, or
cause to be done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates, instruments and
documents, as the other party may reasonably request in order to carry out the
intent and accomplish the purposes of this Agreement and the consummation of
the transactions contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed and delivered by their duly authorized representatives as of the
day and year first above written.
REFAC
By: /s/ Xxxxxx X. Xxxxxxx
---------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
XXXX LIMITED, INC.
By: /s/ Xxxxxxx X. Xxxx
---------------------------------
Name: Xxxxxxx X. Xxxx
Title: Chief Executive Officer
