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AMENDMENT AGREEMENT
This Amendment Agreement is made as of the 23 day of June,
1995 by and between Masada Security, Inc., a Delaware corporation ("Masada")
and Centennial Security, Inc., a Delaware corporation ("Centennial").
RECITALS
Whereas, Masada and Centennial are parties to (1) a certain
Purchase Agreement dated as of June 10, 1994 regarding the sale by Centennial
and the purchase by Masada of Centennial's Class B Common Stock (the "Purchase
Agreement"), (2) a certain Trademark and Intellectual Property Agreement dated
as of June 10, 1994 regarding the licensing by Masada of certain of its
intellectual property and trademarks to Centennial (the "Trademark Agreement"),
and (3) an Agreement dated as of June 10, 1994 regarding the provision by
Masada of certain monitoring, billing, remittance processing and business
management support service to Centennial (the "Monitoring Agreement"); and
Whereas, Masada and Centennial desire to amend certain of the
provisions of the Purchase Agreement, the Trademark Agreement and the
Monitoring Agreement (collectively, the "Agreements").
NOW, THEREFORE, the parties hereto, in consideration of the
mutual covenants, agreements and specific considerations set forth below, the
sufficiency and adequacy of which is hereby acknowledged, and intending to be
legally bound, agree as follows:
1. Certain Definitions. All terms used but not defined
herein with respect to the amendment of each of the Agreements, shall have the
meaning ascribed thereto in such Agreement, unless the context clearly
otherwise requires.
2. Amendment to Purchase Agreement. Section 3H, Sale of
the Company, of the Purchase Agreement is amended and restated in its entirety
to read as follows:
" (i) If, at any time prior to closing a public
offering of any of the Company's securities registered under
the Securities Act, the Company determines to seek a sale of
all or substantially all of the Company's assets or any
transaction of the type specified in Section C.4(ii)(b) or (d)
of the Charter Amendment (each, a "Sale of the Company"),
prior to soliciting any Person or entering into any written or
oral agreement or understanding (including any nonbinding
letter of intent) with any Person regarding a Sale of the
Company transaction, whether directly or indirectly, the
Company will notify the Purchaser of the desire to effect a
Sale of the Company (the "Sale of Company Notice") and
materially comply with the procedures set forth in subsections
(ii) through (v) below, as applicable.
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(ii) The Purchaser shall have until the expiration
of the 30th day following receipt of the Sale of Company
Notice, the right to offer to purchase the Company. If the
Purchaser desires to exercise this right, the Purchaser on or
before the expiration of the 30th day following receipt of the
Sale of Company Notice shall notify the Company of the terms
of the Purchaser's offer to purchase the Company including the
Cash Price (a "Purchaser's Offer to Purchase"). If the
Purchaser fails to deliver to the Company a Purchaser's Offer
to Purchase on or before the expiration of the 30th day
following the Purchaser's receipt of the Sale of Company
Notice, the Company shall thereafter be free, subject to
subsection (vii) below, to solicit or otherwise enter into
discussions or negotiations with Persons other than the
Purchaser regarding a Sale of the Company transaction and to
close a Sale of the Company transaction in such form and for
such consideration as the Company may negotiate.
(iii) If the Purchaser delivers to the Company a
Purchaser's Offer to Purchase on or before the expiration of
the 30th day following the Purchaser's receipt of the Sale of
Company Notice, the Company shall have until the expiration of
the 30th day following receipt of the Purchaser's Offer to
Purchase the right to accept or reject it. If the Company
accepts the Purchaser's Offer to Purchase, the Company and the
Purchaser shall in good faith negotiate definitive agreements
to effectuate the transaction within 90 days of the Company's
acceptance. If the transaction does not close within such 90
days and unless the Company has withheld from or failed to
disclose to the Purchaser material information and/or material
information requested by the Purchaser, made any material
misrepresentations to the Purchaser, failed to negotiate in
good faith with the Purchaser, unilaterally failed or refused
to execute definitive agreements to effect the transaction
with the Purchaser, or breached such definitive agreements,
the Company shall thereafter be free, subject to subsection
(vii) below, to solicit or otherwise enter into discussions or
negotiations with Persons other than the Purchaser regarding a
Sale of the Company transaction and to close a Sale of the
Company transaction in such form and for such consideration as
the Company may negotiate. In the event the Company accepts
the Purchaser's Offer to Purchase, but the Sale of the Company
transaction with the Purchaser does not close due to any of
the reasons described in the immediately preceding sentence,
the Company shall again be required to comply with all
requirements of this Section 3H prior to soliciting or
otherwise entering into any negotiations or discussions with
any Person regarding a Sale of the Company transaction,
whether directly or indirectly.
(iv) If the Company receives a Purchaser's Offer
to Purchase, but determines to reject it, the Company on or
before the 30th day following its receipt of the Purchaser's
Offer to Purchase, shall deliver to the Purchaser a notice of
rejection together with the Cash Price at which the board of
directors of the Company would recommend a sale of the Company
to the Purchaser (the "Counteroffer"). The Purchaser shall
have 10 days following receipt of a Counteroffer to accept it
by delivering written notice thereof to the Company prior to
the expiration of such 10th day. If the Purchaser accepts the
Company's
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Counteroffer, the Company and the Purchaser shall in good
faith negotiate definitive agreements to effectuate the
transaction within 90 days of the Purchaser's acceptance. If
the transaction does not close within 90 days and unless the
Company has withheld from or failed to disclose to the
Purchaser material information and/or material information
requested by the Purchaser, made any material
misrepresentations to the Purchaser, failed to negotiate in
good faith with the Purchaser, unilaterally failed or refused
to execute definitive agreements to effect the transaction
with the Purchaser, or breached such definitive agreements,
the Company shall thereafter be free, subject to subsection
(vii) below, to solicit or otherwise enter into discussions or
negotiations with Persons other than the Purchaser regarding a
Sale of the Company transaction and to close a Sale of the
Company transaction in such form and for such consideration as
the Company may negotiate. In the event the Purchaser accepts
the Company's Counteroffer, but the Sale of the Company
transaction with the Purchaser does not close due to any of
the reasons described in the immediately preceding sentence,
the Company shall again be required to comply with all
requirements of this Section 3H prior to soliciting any Person
or entering into any written or oral agreement or
understanding (including any non-binding letter of intent)
with any Person regarding a Sale of the Company transaction,
whether directly or indirectly. If the Company receives a
Purchaser's Offer to Purchase, but fails on or before the 30th
day following its receipt of the Purchaser's Offer to Purchase
to deliver either an acceptance or rejection of it, the
Company shall again be required to comply with all
requirements of this Section 3H prior to soliciting or
otherwise entering into any negotiations or discussions with
any Person regarding a Sale of the Company transaction,
whether directly or indirectly.
(v) If the Company delivers a Counteroffer to the
Purchaser and the Purchaser does not deliver to the Company
written notice of acceptance of the Counteroffer within 10
days of the Purchaser's receipt of the Counteroffer, the
Company shall thereafter be free, subject to subsection (vii)
below, to solicit or otherwise enter into discussions or
negotiations with Persons other than the Purchaser regarding a
Sale of the Company transaction and to close a Sale of the
Company transaction upon such terms and for such consideration
as may be agreed upon, provided, however, that the Cash Price
for such Sale of the Company transaction to a Person other
than the Purchaser must exceed the Minimum Cash Price. The
term "Minimum Cash Price" shall mean an amount equal to (1)
the Cash Price contained in the Purchaser's Offer to Purchase,
plus (2) fifty percent (50%) of the amount by which the Cash
Price contained in the Counteroffer exceeds the Cash Price
contained in the Purchaser's Offer to Purchase.
(vi) The term "Cash Price" shall mean, whether the
proposed acquire (the "Acquirer") is the Purchaser or a Person
other than the Purchaser, the sum of (a) the cash to be paid
to the Company and/or its shareholders by the Acquirer, (b) the
book value of the liabilities of the Company to be assumed by
the Acquirer, (c) the aggregate value as determined at the time
of the Purchaser's
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Offer to Purchase, the Counteroffer or the letter of intent of
a Person(s) other than the Purchaser, as the case may be, by
the Company's board of directors in good faith of any
securities to be paid to the Company and/or its shareholders
by the Acquirer which are or upon consummation of the
transaction would be freely transferable (except for
shareholders who are affiliates of the Company and whose
resale would be limited as provided in Rule 145(d) promulgated
under the Securities Act, or any successor rule) and readily
marketable on a national securities exchange or in the
National Market System of the National Association of
Securities Dealers, and (d) the aggregate value as determined
at the time of the Purchaser's Offer to Purchase, the
Counteroffer or the letter of intent of a Person other than
the Purchaser, as the case may be, by the Company's board of
directors in good faith based upon advice from its investment
banker or by such other Person as the Company and the
Purchaser mutually select of any securities to be paid to the
Company and/or its shareholders by the Acquirer which do not
meet the transferability and marketability requirements set
forth in the preceding clause (c) of this subsection (vi).
(vii) If pursuant to the provisions of subsections
(ii), (iii), (iv) or (v) above the Company is free to solicit
and to close a Sale of the Company transaction, the Company
shall have, until the date which is 180 days following the
first date on which it was free to solicit or otherwise enter
into negotiations or discussions with Persons other than the
Purchaser, the right to enter into a written letter of intent
with such Person(s) to engage in a Sale of the Company
transaction, and, until the date which is 300 days following
the first date on which it was free to solicit or otherwise
enter into negotiations or discussions with Persons other than
the Purchaser, the right to close with such Person(s) a Sale
of the Company transaction. If the Company fails to enter
into a written letter of intent on or before the
above-referenced 180th day or to close on or before the
above-referenced 300th day, with such Person(s), the Company
shall again be required to comply with all requirements of
this Section 3H prior to soliciting any Person or entering
into any written or oral agreement or understanding (including
any non-binding letter of intent) with any Person regarding a
Sale of the Company transaction, whether directly or
indirectly.
(viii) In the event the Company intends to engage in
a Sale of the Company transaction with a Person(s) other than
the Purchaser in accordance with subsection (v) above, the
Company shall deliver to the Purchaser at least 15 days prior
to any closing of a Sale of the Company transaction with
Person(s) other than the Purchaser a written statement setting
forth the valuation made by the Company's board of directors
in good faith of all securities, if any, that were to be paid
to the Company and/or its shareholders pursuant to the terms
of the Purchaser's Offer to Purchase and/or the Counteroffer
and/or a Sale of the Company transaction with a Person(s)
other than the Purchaser. In addition, upon request of the
Purchaser made after the Purchaser's Offer to Purchase and/or
the Counteroffer, the Company will promptly provide a written
statement setting forth the valuation that was made by the
Company's board of directors in good faith of all securities,
if any, that were to be paid to the Company and/or its
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shareholders pursuant to the terms of the Purchaser's Offer to
Purchaser and/or the Counteroffer. If the Company fails to
deliver such written statement(s) on a timely basis or if such
statement(s) do not comply with this subsection (viii), the
Company shall again be required to comply with all
requirements of this Section 3H prior to soliciting or
otherwise entering into any negotiations or discussions with
any Person regarding a Sale of the Company transaction,
whether directly or indirectly.
3. Amendments to Trademark Agreement.
a. Section 2.1, Trademarks and Trade Name, of the
Trademark Agreement is amended by the addition of the phrase "in the Territory"
in the second sentence thereof after the word "Services" and by the addition at
the end thereof of the following new third sentence:
"Nothing contained herein shall restrict Masada from offering
Services in the Territory provided that Masada does not use
inside the Territory the trade name "Masada" or the Trademarks
or shall restrict Centennial from offering Services outside
of the Territory provided that Centennial does not use outside
the Territory the trade name "Masada" or the Trademarks."
b. Section 2.3, Transfers or Assignments, of the
Trademark Agreement is amended by restating it in its entirety to read as
follows:
"Centennial may sell, sublicense or otherwise transfer all of
its rights under this Agreement to any third person which is
acquiring all or substantially all of Centennial's assets,
whether by purchase of assets, purchase of Centennial's
capital stock, by merger or otherwise, but, only if, such
person assumes all of Centennial's obligations hereunder in a
written instrument reasonably satisfactory in form to Masada."
c. Section 5.2, Use of Other Trademarks, of the
Trademark Agreement is amended by the addition of the phrase "in the Territory"
to the first and second sentences thereof after the word "Services" in such
sentences.
d. Section 6.1, Masada Confidential Information, of the
Trademark Agreement is amended by the addition of new subclause (iii) at the
end of clause (b) thereof which reads as follows:
"or (iii) to potential purchasers of the capital stock or
assets of Centennial, Provided that such potential purchasers
enter into confidentiality agreements in form reasonably
acceptable to Masada to hold confidential the Masada
Confidential Information."
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e. Section 9.3, Termination for Breach, of the Trademark
Agreement is amended by replacing the terms "sixty (60) days" with the term
"ninety (90) days" in the last sentence of the introductory paragraph which
precedes subsection (a) thereof.
f. Section 9.4, Rights on Termination, of the Trademark
Agreement is amended by the deletion of the period at the end of the last
sentence thereof and the addition of the following at the end of such sentence:
"using the tradename "Masada" or the Trademarks and Masada
shall not grant a sublicense to any third party to use any of
the Trademarks or the trade name "Masada" in the Territory on
or before the expiration of three years after the date of such
termination. Notwithstanding anything in this Agreement to
the contrary, upon termination of this Agreement due to a
breach by Centennial, Masada shall not provide or offer to
provide any Services in the Territory using the tradename
"Masada" or the Trademarks for a period of six months after
the date of such termination and Masada shall not grant a
sublicense to any third party to use any of the Trademarks or
the trade name "Masada" in the Territory on or before the
expiration of six months after the date of such termination."
g. Section 9.5, Actions Upon Termination, of the
Trademark Agreement is amended by restating in its entirety subsection (b) in
the second sentence thereof to read as follows:
"(b) this Agreement is terminated in connection with
Centennial merging with or into another entity or Centennial
selling all or substantially all of its assets or capital
stock to another entity due to either the surviving entity in
the case of a merger or the purchasing entity in the case of a
sale of assets failure to assume Centennial's obligations
hereunder, in which case Centennial shall pay all such costs
and expenses or cause the entity purchasing Centennial's
assets to pay all."
h. The Trademark Agreement is further amended by the
additional of new Section 11.10 which reads in its entirety as follows:
"11.10 Subsidiaries of Centennial. Centennial shall
cause each corporation or other entity over which Centennial
has voting control during the term of this Agreement, whether
directly or indirectly, including, without limitation,
majority-owned or wholly-owned subsidiary corporations
(collectively, "Subsidiaries"), to comply with each and every
material representation, warranty, covenant or obligation of
Centennial set forth in this Agreement. Any breach or failure
to comply by any of the Subsidiaries of or with any material
representation, warranty, covenant, or obligation of
Centennial set forth in this Agreement shall constitute a
breach or failure to comply by Centennial. Each and every
reference to Centennial in this Agreement shall be deemed to
include Centennial and all Subsidiaries."
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4. Amendment to Monitoring Agreement.
a. Section 2, Monitoring Services, of the Monitoring
Agreement is amended by the deletion of the first sentence of subsection (a)
thereof and the substitution therefor of the following sentence:
"Masada agrees to perform central station monitoring services
for Centennial Subscribers."
b. Section 2, Monitoring Services, of the Monitoring
Agreement is further amended by the addition of new subsection (g) thereto
which reads in its entirety as follows:
"(g) Masada warrants and covenants as follows with respect to
its central station monitoring services (1) that the central
monitoring service to Centennial Subscribers shall comply at
all times with the standards set forth by Underwriters
Laboratories in UL 827-Central Stations for Watchman,
Fire-Alarm and Supervisory Services, (2) that, under optimum
conditions, the central monitoring station for all such
subscribers will respond to an alarm signal by an Alarm System
at a Centennial Subscriber within 1 minute or less of receipt
of such signal; (3) that the quality of central station
monitoring services supplied to Centennial Subscribers shall
be at least the same as Masada provides to Other Subscribers;
(4) that the quality of central station monitoring services
supplied to Centennial Subscribers shall at least equal
monitoring industry standard; and (5) no more than that number
of Centennial Subscribers in any 3 consecutive month period
which when annualized would exceed two percent (2%) per year,
will cancel their agreements with Centennial due to
dissatisfaction with the central station monitoring services
provided by Masada."
c. Section 2. Monitoring Services, of the Monitoring
Agreement is amended by the addition of new subsection (h)
thereto, which reads in its entirety as follows:
"(h) As Centennial acquires new Centennial
Subscribers, Masada shall provide services, to the
extent requested by Centennial, for the integration
of such new Centennial Subscribers into Masada's
information systems, including, without limitation,
data entry and data conversion. Masada agrees to make
such services available to Centennial at Masada's
cost."
d. Section 7, Term of the Monitoring Agreement is
amended by the restatement in their entirety of subsections (a) and (b) to read
as follows:
"(a) This Agreement shall commence on the date hereof and
shall terminate, except as to the provisions of Section 7(b),
on the earliest to occur of (i) any anniversary after the date
Masada commences monitoring services pursuant to Section 2
hereof, provided, that Centennial provides written notice of
termination
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to Masada at least 60 days prior to such anniversary and,
provided further, that Centennial shall not deliver any notice
of termination which would terminate this Agreement prior to
the second anniversary from the date on which Masada commences
monitoring services pursuant to Section 2 hereof, or (ii)
termination of this Agreement pursuant to the provisions of
Section 7(b) or (c). The period during which this Agreement
shall be in effect shall be referred to herein as the "Term".
(b) Centennial shall not enter into a central station
monitoring agreement with a third party to replace Masada as
the provider of central station monitoring and billing
services unless Centennial shall deliver to Masada a written
proposal from a third party to provide central station
monitoring and billing services to Centennial (the
"Alternative Proposal"). Centennial shall deliver the
Alternative Proposal to Masada at least 30 days before the
Alternative Proposal would take effect between Centennial and
the third party. If, within 20 days of receipt of the
Alternative Proposal, Masada delivers to Centennial a written
statement in which Masada agrees to provide services to
Centennial upon the principal terms set forth in the
Alternative Proposal, this Agreement shall not terminate and
shall be deemed to be amended consistent with the principal
terms set forth in the Alternative Proposal. If Masada fails
to deliver to Centennial within 20 days of receipt of the
Alternative Proposal, a written statement agreeing to provide
services to Centennial in accordance with the principal terms
set forth in the Alternative Proposal, Centennial shall be
free to enter into the Alternative Proposal with the third
party. Centennial shall not enter into an agreement with a
third party to provide central station monitoring and billing
services to Centennial on terms materially different than those
set forth in the Alternative Proposal without again complying
with the provisions of this subsection (b). This subsection
(b) shall not be applicable in the event of termination of
this Agreement pursuant to Section 7(c) hereof."
e. Section 7, Term, of the Monitoring Agreement is
amended by the addition of new subsection (d) thereto, which reads in its
entirety as follows:
"(d) Notwithstanding the provisions of subsection (b) above,
Centennial need not comply with subsection (b) hereof
following the end of the Term or any extensions of the Term so
long as Centennial or a wholly-owned subsidiary of Centennial
begins providing such central station monitoring and billing
services to all Centennial Subscribers upon the end of the
Term or any extensions of the Term."
5. Miscellaneous. Copies of any notices to Masada under
any of the Agreements shall be sent, not to Xxxxxxxxxxx X. Xxxxxx, Esq., but to
W. Xxx Xxxxxxx, Esq., Xxxx & Xxxxxx, 0000 Xxxxx Xxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxx
00000, telecopier: (000)000-0000. All terms of the Agreements not specifically
amended by this Amendment Agreement shall remain in full force and effect.
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IN WITNESS WHEREOF, the parties have executed this Amendment Agreement
as of the date first written above.
MASADA SECURITY, INC.
By: /s/ Xxxxx X. Xxxxxxx
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Title: President
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CENTENNIAL SECURITY, INC.
By: /s/ Xxxxxx X. Xxxxxx
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Title: President
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