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EXHIBIT 10.75
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is dated as of August
13, 1999, and is entered into by and between Integrated Security Systems, Inc.,
a Delaware corporation (the "Seller"), Notification Systems of America, Inc., a
Texas corporation (the "Purchaser"), and Tri-Coastal Systems, Inc., a Texas
corporation (the "Company").
WHEREAS, Seller owns all of the issued and outstanding shares of
capital stock of Company; and
WHEREAS, Seller desires to sell to Purchaser and Purchaser desires to
purchase from Seller all shares of common stock of the Company, $.01 par value
(the "Shares") on the basis set forth more fully herein;
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the sufficiency of which are
hereby acknowledged, the parties to this Agreement agree as follows:
ARTICLE 1
SALE OF STOCK
1.1. Purchase and Sale of Stock. Subject to the terms and conditions
stated in this Agreement, and on the basis of the representations, warranties,
covenants and agreements set forth herein, at the Closing (defined below) the
Seller shall sell, convey, assign, transfer and deliver to Purchaser, and
Purchaser shall purchase from the Seller, the Shares.
1.2. Purchase Price. The purchase price to be paid by the Purchaser to
the Seller for the Shares at the Closing is $76,058.00 (the "Purchase Price").
Purchaser shall pay the Purchase Price by delivery to Seller, at Closing, of
Purchaser's promissory note, in substantially the form attached hereto as
Exhibit A.
1.3. Closing. The Closing of the transactions contemplated by this
Agreement (the "Closing") shall take place at the offices of the Seller, 0000
Xxxxxxxxxx Xxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000 on August 13, 1999, at 3:00
central time. The time and date of the Closing are referred to herein as the
Closing Date.
ARTICLE 2
OTHER AGREEMENTS
2.1. Guarantee of PSA Contract by Seller. The Seller hereby guarantees
the full and timely payment of the Company's account payable to PSA (the "PSA
Payable"), in the amount set forth on Exhibit B attached hereto.
2.2. Assignment of Accounts Receivable by Purchaser. The Company
hereby assigns to the Seller all of the Company's right, title and interest in
the accounts receivable of the Company, as such accounts receivable exists on
the date hereof. Such accounts receivable (the "Accounts Receivable"), are set
forth on Exhibit C attached hereto.
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2.3. Authority. The Purchaser and the Company authorize the Seller to
endorse any Accounts Receivable payments that are received after the Closing
Date, and to apply the proceeds therefrom against the PSA Payable. At such time
as the PSA Payable has been paid in full by Seller from the proceeds of the
Accounts Receivable, the Seller shall promptly thereafter assign to the Company
all remaining Accounts Receivable, if any.
2.4. Transfer to Seller. Prior to the Closing Date, Purchaser
acknowledges and approves the transfer of the following items from the Company
to the Seller: (i) the inventory of the Company, as set forth on the Company
financial statements as of July 31, 1999; (ii) property and equipment of the
Company, as set forth on the Company financial statements as of July 31, 1999,
excluding three computers, two printers, and one plotter; (iii) the contract
between the Company and Xxxxxx County Jail and Courthouse, Abilene, Texas, dated
October 21, 1997; (iv) the contract between the Company and the United States
Postal Service, P&DC, Coppell, Texas, dated March 12, 1998; (v) the contract
between the Company and the United States Postal Service, Rosemead location,
Carrollton, Texas, dated January 6, 1998; (vi) the contract between the Company
and the United States Postal Service, AMC, Dallas, Texas, dated April 16, 1998;
(vii) the contract between the Company and the United States Postal Service,
AMC, Dallas, Texas, dated April 21, 1998; and (viii) the contract between the
Company and BancTec-Midway, Dallas, Texas, dated June 3, 1999. The Purchaser
retains and assumes all remaining contracts of the Company.
ARTICLE 3
SELLER REPRESENTATIONS
Seller represents and warrants to Purchaser as of the date hereof as
follows:
3.1. Authority. The Seller has full power, right and authority to enter
into and preform its obligations under this Agreement. The Agreement has been
duly executed and delivered by the Seller and constitutes the valid and binding
obligations of the Seller and is enforceable against Seller in accordance with
its terms. Seller shall deliver to Purchaser a corporate resolution approving
the consummation of this sale and authorizing its officers to execute whatever
documents are necessary pertaining to the sale of stock as set forth herein.
3.2. Qualification. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the state of its
incorporation.
3.3. Financial Statements. The financial statements of the Company
(attached as Exhibit D) fairly present the financial position of the Company as
of July 31, 1999. Except as set forth in this Agreement, since the date of such
financial statements, the financial position of the Company has not changed in a
any materially adverse manner.
3.4. Capitalization. The Shares constitute all of the issued and
outstanding shares of capital stock of the Company. There are no outstanding
rights, options, warrants, conversion rights or agreements for the purchase or
acquisition from the Company of any shares of its capital stock.
3.5. Taxes. Seller represents that all taxes, whether federal, state,
or local, have been paid or adequately provided for, and that there are no
unpaid taxes that could adversely affect the transfer of stock contemplated by
this Agreement.
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3.6. Absence of Litigation. There are no suits, governmental
proceedings, or litigation pending, or (to the knowledge of Seller) threatened
against Seller that might materially affect the financial condition, business,
or property of Seller that would adversely affect the transfer of stock
contemplated by this Agreement.
3.7. Insurance. Any inventories or other fixed assets, if any, to be
transferred by Seller to Purchaser, will be adequately insured by Seller against
any casualty loss prior to the date of closing.
3.8. Access to Records. Seller shall give to Purchaser, during normal
business hours, reasonable access to all relevant books and records pertinent to
the transfer contemplated herein, including the right to make copies of said
records.
3.9. Resignations. At closing, Seller will deliver resignations of
officers and directors, pertaining to the corporation of the stock being
transferred herein.
3.10. No Violation. Neither the execution, delivery and performance by
the Seller of this Agreement or the other agreements, documents and instruments
contemplated by this Agreement, nor the consummation of the transactions
contemplated by this Agreement, will (i) breach or cause any default in any
document, instrument, agreement, or other contract to which Seller is a party or
to which any of its property is subject, and none of such actions will result in
acceleration, or any similar right of any party, under any loan or other
agreement to which it is a party or (ii) violate any judgment, decree, order,
regulation, or rule of any court or of any statute, law or regulation of any
governmental authority applicable to Seller or any of its property.
ARTICLE 4
PURCHASER REPRESENTATIONS
Purchaser represents and warrants to Seller as of the date hereof as
follows:
4.1. Purchase for Investment. Purchaser will acquire the Shares for its
own account for investment and not with a view toward any resale or distribution
thereof.
4.2. No Violation. Neither the execution, delivery and performance by
the Purchaser of this Agreement or the other agreements, documents and
instruments contemplated by this Agreement, nor the consummation of the
transactions contemplated by this Agreement, will (i) breach or cause any
default in any document, instrument, agreement, or other contract to which
Purchaser is a party or to which any of its property is subject, and none of
such actions will result in acceleration, or any similar right of any party,
under any loan or other agreement to which it is a party or (ii) violate any
judgment, decree, order, regulation, or rule of any court or of any statute, law
or regulation of any governmental authority applicable to Purchaser or any of
its property.
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ARTICLE 5
INDEMNIFICATION
5.1. Breach. The representations, warranties, covenants and agreements
made in any exhibit shall be deemed representations, warranties, covenants and
agreements made herein. None of (i) the consummation of the transactions
contemplated by this Agreement, (ii) the delay or omission of any party to
exercise any of its rights under this Agreement or (iii) any investigation or
disclosure that any party makes, any notice that any party gives, or any
knowledge that any party obtains as a result thereof, or otherwise, shall (A)
affect the liability of the parties to one another for Breaches (defined below)
of this Agreement or (B) prevent any party from relying on the representations
or warranties contained in this Agreement. As used herein, a party's "Breach"
shall mean any representation or warranty being untrue when made by such party,
any breach of any of such party's covenants or agreements or any other claim
that may be asserted against such party arising from the document in question or
the transactions contemplated thereby.
5.2. Indemnity by Seller. The Seller agrees to indemnify Purchaser
against all claims, losses, damages and liabilities, including legal and other
expenses reasonably incurred in investigating or defending against the same,
arising out of any (a) Breach by any Seller of this Agreement, (b) any claim
asserted by a third party that, assuming the truth thereof, would constitute a
Breach by any Seller of this Agreement.
5.3. Indemnity by Purchaser. The Purchaser agrees to indemnify the
Seller against all claims, losses, damages and liabilities, including legal and
other expenses reasonably incurred in investigating or defending against the
same, arising out of any (a) Breach by the Purchaser of this Agreement, (b) any
claim asserted by a third party that, assuming the truth thereof, would
constitute a Breach by Purchaser of this Agreement, and (c) any liabilities or
obligations of the Company that arise after the date hereof, other than with
respect to the PSA Payable and the contracts assigned to Seller pursuant to
Section 2.4 of this Agreement.
5.4. Procedure. In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to this Article 4, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing. In case any such
proceeding shall be brought against any indemnified party, it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party and shall pay as
incurred the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel at its own expense. Notwithstanding the foregoing, the indemnifying
party shall pay as incurred the fees and expenses of the counsel retained by the
indemnified party in the event (a) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (b) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. The indemnifying party shall not be liable for
any settlement of any proceeding effected without its written consent but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.
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5.5. Survival. After Closing, any claim for indemnification hereunder
that is not made in writing to the party against whom indemnification is sought
within twelve (12) months of the Closing Date shall be deemed waived, and no
person shall have any remedy under this Article 5 against any party for
indemnification.
ARTICLE 6
MISCELLANEOUS
6.1. Entire Agreement. This Agreement and the other documents delivered
pursuant hereto constitute the full and entire understanding and agreement
between the parties with regard to the subjects hereof and thereof and they
supersede, merge and render void every other prior written and/or oral
understanding or agreement among or between the parties hereto.
6.2. Waivers and Amendments. This Agreement or any provision hereof may
be amended, waived, discharged or terminated only by a statement in writing
signed by the party against which enforcement of the amendment, waiver,
discharge or termination is sought.
6.3. Governing Law. This Agreement is made pursuant to, will be
construed under, and will be conclusively deemed for all purposes to have been
executed and delivered under, the substantive laws of the state of Texas,
without regard to its principles of conflict of laws.
6.4 Severability. In case any provision of this Agreement shall be
found by a court of law to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not in any way be affected or impaired thereby.
6.5. Further Assurances. Each of the parties to this Agreement agrees
that it will perform all such further acts and execute and deliver all such
further documents as may be reasonably required in connection with the
consummation of the transactions contemplated hereby in accordance with the
terms of this Agreement.
6.6. Expenses. The Seller and the Purchaser shall each bear their own
expenses and legal fees in connection with the consummation of this transaction.
6.7. Broker. Each party represents that no other person, firm,
corporation, or entity is entitled to any compensation pertaining to the
purchase and sale of said stock and/or assets set forth herein, and that there
are no brokers representing either party to this transaction.
6.8. Notices. Any notice, consent, request, claim, or other
communication hereunder shall be in writing, and shall be deemed to have been
duly given if delivered or mailed by registered or certified mail, return
receipt requested, to the address for the respective party. Such addresses may
be changed by any party by notice given to the other party.
6.9. Attorney Fees. In the event either party to this Agreement shall
employ legal counsel to protect its rights under this Agreement or to enforce
any term or provision of this Agreement, then the party prevailing in any such
legal action shall have the right to recover from the other party all of its
reasonable attorney's fees costs, and expenses incurred in relation to such
claim.
6.10. Time of Essence. Time is of the essence of this Agreement.
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6.11. Counterparts. This Agreement may be executed simultaneously in
two or more counterparts, each of which shall be deemed an original, but all of
which shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date hereof.
INTEGRATED SECURITY SYSTEMS, INC.
By:
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Xxxxxx X. Xxxxxxxx, President
NOTIFICATION SYSTEMS OF AMERICA, INC.
By:
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Xxxxxxx Xxxxxxxx, President
TRI-COASTAL SYSTEMS, INC.
By:
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Xxxxxx X. Xxxxxxxx, Chairman
