EXECUTION COPY
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STOCK PURCHASE AGREEMENT
September 12, 2000
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered into
as of September 12, 2000, by and among the parties listed on Schedule A (each a
"Seller" and collectively, the "Sellers") and Reliance Security Group plc, a
company organized under the laws of England and Wales (the "Purchaser").
WITNESSETH
WHEREAS, the Sellers Beneficially Own (as hereinafter defined) the number
of shares of Common Stock, $.0001 par value (the "Common Stock") and Series A
Preferred Stock, $.0001 par value (the "Preferred Stock"), of Command Security
Corporation, a New York Corporation (the "Company"), set forth opposite each
Seller's name on Schedule A annexed hereto (the "Shares");
WHEREAS, certain of the Sellers Beneficially Own the number of warrants to
purchase shares of Common Stock of the Company set forth opposite that Seller's
name on Schedule A annexed hereto (the "Warrants");
WHEREAS, the Sellers, individually and not as a group, desire to sell and
transfer, and the Purchaser desires to purchase and acquire from Sellers, all
right, title and interest in and to the Shares and Warrants (the "Acquisition");
NOW, THEREFORE, in consideration of the foregoing recitals and the mutual
promises, representations, warranties, and covenants hereinafter set forth and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. AGREEMENT TO SELL AND PURCHASE.
1.1 Sale and Purchase. Subject to the terms and conditions hereof,
at the Closing (as hereinafter defined) the Sellers, individually and not
jointly, shall convey, sell, transfer, assign and deliver to the Purchaser, and
Purchaser shall purchase and accept from the Sellers, all of the Shares of
Common Stock and Preferred Stock Beneficially Owned by the Sellers (the
"Transaction Shares") and Warrants, which shall not be less than 770,414 Shares
of Common Stock and 9,877.07 Shares of Preferred Stock, and 300,000 Warrants;
provided all Shares owned of record by the Sellers and their affiliates and the
plaintiffs in the action entitled Rosan et al. x. Xxxxxxx, New York State
Supreme Court, County of New York, Index No. 606166/97 (the "Litigation") shall
be sold to the Purchaser.
1.2 Purchase Price and Allocation. The purchase price (i) per
Transaction Share of Common Stock shall be $2.20, (ii) per Transaction Share of
Preferred Stock shall be $2.20 multiplied by the number of shares of Common
Stock issuable upon conversion of such Share of Preferred Stock, and (iii) per
Warrant shall be $2.20 per share of Common Stock issuable upon exercise of each
Warrant (each a "Warrant Share") less the exercise price per Warrant Share of
each Warrant. The aggregate purchase price for the Shares and Warrants shall be
$5,976,888.30
(assuming discretionary authority is not withdrawn over any Shares), allocated
among the Sellers in accordance with the allocation set forth on Schedule A
annexed hereto (the "Purchase Price Allocation") and shall be paid in
immediately available funds.
2. CLOSING.
The closing of the sale and purchase of the Transaction Shares and
Warrants under this Agreement (the "Closing") shall take place as soon as
practicable after the satisfaction of the conditions set forth in Section 5. The
Closing shall take place at the offices of Rosenman & Colin LLP, 000 Xxxxxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The date and time of the Closing is
hereinafter referred to as the "Closing Date").
3. REPRESENTATIONS AND WARRANTIES OF THE SELLERS.
In order to induce the Purchaser to enter into this Agreement and to
perform its obligations hereunder, each Seller, as to himself or to itself only,
makes the following representations and warranties to the Purchaser.
3.1 Ownership of Shares.On the date hereof, the Seller is the record
holder of or Beneficially Owns (as hereinafter defined) the Shares and Warrants.
The Seller has power of disposition, power of conversion and power to agree to
all of the matters set forth in this Agreement, in each case with respect to all
of the Shares, with no limitations, qualifications or restrictions on such
rights, subject to revocation and termination rights under state law, applicable
state and federal securities laws, and the terms and conditions of discretionary
agreements to which the Sellers may be subject and the terms of this Agreement.
With respect to Shares over which discretionary authority has been granted to
Sellers, such Shares are Beneficially Owned or owned of record by Persons (as
hereinafter defined) with whom a Seller has had a pre-existing relationship.
On the Closing Date, the Seller will be the record holder of or will
Beneficially Own (as hereinafter defined) the Transaction Shares and Warrants.
The Seller will have power of disposition, power of conversion and power to
agree to all of the matters set forth in this Agreement, in each case with
respect to all of the Transaction Shares, with no limitations, qualifications or
restrictions on such rights, subject to revocation and termination rights under
state law, applicable state and federal securities laws, and the terms and
conditions of discretionary agreements to which the Sellers may be subject and
the terms of this Agreement.
For purposes of this Agreement, "Beneficially Own" "Beneficial
Ownership" with respect to any securities shall mean having "beneficial
ownership" of such securities (as determined pursuant to Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")), including
pursuant to any agreement, arrangement or understanding, whether or not in
writing. Without duplicative counting of the same securities by the same holder,
securities Beneficially Owned by a Person (as defined below) shall include
securities Beneficially Owned by all other Persons with whom such Person would
constitute a "group" within the meaning of Section 13(d)(3) of the Exchange Act.
No representation or warranty is
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made hereby that the Sellers constitute a "group" as within the meaning of
Section 13(d)(3) of the Exchange Act.
"Person" shall mean an individual, corporation, partnership, limited
liability company, joint venture, association, trust, unincorporated
organization or other entity.
3.2 Power; Binding Agreement. The Seller has the legal capacity,
power and authority to enter into and perform all of the Seller's obligations
under this Agreement. The execution, delivery and performance of this Agreement
by the Seller will not violate any other Agreement to which Seller may be a
party, but is subject to any outstanding discretionary agreement to which such
Seller may be party, including the right of the record owner of the Shares to
withdraw such discretion at any time. This Agreement has been duly and validly
executed and delivered by the Seller and constitutes a valid and binding
agreement of the Seller, enforceable against the Seller in accordance with its
terms except that such enforceability (i) may be limited by bankruptcy,
insolvency, moratorium or other similar laws relating to the enforcement of
creditors' rights generally and (ii) is subject to general principles of equity
and discretion of the court before which any proceedings seeking injunctive
relief or specific performance may be sought. If the Seller is married and the
Seller's Shares and/or Warrants Beneficially Owned by him (exclusive of Shares
Beneficially Owned by virtue of discretionary authority) constitute community
property, this agreement has been duly authorized, executed and delivered by,
and constitutes a valid and binding agreement of, the Seller's spouse,
enforceable against such Person in accordance with its terms except that such
enforceability (i) may be limited by bankruptcy, insolvency, moratorium or other
similar laws relating to the enforcement of creditors' rights generally and (ii)
is subject to general principles of equity and discretion of the court before
which any proceedings seeking injunctive relief or specific performance may be
sought.
3.3 No Encumbrances. When the Transaction Shares and Warrants are
delivered by the Seller in accordance with this Agreement, the Purchaser will
receive valid title to the Transaction Shares and Warrants purchased by it
hereunder, free and clear of all liens, claims, security interests, proxies,
voting trusts or agreements, understandings or arrangements or any other
encumbrances whatsoever (collectively, "Liens").
3.4 No Conflicts. No filing with, and no permit, authorization,
consent or approval of, any state, local or federal or foreign public body or
authority or any other party is necessary for the execution of this Agreement by
the Seller and the consummation by the Seller of the transactions contemplated
hereby; provided that the parties understand that certain filings, including but
not limited to a Schedule 13D, must be made to the Securities and Exchange
Commission (the "Commission") in order to be in compliance with Federal
securities laws. Neither of the execution and delivery of this Agreement by the
Seller, the consummation by the Seller of the Acquisition or the transactions
contemplated hereby nor compliance by the Seller with any of the provisions
hereof shall, in a manner which would be material and adverse to the ability of
the Seller to consummate the Acquisition or the transactions contemplated hereby
or to comply with the terms hereof (i) result in a violation or breach of, or
constitute (with or without notice or lapse of time or both) a default (or give
rise to any third party right of termination, cancellation, material
modification or acceleration) under any of the terms, conditions or
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provisions of any note, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which the Seller is a party or by which the Seller or
any of the Seller's properties or assets may be bound, other than that certain
Shareholders Voting Agreement, dated as of the 8th day of March, 1995, as
amended, by and among Xxxxxxx X. Xxxxxxx, Xxxxxx Xxxxxxxx, Xxxxx X. Xxxxxxxx
III, Xxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxx X. Xxxxx, Xxxxx X. Xxxxx and Xxxxxxx X.
Xxxxxx, which must be revoked as a condition to Purchaser's obligation to close
under this Agreement or (ii) violate any order, writ, injunction, decree,
judgment, order, statute, rule or regulation applicable to the Seller or any of
the Seller's properties or assets; provided, however, that no representation or
warranty is made with respect to any actions required to be taken by Purchaser
under applicable law as a result of the transactions contemplated hereby.
3.5 Broker's Fees. Except for fees paid to Xxxxx Xxxxx, the Seller
represents and warrants that no agent, broker, investment banker, person or firm
acting on behalf of or under the authority of such party hereto is or will be
entitled to any broker's or finder's fee or any other commission directly or
indirectly in connection with the transactions contemplated herein.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Purchaser hereby represents and warrants to the Sellers as
follows:
4.1 Due Organization. Purchaser is a corporation duly organized,
validly existing and in good standing under the laws of England and Wales and
has all requisite corporate power and authority to own, lease and operate its
properties and carry its business in the places where such properties are now
owned, leased or operated or where such business is now being conducted
4.2 Power; Binding Agreement. The Purchaser has the legal capacity,
power and authority to enter into and perform all of its obligations under this
Agreement. The execution, delivery and performance of this Agreement by the
Purchaser will not violate any other Agreement to which the Purchaser is a
party. This Agreement has been duly and validly executed and delivered by the
Purchaser and constitutes a valid and binding agreement of the Purchaser,
enforceable against the Purchaser in accordance with its terms except that such
enforceability (i) may be limited by bankruptcy, insolvency, moratorium or other
similar laws relating to the enforcement of creditors' rights generally and (ii)
is subject to general principles of equity and discretion of the court before
which any proceedings seeking injunctive relief or specific performance may be
sought.
4.3 No Conflicts. No filing with, and no permit, authorization,
consent or approval of, any state, local or federal or foreign public body or
authority or any other party is necessary for the execution of this Agreement by
the Purchaser and the consummation by the Purchaser of the transactions
contemplated hereby. Neither the execution and delivery of this Agreement by the
Purchaser, the consummation by the Purchaser of the Acquisition or the
transactions contemplated hereby nor compliance by the Purchaser with any of the
provisions hereof shall, in a manner which would be material and adverse to the
ability of the Purchaser to consummate the Acquisition or the transactions
contemplated hereby or to comply with the terms hereof (i) result in a violation
or breach of, or constitute (with or without notice or lapse of time
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or both) a default (or give rise to any third party right of termination,
cancellation, material modification or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
contract, commitment, arrangement, understanding, agreement or other instrument
or obligation of any kind to which the Purchaser is a party or by which the
Purchaser or any of the Purchaser's properties or assets may be bound, or (ii)
violate any order, writ, injunction, decree, judgment, order, statute, rule or
regulation applicable to the Purchaser or any of the Purchaser's properties or
assets; provided, however, that no representation or warranty is made with
respect to any actions required to be taken by Seller under applicable law as a
result of the transactions contemplated hereby.
4.4 Broker's Fees. Except for fees paid to Xxxxx Xxxxx, the
Purchaser represents and warrants that no agent, broker, investment banker,
person or firm acting on behalf of or under the authority of such party hereto
is or will be entitled to any broker's or finder's fee or any other commission
directly or indirectly from the Purchaser in connection with the transactions
contemplated herein.
4.5 Investment Representations. The Purchaser is acquiring the
Transaction Shares and Warrants as principal for its own account for investment
purposes only and not with a view to or for distributing or reselling such
Transaction Shares or any part thereof. By executing this Agreement, the
Purchaser further represents that the Purchaser does not presently have any
contract, undertaking, agreement or arrangement with any Person to sell or
transfer to such Person or to any third person, with respect to any of the
Transaction Shares or Warrants. At the time the Purchaser was offered the
Shares, it was, and at the date hereof it is, and at each exercise date under
the Warrants, it will be, an "accredited investor" as defined in Rule 501(a)
under the Securities Act of 1933, as amended (the "Securities Act"). The
Purchaser, either alone or together with its representatives, has such
knowledge, sophistication and experience in business and financial matters so as
to be capable of evaluating the merits and risks of the prospective investment
in the Transaction Shares and Warrants, and has so evaluated the merits and
risks of such investment. The Purchaser is able to bear the economic risk of an
investment in the Transaction Shares and Warrants and, at the present time, is
able to afford a complete loss of such investment. The Purchaser's overall
commitment to investments which are not readily marketable is not excessive in
view of its net worth and financial circumstances and the purchase of the
Transaction Shares and Warrants will not cause such commitment to become
excessive. The Purchaser acknowledges it (i) has reviewed or had the opportunity
to review all of the Company's periodic reports under the Exchange Act, (ii) has
had access to information about the Company and the Company's financial
condition, results of operations, business, properties, management and prospects
sufficient to enable it to evaluate its investment; and (iii) has had the
opportunity to obtain such additional information that is necessary to make an
informed investment decision with respect to the investment. The Purchaser is
not purchasing the Transaction Shares and Warrants as a result of or subsequent
to any advertisement, article, notice or other communication regarding the
Transaction Shares and Warrants published in any newspaper, magazine or similar
media or broadcast over television or radio or presented at any seminar or any
other general solicitation or general advertisement. The Purchaser understands
and acknowledges that (i) the Transaction Shares and Warrants are being offered
and sold to it without registration under the Securities Act in a private
placement that is exempt from the registration provisions of the Securities Act
and (ii) the availability of such exemption, depends
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in part on, and the Sellers will rely upon the accuracy and truthfulness of, the
foregoing representations and the Purchaser hereby consents to such reliance.
The Purchaser understands that certain of the Transaction Shares and the
Warrants are "restricted securities" under applicable U.S. federal and state
securities laws and that, pursuant to these laws, the Purchaser must hold such
Transaction Shares and Warrants indefinitely unless they are registered with the
Commission and qualified by applicable state authorities, or an exemption from
such registration and qualification requirements is available.
4.6 Purchaser represents and acknowledges that no Seller has made
any representation or warranty with respect to the business, operations,
condition (financial or otherwise), or prospects of the Company.
5. CONDITIONS TO CLOSING; COVENANTS WITH RESPECT TO CLOSING
5.1 Conditions to Purchaser's Obligations at the Closing. The
Purchaser's obligations to purchase the Transaction Shares and Warrants at the
Closing are subject to the satisfaction, at or prior to the Closing Date, of
each of the following conditions (all or any of which may be waived in whole or
in part by the Purchaser in its sole discretion):
(a) Representations and Warranties True; Performance of
Obligations. The representations and warranties made by the Sellers in Section 3
hereof shall be true and correct in all material respects as of the Closing Date
with the same force and effect as if they had been made as of the Closing Date,
and the Sellers shall have performed all obligations, agreements and conditions
herein required to be performed or observed by it on or prior to the Closing.
(b) Consents, Permits, and Waivers. The Company and Sellers
shall have obtained any and all consents, permits and waivers necessary for
consummation of the transactions contemplated by the Agreement (except for such
as may be properly obtained subsequent to the Closing), including, without
limitation, the necessary approval of the Company's shareholders of the warrant,
substantially in the form attached hereto as Exhibit A (the "Company Warrant"),
entitling the Purchaser to purchase from the Company such number of shares of
Common Stock equal to 20% of the outstanding Common Stock on a fully-diluted
basis taking into account the exercise of all stock options, warrants and rights
to acquire shares of Common Stock outstanding on the Closing Date, conversion of
all shares of Preferred Stock outstanding on the Closing Dated and the exercise
of the Company Warrant and any warrant issued to Xxxxxxx Xxxxxxx. The Company
shall have used its best efforts to obtain the approval of the Company's
Shareholders of the amendment to the Company's Certificate of Incorporation
substantially in the form attached hereto as Exhibit B (the "Charter
Amendment"). In furtherance of obtaining the shareholder approval of the Company
Warrant and Charter Amendment, certain of the Sellers shall have executed on the
date hereof the voting agreement substantially in the form attached hereto as
Exhibit C (the "Voting Agreement").
(c) Compliance Certificate. Each Seller shall have delivered
to Purchaser a compliance certificate, executed by the Seller, dated the Closing
Date, to the effect that the conditions specified in subsection (a) and (b) of
this Section 5.1 have been satisfied.
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(d) Instruments of Transfer. Sellers shall have delivered to
the Purchaser the stock certificates for the Transaction Shares, Warrants or
Warrant certificates, stock powers and other documents of transfer, conveyance
and assignment in form and substance reasonably satisfactory to the Purchaser
and Purchaser's counsel required to transfer all of Sellers' right, title and
interest in and to the Transaction Shares and Warrants to Purchaser and to vest
in Purchaser good and marketable title to the Transaction Shares and Warrants
free and clear of all Liens.
(e) Company Warrant. The Company Warrant shall have been
executed by the Company and delivered to the Purchaser.
(f) Listing of Shares Underlying Company Warrant. The Company
shall file an application to cause the shares of the Company's Common Stock to
be issued upon exercise of the Company Warrant to be approved for listing on the
Nasdaq Small Cap Market and pay all requisite fees with respect thereto.
(g) Registration Rights Agreement. The registration rights
agreement in the form attached hereto as Exhibit D (the "Registration Rights
Agreement") shall have been executed and delivered by the parties thereto and
shall be in full force and effect.
(h) Shareholders' Agreement. The shareholders' agreement in
the form attached hereto as Exhibit E (the "Shareholders' Agreement") shall have
been executed and delivered by the parties thereto and shall be in full force
and effect.
(i) Employment Agreement. The employment agreement between the
Company and Xxxxxxx X Xxxxxxx engaging Xx. Xxxxxxx to serve as Chairman of the
Board and Chief Executive Officer of the Company, in the form attached hereto as
Exhibit F (the "Employment Agreement") shall have been executed and delivered by
the parties thereto and shall be in full force and effect.
(j) Charter Amendment. If approved by the Company's
Shareholders, the Charter Amendment shall have been filed with the Secretary of
State of New York.
(k) Corporate Documents. The Company shall have delivered to
Purchaser or its counsel, copies of all corporate documents of the Company as
Purchaser shall reasonably request.
(l) Termination of Shareholders Voting Agreement. That certain
Shareholders Voting Agreement dated as of the 8th day of March, 1995 by and
among Xxxxxxx X. Xxxxxxx, Xxxxxx Xxxxxxxx, Xxxxx X. Xxxxxxxx III, Xxxxx Xxxxx,
Xxxxxx Xxxxx, Xxxxxx X. Xxxxx, Xxxxx X. Xxxxx and Xxxxxxx X. Xxxxxx, shall have
been terminated pursuant to a termination agreement substantially in the form
attached hereto as Exhibit G.
(m) Term Loan Facility. The Company shall have entered into an
additional $2.25 million term loan facility.
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(n) Operating Licenses. The Company shall have used its best
efforts to cause all government licenses, permissions, consents, approvals or
authorizations necessary for the conduct of the Company's business as being
conducted by it as of the Closing Date to be registered in the name of an
officer or employee of the Company other than, or in addition to, Xxxxxxx X.
Xxxxxxx.
(o) Dismissal of Litigation. The Company and the Sellers shall
have obtained a dismissal of (i) all claims brought by the Sellers, their
affiliates and each other plaintiff in the Litigation and (ii) the receiver
appointed in connection with such action. In furtherance of obtaining such
dismissal, each Seller has executed on the date hereof a stipulation (the
"Stipulation"), a copy of which is attached hereto as Exhibit H.
(p) Nasdaq Listing. The Company's Common Stock shall continue
to be listed on Nasdaq Small Cap Market or any national securities exchange.
(q) Board of Directors. Each of Messrs. Snitow, Robinett,
Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxx and Xxxxx shall have resigned as a member of
the Board of Directors of the Company. The authorized size of the Board of
Directors of the Company shall have been reduced to seven (7) members and the
Board shall consist of Xxxxxxx X. Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxx
Xxxxxxxxxx, Xxxxxx Xxxxxx, Xxx Xxxxxxx and the director to be mutually agreed
upon in writing by Xxxxxxx Xxxxxxx and the Purchaser in accordance with the
terms of the Shareholders Agreement.
(r) Directors' and Officers' Insurance. The Company shall have
in full force and effect directors' and officers' liability insurance from
established and reputable insurers in an amount not less than $2,000,000.
(s) Escrowed Shares. Xxxxxxx X. Xxxxxxx shall have deposited
250,000 Shares of Common Stock into escrow pursuant to the Escrow Agreement,
dated the date hereof, among Xxxxxxx Xxxxxxx, the Purchaser and Proskauer Rose
LLP.
(t) Injunctions or Restraints. No court of competent
jurisdiction or other court, tribunal, arbitrator, authority, agency commission,
official or other instrumentality of the United States, any foreign country or
any domestic or foreign state, county, city, or other political subdivision (a
"Governmental or Regulatory Authority") shall have enacted, issued, promulgated,
enforced or entered any law or order (whether temporary, preliminary or
permanent) which is in effect and has the effect of making illegal or otherwise
restricting, preventing or prohibiting consummation of the Acquisition or the
other transactions contemplated hereby.
(u) Proceedings and Documents. All corporate and other
proceedings in connection with the Acquisition and transactions contemplated
hereby and all documents and instruments incident to such transactions shall be
reasonably satisfactory in substance and form to the Purchaser and its counsel,
and the Purchaser and its counsel shall have received all such counterpart
originals or certified or other copies of such documents as they may reasonably
request.
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(v) Material Adverse Effect. Since the date of this Agreement,
there shall not have occurred any condition, change or effect that is materially
adverse to the business, properties, prospects or condition (financial or
otherwise) of the Company (a "Material Adverse Effect") and no facts or
circumstances arising after the date of this Agreement shall have occurred
which, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.
5.2 Conditions to Obligations of the Sellers. Each of the Sellers'
obligation to issue and sell the Shares and Warrants at the Closing is subject
to the satisfaction, on or prior to such Closing, of the following conditions
(all or any of which may be waived in whole or in part by the Sellers):
(a) Representations and Warranties True. The representations
and warranties in Section 4 made by the Purchaser shall be true and correct in
all material respects as of the Closing Date, with the same force and effect as
if they had been made on and as of said date.
(b) Compliance Certificate. The Purchaser shall have delivered
to each Seller a compliance certificate, executed by the Purchaser, dated the
Closing Date, to the effect that the conditions specified in subsection (a) of
this Section 5.2 have been satisfied.
(c) Performance of Obligations. The Purchaser shall have
performed and complied with all agreements and conditions herein required to be
performed or complied with by the Purchaser on or before the Closing.
(d) Delivery of Purchase Price. The Purchaser shall have
delivered to each of the Sellers by wire transfer of immediately available funds
or by certified or bank cashiers check made payable to each such Seller, the
Purchase Price in the amount set forth opposite each Seller's name on Schedule A
annexed hereto.
(e) Delivery of Finders Fee. The Purchaser shall have paid
Xxxxx Xxxxx a finders fee in an amount equal to (i) $.05 multiplied by (ii) the
aggregate number of Shares of Common Stock plus the aggregate number of Shares
of Common Stock issuable upon conversion of the Shares of Preferred Stock plus
the number of Warrants sold by the Sellers to the Purchaser hereunder.
(f) Injunctions or Restraints. No Governmental or Regulatory
Authority shall have enacted, issued, promulgated, enforced or entered any law
or order (whether temporary, preliminary or permanent) which is in effect and
has the effect of making illegal or otherwise restricting, preventing or
prohibiting consummation of the Acquisition or the other transactions
contemplated hereby.
(g) Proceedings and Documents. All corporate and other
proceedings in connection with the Acquisition and transactions contemplated
hereby and all documents and instruments incident to such transactions shall be
reasonably satisfactory in substance and form to the Sellers and their counsel,
and the Sellers and their counsel shall have
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received such counterpart originals or certified or other copies of such
documents as they may reasonably request.
5.3 Covenants Prior to Closing. Each of the parties hereto shall use
its best efforts and shall cooperate fully with the other parties to satisfy the
conditions to Closing set forth in Sections 5.1 and 5.2 and each of the parties
agrees and covenants promptly to execute and deliver, or cause to be executed
and delivered, such documents or instruments, in addition to those expressly
required by this Agreement to be executed and delivered, as any of the other
parties may reasonably deem necessary or desirable to carry out or implement any
provision of this Agreement or the transactions contemplated hereby, including
without limitation, all documents and instruments in addition to the
Stipulation, as may be required to obtain a dismissal of the Litigation;
provided that, with respect to the Shareholders, the agreements in this
paragraph are made in their capacities as shareholders of the Company. Nothing
in this Agreement shall have any effect or impact, or result in any liability to
the Shareholders as a result of actions taken by them as directors of the
Company.
6. TERMINATION.
6.1 Termination. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned
(a) by written agreement of the Purchaser, on the one hand, and each
Seller, on the other hand; or
(b) upon notification to the non-terminating party by the
terminating party:
(i) at any time after January 31, 2001 if the Acquisition
shall have not been consummated on or prior to such date and such failure
to consummate the Acquisition is not caused by a breach of this Agreement
by the terminating party;
(ii) if any court of competent jurisdiction or other competent
Governmental or Regulatory Authority shall have issued an order making
illegal or otherwise preventing or prohibiting the Acquisition and such
order shall have become final and non-appealable; or
(iii) if there has been a breach of any representation,
warranty, covenant or agreement on the part of the non-terminating party
set forth in this Agreement which breach is not curable, or, if curable,
has not been cured within fifteen (15) days following receipt by the
non-terminating party of notice of such breach from the terminating party.
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6.2 Effect of Termination. In the event of a termination of this
Agreement pursuant to 6.1, this Agreement shall become void and there shall be
no liability hereunder on the part of the any Seller or the Purchaser or their
respective officers or directors; provided, however, that nothing contained in
this Section 6.2 shall relieve any party from any liability for any breach of
this Agreement.
7. MISCELLANEOUS.
7.1 Governing Law. This Agreement shall be governed in all respects
by the laws of the State of New York as such laws are applied to agreements
between New York residents entered into and performed entirely in New York.
7.2 Survival. The representations and warranties made herein shall
survive the closing of the transactions contemplated hereby for three years
following the Closing and shall in no way be affected by any investigation or
knowledge of the subject matter thereof made by or on behalf of any Purchaser.
All agreements contained herein shall survive the Closing until, by their
respective terms, they are no longer operative.
7.3 Indemnification.
(a) Each Seller, severally and not jointly, shall indemnify,
defend and hold the Purchaser, its affiliates and respective officers,
directors, partners (and the affiliates, officers, directors, partners,
employees, agents, successors and assigns thereof), employees, agents,
successors and assigns (each a "Purchaser Entity") harmless from and against all
Losses (as defined below) incurred or suffered by a Purchaser Entity as a result
of the breach of any of the representations, warranties, covenants or agreements
made by such Seller in this Agreement or the Voting Agreement. The Purchaser,
shall indemnify, defend and hold the Sellers, their affiliates and respective
officers, directors, partners (and the affiliates, officers, directors,
partners, employees, agents, successors and assigns thereof) employees, agents,
successors and assigns (each, a "Seller Entity") harmless against all Losses
incurred or suffered by a Seller Entity as a result of the breach of any of
Purchaser's representations, warranties, covenants or agreements in this
Agreement.
(b) For purposes of this Section 7.3, "Losses" shall mean each
and all of the following items: claims, losses, liabilities, obligations,
payments, damages, charges, judgments, fines, penalties, amounts paid in
settlement, costs and expenses (including, without limitation, interest which
may be imposed in connection therewith, costs and expenses of investigation,
actions, suits, proceedings, demands, assessments and reasonable fees, expenses
and disbursements of counsel, consultants and other experts). Any payment (or
deemed payment) by a Seller to the Purchaser pursuant to this Section 7.3 shall
be treated for federal income tax purposes as an adjustment to the price paid by
the Purchaser for the Shares and Warrants pursuant to this Agreement.
(c) A party seeking indemnification (the "Indemnified Party")
under this Section 7.3 shall promptly upon becoming aware of the facts
indicating that a claim for indemnification may be warranted, give to the party
from whom indemnification is being sought (the "Indemnifying Party") a claim
notice relating to such Loss (a "Claim Notice"). Each Claim
11
Notice shall specify the nature of the claim, the applicable provision(s) of
this Agreement or other instrument under which the claim for indemnity arises,
and, if possible, the amount or the estimated amount thereof. No failure or
delay in giving a Claim Notice and no failure to include any specific
information relating to the claim (such as the amount or estimated amount
thereof) or any reference to any provision of this Agreement or other instrument
under which the claim arises shall affect the obligation of the Indemnifying
Party unless such failure materially and adversely prejudices the Indemnifying
Party. If such Loss relates to the commencement of any action or proceeding by a
third person, the Indemnified Party shall give a Claim Notice to the
Indemnifying Party regarding such action or proceeding and the Indemnifying
Party shall be entitled to participate therein to assume the defense thereof
with counsel reasonably satisfactory to the Indemnified Party. After notice from
the Indemnifying Party to the Indemnified Party of its election to assume the
defense of such action or proceeding, the Indemnifying Party shall not be liable
(except to the extent the proviso to this sentence is applicable, in which event
it will be so liable) to the Indemnified Party under this Section 7.3 for any
legal or other expenses subsequently incurred by the Indemnified Party in
connection with the defense thereof other than reasonable costs of
investigation; provided that each Indemnified Party shall have the right to
employ separate counsel to represent it and assume its defense (in which case,
the Indemnifying Party shall not represent it) if (i) upon the advice of
counsel, the representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them, (ii)
in the event the Indemnifying Party has not assumed the defense thereof within
ten (10) business days of receipt of notice of such claim or commencement of
action, and in which case the fees and expenses of one such separate counsel
shall be paid by the Indemnifying Party or (iii) if such Indemnified Party who
is a defendant in any action or proceeding which is also brought against the
Indemnifying Party reasonably shall have concluded that there may be one or more
legal defenses available to such Indemnified Party which are not available to
the Indemnifying Party. If any Indemnified Party employs such separate counsel
it will not enter into any settlement agreement which is not approved by the
Indemnifying Party, such approval not to be unreasonably withheld. If the
Indemnifying Party so assumes the defense thereof, it may not agree to any
settlement of any such claim or action as the result of which any remedy or
relief, other than monetary damages for which the Indemnifying Party shall be
responsible hereunder, shall be applied to or against the Indemnified Party,
without the prior written consent of the Indemnified Party. In any action
hereunder as to which the Indemnifying Party has assumed the defense thereof
with counsel reasonably satisfactory to the Indemnified Party, the Indemnified
Party shall continue to be entitled to participate in the defense thereof, with
counsel of its own choice, but, except as set forth above, the Indemnifying
Party shall not be obligated hereunder to reimburse the Indemnified Party for
the costs thereof.
(d) Except with respect to Losses which arise as a result of a
claim based on an inaccuracy of a representation or the breach of a warranty
which is known to a Seller to be false at the time such representation or
warranty is made by such Seller (a "Purchaser Fraud Claim") for which there
shall be no limit, in no event shall the aggregate liability of a Seller with
respect to Losses exceed the aggregate amount of (i) $2.20 multiplied by the
number of Transaction Shares of Common Stock purchased from such Seller, (ii)
$2.20 multiplied by the number of Shares of Common Stock issuable upon
conversion of each Transaction Share of Preferred Stock purchased from such
Seller and (iii) $2.20 per share of Common Stock issuable upon exercise of each
Warrant.
12
(e) Except with respect to Losses which arise as a result of a
claim based on an inaccuracy of a representation or the breach of a warranty
which is known to the Purchaser to be false at the time such representation or
warranty is made by the Purchaser (a "Seller Fraud Claim") for which there shall
be no limit, in no event shall the aggregate liability of the Purchaser to any
Seller with respect to Losses exceed the aggregate amount of (i) $2.20
multiplied by the number of Transaction Shares of Common Stock purchased from
such Seller, (ii) $.2.20 multiplied by the number of Transaction Shares of
Common Stock issuable upon conversion of each Transaction Share of Preferred
Stock purchase from such Seller, and (iii) $2.20 per share of Common Stock
issuable upon exercise of each Warrant.
7.4 Public Announcements. The Sellers will consult with the
Purchaser before issuing any press release or otherwise making any public
statements with respect to the transactions contemplated by this Agreement and
shall not issue any such press release or make any such public statement prior
to such consultation, except as may be required by applicable law or regulation.
7.5 No Shop. Until the Closing or the termination of this Agreement
in accordance with Section 6, neither the Sellers nor their respective
affiliates nor any investment banker, attorney or accountant or other
representative retained by the Sellers, shall solicit, or encourage the
solicitation of, or enter into, negotiations of any type, directly or
indirectly, or enter into a letter of intent or purchase agreement or other
similar agreement with any person, firm or corporation other than the Purchaser
with respect to the sale of any of the Shares or Warrants.
7.6 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of the Shares and/or Warrants from time to time.
7.7 Entire Agreement. This Agreement, the exhibits and schedules
hereto, 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 no party shall be liable or bound to any other in any manner
by any representations, warranties, covenants and agreements except as
specifically set forth herein and therein.
7.8 Severability. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby;
provided that the overall intent of this Agreement is achieved.
7.9 Amendment and Waiver.
(a) This Agreement may be amended or modified only upon the
written consent of all the parties hereto.
13
(b) No waiver of the provisions hereof shall be effective
unless in writing and signed by the party to be charged with such waiver.
7.10 Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to any party, upon any breach, default or
noncompliance by another party under this Agreement, shall impair any such
right, power or remedy, nor shall it be construed to be a waiver of any such
breach, default or noncompliance, or any acquiescence therein, or of or in any
similar breach, default or noncompliance thereafter occurring. Any waiver,
consent or approval of any kind or character on the Purchaser's part in
connection with any breach, default or noncompliance under this Agreement, or
any waiver on such party's part of any provisions or conditions of this
Agreement, shall be in writing and shall be effective only to the extent
specifically set forth in such writing.
7.11 Notices. All offers, notices, acceptances, requests of other
communications hereunder shall be in writing and shall be delivered (i) in
person, (ii) by certified or registered mail, return receipt requested, (iii) by
Federal Express or other nationally recognized overnight courier service which
issues confirmation of delivery or (iv) by confirmed facsimile transmission, to
the Company, each Seller and the Purchaser at the addresses or facsimile numbers
set forth below or to such other addresses or facsimile number, as applicable,
as any party hereto may designate to the others in writing:
If to Sellers:
Xxxxx Xxxxx
c/o Kikis Asset Management
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Xxxxxx Xxxxx
c/o Sands Brothers & Co., Ltd.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx & Galt LLP
00 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
and
14
Xxxxxxx Xxxxxx Xxxx & Ball P.C.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Purchaser
Reliance Security Group plc
Xxxxxxxx Xxxxx
Xxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxx XX0 0XX
Attention: Xxxxx Xxxxxxxxxx
Facsimile: 011441895205090
with a copy to:
Rosenman & Colin LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Xxxxx Xxxx, Esq.
Facsimile: 000 000 0000
Any such notice shall be deemed to be given (i) when delivered, if delivered
personally or by Federal Express or other nationally recognized overnight
courier service, (ii) on the third Business Day after the date of mailing, if
sent by certified or registered mail or (iii) upon confirmation of receipt, if
delivered by facsimile transmission.
7.12 Titles and Subtitles. The titles of the sections and
subsections of the Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
7.13 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
7.14 Pronouns. All pronouns contained herein, and any variations
thereof, shall be deemed to refer to the masculine, feminine or neutral,
singular or plural, as to the identity of the parties hereto may require.
7.15 Other Remedies. In addition to those remedies specifically set
forth herein, if any, either party hereto may proceed to protect and enforce its
rights under this Agreement either by suit in equity and/or by action at law,
including, but not limited to, an action for damages as a result of any such
breach and/or an action for specific performance of any such covenant or
agreement contained in this Agreement. No right or remedy conferred upon or
15
reserved to either party or the holder of Shares under this Agreement is
intended to be exclusive of any other right or remedy, and every right and
remedy shall be cumulative and in addition to every other right and remedy given
under this Agreement or now and hereafter existing under applicable law. Every
right and remedy given by this Agreement or by applicable law to either party
hereto or the holders of Shares may be exercised from time to time and as often
as may be deemed expedient by the holders.
7.16 Further Assurances. At any time or from time to time for a
reasonable period following the Closing, the Company and the Purchaser agree to
cooperate with each other, and at the request of the other party, to execute and
deliver any further instruments or documents and to take all such further action
as the other party may reasonably request in order to evidence or effectuate the
consummation of the Acquisition and the transactions contemplated hereby and to
otherwise carry out the intent of the parties hereunder.
7.17 Facsimile Signatures. Any signature page delivered by a fax
machine shall be binding to the same extent as an original signature page, with
regard to any agreement subject to the terms hereof or any amendment thereto.
Any party who delivers such a signature page agrees to later deliver an original
counterpart to any party which requires it.
7.18 Risk of Revocation of Discretionary Authority. The parties
understand and agree that certain Sellers' discretionary authority over the
Shares may be revoked at any time and further agree that such Seller shall have
no liability for any representations, warranties, covenants, obligations or
agreements with respect to Shares for which his discretionary authority has been
revoked at any time prior to the Closing hereunder.
7.19 Adjustment. All dollar amounts and share numbers set forth
herein shall be subject to equitable adjustment in the event of any stock split,
stock dividend, reverse stock split or similar event affecting the Company
Common Stock and/or Preferred Stock, between the date of this Agreement and the
Closing Date, to the extent appropriate.
[Remainder of this page intentionally left blank]
16
IN WITNESS WHEREOF, the parties hereto have executed this STOCK PURCHASE
AGREEMENT as of the date set forth in the first paragraph hereof.
PURCHASER:
RELIANCE SECURITY GROUP PLC
By: /s/ Xxxxx X. Xxxxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Finance Director
SELLERS:
/s/ Xxxxx Xxxxx
----------------------------------------
Xxxxx Xxxxx
/s/ Xxxxxx Xxxxx
----------------------------------------
Xxxxxx Xxxxx
THE KIKIS FAMILY FOUNDATION
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name: Xxxxx Xxxxx
Title:
THE PERSONS LISTED ON SCHEDULE
B-1 HERETO
/s/ Xxxxxx Xxxxx
----------------------------------------
By: Xxxxxx Xxxxx, as Attorney-in-Fact
/s/ Xxxxx Xxxxxx
----------------------------------------
Xxxxx Xxxxxx
/s/ Xxxxxx Xxxxxx
----------------------------------------
Xxxxxx Xxxxxx
/s/ Xxxxxxx Xxxxxx
----------------------------------------
Xxxxxxx Xxxxxx
/s/ Xxxx Xxxxxxx
----------------------------------------
Xxxx Xxxxxxx
/s/ Xxxxxx Xxxxxxxxx
----------------------------------------
Xxxxxx Xxxxxxxxx
THE PERSONS LISTED ON SCHEDULE
B-2(a) HERETO
/s/ Xxxxxx Xxxxx
----------------------------------------
By: Xxxxxx Xxxxx, as Attorney-in-Fact
THE PERSONS LISTED ON SCHEDULE B-2(b)
HERETO
/s/ Xxxxxx Xxxxx
----------------------------------------
By: Xxxxxx Xxxxx, as Attorney-in-Fact
KATIE & XXXX BRIDGE PARTNERS,
L.P.
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Name:
Title:
OWL-1 PARTNERS, L.P.
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Name:
Title:
/s/ Xxxxx Xxxxxxxx
----------------------------------------
Xxxxx Xxxxxxxx
/s/ Xxxxxx Xxxxx
----------------------------------------
Xxxxxx Xxxxx
SCHEDULE A
SCHEDULE B-1
Deltec Pan American
Xxxxxx Xxxxxx
Xxxxxx Xxxxxxx
Xxxxxxx Xxxx
Xxxx Xxxxxx
Xxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxxx XXX
Xxxxxxxxx Xxxxxxxx
Xxxxxxx Xxxxxxx
Xxxxxxx X. Xxxxxxxx
Xxxxxxx X. Xxxxxxxx Trust
Xxxxxx Xxxxxxx
Xxxxxxxx Xxxxxxxx
Xxxxxxxx Group
Xxxx Xxxxxxxx
Xxxx Xxxxxxxx
Xxxx Xxxxx
Xxxxx Xxxxx
SCHEDULE B-2(a)
Lexus Industries
Xxxxxx Preblod
Xxxxx Xxxxxx
Xxxxxx Xxxxxx
Xxxxxx Xxxx
Xxxx Xxxxx
Xxxxxx Xxxxxx
Xxxxxxx Xxxxx
Xxxxx Xxxxxxxx
Xxxxxxxx Xxxxxx
March Investment Limited Partnership
Xxxxxxx Xxxxxxxxx
SCHEDULE B-2(b)
Xxxxxx Xxxxx
