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PURCHASE AGREEMENT
DATED JUNE 10, 1994
BY AND AMONG CENTENNIAL SECURITY, INC.,
MASADA SECURITY, INC.,
AND, FOR THE LIMITED PURPOSE SET FORTH HEREIN,
CERTAIN STOCKHOLDERS OF CENTENNIAL SECURITY, INC.
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TABLE OF CONTENTS
Page
1. Authorization and Closing . . . . . . . . . . . . . . . . . . . . . . . 1
1A. Authorization of the Common Stock . . . . . . . . . . . . . . 1
1B. Purchase and Sale of the Class B Common Stock . . . . . . . . 1
1C. The Closing . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Conditions of the Purchaser's Obligation at the Closing . . . . . . . . 1
2A. Representations and Warranties; Covenants . . . . . . . . . . 1
2B. Amendment to Charter . . . . . . . . . . . . . . . . . . . . . 2
2C. Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2D. Blue Sky Clearance . . . . . . . . . . . . . . . . . . . . . . 2
2E. Closing Documents . . . . . . . . . . . . . . . . . . . . . . 2
2F. Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . 2
2G. Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3A. Financial Statements and Other Information . . . . . . . . . . 3
3B. Compliance with Agreements . . . . . . . . . . . . . . . . . . 4
3C. Current Public Information . . . . . . . . . . . . . . . . . . 4
3D. First Refusal Rights . . . . . . . . . . . . . . . . . . . . . 4
3E. Board of Director Representation . . . . . . . . . . . . . . . 5
3F. Additional Issuances of Class B Common . . . . . . . . . . . . 6
3G. Affirmative Covenants . . . . . . . . . . . . . . . . . . . . . . . . . 6
3H. Sale of the Company . . . . . . . . . . . . . . . . . . . . . 7
4. Transfer of Restricted Securities . . . . . . . . . . . . . . . . . . . 8
5. Representations and Warranties of the Company . . . . . . . . . . . . . 9
5A. Organization and Corporate Power . . . . . . . . . . . . . . . 9
5B. Capital Stock and Related Matters . . . . . . . . . . . . . . 9
5C. Authorization; No Breach . . . . . . . . . . . . . . . . . . . 10
5D. No Operating History . . . . . . . . . . . . . . . . . . . . . 10
5E. Governmental Consent, etc . . . . . . . . . . . . . . . . . . 10
5F. Closing Date . . . . . . . . . . . . . . . . . . . . . . . . . 10
6. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
7A. Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
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7B. Purchaser's Representations and Warranties . . . . . . . . . . 12
7C. Consent to Amendments . . . . . . . . . . . . . . . . . . . . 13
7D. Survival of Representations and Warranties . . . . . . . . . . 13
7E. Successors and Assigns . . . . . . . . . . . . . . . . . . . . 14
7F. Severability . . . . . . . . . . . . . . . . . . . . . . . . . 14
7G. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 14
7H. Descriptive Headings; Interpretation . . . . . . . . . . . . . 14
7I. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 14
7J. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
LIST OF EXHIBITS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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PURCHASE AGREEMENT
THIS AGREEMENT is made as of June 10, 1994, by and among Centennial
Security, Inc., a Delaware corporation (the "Company"), Masada Security, Inc.,
a Delaware corporation (the "Purchaser"), and, with respect to Section 3E(i) of
this Agreement only, the persons named as Stockholders (the "Stockholders") on
the signature page hereto. Except as otherwise indicated herein, capitalized
terms used herein are defined in Section 6 hereof.
The parties hereto agree as follows:
Section 1. Authorization and Closing.
1A. Authorization of the Common Stock. The Company shall authorize
the issuance and sale to the Purchaser of 4,750 shares of its class B common
stock, par value $.001 per share (the "Class B Common Stock").
1B. Purchase and Sale of the Class B Common Stock. At the Closing,
the Company shall issue and sell to the Purchaser and, subject to the terms
and conditions set forth herein, the Purchaser shall purchase and acquire from
the Company, 4,750 shares of Class B Common Stock. In consideration therefore,
the Purchaser agrees to enter into with the Company and fully perform its
obligations under a Trademark and Intellectual Property Agreement substantially
in the form set forth as Exhibit A attached hereto (the "Trademark Agreement").
1C. The Closing. The closing of the purchase and sale of the Class B
Common Stock and execution of the Trademark Agreement (the "Closing") shall
take place at the offices of Xxxxxxxx & Xxxxx, 0000 Xxxxxxxx, Xxxxx 0000,
Xxxxxx, Xxxxxxxx at 10:00 a.m. on June 10, 1994, or at such other place or on
such other date as may be mutually agreeable to the Company and the Purchaser.
At the Closing, the Company shall deliver to the Purchaser stock certificates
evidencing the Class B Common Stock to be purchased by the Purchaser,
registered in the Purchaser's or its nominee's name, upon the Purchaser's
execution of the Trademark Agreement.
Section 2. Conditions of the Purchaser's Obligation at the Closing.
The obligation of the Purchaser to purchase and pay for the Class B Common
Stock and enter into the Trademark Agreement at the Closing is subject to the
satisfaction as of the Closing of the following conditions:
2A. Representations and Warranties; Covenants. The representations
and warranties contained in Section 5 hereof shall be true and correct in all
material respects at and as of the Closing as though then made, except to the
extent of changes caused by
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the transactions expressly contemplated herein, and the Company shall have
performed in all material respects all of the covenants required to be
performed by it hereunder prior to the Closing.
2B. Amendment to Charter. At or prior to the Closing, the Company
shall have amended its Certificate of Incorporation to create the Class B
Common Stock and class A common stock, $0.001 par value per share ("Class A
Common"), each with the rights and privileges, and subject to the
qualifications, limitations and restrictions substantially as set forth in
Exhibit B attached hereto (the "Charter Amendment").
2C. Bylaws. The Company's bylaws as previously provided to the
Purchaser shall be in full force and effect as of the Closing and shall not
have been amended or modified.
2D. Blue Sky Clearance. The Company shall have made all filings under
applicable state securities laws necessary to consummate the issuance of the
Class B Common Stock pursuant to this Agreement in compliance with such laws.
2E. Closing Documents. The Company shall have delivered to the
Purchaser all of the following documents:
(i) copies of the resolutions duly adopted by the
Company's board of directors authorizing the execution, delivery and
performance of this Agreement and the Trademark Agreement and each of
the other agreements contemplated hereby, the filing of the Charter
Amendment with the Delaware Secretary of State, the issuance and sale
of the Class B Common Stock, and the consummation of all other
transactions contemplated by this Agreement;
(ii) copies of the Certificate of Incorporation and the
Company's bylaws, each as in effect at the Closing; and
(iii) copies of any governmental consents, approvals and
filings required in connection with the consummation of the
transactions hereunder (including, without limitation, all blue sky
law filings).
2F. Proceedings. All corporate and other proceedings taken or
required to be taken by the Company in connection with the transactions
contemplated hereby to be consummated at or prior to the Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to the Purchaser and its counsel.
2G. Waiver. Any condition specified in this Section 2 may be waived
by the Purchaser if such waiver is set forth in a writing executed by the
Purchaser.
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Section 3. Covenants.
3A. Financial Statements and Other information. The Company shall
deliver to the Purchaser so long as the Purchaser holds all of the Class B
Common Stock purchased by the Purchaser pursuant to this Agreement or all of
the shares of Class A Common into which such shares of Class B Common Stock
shall have been converted:
(i) as soon as available but in any event within 45 days
after the end of each monthly accounting period in each fiscal year,
unaudited consolidating and consolidated statements of income and
cash flows of the Company and its Subsidiaries for such monthly
period and for the period from the beginning of the fiscal year to
the end of such month, and consolidating and consolidated balance
sheets of the Company and its Subsidiaries as of the end of such
monthly period, setting forth in each case comparisons to the
corresponding period in the preceding fiscal year, and all such
statements shall be prepared in accordance with generally accepted
accounting principles, consistently applied, subject to the absence
of footnote disclosures and to normal year-end adjustments;
(ii) within 120 days after the end of each fiscal year,
consolidating and consolidated statements of income and cash flows of
the Company and its Subsidiaries for such fiscal year, and
consolidating and consolidated balance sheets of the Company and its
Subsidiaries as of the end of such fiscal year, setting forth in each
case comparisons to the preceding fiscal year, all prepared in
accordance with generally accepted accounting principles,
consistently applied, and accompanied by, with respect to the
consolidated portions of such statements, an opinion of an
independent accounting firm of recognized national standing;
(iii) promptly upon receipt thereof, any additional
reports, management letters or other detailed information concerning
significant aspects of the Company's operations or financial affairs
given to the Company by its independent accountants (and not
otherwise contained in other materials provided hereunder); and
(iv) within ten business days after transmission thereof,
copies of all financial statements, proxy statements, reports and any
other general written communications which the Company sends to its
stockholders and copies of all registration statements and all
regular, special or periodic reports which it files, or (to its
knowledge) any of its officers or directors file with respect to the
Company, with the Securities and Exchange Commission or with any
securities exchange on which any of its securities are then listed,
and copies of all press releases and other statements made available
generally by the Company to the public concerning material
developments in the Company's businesses.
Each of the financial statements referred to in subparagraph (i) and (ii) shall
be true and correct in all material respects as of the dates and for the
periods stated therein, subject in the case of the unaudited financial
statements to changes resulting from normal
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year-end audit adjustments (none of which would, alone or in the aggregate, be
materially adverse to the financial condition or business prospects of the
Company and its Subsidiaries taken as a whole).
3B. Compliance with Agreements. The Company shall perform and
observe all of its obligations to each holder of the Class B Common Stock set
forth in the Certificate of Incorporation and the Company's bylaws.
3C. Current Public Information. At all times after the Company
has filed a registration statement with the Securities and Exchange Commission
pursuant to the requirements of either the Securities Act or the Securities
Exchange Act, the Company shall file all reports required to be filed by it
under the Securities Act and the Securities Exchange Act and the rules and
regulations adopted by the Securities and Exchange Commission thereunder and
shall take such further action as any holder or holders of Restricted
Securities may reasonably request, all to the extent required to enable such
holders to sell Restricted Securities pursuant to (i) Rule 144 adopted by the
Securities and Exchange Commission under the Securities Act (as such rule may
be amended from time to time) or any similar rule or regulation hereafter
adopted by the Securities and Exchange Commission or (ii) a registration
statement on Form S-2 or S-3 or any similar registration form hereafter adopted
by the Securities and Exchange Commission. Upon request, the Company shall
deliver to any holder of Restricted Securities a written statement as to
whether it has complied with such requirements.
3D. First Refusal Rights.
(i) Except for the issuance of Class A Common Stock (a) to the
Company's employees, (b) in connection with the acquisition of another
business, or (c) pursuant to a public offering registered under the Securities
Act, if, at any time at and after the Class B Common Stock purchased hereunder
is converted into Class A Common pursuant to the terms of the Charter
Amendment, the Company authorizes the issuance or sale of any shares of Class A
Common or any securities containing options or rights to acquire any shares of
Class A Common (other than as a dividend on the outstanding Class A Common),
the Purchaser shall be entitled to purchase in such issuance or sale a portion
of such stock or securities equal to the result obtained by multiplying the
number of shares of such stock or other securities proposed to be issued and
sold by the quotient determined by dividing (1) the aggregate number of shares
of Class A Common held by the Purchaser (on a fully diluted basis) by (2) the
total number of shares of Class A Common outstanding (on a fully diluted
basis), including such shares held by the Purchaser. The Purchaser shall be
entitled to purchase such stock or securities at the most favorable price and
on the most favorable terms as such stock or securities are offered and sold to
any other Persons. The purchase price for all stock and securities offered to
the Purchaser shall be payable in accordance with the terms of said offer in
cash or, to the extent otherwise provided thereunder, notes issued by such
holders.
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(ii) In order to exercise its purchase rights hereunder, the Purchaser must
within 15 days after receipt of written notice from the Company describing in
reasonable detail the stock or securities being offered, the purchase price
thereof, the payment and other material terms, and such holder's percentage
allotment, deliver a written notice to the Company describing its election
hereunder. If all of the stock and securities offered to the Purchaser is not
fully subscribed by the Purchaser, the remaining stock and securities may be
purchased by Principals and other stockholders of the Purchaser if the Company
is notified in writing, within the 15-day time period referred to in the
previous sentence, as to the identity of such Principals and other stockholders
and the amount of stock or other securities to be purchased by each such
Principal and other stockholder; provided, however, that, unless the Company
otherwise consents in writing in its sole discretion, no such Principal or
other stockholder shall be entitled to purchase any stock or securities from
the Company unless such Principal or other stockholder is an "accredited
investor" within the meaning of Regulation D under the Securities Act; and
provided further, however, that the Company has been provided with
documentation satisfactory to it (which shall, upon the Company's request,
include an opinion of counsel reasonably satisfactory to the Company) that in
purchasing such stock or other securities, such Principal or other stockholder
would not be usurping a corporate opportunity of the Purchaser in contravention
of applicable law.
(iii) Upon the expiration of the offering period described above, the
Company shall be entitled to sell such stock or securities which the Purchaser
(including the Principals and other stockholders of the Purchasers) has not
elected to purchase during the 90 days following such expiration on terms and
conditions no more favorable to the purchasers thereof than those offered to
such holders. Any stock or securities offered or sold by the Company after such
90-day period must be reoffered to the Purchaser pursuant to the terms of this
paragraph.
(iv) The rights under this paragraph 3D shall terminate upon the
closing of an underwritten public offering of any class of the Company's common
stock pursuant to a registration statement filed by the Company with the
Securities and Exchange Commission under the Securities Act, and such rights
shall not apply to such offering.
3E. Board of Director Representation.
(i) At or any time after the Conversion time (as defined in the
Charter Amendment), as a result of which the Purchaser, as the holder of Class
B Common Stock, shall no longer be entitled to elect a member of the Company's
Board of Directors pursuant to the Charter Amendment, and upon the Company's
request, the Purchaser shall take all necessary and desirable actions within
its control to cause the director elected by the holders of Class B Common
Stock pursuant to the Charter Amendment to resign immediately from the
Company's Board of Directors. Subject to the preceding sentence and the
Charter Amendment, from and after the Conversion Time and notwithstanding the
conversion of all Class B Common Stock into Class A Common at such time
pursuant to the Charter Amendment, if and as long as (i) the Trademark
Agreement is in full force and
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effect and the Purchaser is not in default thereunder, and (ii) the Purchaser
has not transferred or otherwise disposed of any of the Class B Common Stock
purchased hereunder (including any shares of Class A Common received upon
conversion of such Class B Common Stock), each Stockholder shall vote all of
his shares of Class A Common and any other voting securities of the Company
over which such Stockholder has voting control and shall take all other
necessary or desirable actions within his control (whether in his capacity as a
stockholder, member of the Board of Directors (the "Board"), member of a Board
committee or officer of the Company or otherwise, and including, without
limitation, attendance at meetings in person or by proxy for purposes of
obtaining a quorum and execution of written consents in lieu of meetings)
consistent with applicable fiduciary duties, and the Company shall take all
necessary and desirable actions within its control (including, without
limitation, calling special Board and stockholder meetings), consistent with
applicable fiduciary duties, so that one of the Principals (or another person
acceptable to the Company), as designated by the Purchaser from time to time,
shall be elected and be entitled to serve on the Company's Board of Directors.
(ii) If the Purchaser fails to designate a representative to fill
the directorship pursuant to the terms of this paragraph 3E or to fill any
subsequent vacancy therein within ten business days after receiving a written
request from the Company to designate such representative, the election of a
person to such directorship shall be accomplished in accordance with the
Company's bylaws and applicable law.
(iii) The Company will require as a precondition to any person acquiring
equity securities of the Company after the date hereof to agree to be bound by
and comply with the provisions of Section 3(E)(i) as applicable to Stockholders
until such time as the Purchaser is no longer entitled to designate a person to
serve on the Company's Board of Directors pursuant thereto.
3F. Additional Issuances of Class B Common.
Until the Conversion Time, the Company shall not issue any shares of
Class B Common Stock to any Person other than the Purchaser without the
Purchaser's prior written consent.
3G. Affirmative Covenants. So long as (a) the Trademark Agreement
is in full force and effect and the Purchaser is not in default thereunder, and
(b) the Purchaser holds all of the Class B Common Stock purchased hereunder
(including shares of Class A Common received upon conversion of such Class B
Common Stock) the Company shall use its best efforts, and shall cause each
Subsidiary to use its best efforts, to:
(i) cause to be done all things necessary to maintain, preserve
and renew its corporate existence and all material licenses, authorizations and
permits necessary to the conduct of its business;
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(ii) maintain and keep its properties in good repair, working order
and condition, and from time to time make all necessary repairs, renewals and
replacements, so that its businesses may be properly conducted at all times;
(iii) pay and discharge when payable all taxes, assessments and
governmental charges imposed upon its properties or upon the income or profits
therefrom (in each case before the same becomes delinquent and before penalties
accrue thereon) and all claims for labor, materials or supplies to the extent
to which the failure to pay or discharge such obligations would reasonably be
expected to have a material adverse effect upon the financial condition of the
Company and its Subsidiaries taken as a whole, unless and to the extent that
the same are being contested in good faith and by appropriate proceedings and
adequate reserves (as determined in accordance with generally accepted
accounting principles, consistently applied) have been established on its books
with respect thereto;
(iv) comply with all other material obligations which it incurs
pursuant to any contract or agreement as such obligations become due to the
extent to which the failure to so comply would reasonably be expected to have a
material adverse effect upon the financial condition of the Company and its
Subsidiaries taken as a whole, unless and to the extent that the same are being
contested in good faith and by appropriate proceedings and adequate reserves
(as determined in accordance with generally accepted accounting principles,
consistently applied) have been established on its books with respect thereto;
(v) comply with all applicable laws, rules and regulations of all
governmental authorities, the violation of which would reasonably be expected
to have a material adverse effect upon the financial condition of the Company
and its Subsidiaries taken as a whole; and
(vi) maintain proper books of record and account which fairly
present its financial condition and results of operations and make provisions
on its financial statements for all such proper reserves as in each case are
required in accordance with generally accepted accounting principles,
consistently applied.
3H. Sale of the Company.
(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"), the Company will, at the
Purchaser's election, negotiate exclusively with the Purchaser in good faith
for a period of thirty (30) days (such thirty (30) day period shall herein be
referred to as the "Negotiating Period") with respect to entering into a Sale
of the Company with the Purchaser.
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(ii) If, at the end of the Negotiating Period, the Company and the
Purchaser have not reached agreement with respect to a Sale of the Company or
to extend, by mutual agreement, the Negotiating Period, the Company shall
promptly notify the Purchaser in writing of the principal terms and conditions
upon which it is then willing to enter into an agreement relating to a Sale of
the Company. Such notice shall contain an offer (the "Offer") to contract with
the Purchaser on such terms and conditions, and the Purchaser shall have a
period of ten (10) business days from its receipt of the Offer in which to
accept the Offer. If the Offer is not accepted by the Purchaser, then the
Company may enter into an agreement on terms and conditions substantially
similar or more favorable to Centennial than those described in the Offer with
any other party. The Company may not enter into an agreement relating to a
Sale of the Company that is not on terms and conditions substantially similar
or more favorable to Centennial than those described in the Offer without again
complying with the provisions of this Section 3H(ii).
Section 4. Transfer of Restricted Securities.
(i) Restricted Securities are transferable only pursuant to (a)
public offerings registered under the Securities Act, (b) Rule 144 or Rule 144A
of the Securities and Exchange Commission (or any similar rule or rules then in
force) if either of such rules is available and (c) subject to the conditions
specified in subparagraph (ii) below, any other legally available means of
transfer.
(ii) In connection with the transfer of any Restricted Securities
(other than a transfer described in subparagraph 4(i)(a) or (b) above), the
holder thereof shall deliver written notice to the Company describing in
reasonable detail the transfer or proposed transfer, together with an opinion
of counsel which (to the Company's reasonable satisfaction) is knowledgeable in
securities law matters to the effect that such transfer of Restricted
Securities may be effected without registration of such Restricted Securities
under the Securities Act. In addition, if the holder of the Restricted
Securities delivers to the Company an opinion of counsel reasonably acceptable
to the Company that no subsequent transfer of such Restricted Securities shall
require registration under the Securities Act, the Company shall promptly upon
such contemplated transfer deliver new certificates for such Restricted
Securities which do not bear the Securities Act legend set forth in paragraph
7B(i). If the Company is not required to deliver new certificates for such
Restricted Securities not bearing such legend, the holder thereof shall not
transfer the same until the prospective transferee has confirmed to the Company
in writing its agreement to be bound by the conditions contained in this
paragraph and paragraph 7B (i).
(iii) Upon the request of the Purchaser, the Company shall promptly
supply to the Purchaser or its prospective transferees all information
regarding the Company required to be delivered in connection with a transfer
pursuant to Rule 144A of the Securities and Exchange Commission; provided,
however, that any prospective transferees enter into confidentiality agreements
reasonably requested by the Company.
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(iv) Upon the request of any holder of Restricted Securities, the
Company shall remove the foregoing legend from the certificates for such
holder's Restricted Securities; provided that such Restricted Securities are
eligible for sale pursuant to Rule 144(k).
Section 5. Representations and Warranties of the Company. As a
material inducement to the Purchaser to enter into this Agreement and purchase
the Class B Common Stock, the Company hereby represents and warrants that:
5A. Organization and Corporate Power. The Company is a corporation duly
organized, validly existing and in good standing under the laws of Delaware and
is qualified to do business in every jurisdiction in which the failure to so
qualify would reasonably be expected to have a material adverse effect on the
financial condition or business prospects of the Company and its Subsidiaries
taken as a whole. The Company has all requisite corporate power and authority
and all material licenses, permits and authorizations necessary to own and
operate its properties, to carry on its businesses as now conducted and
presently proposed to be conducted and to carry out the transactions
contemplated by this Agreement. The copies of the Company's charter documents
and bylaws which have been furnished to the Purchaser's counsel reflect all
amendments made thereto at any time prior to the date of this Agreement and are
correct and complete.
5B. Capital Stock and Related Matters.
(i) As of the Closing and immediately thereafter, the authorized
capital stock of the Company shall consist of 5,000 shares of Class B Common
Stock, of which 4,750 shares shall be issued and outstanding, 50,000 shares of
Class A Common, of which 27,000 shares shall be issued and outstanding and
10,000 shares of preferred stock, none of which shall be issued and
outstanding. As of the Closing, neither the Company nor any Subsidiary shall
have outstanding any stock or securities convertible or exchangeable for any
shares of its capital stock or containing any profit participation features,
nor shall it have outstanding any rights or options to subscribe for or to
purchase its capital stock or any stock or securities convertible into or
exchangeable for its capital stock or any stock appreciation rights or phantom
stock plans, except as set forth in this Agreement. As of the Closing, the
Company shall not be subject to any obligation (contingent or otherwise) to
repurchase or otherwise acquire or retire any shares of its capital stock or
any warrants, options or other rights to acquire its capital stock. As of the
Closing, all of the outstanding shares of the Company's capital stock shall be
validly issued, fully paid and nonassessable.
(ii) There are no statutory or, to the best of the Company's
knowledge, except as contemplated by this Agreement, contractual stockholders
preemptive rights or rights of refusal with respect to the issuance of the
Class B Common Stock hereunder. To the best of the Company's knowledge, the
Company has not violated any applicable federal or state securities laws in
connection with the offer, sale or issuance of any of its capital stock, and
the offer, sale and issuance of the Class B Common Stock hereunder do not
require registration under the Securities Act or any applicable state
securities laws. To the
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best of the Company's knowledge, there are no agreements between the Company's
stockholders with respect to the voting or transfer of the Company's capital
stock or with respect to any other aspect of the Company's affairs, except as
contemplated by this Agreement.
5C. Authorization; No Breach. The execution, delivery and
performance of this Agreement, the Trademark Agreement and all other agreements
contemplated hereby and thereby to which the Company is a party, have been duly
authorized by the Company. This Agreement, the Trademark Agreement and all
other agreements contemplated hereby and thereby each constitutes a valid and
binding obligation of the Company, enforceable in accordance with its terms,
subject to applicable laws of bankruptcy, insolvency and similar laws affecting
creditors' rights and the application of general rules of equity. The
execution and delivery by the Company of this Agreement, the Trademark
Agreement and all other agreements contemplated hereby and thereby to which the
Company is a party, the offering, sale and issuance of the Class B Common Stock
hereunder, and the fulfillment of and compliance with the respective terms
hereof and thereof by the Company, do not and shall not (i) conflict with or
result in a breach of the terms, conditions or provisions of, (ii) constitute a
default under, (iii) result in the creation of any lien, security interest,
charge or encumbrance upon the Company's capital stock or assets pursuant to,
(iv) give any third party the right to modify, terminate or accelerate any
obligation under, (v) result in a violation of, or (vi) require any
authorization, consent, approval, exemption or other action by or notice to any
court or administrative or governmental body pursuant to, the charter or bylaws
of the Company, or, to the Company's knowledge, any material law, statute, rule
or regulation to which the Company is subject, or any material agreement,
instrument, order, judgment or decree to which the Company is subject.
5D. No Operating History. The Company was formed in November 1993
and has conducted no material business operations to date other than those
incident to its formation and entering into this Agreement, the Trademark
Agreement and the transactions contemplated hereby and thereby.
5E. Governmental Consent, etc. No permit, consent, approval or
authorization of, or declaration to or filing with, any governmental authority
is required in connection with the execution, delivery and performance by the
Company of this Agreement or the other agreements contemplated hereby, or the
consummation by the Company of any other transactions contemplated hereby or
thereby, except as expressly contemplated herein or in the exhibits hereto.
5F. Closing Date. The representations and warranties of the
Company contained in this Section 5 and elsewhere in this Agreement and all
information contained in any exhibit, schedule or attachment hereto or in any
writing delivered by, or on behalf of, the Company to the Purchaser shall be
true and correct in all material respects on the date of the Closing as though
then made, except as affected by the transactions expressly contemplated by
this Agreement.
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14
Section 6. Definitions. For the purposes of this Agreement, the
following terms have the meanings set forth below:
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization and a governmental entity or any department, agency or political
subdivision thereof.
"Principal" means each of Xxxxx X. Xxxxxxx and Xxxxx X. Xxxxx.
"Restricted Securities" means (i) the Class B Common Stock issued
hereunder, and (ii) any securities issued with respect to or upon conversion of
the Class B Common Stock referred to in (i) above by way of a stock dividend or
stock split or in connection with a combination of shares, recapitalization,
merger, consolidation or other reorganization, or in connection with the
conversion of such Class B Common Stock. As to any particular Restricted
Securities, such securities shall cease to be Restricted Securities when they
have (a) been effectively registered under the Securities Act and disposed of
in accordance with the registration statement covering them, (b) become
eligible for sale pursuant to Rule 144(k) (or any similar provision then in
force) under the Securities Act or (c) been otherwise transferred and new
certificates for them not bearing the Securities Act legend set forth in
paragraph 7B have been delivered by the Company in accordance with paragraph
4(ii). Whenever any particular securities cease to be Restricted Securities,
the holder thereof shall be entitled to receive from the Company, without
expense, new securities of like tenor not bearing a Securities Act legend of
the character set forth in paragraph 7B.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal law then in force.
"Securities Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any similar federal law then in force.
"Securities and Exchange Commission" includes any governmental body or
agency succeeding to the functions thereof.
"Subsidiary" means any corporation of which the securities having a
majority of the ordinary voting power in electing the board of directors are, at
the time as of which any determination is being made, owned by the Company
either directly or through one or more Subsidiaries.
Section 7. Miscellaneous.
7A. Remedies. The Company and the Purchaser shall be entitled to
enforce any rights under any provision of this Agreement specifically (without
posting a bond or other security), to recover damages by reason of any breach of
any provision of this Agreement and to exercise all other rights granted by law.
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15
7B. Purchaser's Representations and Warranties. The Purchaser hereby
represents and warrants that:
(i) The Purchaser is acquiring the Class B Common Stock purchased
hereunder or acquired pursuant hereto for its own account with the present
intention of holding such securities for purposes of investment, and that it
has no intention of selling such securities in a public distribution in
violation of the federal securities laws or any applicable state securities
laws; provided that nothing contained herein shall prevent the Purchaser and
subsequent holders of Class B Common Stock from transferring such securities in
compliance with the provisions of paragraph 4 hereof. The Purchaser
understands that the Class B Common Stock has not been registered under the
Securities Act by reason of its issuance by the Company in a transaction exempt
from the registration requirements of the Act. Each certificate for Class B
Common Stock shall be imprinted with a legend in substantially the following
form:
"The securities represented by this certificate were originally issued
on June 10, 1994, and have not been registered under the Securities
Act of 1933, as amended. The transfer of the securities represented
by this certificate is subject to the conditions specified in the
Purchase Agreement, dated as of June 10, 1994, between the issuer (the
"Company") and a certain investor, and the Company reserves the right
to refuse the transfer of such securities until such conditions have
been fulfilled with respect to such transfer. The securities
represented by this certificate are also subject to certain
restrictions on transfer and other matters set forth in the Company's
Certificate of Incorporation. A copy of all such conditions and other
matters shall be furnished by the Company to the holder hereof upon
written request and without charge."
(ii) The Purchaser recognizes that investing in the Class B Common
Stock involves a high degree of risk, and is in a financial position to hold
the Class B Common Stock indefinitely and is able to bear the economic risk and
withstand a complete loss of its investment in the Class B Common Stock; the
Purchaser understands that it may incur a complete loss of its investment in
the Class B Common Stock.
(iii) The Purchaser is a sophisticated investor and is capable of
evaluating the merits and risks of investing in the Company given its stage of
development.
(iv) The Purchaser has had an opportunity to discuss the Company's
business, management and financial affairs with the Company's management, has
been given full and complete access to information concerning the Company, and
has utilized such access to its satisfaction for the purpose of obtaining
information or verifying information and has had the opportunity to inspect the
Company's facilities.
(v) The Purchaser has had the opportunity to ask questions of, and
receive answers from, the management of the Company (and any person acting on
its
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16
behalf) concerning the Class B Common Stock and the terms and conditions of
this Agreement and the agreements and transactions contemplated hereby, and to
obtain any additional information as the Purchaser may have requested in making
its investment decision.
(vi) The Purchaser is an "accredited investor," as defined by
Regulation D promulgated under the Securities Act.
(vii) The Purchaser has the power (corporate or otherwise) and
requisite authority, and has taken all action (corporate or otherwise)
necessary, to execute, deliver and perform this Agreement, the Trademark
Agreement and all other agreements contemplated hereby and thereby to which the
Purchaser is a party and to subscribe for and purchase the Class B Common Stock.
(viii) Each of this Agreement, the Trademark Agreement and all other
agreements contemplated hereby and thereby to which the Purchaser is a party,
upon execution by the Purchaser, will be duly authorized, executed and delivered
by the Purchaser, and will be the legal and binding obligation of the Purchaser,
enforceable in accordance with its terms, subject to applicable laws of
bankruptcy, insolvency and similar laws affecting creditors' rights and the
application of general rules of equity.
(ix) The execution and delivery by the Purchaser of this Agreement, the
Trademark Agreement and all other agreements contemplated hereby and thereby
and the fulfillment of and compliance with the respective terms hereof and
thereof, do not and shall not (i) violate any constitution, statute,
regulation, rule, injunction, judgement, order, decree, ruling, or other
restriction of any government, governmental agency, or court to which the
Purchaser is subject, or any provision of the Purchaser's charter or bylaws or
other internal governing documents or (ii) conflict with, result in a breach
of, or constitute a default under, result in the acceleration of, create in any
party the right to accelerate, terminate, modify, or cancel, or require any
notice under, any agreement, contract, lease, permit, license, instrument, or
any other arrangement to which the Purchaser is a party or by which it is bound
or to which its assets are subject. No notice, consent, filing, authorization
or approval of any government or governmental agency is required for the
Purchaser to consummate the transactions contemplated hereby.
7C. Consent to Amendments. Except as otherwise expressly provided
herein, the provisions of this Agreement may be amended and the Company or the
Purchaser may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, only if the Company or the Purchaser, as
the case may be, has obtained the written consent of the other party.
7D. Survival of Representations and Warranties. All representations
and warranties contained herein or made in writing by any party in connection
herewith shall survive the execution and delivery of this Agreement and the
consummation of the
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17
transactions contemplated hereby, regardless of any investigation made by the
Purchaser or the Company or on either parties' behalf.
7E. Successors and Assigns. Except as otherwise expressly provided
herein, all covenants and agreements contained in this Agreement by or on
behalf of any of the parties hereto shall bind and inure to the benefit of the
respective successors and assigns of the parties hereto whether so expressed or
not.
7F. Severability. Whenever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be prohibited
by or invalid under applicable law, such provision shall be ineffective only to
the extent of such prohibition or invalidity, without invalidating the
remainder of this Agreement.
7G. Counterparts. This Agreement may be executed simultaneously in two
counterparts, either one of which need not contain the signatures of more than
one party, but both such counterparts taken together shall constitute one and
the same Agreement.
7H. Descriptive Headings; Interpretation. The descriptive headings of
this Agreement are inserted for convenience only and do not constitute a
Section of this Agreement. The use of the word "including" in this Agreement
shall be by way of example rather than by limitation.
7I. Governing Law. The corporate law of Delaware shall govern all
issues concerning the relative rights of the Company and its stockholders. All
other questions concerning the construction, validity and interpretation of
this Agreement and the exhibits and schedule hereto shall be governed by the
internal law, and not the law of conflicts, of Colorado.
7J. Notices. All notices, demands or other communications to be given
or delivered under or by reason of the provisions of this Agreement shall be in
writing and shall be deemed to have been given when delivered personally to the
recipient, sent to the recipient by reputable express courier service (charges
prepaid) or mailed to the recipient by certified or registered mail, return
receipt requested and postage prepaid. Such notices, demands and other
communications shall be sent to the Company at:
Centennial Security, Inc.
0000 Xxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxxxx X. Xxxxxxxx
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18
with a copy to:
Xxxxxxxx & Xxxxx
0000 Xxxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxx
and to the Purchaser at:
Masada Security, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
with a copy to:
Xxxxxx, Xxxxxx, Xxxxxx & Xxxxx, P.C.
Suite 900
Park Place Tower
0000 Xxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxxx
or to such other address or to the attention of such other person as the
recipient party has specified by prior written notice to the sending party.
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19
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
on the date first written above.
THE COMPANY CENTENNIAL SECURITY, INC.
/s/ Xxxxxxxxx X. Xxxxxxxx
----------------------------------
By: Xxxxxxxxx X. Xxxxxxxx
Its: President
THE PURCHASER MASADA INC.
/s/ Xxxxx X. Xxxxxxx
-------------------------------------
By: Xxxxx X. Xxxxxxx
Its: President
THE STOCKHOLDERS CENTENNIAL FUND IV, L.P.
By: Centennial Holdings IV, L-P.
Its: General Partner
Only with Respect to Section 3E(i) of
this Agreement
/s/ Xxxxx Xxxxxx
------------------------------------
By: Xxxxx Xxxxxx
Its: General Partner
LARIMER & CO
Only with Respect to Section 3E(i) of
this Agreement
/s/ Xxxxx Xxxxxx
-------------------------------------
By: Xxxxx Xxxxxx
Its: Senior Vice President
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LIST OF EXHIBITS
Exhibit A - Trademark and Intellectual Property Agreement
Exhibit B - Charter Amendment
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