EXECUTION COPY
STOCK PURCHASE AGREEMENT
Dated March 21, 1998
between
STRATEGIC REALTY CAPITAL CORP.
and
CNC HOLDING CORP.
This STOCK PURCHASE AGREEMENT (this "Agreement") is made and entered
into this 21st day of March, 1998, between STRATEGIC REALTY CAPITAL CORP., a
Maryland corporation (the "Company"), and CNC HOLDING CORP., a Delaware
corporation (the "Purchaser").
WHEREAS, upon the terms and subject to the conditions set forth in
this Agreement, the Purchaser wishes to purchase from the Company, and the
Company wishes to issue and sell to the Purchaser, shares of the Company's
Common Stock, par value $.0001 per share (the "Common Stock"), in the amount and
on the terms set forth herein;
WHEREAS, concurrently with the execution of this Agreement between the
Company and the Purchaser, the Company shall enter into separate Stock Purchase
Agreements with each of ContiWest Corporation ("ContiWest") and MarRay
Investment, L.L.C. ("MarRay") (the Purchaser, ContiWest and MarRay are each a
"Holder" and collectively the "Holders", and the shares of stock purchased by
them pursuant to Stock Purchase Agreements executed on the date hereof,
including this Agreement, are "Sponsor Shares").
NOW, THEREFORE, in consideration of the mutual recitals and covenants
hereinafter set forth, the parties to this Agreement hereby agree as follows:
ARTICLE I.
DEFINTIONS
Section 1.1 DEFINED TERMS. As used in this Agreement, the terms
set forth in this Article I shall have the respective definitions given.
"Crown Holder" has the meaning as defined in the Rights Agreement.
"Rights Agreement" means the Registration Rights Agreement dated as of
March 21, 1998 among MarRay Investment, L.L.C., the Purchaser, the Company and
ContiWest Corporation.
ARTICLE II.
CLOSING DATE TRANSACTIONS
Section 2.1 SALE AND PURCHASE OF STOCK. In reliance on the
representations, warranties and covenants contained herein, at the Closing (as
hereinafter defined) the Company will issue and sell to the Purchaser, and the
Purchaser will purchase from the Company, such number of shares equal to (i)
10,000,000 divided by (ii) the price per share paid by the public in the
Company's initial public offering (the "IPO") pursuant to a firm commitment
underwritten public offering and an effective registration statement under the
Securities Act of 1933, as amended (the "Securities Act")(such number of shares
being hereinafter referred to as the "Number of Shares"), for an aggregate
purchase price of $2,000,000, free and clear of any liens or encumbrances.
1
(The shares of Common Stock to be issued to the Purchaser pursuant to this
Agreement are hereinafter referred to as the "Crown Shares.")
Section 2.2 PURCHASE PRICE; PAYMENT. The aggregate purchase price
for the Crown Shares shall be $2,000,000.
At the Closing, the Purchaser will pay the aggregate purchase price by
wire transfer of immediately available funds to an account designated by the
Company.
Section 2.3 STOCK CERTIFICATES. At the Closing, the Company will
deliver to the Purchaser a certificate or certificates evidencing shares of
Common Stock in an amount equal to the Number of Shares. Such certificate or
certificates will bear the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 (THE "SECURITIES ACT"), AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT,
OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT, THE
AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE REASONABLE SATISFACTION OF THE
COMPANY.
ARTICLE III.
CLOSING
The closing of the transaction contemplated hereby (the "Closing")
shall take place concurrently with the closing of the Company's IPO at such
place as the parties shall agree. At the Closing, the parties hereto will
exchange funds, certificates and other documents specified in this Agreement.
ARTICLE IV.
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
OF THE COMPANY
The Company hereby represents and warrants to and agrees with the
Purchaser as follows:
Section 4.1 ORGANIZATION AND STANDING. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Maryland and has all requisite corporate power and authority to
conduct its business as now conducted and as proposed to be conducted and is
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction in which qualification is necessary under applicable law,
except where the failure to be so qualified would not have a material adverse
effect on its business.
2
Section 4.2 CAPITALIZATION. The authorized capital stock of the
Company consists of 500,000,000 shares of capital stock, all of which is
initially classified as Common Stock and of which 100 shares are issued and
outstanding as of the date hereof.
Section 4.3 DUE AUTHORIZATION. The Company has all requisite power
and authority to execute, deliver and perform its obligations under this
Agreement. The execution, delivery and performance of this Agreement by the
Company and the consummation by the Company of the transactions contemplated
hereby have been duly authorized by all requisite corporate action and this
Agreement constitutes the legal, valid and binding obligation of the Company,
enforceable in accordance with its terms, except as enforcement hereof may be
limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights in general or by general principles of equity.
Section 4.4 NO CONFLICT. The execution, delivery and performance
by the Company of this Agreement will not violate or conflict with, result in a
breach of, or constitute (with due notice or lapse of time or both) a default
under any provision of law, any order of any court or governmental agency, the
Articles of Incorporation or bylaws of the Company or any provision of any
indenture, agreement or other instrument by which the Company or any of its
properties or assets is bound, or result in the creation or imposition of any
lien, charge, restriction, claim or encumbrance of any nature whatsoever upon
any of the properties or assets of the Company.
Section 4.5 VALID ISSUANCE OF THE SHARES. The Shares to be
purchased by the Purchaser hereunder have been duly authorized and, when issued
in accordance with this Agreement, will be validly issued, fully paid and
nonassessable. Based in part upon the representations of the Purchaser
contained in Sections 5.1 and 5.2 of this Agreement, the Crown Shares, when
issued and delivered pursuant to this Agreement, will be issued in compliance
with Federal and applicable state securities laws.
Section 4.6 LITIGATION. There is no action, suit, proceeding or
investigation pending or currently threatened against the Company which
questions the validity of this Agreement or the right of the Company to enter
into it, or to consummate the transactions contemplated hereby, or which might
result, either individually or in the aggregate, in any material adverse change
in the financial position, business prospects or results of operations of the
Company, or any change in the current equity ownership of the Company, nor is
the Company aware that there is any basis for the foregoing.
ARTICLE V.
REPRESENTATIONS, WARRANTIES AND AGREEMENTS
OF THE PURCHASER
The Purchaser hereby represents and warrants to and agrees with the
Company as follows:
Section 5.1 INVESTMENT INTENT. The Crown Shares to be purchased by
the Purchaser pursuant to this Agreement are being acquired by the Purchaser
solely for
3
the Purchaser's own account, for investment purposes only, and with no present
intention of distributing, selling or otherwise disposing of such Crown Shares.
Section 5.2 ACCREDITED INVESTOR. The Purchaser is an Accredited
Investor as such term is defined in Rule 501 of the General Rules and
Regulations promulgated under the Securities Act.
Section 5.3 DUE AUTHORIZATION. The Purchaser has all requisite
power and authority to execute, deliver and perform its obligations under this
Agreement. The execution, delivery and performance of this Agreement by the
Purchaser and the consummation by the Purchaser of the transactions contemplated
hereby have been duly authorized by all requisite corporate action and this
Agreement constitutes the legal, valid and binding obligation of the Purchaser,
enforceable in accordance with its terms, except as enforcement hereof may be
limited by bankruptcy, insolvency or other similar laws affecting the
enforcement of creditors' rights in general or by general principles of equity.
ARTICLE VI.
RESTRICTIONS ON TRANSFER
The Purchaser agrees that none of the Crown Shares shall be sold,
transferred, assigned, pledged, hypothecated or otherwise disposed of by the
Purchaser: (i) for a period of 180 days from the date of the Closing and (ii)
after the expiration of the 180 day period following the date of the Closing,
unless and until such disposition is in accordance with the provisions of the
Securities Act.
ARTICLE VII.
RIGHTS OF HOLDER
The Crown Shares purchased under this agreement are entitled to the
benefits of the Rights Agreement. The Company shall keep a copy of the Rights
Agreement and any amendment thereto, at the principal office of the Company and
shall furnish copies thereof to the Purchaser upon request.
ARTICLE VIII.
CONDITIONS
Section 8.1 CONDITIONS TO OBLIGATION OF EACH PARTY TO EFFECT THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. The obligation of each party to
effect the transactions contemplated by this Agreement shall be subject to the
fulfillment at or prior to the Closing Date of the following conditions:
(a) The closing of the Company's IPO, on substantially the same
terms and conditions as set forth in the draft registration statement
attached as Annex I hereto, except that the net proceeds to be received by
the Company from such IPO must equal or exceed $75 million; and
4
(b) all governmental and other consents and approvals, if any,
necessary to permit the consummation of the transactions contemplated by
this Agreement shall have been obtained.
Section 8.2 CONDITIONS TO THE OBLIGATION OF THE COMPANY. The
obligation of the Company to effect the transactions contemplated by this
Agreement is subject to the fulfillment at or prior to the Closing Date of the
following conditions:
(a) The Purchaser shall have performed in all material respects
each obligation and agreement and complied in all material respects with
each covenant to be performed and complied with by it hereunder at or prior
to the Closing Date;
(b) The representations and warranties of the Purchaser in this
Agreement shall be true and correct in all material respects as of the
Closing Date with the same force and effect as though made at such time,
except for changes contemplated by this Agreement;
(c) The Purchaser shall have furnished to the Company a
certificate, dated as of the Closing Date, signed by a duly authorized
officer of the Purchaser to the effect that all conditions set forth in
Sections 8.2(a) and (b) have been satisfied; and
(d) The Purchaser shall have furnished to the Company such other
instruments and documents, in form and substance reasonably acceptable to
the Company, as may be reasonably necessary to effect the Closing.
Section 8.3 CONDITIONS TO THE OBLIGATION OF THE PURCHASER. The
obligation of the Purchaser to effect the transactions contemplated by this
Agreement is subject to the fulfillment at or prior to the Closing Date of the
following conditions:
(a) The Company shall have performed in all material respects
each obligation and agreement and complied in all material respects with
each covenant to be performed and complied with by it hereunder at or prior
to the Closing;
(b) The representations and warranties of the Company in this
Agreement shall be true and correct in all material respects as of the
Closing Date with the same force and effect as though made at such time,
except for changes contemplated by this Agreement;
(c) The Company shall have furnished to the Purchaser a
certificate, dated as of the Closing Date, signed by a duly authorized
officer of the Company to the effect that all conditions set forth in
Sections 8.3(a) through (f) have been satisfied;
(d) The Company shall have furnished to the Purchaser a
certificate, signed by an authorized officer of the Company, certifying:
(i) the due organization and good standing of the Company; (ii) the
corporate resolutions of the Company authorizing the transactions
contemplated by this Agreement; and
5
(iii) the incumbency of officers of the Company executing this Agreement
and the other instruments or certificates delivered at the Closing;
(e) The Company shall have furnished to the Purchaser a
certificate or certificates representing the Shares; and
(f) The Company shall have furnished to the Purchaser such other
instruments and documents, in form and substance reasonably acceptable to
the Purchaser, as may be reasonably necessary to effect the Closing.
ARTICLE IX.
MISCELLANEOUS PROVISIONS
Section 9.1 NOTICES. All notices and other communications
hereunder shall be in writing and shall be deemed given if delivered personally,
sent by facsimile transmission, sent by overnight express mail or mailed by
registered or certified mail, return receipt requested, postage pre-paid, to the
parties at the following addresses (or at such other address for a party as
shall be specified by like notice; provided that notices of any change of
address shall be effective only upon receipt thereof):
If to the Company: Strategic Realty Capital Corp.
0000 Xxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Fax No.: (000) 000-0000
If to the Purchaser: CNC Holding Corp.
0000 Xxxxxx Xxxx
Xxxxxxxx, Xxxx 00000
Fax No.: (000) 000-0000
A notice shall be deemed given when received by the addressee.
Section 9.2 SUCCESSORS AND ASSIGNS. Each of the parties hereto
hereby acknowledges that in entering into this Agreement it has not relied upon
any representation or warranty except as expressly set forth herein. Subject to
the exceptions specifically set forth in this Agreement, the terms and
conditions of this Agreement shall inure to the benefit of and be binding upon
the respective executors, administrators, heirs, successors and permitted
assigns of the parties. This agreement cannot be assigned by the Purchaser or
the Company other than to "Affiliates" of the Company or the Purchaser, as such
term is defined in Section 405 of the General Rules and Regulation promulgated
under the Securities Act. Any assignee of this Agreement will agree in writing
to be bound by the terms hereof prior to such assignment becoming effective.
Section 9.3 GOVERNING LAW; JURISDICTION; SERVICE. This Agreement
has been negotiated, executed and delivered at and shall be deemed to have been
made in New York, New York. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without giving effect to
the conflict of laws rules therein. The parties hereto hereby consent and agree
that the Supreme
6
Court of New York County, New York and the United Stated District court for
the Southern District of New York, shall have exclusive jurisdiction to hear
and determine any claims or disputes between the parties hereto pertaining to
this Agreement or to any matter arising out of or related to this Agreement.
The parties hereto expressly submit and consent in advance to such jurisdiction
in any action or suit commenced in any such court, and hereby waive any
objection which it may have been based upon lack of personal jurisdiction,
improper venue or forum non conveniens and hereby consent to the granting for
such legal or equitable relief as is deemed appropriate by such court. Each
party hereto irrevocably consents to the service of process by registered or
certified mail, postage prepaid, its address given pursuant to Section 9.1
hereof. Subject to the foregoing, nothing in this Agreement shall be deemed to
operate to affect the right of any party hereto to serve legal process in any
other manner permitted by law, to preclude the enforcement by any party hereto
of any judgement or order obtained in such forum or the taking of any action
under this Agreement to enforce same in any other appropriate forum or
jurisdiction.
Section 9.4 IMMUNITY; WAIVER OF TRIAL BY JURY. To the extent that
a party has or may hereafter acquire any immunity from the jurisdiction of any
court or from any legal process (whether through service or notice, attachment
prior to judgement, attachment in aid of execution, execution or otherwise) with
respect to such party or such party's property, such Party hereby irrevocably
waives such immunity in respect of its obligations under this Agreement.
SUBJECT TO SECTION 9.7 HEREIN, EACH PARTY HERETO WAIVES THE RIGHT TO TRIAL BY
JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF
OR RELATED TO THIS AGREEMENT. In the event of litigation, this Agreement may be
filed as a written consent to a trial by the court. To the extent permitted by
applicable law, each party hereto irrevocably waives any right such party may
have to punitive damages.
Section 9.5 COUNTERPARTS. This Agreement may be executed in two (2)
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
Section 9.6 CROSS-REFERENCES; SCHEDULES; TITLES AND SUBTITLES.
Unless expressly indicated to the contrary, all references in this Agreement to
enumerated Sections are to the respective Sections of this Agreement. The
titles and subtitles used in this Agreement are used for convenience only and
are not to be considered in construing or interpreting this Agreement.
Section 9.7 DISPUTE RESOLUTION. The parties agree that each will
attempt in good faith to resolve through negotiation any dispute, claim or
controversy arising out of or relating to this Agreement prior to filing any
claim by suit in a court. Any party may initiate negotiations by providing
written notice in letter form to the other party, setting forth the subject of
the dispute and the relief requested. The recipient of such notice will respond
in writing within five days with a statement of its position on and recommended
solution to the dispute. If the dispute is not resolved by this exchange of
correspondence, then representatives of each party with full settlement
authority will meet at a mutually agreeable time and place within ten days of
the date of the initial notice in order to exchange relevant information and
perspectives, and to attempt to
7
resolve the dispute. If the dispute is not resolved by these negotiations, the
matter will be submitted to J.A.M.S/ENDISPUTE, or its successor, for mediation.
If the matter is not resolved by such mediation within 180 days of the
initiation of negotiations, then either party may file a suit in court. If the
matter is resolved by litigation, the prevailing party's litigation expenses,
including but not limited to all filing fees, attorney's fees and fees paid to
other consultants in the course of litigation will be paid by the other party.
Each party agrees to bear its own costs and expenses relating to mediation.
Section 9.8 WAIVER; SEVERABILITY . The waiver by one party hereto
of any breach by the other (the "BREACHING PARTY") of any provision of this
Agreement shall not operate or be considered as a waiver of any other (prior or
subsequent) breach by the Breaching Party, and waiver of a breach of a provision
in one instance shall not be deemed a waiver of such provision in any other
circumstance. If any term or provision of this Agreement or the application
thereof to any person, property or circumstance shall to any extent be invalid
or unenforceable, the remainder of this Agreement, or the application of such
term or provision to persons, property or circumstances other than those as to
which it is invalid or unenforceable, shall not be affected thereby.
Section 9.9 ENTIRE AGREEMENT. This Agreement constitutes the
entire agreement between the parties with respect to the subject matter hereof
and supersedes all other prior agreements or understandings, written or oral,
between the parties with respect to the subject matter hereof.
8
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
CNC HOLDING CORP. STRATEGIC REALTY CAPITAL CORP.
By: /s/Xxxxxx X. Xxxxx By:/s/Xxxxxx X. Xxxxx
------------------------------ ---------------------------------
Name: Xxxxxx X. Xxxxx Name: Xxxxxx X. Xxxxx
Title: Chairman and Chief Title: President and Chief
Executive Officer Executive Officer
