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SECURITIES PURCHASE AGREEMENT
BETWEEN
GCM SECURITY PARTNERS, LLC
AND
RELIANCE SECURITY GROUP PLC
DATED AS OF APRIL 23, 2004
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TABLE OF CONTENTS
Page
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ARTICLE 1
Definitions....................................................................1
Section 1.1. Definitions...................................................1
ARTICLE 2
Purchase And Sale..............................................................3
Section 2.1. Purchase and Sale of the Securities...........................3
Section 2.2. Purchase Price................................................3
Section 2.3. Closing.......................................................3
Section 2.4. Closing Deliveries by Seller..................................3
Section 2.5. Closing Deliveries by Purchaser...............................4
Section 2.6. Adjustment upon Change in Capitalization or Merger............4
ARTICLE 3
Representations And Warranties Of Seller.......................................4
Section 3.1. Organization, Authority and Qualification of Seller...........4
Section 3.2. No Conflict...................................................5
Section 3.3. Valid Issuance; Ownership of the Securities...................5
Section 3.4. Absence of Litigation.........................................6
Section 3.5. Brokers.......................................................6
Section 3.6. Compliance with Laws..........................................6
ARTICLE 4
Representations And Warranties Of Purchaser....................................6
Section 4.1. Organization and Authority of Purchaser.......................6
Section 4.2. No Conflict; Required Filings and Consents....................6
Section 4.3. Investment....................................................7
Section 4.4. Investment Experience.........................................7
Section 4.5. Disclosure of Information.....................................7
Section 4.6. Accredited Investor...........................................7
Section 4.7. Transfer Restrictions.........................................7
Section 4.8. Legends.......................................................8
Section 4.9. Brokers.......................................................8
Section 4.10. Absence of Litigation........................................8
ARTICLE 5
Additional Agreements..........................................................8
Section 5.1. No Disposition or Encumbrance of the Securities...............8
Section 5.2. Company Board Representation..................................9
Section 5.3. Notification of Certain Matters...............................9
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TABLE OF CONTENTS
(continued)
Page
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Section 5.4. Further Action; Reasonable Efforts............................9
Section 5.5. Public Announcements..........................................9
ARTICLE 6
Conditions To Closing.........................................................10
Section 6.1. Conditions to Obligations of each Party......................10
Section 6.2. Conditions to Obligations of Seller..........................10
Section 6.3. Conditions to Obligations of Purchaser.......................10
ARTICLE 7
Termination And Waiver........................................................11
Section 7.1. Termination..................................................11
Section 7.2. Effect Of Termination........................................12
Section 7.3. Waiver.......................................................12
ARTICLE 8
Indemnification...............................................................12
Section 8.1. Indemnification by Seller....................................12
Section 8.2. Indemnification by Purchaser.................................12
Section 8.3. Notice and Payment of Losses.................................13
Section 8.4. Defense of Third-Party Claims................................13
Section 8.5. Survival of Representations and Warranties...................14
Section 8.6. Limitation on Indemnification................................14
Section 8.7. Characterization of Indemnity Payments.......................14
Section 8.8. Exclusive Remedy.............................................14
ARTICLE 9
General Provisions............................................................14
Section 9.1. Expenses.....................................................14
Section 9.2. Notices......................................................14
Section 9.3. Headings.....................................................15
Section 9.4. Severability.................................................15
Section 9.5. Entire Agreement.............................................16
Section 9.6. Assignment...................................................16
Section 9.7. Parties In Interest..........................................16
Section 9.8. Governing Law................................................16
Section 9.9. Waiver Of Jury Trial.........................................16
Section 9.10. Counterparts................................................16
Section 9.11. Specific Performance........................................17
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SECURITIES PURCHASE AGREEMENT, dated as of April 23, 2004 (this
"Agreement"), between GCM Security Partners, LLC, a Delaware limited liability
company ("Purchaser") and Reliance Security Group plc, a company organized under
the laws of England and Wales ("Seller"), as stockholder of Command Security
Corporation, a New York corporation (the "Company").
RECITALS:
The Seller desires to sell, and Purchaser desires to purchase and
acquire, all upon the terms and subject to the conditions set forth in this
Agreement, (a) 1,617,339 shares of the Company's common stock, $.0001 par value
per share (the "Common Stock"), (b) 12,325.35 shares of the Company's Series A
convertible preferred stock, $.0001 par value per share (the "Preferred Stock"),
(c) a warrant to acquire 150,000 shares of Common Stock at an exercise price of
$1.03125 per share and (d) a warrant to acquire 2,298,092 shares of Common Stock
at an exercise price of $1.25 per share (the warrants referred to in (c) and (d)
are collectively referred to herein as the "Warrants").
Accordingly, in consideration of the premises and the mutual agreements
and covenants hereinafter set forth, Purchaser and Seller hereby agree as
follows:
ARTICLE 1
DEFINITIONS
Section 1.1. Definitions. For purposes of this Agreement:
"Affiliate" means, with respect to any person, any person or entity
which is controlling, controlled by, or under common control with, directly or
indirectly through any person or entity, the person referred to, and, if the
person referred to is a natural person, any member of such person's immediate
family. The term "control" (including, with correlative meaning, the terms
"controlled by" and "under common control with") as used with respect to any
person, means the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of such person, whether
through the ownership of voting securities, by contract or otherwise.
"Agreement" has the meaning set forth in the preamble hereto, as such
agreement may be amended and supplemented from time to time in accordance with
its terms.
"Business Day" means any day on which banks are not required or
authorized to close in New York, New York.
"Action" means any claim, suit, action, arbitration, inquiry,
investigation or other proceeding of any nature (whether criminal, civil,
legislative, administrative, regulatory, prosecutorial or otherwise) by or
before any arbitrator or Governmental Entity.
"Closing" has the meaning set forth in Section 2.3.
"Closing Date" has the meaning set forth in Section 2.3.
"Common Stock" has the meaning set forth in the recitals to this
Agreement.
"Company" has the meaning set forth in the preamble to this Agreement.
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
or any successor statute.
"Governmental Entity" means any government or any state, department or
other political subdivision thereof, or any governmental body, agency, authority
(including, but not limited to, any central bank or taxing authority) or
instrumentality (including, but not limited to, any court, tribunal or grand
jury) exercising executive, prosecutorial, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Indemnifying Party" has the meaning set forth in Section 8.3.
"Injured Party" has the meaning set forth in Section 8.3.
"Law" means any United States federal, state, local or foreign law,
statute, regulation, ordinance, order, judgment, decree, rule or other
applicable governmental or judicial restriction or requirement, and any judicial
or administrative interpretation or determination with respect thereto.
"Lien" means any lien, mortgage, deed of trust, pledge, hypothecation,
security interest, encumbrance, claim or charge of any kind, or any conditional
sale agreement or other agreement to create any of the foregoing.
"Losses" has the meaning set forth in Section 8.1.
"Notice of Claim" has the meaning set forth in Section 8.3.
"Person" means an individual, corporation, partnership, limited
partnership, limited liability company, syndicate, person (including, without
limitation, a "person" as defined in Section 13(d)(3) of the Exchange Act),
trust, association or entity or government, political subdivision, agency or
instrumentality of a government.
"Preferred Stock" has the meaning set forth in the recitals to this
Agreement.
"Purchase Price" has the meaning set forth in Section 2.2.
"Purchaser" has the meaning set forth in the preamble to this
Agreement.
"Purchaser Party" has the meaning set forth in Section 8.1.
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"Regulation D" means Regulation D promulgated under the Securities Act.
"SEC" means the United States Securities and Exchange Commission.
"Securities" has the meaning set forth in Section 2.1.
"Securities Act" means the Securities Act of 1933, as amended, or any
successor statute.
"Seller Party" has the meaning set forth in Section 8.2.
"Seller's Bank Account" means a bank account to be designated by Seller
in a written notice to Purchaser at least five Business Days before the Closing.
"Shareholders' Agreement" means that certain Shareholders' Agreement,
made and entered into on September 12, 2000, by and among the Company, Xxxxxxx,
and Seller.
"Shares" has the meaning set forth in Section 2.1.
"Xxxxxxx" has the meaning set forth in Section 3.4.
"Xxxxxxx Litigation" has the meaning set forth in Section 3.4.
"Warrants" has the meaning set forth in the recitals to this Agreement.
ARTICLE 2
PURCHASE AND SALE
Section 2.1. Purchase and Sale of the Securities. Upon the terms and
subject to the conditions contained in this Agreement, at the Closing, Seller
agrees to sell to Purchaser, and Purchaser agrees to purchase from Seller (a)
1,617,339 shares of Common Stock, (b) 12,325.35 shares of Preferred Stock, which
are convertible into 1,232,535 shares of Common Stock (together with the shares
of the Common Stock, the "Shares") and (c) the Warrants (together with the
Shares, and as adjusted pursuant to Section 2.6, if applicable, the
"Securities").
Section 2.2. Purchase Price. The aggregate purchase price for the
Securities shall be two million eight hundred fifty thousand dollars
($2,850,000) in immediately available United States dollars (the "Purchase
Price").
Section 2.3. Closing. Subject to the terms and conditions of this
Agreement, the sale and purchase of the Securities contemplated by this
Agreement shall take place at a closing (the "Closing") to be held at the
offices of Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx 00000 as soon as practicable following satisfaction or waiver of all
conditions to the obligations of the parties set forth in Article 6, or at such
other place or at such other time or on such other date as Seller and Purchaser
may mutually agree in writing. The date on which the Closing takes place is
referred to herein as the "Closing Date."
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Section 2.4. Closing Deliveries by Seller. At the Closing, Seller shall
deliver or cause to be delivered to Purchaser:
(a) stock certificates evidencing the Shares duly endorsed in blank, or
accompanied by stock powers duly executed in blank, in form reasonably
satisfactory to Purchaser and with all required stock transfer tax stamps
affixed;
(b) the Warrants duly assigned to Purchaser or its nominees;
(c) a receipt for the Purchase Price; and
(d) the officer's certificates required to be delivered pursuant to
Section 6.3(a) and Section 6.3(b).
Section 2.5. Closing Deliveries by Purchaser. At the Closing, Purchaser
shall deliver to Seller:
(a) the Purchase Price by wire transfer in immediately available funds
to Seller's Bank Account; and
(b) the officer's certificates required to be delivered pursuant to
Section 6.2(a) and Section 6.2(b).
Section 2.6. Adjustment upon Change in Capitalization or Merger. In the
event of any change in the Company's capital stock by reason of a stock
dividend, stock split, merger, consolidation, recapitalization, combination,
conversion, exchanges of shares, extraordinary or liquidating dividend or other
change in the corporate or capital structure of the Company which would have the
effect of diluting or changing Seller's or Purchaser's rights hereunder, the
number and kind of shares or other securities or property subject to this
Agreement shall be appropriately and equitably adjusted so that Purchaser shall
receive at the Closing the number of shares or other securities or property that
Purchaser would have received in respect of the Securities purchasable
immediately prior to such event.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF SELLER
As an inducement to Purchaser to enter into this Agreement, Seller
hereby represents and warrants to Purchaser as follows:
Section 3.1. Organization, Authority and Qualification of Seller.
Seller is a company duly organized, validly existing and in good standing under
the laws of England and Wales and has all necessary power and authority to enter
into this Agreement, to carry out its obligations hereunder and to consummate
the transactions contemplated hereby. The execution and delivery of this
Agreement by Seller, the performance by Seller of its obligations hereunder and
the consummation by Seller of the transactions contemplated hereby have been
duly authorized by
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all requisite action on the part of Seller. This Agreement has been duly
executed and delivered by Seller, and (assuming due authorization, execution and
delivery by Purchaser) this Agreement constitutes a legal, valid and binding
obligation of Seller enforceable against it in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
Section 3.2. No Conflict. (a) The execution, delivery and performance
of this Agreement by Seller do not and will not, (i) contravene, conflict with
or violate the organizational documents of Seller, (ii) contravene, conflict
with or violate any Law applicable to Seller or by which any property or asset
of Seller is bound or affected or (iii) result in any breach of, or constitute a
default (or an event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a Lien on any
property or asset of Seller pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation, except for any such conflicts, violations, breaches, defaults or
other occurrences that would not adversely affect or materially delay the
ability of any of Seller to carry out its obligations under, and to consummate
the transactions contemplated by, this Agreement.
(b) The execution, delivery and performance of this Agreement by Seller
do not and will not require any consent, approval, authorization or permit of,
or filing with or notification to, any Governmental Entity, except where the
failure to obtain such consents, approvals, authorizations or permits, or to
make such filing or notifications would not adversely affect or materially delay
the ability of Seller to carry out its obligations under, and to consummate the
transactions contemplated by, this Agreement; provided that the parties
understand that certain filings, including, but not limited to, a Schedule 13D
and a Statement of Changes in Beneficial Ownership on Form 4 must be made with
the SEC following the Closing by the Seller pursuant to the Exchange Act.
Section 3.3. Valid Issuance; Ownership of the Securities. (a) Seller is
the sole record and beneficial owner of, and has good and marketable title to,
the Securities. The Securities are owned by Seller free and clear of all Liens,
other than those that may exist under the Shareholders' Agreement and other than
those alleged in the Xxxxxxx Litigation, and at Closing will not be subject to
any Liens or pre-emptive or similar rights and other than those alleged in the
Xxxxxxx Litigation. Upon the delivery and payment for the Securities as provided
in this Agreement, Seller will convey to Buyer good, valid and marketable title
to the Securities free and clear of any Liens other than those Liens created
pursuant to the Shareholders' Agreement and other than those alleged in the
Xxxxxxx Litigation.
(b) The Securities have been validly issued to Seller, and are fully
paid and nonassessable. The Securities are all the equity securities of the
Company owned, either of record or beneficially, by Seller or any Affiliate of
Seller, and neither Seller nor any Affiliate of
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Seller has any option or other right to acquire any other securities of the
Company. Except as provided in this Agreement, Seller has not appointed or
granted any proxy, which appointment or grant is still effective, with respect
to the Shares owned by Seller.
(c) Subject to the accuracy of the representation made by Purchaser in
Sections 4.4, 4.5, 4.6, 4.7 and 4.8 the Securities (assuming no change in
applicable law and no unlawful distribution of the Securities by Purchasers or
other parties) will be sold to Purchaser in compliance with applicable
exemptions from (i) the registration and prospectus delivery requirements of the
Securities Act and (ii) the registration and qualification requirements of all
applicable securities laws of the states of the United States.
Section 3.4. Absence of Litigation. Except for the claims presently
alleged in the action commenced by Xxxxxxx Xxxxxxx, the Company's Chief
Executive Officer ("Xxxxxxx"), against Seller and the Company in the United
States District Court for the Southern District of New York on April 7, 2004
(the "Xxxxxxx Litigation"), as of the date of this Agreement, there is no Action
pending or, to the knowledge of Seller, threatened against Seller, or any
property or asset of Seller, before any Governmental Entity or any tribunal that
seeks to delay or prevent the consummation of the transactions contemplated by
this Agreement.
Section 3.5. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Seller, other than Xxxxxx Capital LLC. The Seller shall
pay all fees and expenses due to Xxxxxx Capital LLC.
Section 3.6. Compliance with Laws. Seller has complied with all legal
requirements, including, without limitation, those promulgated by the SEC, and
has made all required filings with any Governmental Entity, concerning its
ownership of the Securities.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
As an inducement to Seller to enter into this Agreement, Purchaser
hereby represents and warrants to Seller as follows:
Section 4.1. Organization and Authority of Purchaser. Purchaser is a
limited liability company duly organized, validly existing and in good standing
under the laws of the State of Delaware and has all necessary power and
authority to enter into this Agreement, to carry out its obligations hereunder
and to consummate the transactions contemplated hereby. The execution and
delivery of this Agreement by Purchaser, the performance by Purchaser of its
obligations hereunder and the consummation by Purchaser of the transactions
contemplated hereby have been duly authorized by all requisite action on the
part of Purchaser. This Agreement has been duly executed and delivered by
Purchaser, and (assuming due authorization, execution and delivery by Seller)
this Agreement constitutes a legal, valid and binding obligation of Purchaser
enforceable against Purchaser in accordance with its terms, subject to
bankruptcy, insolvency,
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fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
Section 4.2. No Conflict; Required Filings and Consents. (a) The
execution, delivery and performance of this Agreement by Purchaser do not and
will not (i) contravene, conflict with or violate the certificate of formation
or the limited liability company operating agreement of Purchaser, (ii)
contravene, conflict with or violate any Law applicable to Purchaser or by which
any property or asset of Purchaser is bound or affected or (iii) result in any
breach of, or constitute a default (or event that with notice or lapse of time
or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in the
creation of a Lien on any property or asset of Purchaser pursuant to, any note,
bond, mortgage, indenture, contract, agreement, lease, license, permit,
franchise or other instrument or obligation, except for any such conflicts,
violations, breaches, defaults or other occurrences that would not adversely
affect or materially delay the ability of Purchaser to carry out its obligations
under, and to consummate the transactions contemplated by, this Agreement.
(b) The execution, delivery and performance of this Agreement by
Purchaser do not and will not, require any consent, approval, authorization or
permit of, or filing with, or notification to, any Governmental Entity, except
where the failure to obtain such consents, approvals, authorizations or permits,
or to make such filings or notifications, would not adversely affect or
materially delay the ability of Purchaser to carry out its obligations under,
and to consummate the transactions contemplated by, this Agreement; provided
that the parties understand that certain filings, including, but not limited to,
a Schedule 13D and an Initial Statement of Beneficial Ownership of Securities on
Form 3 must be made with the SEC following the Closing by the Purchaser pursuant
to the Exchange Act.
Section 4.3. Investment. Purchaser is acquiring the Securities for its
own account as principal, not as a nominee or agent, for investment purposes
only, and not with a view to, or for, resale or distribution thereof in whole or
in part. Purchaser does not have any contract, undertaking, agreement or
arrangement with any Person or entity to sell, transfer or grant participations
to such Person or entity or to any third Person or entity with respect to any of
the Securities.
Section 4.4. Investment Experience. The Purchaser acknowledges that it
can bear the economic risk and complete loss of its investment in the Securities
and has such knowledge and experience in financial or business matters that it
is capable of evaluating the merits and risks of the investment contemplated
hereby.
Section 4.5. Disclosure of Information. The Purchaser has had an
opportunity to receive all information related to the Company requested by it
and to ask questions of and receive answers from the Company regarding the
Company, its business and the terms and conditions of the Securities. The
Purchaser acknowledges receipt of copies of all SEC filings of the Company as
requested.
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Section 4.6. Accredited Investor. Purchaser is an "accredited
investor," as that term is defined in Rule 501 of Regulation D.
Section 4.7. Transfer Restrictions. Purchaser shall not sell or
otherwise transfer any of the Securities without registration under the
Securities Act or an exemption therefrom, and Purchaser fully understands and
agrees that Purchaser must bear the economic risk of its purchase of the
Securities because, among other reasons, the Securities have not been registered
under the Securities Act or under the securities laws of any state and,
therefore, cannot be resold, pledged, assigned or otherwise disposed of unless
they are subsequently registered under the Securities Act and under the
applicable securities laws of such states, or unless exemptions from such
registration requirements are available. In particular, Purchaser is aware that
the Securities are "restricted securities," as such term is defined in Rule 144
promulgated under the Securities Act. Such Purchaser further understands that
sale or transfer of the Securities are further restricted by state securities
laws and the provisions of this Agreement.
Section 4.8. Legends. Purchaser agrees that, so long as required by
law, certificates evidencing any of the Securities and any securities issued in
exchange for or in respect thereof will bear a legend substantially to the
following effect:
(a) "THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT")
OR WITH ANY STATE SECURITIES COMMISSION, AND MAY NOT BE TRANSFERRED OR DISPOSED
OF BY THE HOLDER IN THE ABSENCE OF A REGISTRATION STATEMENT WHICH IS EFFECTIVE
UNDER THE SECURITIES ACT AND APPLICABLE STATE LAWS AND RULES, OR, UNLESS,
IMMEDIATELY PRIOR TO THE TIME SET FOR TRANSFER, THE HOLDER PROVIDES A REASONABLY
ACCEPTABLE LEGAL OPINION TO THE COMPANY THAT SUCH TRANSFER MAY BE EFFECTED
WITHOUT VIOLATION OF THE SECURITIES ACT AND OTHER APPLICABLE STATE LAWS AND
RULES."; and
(b) any other legends required by applicable state or federal
securities laws.
Section 4.9. Brokers. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based upon arrangements
made by or on behalf of Purchaser.
Section 4.10. Absence of Litigation. As of the date of this Agreement,
there is no Action pending or, to the knowledge of Purchaser, threatened against
Purchaser or any property or asset of Purchaser before any Governmental Entity
or any tribunal that seeks to materially delay or prevent the consummation of
the transactions contemplated by this Agreement.
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ARTICLE 5
ADDITIONAL AGREEMENTS
Section 5.1. No Disposition or Encumbrance of the Securities. Seller
agrees that except as contemplated by this Agreement or the Shareholders'
Agreement, Seller shall not (a) sell, transfer, tender, pledge, assign,
contribute to the capital of any entity, hypothecate, give or otherwise dispose
of, grant a proxy or power of attorney with respect to, deposit into any voting
trust, enter into any voting agreement with respect to, or create or permit to
exist any Liens of any nature whatsoever with respect to, any of the Securities
(or agree or consent to, or offer to do, any of the foregoing), (b) take any
action that would make any representation or warranty of Seller herein untrue or
incorrect in any material respect or have the effect of preventing or disabling
Seller from performing Seller's obligations hereunder or (c) knowingly, directly
or indirectly, initiate, solicit or encourage any Person to take actions that
could reasonably be expected to lead to the occurrence of any of the foregoing.
Section 5.2. Company Board Representation. Promptly upon the Closing,
Seller shall cause the directors nominated by Seller or who are otherwise
affiliated with Seller after the Closing to resign from the Board of Directors
of the Company and, if applicable, the boards of directors of the Company's
subsidiaries.
Section 5.3. Notification of Certain Matters. Seller shall give prompt
notice to Purchaser, and Purchaser shall give prompt notice to Seller, of (a)
the occurrence, or non-occurrence, of any event the occurrence, or
non-occurrence, of which reasonably could be expected to cause any
representation or warranty contained in this Agreement to be untrue or
inaccurate in any material respect and (b) any failure of Seller or Purchaser,
as the case may be, to comply with or satisfy any covenant or agreement to be
complied with or satisfied by it hereunder; provided, however, that the delivery
of any notice pursuant to this Section 5.3 shall not limit or otherwise affect
the remedies available hereunder to the party receiving such notice.
Section 5.4. Further Action; Reasonable Efforts. (a) Upon the terms and
subject to the conditions hereof, each of the parties hereto shall use its
reasonable efforts to take, or cause to be taken, all appropriate action, and to
do, or cause to be done, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, including, without limitation,
using its reasonable efforts to obtain all permits, consents, approvals,
authorizations, qualifications and orders of Governmental Entities as are
necessary for the consummation of the transactions contemplated by this
Agreement; provided that no party will be required by this Section 5.4 to take
any action that would materially delay or prevent the consummation of the
transactions contemplated by this Agreement by Seller or Purchaser, including,
without limitation, entering into any consent decree, hold separate orders or
other arrangements. In case, at any time after the Closing Date, any further
action is necessary or desirable to carry out the purposes of this Agreement,
the proper officers and directors of each party to this Agreement shall use
their reasonable efforts to take all such action.
(b) Each of the parties hereto agrees to cooperate and use its
commercially reasonable efforts to vigorously contest and resist any Action,
including administrative or judicial Action, and to have vacated, lifted,
reversed or overturned any decree, judgment, injunction or other
9
order (whether temporary, preliminary or permanent) that is in effect and that
restricts, prevents or prohibits consummation of the transactions contemplated
by this Agreement, including, without limitation, by vigorously pursuing all
available avenues of administrative and judicial appeal.
(c) Subject to the consent of the Company's Board of Directors,
Purchaser shall use its commercially reasonable efforts to obtain the agreement
of CIT Group Inc. referred to in Section 6.3(e).
Section 5.5. Public Announcements. The parties hereto agree that no
public release or announcement concerning the transactions contemplated by this
Agreement shall be issued by any party without the prior consent (which consent
shall not be unreasonably withheld) of Purchaser, in the case of a release or
announcement by Seller or any of its Affiliates (other than the Company), or
Seller, in the case of a release or announcement by Purchaser or any of its
Affiliates, except as, and to the extent that, such release or announcement may
be required by Law or the rules or regulations of any quotation system on which
the Common Stock or any exchange on which any securities of Seller is listed or
quoted for trading, in which case the party required to make the release or
announcement shall use its reasonable best efforts to allow the other party
reasonable time to comment on such release or announcement in advance of such
issuance; provided, however, that filings under the Exchange Act and a press
release by the Seller in accordance with the London Stock Exchange requirements
shall not required to be submitted to the other party for comment.
ARTICLE 6
CONDITIONS TO CLOSING
Section 6.1. Conditions to Obligations of each Party. The obligations
of Seller and Purchaser to consummate the transactions contemplated by this
Agreement shall be subject to the satisfaction, at or prior to the Closing, of
the following conditions:
(a) No Governmental Entity shall have enacted, issued, promulgated,
enforced or entered any Law (whether temporary, preliminary or permanent) which
is then in effect and has the effect of making the acquisition of shares by
Purchaser or any Affiliate of Purchaser illegal or otherwise restricting,
prohibiting or imposing material conditions upon consummation of the
transactions contemplated by this Agreement.
(b) Consummation of the transactions contemplated by this Agreement
shall not conflict with or violate any provision of Law.
Section 6.2. Conditions to Obligations of Seller. The obligations of
Seller to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment, at or prior to the Closing, of each of the following
additional conditions:
(a) The representations and warranties of Purchaser contained in
Article 4 in this Agreement (i) that are qualified by materiality shall be true
and correct as of the Closing with the
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same force and effect as if made as of the Closing, other than such
representations and warranties as are made as of another date, which shall be
true and correct as of such date, and (ii) that are not qualified by materiality
shall be true and correct in all material respects as of the Closing with the
same force and effect as if made as of the Closing, other than such
representations and warranties as are made as of another date, which shall be
true and correct in all material respects as of such date, and Seller shall have
received a certificate to such effect signed by a duly authorized officer of
Purchaser.
(b) The covenants and agreements contained in this Agreement to be
complied with or performed by Purchaser on or before the Closing shall have been
complied with or performed by Purchaser in all material respects, and Seller
shall have received a certificate to such effect signed by a duly authorized
officer of Purchaser.
Section 6.3. Conditions to Obligations of Purchaser. The obligations of
Purchaser to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment, at or prior to the Closing, of each of the following
additional conditions:
(a) The representations and warranties of Seller contained in Article 3
of this Agreement (i) that are qualified by materiality shall be true and
correct as of the Closing with the same force and effect as if made as of the
Closing, other than such representations and warranties as are made as of
another date, which shall be true and correct as of such date, and (ii) that are
not qualified by materiality shall be true and correct in all material respects
as of the Closing with the same force and effect as if made as of the Closing,
other than such representations and warranties as are made as of another date,
which shall be true and correct in all material respects as of such date, and
Purchaser shall have received a certificate to such effect signed by a duly
authorized officer of Seller.
(b) The covenants and agreements contained in this Agreement to be
complied with or performed by Seller on or before the Closing shall have been
complied with or performed by Seller in all material respects, and Purchaser
shall have received a certificate to such effect signed by a duly authorized
officer of Seller.
(c) All members of the Company's Board of Directors that have been
nominated or appointed by Seller shall have submitted their resignations as of
the Closing Date.
(d) Xxxxxxx shall either have resigned or shall have been terminated as
an officer and employee of the Company and all of its subsidiaries, effective on
or prior to the Closing.
(e) CIT Group Inc. shall have agreed in writing that no default or
event of default under its credit facility with the Company exists as of the
Closing or shall occur or have occurred as a result of the consummation of the
transactions contemplated hereby.
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ARTICLE 7
TERMINATION AND WAIVER
Section 7.1. Termination. This Agreement may be terminated at any time
prior to the Closing:
(a) by mutual written consent of both Seller and Purchaser, which
consent shall have been duly authorized by the Board of Directors or Board of
Managers of Seller and Purchaser, as the case may be; or
(b) by either Seller or Purchaser if:
(i) the Closing shall not have occurred by May 14, 2004;
provided, however, that the right to terminate this Agreement under
this Agreement shall not be available to any party whose failure to
fulfill any obligation under this Agreement has been the cause of, or
resulted in, the failure of the Closing to occur on or before such
date, or
(ii) any Governmental Entity shall have enacted, issued,
promulgated, enforced or entered any injunction, order, decree or
ruling (whether temporary, preliminary or permanent) which has become
final and nonappealable and has the effect of making the transactions
contemplated by this Agreement illegal or otherwise preventing or
prohibiting consummation of the transactions contemplated by this
Agreement; or
(iii) the other party materially breached any representation
or warranty (without giving effect to any materiality qualifications or
thresholds contained in such representation or warranty) or covenant
contained in this Agreement and such breach has continued without cure
for a period of ten days after such other party has received written
notice of such breach.
Section 7.2. Effect Of Termination. In the event of termination of this
Agreement as provided herein, this Agreement shall forthwith become void and
there shall be no liability on the part of either party hereto except (a) as set
forth in Section 9.2 and (b) that nothing herein shall relieve any party from
liability for any breach of this Agreement.
Section 7.3. Waiver. At any time prior to the Closing, either of the
parties hereto may (a) extend the time for the performance of any obligation or
other act of the other party hereto, (b) waive any inaccuracies in the
representations and warranties of the other party contained herein or in any
document delivered pursuant hereto and (c) waive compliance with any agreement
of the other party or any condition to its own obligations contained herein. Any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed by the party or parties to be bound thereby.
ARTICLE 8
INDEMNIFICATION
Section 8.1. Indemnification by Seller. Seller shall indemnify and hold
harmless Purchaser and its directors, managers, officers, members, partners,
employees and agents (each, a
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"Purchaser Party") against and in respect of any and all losses, liabilities,
obligations, claims, settlements, court costs and reasonable attorneys' fees and
costs of investigation (collectively, "Losses") that any such Purchaser Party
may suffer or incur as a result of or relating to:
(a) any breach or violation of the covenants made in this Agreement by
Seller;
(b) any misrepresentation, breach or inaccuracy of any of the
representations and warranties made by Seller in this Agreement; or
(c) the Xxxxxxx Litigation.
Section 8.2. Indemnification by Purchaser. Purchaser shall indemnify
and hold harmless Seller and its directors, managers, officers, members,
partners, employees and agents (each, a "Seller Party") against and in respect
of any and all Losses that any such Seller Party may suffer or incur as a result
of or relating to:
(a) any breach or violation of the covenants made in this Agreement by
Purchaser; or
(b) any misrepresentation, breach or inaccuracy of any of the
representations and warranties made by Purchaser in this Agreement.
Section 8.3. Notice and Payment of Losses. Upon obtaining knowledge of
any Loss, the party entitled to indemnification (the "Injured Party") shall
promptly notify the party liable for such indemnification (the "Indemnifying
Party") in writing of such Losses which the Injured Party has determined have
given or could give rise to a claim under Section 8.1 or 8.2 (such written
notice being hereinafter referred to as a "Notice of Claim"); provided, however,
that failure of an Injured Party timely to give a Notice of Claim to the
Indemnifying Party shall not release the Indemnifying Party from its indemnity
obligations set forth in this Article 8 except to the extent that such failure
adversely affects the ability of the Indemnifying Party to defend such claim or
increases the amount of indemnification which the Indemnifying Party is
obligated to pay hereunder, in which event the amount of indemnification which
the Injured Party shall be entitled to receive shall be reduced to an amount
which the Injured Party would have been entitled to receive had such Notice of
Claim been timely given. The Injured Party shall use commercially reasonable
efforts to mitigate any continuing Losses (including without limitation by using
its commercially reasonable efforts to obtain any applicable insurance
proceeds). If the Injured Party settles or compromises any third party claims
prior to giving a Notice of Claim to the Indemnifying Party, the Indemnifying
Party shall be released from its indemnity obligation. A Notice of Claim shall
specify in reasonable detail, to the extent known by the Injured Party, the
nature and, to the extent reasonably calculable, estimated amount of any such
claim giving rise to a right of indemnification. The Indemnifying Party shall
satisfy its obligations under Section 8.1 or 8.2, as the case may be, within
sixty (60) days of its receipt of a Notice of Claim; provided, however, that for
so long as the Indemnifying Party is disputing its liability or defending a
third-party claim in good faith pursuant to Section 8.4, its obligations to
indemnify the Injured Party with respect thereto shall be suspended until a
final unappealable judgment of a court of competent jurisdiction is given in
relation to such claim. The Indemnifying Party shall
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have thirty (30) business days (or such shorter period of time that the Injured
Party may be required to respond to any suit or governmental action) after
receipt of a Notice of Claim to notify the Injured Party (a) whether or not it
disputes its liability to the Injured Party with respect to such Notice of Claim
and (b) whether it elects to defend a third-party claim pursuant to Section 8.4.
Section 8.4. Defense of Third-Party Claims. With respect to any action
or any claim set forth in a Notice of Claim relating to a third-party claim, the
Indemnifying Party may defend, in good faith and at its expense, any such claim
or demand, and the Injured Party, at its expense, shall have the right, but not
the obligation, to participate (but not control) at its expense in the defense
of any such third-party claim; provided that if the Injured Party reasonably
determines that the counsel selected by the Indemnifying Party to defend such
claim or demand is subject to an actual or potential material conflict of
interest which precludes such counsel from adequately representing the interests
of both the Indemnified Party and the Injured Party in connection with such
matter, the Injured Party shall be entitled to retain its own counsel (the
reasonable fees and expenses of which shall be paid as incurred by the
Indemnifying Party) to defend the interests of the Injured Party with respect to
such matter. So long as the Indemnifying Party is defending any such third-party
claim, the Injured Party shall not settle or compromise such third-party claim
without the consent of the Indemnifying Party, which consent shall not be
unreasonably withheld. If such claim is settled by the Injured Party without the
Indemnifying Party's reasonable consent, the Injured Party shall be deemed to
have waived all rights hereunder for money damages arising out of such claim.
The Indemnifying Party may settle or compromise such third-party claim without
the consent of the Injured Party, unless there has not been a complete release
of the Injured Party, in which case the Indemnifying Party may not settle or
compromise such third-party claim without the consent of the Injured Party,
which consent shall not be unreasonably withheld. The Injured Party shall make
available to the Indemnifying Party or its representatives all records and other
materials reasonably required for use in contesting any third-party claim. The
Injured Party shall cooperate fully with the Indemnifying Party in the defense
of all such claims. If the Indemnifying Party elects not to defend any such
third-party claims, the Injured Party shall have no obligation to do so, but may
settle or compromise any such third-party claim at the risk and expense of the
Indemnifying Party. The Indemnifying Party will not, however, be responsible for
any Losses if and to the extent that they arise from action taken or omitted to
be taken by the Injured Party in bad faith, fraudulently or as a result of a
breach of this Agreement by the Injured Party.
Section 8.5. Survival of Representations and Warranties. All of the
representations and warranties made by any Party in Articles 3 or 4, as the case
may be, shall survive the Closing.
Section 8.6. Limitation on Indemnification. The indemnification
obligations of Seller and Purchaser shall be limited by the amount of the
Purchase Price, and neither Seller nor Purchaser shall have any obligation to
make indemnification payments to the extent that the aggregate amount of all
such payments made by such party exceeds the Purchase Price.
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Section 8.7. Characterization of Indemnity Payments. Any
indemnification payments made pursuant to this Agreement shall be considered, to
the extent permissible under Law, as adjustments to the Purchase Price for all
purposes.
Section 8.8. Exclusive Remedy. In the absence of fraud or the
intentional breach of this Agreement, the indemnification provisions set forth
in this Article 8 shall provide the exclusive remedy for breaches of any
covenant, agreement, representation or warranty set forth in this Agreement or
any other agreement ancillary hereto executed pursuant to this Agreement.
ARTICLE 9
GENERAL PROVISIONS
Section 9.1. Expenses. Except as otherwise specified in this Agreement,
all costs and expenses, including, without limitation, fees and disbursements of
counsel, financial advisors and accountants, incurred in connection with this
Agreement and the transactions contemplated hereby shall be paid by the party
incurring such costs and expenses, whether or not the Closing shall have
occurred.
Section 9.2. Notices. All notices, requests, claims, demands and other
communications hereunder shall be in writing and shall be given (and shall be
deemed to have been duly given upon receipt) by delivery in person, by
facsimile, or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties at the following addresses or facsimile
numbers (or at such other address or facsimile number for a party as shall be
specified in a notice given in accordance with this Section 9.2):
(a) if to Seller, to
Reliance Security Group plc
Xxxxxxx Xxxxx
Xxxxxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxx XX00XX
Xxxxxx Xxxxxxx
Facsimile: 011-44-1895-205-085
Attention: Xxxx Xxxxxx
Group Finance Director
with copy to:
KMZ Rosenman
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Xxxxxx Xxxxxx
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxx, Esq.
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(b) if to Purchaser:
GCM Security Partners, LLC
c/x Xxxxxxxx Capital Management, LLC
1325 Avenue of the Americas, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx
Facsimile:
Attention: Xxxxx Xxxxxxxx
with a copy to:
Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Xxxxxx
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxx, Esq.
Section 9.3. Headings. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
Section 9.4. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in a mutually acceptable
manner in order that the transactions contemplated hereby are consummated as
originally contemplated to the fullest extent possible.
Section 9.5. Entire Agreement. This Agreement constitutes the entire
agreement among the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both written and oral, among
the parties or any of them, with respect to the subject matter hereof.
Section 9.6. Assignment. Neither party may assign this Agreement or any
rights or obligations hereunder without the prior written consent of the other
party; provided, however, that Purchaser may assign all or any of its rights and
obligations under this Agreement to one or more of its Affiliates.
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Section 9.7. Parties In Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto, along with its successors
and assigns and nothing in this Agreement, express or implied, is intended to or
shall confer upon any other Person any right, benefit or remedy of any nature
whatsoever under or by reason of this Agreement.
Section 9.8. Governing Law. This Agreement shall be governed by and
construed in accordance with, the laws of the State of New York. The parties
hereto hereby (a) submit to the exclusive jurisdiction of any state or federal
court sitting in the Borough of Manhattan of The City of New York in respect of
the interpretation and enforcement of the provisions of this Agreement brought
by any party hereto, and (b) irrevocably waive, and agree not to assert by way
of motion, defense, or otherwise, in any such Action, any claim that it is not
subject personally to the jurisdiction of the above-named courts, that its
property is exempt or immune from attachment or execution, that the Action is
brought in an inconvenient forum, that the venue of the Action is improper, or
that this Agreement may not be enforced in or by any of the above-named courts.
Section 9.9. Waiver Of Jury Trial. Each of the parties hereto hereby
waives to the fullest extent permitted by applicable law any right it may have
to a trial by jury with respect to any litigation directly or indirectly arising
out of, under or in connection with this Agreement. Each of the parties hereto
(a) certifies that no representative, agent or attorney of any other party has
represented, expressly or otherwise, that such other party would not, in the
event of litigation, seek to enforce that foregoing waiver and (b) acknowledges
that it and the other parties hereto have been induced to enter into this
Agreement by, among other things, the mutual waivers and certifications in this
Section 9.9.
Section 9.10. Counterparts. This Agreement may be executed and
delivered (including by facsimile transmission) in one or more counterparts, and
by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original but all of which taken together shall
constitute one and the same agreement.
Section 9.11. Specific Performance. The parties hereto agree that
irreparable damage would occur in the event any provision of this Agreement were
not performed in accordance with the terms hereof and that the parties shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or equity.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.
GCM SECURITY PARTNERS, LLC
By: /s/ Xxxxx Xxxxxxxx
-----------------------------
Name: Xxxxx Xxxxxxxx
Title:
RELIANCE SECURITY GROUP PLC
By: /s/ Xxxx Xxxxxx
-----------------------------
Name: Xxxx Xxxxxx
Title: Group Finance Director
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