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EXHIBIT A
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made as of this
26th day of September, 1997, between Xxxxxxx X. Xxxxxx ("Buyer") and General
Atlantic Corporation, a Delaware corporation (the "Seller"), having its
principal office at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
WHEREAS, the Seller owns beneficially and of record 1,255,000 shares
(the "Shares") of the issued and outstanding shares of Common Stock, par value
$.01 per share, of Solo Serve Corporation, a Delaware corporation ("Solo
Serve"), having its principal office at 0000 Xxxxxxxxx Xxxxxxxxx, Xxx Xxxxxxx
XX 00000; and
WHEREAS, subject to the terms and conditions set forth herein, Buyer
desires to purchase from the Seller, and the Seller desires to sell to Buyer,
the Shares.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties and conditions contained in this Agreement, the
parties hereto hereby agree as follows:
1. DEFINITIONS
1.1. Certain Defined Terms. Unless the context otherwise
requires, as used in this Agreement, the following terms have the following
meanings (such meanings to be equally applicable to both the singular and
plural forms of the terms defined):
"Affiliate" with respect to any Person, means any other Person
directly or indirectly Controlling, Controlled by or under common Control with
such Person.
"Applicable Law" means all applicable laws, statutes,
regulations and orders of any governmental authority or regulatory body and
judgments, decrees, injunctions, writs, orders, or
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like action of any court, arbitrator or other judicial tribunal of competent
jurisdiction with respect thereto.
"Business Day" means any day other than a Saturday, Sunday or
a day on which commercial banks in the State of New York are required or
authorized by law to close.
"Contract" means, with respect to a Person, any contract,
agreement, lease, indenture, deed of trust, mortgage, license, note,
instrument, guarantee or obligation to which such Person is a party or by which
such Person or its property is bound or affected.
"Control" whether used as a noun or verb, refers to the
possession, directly or indirectly, of the power to direct, or cause the
direction of, the management or policies of a Person, whether through the
ownership of voting securities, by contract or otherwise.
"Person" means any individual, corporation, limited liability
company, partnership, firm, joint venture, association, joint-stock company,
trust, unincorporated organization, governmental or regulatory body or other
entity.
2. CONSIDERATION FOR PURCHASE AND SALE OF SHARES; TRANSFER OF SHARES
2.1. Consideration for Shares. Subject to the terms and
conditions set forth in this Agreement, at the Closing the Seller agrees to
sell, assign, transfer, convey and deliver to Buyer, and the Buyer agrees to
purchase, acquire and accept delivery from Seller of, all of the Shares for the
Purchase Price. The Purchase Price shall be $125,500, payable by delivery of a
Promissory Note (the "Note") in the form of Exhibit A.
2.2. Transfer of Shares. On the Closing Date, the Seller
shall sell, assign, transfer, convey and deliver to Buyer all of the Shares
together with appropriate stock powers and other transfer documents signed in
blank.
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3. REPRESENTATIONS AND WARRANTIES OF SELLER
The parties hereto recognize that Buyer was responsible for the
management of the business of Solo Serve prior to the date hereof and is
expected to continue in such capacity subsequent to the Closing Date.
Consequently, the Seller has relied, in part, upon information supplied by
Buyer regarding the business and affairs of Solo Serve and is selling the
Shares "as is" without representations or warranties regarding the business or
affairs of Solo Serve and only with the following representations and
warranties:
3.1. Corporate Existence. Seller is a corporation duly
organized, validly existing and in good standing under the laws of the State
of Delaware.
3.2. Ownership of Stock. Seller is and as of the Closing
will be the registered holder and beneficial owner of all of the Shares.
Seller has, and at the Closing will have, good and marketable title to all of
the Shares, free and clear of any and all liens and encumbrances.
3.3. Due Authorization; No Restrictions. Seller has full
corporate power and authority to execute, deliver and perform its obligations
under this Agreement and to carry out the transactions contemplated hereunder.
The execution, delivery and performance of this Agreement by Seller will not
conflict with, result in a default, right to accelerate or loss of rights
under, or require the consent of any governmental authority or regulatory body
or other Person under any provision of the certificate of incorporation or by-
laws of Seller, or (b) any material Contract of Seller or any Applicable Law.
This Agreement has been duly authorized, executed and delivered by Seller and
constitutes Seller's legal, valid and binding obligation enforceable in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization or other similar laws
relating to or affecting the enforcement of creditors' rights
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generally and except as enforceability may be subject to the application of
general principles of equity (regardless of whether considered in a proceeding
in equity or at law).
4. REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby represents, covenants and warrants as follows and
acknowledges that Seller is relying upon such representations, covenants and
warranties in connection with the sale, assignment and transfer to Buyer of the
Shares:
4.1. Due Authorization; No Breach. Buyer has full power
and authority to execute, deliver and perform its obligations under this
Agreement and to carry out the transactions contemplated hereunder. The
execution, delivery and performance of this Agreement and the Note by Buyer
will not conflict with, result in a default, right to accelerate or loss of
rights under, or require the consent of any governmental authority or
regulatory body or other Person pursuant to any material Contract of the Buyer
or Solo Serve or any Applicable Law. This Agreement has been duly executed and
delivered by Buyer and constitutes, and the Note when executed and delivered in
accordance with this Agreement will constitute, Buyer's legal, valid and
binding obligation enforceable in accordance with their terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization or other similar laws relating to or affecting the enforcement
of creditors' rights generally and except as enforceability may be subject to
the application of general principles of equity (regardless of whether
considered in a proceeding in equity or at law).
4.2. Investment Representation. The Buyer is acquiring
the Shares for his own account and with no present intention of dividing the
same or otherwise making any distribution of the same. Buyer will not make any
sale, transfer or other disposition of any of the Shares in violation of the
Securities Act of 1933, as amended, or applicable state securities laws.
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4.3 No Material Litigation. No litigation or
administration of or before any court, tribunal or governmental body is
presently pending, or, to the knowledge of Buyer, threatened against Buyer or
any of his properties which, if adversely determined, would have a material
adverse effect on the business, assets or financial condition of the Buyer.
5. NATURE AND SURVIVAL OF REPRESENTATIONS AND WARRANTIES OF BUYER AND
SELLER
All statements contained herein or any certificate delivered pursuant
to this Agreement shall be deemed representations, warranties, covenants and
agreements made by Buyer or Seller, as the case may be. Each statement,
representation, warranty, covenant and agreement made or deemed made by Seller
shall remain in effect continuously to and including the Closing but shall not
survive the Closing except that the representations and warranties made by the
Seller in Section 3.2 shall survive for a period of five years after the
Closing Date. Each statement, representation, warranty, covenant and agreement
made or deemed made by Buyer shall remain in effect continuously to and
including the date one year after the date on which all indebtedness under the
Note shall have been paid in full.
6. THE CLOSING
6.1. Time and Place. Subject to satisfaction or waiver of
the conditions set forth in Article 7 hereof, the transfer of beneficial
ownership of and legal title to the Shares by the Seller to the Buyer and
transfer of the Purchase Price by the Buyer to the Seller (the "Closing") shall
occur at the offices of Cadwalader, Xxxxxxxxxx & Xxxx, 000 Xxxxxx Xxxx, Xxx
Xxxx, Xxx Xxxx 00000, at 10:00 A.M. local time, on September 30, 1997, or at
such other place and time as may be mutually agreed in writing by the Seller
and the Buyer. The date on which the Closing takes place is referred to herein
as the "Closing Date."
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6.2 Closing Actions. At the Closing the Seller shall
deliver to the Buyer certificates representing all of the Shares endorsed or
accompanied by stock powers executed in blank sufficient to transfer good and
marketable legal title in and beneficial ownership of the Shares to Buyer or
its designee against payment by Buyer of the Purchase Price by delivery of the
Note. Seller shall pay any documentary stamp tax or transfer tax due or
payable by the Seller in connection with the transfer of the Shares to Buyer or
its designee.
7. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligations of Seller to sell, assign, transfer, convey and
deliver the Shares to Buyer and to consummate the transactions contemplated
hereunder is subject to the satisfaction of the conditions set forth in this
Article 7 for the exclusive benefit of the Seller to be fulfilled at or prior
to the Closing, all in form and substance reasonably satisfactory to Seller.
Seller may, however, waive the fulfillment of any of these conditions, either
before or after the Closing, but any waiver, to be binding upon Seller, must be
by a writing duly executed by it. Buyer shall use its best efforts to cause
each condition set forth in this Article 7 to be fulfilled.
7.1. Reduction in Amount of Letter of Credit. The Letter
of Credit issued in favor of Congress Financial Corporation in the original
amount of $1,500,000 shall have been terminated and a new letter of credit
shall have been issued in favor of Sanwa Business Credit Corporation in the
amount of $750,000 and shall provide for the termination thereof on December
31, 1998.
7.2. Solo Serve shall have completed an inventory
financing with Sanwa Bank in the amount of up to $12,000,000 upon the terms and
conditions attached as Exhibit B.
7.3. Buyer and/or its Affiliates shall have made a loan to
Solo Serve in the amount of $500,000 upon the terms and conditions attached as
Exhibit C.
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8. MISCELLANEOUS
8.1. Stock Option Plan. Seller agrees to vote any shares
of Solo Serve then held by it in favor of an amendment to the Solo Serve Stock
Option Plan (the "Plan"), which was previously approve by the board of
directors of Solo Serve, in order to increase the number of shares covered by
the Plan to 750,000 in the event the amendment to the Plan is presented to the
shareholders of Solo Serve for their approval.
8.2. Notices. All notices, requests and other
communications hereunder shall be in writing and shall be delivered personally,
telegraphed, telexed (with appropriate answer back received), sent by facsimile
transmission (with immediate confirmation thereafter by telephone or
otherwise), or sent by U.S. registered, certified or express mail, postage
prepaid, return receipt requested, or sent by a nationally recognized overnight
courier service, marked for overnight delivery. Any such notice shall be
deemed given when so delivered personally, telegraphed, telexed (provided the
correct answer back is received), or sent by facsimile transmission (provided
confirmation is received immediately thereafter); or if sent by express mail or
overnight courier, one Business Day after the date of delivery to a U.S. Post
Office or the courier service marked for overnight delivery; or if so sent by
registered or certified mail, seven days after the date of deposit in the
mails; in each case addressed as follows:
(a) If to Buyer, to:
Xxxxxxx X. Xxxxxx
0000 Xxxxxxx Xxxx
Xxx Xxxxxxx, XX 00000
with a copy to:
Xxxxx Xxxxxxxxxxx, Esq.
Xxxxxxxxxxx, Blend, Xxxxxxxx & Xxxx
000 Xxxxxxx
0xx Xxxxx
Xxx Xxxxxxx, XX 00000
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(b) If to Seller, to:
General Atlantic Corporation
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxxxxxx X. Xxxxxxx
with a copy to:
Xxxxxxx X. Xxxxxxx
Cadwalader, Xxxxxxxxxx & Xxxx
000 Xxxxxx Xxxx
Xxx Xxxx, XX 00000
or to such other address as the parties hereto may specify from time to time by
notice given as provided herein.
8.3. No Waiver. No modification hereof nor any waiver of
any breach or default hereunder shall be valid unless in writing and signed by
the parties making such modification or giving such waiver, and no such waiver
shall be deemed a waiver of any subsequent breach or default of the same or
similar nature.
8.4. Binding Effect. This Agreement shall be binding upon
and inure to the benefit of each party hereto, and its successors and permitted
assigns. This Agreement shall not be transferred or assigned by either Buyer
or Seller and any attempted transfer or assignment shall be null and void.
8.5. Headings. The article and section headings contained
herein are for the purpose of convenience only and are not intended to define
or limit the contents of said articles or sections.
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8.6. Merger. This Agreement cancels and supersedes all
prior letters of intent, memoranda of terms, and other documents of
understanding heretofore executed by or exchanged, circulated or discussed
between the parties with respect to the subject matter hereof.
8.7. Governing Law. This Agreement and all amendments
hereof shall, in all respects, be governed by and construed and enforced in
accordance with the internal laws (without regard to principles of conflicts of
law) of the State of New York.
8.8. Expenses. Each party shall bear its own costs and
expenses in connection with the negotiation, preparation, execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby.
8.9. Brokers. None of the parties hereto nor any of their
respective Affiliates is obligated to pay, or has retained any broker or finder
or any other Person who is entitled to, any broker's or finder's fee or any
other commission or financial advisory fee based on any agreement or
undertaking made by or for the benefit of Seller or Buyer in connection with
the sale of the Shares and the consummation of the transactions contemplated
herein. Each party hereto agrees to indemnify, defend and hold the other party
hereto harmless from any claim or demand from any Person for any and all such
fees and commissions through Seller or Buyer.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
GENERAL ATLANTIC CORPORATION
By: /s/ Xxxxx Xxxxxxxxx
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Name: Xxxxx Xxxxxxxxx
Title: Vice President
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EXHIBIT A
PROMISSORY NOTE
$125,500.00 September 30, 1997
FOR VALUE RECEIVED, the undersigned (the "Maker") hereby
agrees to pay to the order of General Atlantic Corporation, a Delaware
Corporation (the "Corporation"), the principal sum of $125,500.00 in 5 equal
annual installments commencing on October 1, 1998, together with interest on
such principal amount from September 30, 1997 at a fixed rate of 7% per annum.
Interest shall be computed on the basis of a 360-day year of twelve 30-day
months. The Maker may prepay the full principal amount of this Note, together
with interest due thereon to date of payment, without penalty or premium.
This Note has been made and delivered pursuant to the terms
and conditions of the Stock Purchase Agreement, dated September 26, 1997,
between the Corporation and the Maker.
Any installment of principal and interest that is paid more
than ten (10) days late shall be subject to a 2% penalty. In addition, Maker
shall pay any court costs and reasonable attorneys' fees and other charges
incurred by the holder in connection with the collection of amounts due
hereunder.
The outstanding balance of this Note may be accelerated by the
holder and declared immediately due and payable upon the failure to pay any
installment of principal and interest within ten (10) day after it is due or
upon the insolvency of Maker, an assignment for the benefit of creditors or the
institution of bankruptcy or similar proceedings by Maker.
The terms of this Note shall be governed by and construed and
enforced in accordance with the internal laws (without regard to the principles
of conflicts of law) of the State of New York.
/s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
