SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
MAY 7, 1997
GUARDIAN INTERNATIONAL, INC.
(Formerly Everest Security Systems Corporation,
formerly Everest Funding Corporation, formerly Burningham
Enterprises, Inc.)
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(Exact name of the registrant as specified in charter)
NEVADA 0-28490 58-1799634
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(State of Incorporation) (Commission File Number) (I.R.S. Employer ID No.)
3880 NORTH 28TH TERRACE, HOLLYWOOD, FLORIDA 33020-1118
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(Address of principal executive offices)
Telephone Number (954) 926-5200
NONE
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(Former name or address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On May 7, 1997 (the "Closing Date"), Guardian International, Inc. (the
"Company") purchased approximately 2,200 customer contracts as well as
certain other assets from Alarm Control, Inc. ("ACI" or "Seller"), an alarm
installation and service company. The total purchase price was $2.2 million in
cash, 50,000 shares of unregistered Class A Voting Common Stock of the Company
("Common Stock"), and an option issued to the Seller to purchase 100,000 shares
of Class A Common Stock of the Company exercisable between January 1, 1998 and
January 1, 2002 at an exercise price of $2.50 per share (the market price of the
Common Stock on the Closing Date was $0.78). Of the $2.2 million cash, $2.1
million was paid to the Seller on the Closing Date, and $100,000 was held back
by the Company so that any necessary post-closing adjustments to the purchase
price could be made.
In connection with the transaction, the Company's senior lender, Heller
Financial, Inc., increased the Company's current credit facility from $7 million
to $8 million to provide sufficient capital to fund the asset purchase.
Terry E. Akins, President of ACI, has been appointed to serve as the
Company's Chief Operating Officer and Vice President of Account Acquisitions
pursuant to a four year employment agreement entered into pursuant to the terms
of the Asset Purchase Agreement Dated May 7, 1997 by and among the Company, ACI,
and Mr. Akins (the "Asset Purchase Agreement"). Additionally, Mr. Akins was
elected to the Company's Board of Directors on May 15, 1997 (see Item 5. of this
Form 8-K).
ITEM 5. OTHER EVENTS
On May 15, 1997, the Company's Board of Directors amended Paragraph 2,
Article III of the Company's Bylaws to increase the size of the Board of
Directors from three to six members. Pursuant to the powers granted to the Board
of Directors under Paragraph 8, Article III of the Company's Bylaws, the Board
of Directors appointed the following individuals to fill the three vacancies
thus created, to serve until the next annual meeting of the stockholders and
until their successors are elected and qualified, or until their earlier
resignation or removal from office:
Ernest H. Dunham
William Remington
Terry E. Akins
ERNEST H. DUNHAM
Mr. Ernest R. Dunham has been a private investigator (licensed in the
State of Florida) and security consultant since 1988. Between 1973 and 1988, Mr.
Dunham served as Director of Security for Eastern Airlines. Between 1963 and
1973, approximately, Mr. Dunham was Director of Security for American Airlines.
Between approximately 1953 and 1963, Mr. Dunham was a Special Agent of the
Federal Bureau of Investigation. Mr. Dunham received a Bachelor of Science in
Accounting from Hofstra University, New York in 1950.
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WILLIAM REMINGTON
Mr. William Remington is a Canadian citizen and resident. For the past
twenty-one years, Mr. Remington has been the Director General of the Town of
Hampstead, Quebec, Canada. In addition, Mr. Remington has participated in the
design and installation of central monitoring stations for alarm monitoring
companies located in Montreal, Canada, Kingston, Jamaica, London, England, and
Florida.
TERRY E. AKINS
Mr. Terry E. Akins has been appointed to serve as a director of the
Company in accordance terms of the Asset Purchase Agreement. Additionally, Mr.
Akins has been appointed to serve as the Company's Chief Operating Officer and
Vice President of Operations pursuant to a four year employment agreement. Mr.
Akins served as president of ACI, which he co-founded in 1970, between 1989 and
May 1997. From 1970 to 1989, Mr. Akins served as Vice President of ACI. In
addition, Mr. Akins has been active with local, state, and national alarm
associations, having served in 1989 as President of The Alarm Association of
Florida, an association he co-founded in 1970. Mr. Akins received a Bachelor of
Science from the Georgia Institute of Technology in 1969.
ITEM 7 . FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
2A Asset Purchase Agreement dated May 7, 1997 by and among Guardian E-1
International, Inc., Alarm control, Inc. and Terry E. Akins
The exhibits and schedules listed below are not being filed with this
Form 8-K but will be provided to the Commission upon request:
Exhibit A - Service leasing and monitoring contracts purchased by the
Company
Exhibit B - Vans and trucks purchased by the Company
Exhibit C - Stock Option Agreement between the Company and Alarm
Control, Inc.
Exhibit D - Purchase price allocation
Exhibit E - List of subsidiaries and affiliates
Exhibit F - List of residential and commercial subscriber accounts
Exhibit G - List of sellers employees
Exhibit H - Employment Agreement between the Company and
Terry E. Akins
Schedule 4.5 - Encumbrances on assets
Schedule 4.6 - Required consents
Schedule 4.9 - Employment benefit plans
10A Employment Agreement dated May 7, 1997 by and between Guardian E-14
International, Inc. and Terry E. Akins
10B Option Agreement dated May 7, 1997 by and between Guardian E-22
International, Inc. and Alarm Control, Inc.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Guardian International, Inc.
SIGNATURE TITLE DATE
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/s/ Robert K. Norris Senior Executive Vice President, May 21, 1997
- --------------------------- Chief Financial Officer
Robert K. Norris
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EXHIBIT INDEX
EXHIBIT DESCRIPTION
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2A Asset Purchase Agreement dated May 7, 1997 by and among Guardian
International, Inc., Alarm control, Inc. and Terry E. Akins
10A Employment Agreement dated May 7, 1997 by and between Guardian
International, Inc. and Terry E. Akins
10B Option Agreement dated May 7, 1997 by and between Guardian
International, Inc. and Alarm Control, Inc.
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("Agreement") is made this 7th day of
May, 1997, but made effective as of May 1, 1997, by and between GUARDIAN
INTERNATIONAL, INC., a Nevada Corporation ("Buyer") and ALARM CONTROL, INC., a
Florida Corporation ("Seller") with the joinder and consent of TERRY E. AKINS
("Shareholder").
WITNESSETH
WHEREAS, Seller is engaged in the business of marketing and installing
residential and commercial security system accounts, transacting business within
the State of Florida; and
WHEREAS, Buyer is in the business of acquiring existing and new
accounts and the management of such accounts, which includes the monitoring of
security alarm systems and the billing and collecting of monitoring fees
(hereinafter referred to as "Buyer's Business"), and has an operating facility
for such business; and
WHEREAS, subject to the terms and conditions set forth herein, Seller
desires to sell the "Purchased Assets" (as hereinafter defined) to Buyer, and
Buyer desires to purchase the Purchased Assets from Seller as hereinafter
provided; and
WHEREAS, as a material inducement to Buyer to enter into this
Agreement, and as a condition to purchasing the Purchased Assets, Buyer desires
to obtain from Seller the "Restrictive Covenants" (as hereinafter defined) upon
the terms and provisions hereinafter set forth;
NOW THEREFORE, in consideration of the premises and the mutual
covenants of the parties hereinafter expressed, it is hereby agreed as follows:
ARTICLE I
RECITALS, EXHIBITS, SCHEDULES
The foregoing recitals are true and correct and, together with the
schedules and exhibits referred to hereafter, are hereby incorporated into this
Agreement without further references thereto.
ARTICLE II
PURCHASE AND SALE OF ASSETS
2.1 PURCHASED ASSETS. Subject to the terms and conditions of this
Agreement, at "Closing" (as hereinafter defined), Seller shall sell, transfer,
convey, assign and deliver to Buyer, and Buyer shall purchase, acquire and
accept from Seller, all of the following:
(a) All of Seller's right, title and interest in and to the
service, leasing and monitoring contracts described in EXHIBIT "A" attached
hereto and made a part hereof ("Contracts"), and all alarm equipment owned by
Seller and utilized by, or in connection with, customers of Seller.
(b) All processes, know-how, trade secrets and other
intellectual property rights utilized by Seller in its business and all books
and records relating thereto.
(c) All data and materials utilized by Seller in its business
and operations and all books and records relating to the Contracts and/or
customers.
(d) All trade names utilized by Seller in its business
(including, without limitation, all of Seller's right, title and interest in and
to the name "Alarm Control, Inc." , "ACI", and any derivations or variations
thereof), and all books and records relating thereto.
(e) All goodwill and customer and subscriber lists pertaining
to Seller's business and all books and records relating thereto.
(f) All inventory and equipment on hand remaining on the
Closing date relating to the servicing of customer accounts.
(g) All computer software utilized by Seller in connection
with the Contracts.
(h) Those certain vans and trucks described on EXHIBIT "B"
attached hereto and made a part hereof ("Vehicles").
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(i) All telephone lines, communication lines and network
information systems utilized in connection with the Seller's business.
The foregoing assets, properties and rights are collectively
referred to herein as the "Purchased Assets".
The sale, assignment, transfer, conveyance and delivery of the
Purchased Assets shall be made by such bills of sale, endorsements, assignments,
certificates of title and other instruments of assignment, transfer and
conveyance as Buyer shall reasonably request.
2.2 NO ASSUMPTION OF LIABILITIES. Notwithstanding, anything contained
herein to the contrary, Buyer does not assume nor shall Buyer be responsible for
any liabilities or obligations of Seller whatsoever, except with regard to the
Contracts and with regard to the Vehicles and telephone lines, provided such
liabilities or obligations are first occurring subsequent to the date of
Closing. In that regard, Seller and the Shareholder, jointly, severely and
collectively, hereby indemnify and hold Buyer forever harmless from and against
all loss, cost, damage, claims and or threats of claims incurred by reason of
any liabilities or obligations of Seller in violation of the provisions of this
Paragraph 2.2 The provisions of this Paragraph 2.2 shall survive Closing or
earlier termination of this Agreement.
ARTICLE III
PURCHASE PRICE
3.1 PURCHASE PRICE. In exchange for the Purchased Assets and the
Restrictive Covenants, Buyer agrees, subject to the terms, conditions and
limitations set forth in this Agreement, to pay to or for the account of Seller
("Purchase Price") being the aggregate of the following: (i) Two Million Two
Hundred Thousand and No/100 Dollars ($2,200,000.00) ("Cash Portion"); (ii)
50,000 shares of the common stock, par value $.001 per share, of Buyer ("Common
Stock"); and (iii) an option to purchase 100,000 shares of Common Stock at an
exercise price of $2.50 per share, as more fully set forth in the "Option
Agreement" attached hereto and made a part hereof as EXHIBIT "C" ("Option")(the
Common Stock, the Option and the shares issuable upon the exercise of the Option
are sometimes hereinafter collectively referred to as the "Securities").
3.2 PAYMENT OF PURCHASE PRICE. The Purchase Price, subject to
proration, credits and adjustments as hereinafter set forth, shall be paid by
Buyer to Seller as follows, to wit:
(i) At Closing, the Cash Portion shall be paid by Buyer to
Seller in cash, cashiers check or by wire transfer.
(ii) At Closing, Buyer shall deliver the Common Stock and the
Option Agreement to Seller as more fully set forth in Paragraph 11.2 hereof.
Further, the Purchase Price shall be allocated to the
Purchased Assets as agreed on EXHIBIT "D" attached hereto and made a part
hereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF SELLER AND SHAREHOLDER
Seller and Shareholder, jointly, hereby makes the following
representations and warranties to Buyer, each of which is true and correct on
date hereof and shall be true and correct on the Closing date, each of which
shall survive Closing and each of which shall be deemed to be material and
relied upon by Buyer regardless of any investigation made by or information
known to Buyer, to wit:
4.1 CORPORATION EXISTENCE AND QUALIFICATION. Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Florida. Seller has the corporate power and authority to own and use
its properties and to transact the business in which it is engaged, holds all
franchises, licenses, occupancy licenses and permits necessary and required
therefor and is not required to be licensed or qualified to do business in any
other jurisdiction. Seller has no subsidiaries or affiliates, direct or
indirect, except as set forth on EXHIBIT "E" attached hereto and made a part
hereof.
4.2 NO VIOLATION. Neither the execution and delivery of this Agreement,
nor the performance by Seller of its obligations hereunder will (a) violate any
provision of the articles of incorporation or bylaws of Seller, (b) violate, or
be in conflict with, or constitute a default under, or require the consent of
any other party to, or result in the creation or imposition of any lien upon any
of the assets of Seller under any agreement or commitment which Seller is a
party or by which it is bound, or (c) violate any statute or law or any
judgment, decree, order, regulation or rule of any court or governmental
authority to which Seller is subject.
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4.3 AUTHORITY AND APPROVAL OF AGREEMENT BY SELLER. The execution and
delivery of this Agreement by Seller and the performance of all obligations of
Seller hereunder have bean duly authorized and approved by Corporation and its
shareholders pursuant to all applicable state and federal laws.
4.4 FINANCIAL STATEMENTS. To the best of Seller's knowledge, all of the
books and records and all other business reports, information, summaries, and
other documents of the Seller have been prepared in accordance with generally
accepted accounting principles, on the accrual basis, consistently applied, as
applicable as to each such document in question and reflects true and accurate
information regarding the operations, as well as the Purchased Assets.
4.5 PURCHASED ASSETS. Except as set forth on SCHEDULE 4.5 attached
hereto, Seller has good and marketable title to the Purchased Assets, free and
clear of all deeds of trust, mortgages, options, liens, charges, security
interests, leases, covenants, conditions, agreements, claims, restrictions, and
other liens, claims or encumbrances of every kind or nature and there exists no
restriction or prohibition on the assignment, transfer and use of such assets.
At Closing, good and marketable title to the Purchased Assets will be vested in
Buyer, free and clear of all liens, claims and encumbrances, and the customers
under the Contracts shall attorn to and recognize the Buyer thereunder.
4.6 CONTRACTS. The Contracts are in full force and effect, and no event
has occurred that, with the passage of time and/or the giving of notice, would
result in a default thereunder by any party thereto which results or could
result in a material modification to the "MRI" (as hereinafter defined)
anticipated to be collected by Buyer by purchasing the Purchased Assets.
Further, Seller has received no notice, nor has any knowledge of any pending or
contemplated termination of any of the Contracts and, no such termination is
proposed or has been threatened. Further, there have been no modifications to
the Contracts, except as specifically set forth in writing, copies of which
having been delivered to Buyer. Further, except as set forth on SCHEDULE 4.5, no
consent, approval, permission, or other confirmation, notice or communication is
required under any of the contracts in connection with the transaction
contemplated by this Agreement. Further, simultaneous with Closing, Buyer shall
be the owner and holder of those Contracts assigned to Buyer in accordance with
the terms and provisions hereof, and such assignment shall be binding upon each
customer corresponding to each Contract acquired by Buyer.
4.7 MONTHLY RECURRING REVENUE AND SUBSCRIBER ACCOUNTS. Seller has
approximately two thousand two hundred (2,200) residential and commercial
subscriber accounts as reflected on EXHIBIT "F". The MRI is approximately Sixty
Thousand and No/100 Dollars ($60,000.00) per month as reflected on EXHIBIT "F".
For purposes of this Agreement, the term "Monthly Recurring
Revenue" or "MRI" means the total recurring regular amounts billable for a one
(1) month period to customers under a Contract (regardless of whether such
customer is billed monthly or less frequently) measured by the amounts most
recently billed to and collected from any customer for a one (1) month period
relating to monitoring revenues, leasing revenues and service agreements.
4.8 LITIGATION. There is no suit, claim, action or proceeding now
pending or, to the best of Seller's knowledge, threatened before any court, any
administrative or regulatory body or any governmental or quasi-governmental
agency to which Seller or the Purchased Assets is a party.
4.9 LABOR AGREEMENTS, EMPLOYEE BENEFIT PLANS AND EMPLOYMENT AGREEMENTS.
Except as set forth on SCHEDULE 4.9 attached hereto, Seller is not a party to:
(i) any union collective bargaining or similar agreement; (ii) any profit
sharing, pension, retirement, deferred compensation, bonus, stock option, stock
purchase, retainer, consulting, health, welfare or incentive plan or agreement,
whether legally binding or not; (iii) any plan providing for "fringe benefits"
to its employees, including, but not limited to, vacation, disability, sick
leave, medical, hospitalization and life insurance and other insurance plans,
and related benefits; or (iv) any employment agreements.
4.10 DISCRIMINATION AND OCCUPATIONAL SAFETY STATUTES AND REGULATIONS.
To the best of Seller's knowledge, no person or party (including, but not
limited to, governmental agencies of any kind) has any claim, or basis for any
action or proceeding against Seller arising out of any statute, ordinance or
regulation relating to discrimination in employment or to employment practices
or occupation safety and health standards, which, if upheld, would have an
adverse effect on the business or condition, financial or otherwise, of Seller.
4.11 LICENSURE. Seller maintains all necessary approvals, consents,
permits and licenses that are required by any and all governmental and
quasi-governmental authorities having jurisdiction thereof in connection with
the operation and conduct of a burglar alarm company.
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4.12 SHAREHOLDER. Shareholder owns legally and beneficially, one
hundred percent (100%) of all authorized, issued and outstanding capital stock
of Seller. Seller and Shareholder each has full authority to enter into and
perform their respective obligations under this Agreement and neither the
execution, delivery nor performance by Seller of this Agreement will result in a
violation or breach of any term or provision, nor
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constitute a default under, any contract or agreement to which either Seller is
a party or by which either Seller is bound, or violate any order, writ,
injunction or decree of any court, administrative agency or governmental or
quasi-governmental body.
4.13 TAX MATTERS. All federal, foreign, state, county, local and other
taxes, including, but not limited to, employee withholding taxes, social
security payments, unemployment taxes, payroll taxes, sales taxes and ad valorem
taxes, due and payable by Seller on or before the date of this Agreement, have
been paid or accrued and Seller has filed by all tax returns and reports
required to be filed by it with all such taxing authorities. No assessments of
deficiencies have been made against Seller and no extensions of time are in
effect for the assessment of deficiencies. Seller has no notice of any of its
federal income tax returns being presently examined by the Internal Revenue
Service.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer hereby makes the following representations and warranties to
Seller, each of which is true and correct on the date hereof and shall be true
and correct on the Closing date, each of which shall survive Closing and each of
which shall be deemed to be material and relied upon by Seller regardless of any
investigation made by or information known to Seller, to wit:
5.1 CORPORATION EXISTENCE AND QUALIFICATION. Buyer is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Nevada. Buyer has the corporate power and authority to own and to use
its properties and to transact the business in which it is engaged, holds
franchises, licenses, occupancy licenses and permits necessary and required
therefor, and is not required to be licensed or qualified to do business in any
other jurisdiction.
5.2 AUTHORITY AND APPROVAL OF AGREEMENT BY BUYER. The execution and
delivery of this Agreement by Buyer and the performance of all obligations of
Buyer hereunder have been duly authorized and approved by Buyer pursuant to all
applicable state and federal laws.
ARTICLE VI
BROKERAGE
6.1 BROKERS. No brokers , finder or other similar intermediary has been
engaged by Buyer or Seller in connection with the transaction contemplated by
this Agreement.
ARTICLE VII
RESTRICTIVE COVENANTS
7.1 NONSOLICITATION; COVENANT AGAINST INTERFERENCE; NONDISCLOSURE OF
CONFIDENTIAL INFORMATION.
(a) Seller, its officers and directors, and the Shareholder
(jointly, severally and collectively "Covenantors" ) hereby covenant and agree
with Buyer that, from and after the date of Closing this Agreement, and
continuing until twenty-three (23) months following the date of the termination
or expiration of Shareholder's employment or engagement with the Buyer (whether
with or without cause) they shall not: directly or indirectly, (i) solicit or
counsel any third person or business entity that Seller knows or should know is
or was (within the previous five years) a customer of Seller, Buyer (or
affiliated companies), regardless of such person's or entity's location, and
regardless of whether such third person or business entity has terminated any
business relationship with Buyer or commenced a similar business relationship
with any other individual or business entity; (ii) accept, with or without
solicitation, business from any third person or business entity that Seller
knows or should know is or was (within the previous five years) a customer of
Seller, Buyer (or affiliated companies), regardless of such person's or entity's
location; or (iii) solicit for employment, employ or otherwise engage the
services of, any employees, affiliates, or agents of Buyer, regardless of such
person's or entity's location. The Covenantors hereby acknowledge that the
foregoing Covenant includes and prohibits Covenantors to advertise, in all
mediums, the Covenantors' prior affiliation with Seller.
(b) Covenantors acknowledge that they possess confidential
information of a special and unique nature and value affecting and relating to
the Seller's business, including, but not limited to, the identity of Seller's
customers and accounts, the prices being charged by Seller to such customers and
accounts, the Contracts, books and records, business records and other records,
Seller's trade secrets and other similar information relating to Seller and the
Seller's business and Buyer (all the foregoing being hereinafter referred to
collectively as "Confidential Information"). Covenantors recognize and
acknowledge that all Confidential Information is the exclusive property of
Buyer, is material and confidential, and greatly affects the goodwill and the
effective and successful conduct of the Seller's business. As a material
inducement for Buyer to enter
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into this Agreement, Covenantors covenant and agree that they will not at any
time, directly or indirectly, divulge, reveal or communicate any Confidential
Information to any person, firm, corporation or entity whatsoever, or use any
Confidential Information for their own benefit or for the benefit of others.
Notwithstanding the foregoing, from and after a date which is six (6) years
following the Closing, Shareholder shall be entitled to use information that he
has learned and acquired as a result of being in the burglar alarm business for
many years for his benefit; provided; however, at no time shall Covenantors ever
be able to use, divulge, reveal or communicate, directly or indirectly, any
Confidential Information that Covenantors learned or acquired from, or that
belongs to, Buyer or Buyer's Business.
(c) In view of the irreparable harm and damage to Buyer which
would result from a breach or a threatened breach of the covenants or agreements
under Subsections (a) and (b) of this Section ("Restrictive Covenants"), and in
view of the lack of an adequate remedy at law to protect Buyer' s interest,
Buyer shall have the right to receive, and Covenantors hereby consent to the
issuance of a temporary and permanent injunction enjoining Covenantors from any
violation of the Restrictive Covenants. In this regard, Covenantors are hereby
estopped from asserting an objection to same. Covenantors acknowledge that a
temporary and permanent injunction is an appropriate remedy for such a breach or
threatened breach. The foregoing remedy shall be in addition to, and not in
limitation of, any other rights or remedies to which Buyer is or may be entitled
at law or in equity. It is further agreed that in the event Buyer is required to
take any action in order to enforce the provisions of this Article VIII, the
prevailing party shall be entitled to all legal fees and costs, including, but
not limited to, attorneys' fees, paralegals' fees and court costs arising from
or incidental to any action so taken through and including all trial and
appellate levels.
(d) Covenantors hereby acknowledge the existence of the
following legitimate business interests of the Buyer: (i) valuable confidential
business information relating to and associated with Corporation, Buyer and
Buyer's Business; (ii) substantial relationships with prospective or existing
customers; and (iii) customer goodwill associated with Buyer and Buyer's
Business and the specific geographic location in which the Buyer operates its
business. Covenantors further acknowledge that they have carefully read and
considered the Restrictive Covenants and, having done so, upon advice of legal
counsel, agree that the restrictions set forth herein are fair and reasonable
and are reasonably required for the protection of the legitimate business
interests of Buyer, including, without limitation, the protection of the
legitimate business interests of Buyer set forth in the immediately preceding
sentence. It is the belief of the parties that the best protection which can be
given to Buyer which does not in any way infringe on the rights of Covenantors
to conduct any business (not otherwise in violation of these Restrictive
Covenants) is to provide for the restrictions described above. Covenantors
acknowledge that their ability to find gainful work in its, his or her,
respectively, field will not be significantly impaired by their compliance with
said restrictions. In the event any of such restrictions shall be held
unenforceable by any court of competent jurisdiction, the parties hereto agree
that it is their desire that such court shall substitute a reasonable,
judicially enforceable limitation in place of any limitation deemed
unenforceable and, as so modified, this covenant shall be as fully enforceable
as if it had been set forth herein by the parties hereto. In determining this
limitation, it is the intent of the parties that the court recognize that the
parties hereto desire that the Restrictive Covenants be imposed and maintained
to the maximum lawful extent. Further, the parties hereto acknowledge that the
Covenantors should be entitled to remain in the security alarm business subject
to the terms of these Restrictive Covenants.
ARTICLE VIII
COVENANTS OF SELLER
8.1 PRESERVATION OF SELLER'S BUSINESS. From the date hereof through the
Closing date, Seller agrees to conduct its business in the ordinary course, and
without the prior written consent of Buyer, shall not dispose of any of the
Purchased Assets, encumber, pledge or lien any of the Purchased Assets. In
addition, Seller represents and warrants that, from and after a date which was
ninety (90) days prior to the date of the execution of this Agreement, through
the date of the execution of this Agreement, Seller has conducted its business
in the ordinary course and have not entered into agreements with customers
included within the Purchased Assets in a manner inconsistent with the normal
practice of the Seller's business , nor in contemplation of the transaction
contemplated by this Agreement. Immediately after executing this Agreement,
Seller will furnish, or cause to be furnished, to Buyer any documents and other
information requested by Buyer with respect to the Purchased Assets, which
Seller has in its possession or has a right to possess (without payment of
additional fees therefor except for reasonable copy charges, if any).
8.2 INSPECTIONS. Between the date of the execution of this Agreement
and Closing, Seller shall allow Buyer to inspect copies of all permits,
licenses, approvals, reports, studies and any and all other documents which
Seller may have pertaining to the Purchased Assets. Buyer, its authorized
agents, employees and Seller shall have the right of access to such Books and
Records and all other documents and instruments pertaining to the Purchased
Assets at all reasonable times subsequent to the date of the execution of this
Agreement at reasonable times, upon reasonable notice, with full right to: (i)
inspect the Purchased Assets ; and (ii) conduct on all Books and Records, and
all other documents and instruments, studies, surveys and tests on the Purchased
Assets as Buyer, its authorized agents, employees and Sellers shall deem
necessary or desirable (collectively, the foregoing are hereinafter referred to
as "Inspections"). Such rights of Inspection,
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or the exercise or non-exercise of same, shall not constitute a waiver by Buyer
of the breach of any representation or warranty of Seller which were or might
have been disclosed by such Inspections.
8.3 CONTRACT CUSTODIAN. Seller hereby acknowledges that Buyer has
advised that, in connection with its acquisition line of credit financing, the
originals of the Contracts must be delivered to a custodian in order for there
to be a timely disbursement of the loan proceeds. In that regard, Seller hereby
covenants and agrees to deliver to Buyer, within three (3) business days of
written request therefor, the original Contracts solely for the purposes of
immediately delivering same to the custodian. Upon receipt of the original
Contracts, Buyer agrees to make copies of same for Seller, at Buyer's expense.
In the event the transaction contemplated by this Agreement is not consummated
for any reason, Buyer covenants and agrees that within three (3) business days
following written request therefor, Buyer shall cause the original Contracts to
be returned to Seller.
8.4 EMPLOYEES OF SELLER'S BUSINESS. Seller hereby covenants and agrees
that attached hereto as EXHIBIT "G" is a true and correct list of all employees
associated with Seller's business designating thereon the length of service with
Seller, the position maintained, the salary level and benefits currently offered
by Seller. Further, Seller represents and warrants that none of its employees
has any employment agreement (written or oral), regarding the staffing of
Seller's business. Further, if, as and to the extent Buyer desires to employ any
or all of Seller's employees, Buyer is authorized to pursue such persons during
the term hereof. The terms and provisions of this Paragraph shall survive
Closing.
8.5 ACQUISITION OF SECURITIES.
(a) RESTRICTIONS ON TRANSFER; NO RIGHT TO REQUIRE
REGISTRATION. Seller and Shareholder acknowledge and agree that the Securities
have not been registered under the Securities Act of 1933, as amended (the
"Securities Act"), or under relevant state securities laws and, therefore, they
cannot be sold, pledged, assigned, transferred or otherwise disposed of unless
they are subsequently registered under the Securities Act and/or under relevant
state securities laws or an exemption from such registration is available.
Seller further understands that as a result of the foregoing restrictions, they
must bear the economic risk of holding the Securities for an indefinitie period
of time until the Securities are registered under the Securities Act, or an
exemption from registration thereunder is available. Further the Seller and the
Shareholder understand that they have no right to require Buyer to register the
Securities under the Securities Act or relevant state securities laws.
(b) INVESTMENT INTENT. As a material inducement to Buyer to
enter into, execute and deliver this Agreement, Seller and Shareholder hereby
represent and warrant that Seller is acquiring the Securities solely for the
account of Seller for investment purposes only and not with a view for
distribution or resale to others. Seller and Shareholder further represent and
warrant that Seller will not, directly or indirectly, offer, sell, transfer,
assign, pledge, hypothecate or otherwise dispose of ("Transfer") the Securities,
unless (i) the Transfer is pursuant to an effective registration statement under
the Securities Act, and (ii) counsel for Seller (which counsel shall be
reasonable acceptable to Buyer) shall have furnished the Buyer with an opinion,
reasonably satisfactory in form and substance to the Buyer, to the effect that
no such registration is required because of the availability of an exemption
from registration under the Securities Act, or that such shares have been sold
in compliance with Rule 144 under the Securities Act.
(c) SOPHISTICATION. Seller and Shareholder hereby represent
and warrant that they each have knowledge and experience in financial and
business matters in general and are capable of evaluating the merits and risks
of the prospective investment in the Securities.
(d) ACCESS TO INFORMATION. Seller and Shareholder hereby
acknowledge and confirm that they have been given complete access to all public
documents, records, contracts and books of the Buyer, and that Seller and the
Shareholder have engaged in a complete examination of all such public documents,
records, contracts and books to the extent deemed necessary by them in reaching
the decision to obtain and become investors in Buyer. Seller and the Shareholder
hereby further acknowledge and confirm that they have had an opportunity to ask
questions of and receive answers from the executive officers of the Buyer
concerning the Securities, the Buyer and its affairs and related matters and
with respect to any other matter the Seller or the Shareholder deemed relevant,
and all such inquiries have been completed to the Seller's and the Shareholder
satisfaction.
(e) RELIANCE ON REPRESENTATIONS. Seller and Shareholder
acknowledge and understand that Buyer will be relying on the accuracy and
completeness of all matters set forth in this Paragraph 8.6, and the Seller and
Shareholder represent and warrant to the Buyer that the representations,
warranties, acknowledgments, covenants and agreements set forth herein are
complete, true and correct and may be relied upon by them in determining whether
the offer and sale of the Securities to the Seller is exempt from registration
under the Securities Act and relevant state securities laws.
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(f) LEGEND. Seller further understands that the certificates
evidencing the Common Stock and the certificates issuable upon the exercise of
the Option will bear a legend in substantially the following form:
The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Act") and may not be
sold, assigned or transferred in the absence of an effective
registration statement under the Act, an opinion of counsel
satisfactory to Guardian International, Inc. that such registration is
not required, or evidence that the shares have been sold in compliance
with Rule 144 under the Act.
8.6 LEASE OF PREMISES. Seller and Shareholder represent that
Shareholder and Kenneth R. Akins (collectively "Lessor") are the fee simple
title holders to the "Building" (as hereinafter defined). At Closing, Buyer
shall receive exclusive possession of Suite B-15 of a building located at 6065
N.W. 167th Street, Miami Lakes, Florida ("Building"), presently occupied by
Seller and execute a lease reasonably acceptable to Buyer at a rental rate of
Two Thousand Seven Hundred Forty-Two and No/100 Dollars ($2,742.00) per month.
The term shall be on a month to month basis, terminable by Buyer upon five (5)
days written notice to Seller.
8.7 CENTRAL STATION. Seller is a wholesale customer of Buyer in
connection with monitoring of the Contracts through Buyer's central station.
Subsequent to the date of this Agreement through Closing, Seller shall continue
to direct all monitoring services for its customers to Buyer's central station.
8.8 CHANGE OF NAME OF SELLER. Seller will, at Closing, execute and
deliver (and pay for) all documents necessary to change its corporate name to a
name dissimilar to its present name and Seller further covenants and agrees not
use the logo's currently used by Seller or similar logos. At Closing, Seller
shall also execute and deliver, all necessary documents to terminate any d/b/a
filings or any other rights in and to the "Alarm Control" name and logo or
similar names and logos.
ARTICLE IX
CLOSING
The closing of the transaction contemplated by this Agreement
("Closing") shall be effective as of 12:00 a.m. on the day of Closing, and shall
be held at the office of Buyer's attorneys, Navon, Kopelman, & O'Donnell, P.A.,
2699 Stirling Road, Suite B-100, Ft. Lauderdale, FL 33312, Attn.: Samuel D.
Navon, Esq., commencing at 10:00 o'clock A.M. on May 1, 1997, unless extended by
other provisions of this Agreement, or unless otherwise agreed to in writing by
the parties.
ARTICLE X
DOCUMENTS TO BE DELIVERED AT CLOSING
10.1 At Closing, Seller shall deliver or cause to be delivered to
Buyer, the following:
(a) The original of all documents which Seller may have
pertaining to the Purchased Assets and a Bill of Sale, Absolute, in form and
content satisfactory to the Buyer's legal counsel conveying to Buyer all of
Seller's right, title and interest in and to the Purchased Assets, free and
clear of all liens, claims and encumbrances ;
(b) A standard No Lien and Party-In-Possession Affidavit
executed by Seller which shall be in recordable form and otherwise satisfactory
to the Buyer's counsel;
(c) A duly executed and delivered assignment, with full
recourse and warranty, free and clear of liens, claims and encumbrances, of the
Purchased Assets, which shall be in recordable form and otherwise satisfactory
to the Buyer' s counsel;
(d) A certificate of good standing with regard to the Seller,
together with a corporate resolution and incumbency certificate satisfactory to
Buyer's counsel;
(e) A notice to each customer of the Purchased Assets advising
of the transaction contemplated by this Agreement in form and content acceptable
to Buyer and Seller;
(f) Uniform Commercial Code Financing Statements UCC-3's
required in connection with all UCC-1s filed with respect to the Purchased
Assets in favor of and naming Seller (and its predecessors) as secured parties
thereunder to assign all of Seller's (and its predecessors) interest to Buyer ,
as well as UCC-3's required to terminate any UCC-1's naming Seller as debtor and
which affect any of the Purchased Assets;
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(g) An officer's certificate of Seller and an affidavit from
the Shareholder attesting to the truth and accuracy of the representations and
warranties of Seller and Shareholder, including, but not limited to, the
accounts and the MRI generated therefrom, in form acceptable to Buyer's counsel;
and
(h) Such other documents or instruments reasonably required by
this Agreement.
10.2 The Buyer shall deliver:
(a) The Purchase Price;
(b) At Closing, Buyer shall cause its transfer agent to issue
the certificates representing the Common Stock to Seller, together with any
stock issuance taxes or fees required in connection with such issuance. In
connection with the issuance of the Common Stock, Seller shall provide Buyer, or
its transfer agent, with Seller's address and federal employee identification
number, and such other information as Buyer, or its transfer agent, may
reasonably request in connection with the issuance of the Common Stock; and
(c) The Option Agreement.
10.3 At Closing, Seller and Buyer shall mutually execute and deliver to
each other a Closing statement in customary form.
ARTICLE XI
EXPENSES, PRORATIONS AND ADJUSTMENTS
11 .1 EXPENSES. Any cost to obtain and record any curative or
corrective documents required by this Agreement, the UCC-11 search fees
regarding UCC-1 filings with the Secretary of State of Florida, transfer taxes
and / or other transfer costs delivered at Closing in order to vest fee simple
title of the Purchased Assets in Buyer shall be paid by Buyer. Except in the
event of a default, each party shall bear its own respective attorneys' fees.
11.2 PRORATIONS AND ADJUSTMENTS. Seller shall be entitled to all MRI
generated under the Contracts for the period prior to the Closing; Buyer shall
be entitled to all MRI generated under the Contracts accruing thereafter;
provided, however, notwithstanding anything contained in this Agreement to the
contrary with respect to prorations, Seller shall not be entitled to a credit
for accrued but uncollected MRI, provided that if and to the extent such amounts
are collected by Buyer following the date of closing ("Adjustment Date"), such
sums forthwith shall be tendered to Seller (if Buyer receives such sums in the
forms of checks such checks may be endorsed by Buyer from and after the
Closing). All monies received by Buyer from customers under the Contracts shall
first be applied to obligations incurred from and after the Closing. In the
event the Seller is obligated to pay ad valorem personal property taxes or
intangible personal property taxes with respect to the purchased Assets, same
shall be prorated between Seller and Buyer as of midnight on the date of
Closing. Such taxes shall be prorated on the basis of the current year's tax, if
known. If the Closing shall occur before the amount of current taxes can be
determined, such taxes shall be prorated upon the basis of the taxes for the
most recent fiscal year applied to the latest assessed valuation and shall be
promptly reprorated after receipt of the current year's tax statement. Payment
required by either party to the other shall be made within fifteen (15) days'
notice by either party to the other when the current taxes are ascertained, and
a statement to the effect of the foregoing is to be set forth on the Closing
statements.
ARTICLE XII
DEFAULT
12.1 In the event Buyer shall default in any of the material covenants
of this Agreement on the part of the Buyer to be performed, and Seller shall
have performed all of its obligations hereunder, Seller shall notify the Buyer,
in writing, of any such default and the action Seller deems necessary to cure
such default, and Buyer shall have ten (10) days from receipt of such notice in
which to cure any such default. In the event Buyer fails to cure such default
within said cure period, Seller shall be entitled terminate this Agreement.
12.2 If on or before the Closing: (i) there shall be an adverse change
in the status of title to the Purchased Assets from and after the effective date
of this Agreement so that Seller is unable to deliver good and marketable title
to the Purchased Assets as required by this Agreement; or (ii) Seller shall have
failed to comply with any other material term, provision or covenant of this
Agreement; or (iii) any of the representations, warranties and covenants made by
Seller herein shall be in any material respect inaccurate or there is an
omission of a material fact necessary to make any representation, warranty, or
covenant contained herein not misleading in light of the circumstances under
which it was made, Buyer shall have the right to terminate this Agreement.
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ARTICLE XIII
MISCELLANEOUS
13.1 SUCCESSION OF AGREEMENT. This Agreement and the rights and
obligations contained herein shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns.
13.2 EXECUTION DATE. The "date of the execution of this Agreement"
shall mean the last day upon which it becomes fully executed by Seller and
Buyer.
13.3 SURVIVAL. The representations and warranties set forth in and made
pursuant to this Agreement shall remain operative and shall survive the Closing
and the execution and delivery of the Assignment of Contract and Bill of Sale
and shall not be merged therein.
13.4 FURTHER ASSURANCES. The parties hereto each agree to execute,
acknowledge and deliver aid cause to be done, executed, acknowledged and
delivered all such further assignments, transfers and assurances and perform
such acts as shall reasonably be requested of either of them, respectively, in
order to carry out this Agreement and give effect thereto. The parties hereto
acknowledge that it is to their mutual benefit to effectuate an orderly and
efficient transfer of ownership as contemplated hereby. Accordingly, without in
any manner limiting the specific rights and obligations set forth in this
Agreement, the parties declare their intention to cooperate each with the other
in effecting the terms of this Agreement.
13.5 TIME IS OF THE ESSENCE. For purposes herein, the parties agree
that time shall be of the essence of this Agreement.
13.6 CAPTIONS AND PARAGRAPH HEADINGS. Captions and paragraph headings
contained in this Agreement are for convenience and reference only and in no way
define, describe, extend or limit the scope or intent of this Agreement, nor the
intent of any provision hereof.
13.7 NO WAIVER. No waiver of any provision of this Agreement shall be
effective unless it is in writing, signed by the party against whom it is
asserted and any such written waiver shall only be applicable to the specific
instance to which it relates and shall not be deemed to be a continuing or
future waiver.
13.8 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same Agreement.
13.9 GENDER. All terms and words used in this Agreement regardless of
the number and gender in which used, shall be deemed to include any other gender
or number as the context or the use thereof may require.
13.10 POSSESSION. Possession of the Purchased Assets shall be delivered
to Buyer at the Closing.
13.11 ENTIRE AGREEMENT AND MODIFICATION. This Agreement constitutes the
entire understanding and agreement between the parties and may not be changed,
altered or modified except by an instrument in writing signed by all parties
against whom enforcement of such change would be sought. In the event any term
or provision of this Agreement be determined by appropriate judicial authority
to be illegal or otherwise invalid, such provision shall be given its nearest
legal meaning or be construed as deleted as such authority determines, and the
remainder of this Agreement shall be construed to be in full force and effect.
This Agreement shall not be modified (and no purported modification thereof
shall be effective) unless in writing and signed by the party to be charged.
13.12 EXHIBITS. All Exhibits attached hereto contain additional terms
of this Agreement. Typewritten or handwritten provisions inserted in this form
or attached hereto shall control all printed provisions in conflict therewith.
13.13 GOVERNING LAW. This Agreement shall be construed and interpreted
according to the laws of the State of Florida, and venue with respect to any
litigation shall be Broward County, Florida.
13.14 EMPLOYMENT AGREEMENT. At Closing, Buyer and Terry E. Akins shall
execute and deliver an "Employment Agreement" in the form of EXHIBIT "H"
attached hereto and made a part hereof.
ARTICLE XIV
NOTICES
All notices of request, demand and other communications hereunder shall
be addressed to the parties as follows:
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If to Buyer: GUARDIAN INTERNATIONAL, INC.
Attn.: Richard Ginsburg
3880 N 28 Terrace
Hollywood, FL 33020
Telephone: (954) 926-1800
Telecopier: (954) 926-1822
With a copy to: NAVON, KOPELMAN & O'DONNELL, P.A.
2699 Stirling Road, Suite B-100
Fort Lauderdale, FL 33312
Attn: Samuel D. Navon, Esq.
Telephone: (954) 967-2788
Telecopier: (954) 983-7021
If to Seller: ALARM CONTROL, INC.
6065 N.W. 167th Street, Suite B-15
Miami Lakes, FL 33015
Attn: Terry E. Akins
Telephone: (305) 825-4647
Telecopier: (305) 556-1025
With a copy to: Mortimer H. Kass, Esq.
9000 S.W. 78th Court
Miami, Florida 33176
Telephone: (305) 595-5050
Telecopier: (305) 595-0473
unless the address is changed by the party by like notice given to the other
parties. Notice shall be in writing, mailed certified mail, return receipt
requested, postage prepaid and shall be deemed delivered when mailed or upon
hand delivery to the address indicated. Notwithstanding the foregoing, notice,
requests or demands or other communications referred to in this Agreement may be
sent by telegraph, federal express or other method of delivery, but shall be
deemed to have been given only when received.
ARTICLE XV
INDEMNIFICATION
15.1 Seller and Shareholder hereby jointly, severally and collectively
indemnify and hold Buyer forever harmless from and against any and all
liabilities and obligations or claims asserted against Buyer for acts of the
Seller taken or omitted prior to Closing. In addition, Seller and Shareholder
hereby jointly, severally and collectively indemnify and hold Buyer forever
harmless from and against any and all liability, damage, cost, claim or expense
which may be or cause to be incurred by the Buyer arising out of or in
connection with any breach of any warranty, representation or agreement given by
Seller and/or Shareholder hereunder or the falsity of any representation,
warranty or agreement made by Seller and/or Shareholder hereunder.
15.2 Buyer hereby agrees to indemnify and hold Seller harmless from and
against any and all liabilities and obligations or claims asserted against
Seller for acts of the Buyer taken or omitted on or subsequent to the date of
Closing. In addition, Buyer hereby indemnifies and holds Seller harmless from
and against any and all liability, damage, cost, claim or expense which may be
or cause to be incurred by the Seller arising out of, or in connection with any
breach of any warranty, representation or agreement given by Buyer hereunder, or
the falsity of any representation, warranty or agreement made by Buyer
hereunder.
15.3 The party responsible to provide indemnification hereunder
("Indemnifying Party") shall be solely responsible, at its expense, for
litigating, defending or otherwise attempting to resolve any action, matter or
proceeding against which the other party ("Indemnified Party") is indemnified
under this Article XV, except that: (i) the Indemnified Party shall have the
right to participate in the defense of any such action, matter or proceeding, at
the Indemnified Party's expense and through counsel of the Indemnified Party's
choice; (ii) the Indemnified Party may, at its option, defend or otherwise
attempt to resolve, at the Indemnifying Party's expense, any such action, matter
or proceeding, or cause the Indemnifying Party to defend or otherwise attempt to
resolve, any such action, matter or proceeding against which the Indemnified
Party is indemnified under this Article XV, if the Indemnifying Party does not
promptly and diligently defend or otherwise attempt to resolve any such action,
matter or proceeding, or if the Indemnified Party, in good faith, believes that
the defense or resolution of such action, matter or proceeding might adversely
affect its relations with a customer or supplier, in which event the
Indemnifying Party shall continue to be obligated to indemnify the Indemnified
Party hereunder in connection with such action, matter or proceedings; and (iii)
the Indemnifying Party shall not agree to any settlement without the Indemnified
Party's express prior written consent which shall not be unreasonably withheld.
The terms of this Article XV shall survive Closing.
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ARTICLE XVI
CONDITIONS
The occurrence of the following events or conditions, or the written
waiver thereof by Buyer, shall be conditions precedent to Buyer' s obligation to
close the transaction contemplated by this Agreement, to wit:
(a) The representations, warranties and covenants of Seller set forth
herein shall remain true and correct in all material respects.
(b) At Closing, the Contracts shall remain in full force and effect, no
event shall have occurred that with the passage of time and/or the giving of
notice would or may result in a termination thereunder which results or could
result in a material modification to the MRI anticipated to be collected by
Buyer, and no termination thereof shall have been proposed or threatened and
Seller has no knowledge of any fact or condition which would result in a
termination of the Contracts resulting in a material modification to the MRI
anticipated to be collected by Buyer.
Buyer shall, however, have the right to waive, in whole or in part,
such conditions set forth in this Article XVI. If such conditions have not been
satisfied or waived, on or before the Closing, Buyer shall have the right to:
(i) terminate this Agreement by giving written notice to Seller, whereupon the
parties shall be released of all further obligations each to the other
hereunder; or (ii) proceed to Closing, whereby the conditions not otherwise
satisfied shall be deemed waived.
ARTICLE XVII
DISCLOSURE
17.1 CONFIDENTIALITY. Seller and Shareholder covenant and agree that
they shall keep the specific terms and provisions of this Agreement, including,
without limitation, Purchase Price and all other financial aspects of this
transaction, strictly confidential, except with regard to any disclosure of such
information required in connection with the retaining of any accountants,
attorneys or other professionals necessary to further any of the rights or
remedies of the parties hereto pursuant to the terms and provisions of this
Agreement and except as otherwise mandated by court order; it being the
intention of the parties hereto that such information shall not be disseminated
to the public at large by Seller or Shareholder.
17.2 PRESS RELEASE. Seller acknowledges that as a result of Buyer's
obligations as a company registered under the Securities and Exchange Act of
1934, Buyer is mandated, and intends, to issue certain press releases regarding
the transaction contemplated by this Agreement.
ARTICLE XVIII
PIGGY-BACK REGISTRATION RIGHTS
18.1 REGISTRATION RIGHTS.
(a) From the date of Closing and for a period of twelve (12)
months thereafter, if Buyer (or any successor entity into or with whom Buyer may
have merged or consolidated) proposes to register any securities of Buyer under
the Securities Act of 1933, as amended (the "Act"), on any registration form
(otherwise than for the registration of securities to be offered and sold by
Buyer pursuant to (A) an employee benefit plan, (B) a dividend or interest
reinvestment plan, (C) other similar plans, (D) reclassifications of securities,
mergers, consolidations and acquisitions of assets, or (E) shares on Form S-8 to
qualified consultants), then not less than ninety (90) days prior to each such
registration, Buyer shall give to Shareholder written notice of such proposal
which shall describe in detail the proposed registration and distribution and,
upon the written request of Shareholder furnished within thirty (30) days after
the date of any such notice, proceed to include in such registration the number
of shares of Buyer's Common Stock ("Piggy-Back Shares") as have been requested
by Shareholder to be included in such registration (subject to the limitations
set forth below). Buyer will in each instance use its best efforts to cause all
such Piggy-Back Shares to be registered under the Act and qualified under the
securities or blue sky laws of any jurisdiction requested by Shareholder, all to
the extent necessary to permit the sale or other disposition thereof (in the
manner stated in such request) by Shareholder.
(b) If the managing underwriter, who shall be selected by the
Buyer, advises Buyer in writing that, in its opinion, the inclusion of the
Piggy-Back Shares with the securities being registered by Buyer would adversely
affect the distribution of all such securities, then Shareholder shall not be
entitled to the registration rights set forth in Section 18.1(a) above.
(c) Shareholder, by acceptance of the terms and provisions
hereof, agrees to: (A) the selection by Buyer of the underwriter to manage such
registration; and (B) to execute an underwriting agreement with such
underwriter; provided, however, that such underwriting agreement is in customary
form.
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Nothing in this Section shall be deemed to require Buyer to proceed with any
registration of its securities after giving the notice as provided herein.
18.2 REGISTRATION AND QUALIFICATION PROCEDURES. Whenever Buyer is
required by the provisions of Section 18.1 above, to effect the registration of
the Buyer's Common Stock under the Act, Buyer will, as expeditiously as is
possible, take such steps as are necessary or appropriate to prepare for a
registration or qualification of its securities, including without limitation
preparing and filing with the Securities and Exchange Commission ("Commission")
a registration statement, and amendments and supplements thereto, furnishing to
each seller sufficient copies of prospectuses, preparing and filing
registrations under the blue sky laws of applicable jurisdictions, entering into
and performing underwriting agreements, keeping each seller advised as to the
progress of the steps being taken and otherwise taking such actions in
cooperation with each seller as are customarily taken or required in connection
with the public registration and sale of securities. Buyer and Shareholder shall
cooperate with each other in supplying such information as may be necessary for
any of such parties to complete and file any information reporting forms
presently or hereafter required by the Commission or any commissioner or other
authority administering the blue sky or securities laws of any jurisdiction
where shares of the Buyer's Common Stock are proposed to be sold hereunder.
18.3 ALLOCATION OF EXPENSES.
(a) Buyer shall pay all registration expenses in connection
with the registration of the Buyer's Common Stock, including, without
limitation, all registration fees and filing fees, printing expenses, expenses
of complying with state or blue sky laws (including fees of counsel for Buyer
and counsel for the underwriters, if necessary), fees and disbursements of
counsel for Buyer, and accountants' fees and expenses incident to or required by
any such registration. It shall be a condition precedent to the obligation of
Buyer to take any action under this Article XVIII that: (x) Buyer shall have
received an undertaking satisfactory to it from Shareholder to notify Buyer, at
any time when a prospectus relating to the Buyer's Common Stock is required to
be delivered under the Act, of the happening of any event relating to such
Shareholder, the Buyer's Common Stock held by such Shareholder, or the method of
disposition of Shareholder's Common Stock in Buyer, as a result of which such
prospectus includes an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances then existing; and (y)
Shareholder shall furnish to Buyer such information regarding such Shareholder,
the Common Stock held by such Shareholder and the method of disposition of such
Common Stock held by such Shareholder as Buyer shall reasonably request and as
shall be required in connection with the action to be taken by Buyer.
(b) All underwriting fees incurred by Shareholder and all fees
and disbursements of counsel for Shareholder shall be borne by Shareholder.
18.4 INDEMNIFICATION. In connection with any registration or
qualification of securities under this Article XVIII, Buyer agrees to indemnify
Shareholder and each underwriter thereof, against all losses, claims, damages,
liabilities and expenses (including reasonable costs of investigation and the
costs, fees and expenses of legal counsel) caused by any untrue, or alleged
untrue, statement of a material fact contained in any registration statement,
preliminary prospectus, prospectus or notification or offering circular (as
amended or supplemented if Buyer shall have furnished any amendments or
supplements thereto) or caused by any omission, or alleged omission, to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages, liabilities or expenses are caused by any untrue statement or alleged
untrue statement or omission or alleged omission based upon information
furnished in writing to Buyer by Shareholder or underwriter expressly for use
therein. Buyer and each officer, director and controlling person of Buyer shall
be indemnified, respectively, by Shareholder for all such losses, claims,
damages, liabilities and expenses (including the costs of reasonable
investigation and the costs, fees. and expenses of legal counsel) caused by any
such untrue, or alleged untrue, statement or any such omission or alleged
omission, based upon information furnished in writing to Buyer by such
Shareholder expressly for use therein.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
day and year first above written.
SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF:
BUYER:
GUARDIAN INTERNATIONAL, INC.
a Nevada corporation
/s/ Mortimer Kass By: /s/ Richard Ginsburg
- ------------------------- -------------------------------------
Print Name: Mortimer Kass Richard Ginsburg, President
/s/ David Kahan
- -------------------------
Print Name: David Kahan
SELLER:
ALARM CONTROL, INC.,
a Florida corporation
/s/ Mortimer Kass By: /s/ Terry E. Akins
- ------------------------- -------------------------------------
Print Name: Mortimer Kass Terry E. Akins, President
/s/ David Kahan
- -------------------------
Print Name: David Kahan
/s/ Mortimer Kass By: /s/ Terry E. Akins
- ------------------------- -------------------------------------
Print Name: Mortimer Kass TERRY E. AKINS, individually
/s/ David Kahan
- -------------------------
Print Name: David Kahan
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EMPLOYMENT AGREEMENT
GUARDIAN INTERNATIONAL, INC.
This Employment Agreement ("Agreement") is made and entered into on the
7th day of May, 1997, but made effective as of May 1, 1997, by and between
GUARDIAN INTERNATIONAL, INC., a Nevada corporation, hereinafter referred to as
the "Company", and TERRY E. AKINS, hereinafter referred to as "Executive".
W I T N E S S E T H:
WHEREAS, the Company and Executive desire to set forth their agreement
and understanding regarding the employment of the Executive by the Company;
NOW THEREFORE, for Ten ($10.00) Dollars and other good and valuable
consideration, the receipt, adequacy, and sufficiency of which is hereby
acknowledged, the parties each intended to be legally bound hereby do agree as
follows, to wit:
1. RECITATIONS. The recitations set forth in the preamble of this
Agreement are true and correct and are incorporated herein by this reference.
2. EMPLOYMENT.
(a) In exchange for the compensation hereinafter provided for,
Company hereby employs Executive to render the "Executive Duties" (as
hereinafter defined) and Executive hereby accepts such employment upon the terms
and conditions hereinafter set forth.
(b) The Executive affirms and represents that he is under no
obligation to any former employer or other party which is in any way
inconsistent with, or which imposes any restriction upon, the Executive's
acceptance of employment hereunder with the Company, the employment of the
Executive by the Company, or the Executive's undertakings under this Agreement.
3. EXECUTIVE DUTIES.
(a) For purposes of this Agreement, "Executive Duties" shall
mean serving the Company as its Chief Operating Officer - Vice President of
Acquisitions faithfully and diligently, and performing, from time to time, such
additional duties as Company shall request. Executive shall devote full working
time and attention to the performance of the Executive Duties, which Executive
Duties shall include, but not be limited to, those duties more specifically set
forth on EXHIBIT "A" attached hereto and made a part hereof.
(b) Executive shall at all times discharge his Executive
Duties in a competent and professional manner, and in the best interest of the
Company.
4. TERM. Subject to the provisions for termination hereafter set forth,
the initial term of this Agreement shall commence simultaneous with the
execution of this Agreement ("Commencement Date") and shall continue thereafter
for a term of forty-eight (48) consecutive calendar months ("Term").
5. COMPENSATION.
(a) SALARY. In exchange for the performance of the Executive
Duties hereunder, Company shall pay to Executive an annual gross salary
("Salary") equal to One Hundred Fifty Thousand Dollars ($150,000.00) for the
Term. Salary shall be paid by Company in accordance with Company's regular
payroll practices.
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(b) ADDITIONAL COMPENSATION. In addition to the Salary, in the
event the Company consummates an acquisition of monitoring accounts, which
acquisition was procured and organized solely from Executive's efforts, as
reasonably determined by the Company, the Company shall pay Executive additional
compensation ("Additional Compensation") as follows:
(i) if payment for the acquisition is based on a
multiple equal to or less than twenty-seven (27) times "MRI" (as hereinafter
defined), then the Company shall pay to Executive a sum equal to two (2) times
the MRI acquired in such acquisition, subject to any adjustments as hereinafter
provided.
(ii) if payment for the acquisition is based on a
multiple greater than twenty-seven (27) times MRI, then the Company shall pay to
Executive a sum equal to one (1) times the MRI acquired in such acquisition,
subject to any adjustments hereinafter provided.
In calculating the Additional Compensation, to the extent
there is a "holdback" or "reserve" of a percentage of the purchase price to be
paid by the Company for the accounts being acquired, the MRI upon which the
Additional Compensation will be based shall be reduced by the percentage that
such "holdback" or "reserve" bears to the total purchase price for the
acquisition. The amount of Additional Compensation held back pursuant to the
foregoing sentence shall be paid to Executive only if, when and as to the extent
that the purchase price "holdback" or "reserve" is paid by the Company.
The payment of the Additional Compensation, except for the
compensation held back pursuant to the foregoing paragraph, shall be made by the
Company to Executive at the closing of the subject acquisition, or within ten
(10) days thereof.
(c) OTHER BENEFITS. During the Term, the Executive shall:
(i) be eligible to participate in employee fringe
benefits and pension and/or profit sharing plans that may be provided by the
Company for its senior executive employees in accordance with the provisions of
any such plans, as the same may be in effect from time to time;
(ii) be eligible to participate in any medical and
health plans or other employee welfare benefit plans that may be provided by the
Company for its senior executive employees in accordance with the provisions of
any such plans, as the same may be in effect from time to time;
(iii) be eligible for consideration by the Board of
Directors for awards of stock options under any stock option plan which may be
established by the Company for its key employees, the amount, if any, of shares
for which options may be granted to Executive to be in the sole discretion of
the Board of Directors;
(iv) be entitled to sick leave, sick pay and
disability benefits in accordance with any Company policy that may be applicable
to senior executive employees from time to time;
(v) be entitled to reimbursement for all reasonable
and necessary out-of-pocket business expenses, including, cellular phone
expenses, incurred by the Executive in the performance of his duties hereunder,
provided that such expenses are itemized and presented to the Company in
accordance with its general policies relating to reimbursement of employee
business expenses; and
(vi) be entitled to a Company automobile.
(d) VACATION. Executive shall be entitled to four (4) weeks
annually of paid vacation time during the Term to be taken at such times as
shall be mutually agreed upon between Executive and Company. The unused portion
of any vacation time within each year of the Term may not be carried over into
the subsequent year, and if not taken within the applicable year in which it was
earned, such vacation time shall lapse.
(e) WITHHOLDING, ETC. Company shall be entitled to deduct or
withhold from all compensation payable hereunder all amounts required to be
deducted or withheld from compensation pursuant to state or federal law, or as
otherwise permitted hereunder.
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6. TERMINATION.
(a) BY COMPANY - FOR CAUSE. The Company shall have the right
to terminate the employment of Executive for cause immediately upon written
notice to Executive. For purposes of this Agreement, "cause" shall mean the
occurrence of any of the following:
(i) Executive's failure, within thirty (30) days
after written notice from the Company, to cure any material breach of the
Executive Duties or his other obligations under this Agreement or to correct any
act, omission or behavior that the Company reasonably believes has had or may
have a material adverse effect on its business or reputation;
(ii) Executive's death or Disability (as hereinafter
defined). For purposes of this Agreement, Disability shall mean the Executive's
inability or failure, as a result of an incapacitating physical or mental
condition, to perform the Executive Duties as required herein for a period of at
least ninety (90) consecutive days. If there is any dispute as to whether
Executive suffered a Disability, Executive shall submit to examination by a
physician designated by the Company, whose determination shall be determinative
of the issue. In the event Executive dies or suffers a Disability during the
Term, Company shall pay to Executive's estate or Executive, as applicable, a
severance payment in an amount equal to Seventy Five Thousand Dollars
($75,000.00), which amount may be paid, at the Company's option, in a lump sum
or in equal installments over a six (6) month period following the termination
of Executive's employment as a result of his death or Disability, in which case
the severance payment shall be paid in accordance with the Company's regular
payroll practices. In addition, Executive or Executive's immediate family shall
be entitled to receive the same medical/health care coverage benefits received
immediately prior to termination of this Agreement for a period of twelve (12)
months following the termination of Executive's employment as a result of his
death or Disability. In addition, Executive or his estate shall be entitled to
receive any Salary earned by Executive through the date of termination of his
employment as a result of his death or Disability and remaining unpaid ;
(iii) Executive's commission of any act of corporate
theft, misappropriation of funds, breach of duty as an officer of Company or
other intentional harm against or to Company; or
(iv) Executive's conviction of or pleading nolo
contendere to any felony.
(b) BY COMPANY OR EXECUTIVE - WITHOUT CAUSE. Either party may
terminate Executive's employment hereunder without cause, upon thirty (30) days
prior written notice to the other party hereto.
(c) EFFECT OF TERMINATION PURSUANT TO SUBPARAGRAPH 6(B) . In
the event the Company terminates Executive's employment hereunder pursuant to
subparagraph 6(b) hereof: (i) Executive agrees to continue to perform his duties
hereunder through the date of termination of his employment, if requested to do
so by the Company; (ii) Executive shall also be entitled to receive a severance
payment equal to the aggregate of Executive's then current annual Salary for the
remainder of the Term, which amount may be paid, at the Company's option, in a
lump sum or over the remainder of the Term in accordance with the Company's
regular payroll practices. In the event the Company decides to pay the foregoing
severance payment in a lump sum, such aggregate amount shall be discounted to
present value at an interest rate of two percent (2%) per annum over the prime
rate of interest as announced from time to time by Barnett Banks, Inc. In the
event Barnett Banks, Inc. fails to announce a prime interest rate, then the
Company shall select the prime interest rate announced by a comparable financial
institution in order to determine the actual rate to use in discounting the lump
sum payment payable to Executive; and (iii) Executive shall be entitled to
receive the same medical/health care coverage benefits received immediately
prior to termination of this Agreement so long as Executive is receiving the
severance payments described in this subparagraph.
7. NONSOLICITATION; COVENANT AGAINST INTERFERENCE; NONDISCLOSURE OF
CONFIDENTIAL INFORMATION.
(a) Executive hereby acknowledges and agrees that the Company
will suffer irreparable injury if Executive solicits or interferes with the
Company. As a material inducement to the Company to engage or employ Executive
or to continue such engagement or employment beyond the date hereof, Executive
hereby covenants and agrees that beginning on the date of this Agreement and
continuing until twenty three (23) months following the date of the termination
or expiration of Executive's employment or engagement with the Company (whether
with or without cause), Executive shall not, directly or indirectly:
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(i) solicit or counsel any third person or business
entity that Executive knows or should know is or was (within the previous five
years) a customer of the Company (or affiliated companies), regardless of such
person's or entity's location, and regardless of whether such third person or
business entity has terminated any business relationship with the Company or
commenced a similar business relationship with any other individual or business
entity;
(ii) accept, with or without solicitation, business
from any third person or business entity that Executive knows or should know is
or was (within the previous five years) a customer of Buyer (or affiliated
companies), regardless of such person's or entity's location; or
(iii) solicit for employment, employ or otherwise
engage the services of, any employees, affiliates, or agents of the Company,
regardless of such person's or entity's location.
The Executive hereby acknowledges that the foregoing covenant includes
and further prohibits any advertising, in all mediums, regarding the Executive's
prior affiliation with Alarm Control, Inc. The parties hereby agree that this
covenant shall not preclude Executive from engaging in any form of advertising,
provided however, Covenantors are strictly prohibited from soliciting or signing
a contact with any current or former customer [within the previous five (5)
years].
In addition, for purposes of this Agreement, solicitation of a client
or account by Executive shall be presumed in the event that Executive or any
business with which Executive is affiliated, directly or indirectly, has any
contact or communication whatsoever with two or more clients or accounts of the
Company, its successors or assigns at any time subsequent to the termination or
expiration of Executive's employment or engagement with the Company. The
foregoing shall not limit the manner in which the Company may prove solicitation
by Executive.
(b) CONFIDENTIAL INFORMATION. Executive hereby acknowledges
that Executive has had access to, used, acquired and added to, and will or may
be making use of, acquiring and adding to confidential information of a special
and unique nature and value to the Company, including, but not limited to, the
operation of the Company's business, the identity of the Company's customers and
suppliers, the prices paid by the Company, its business practices, pricing
structure, methods and operations, marketing strategies and expansion plans, the
Company's contracts, business records and other records, the Company's trade
secrets, inventions, recipes, techniques used in the Company's business,
know-how and technologies, whether or not patentable, and other similar
information relating to the Company and the Company's business (all the
foregoing, regardless of whether same was known to Executive prior to the date
hereof or is or becomes known to third parties, is hereinafter referred to
collectively as "Confidential Information"). Executive further acknowledges and
agrees that all Confidential Information is the exclusive property of the
Company, is material and confidential, and greatly affects the goodwill and
effective and successful conduct of the business of the Company. Accordingly, as
a material inducement to the Company to engage or employ Executive, or to
continue such engagement or employment beyond the date hereof, Executive hereby
covenants and agrees that Executive will use the Confidential Information only
for the benefit of the Company and shall not at any time, directly or
indirectly, either during the term of this Agreement or at any time afterward,
divulge, reveal or communicate any Confidential Information under any
circumstances whatsoever, except as compelled by applicable law, or use any
Confidential Information for Executive's own benefit or for the benefit of
others. Upon termination of Executive's employment or engagement, Executive
shall promptly account for and deliver to the Company all Confidential
Information and copies of Confidential Information in Executive's possession or
control. Notwithstanding the foregoing, from and after a date which is six (6)
years following the Commencement Date, Executive shall be entitled to use
information that he has learned and acquired as a result of being in the burglar
alarm business for many years for his benefit; provided; however, at no time
shall Executive ever be able to use, divulge, reveal or communicate, directly or
indirectly, any Confidential Information that Executive learned or acquired
from, or that belongs to, the Company or the Company's business.
(c) Executive agrees that irreparable injury to the Company
would result from a breach or threatened breach by the Executive of any of the
covenants or agreements set forth in Sections 7 (a) and (b) hereof, that there
is not an adequate remedy at law to protect the Company from any such breach or
threatened breach, and that a permanent injunction is an appropriate remedy for
such a breach or threatened breach. The remedy of injunction shall be in
addition to and not in limitation of any other rights or remedies to which the
Company is or may be entitled at law or in equity. The Executive and the Company
further agree that in the event either of them incurs any fees or costs in order
to enforce the provisions of Sections 7 (a) and (b) hereof and such party
prevails in such enforcement, the non-prevailing party shall pay all fees and
costs so incurred by the prevailing party, including, but not limited to,
reasonable attorneys' and paralegals' fees at all trial and appellate levels.
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<PAGE>
(d) Executive hereby acknowledges the existence of the
following legitimate business interests of the Company: (i) valuable
confidential business information relating to and associated with the Company
and the Company's Business; (ii) substantial relationships with prospective or
existing customers; and (iii) customer goodwill associated with the Company and
the Company's Business and the specific geographic location in which the Company
operates its business. Employee further acknowledges that he has carefully read
and considered the covenants contained in this Section 7 and, having done so,
upon advice of legal counsel, agrees that the restrictions set forth herein are
fair and reasonable and are reasonably necessary and justified for the
protection of the legitimate business interests of the Company, including,
without limitation, the protection of the Company's legitimate business
interests set forth in the preceding sentence. It is the belief of the parties
that the best protection which can be given to the Company which does not in any
way infringe on the rights of Executive to conduct any business (not otherwise
in violation of the covenants in this Section 7) is to provide for the
restrictions described above. Executive acknowledges that his ability to find
gainful work in his field will not be significantly impaired by their compliance
with said restrictions. In the event any of such restrictions shall be held
unenforceable by any court of competent jurisdiction, the parties hereto agree
that it is their desire that such court shall substitute a reasonable,
judicially enforceable limitation in place of any limitation deemed
unenforceable and, as so modified, this covenant shall be as fully enforceable
as if it had been set forth herein by the parties hereto. In determining this
limitation, it is the intent of the parties that the court recognize that the
parties hereto desire that the covenants in this Section 7 be imposed and
maintained to the maximum lawful extent.
(e) SURVIVAL. The provisions of this Agreement shall survive
the termination or expiration of Executive's employment with Company.
8. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties and supersedes all prior and contemporaneous
agreements, understandings and promises, whether oral or written, expressed or
implied.
(b) NOTICES. Any notices provided for by this Agreement shall
be in writing and shall be deemed duly given upon hand delivery thereof or upon
the first business day after mailing by United States registered or certified
mail, postage prepaid at the following addresses:
Company: Guardian International, Inc.
3880 N. 28th Terrace
Hollywood, Florida 33020
Facsimile: (954)926-1822
Attn: Richard Ginsburg, President
Executive: Terry E. Akins
6065 N.W. 167th Street, Suite B-15
Miami Lakes, Florida 33015
unless the address is changed by the party by like notice to the other.
Notwithstanding the foregoing, notice, requests, or demands, or other types of
communications may be sent by facsimile, federal express or other method of
delivery, but shall be deemed to have been given only when received.
(c) HEADINGS; GENDER AND USE OF SINGULAR AND PLURAL. The
defined terms and paragraph and section titles used herein are for convenience
of reference only and shall not be used in interpreting this Agreement. When
applicable, the use of the singular form of any work shall mean or apply to the
plural, and the masculine, feminine, or neuter form shall mean and apply to the
masculine, feminine, or neuter form as the case may be.
(d) GOVERNING LAW. This Agreement shall be construed,
interpreted and enforced under and in accordance with the laws of the State of
Florida (notwithstanding any conflict of laws provisions of the State of
Florida) and venue with respect to any proceeding arising between the parties in
any matter pertaining to or arising under this Agreement shall be held in
Broward County, Florida.
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(e) NO WAIVER. The failure of Company in any instance to
insist upon a strict performance of the terms of this Agreement or to exercise
any option herein, shall not be construed as a waiver or a relinquishment for
the future of such term or option, but that the same shall continue in full
force and effect. No waiver of any provision of this Agreement shall be
effective unless it is in writing and signed by the party against whom it is
asserted, and any such written waiver shall only be applicable to the specific
instance to which it relates and shall not be deemed to be a continuing or
future waiver.
(f) BINDING EFFECT. The terms and provisions of this Agreement
shall be binding upon the parties hereto, their legal representatives,
successors and assigns.
(g) AMENDMENT. The parties hereby irrevocably agree that no
attempted amendment, modification, termination, discharge or change
(collectively, "Amendment") of this Agreement shall be valid and effective,
unless the parties shall unanimously agree in writing to such Amendment.
(h) SEVERABILITY. All agreements and covenants contained
herein are severable, and in the event any of them shall be held to be invalid
or unreasonable by any competent court, this contract shall be interpreted as if
such invalid agreement or covenants were contained herein.
(i) NO ASSIGNMENT. All rights and obligations of the Executive
hereunder are personal and nonassignable without the express written consent of
Company.
IN WITNESS WHEREOF, this Agreement has been executed on the date first
written above.
SIGNED, SEALED AND DELIVERED
IN THE PRESENCE OF: EMPLOYER:
GUARDIAN INTERNATIONAL, INC.,
a Florida corporation
/s/ Mortimer Kass By: /s/ Richard Ginsburg
- ----------------------- --------------------------------------
PRINT NAME: Mortimer Kass Richard Ginsburg, President
/s/ David Kahan
- -----------------------
PRINT NAME: David Kahan
EMPLOYEE:
/s/ Mortimer Kass By: /s/ Terry E. Akins
- ----------------------- --------------------------------------
PRINT NAME: Mortimer Kass Terry E. Akins
/s/ David Kahan
- -----------------------
PRINT NAME: David Kahan
E-19
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EXHIBIT "A"
EXECUTIVE DUTIES
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<PAGE>
DUTIES
INITIAL 3 MONTHS AFTER ASSET PURCHASE OF ALARM CONTROL
Mr. Akins will be required to assist in the assimilation of the approximately
2,200 subscribers into the Guardian accounting and billing system. Key customers
need to be identified and contacted. Assurances need to be given that Mr. Akins
is a part of the new company and he will be available if needed.
AFTER THE ASSIMILATION STAGE IS OVER
EXECUTIVE VICE PRESIDENT / CHIEF OPERATING OFFICER
MR. AKINS WILL BE EXPECTED TO DO THE FOLLOWING
1) Work directly with the CEO in the ongoing analyzation of the operations of
the company including finance, operations, customer service, etc.
2) Identify and negotiate potential acquisition candidates or dealer acquisition
candidates. Including:
/bullet/ Solicitation of potential candidates through Mr. Akins contacts
/bullet/ Respond to advertisement leads for Acquisition / Dealer inquiries
/bullet/ Attend Industry trade show and represent the company
3) Assist in organization ongoing EXECUTIVE management of the following:
/bullet/ South Dade branch office
/bullet/ Hollywood based service dispatch center
/bullet/ Hollywood and Dade county based installation department
/bullet/ South Dade Sales team
4) Miscellaneous
/bullet/ Company liaison with various industry associations
/bullet/ Possible attendnace of investor conferences and ongoing tours of
company for interested investors / shareowners.
E-21
OPTION AGREEMENT
THIS OPTION AGREEMENT ("Agreement") is made and entered into as of the
7th day of May, 1997 by and between GUARDIAN INTERNATIONAL, INC., a Nevada
corporation (the "Company"), and ALARM CONTROL, INC., a Florida corporation
("Optionee").
W I T N E S S E T H:
WHEREAS, the Company desires to grant Optionee an option to acquire up
to One Hundred Thousand (100,000) shares of the Company's common stock, par
value $.001 per share ("Common Stock"), subject to the terms and conditions set
forth herein.
NOW, THEREFORE, in consideration of Ten Dollars ($10.00) in hand paid,
and other good and valuable consideration, the receipt, adequacy and sufficiency
of which is hereby acknowledged, the parties hereby agree as follows:
1. RECITALS. The forgoing recitals are true and correct and are hereby
incorporated by reference.
2. OPTION. The Company hereby grants Optionee the option ("Option") to
purchase One Hundred Thousand (100,000) shares of Common Stock (the "Option
Stock") for a price ("Option Price") equal to Two Dollars and 50/100 ($2.50) per
share of Common Stock, subject to adjustment as hereinafter provided. The Option
shall become exercisable on January 1, 1998 and shall continue to be exercisable
until (and including) January 1, 2002 ("Exercise Period"). The Option may be
exercised from time to time during the Exercise Period for a minimum number of
shares of Option Stock equal to Five Thousand (5,000) shares.
3. EXERCISE OF OPTION. Optionee may exercise the Option by delivering
written notice thereof ("Exercise Notice") to the Company at any time during the
Exercise Period, which Exercise Notice shall specify the number of shares of
Option Stock for which such exercise is made. It shall be a condition precedent
of any exercise of the Option that Optionee shall have remained in the
continuous employment of the Company from the date hereof through and including
the date of the exercise of the Option. The Option shall terminate upon and
shall not be exercisable after and in the event Terry E. Akins's ("Terry")
employment with the Company is terminated for cause, as such term is defined in
that certain Employment Agreement by and between Terry and the Company. The
closing of the purchase and sale of Option Stock pursuant to the Option ("Option
Closing") shall take place on the date set forth in the Exercise Notice, which
date shall not be less than fourteen (14) days, nor later than thirty (30) days,
after the date the Exercise Notice is given to the Company. At the Option
Closing, Optionee shall tender the Option Price to the Company by cashier's
check or wire transfer, and the Company shall issue, or cause to be issued, to
Optionee stock certificates evidencing the Option Stock.
4. SUBDIVISION OR COMBINATION OF COMMON STOCK. If the Company at any
time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, the Option Price in effect immediately prior to such
subdivision will be proportionately reduced and the number of shares of Option
Stock obtainable upon exercise of the Option will be proportionately increased.
If the Company at any time combines (by reverse stock split or otherwise) one or
more classes of its outstanding shares of Common Stock into a smaller number of
shares, the Option Price in effect immediately prior to such combination will be
proportionately increased and the number of shares of Common Stock obtainable
upon exercise of the Option will be proportionately decreased.
5. REGISTRATION RIGHTS. In the event Buyer proposes to register any of
its securities under the "Act" (as hereinafter defined)("Offering"), then
Optionee shall be entitled to the registration rights set forth in Article XVIII
of that certain "Asset Purchase Agreement" dated of even date herewith by and
between the Company and Optionee, to which this Agreement is attached as an
exhibit, and the Company shall permit Optionee to exercise the Option and
consummate the Option Closing prior to the date "Shareholder" (as defined in the
Asset Purchase Agreement) must give notice to the Company of its intention to
register Common Stock in such Offering.
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6. COVENANT OF THE COMPANY. The Company covenants and agrees with
Optionee that it shall at all time during the Exercise Period reserve for
issuance the Option Stock.
7. REPRESENTATIONS AND WARRANTIES OF OPTIONEE. Optionee represents and
warrants to the Company as of the date hereof and upon each exercise of the
Option as follows:
A. It is acquiring the Option and the Option Stock for itself for
the purpose of investment and not with a view to the distribution or resale
thereof.
B. It is fully informed that (i) the Option and the Option Stock are
being sold pursuant to an exemption under the Securities Act of 1933, as amended
(the "Act"), and under similar exemptions from registration under other state
securities or similar laws, and that the sale of the Option and the Option Stock
is not being registered under the Act or under any state or other securities or
similar laws; (ii) except as otherwise provided herein, the Option and the
Option Stock must be held indefinitely unless they are subsequently registered
under the Act and under any applicable state or other securities or similar laws
or unless an exemption from such registration is available under or pursuant to
the Act or any such other laws; and (iii) the Company has no obligation with
respect to registration of the Option or the Option Stock. Optionee further
understands that as a result of the foregoing restrictions, he must bear the
economic risk of holding the Option Stock for an indefinite period of time until
the Option Stock is registered under the Securities Act, or an exemption from
registration thereunder is available.
C. Optionee hereby represents and warrants that he has knowledge and
experience in financial and business matters in general and is capable of
evaluating the merits and risks of the prospective investment in the Option and
the Option Stock.
D. Optionee hereby acknowledges and confirms that he has been given
complete access to all public documents, records, contracts and books of the
Company, and that he has engaged in a complete examination of all such public
documents, records, contracts and books to the extent deemed necessary by him in
reaching the decision to obtain the Option and the Option Stock and become an
investor in the Company. Optionee hereby further acknowledges and confirms that
he has had an opportunity to ask questions of and receive answers from the
executive officers of the Company concerning the Option, the Option Stock, the
Company and its affairs and related matters and with respect to any other matter
the Optionee deemed relevant, and all such inquiries have been completed to the
Optionee's satisfaction.
E. Optionee acknowledges and understands that the Company will be
relying on the accuracy and completeness of all matters set forth in this
Paragraph 7, and the Optionee represents and warrants to the Company that the
representations, warranties, acknowledgments, covenants and agreements set forth
herein are complete, true and correct and may be relied upon by them in
determining whether the offer and sale of the Option and the Option Stock to the
Optionee is exempt from registration under the Securities Act and relevant state
securities laws.
F. Optionee further understands that the certificates evidencing the
Option Stock will bear a legend in substantially the following form:
The shares represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Act") and may not be
sold, assigned or transferred in the absence of an effective
registration statement under the Act, an opinion of counsel
satisfactory to Guardian International, Inc. that such registration is
not required, or evidence that the shares have been sold in compliance
with Rule 144 under the Act.
8. RIGHTS OF THE OPTIONEE. The grant of this Option, execution of this
Agreement or exercise of any portion of this Option shall not confer upon the
Optionee any right to, or guaranty of, a position as an employee, consultant,
advisor or director of the Company or any of its subsidiaries, or in any way
limit the right of the Company or such subsidiaries to terminate the Optionee's
position as an employee, consultant and/or director at any time.
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9. MISCELLANEOUS.
A. NOTICES. All notices, demands or other communications given
hereunder shall be in writing and shall be deemed to have been duly given only
upon hand delivery thereof or upon the first business day after mailing by
United States registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
To Company: Guardian International, Inc.
3880 N. 28th Terrace
Hollywood, Florida 33020
Telephone: (954)926-1800
Facsimile: (954)926-1822
Attention: Richard Ginsburg, President
To Optionee: Alarm Control, Inc.
6065 N.W. 167th Street, Suite B-15
Miami Lakes, Florida 33015
Telephone: (305)825-4647
Facsimile: (305)556-1025
Attention: Terry E. Akins
or to such other address or such other person as any party shall designate, in
writing, to the other for such purposes and in the manner hereinabove set forth.
Notwithstanding the foregoing, notice, requests or demands or other
communications referred to in this Agreement may be sent by facsimile, federal
express or other method of delivery, but shall be deemed to have been given only
when received.
B. AMENDMENT. The parties hereby irrevocably agree that no attempted
amendment, modification, termination, discharge or change (collectively,
"Amendment") of this Agreement shall be valid and effective, unless the parties
shall unanimously agree in writing to such Amendment.
C. NO WAIVER. No waiver of any provision of this Agreement shall be
effective unless it is in writing and signed by the party against whom it is
asserted, and any such written waiver shall only be applicable to the specific
instance to which it relates and shall not be deemed to be a continuing or
future waiver.
D. GOVERNING LAW. This Agreement shall be construed in accordance
with the laws of the State of Florida and any proceeding arising between the
parties in any manner pertaining or related to this Agreement shall, to the
extent permitted by law, be held in Broward County, Florida.
E. FURTHER ASSURANCES. The parties hereto will execute and deliver
such further instruments and do such further acts and things as may be
reasonably required to carry out the intent and purposes of this Agreement.
F. ENTIRE AGREEMENT. This Agreement sets forth all the promises,
covenants, agreements, conditions and understandings between the parties hereto,
and supersedes all prior and contemporaneous agreements, understandings,
inducements or conditions, expressed or implied, oral or written, between the
parties with respect to the matters contained herein.
G. PREVAILING PARTY. If any party hereto is required to engage in
litigation against any other party hereto, either as a plaintiff or as
defendant, in order to enforce or defend any rights under this Agreement and
such litigation results in a final judgment in favor of such party ("Prevailing
Party"), then the party or parties against whom said final judgment is obtained
shall reimburse the Prevailing Party for all direct, indirect or incidental
expenses incurred including, but not limited to all attorneys' fees, paralegals'
fees, court costs and other expenses incurred throughout all negotiations,
trials or appeals undertaken in order to enforce the Prevailing Party's rights
hereunder.
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<PAGE>
H. BINDING EFFECT; ASSIGNMENT. This Agreement shall inure to
the benefit of the Company and Optionee and be binding upon the parties hereto,
and their respective successors and permitted assigns. Neither the Option, this
Agreement, or any right or interest hereto shall be assignable in whole or in
part by Optionee, except with the Company's prior written consent, which may be
withheld in the Company's sole discretion.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year set forth above.
Witness: GUARDIAN INTERNATIONAL, INC., a Nevada corporation
/s/ Robert Norris By: /s/ Richard Ginsburg
- ---------------------- ------------------------------------------------
Robert Norris Richard Ginsburg, President
/s/ David Kahan
- ----------------------
David Kahan
ALARM CONTROL, INC., a Florida corporation
/s/ Robert Norris By: /s/ Terry E. Akins
- ---------------------- ------------------------------------------------
Robert Norris Terry E. Akins, President
/s/ David Kahan
- ----------------------
David Kahan
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