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
Date of Report (Date of earliest event reported):
December 5, 1997
THE SHERWOOD GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 1-9480 22-23394480
(State or other juris- (Commission (IRS Employer
diction of incorporation) File Number) Identification
Number)
10 Exchange Place Centre, Jersey City, New Jersey 07302
(Address of principal executive office) (Zip Code)
Registrant's telephone number including area code: (201) 946-2200
Not Applicable
(Former name and former address, as changed since last report)
<PAGE>
Item 5. Other Events
On December 5, 1997, The Sherwood Group, Inc., a Delaware corporation
(the "Company") entered into a Stock Purchase Agreement (the "Stock Purchase
Agreement") with IAT Reinsurance Syndicate Ltd., a corporation formed under the
laws of the Commonwealth of Bermuda ("IAT"), pursuant to which IAT has agreed to
acquire 1,500,000 shares (the "Shares") of common stock, par value $.01 per
share, of the Company (the "Common Stock") for a purchase price of $19,312,500
in cash (the "Purchase Price"), subject to certain conditions. The closing of
transactions contemplated by the Stock Purchase Agreement is scheduled for
January 31, 1998, or at such other mutually agreed upon date (the "Closing").
In the event of a change of control of the Company, as defined in the
Stock Purchase Agreement, the Company has the right to repurchase the Shares for
the Purchase Price plus interest at the rate of twelve percent (12%) per annum,
plus out-of-pocket expenses incurred by IAT in connection with the Stock
Purchase Agreement.
The Company has agreed in connection with the Stock Purchase Agreement
to grant registration rights with respect to the Shares, the terms and
conditions of which are to be agreed upon by the Company and IAT prior to the
Closing.
Peter R. Kellogg is the sole holder of the voting stock of IAT. As of
December 12, 1997, Mr. Kellogg beneficially owned directly and indirectly an
aggregate of 1,021,500 shares of the Company's Common Stock, constituting 8.03%
of the Common Stock outstanding. Of those shares of Common Stock, 650,000 shares
were owned by Mr. Kellogg personally, 350,000 shares were owned by IAT and
21,500 shares were owned by the Peter R. and Cynthia K. Kellogg Foundation, a
charitable entity of which Mr. Kellogg is a trustee. Upon the closing of the
transactions contemplated by the Stock Purchase Agreement, Mr. Kellogg will
beneficially own directly and indirectly an aggregrate of 2,521,500 shares of
the Company's Common Stock, or 17.7% of the Common Stock outstanding as of
December 12, 1997 and giving effect to the issuance of the Shares.
Mr. Kellogg is also a limited partner of S.G.I. Partners, L.P. ("SGI"),
which is the beneficial owner of 4,000,000 shares of the Company's Common Stock,
or 31.4% of the Common Stock outstanding as of December 12, 1997. Mr. Kellogg
disclaims any beneficial ownership of the shares of Common Stock held by SGI.
The foregoing summary does not purport to be complete and is qualified
in its entirety by reference to the full text of the Stock Purchase Agreement, a
copy of which is attached hereto as Exhibit 10 and is incorporated herein by
reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit No. Description
10 Stock Purchase Agreement between The Sherwood
Group, Inc. and IAT Reinsurance Syndicate Ltd.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
THE SHERWOOD GROUP, INC.
Dated: December 15, 1997 By: /s/ Arthur Kontos
------------------------
Name: Arthur Kontos
Title: Chief Executive Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
10 Stock Purchase Agreement between The Sherwood
Group, Inc. and IAT Reinsurance Syndicate Ltd.
<PAGE>
Exhibit 10.25
STOCK PURCHASE AGREEMENT
Dated as of December 5, 1997
between
THE SHERWOOD GROUP, INC.
and
IAT REINSURANCE SYNDICATE LTD.
12/5/97
<PAGE>
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT dated as of December 5, 1997 (the
"Agreement") by and between THE SHERWOOD GROUP, INC., a Delaware corporation,
having its principal office at 10 Exchange Place Centre, Jersey City, New Jersey
07302 ("Seller"), and IAT REINSURANCE SYNDICATE LTD., a corporation formed under
the laws of the Commonwealth of Bermuda with offices at Cedar House, 41 Cedar
Avenue, Hamilton, Bermuda ("Buyer").
RECITALS:
A. Buyer wishes to acquire 1,500,000 shares of the common stock, par
value $.01 per share, of the Seller (the "Shares").
B. Seller desires to issue to Buyer, the Shares, upon the terms and
subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties, covenants, agreements and conditions hereinafter
set forth, the parties hereto, intending to be legally bound, agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions. (a) As used in this Agreement, the terms
defined in the Preamble and the Recitals hereto shall have the respective
meanings ascribed thereto, and the following terms shall have the meanings set
forth below (such definitions to be applicable equally to the singular and
plural forms thereof):
"Change of Control": shall be deemed to have occurred if the board of
directors of Seller approves and Seller executes and delivers a definitive
agreement with a Person (i) to merge into or, consolidate with, or engage in a
similar transaction with such Person where, as a result of such merger,
consolidation, or similar transaction, the stockholders of Seller will own less
than 50% of the outstanding shares of the survivor after such merger,
consolidation or similar transaction or (ii) to sell all or substantially all
Seller's assets to a Person or (iii) the stockholders of Seller approve a plan
of complete liquidation of Seller.
"Closing": as defined in Section 7.1.
"Closing Date": as defined in Section 7.1.
"Closing Documents": collectively, this Agreement and all other
documents and instruments to be executed and delivered by Seller pursuant
hereto, including the Registration Rights Agreement.
"GAAP": generally accepted United States accounting principles.
"Governmental Authority": any nation or government, any state or other
political subdivision thereof, any regulatory agency or body and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"HSR": Hart Scott Rodino Antitrust Improvement Act of 1976, as
amended, and the rules and regulations issued thereunder.
"Laws": all federal, state, local and foreign laws, ordinances, orders,
rules and regulations (including, without limitation, those relating to
discrimination in employment, occupational safety and health, trade practices,
competition and pricing, product warranties, zoning, building and sanitation,
toxic and chemical substances, employment, retirement and labor relations,
product advertising and pollution, discharge, disposal and emission of wastes,
materials and gases into the environment.
"Person" means an individual, a partnership, a corporation, an
association, a joint stock company, a trust, a joint venture, an unincorporated
organization, or a governmental entity (or any department, agency, or political
subdivision thereof).
"Registration Rights Agreement" means the Registration Rights Agreement
between Seller and Buyer dated the date of this Agreement respecting the
registration of the Shares under the Securities Act.
"Securities Act": the Securities Act of 1933, as amended, and any rules
and regulations promulgated thereunder and any successor federal statute, rules
or regulations.
"Securities Exchange Act": Securities Exchange Act of 1934, as amended,
and any rules and regulations promulgated thereunder and any successor federal
statutes, rules or regulations.
"SEC": United States Securities and Exchange Commission.
"Seller Reports": as defined in Section 3.6.
"Subsidiary" means any corporation with respect to which a specified
Person (or a Subsidiary thereof) owns a majority of the common stock or has the
power to vote or direct the voting of sufficient securities to elect a majority
of the directors.
(b) Knowledge. To the extent that any representation, warranty or other
provision in the Agreement is, by its terms, based upon or limited by the
"knowledge" of Seller, that term signifies that no information has come to the
attention of Seller or any of the president, executive vice president, senior
vice president or vice president of Seller that would give such party actual
knowledge or actual notice that such representation or warranty or the subject
matter of such provision is not true, accurate or complete.
ARTICLE II
ISSUANCE AND PURCHASE OF SHARES
Section 2.1. Sale and Purchase of Shares. Seller hereby agrees to issue
to Buyer, and Buyer hereby agrees to purchase and accept from Seller, the Shares
upon the terms, conditions, representations, warranties, covenants and
agreements set forth herein.
Section 2.2. Purchase Price. The purchase price for the Shares is
$19,312,500 (the "Purchase Price") payable to Seller in immediately available
funds by wire transfer on the date this Agreement is executed by Seller and
Buyer. Seller will return the Purchase Price to Buyer if the Closing does not
occur prior to the termination of this Agreement.
Section 2.3 Use of Proceeds. Pending the Closing, Seller may utilize
the funds representing the Purchase Price for investment in its subsidiaries.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represent and warrant to Buyer as follows:
Section 3.1. Capitalization of Seller. The authorized capital stock of
Seller consists of 51,000,000 shares, 1,000,000 of which are preferred stock,
par value $.01 per share, none of which are outstanding, 50,000,000 shares of
common stock, $.01 par value per share, of which 12,724,624 shares are issued
and currently outstanding as of the date hereof and 845,898 of which are
reserved at the date hereof for issuance for options granted or to be granted
under The Sherwood Group, Inc. 1995 Stock Option Plan, as amended and 1,618,577
of which at the date hereof are held as treasury stock. All of the Shares when
issued and paid for as provided in this Agreement will be fully paid and
nonassessable.
Section 3.2. Organization; Corporate Name. Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Delaware.
Section 3.3. Authority. No further corporate act or proceeding on the
part of Seller is necessary to authorize this Agreement or the other Closing
Documents or the consummation of the transactions contemplated hereby and
thereby. This Agreement constitutes and, when executed and delivered, the other
Closing Documents will constitute, valid and binding agreements of Seller
enforceable against Seller in accordance with their respective terms, except as
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally, and by general equitable principles
affecting the availability of equitable relief.
Section 3.4. No Violation. Neither the execution and delivery of this
Agreement or the other Closing Documents, nor the consummation by Seller of the
transactions contemplated hereby and thereby (i) will violate any statute, law,
rule, regulation, order, writ, injunction or decree of any court or Governmental
Authority applicable to Seller or any Subsidiary, (ii) will require any
authorization, consent, approval, exemption or other action by, or filing with
or notice to, any court or Governmental Authority or any other Person, other
than the filings with and approvals disclosed in Schedule 3.4, or (iii) will
violate or conflict with, or constitute a default (or an event which, with
notice or lapse of time, or both, would constitute a default) under, or will
result in the termination of, or accelerate the performance required by, or
result in the creation of any lien, security interest, charge or encumbrance
upon any of the assets material to the business, assets or financial condition
of Seller, under any term or provision of (a) the Restated Certificate of
Incorporation, as amended, or By-laws of Seller, or (b) any material contract,
commitment, understanding, arrangement, agreement or restriction of any kind or
character to which Seller or any Subsidiary is a party, or by which Seller or
any Subsidiary, or any of their respective assets or properties may be bound.
Section 3.5. Brokers or Finders. Neither Seller, nor any person acting
on its behalf has employed any broker or finder or consultant, or has incurred
any obligation or liability for any brokerage fees, commissions, finders' fees
or consultants' fees in connection with the transactions contemplated by this
Agreement, and no Person has or will have any right, interest or valid claim
against or upon Buyer, for any such fee or commission.
Section 3.6. SEC Reports; Financial Statements. Seller has filed all
reports, registration statements and filings, together with any amendments
required to be made thereto, required to be filed with the SEC under the
Securities Exchange Act since January 1, 1993, including, but not limited to,
Form 10-K, Form 10-Q and proxy statements, and will so file all such reports,
statements and filings required after the date hereof (collectively, the "Seller
Reports"). Included or to be included in the Seller Reports are the consolidated
financial statements of Seller, which consist of the audited consolidated
statement of condition at May 31, 1997, and the related consolidated statement
of income and retained earnings and changes in financial position for the fiscal
year then ended. Seller financial statements fairly presented, and the financial
statements contained in the Seller Reports filed after the date hereof will
fairly present, the financial position of Seller and its Subsidiaries (on a
consolidated basis) as at the dates thereof and the results of operations and
changes in financial position for the periods then ended in conformity with GAAP
applied on a consistent basis (subject to any exceptions as to consistency
specified in the financial statements, and, in the case of the interim financial
statements, to normal recurring year-end adjustments). As of their respective
dates, the Seller Reports referred to herein complied, or will comply, as the
case may be, in all material respects with all rules and regulations promulgated
by the SEC and did not, or will not, as the case may be, contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. Since May 31,
1997, neither Seller nor any of its Subsidiaries has suffered any change in its
condition (financial or otherwise), properties, assets, liabilities, prospects,
business or operations which have been, in any case or in the aggregate,
materially adverse to Seller and its Subsidiaries taken as a whole.
Section 3.7. Disclosure. No representation or warranty of Seller
contained in this Agreement or fact disclosed in the Schedules of Seller hereto
contains any untrue statement or omits to state a material fact necessary in
order to make the statements herein or therein, in light of the circumstances
under which they were made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
Section 4.1. Status. Buyer is a corporation, duly organized, validly
existing and in good standing under the laws of the Commonwealth of Bermuda and
is an "accredited investor" as defined in Rule 501 of Regulation D of the
Securities Act.
Section 4.2. Validity. This Agreement and the Registration Rights
Agreement constitute the valid, legal and binding agreements of Buyer,
enforceable against Buyer in accordance with their respective terms, except as
such may be limited by bankruptcy, insolvency, reorganization, moratorium or
other laws affecting creditors' rights generally, and by general equitable
principles affecting the availability of equitable relief. No further corporate
act or proceeding on the part of Buyer is necessary to authorize this Agreement
and the Registration Rights Agreement or the consummation of the transaction
contemplated thereunder by Buyer.
Section 4.3. No Violation. Neither the execution and delivery of this
Agreement and the Registration Rights Agreement, nor the consummation by Buyer
of the transactions contemplated hereby and thereby (i) will violate any
statute, law, rule, regulation, order, writ, injunction or decree of any court
or Governmental Authority applicable to Buyer or any Subsidiary or Peter R.
Kellogg, (ii) will require any authorization, consent, approval, exemption or
other action by, or filing with or notice to, any court or Governmental
Authority or any other Person, other than the filings with and approvals
disclosed in Schedule 4.3, or (iii) will violate or conflict with, or constitute
a default (or an event which, with notice or lapse of time, or both, would
constitute a default) under, or will result in the termination of, or accelerate
the performance required by, or result in the creation of any lien, security
interest, charge or encumbrance upon any of the assets material to the business,
assets or financial condition of Buyer, under any term or provision of (a) the
basic corporate documents of Buyer, or (b) any material contract, commitment,
understanding, arrangement, agreement or restriction of any kind or character to
which Seller, or any Subsidiary, or Peter R. Kellogg is a party, or by which
Buyer or any Subsidiary or Peter R. Kellogg, or any of their respective assets
or properties may be bound.
Section 4.4. Governmental Filings. Except as provided in Schedule 4.3.,
no notices, reports or other filings are required to be made by Buyer with, nor
are any consents, registrations, approvals, permits or authorizations required
to be obtained by Buyer from, any Governmental Authorities of the Commonwealth
of Bermuda, the several states of the United States or any foreign jurisdictions
or any other Person in connection with the execution and delivery of this
Agreement by Buyer and the consummation by Buyer of the transactions
contemplated hereby.
Section 4.5. Brokers and Finders. Except as set forth in Schedule 4.4,
neither Buyer nor any person acting on its behalf has employed any broker,
finder or consultant, or incurred any obligation or liability for any brokerage
fees, commissions, or finders' fees or consultants' fees in connection with the
transactions contemplated by this Agreement, and in any event no Person has or
will have any right, interest or valid claim against or upon Seller for any such
fee or commission.
Section 4.6. Ownership of Shares. Inclusive of 1,021,500 shares of
Common Stock of Seller owned by Peter R. Kellogg and the Shares, Peter R.
Kellogg will not be deemed to be beneficially own more than 2,521,500 shares of
Common Stock of Seller upon consummation of the Closing. All the voting
securities of Buyer are beneficially owned by Peter R. Kellogg. For purposes of
this Agreement, the term beneficially own or beneficially owned shall have the
meaning given such term in Rule 13d-3 of the rules and regulations of the SEC
under the Securities Exchange Act.
Section 4.7. Investment Intent.
(i) Buyer is able to bear the economic risk of
an investment in the Shares, including the
loss of the entire investment.
(ii) Buyer has prior substantial investment
experience, including investments in
non-registered securities.
(iii) Buyer is fully familiar with the affairs of
Seller.
(iv) Buyer has been afforded the opportunity to
ask questions of, and receive answers from,
directors and executive officers of Seller
concerning Seller, the terms and conditions
of the offering of the Shares and any
additional information requested by Buyer.
Buyer has been furnished with all
information and all documents which Buyer
has requested.
(v) Neither the offer nor the sale of the
Shares is being registered under the
Securities Act or the securities laws of
any state. The Shares are being offered
and sold in reliance on exemptions from
registration under the Securities Act
and the various state securities laws for
transactions not involving any public
offering. Accordingly, none of the Shares
can be sold, pledged, hypothecated or
otherwise transferred (each individually
a "Transfer") by Buyer unless and until
each is registered under the Securities
Act and the securities laws of each
applicable state or an exemption from
registration pursuant to the Securities
Act and such laws is available to Buyer.
(vi) Seller is relying on exemptions from the
various federal and state securities laws
which depend, in part, upon Buyer's
investment intent and upon the information
Buyer has set forth in this Agreement. This
Agreement is delivered to Seller by Buyer
with the understanding and intent that
Seller will rely on the representations and
warranties of Buyer contained in this
Agreement and with Buyer's consent to such
reliance.
(vii) The Shares are being purchased by Buyer
for its own account for investment and
not for distribution or resale or
fractionalization thereof or reselling
thereof or any part thereof within the
meaning of the Securities Act other than
in compliance therewith or in
accordance with an exemption therefrom.
Buyer will not Transfer any of the Shares
unless they are registered under the
Securities Act and the securities laws of
each applicable state or unless an
exemption from each such registration is
available for such Transfer, and such
Transfer will not violate the terms of this
Agreement or the Shares. Buyer has adequate
means of providing for its current needs and
possible business contingencies and has no
need for liquidity of this investment in the
Shares.
(viii) Buyer specifically represents with respect
to the offer and sale of the Shares to it
that it has not received any advertisement,
article, notice or other communication
published in a newspaper, magazine, or
similar media or broadcast over television
or radio, nor has Buyer attended any seminar
or meeting to which Buyer has been invited
by any general solicitation or general
advertising representing such offer or sale.
(ix) Buyer understands that the offer and sale
of the Shares has not been registered under
the Securities Act, nor pursuant to the
provisions of the securities or other
laws of any other applicable
jurisdictions, in reliance upon the
exemption for private offerings contained
in Section 4(2) of the Securities Act and
the laws of such jurisdictions. Buyer is
fully aware that the Shares, sold to Buyer
are being sold in reliance upon such
exemptions based upon Buyer's
representations, warranties and agreements.
Buyer is fully aware of the restrictions on
sale, transferability and assignment of the
Shares, and that Buyer must bear the
economic risk of an investment herein for
an indefinite period of time because the
offer and sale of the Shares has not been
registered under the Securities Act and,
therefore, the Shares cannot be offered or
sold unless the Shares are subsequently
registered under the Securities Act or an
exemption from such registration is
available.
(x) Buyer is making the investment hereunder for
Buyer's own account and not for the account
of others and for investment purposes only
and not with a view to or for the transfer,
assignment, resale or distribution thereof,
in whole or in part. Buyer has no present
plans to enter into any such contract,
undertaking, agreement or arrangement.
(xi) The representations and warranties in this
Section of this Agreement shall survive the
Closing Date.
(xii) The address set forth in Section 10.7 for
Buyer is Buyer's true and correct residence,
and Buyer has no present intention of
becoming a resident of any other country,
state or jurisdiction prior to its purchase
of the Shares.
(xiii) Buyer acknowledges that Seller and its
officers and agents have made no
representations or warranties, whether
orally or in writing, or express or implied,
as to the financial condition, assets,
operations, business, prospects or condition
of Seller other than as set forth in this
Agreement and the Seller Reports.
(xiv) Buyer understands the meaning and legal
consequences of the foregoing
representations and warranties, which are
true and correct as of the date hereof and
will be true and correct as of the date of
Buyer's purchase of the Shares purchased
hereby. Each such representation and
warranty shall survive such purchase.
(xv) Each of the certificates representing the
Shares shall bear substantially the
following legend:
"THE SHARES EVIDENCED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED, AND
HAVE BEEN ACQUIRED BY THE PURCHASER FOR
INVESTMENT PURPOSES. SAID SHARES MAY NOT BE
SOLD OR TRANSFERRED UNLESS (A) THEY HAVE
BEEN REGISTERED UNDER SAID ACT, OR (B) THE
TRANSFER AGENT (OR THE COMPANY IF THEN
ACTING AS ITS TRANSFER AGENT) IS PRESENTED
WITH EITHER A WRITTEN OPINION SATISFACTORY
TO COUNSEL FOR THE COMPANY OR A "NO-ACTION'
OR INTERPRETIVE LETTER FROM THE SECURITIES
AND EXCHANGE COMMISSION TO THE EFFECT THAT
SUCH REGISTRATION IS NOT REQUIRED UNDER THE
CIRCUMSTANCES OF SUCH SALE OR TRANSFER."
Section 4.8. Disclosure. No representation or warranty of Buyer
contained in this Agreement or fact disclosed in the Schedules of Buyer hereto
contains any untrue statement or omits to state a material fact necessary in
order to make the statements herein or therein, in light of the circumstances
under which they were made, not misleading.
ARTICLE V
CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS
The obligations of Buyer hereunder are subject to the satisfaction or
fulfillment, at or prior to the Closing Date, of each of the following
conditions, any or all of which may be waived in whole or in part by Buyer:
Section 5.1. Representations and Warranties True on the Closing Date.
The representations and warranties of Seller set forth in Article III of this
Agreement, and the statements contained in the Schedules of Seller hereto or in
any other Closing Document delivered by Seller pursuant to this Agreement, shall
be true and correct in all material respects when made and as of the Closing
Date as though made or given on and as of the Closing Date, except for any
changes contemplated or permitted by the terms of this Agreement or otherwise
consented to in writing by Buyer.
Section 5.2. Compliance With Agreement. Seller shall have performed and
complied in all material respects with each obligation and covenant required to
be performed or complied with by Seller at or prior to the Closing Date pursuant
to the terms of this Agreement, including delivery of the Closing Documents
specified in Section 7.2, which shall be in form and substance satisfactory to
Buyer's counsel.
Section 5.3. Absence of Suit. No action, suit or proceeding before any
court or any Governmental Authority shall have been commenced or threatened, and
no investigation by any Governmental Authority shall have been commenced,
against Buyer, Seller, or any of their respective affiliates, (i) seeking to
restrain, prohibit or enjoin the consummation of the transactions contemplated
hereby or to change any of the terms thereof, (ii) questioning the validity,
legality or enforceability of any such transactions, or (iii) seeking damages in
connection with any such transactions.
Section 5.4. Consents and Approvals. All filings required to be made
prior to the Closing Date by Seller with, and all material consents, approvals,
waivers and authorizations required to be obtained prior to the Closing Date by
Seller and/or Seller's Subsidiaries from, Governmental Authorities or other
Persons in connection with the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby by Buyer or Seller,
including without limitation, the approval of any regulatory body shall have
been made or obtained (as the case may be).
Section 5.5. Actions Satisfactory. The form and substance of all
actions, proceedings, instruments and documents required to consummate the
transactions contemplated by the Agreement shall be satisfactory in all
reasonable respects to Buyer and its counsel.
Section 5.6. HSR Act. Any waiting period applicable to the consummation
of the sale of the Shares to Buyer under the HSR Act shall have expired or been
terminated.
Section 5.7. Registration Rights Agreement. Seller shall have executed
and delivered to Buyer the Registration Rights Agreement.
ARTICLE VI
CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS
The obligations of Seller hereunder are subject to the satisfaction or
fulfillment, at or prior to the Closing Date, of the following conditions:
Section 6.1. Representations and Warranties True on the Closing Date.
The representations and warranties of Buyer set forth in Article IV of this
Agreement shall be true and correct in all material respects when made and as of
the Closing Date as though made or given on and as of the Closing Date.
Section 6.2. Compliance With Agreement. Buyer shall have performed and
complied in all material respects with each agreement and obligation required to
be performed or complied with by it at or prior to the Closing Date pursuant to
the terms of this Agreement, including the delivery of the Closing Documents
specified in Section 7.3, which shall be in form and substance satisfactory to
Seller's counsel.
Section 6.3. Absence of Suit. No action, suit or proceeding before any
court or any Governmental Authority shall have been commenced or threatened, and
no investigation by any Governmental Authority shall have been commenced,
against Buyer or Seller or any of their respective affiliates, (i) seeking to
restrain, prohibit or enjoin the consummation of the transactions contemplated
hereby or to change any of the terms thereof, (ii) questioning the validity,
legality or enforceability of any such transactions, or (iii) seeking damages in
connection with any such transactions.
Section 6.4. Consents and Approvals. All filings required to be made
prior to the Closing Date by Buyer with, and all material consents, approvals,
waivers and authorizations required to be obtained prior to the Closing Date by
Buyer from, Governmental Authorities or any other Person in connection with the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by Buyer or Seller shall have been made or
obtained (as the case may be).
Section 6.5. Actions Satisfactory. The form and substance of all
actions, proceedings, instruments and documents required to consummate the
transactions contemplated by this Agreement shall be satisfactory in all
reasonable respects to Seller and his counsel.
Section 6.6. HSR Act. Any waiting period applicable to the consummation
of the sale of the Shares to Buyer under the HSR Act shall have expired or been
terminated.
ARTICLE VII
CLOSING
Section 7.1. Closing Date. The closing of the acquisition of the Shares
and the consummation of the transactions contemplated by the Agreement (the
"Closing") shall take place at the offices of Crummy, Del Deo, Dolan, Griffinger
& Vecchione, One Riverfront Plaza, Newark, New Jersey, at 10:00 a.m. on January
31, 1998 or at such other time and place as may be mutually agreed upon by the
parties (the "Closing Date"). All proceedings to take place on the Closing Date
shall be deemed to take place simultaneously and no delivery shall be deemed to
have been made until all such proceedings have been completed.
Section 7.2. Documents to be Delivered by Seller. At the Closing,
Seller shall deliver to Buyer the following documents:
(a) Stock Certificates. Certificates representing the
Shares registered in the name of Buyer.
(b) Compliance Certificate. A certificate signed by Seller to
the effect that the representations and warranties of Seller set forth in
Article III of this Agreement are true and correct in all material respects on
and as of the Closing Date with the same effect as though made or given on and
as of the Closing Date (except for changes contemplated or permitted by the
terms of this Agreement or consented to in writing by Buyer), and that Seller
have performed and complied in all material respects with each obligation and
covenant required to be performed or complied with by Seller on or prior to the
Closing Date.
(c) Good Standing Certificates. A good standing certificate of
current date of Seller, from the Secretary of State of the State of Delaware.
(d) Secretary's Certificates. Certificate, dated the Closing
Date, executed by the Secretary of Seller, which shall identify by name and
title and bear the signature of each officer thereof authorized to execute any
Closing Document to be executed and delivered on behalf of Seller, pursuant to
the terms of this Agreement and shall have attached to it as exhibits (i) a copy
of the By-laws, as amended, of the Seller, and (ii) a copy of the Certificate of
Incorporation, as amended, of the Seller certified by the Secretary of State of
the state of its formation as of a recent date.
(e) Opinion of Counsel. The opinion of Crummy, Del Deo, Dolan,
Griffinger & Vecchione, P.C., counsel to Seller, addressed to Buyer dated the
Closing Date, in form reasonably satisfactory to Buyer and its counsel.
(f) Other Documents. All other documents, instruments or
writings required to be delivered to Buyer at or prior to the Closing pursuant
to the terms of this Agreement, including the Registration Rights Agreement have
been executed and delivered by Seller.
Section 7.3. Documents to be Delivered by Buyer. At the Closing, Buyer
shall deliver to Seller the following documents:
(a) Compliance Certificate. A certificate signed by Buyer to
the effect that the representations and warranties of Buyer set forth in Article
IV of this Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as though made or given on and as of the
Closing Date (except for changes contemplated or permitted by the terms of this
Agreement or consented to in writing by Seller), and that Buyer has performed
and complied in all material respects with each obligation and covenant required
to be performed or complied with by Buyer on or prior to the Closing Date.
(b) Good Standing Certificate. A copy of the basic corporate
documents of Buyer certified by the appropriate governmental authority of the
Commonwealth of Bermuda as of a recent date.
(c) Opinion of Counsel. The opinion of counsel to Buyer
addressed to Seller, dated the Closing Date, in form reasonably satisfactory to
Seller and its counsel.
(d) Other Documents. All other documents, instruments or
writings required to be delivered to Seller at or prior to the Closing Date
pursuant to this Agreement.
ARTICLE VIII
TERMINATION AND ABANDONMENT
Section 8.1. Termination by Mutual Consent. This Agreement may be
terminated at any time prior to the Closing Date by the mutual written consent
of Buyer and Seller.
Section 8.2. Termination by Buyer or Seller. This Agreement may be
terminated at any time prior to the Closing Date by Buyer or Seller (i) if the
Closing has not occurred on or before January 31, 1998, unless the party seeking
to invoke this subclause (i) is then in material breach of any of its
obligations hereunder; (ii) if a court of competent jurisdiction or any
Governmental Authority shall have issued an order, decree or ruling or taken any
other action, in each case permanently restraining, enjoining or otherwise
prohibiting the transactions contemplated by this Agreement, and such order,
decree, ruling or other action shall have become final and nonappealable, or
(iii) if the other party shall have breached or failed to comply in all material
respects with its representations, warranties, covenants and agreements
contained in this Agreement; provided, however, that if such breach or failure
is reasonably capable of being cured on or before January 31, 1998 and such
party commences such cure as soon as practicable and diligently prosecutes
(subject to any other limitations of this Agreement) such cure, such party shall
be entitled to postpone the Closing Date for a period reasonably sufficient to
effect such cure to the reasonable satisfaction of the party asserting such
breach or failure, but in no event beyond January 31, 1998.
Section 8.3. Effect of Termination. In the event of termination of this
Agreement pursuant to this Article VIII, no party hereto (or, in the case of
Seller, any of its directors or officers) shall have any liability or further
obligation to any other party to this Agreement, provided that, if this
Agreement is so terminated by a party because one or more of the conditions to
such party's obligations hereunder is not satisfied as a result of the other
party's willful failure to comply with its obligations under this Agreement, the
terminating party's right to pursue all legal remedies for breach of contract or
otherwise, including, without limitation, damages relating thereto, shall also
survive such termination unimpaired. If this Agreement is terminated without a
Closing, Seller will return the Purchase Price received by Seller to Buyer upon
the date of such termination.
ARTICLE IX
REPURCHASE RIGHT
In the event a Change of Control occurs within sixty (60) days after a
Closing, Seller shall have the right upon ten (10) days notice to Buyer after a
Change of Control to repurchase the Shares for the Purchase Price plus interest
at the rate of twelve per cent (12%) per annum on the Purchase Price from the
date of payment by Buyer to Seller to the date the Purchase Price is returned to
Buyer plus the out-of-pocket expenses of Buyer incurred in connection with this
Agreement. Buyer shall tender certificates representing the Shares duly endorsed
for transfer to Seller or its designee upon payment of the above amount to
Buyer.
ARTICLE X
MISCELLANEOUS AND GENERAL
Section 10.1. Schedules. The Schedules referenced in this Agreement
constitute an integral part hereof. Information set forth in the Schedules
specifically references the article or section of this Agreement to which such
information relates and shall not be deemed to have been disclosed with respect
to any other article or section of this Agreement or for any other purpose.
Section 10.2. Further Assurances. Seller and Buyer hereby agree to
execute and deliver such other documents and instruments, and take such other
actions, as may be necessary or desirable in order to consummate and implement
the transactions contemplated by this Agreement.
Section 10.3. Parties-in-Interest; Assignment. This Agreement shall be
binding upon, inure to the benefit of, and be enforceable by the parties hereto
and their respective successors and assigns. Buyer may not assign its rights and
obligations under this Agreement to any third party without the consent of
Seller.
Section 10.4. Governing Law. The validity, interpretation,
enforceability and performance of this Agreement shall be governed by and
construed in accordance with the laws of the State of New Jersey.
Section 10.5. Amendment and Modification. The parties may amend,
modify and supplement this Agreement only by a writing signed by all parties.
Section 10.6. Waiver of Conditions. The conditions to the respective
obligations of Buyer and Seller to consummate the transactions contemplated
hereby are for the sole benefit of such party and may be waived by such party in
whole or in part.
Section 10.7. Notices. All notices, requests, demands and other
communications hereunder shall be in writing and delivered personally or sent by
express overnight or certified mail, postage prepaid, or by facsimile
transaction:
if to Buyer: IAT Reinsurance Syndicate Ltd.
41 Cedar Avenue
Cedar House,
Hamilton, Bermuda
Facsimile: 441-292-8666
If to Buyer at PO Box:
IAT Reinsurance Syndicate Ltd.
PO Box 1179
Hamilton HMEX, Bermuda
with a copy to:
Peter R. Kellogg
120 Broadway
New York, New York 10271
Facsimile: (212) 433-7294
if to Seller: The Sherwood Group, Inc.
10 Exchange Place Centre
15th Floor
Jersey City, NJ 07302-3913
Facsimile: (973) 946-4510
with a copy to:
Crummy, Del Deo, Dolan, Griffinger & Vecchione
A Professional Corporation
One Riverfront Plaza
Newark, New Jersey 07102-5497
Attention: Frank E. Lawatsch, Jr. Esq.
Facsimile: (973) 639-6249
or to such other persons or addresses as may be designated in writing by the
party to receive such notice.
Section 10.8. Publicity. Prior to the Closing Date, neither Buyer nor
Seller shall issue or make, or cause to be issued or made, any announcement or
written statement for dissemination to the public concerning this Agreement or
the transactions contemplated hereby without the prior written consent of the
other, except such as may be required to be made by law or by regulation of any
Governmental Authority, and then only, to the extent practicable, after prior
consultation by the party required to make such announcement or statement with
the other parties hereto concerning the timing and content of such announcement
or other statement. Both parties hereto acknowledge that Seller will issue a
press release and, if it so determines, make a filing with the SEC respecting
this Agreement and the Registration Rights Agreement.
Section 10.9. Transfer Taxes. Any excise, transfer or other similar tax
imposed with respect to the transactions provided for in this Agreement, and any
interest or penalties-related thereto, shall be paid by Buyer; and Buyer shall
indemnify and hold Seller harmless from and against any such tax, interest or
penalty that may be assessed against Seller.
Section 10.10. Expenses. Whether or not the transactions contemplated
hereby are consummated, each of the parties shall bear its own expenses
(including, without limitation, the expenses of its brokers, accountants,
counsel and other agents) in connection with the transactions contemplated
hereby, except as is otherwise provided for in this Agreement or as may
otherwise be agreed to in writing by the parties.
Section 10.11. Entire Agreement. This Agreement (including the
Schedules thereto), constitutes the entire agreement between the parties hereto
with respect to the transactions contemplated hereby, and there have been and
are no agreements, representations or warranties between the parties other than
those set forth or provided for herein or therein.
Section 10.12. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
Section 10.13. Captions. The article, section and paragraph captions
herein are for convenience of reference only, do not constitute a part of this
Agreement, and shall not be deemed to limit or otherwise affect any of the
provisions hereof.
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
THE SHERWOOD GROUP, INC.
By: /s/ Arthur Kontos
Name: Arthur Kontos
Title: President and Chief
Executive Officer
IAT REINSURANCE SYNDICATE LTD.
/s/ Peter Kellogg
Name: Peter R. Kellogg
Title: President
