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EXHIBIT 9
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STOCK PURCHASE AGREEMENT
SEPTEMBER 12, 2000
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STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of September 12, 2000, by and among the parties listed on Schedule A
(each a "Seller" and collectively, the "Sellers") and Reliance Security Group
plc, a company organized under the laws of England and Wales (the "Purchaser").
WITNESSETH
WHEREAS, the Sellers Beneficially Own (as hereinafter defined) the
number of shares of Common Stock, $.0001 par value (the "Common Stock") and
Series A Preferred Stock, $.0001 par value (the "Preferred Stock"), of Command
Security Corporation, a New York Corporation (the "Company"), set forth
opposite each Seller's name on Schedule A annexed hereto (the "Shares");
WHEREAS, certain of the Sellers Beneficially Own the number of
warrants to purchase shares of Common Stock of the Company set forth opposite
that Seller's name on Schedule A annexed hereto (the "Warrants");
WHEREAS, the Sellers, individually and not as a group, desire to sell
and transfer, and the Purchaser desires to purchase and acquire from Sellers,
all right, title and interest in and to the Shares and Warrants (the
"Acquisition");
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises, representations, warranties, and covenants hereinafter set
forth and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. AGREEMENT TO SELL AND PURCHASE.
1.1 SALE AND PURCHASE. Subject to the terms and conditions
hereof, at the Closing (as hereinafter defined) the Sellers, individually and
not jointly, shall convey, sell, transfer, assign and deliver to the Purchaser,
and Purchaser shall purchase and accept from the Sellers, all of the Shares of
Common Stock and Preferred Stock Beneficially Owned by the Sellers (the
"Transaction Shares") and Warrants, which shall not be less than 770,414 Shares
of Common Stock and 9,877.07 Shares of Preferred Stock, and 300,000 Warrants;
provided all Shares owned of record by the Sellers and their affiliates and the
plaintiffs in the action entitled Rosan et al. x. Xxxxxxx, New York State
Supreme Court, County of New York, Index No. 606166/97 (the "Litigation") shall
be sold to the Purchaser.
1.2 PURCHASE PRICE AND ALLOCATION. The purchase price (i) per
Transaction Share of Common Stock shall be $2.20, (ii) per Transaction Share of
Preferred Stock shall be $2.20 multiplied by the number of shares of Common
Stock issuable upon conversion of such Share of Preferred Stock, and (iii) per
Warrant shall be $2.20 per share of Common Stock issuable upon exercise of each
Warrant (each a "Warrant Share") less the exercise price per Warrant Share of
each Warrant. The aggregate purchase price for the Shares and Warrants shall be
$5,976,888.30
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(assuming discretionary authority is not withdrawn over any Shares), allocated
among the Sellers in accordance with the allocation set forth on Schedule A
annexed hereto (the "Purchase Price Allocation") and shall be paid in
immediately available funds.
2. CLOSING.
The closing of the sale and purchase of the Transaction
Shares and Warrants under this Agreement (the "Closing") shall take place as
soon as practicable after the satisfaction of the conditions set forth in
Section 5. The Closing shall take place at the offices of Rosenman & Colin LLP,
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000. The date and time of the Closing
is hereinafter referred to as the "Closing Date").
3. REPRESENTATIONS AND WARRANTIES OF THE SELLERS.
In order to induce the Purchaser to enter into this Agreement
and to perform its obligations hereunder, each Seller, as to himself or to
itself only, makes the following representations and warranties to the
Purchaser.
3.1 OWNERSHIP OF SHARES.On the date hereof, the Seller is the
record holder of or Beneficially Owns (as hereinafter defined) the Shares and
Warrants. The Seller has power of disposition, power of conversion and power to
agree to all of the matters set forth in this Agreement, in each case with
respect to all of the Shares, with no limitations, qualifications or
restrictions on such rights, subject to revocation and termination rights under
state law, applicable state and federal securities laws, and the terms and
conditions of discretionary agreements to which the Sellers may be subject and
the terms of this Agreement. With respect to Shares over which discretionary
authority has been granted to Sellers, such Shares are Beneficially Owned or
owned of record by Persons (as hereinafter defined) with whom a Seller has had
a pre-existing relationship.
On the Closing Date, the Seller will be the record holder of or will
Beneficially Own (as hereinafter defined) the Transaction Shares and Warrants.
The Seller will have power of disposition, power of conversion and power to
agree to all of the matters set forth in this Agreement, in each case with
respect to all of the Transaction Shares, with no limitations, qualifications
or restrictions on such rights, subject to revocation and termination rights
under state law, applicable state and federal securities laws, and the terms
and conditions of discretionary agreements to which the Sellers may be subject
and the terms of this Agreement.
For purposes of this Agreement, "Beneficially Own"
"Beneficial Ownership" with respect to any securities shall mean having
"beneficial ownership" of such securities (as determined pursuant to Rule 13d-3
under the Securities Exchange Act of 1934, as amended (the "Exchange Act")),
including pursuant to any agreement, arrangement or understanding, whether or
not in writing. Without duplicative counting of the same securities by the same
holder, securities Beneficially Owned by a Person (as defined below) shall
include securities Beneficially Owned by all other Persons with whom such
Person would constitute a "group" within the meaning of Section 13(d)(3) of the
Exchange Act. No representation or warranty is
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made hereby that the Sellers constitute a "group" as within the meaning of
Section 13(d)(3) of the Exchange Act.
"Person" shall mean an individual, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization or other entity.
3.2 POWER; BINDING AGREEMENT. The Seller has the legal
capacity, power and authority to enter into and perform all of the Seller's
obligations under this Agreement. The execution, delivery and performance of
this Agreement by the Seller will not violate any other Agreement to which
Seller may be a party, but is subject to any outstanding discretionary
agreement to which such Seller may be party, including the right of the record
owner of the Shares to withdraw such discretion at any time. This Agreement has
been duly and validly executed and delivered by the Seller and constitutes a
valid and binding agreement of the Seller, enforceable against the Seller in
accordance with its terms except that such enforceability (i) may be limited by
bankruptcy, insolvency, moratorium or other similar laws relating to the
enforcement of creditors' rights generally and (ii) is subject to general
principles of equity and discretion of the court before which any proceedings
seeking injunctive relief or specific performance may be sought. If the Seller
is married and the Seller's Shares and/or Warrants Beneficially Owned by him
(exclusive of Shares Beneficially Owned by virtue of discretionary authority)
constitute community property, this agreement has been duly authorized,
executed and delivered by, and constitutes a valid and binding agreement of,
the Seller's spouse, enforceable against such Person in accordance with its
terms except that such enforceability (i) may be limited by bankruptcy,
insolvency, moratorium or other similar laws relating to the enforcement of
creditors' rights generally and (ii) is subject to general principles of equity
and discretion of the court before which any proceedings seeking injunctive
relief or specific performance may be sought.
3.3 NO ENCUMBRANCES. When the Transaction Shares and Warrants
are delivered by the Seller in accordance with this Agreement, the Purchaser
will receive valid title to the Transaction Shares and Warrants purchased by it
hereunder, free and clear of all liens, claims, security interests, proxies,
voting trusts or agreements, understandings or arrangements or any other
encumbrances whatsoever (collectively, "Liens").
3.4 NO CONFLICTS. No filing with, and no permit,
authorization, consent or approval of, any state, local or federal or foreign
public body or authority or any other party is necessary for the execution of
this Agreement by the Seller and the consummation by the Seller of the
transactions contemplated hereby; provided that the parties understand that
certain filings, including but not limited to a Schedule 13D, must be made to
the Securities and Exchange Commission (the "Commission") in order to be in
compliance with Federal securities laws. Neither of the execution and delivery
of this Agreement by the Seller, the consummation by the Seller of the
Acquisition or the transactions contemplated hereby nor compliance by the
Seller with any of the provisions hereof shall, in a manner which would be
material and adverse to the ability of the Seller to consummate the Acquisition
or the transactions contemplated hereby or to comply with the terms hereof (i)
result in a violation or breach of, or constitute (with or without notice or
lapse of time or both) a default (or give rise to any third party right of
termination, cancellation, material modification or acceleration) under any of
the terms, conditions or
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provisions of any note, bond, mortgage, indenture, license, contract,
commitment, arrangement, understanding, agreement or other instrument or
obligation of any kind to which the Seller is a party or by which the Seller or
any of the Seller's properties or assets may be bound, other than that certain
Shareholders Voting Agreement, dated as of the 8th day of March, 1995, as
amended, by and among Xxxxxxx X. Xxxxxxx, Xxxxxx Xxxxxxxx, Xxxxx X. Xxxxxxxx
III, Xxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxx X. Xxxxx, Xxxxx X. Xxxxx and Xxxxxxx X.
Xxxxxx, which must be revoked as a condition to Purchaser's obligation to close
under this Agreement or (ii) violate any order, writ, injunction, decree,
judgment, order, statute, rule or regulation applicable to the Seller or any of
the Seller's properties or assets; provided, however, that no representation or
warranty is made with respect to any actions required to be taken by Purchaser
under applicable law as a result of the transactions contemplated hereby.
3.5 BROKER'S FEES. Except for fees paid to Xxxxx Xxxxx, the
Seller represents and warrants that no agent, broker, investment banker, person
or firm acting on behalf of or under the authority of such party hereto is or
will be entitled to any broker's or finder's fee or any other commission
directly or indirectly in connection with the transactions contemplated herein.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
The Purchaser hereby represents and warrants to the Sellers
as follows:
4.1 DUE ORGANIZATION. Purchaser is a corporation duly
organized, validly existing and in good standing under the laws of England and
Wales and has all requisite corporate power and authority to own, lease and
operate its properties and carry its business in the places where such
properties are now owned, leased or operated or where such business is now
being conducted
4.2 POWER; BINDING AGREEMENT. The Purchaser has the legal
capacity, power and authority to enter into and perform all of its obligations
under this Agreement. The execution, delivery and performance of this Agreement
by the Purchaser will not violate any other Agreement to which the Purchaser is
a party. This Agreement has been duly and validly executed and delivered by the
Purchaser and constitutes a valid and binding agreement of the Purchaser,
enforceable against the Purchaser in accordance with its terms except that such
enforceability (i) may be limited by bankruptcy, insolvency, moratorium or
other similar laws relating to the enforcement of creditors' rights generally
and (ii) is subject to general principles of equity and discretion of the court
before which any proceedings seeking injunctive relief or specific performance
may be sought.
4.3 NO CONFLICTS. No filing with, and no permit,
authorization, consent or approval of, any state, local or federal or foreign
public body or authority or any other party is necessary for the execution of
this Agreement by the Purchaser and the consummation by the Purchaser of the
transactions contemplated hereby. Neither the execution and delivery of this
Agreement by the Purchaser, the consummation by the Purchaser of the
Acquisition or the transactions contemplated hereby nor compliance by the
Purchaser with any of the provisions hereof shall, in a manner which would be
material and adverse to the ability of the Purchaser to consummate the
Acquisition or the transactions contemplated hereby or to comply with the terms
hereof (i) result in a violation or breach of, or constitute (with or without
notice or lapse of time
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or both) a default (or give rise to any third party right of termination,
cancellation, material modification or acceleration) under any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, license,
contract, commitment, arrangement, understanding, agreement or other instrument
or obligation of any kind to which the Purchaser is a party or by which the
Purchaser or any of the Purchaser's properties or assets may be bound, or (ii)
violate any order, writ, injunction, decree, judgment, order, statute, rule or
regulation applicable to the Purchaser or any of the Purchaser's properties or
assets; provided, however, that no representation or warranty is made with
respect to any actions required to be taken by Seller under applicable law as a
result of the transactions contemplated hereby.
4.4 BROKER'S FEES. Except for fees paid to Xxxxx Xxxxx, the
Purchaser represents and warrants that no agent, broker, investment banker,
person or firm acting on behalf of or under the authority of such party hereto
is or will be entitled to any broker's or finder's fee or any other commission
directly or indirectly from the Purchaser in connection with the transactions
contemplated herein.
4.5 INVESTMENT REPRESENTATIONS. The Purchaser is acquiring
the Transaction Shares and Warrants as principal for its own account for
investment purposes only and not with a view to or for distributing or
reselling such Transaction Shares or any part thereof. By executing this
Agreement, the Purchaser further represents that the Purchaser does not
presently have any contract, undertaking, agreement or arrangement with any
Person to sell or transfer to such Person or to any third person, with respect
to any of the Transaction Shares or Warrants. At the time the Purchaser was
offered the Shares, it was, and at the date hereof it is, and at each exercise
date under the Warrants, it will be, an "accredited investor" as defined in
Rule 501(a) under the Securities Act of 1933, as amended (the "Securities
Act"). The Purchaser, either alone or together with its representatives, has
such knowledge, sophistication and experience in business and financial matters
so as to be capable of evaluating the merits and risks of the prospective
investment in the Transaction Shares and Warrants, and has so evaluated the
merits and risks of such investment. The Purchaser is able to bear the economic
risk of an investment in the Transaction Shares and Warrants and, at the
present time, is able to afford a complete loss of such investment. The
Purchaser's overall commitment to investments which are not readily marketable
is not excessive in view of its net worth and financial circumstances and the
purchase of the Transaction Shares and Warrants will not cause such commitment
to become excessive. The Purchaser acknowledges it (i) has reviewed or had the
opportunity to review all of the Company's periodic reports under the Exchange
Act, (ii) has had access to information about the Company and the Company's
financial condition, results of operations, business, properties, management
and prospects sufficient to enable it to evaluate its investment; and (iii) has
had the opportunity to obtain such additional information that is necessary to
make an informed investment decision with respect to the investment. The
Purchaser is not purchasing the Transaction Shares and Warrants as a result of
or subsequent to any advertisement, article, notice or other communication
regarding the Transaction Shares and Warrants published in any newspaper,
magazine or similar media or broadcast over television or radio or presented at
any seminar or any other general solicitation or general advertisement. The
Purchaser understands and acknowledges that (i) the Transaction Shares and
Warrants are being offered and sold to it without registration under the
Securities Act in a private placement that is exempt from the registration
provisions of the Securities Act and (ii) the availability of such exemption,
depends
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in part on, and the Sellers will rely upon the accuracy and truthfulness of,
the foregoing representations and the Purchaser hereby consents to such
reliance. The Purchaser understands that certain of the Transaction Shares and
the Warrants are "restricted securities" under applicable U.S. federal and
state securities laws and that, pursuant to these laws, the Purchaser must hold
such Transaction Shares and Warrants indefinitely unless they are registered
with the Commission and qualified by applicable state authorities, or an
exemption from such registration and qualification requirements is available.
4.6 Purchaser represents and acknowledges that no Seller has
made any representation or warranty with respect to the business, operations,
condition (financial or otherwise), or prospects of the Company.
5. CONDITIONS TO CLOSING; COVENANTS WITH RESPECT TO CLOSING
5.1 CONDITIONS TO PURCHASER'S OBLIGATIONS AT THE CLOSING. The
Purchaser's obligations to purchase the Transaction Shares and Warrants at the
Closing are subject to the satisfaction, at or prior to the Closing Date, of
each of the following conditions (all or any of which may be waived in whole or
in part by the Purchaser in its sole discretion):
(a) REPRESENTATIONS AND WARRANTIES TRUE;
PERFORMANCE OF OBLIGATIONS. The representations and warranties made by the
Sellers in Section 3 hereof shall be true and correct in all material respects
as of the Closing Date with the same force and effect as if they had been made
as of the Closing Date, and the Sellers shall have performed all obligations,
agreements and conditions herein required to be performed or observed by it on
or prior to the Closing.
(b) CONSENTS, PERMITS, AND WAIVERS. The Company
and Sellers shall have obtained any and all consents, permits and waivers
necessary for consummation of the transactions contemplated by the Agreement
(except for such as may be properly obtained subsequent to the Closing),
including, without limitation, the necessary approval of the Company's
shareholders of the warrant, substantially in the form attached hereto as
Exhibit A (the "Company Warrant"), entitling the Purchaser to purchase from the
Company such number of shares of Common Stock equal to 20% of the outstanding
Common Stock on a fully-diluted basis taking into account the exercise of all
stock options, warrants and rights to acquire shares of Common Stock
outstanding on the Closing Date, conversion of all shares of Preferred Stock
outstanding on the Closing Dated and the exercise of the Company Warrant and
any warrant issued to Xxxxxxx Xxxxxxx. The Company shall have used its best
efforts to obtain the approval of the Company's Shareholders of the amendment
to the Company's Certificate of Incorporation substantially in the form
attached hereto as Exhibit B (the "Charter Amendment"). In furtherance of
obtaining the shareholder approval of the Company Warrant and Charter
Amendment, certain of the Sellers shall have executed on the date hereof the
voting agreement substantially in the form attached hereto as Exhibit C (the
"Voting Agreement").
(c) COMPLIANCE CERTIFICATE. Each Seller shall
have delivered to Purchaser a compliance certificate, executed by the Seller,
dated the Closing Date, to the effect that the conditions specified in
subsection (a) and (b) of this Section 5.1 have been satisfied.
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(d) INSTRUMENTS OF TRANSFER. Sellers shall have
delivered to the Purchaser the stock certificates for the Transaction Shares,
Warrants or Warrant certificates, stock powers and other documents of transfer,
conveyance and assignment in form and substance reasonably satisfactory to the
Purchaser and Purchaser's counsel required to transfer all of Sellers' right,
title and interest in and to the Transaction Shares and Warrants to Purchaser
and to vest in Purchaser good and marketable title to the Transaction Shares
and Warrants free and clear of all Liens.
(e) COMPANY WARRANT. The Company Warrant shall
have been executed by the Company and delivered to the Purchaser.
(f) LISTING OF SHARES UNDERLYING COMPANY WARRANT.
The Company shall file an application to cause the shares of the Company's
Common Stock to be issued upon exercise of the Company Warrant to be approved
for listing on the Nasdaq Small Cap Market and pay all requisite fees with
respect thereto.
(g) REGISTRATION RIGHTS AGREEMENT. The
registration rights agreement in the form attached hereto as Exhibit D (the
"Registration Rights Agreement") shall have been executed and delivered by the
parties thereto and shall be in full force and effect.
(h) SHAREHOLDERS' AGREEMENT. The shareholders'
agreement in the form attached hereto as Exhibit E (the "Shareholders'
Agreement") shall have been executed and delivered by the parties thereto and
shall be in full force and effect.
(i) EMPLOYMENT AGREEMENT. The employment
agreement between the Company and Xxxxxxx X Xxxxxxx engaging Xx. Xxxxxxx to
serve as Chairman of the Board and Chief Executive Officer of the Company, in
the form attached hereto as Exhibit F (the "Employment Agreement") shall have
been executed and delivered by the parties thereto and shall be in full force
and effect.
(j) CHARTER AMENDMENT. If approved by the
Company's Shareholders, the Charter Amendment shall have been filed with the
Secretary of State of New York.
(k) CORPORATE DOCUMENTS. The Company shall have
delivered to Purchaser or its counsel, copies of all corporate documents of the
Company as Purchaser shall reasonably request.
(l) TERMINATION OF SHAREHOLDERS VOTING AGREEMENT.
That certain Shareholders Voting Agreement dated as of the 8th day of March,
1995 by and among Xxxxxxx X. Xxxxxxx, Xxxxxx Xxxxxxxx, Xxxxx X. Xxxxxxxx III,
Xxxxx Xxxxx, Xxxxxx Xxxxx, Xxxxxx X. Xxxxx, Xxxxx X. Xxxxx and Xxxxxxx X.
Xxxxxx, shall have been terminated pursuant to a termination agreement
substantially in the form attached hereto as Exhibit G.
(m) TERM LOAN FACILITY. The Company shall have
entered into an additional $2.25 million term loan facility.
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(n) OPERATING LICENSES. The Company shall have
used its best efforts to cause all government licenses, permissions, consents,
approvals or authorizations necessary for the conduct of the Company's business
as being conducted by it as of the Closing Date to be registered in the name of
an officer or employee of the Company other than, or in addition to, Xxxxxxx X.
Xxxxxxx.
(o) DISMISSAL OF LITIGATION. The Company and the
Sellers shall have obtained a dismissal of (i) all claims brought by the
Sellers, their affiliates and each other plaintiff in the Litigation and (ii)
the receiver appointed in connection with such action. In furtherance of
obtaining such dismissal, each Seller has executed on the date hereof a
stipulation (the "Stipulation"), a copy of which is attached hereto as Exhibit
H.
(p) NASDAQ LISTING. The Company's Common Stock
shall continue to be listed on Nasdaq Small Cap Market or any national
securities exchange.
(q) BOARD OF DIRECTORS. Each of Messrs. Snitow,
Robinett, Xxxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxxxx and Xxxxx shall have resigned as
a member of the Board of Directors of the Company. The authorized size of the
Board of Directors of the Company shall have been reduced to seven (7) members
and the Board shall consist of Xxxxxxx X. Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxx Xxxxx,
Xxxxx Xxxxxxxxxx, Xxxxxx Xxxxxx, Xxx Xxxxxxx and the director to be mutually
agreed upon in writing by Xxxxxxx Xxxxxxx and the Purchaser in accordance with
the terms of the Shareholders Agreement.
(r) DIRECTORS' AND OFFICERS' INSURANCE. The
Company shall have in full force and effect directors' and officers' liability
insurance from established and reputable insurers in an amount not less than
$2,000,000.
(s) ESCROWED SHARES. Xxxxxxx X. Xxxxxxx shall
have deposited 250,000 Shares of Common Stock into escrow pursuant to the
Escrow Agreement, dated the date hereof, among Xxxxxxx Xxxxxxx, the Purchaser
and Proskauer Rose LLP.
(t) INJUNCTIONS OR RESTRAINTS. No court of
competent jurisdiction or other court, tribunal, arbitrator, authority, agency
commission, official or other instrumentality of the United States, any foreign
country or any domestic or foreign state, county, city, or other political
subdivision (a "Governmental or Regulatory Authority") shall have enacted,
issued, promulgated, enforced or entered any law or order (whether temporary,
preliminary or permanent) which is in effect and has the effect of making
illegal or otherwise restricting, preventing or prohibiting consummation of the
Acquisition or the other transactions contemplated hereby.
(u) PROCEEDINGS AND DOCUMENTS. All corporate and
other proceedings in connection with the Acquisition and transactions
contemplated hereby and all documents and instruments incident to such
transactions shall be reasonably satisfactory in substance and form to the
Purchaser and its counsel, and the Purchaser and its counsel shall have
received all such counterpart originals or certified or other copies of such
documents as they may reasonably request.
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(v) MATERIAL ADVERSE EFFECT. Since the date of
this Agreement, there shall not have occurred any condition, change or effect
that is materially adverse to the business, properties, prospects or condition
(financial or otherwise) of the Company (a "Material Adverse Effect") and no
facts or circumstances arising after the date of this Agreement shall have
occurred which, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect.
5.2 CONDITIONS TO OBLIGATIONS OF THE SELLERS. Each of the
Sellers' obligation to issue and sell the Shares and Warrants at the Closing is
subject to the satisfaction, on or prior to such Closing, of the following
conditions (all or any of which may be waived in whole or in part by the
Sellers):
(a) REPRESENTATIONS AND WARRANTIES TRUE. The
representations and warranties in Section 4 made by the Purchaser shall be true
and correct in all material respects as of the Closing Date, with the same
force and effect as if they had been made on and as of said date.
(b) COMPLIANCE CERTIFICATE. The Purchaser shall
have delivered to each Seller a compliance certificate, executed by the
Purchaser, dated the Closing Date, to the effect that the conditions specified
in subsection (a) of this Section 5.2 have been satisfied.
(c) PERFORMANCE OF OBLIGATIONS. The Purchaser
shall have performed and complied with all agreements and conditions herein
required to be performed or complied with by the Purchaser on or before the
Closing.
(d) DELIVERY OF PURCHASE PRICE. The Purchaser
shall have delivered to each of the Sellers by wire transfer of immediately
available funds or by certified or bank cashiers check made payable to each
such Seller, the Purchase Price in the amount set forth opposite each Seller's
name on Schedule A annexed hereto.
(e) DELIVERY OF FINDERS FEE. The Purchaser shall
have paid Xxxxx Xxxxx a finders fee in an amount equal to (i) $.05 multiplied
by (ii) the aggregate number of Shares of Common Stock plus the aggregate
number of Shares of Common Stock issuable upon conversion of the Shares of
Preferred Stock plus the number of Warrants sold by the Sellers to the
Purchaser hereunder.
(f) INJUNCTIONS OR RESTRAINTS. No Governmental or
Regulatory Authority shall have enacted, issued, promulgated, enforced or
entered any law or order (whether temporary, preliminary or permanent) which is
in effect and has the effect of making illegal or otherwise restricting,
preventing or prohibiting consummation of the Acquisition or the other
transactions contemplated hereby.
(g) PROCEEDINGS AND DOCUMENTS. All corporate and
other proceedings in connection with the Acquisition and transactions
contemplated hereby and all documents and instruments incident to such
transactions shall be reasonably satisfactory in substance and form to the
Sellers and their counsel, and the Sellers and their counsel shall have
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received such counterpart originals or certified or other copies of such
documents as they may reasonably request.
5.3 COVENANTS PRIOR TO CLOSING. Each of the parties hereto
shall use its best efforts and shall cooperate fully with the other parties to
satisfy the conditions to Closing set forth in Sections 5.1 and 5.2 and each of
the parties agrees and covenants promptly to execute and deliver, or cause to
be executed and delivered, such documents or instruments, in addition to those
expressly required by this Agreement to be executed and delivered, as any of
the other parties may reasonably deem necessary or desirable to carry out or
implement any provision of this Agreement or the transactions contemplated
hereby, including without limitation, all documents and instruments in addition
to the Stipulation, as may be required to obtain a dismissal of the Litigation;
provided that, with respect to the Shareholders, the agreements in this
paragraph are made in their capacities as shareholders of the Company. Nothing
in this Agreement shall have any effect or impact, or result in any liability
to the Shareholders as a result of actions taken by them as directors of the
Company.
6. TERMINATION.
6.1 TERMINATION. This Agreement may be terminated, and the
transactions contemplated hereby may be abandoned
(a) by written agreement of the Purchaser, on the one hand,
and each Seller, on the other hand; or
(b) upon notification to the non-terminating party by the
terminating party:
(i) at any time after January 31, 2001 if the
Acquisition shall have not been consummated on or prior to such date
and such failure to consummate the Acquisition is not caused by a
breach of this Agreement by the terminating party;
(ii) if any court of competent jurisdiction or other
competent Governmental or Regulatory Authority shall have issued an
order making illegal or otherwise preventing or prohibiting the
Acquisition and such order shall have become final and non-appealable;
or
(iii) if there has been a breach of any
representation, warranty, covenant or agreement on the part of the
non-terminating party set forth in this Agreement which breach is not
curable, or, if curable, has not been cured within fifteen (15) days
following receipt by the non-terminating party of notice of such
breach from the terminating party.
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6.2 EFFECT OF TERMINATION. In the event of a termination of
this Agreement pursuant to 6.1, this Agreement shall become void and there
shall be no liability hereunder on the part of the any Seller or the Purchaser
or their respective officers or directors; provided, however, that nothing
contained in this Section 6.2 shall relieve any party from any liability for
any breach of this Agreement.
7. MISCELLANEOUS.
7.1 GOVERNING LAW. This Agreement shall be governed in all
respects by the laws of the State of New York as such laws are applied to
agreements between New York residents entered into and performed entirely in
New York.
7.2 SURVIVAL. The representations and warranties made
herein shall survive the closing of the transactions contemplated hereby for
three years following the Closing and shall in no way be affected by any
investigation or knowledge of the subject matter thereof made by or on behalf
of any Purchaser. All agreements contained herein shall survive the Closing
until, by their respective terms, they are no longer operative.
7.3 INDEMNIFICATION.
(a) Each Seller, severally and not jointly, shall
indemnify, defend and hold the Purchaser, its affiliates and respective
officers, directors, partners (and the affiliates, officers, directors,
partners, employees, agents, successors and assigns thereof), employees,
agents, successors and assigns (each a "Purchaser Entity") harmless from and
against all Losses (as defined below) incurred or suffered by a Purchaser
Entity as a result of the breach of any of the representations, warranties,
covenants or agreements made by such Seller in this Agreement or the Voting
Agreement. The Purchaser, shall indemnify, defend and hold the Sellers, their
affiliates and respective officers, directors, partners (and the affiliates,
officers, directors, partners, employees, agents, successors and assigns
thereof) employees, agents, successors and assigns (each, a "Seller Entity")
harmless against all Losses incurred or suffered by a Seller Entity as a result
of the breach of any of Purchaser's representations, warranties, covenants or
agreements in this Agreement.
(b) For purposes of this Section 7.3, "Losses"
shall mean each and all of the following items: claims, losses, liabilities,
obligations, payments, damages, charges, judgments, fines, penalties, amounts
paid in settlement, costs and expenses (including, without limitation, interest
which may be imposed in connection therewith, costs and expenses of
investigation, actions, suits, proceedings, demands, assessments and reasonable
fees, expenses and disbursements of counsel, consultants and other experts).
Any payment (or deemed payment) by a Seller to the Purchaser pursuant to this
Section 7.3 shall be treated for federal income tax purposes as an adjustment
to the price paid by the Purchaser for the Shares and Warrants pursuant to this
Agreement.
(c) A party seeking indemnification (the
"Indemnified Party") under this Section 7.3 shall promptly upon becoming aware
of the facts indicating that a claim for indemnification may be warranted, give
to the party from whom indemnification is being sought (the "Indemnifying
Party") a claim notice relating to such Loss (a "Claim Notice"). Each Claim
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Notice shall specify the nature of the claim, the applicable provision(s) of
this Agreement or other instrument under which the claim for indemnity arises,
and, if possible, the amount or the estimated amount thereof. No failure or
delay in giving a Claim Notice and no failure to include any specific
information relating to the claim (such as the amount or estimated amount
thereof) or any reference to any provision of this Agreement or other
instrument under which the claim arises shall affect the obligation of the
Indemnifying Party unless such failure materially and adversely prejudices the
Indemnifying Party. If such Loss relates to the commencement of any action or
proceeding by a third person, the Indemnified Party shall give a Claim Notice
to the Indemnifying Party regarding such action or proceeding and the
Indemnifying Party shall be entitled to participate therein to assume the
defense thereof with counsel reasonably satisfactory to the Indemnified Party.
After notice from the Indemnifying Party to the Indemnified Party of its
election to assume the defense of such action or proceeding, the Indemnifying
Party shall not be liable (except to the extent the proviso to this sentence is
applicable, in which event it will be so liable) to the Indemnified Party under
this Section 7.3 for any legal or other expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof other than reasonable
costs of investigation; provided that each Indemnified Party shall have the
right to employ separate counsel to represent it and assume its defense (in
which case, the Indemnifying Party shall not represent it) if (i) upon the
advice of counsel, the representation of both parties by the same counsel would
be inappropriate due to actual or potential differing interests between them,
(ii) in the event the Indemnifying Party has not assumed the defense thereof
within ten (10) business days of receipt of notice of such claim or
commencement of action, and in which case the fees and expenses of one such
separate counsel shall be paid by the Indemnifying Party or (iii) if such
Indemnified Party who is a defendant in any action or proceeding which is also
brought against the Indemnifying Party reasonably shall have concluded that
there may be one or more legal defenses available to such Indemnified Party
which are not available to the Indemnifying Party. If any Indemnified Party
employs such separate counsel it will not enter into any settlement agreement
which is not approved by the Indemnifying Party, such approval not to be
unreasonably withheld. If the Indemnifying Party so assumes the defense
thereof, it may not agree to any settlement of any such claim or action as the
result of which any remedy or relief, other than monetary damages for which the
Indemnifying Party shall be responsible hereunder, shall be applied to or
against the Indemnified Party, without the prior written consent of the
Indemnified Party. In any action hereunder as to which the Indemnifying Party
has assumed the defense thereof with counsel reasonably satisfactory to the
Indemnified Party, the Indemnified Party shall continue to be entitled to
participate in the defense thereof, with counsel of its own choice, but, except
as set forth above, the Indemnifying Party shall not be obligated hereunder to
reimburse the Indemnified Party for the costs thereof.
(d) Except with respect to Losses which arise as
a result of a claim based on an inaccuracy of a representation or the breach of
a warranty which is known to a Seller to be false at the time such
representation or warranty is made by such Seller (a "Purchaser Fraud Claim")
for which there shall be no limit, in no event shall the aggregate liability of
a Seller with respect to Losses exceed the aggregate amount of (i) $2.20
multiplied by the number of Transaction Shares of Common Stock purchased from
such Seller, (ii) $2.20 multiplied by the number of Shares of Common Stock
issuable upon conversion of each Transaction Share of Preferred Stock purchased
from such Seller and (iii) $2.20 per share of Common Stock issuable upon
exercise of each Warrant.
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(e) Except with respect to Losses which arise as
a result of a claim based on an inaccuracy of a representation or the breach of
a warranty which is known to the Purchaser to be false at the time such
representation or warranty is made by the Purchaser (a "Seller Fraud Claim")
for which there shall be no limit, in no event shall the aggregate liability of
the Purchaser to any Seller with respect to Losses exceed the aggregate amount
of (i) $2.20 multiplied by the number of Transaction Shares of Common Stock
purchased from such Seller, (ii) $.2.20 multiplied by the number of Transaction
Shares of Common Stock issuable upon conversion of each Transaction Share of
Preferred Stock purchase from such Seller, and (iii) $2.20 per share of Common
Stock issuable upon exercise of each Warrant.
7.4 PUBLIC ANNOUNCEMENTS. The Sellers will consult with the
Purchaser before issuing any press release or otherwise making any public
statements with respect to the transactions contemplated by this Agreement and
shall not issue any such press release or make any such public statement prior
to such consultation, except as may be required by applicable law or
regulation.
7.5 NO SHOP. Until the Closing or the termination of this
Agreement in accordance with Section 6, neither the Sellers nor their
respective affiliates nor any investment banker, attorney or accountant or
other representative retained by the Sellers, shall solicit, or encourage the
solicitation of, or enter into, negotiations of any type, directly or
indirectly, or enter into a letter of intent or purchase agreement or other
similar agreement with any person, firm or corporation other than the Purchaser
with respect to the sale of any of the Shares or Warrants.
7.6 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of the Shares and/or Warrants from time to time.
7.7 ENTIRE AGREEMENT. This Agreement, the exhibits and
schedules hereto, and the other documents delivered pursuant hereto constitute
the full and entire understanding and agreement between the parties with regard
to the subjects hereof and no party shall be liable or bound to any other in
any manner by any representations, warranties, covenants and agreements except
as specifically set forth herein and therein.
7.8 SEVERABILITY. In case any provision of the Agreement
shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby; provided that the overall intent of this Agreement is
achieved.
7.9 AMENDMENT AND WAIVER.
(a) This Agreement may be amended or
modified only upon the written consent of all the parties hereto.
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(b) No waiver of the provisions hereof shall be
effective unless in writing and signed by the party to be charged with such
waiver.
7.10 DELAYS OR OMISSIONS. No delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement, shall impair
any such right, power or remedy, nor shall it be construed to be a waiver of
any such breach, default or noncompliance, or any acquiescence therein, or of
or in any similar breach, default or noncompliance thereafter occurring. Any
waiver, consent or approval of any kind or character on the Purchaser's part in
connection with any breach, default or noncompliance under this Agreement, or
any waiver on such party's part of any provisions or conditions of this
Agreement, shall be in writing and shall be effective only to the extent
specifically set forth in such writing.
7.11 NOTICES. All offers, notices, acceptances, requests
of other communications hereunder shall be in writing and shall be delivered
(i) in person, (ii) by certified or registered mail, return receipt requested,
(iii) by Federal Express or other nationally recognized overnight courier
service which issues confirmation of delivery or (iv) by confirmed facsimile
transmission, to the Company, each Seller and the Purchaser at the addresses or
facsimile numbers set forth below or to such other addresses or facsimile
number, as applicable, as any party hereto may designate to the others in
writing:
If to Sellers:
Xxxxx Xxxxx
c/o Kikis Asset Management
000 Xxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Xxxxxx Xxxxx
c/o Sands Brothers & Co., Ltd.
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxx & Galt LLP
00 Xxxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxx, Esq.
Facsimile: (000) 000-0000
and
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Xxxxxxx Xxxxxx Xxxx & Ball P.C.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
If to Purchaser
Reliance Security Group plc
Xxxxxxxx Xxxxx
Xxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxx XX0 0XX
Attention: Xxxxx Xxxxxxxxxx
Facsimile: 011441895205090
with a copy to:
Rosenman & Colin LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Xxxxx Xxxx, Esq.
Facsimile: 000 000 0000
Any such notice shall be deemed to be given (i) when delivered, if delivered
personally or by Federal Express or other nationally recognized overnight
courier service, (ii) on the third Business Day after the date of mailing, if
sent by certified or registered mail or (iii) upon confirmation of receipt, if
delivered by facsimile transmission.
7.12 TITLES AND SUBTITLES. The titles of the sections
and subsections of the Agreement are for convenience of reference only and are
not to be considered in construing this Agreement.
7.13 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
7.14 PRONOUNS. All pronouns contained herein, and any
variations thereof, shall be deemed to refer to the masculine, feminine or
neutral, singular or plural, as to the identity of the parties hereto may
require.
7.15 OTHER REMEDIES. In addition to those remedies
specifically set forth herein, if any, either party hereto may proceed to
protect and enforce its rights under this Agreement either by suit in equity
and/or by action at law, including, but not limited to, an action for damages
as a result of any such breach and/or an action for specific performance of any
such covenant or agreement contained in this Agreement. No right or remedy
conferred upon or
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reserved to either party or the holder of Shares under this Agreement is
intended to be exclusive of any other right or remedy, and every right and
remedy shall be cumulative and in addition to every other right and remedy
given under this Agreement or now and hereafter existing under applicable law.
Every right and remedy given by this Agreement or by applicable law to either
party hereto or the holders of Shares may be exercised from time to time and as
often as may be deemed expedient by the holders.
7.16 FURTHER ASSURANCES. At any time or from time to time
for a reasonable period following the Closing, the Company and the Purchaser
agree to cooperate with each other, and at the request of the other party, to
execute and deliver any further instruments or documents and to take all such
further action as the other party may reasonably request in order to evidence
or effectuate the consummation of the Acquisition and the transactions
contemplated hereby and to otherwise carry out the intent of the parties
hereunder.
7.17 FACSIMILE SIGNATURES. Any signature page delivered by a
fax machine shall be binding to the same extent as an original signature page,
with regard to any agreement subject to the terms hereof or any amendment
thereto. Any party who delivers such a signature page agrees to later deliver
an original counterpart to any party which requires it.
7.18 RISK OF REVOCATION OF DISCRETIONARY AUTHORITY. The
parties understand and agree that certain Sellers' discretionary authority over
the Shares may be revoked at any time and further agree that such Seller shall
have no liability for any representations, warranties, covenants, obligations
or agreements with respect to Shares for which his discretionary authority has
been revoked at any time prior to the Closing hereunder.
7.19 ADJUSTMENT. All dollar amounts and share numbers set
forth herein shall be subject to equitable adjustment in the event of any stock
split, stock dividend, reverse stock split or similar event affecting the
Company Common Stock and/or Preferred Stock, between the date of this Agreement
and the Closing Date, to the extent appropriate.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have executed this STOCK PURCHASE
AGREEMENT as of the date set forth in the first paragraph hereof.
PURCHASER:
RELIANCE SECURITY GROUP PLC
By:
--------------------------------
Name:
Title:
SELLERS:
----------------------------
Xxxxx Xxxxx
----------------------------
Xxxxxx Xxxxx
THE KIKIS FAMILY FOUNDATION
By:
-------------------------
Name:
Title:
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THE PERSONS LISTED ON SCHEDULE B-1 HERETO
-----------------------------------------
By: Xxxxxx Xxxxx, as Attorney-in-Fact
----------------------------
Xxxxx Xxxxxx
----------------------------
Xxxxxx Xxxxxx
----------------------------
Xxxxxxx Xxxxxx
----------------------------
Xxxx Xxxxxxx
----------------------------
Xxxxxx Xxxxxxxxx
20
THE PERSONS LISTED ON SCHEDULE B-2(a) HERETO
--------------------------------------------
By: Xxxxxx Xxxxx, as Attorney-in-Fact
THE PERSONS LISTED ON SCHEDULE B-2(b) HERETO
-----------------------------------------
By: Xxxxxx Xxxxx, as Attorney-in-Fact
KATIE & XXXX BRIDGE PARTNERS, L.P.
By:
----------------------------
Name:
Title:
OWL-1 PARTNERS, L.P.
By:
----------------------------
Name:
Title:
----------------------------
Xxxxx Xxxxxxxx
----------------------------
Xxxxxx Xxxxx
