EXHIBIT 10.4
INFRASTRUCTURE & ENVIRONMENTAL PRIVATE EQUITY FUND III,
ENVIRONMENTAL & INFORMATION TECHNOLOGY PRIVATE EQUITY FUND
III, AND THE PRODUCTIVITY FUND, L.P.
- and -
INTERBORO HOLDING, INC.
- and -
EDUCATIONAL VIDEO CONFERENCING, INC.
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STOCK PURCHASE AGREEMENT
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STOCK PURCHASE AGREEMENT
THIS AGREEMENT made as of the 2nd day of July 2, 2001 effective July 1,
2001.
Infrastructure & Environmental Private Equity Fund III,
Environmental & Information Technology Private Equity Fund III,
and The Productivity Fund, L.P. (hereinafter collectively "FAC")
- and -
Interboro Holding, Inc., a corporation formed under the laws of
Delaware or Its Assignee (the "Purchaser" or "IHI")
- and -
Educational Video Conferencing, Inc. , a corporation formed under
the laws of Delaware ( "EVCI").
RECITALS:
1. FAC is the registered and beneficial owner of certain equity and debt
interests in ICTS, Inc. ("ICTS"). These interests, which are listed on
Schedule 1 attached, are hereinafter called the "ICTS Shares", which
include, without limitation, all convertible preferred stock, options,
warrants and debt and all other interests in ICTS held by FAC;
2. FAC wishes to transfer and assign to the Purchaser and the Purchaser
wishes to acquire from FAC all of FAC's right, title and interest in
the ICTS Shares;
3. In order to expedite a Bridge Loan between EVCI and ICTS, the parties
have executed a binding Definitive Term Sheet representing the
business terms which shall be incorporated into a formal Agreement.
This Agreement incorporates those business terms and supersedes and
replaces that Term Sheet.
NOW THEREFORE in consideration of the mutual covenants in this Agreement
and for other consideration (the receipt and sufficiency of which are
acknowledged), the parties agree as follows:
ARTICLE 1
INTERPRETATION
1.1 Definitions
In this Agreement, except as otherwise expressly provided, the
following words and expressions have the following meanings:
"Agreement", "this Agreement", "the Agreement", "hereof", "herein",
"hereto", "hereby", "hereunder" and similar expressions mean this
share purchase agreement and debt assignment and transfer agreement,
including all of its schedules and all instruments supplementing,
amending or confirming this Agreement. All references to "Articles" or
"Sections" refer to the specified Article or Section of this
Agreement;
"Closing", means the completion of the transactions described in this
Agreement which are to occur contemporaneously with the purchase and
sale of all ICTS shares not owned or controlled by FAC. All such
transactions shall be deemed effective July 1, 2001.
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"Closing Date" means as of July 1, 2001.
"Free Cash Flow" means net income after taxes and adding back
depreciation and all other non-cash expenses or charges of ICTS before
any corporate management charge due EVCI or its subsidiaries,
commencing on the Closing Date, as determined in accordance with U. S.
GAAP.
"Seller" means any one of the three partnerships that collectively are
defined in this Agreement as FAC. Where the context requires,
references herein to FAC mean each Seller.
"Warrants" means warrants for the purchase of common stock of EVCI
substantially in the form of Exhibit A attached hereto.
1.2 Time of the Essence
Time shall be of the essence of each provision of this Agreement. Any
extension, waiver or variation of any provision of this Agreement shall not be
deemed to affect this provision and there shall be no implied waiver of this
provision.
1.3 Headings
The descriptive headings preceding Articles and Sections of this
Agreement are inserted solely for convenience of reference and are not intended
as complete or accurate descriptions of the content of such Articles or
Sections. The division of this Agreement into Articles and Sections shall not
affect the interpretation of this Agreement.
1.4 Plurals and Gender
The use of words in the singular or plural, or referring to a
particular gender, shall not limit the scope or exclude the application of any
provision of this Agreement to such persons or circumstances as the context
otherwise permits.
1.5 Construction
The words "including", "include", and "includes" shall mean "including
without limitation", "include, without limitation" and "includes, without
limitation", respectively.
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ARTICLE 2
ASSIGNMENT AND TRANSFER OF ICTS Shares
2.1 Agreement to Assign and Transfer ICTS Shares
(a) Subject to the terms and conditions of this Agreement, FAC shall, on
Closing, transfer and assign to the Purchaser or its designee all
right, title and interest in the ICTS Shares free and clear from all
security interests, liens, charges, encumbrances, adverse claims and
rights of others, for an aggregate purchase price as set out in
Section 2.2 (the "Purchase Price").
(b) With regard to any and all claims, actions and causes of action FAC
now has, or could in the future have, against any of ICTS, or other
entity or person affiliated with ICTS or any of their respective
successors, assigns, servants, agents, employees, officers, directors
and legal and accounting professional advisors (collectively, and
including the respective bankrupt estate of any of them, the "ICTS
Group") arising out of Paragraph 9.17 of the Share Purchase Agreement
dated December 30, 1997, between FAC and ICTS and the Bylaws of ICTS
(copies of which are attached hereto), in respect of FAC's dealings
with the ICTS Group on or prior to the date hereof, FAC covenants not
to sue any of the ICTS Group, provided that neither FAC nor any entity
or person affiliated with FAC is sued after the closing in respect to
any matter concerning ICTS which occurred prior to the date of this
Agreement. FAC is not aware of any such claims.
(c) Effective at Closing, FAC hereby releases the ICTS Group from all
other claims, actions and causes of action FAC now has, or could in
the future have, against any of ICTS Group in respect of FAC's
dealings with the ICTS Group.
2.2 Purchase Price
The Purchaser hereby agrees that the purchase price for the ICTS
shares "Purchase Price" shall be paid and satisfied by the Purchaser as follows:
(a) Delivery at Closing of Warrants to purchase 250,000 shares of EVCI
Common Stock at the initial exercise price of the greater of $1.00 per
share.
(b) Delivery at Closing of Warrants to purchase 100,000 shares of EVCI
Common Stock at the strike price of $3.00 per share.
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(c) Payment of an amount equal to 20% ICTS's Free Cash Flow up to a
maximum aggregate payment of $500,000. Within 45 days after the end of
each calendar quarter, commencing the calendar quarter ending March
31, 2002, ICTS shall pay to FAC ten percent of the estimated Free Cash
Flow for that quarter. Within 90 days after the end of each such
fiscal year, an appropriate adjustment shall be made to reconcile the
actual payments to 20% ICTS's Free Cash Flow for the fiscal year. Any
shortfall shall be paid to FAC and any excess shall be carried over
and applied to satisfy the application of Free Cash Flow required for
the immediately succeeding fiscal year.
(d) In the event that EVCI is delisted from the NASDAQ National Market for
a period of twelve months prior to (i) FAC exercising the Warrants or
(ii) EVCI completing payment in full of the above mentioned $500,000
amount to FAC, then the maximum aggregate payment shall increase to
$600,000.
(e) The Purchase Price shall be allocated among each seller in the
percentages set forth in Schedule 1.
2.3 Transfer and Assignment
Contemporaneously with the delivery of the Warrants, at Closing, FAC
shall deliver to the Purchaser the ICTS Shares duly endorsed in blank for
transfer, or accompanied by irrevocable security transfer powers of attorney
duly executed in blank and such other documents with respect to such transfer as
are reasonably requested by the Purchaser, including a certified copy of a
resolution of the appropriate authority of the ownership entities approving such
transfer.
2.4 ICTS Board of Directors
FAC shall be entitled to nominate one member of the ICTS Board of
Directors, and IHI will use its best efforts to have that nominee
elected a director.
ARTICLE 3
Representations and Warranties
3.1 Representations and Warranties of FAC
FAC hereby represents and warrants to the Purchaser (and acknowledges
that the Purchaser is relying on the representations and warranties in
completing the transactions contemplated by this Agreement) that:
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(a) Organization
Each Seller is a partnership duly formed and validly subsisting, and
in good standing in the jurisdiction in which it is formed. The
Sellers' jurisdictions of formation are indicated in the Schedule I.
(b) Authority
Each Seller has all necessary partnership power, authority and
capacity to enter into this Agreement and to perform its obligations
hereunder and the execution and delivery of this Agreement and the
performance by each Seller of its obligations hereunder has been duly
authorized by all necessary partnership action on the part of such
Seller.
(c) Binding Agreement, Validity of Transactions
XXX has duly executed and delivered this Agreement. This Agreement
constitutes a legal, valid, and binding obligation of FAC, enforceable
against FAC in accordance with its terms (subject, as to the
enforcement of remedies, to bankruptcy, reorganization, insolvency,
and other laws relating to or affecting creditors' rights generally
and subject to the availability of equitable remedies). The execution
and delivery of this Agreement by FAC, the consummation of the
transactions contemplated by this Agreement and the fulfilment by FAC
of the terms, conditions and provisions hereof will not contravene or
violate or result in the breach (with or without the giving of notice
or lapse of time, or both) or acceleration of any obligations of FAC
under:
(i) any laws applicable to FAC;
(ii) any judgment, order, writ, injunction or decree of any court
which is presently applicable to FAC; or
(iii) the partnership agreement, other organizational documents or
any resolutions of FAC or amendments thereto or restatements
thereof.
(d) Ownership of ICTS Shares
Each Seller is the sole beneficial and registered owner of the ICTS
Shares listed next to its name in Schedule 1 free and clear of any
security interests, liens, claims, charges, encumbrances, adverse
claims or rights of others (other than the rights of the Purchaser
hereunder). There is no contract, option or other right of another
binding upon or which at any time in the future may become binding
upon FAC to sell, transfer, assign, pledge, charge, mortgage or in any
other way dispose of or encumber any of the ICTS Shares other than
pursuant to this Agreement. FAC holds no interest and holds no option
or other right to acquire any interest in the equity or debt of ICTS,
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other than the ICTS Shares except the right to acquire an additional
196,833 shares of common stock as set forth in the contract dated
September 30, 1999, a true and complete copy of which, as amended, has
been provided to the Purchaser. Effective upon the closing, such
contract shall be deemed cancelled and all claims and rights of FAC
thereunder shall be deemed to have been released and relinquished. At
Closing, FAC will transfer to the Purchaser valid title to the ICTS
Shares free and clear of any and all security interests, liens,
claims, charges, encumbrances, adverse claims or rights of others of
any kind.
(e) No Outstanding Obligations
On Closing, FAC shall not have any outstanding obligations (whether
accrued, absolute, contingent or otherwise) nor any outstanding
commitments or obligations of any kind owing to it from, or owing by
it to, any member of the ICTS Group or Purchaser except as set forth
in this agreement.
(f) Material Contradictions
FAC shall review the Stock Purchase Agreement among Xxxxx Xxxxxx, Xxxx
Xxxxxx, Xxxxxx Xxxxxx, ICTS, Purchaser and EVCI (the "Other
Agreement") and advise IHI and EVCI within in 30 days after Closing of
any material fact of which it has knowledge that would materially
contradict the representations and warranties given by ICTS and the
other Seller to IHI and EVCI in the Other Agreement.
3.2 Representations and Warranties of the Purchaser and EVCI
The Purchaser hereby represents and warrants to FAC (and acknowledges
that FAC is relying on the representations and warranties in
completing the transactions contemplated hereby) that:
(a) Corporate
The Purchaser is a corporation duly incorporated under the laws of
Delaware and has not been dissolved.
(b) Authority
The Purchaser has all necessary corporate power, authority and
capacity to enter into this Agreement and to perform its obligations
hereunder and the execution and delivery of this Agreement and the
performance by the Purchaser of its obligations hereunder has been
duly authorized by all necessary corporate action on the part of the
respective corporation.
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(c) Enforceability
The Purchaser has duly executed and delivered this Agreement. This
Agreement constitutes a legal, valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its
terms (subject, as to the enforcement of remedies, to bankruptcy,
reorganization, insolvency, and other laws relating to or affecting
creditors' rights generally and subject to the availability of
equitable remedies). The execution and delivery of this Agreement by
the Purchaser, the consummation of the transactions contemplated
hereby and the fulfilment of the Purchaser do not violate or result in
the breach (with or without the giving of notice or lapse of time, or
both) or acceleration of any obligations of the Purchaser under:
(i) any laws applicable to the Purchaser;
(ii) any judgment, order, writ, injunction or decree of any court or
of any Authority which is presently applicable to the
Purchaser; or
(iii) the articles, by-laws or any resolutions of each of the
Purchaser or any amendments thereto or restatements thereof.
3.3 Non-Waiver
No investigations made by or on behalf of any party at any time shall
have the effect of waiving, diminishing the scope of or otherwise affecting any
representation or warranty made by the other parties herein or pursuant hereto
provided, however, that if a party comes to believe prior to Closing that
another party is in material breach of a representation or warranty, the first
party cannot close in reliance upon such representation or warranty unless the
second party reaffirms such representation or warranty after being notified that
the first party believes the same may have been breached.
3.4 Nature and Survival of FAC's Representations and Warranties
The representations and warranties of FAC contained in this Agreement
or in any document or certificate given pursuant to this Agreement shall survive
the Closing for the benefit of the Purchaser for a period of two (2) years,
unless a bona fide notice of a claim shall have been given in writing before the
expiration of that period, in which case the representation and warranty to
which such notice applies shall survive in respect of that claim until the final
determination or settlement of that claim.
3.5 Survival of Purchaser's Representations and Warranties
The representations and warranties of the Purchaser and EVCI contained
in this Agreement or any document or certificate given pursuant to this
Agreement shall survive the Closing for the benefit of FAC for a period of two
(2) years, unless a bona fide notice of claim shall have been made in writing
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before the expiration of that period, in which case the representation and
warranty to which such notice applies shall survive in respect of that claim
until the final determination or settlement of that claim.
ARTICLE 4
COVENANTS
4.1 FAC Assignments
FAC will execute all documents or take any actions reasonably
requested by the Purchaser to assign to the Purchaser any collateral of any kind
or any security interest, liens, claims, charges, encumbrances, adverse claims
or other rights securing or otherwise resulting from any covenants, indemnities
or other obligations of any kind whatsoever, whether absolute or contingent,
held by FAC or any affiliate in connection with its ownership of the ICTS
Shares.
4.2 Warrants and Warrant Shares
Purchaser and EVCI covenant:
(a) That shares acquired by the holders of Warrants upon exercise
thereof and payment of the strike price provided for in the respective Warrants
will upon issuance be duly authorized, validly issued, fully paid and
non-assessable.
(b) That EVCI will at all times have authorized, and will keep
reserved and unissued out of such authorized shares, a sufficient number of
shares of common stock to allow for the full exercise of the Warrants.
(c) That the Warrants, and shares acquired upon exercise of the
Warrants, are and upon such issuance will be free of any and all pre-emptive
rights, rights of first refusal or first offer, consent rights or other similar
rights of any third party, and will be freely transferable except insofar as
securities laws and regulations limit the transferability of unregistered
shares.
ARTICLE 5
CONDITIONS PRECEDENT TO THE PERFORMANCE
BY THE PARTIES OF THEIR OBLIGATIONS UNDER THIS AGREEMENT
5.1 The Purchaser's Conditions
The obligation of the Purchaser to complete the acquisition of the
ICTS Shares hereunder shall be subject to the satisfaction of, or compliance
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with, at or before Closing, each of the following conditions (each of which is
hereby acknowledged to be inserted for the exclusive benefit of the Purchaser):
(a) Representations, Warranties and Covenants
All representations and warranties of FAC contained in this Agreement
shall be true and correct in all material respects at and as of the
date of this Agreement and at and as of the Closing, except as and to
the extent the facts and conditions upon which such representations
and warranties are based are expressly required or permitted to be
changed by the terms hereof. FAC shall have performed and satisfied in
all material respects all material agreements and covenants required
hereby to be performed by it on or prior to the Closing.
(b) Receipt of Closing Documentation
All documentation relating to the due authorization and completion of
the transfer and assignment of the ICTS Shares and all actions and
proceedings taken on or prior to the Closing in connection with the
performance by FAC of its obligations, covenants and agreements under
this Agreement shall be satisfactory to the Purchaser and its counsel,
acting reasonably, and the Purchaser shall have received copies of all
such documentation or other evidence as it may reasonably request in
order to establish the consummation of the transactions contemplated
hereby and the taking of all corporate proceedings in connection
therewith in compliance with these conditions, in form and substance
satisfactory to the Purchaser and its counsel, acting reasonably,
including: (i) certificate of the Secretary of State attesting to the
legal existence and good standing of each Seller; (ii) certificates of
an officer of the general partner of each Seller attesting to the
incumbency of the general partner's officers, and the authenticity and
continuing validity of the resolutions authorizing the transactions
contemplated by this Agreement; (iii) a certificate of an officer of
the Seller's general partner confirming the accuracy of the
representations and warranties in this Agreement and compliance by the
Seller with the covenants to be complied with by it, respectively, at
or prior to the Closing, pursuant to this Agreement. In the event that
FAC is unable to obtain such documentation from any Seller, EVCI shall
hold all consideration for that Seller in escrow until such time as
the documentation is delivered to EVCI
(c) Approvals and Consents
All governmental and regulatory approvals and all consents of third
parties, and compliance with any conditions thereof, required in
connection with the completion of any of the transactions contemplated
by this Agreement, the execution of this Agreement, the Closing or the
performance of any of the terms and conditions hereof shall have been
obtained and complied with on or before Closing.
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(d) No Action to Restrain
No action or proceeding shall be pending or threatened by any
governmental or regulatory authority or any other person (including a
party hereto) to restrain or prohibit the completion of the
transactions contemplated by this Agreement.
(e) Other Agreement
On or before Closing, the Purchaser shall have completed the closing
contemplated by the Other Agreement.
5.2 Conditions of FAC
The obligation of FAC to complete the transfer and assignment of FAC's
ICTS Shares hereunder shall be subject to the satisfaction of or
compliance with, at or before Closing, of each of the following
conditions (each of which is hereby acknowledged to be inserted for
the exclusive benefit of FAC):
(a) Representations, Warranties and Covenants
All representations and warranties of the Purchaser contained in this
Agreement shall be true and correct in all material respects at and as
of the date of this Agreement and at and as of the Closing, except as
and to the extent the facts and conditions upon which such
representations and warranties are based are expressly required or
permitted to be changed by the terms hereof. The Purchaser shall have
performed and satisfied in all material respects all material
agreements and covenants required hereby to be performed by it on or
prior to the Closing.
(b) Receipt of Closing Documentation
All documentation relating to the due authorization and completion of
the transfer and assignment of the ICTS Shares and all actions and
proceedings taken on or prior to the Closing in connection with the
performance by the Purchaser of its obligations under this Agreement
shall be satisfactory to FAC and its counsel, acting reasonably, and
FAC shall have received copies of all such documentation or other
evidence as it may reasonably request in order to establish the
consummation of the transactions contemplated hereby and the taking of
all corporate proceedings in connection therewith in compliance with
these conditions, in form and substance satisfactory to FAC and its
counsel, acting reasonably, including: (i) certificate of the
Secretary of State of the state in which the Purchaser and EVCI are
incorporated attesting to the legal existence and good standing of
each; (ii) certificates of the Secretary of the Purchaser and EVCI
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attesting to the incumbency of the Purchaser's officers, and the
authenticity and continuing validity of the resolutions authorizing
the transactions contemplated by this Agreement; (iii) a certificate
of the Secretary of the Purchaser and EVCI confirming the accuracy of
the representations and warranties in Section 3.2 of this Agreement
and compliance by the Purchaser with the covenants to be complied by
it at or prior to the Closing, pursuant to this Agreement.
(c) No Action to Restrain
No action or proceeding shall be pending or threatened by any
governmental or regulatory authority or any other person (including a
party hereto) to restrain or prohibit the completion of the
transactions contemplated by this Agreement.
5.3 Waiver by Purchaser
If any of the conditions set forth in Section 5.1 have not been
fulfilled, performed or satisfied at or prior to the Closing, the Purchaser may,
by written notice to FAC, terminate all of its obligations hereunder and the
Purchaser shall be released from all its obligations under this Agreement. Any
of such conditions may be waived in whole or in part by the Purchaser by
instrument in writing given to FAC without prejudice to any of the Purchaser's
rights of termination in the event of non-performance of any other condition,
obligation or covenant in whole or in part, and without prejudice to its right
to complete the transactions contemplated by this Agreement and claim damages
for breach of any other representation, warranty or covenant that was not
waived.
5.4 Waiver by FAC
If any of the conditions set forth in Section 5.2 have not been
fulfilled, performed or satisfied at or prior to the Closing, FAC may, by
written notice to the Purchaser, terminate all of its obligations hereunder and
FAC shall be released from all its obligations under this Agreement. Any of such
conditions may be waived in whole or in part by FAC by instrument in writing
given to the Purchaser, without prejudice to FAC's rights of termination in the
event of non-performance of any other condition, obligation or covenant in whole
or in part, and without prejudice to its right to complete the transactions
contemplated by this Agreement and claim damages for breach of any other
representation, warranty or covenant that was not waived.
ARTICLE 6
INDEMNIFICATION
6.1 Indemnification
FAC covenants and agrees with the Purchaser, and the Purchaser,
covenants and agrees with FAC (the party or parties so covenanting and agreeing
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to indemnify the other party or parties being referred to as the "Indemnifying
Party" and the party or parties to be indemnified being called the "Indemnified
Party" in this paragraph), to indemnify and save harmless the Indemnified Party,
effective as from Closing, from and against any claim, demand, action, causes of
action, damage, loss, costs, liability or expense, including reasonable
professional fees and disbursements (the "Claim") which may be made or brought
against the Indemnified Party or which the Indemnified Party may suffer or incur
as a result of, in respect of, or arising out of:
(a) any non-fulfilment of any covenant or agreement on the part of the
Indemnifying Party under this Agreement or in any or certificate,
agreement, document or instrument given pursuant to this Agreement,
which non-fulfillment was not waived by the Indemnified Party;
(b) any inaccuracy in or breach of any representation or warranty of the
Indemnifying Party contained in this Agreement or in any certificate,
agreement, document or instrument furnished by the Indemnifying Party
pursuant to this Agreement, which inaccuracy or breach was not waived
by the Indemnified Party.
The foregoing obligation of indemnification in respect of a Claim shall be
subject to the requirement that the Indemnifying Party shall, in respect of any
Claim made by any third party, be notified forthwith of all material particulars
thereof and be afforded an opportunity at their sole expense to resist, defend
and compromise the same provided that the Indemnifying Party shall not be
obligated to do so; and further provided that if the Indemnifying Party does not
assume the defence of that Claim, the Indemnified Party may defend against the
Claim in a manner the Indemnified Party deems appropriate and may take such
action as may be reasonably prudent in the circumstances to settle the Claim.
This indemnity shall survive Closing.
6.2 Rights Cumulative
The rights of indemnification contained in this Article 6 are
cumulative and are in addition to every other right or remedy of the parties
contained in this Agreement or otherwise.
6.3 Limitation of FAC's Liability.
The maximum aggregate liability of FAC to the Purchaser and those
claiming by, through or under Purchaser arising out of the sale of the ICTS
Shares to Purchaser (irrespective of whether or not such liability is premised
upon the provisions of this Agreement, and irrespective of whether the claim is
premised upon the indemnification provisions of this Agreement, breach of
representations and warranties made by FAC in this Agreement, breach of
covenants made by FAC in this Agreement, non-compliance by FAC with securities
laws and regulations, or any other basis whatsoever) shall be limited to the
Purchase Price paid to FAC pursuant to this Agreement. Any liability finally
determined to be owed by FAC shall be paid and satisfied in the following
manner:
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(a) First, by offsetting the liability dollar for dollar against future
payments under the provisions of Section 2.2(c) of this Agreement.
(b) Next, by the surrender to EVCI of the Warrants. For this purpose
Warrants shall be valued at their fair market value on the date of
surrender to Purchaser.
(c) Next, by the surrender to EVCI of securities acquired upon exercise of
Warrants. The securities so surrendered shall be valued at their fair
market value on the date of surrender less the Warrant exercise price
paid by FAC to acquire the surrendered shares. In the event that the
securities are valued less than the excise price, then EVCI shall have
no obligation to accept such surrendered securities and FAC shall
immediately repay EVCI sums actually paid to FAC pursuant to Section
2.2 (c) of this Agreement.
(d) Next, by the repayment to EVCI of sums actually paid to FAC pursuant
to Section 2.2(c) of this Agreement.
No payments other than those provided for in subsections (a), (b), (c) and (d)
of this Section 6.3 shall be payable by FAC for any reason whatsoever. Purchaser
acknowledges and agrees that the foregoing limitation of liability has been
specifically bargained for by FAC as an essential element of the consideration
for this transaction and that but for this limitation of liability, FAC would
not have entered into this Agreement.
ARTICLE 7
GENERAL
7.1 Public Notices
All public notices to third parties and all other publicity concerning
the matters contemplated by this Agreement shall be jointly planned and
co-ordinated by the Parties and no Party shall act unilaterally in this regard
without the prior approval of the other Parties, which consent shall not be
unreasonably withheld or delayed, and Purchaser and EVCI agree not mention the
names of FAC in any publicity relating to this agreement without the prior
approval of FAC except where the Party making such notice is required to do so
by law or by the applicable regulations or policies of any regulatory agency of
competent jurisdiction or any stock exchange in circumstances where prior
consultation with the other Parties is not practicable.
7.2 Expenses
Each Party to this Agreement shall pay its respective legal,
accounting and other professional advisory fees, costs and expenses incurred in
connection with the negotiation, preparation or execution of this Agreement and
all documents and instruments executed or delivered pursuant to this Agreement,
as well as any other costs and expenses incurred.
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7.3 Further Assurances
The Parties shall do all such things and provide all such reasonable
assurances as may be required to consummate the transactions contemplated by
this Agreement, and each Party shall provide such further documents or
instruments required by any other party as may be reasonably necessary or
desirable to effect the purpose of this Agreement and carry out its provisions,
whether before or after Closing.
7.4 Assignment
Neither this Agreement nor any benefits or duties accruing under this
Agreement shall be assignable by any Party without the prior written consent of
each of the other Parties, which consent shall not be unreasonably withheld or
delayed. Notwithstanding the foregoing, the Purchaser may assign all or any part
of its rights and/or obligations under this Agreement to one of its direct or
indirect subsidiaries, provided that (a) any assignee agrees in writing to be
bound by the terms and conditions of this Agreement which it assumes, (b) such
assignment imposes no additional obligations which would have an adverse effect
upon FAC, and (c) notwithstanding the assignment, the Warrants shall be issued
by EVCI for the purchase of EVCI common stock. Subject to the foregoing, this
Agreement shall enure to the benefit of and be binding upon the Parties and
their respective successors (including any successor by reason of amalgamation
of any Party) and permitted assigns.
7.5 Entire Agreement
With respect to the subject matter of this Agreement, this Agreement
supersedes all prior understandings and communications between the parties or
any of them, oral or written. This Agreement and any document delivered pursuant
to this Agreement, constitutes the entire agreement between the Parties with
respect to the matters herein and supersedes all prior agreements,
understandings, negotiations and discussions relating to the subject matter
hereof. The execution of this Agreement has not been induced by, nor do any of
the Parties rely upon or regard as material, any representations, promises,
agreements or statements whatsoever not incorporated herein and made a part
hereof. This Agreement shall not be amended, altered or qualified except by
written agreement signed by all of the Parties.
7.6 Waiver
Except as otherwise expressly set out herein, no waiver of any
provision of this Agreement shall be binding unless it is in writing. No
indulgence or forbearance by a Party shall constitute a waiver of such Party's
right to insist on performance in full and in a timely manner of all covenants
in this Agreement. Waiver of any provision shall not be deemed to waive the same
provision thereafter, or any other provision of this Agreement at any time.
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7.7 Notices
All communications which may be or are required to be given by any
party to any other party, shall be in writing and (i) delivered personally, (ii)
sent by prepaid courier service or mail, or (iii) sent by prepaid telecopier or
other similar means of electronic communication to the parties at their
following respective addresses:
For FAC:
First Analysis Corporation
233 So. Xxxxxx Xxxxx
Xxxxxxx XX 00000
Attention: Xxxx Xxxxxx
Telecopier: (312) 258- 0334
For the Purchaser
Educational Video Conferencing, Inc.
00 Xxxx Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxx Xxxx 00000-4613
Attention: Xx. Xxxx Xxxxxxxx, Chairman and Chief Executive Officer
Telecopier: (000) 000-0000
with a copy to:
Educational Video Conferencing, Inc.
00 Xxxx Xxxxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. X'Xxxxx, Esq., General Counsel
Telecopier: (000) 000-0000
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Any such notice so given shall be deemed conclusively to have been given and
received when so personally delivered or delivered by courier or on the day on
which transmission is confirmed (or on the next business day in the place of
intended receipt if it is not transmitted before 5:00 p.m. on a business day in
the place of receipt) if sent by telecopier or other electronic communication.
Any party may from time to time change its address hereinbefore set forth by
notice to the other parties in accordance with this section.
7.8 Severability
If any provision of this Agreement or portion thereof or the
application thereof to any person or circumstance shall to any extent be invalid
or unenforceable, (a) the remainder of this Agreement or the application of such
provision or portion thereof to any other person or circumstance shall not be
affected thereby; and (b) the Parties will negotiate in good faith to amend this
Agreement to implement the intentions set forth herein. Each provision of this
Agreement shall be valid and enforceable to the fullest extent permitted by law.
7.9 Execution by Xxxxxxxxx
The signature of any of the Parties hereto may be evidenced by a
facsimile copy of this Agreement bearing such signature.
7.10 Counterparts
This Agreement may be signed in one or more counterparts, each of
which so signed shall be deemed to be an original, and such counterparts
together shall constitute one and the same instrument. Notwithstanding the date
of execution of any counterpart, each counterpart shall be deemed to bear the
effective date set forth below.
7.11 Governing Law and Jurisdiction for Disputes
This Agreement shall be governed by and construed in accordance with
the laws of the State of New York. All of the Parties to this Agreement
irrevocably submit to the exclusive jurisdiction of the binding arbitration
dispute resolution procedures of the American Arbitration Association in
Westchester County, NY to the extent that the subject matter of any dispute
arising under this Agreement is arbitrable.
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7.12 Survival
Unless replaced, amended or withdrawn prior to any detrimental
reliance thereon by the Accepting Party (as defined in this paragraph), and
subject to the provisions of Section 3.3 requiring the securing of
reaffirmations in certain cases, all covenants, agreements, indemnities,
warranties and representations set forth herein or in any certificate or other
document delivered pursuant to or in connection with this Agreement by or on
behalf of one Party to another Party (the "Accepting Party") shall be deemed to
have been relied upon by the Accepting Party notwithstanding any investigations
heretofore or hereafter made by or on behalf of the Accepting Party or its
agents, and shall, unless expressly provided otherwise, survive in full force
and effect and not merge upon the execution, termination or expiry of this
Agreement.
7.13 Securities Law Matters
Purchasers acknowledge that the ICTS Shares, and FAC acknowledges that
the Warrants and the EVCI common stock purchasable upon exercise of the
Warrants, have not been registered under the Securities Act of 1933 as amended
or any other securities laws or regulations, and are being sold in reliance upon
exemptions from registration for transactions not involving any public offering,
transactions not involving an issuer, underwriter or dealer, and other
applicable exemptions. In that connection, Purchaser and FAC each warrants that
in the context of this Agreement and the transactions hereby contemplated, is
neither an "underwriter" nor a "dealer" within the meaning of the Securities Act
of 1933 as amended.
IN WITNESS WHEREOF the parties have hereunto duly executed this
Agreement on the date first above written.
[SIGNITURE PAGE TO FOLLOW]
INTERBORO HOLDING, INC.
By: /s/ Xx. Xxxx X. XxXxxxx
-------------------------------------
Authorized Signing Officer
Xx. Xxxx X. XxXxxxx, President
EDUCATIONAL VIDEO CONFERENCING, INC.
By: /s/ Xx. Xxxx X. XxXxxxx
-------------------------------------
Authorized Signing Officer
Xx. Xxxx X. XxXxxxx, President
INFRASTRUCTURE & ENVIRONMENTAL PRIVATE
EQUITY FUND III, L.P.
By: INFRASTRUCTURE & ENVIRONMENTAL PRIVATE EQUITY MANAGEMENT III, L.L.C.
By: FIRST ANALYSIS IEPEF MGMT. CO. III, L.L.C.,
A Member
By: FIRST ANALYSIS CORPORATION, A Member
By: /s/ Xxxxx Xxxxxxx
-------------------------------------
Title: Managing Director
----------------------------------
ENVIRONMENTAL & INFORMATION TECHNOLOGY PRIVATE EQUITY FUND III, a civil
partnership with limitation of liability established under the laws of the
Federal Republic of Germany
By: INFRASTRUCTURE & ENVIRONMENTAL PRIVATE EQUITY MANAGEMENT III,
L.L.C.,
Investment Manager
By: FIRST ANALYSIS IEPEF MGMT. CO. III, L.L.C.,
A Member
By: FIRST ANALYSIS CORPORATION, A Member
By: /s/ Xxxxx Xxxxxxx
-------------------------------------
Title: Managing Director
----------------------------------
20
[SIGNITURE PAGE CONTINUES]
THE PRODUCTIVITY FUND III, L.P.
By: FIRST ANALYSIS MANAGEMENT COMPANY III,
L.L.C.,General Partner
By: /s/ Xxxxx Xxxxxxx
--------------------------------------
Title: Managing Director
----------------------------------
21
