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Exhibit 10.48
AMENDMENT TO PLAN AND AGREEMENT OF MERGER
This Amendment to Plan and Agreement of Merger (this "AMENDMENT") is
made as of this 15th day of March, 2001 and is entered into by and among
Security Associates International, Inc, a Delaware corporation ("SAI"), King
Acquisition Corp., a Delaware corporation ("KING ACQUISITION"), KC Acquisition
Corp., a New Jersey corporation (the "COMPANY"), Xx. Xxxxxx X. Few Sr. ("FEW"),
Xx. Xxxxx X. Xxxxx ("XXXXX") and Xx. Xxxxxxx X. XxXxxx ("XXXXXX"; Few, Xxxxx and
XxXxxx are collectively referred to herein as the "SELLING SHAREHOLDERS").
RECITALS
WHEREAS, SAI, King Acquisition, Company and Selling Shareholders are
parties to that certain Plan and Agreement of Merger dated as of May 11, 2000
(the "AGREEMENT"); and
WHEREAS, the parties wish to amend the Agreement by, among other
things, (i) increasing the cash consideration to be paid pursuant to Article 2
of the Agreement, (ii) modifying the liquidation preference and certain other
provisions of SAI Preferred to be distributed to the Selling Shareholders and
(iii) modifying the allocation of the SAI Preferred among the Selling
Shareholders.
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises and covenants set forth below, the undersigned hereby mutually agree as
follows:
I. AMENDMENTS TO AGREEMENT
(a) Section 1.77 of the Agreement is hereby deleted in its entirety
and the following shall be substituted therefor:
1.77 "SAI PREFERRED" SHALL MEAN, COLLECTIVELY, THE SERIES C
PREFERRED AND THE SERIES D PREFERRED. EXCEPT FOR THEIR
RESPECTIVE LIQUIDATION VALUES, EACH OF THE SERIES C PREFERRED
AND SERIES D PREFERRED SHALL BE SUBSTANTIALLY IDENTICAL IN ALL
OTHER RESPECTS.
"SERIES C PREFERRED" SHALL MEAN THE SERIES C CONVERTIBLE PREFERRED STOCK, PAR
VALUE $10.00 PER SHARE OF SAI, OF WHICH THERE SHALL BE 36,000 TOTAL SHARES
AUTHORIZED, EACH HAVING A LIQUIDATION VALUE OF $350 PER SHARE AND CONVERTIBLE
INTO 100 SHARES OF COMMON STOCK, AND OTHERWISE HAVING SUBSTANTIALLY THE TERMS,
PREFERENCES AND PROVISIONS SET FORTH IN THE CERTIFICATE OF DESIGNATIONS
THEREFORE FILED IN THE STATE OF DELAWARE AND PREVIOUSLY DISCLOSED TO THE SELLING
SHAREHOLDERS;
"SERIES D PREFERRED" SHALL MEAN THE SERIES D CONVERTIBLE PREFERRED STOCK, PAR
VALUE $10.00 PER SHARE OF SAI, OF WHICH THERE SHALL BE 9,000 TOTAL SHARES
AUTHORIZED, EACH HAVING A LIQUIDATION VALUE OF $450 PER SHARE AND CONVERTIBLE
INTO 100 SHARES OF COMMON STOCK, AND OTHERWISE HAVING SUBSTANTIALLY THE TERMS,
PREFERENCES AND PROVISIONS SET FORTH IN THE CERTIFICATE OF DESIGNATIONS THEREFOR
FILED IN THE STATE OF DELAWARE AND PREVIOUSLY DISCLOSED TO THE SELLING
SHAREHOLDERS;
(b) Section 1.96 of the Agreement is hereby deleted in its entirety
and the following shall be substituted therefor:
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"SV NOTE" SHALL MEAN THAT CERTAIN PROMISSORY NOTE, EXECUTED BY KING IN
FAVOR OF SV IN THE ORIGINAL PRINCIPAL AMOUNT OF $1,500,000.
(c) Section 2.6 of the Agreement is hereby deleted in its entirety and
the following shall be substituted therefor:
2.6 CONVERSION OF SECURITIES. AT THE EFFECTIVE TIME, BY VIRTUE OF THE
MERGER AND WITHOUT ANY ACTION ON THE PART OF KING ACQUISITION, THE
COMPANY OR THE HOLDERS OF ANY OF THE FOLLOWING SECURITIES, THE
FOLLOWING SECURITIES WILL BE CONVERTED IN THE MANNER SET FORTH
BELOW:
(A) FEW SHALL RECEIVE (X) FOR EACH SHARE OF COMPANY
COMMON HELD BY FEW WHICH IS ISSUED AND OUTSTANDING
IMMEDIATELY PRIOR TO THE EFFECTIVE TIME SHALL BE
CANCELED AND EXTINGUISHED AND CONVERTED INTO AND
BECOME A RIGHT TO RECEIVE 225 SHARES OF SERIES C
PREFERRED AND (Y) IMMEDIATELY AVAILABLE FUNDS IN AN
AMOUNT EQUAL TO $5,200,000.
(B) XXXXX SHALL RECEIVE (X) FOR EACH SHARE OF COMPANY
COMMON HELD BY XXXXX WHICH IS ISSUED AND OUTSTANDING
IMMEDIATELY PRIOR TO THE EFFECTIVE TIME SHALL BE
CANCELED AND EXTINGUISHED AND CONVERTED INTO AND
BECOME A RIGHT TO RECEIVE 225 SHARES OF SERIES D
PREFERRED AND (Y) IMMEDIATELY AVAILABLE FUNDS IN AN
AMOUNT EQUAL TO $650,000.
(C) XXXXXX SHALL RECEIVE (X) FOR EACH SHARE OF COMPANY
COMMON HELD BY XXXXXX WHICH IS ISSUED AND OUTSTANDING
IMMEDIATELY PRIOR TO THE EFFECTIVE TIME SHALL BE
CANCELED AND EXTINGUISHED AND CONVERTED INTO AND
BECOME A RIGHT TO RECEIVE 225 SHARES OF SERIES D
PREFERRED AND (Y) IMMEDIATELY AVAILABLE FUNDS IN AN
AMOUNT EQUAL TO $650,000.
(D) TO THE EXTENT THAT ACTUAL RMR IS LESS THAN THE
MINIMUM RMR, THEN THE NUMBER OF SHARES SERIES C
PREFERRED AND SERIES D PREFERRED TO BE EXCHANGED
PURSUANT TO THIS SECTION 2.6 SHALL BE PROPORTIONATELY
REDUCED, PRO RATA, BASED ON THE RESPECTIVE
LIQUIDATION VALUES OF SERIES C PREFERRED AND SERIES D
PREFERRED, AND BASED ON THE RESPECTIVE NUMBER OF
SHARES OF COMPANY COMMON HELD BY EACH SELLING
SHAREHOLDER.
(E) EACH SHARE OF ACQUISITION COMMON ISSUED AND
OUTSTANDING IMMEDIATELY PRIOR TO THE EFFECTIVE TIME
SHALL BE CONVERTED INTO ONE VALIDLY ISSUED, FULLY
PAID AND NONASSESSABLE SHARE OF COMMON STOCK OF THE
SURVIVING CORPORATION.
(d) Section 2.8 of the Agreement is hereby deleted in its entirety and
the following shall be substituted therefor:
2.8 EXCHANGE OF COMMON CERTIFICATES. EACH HOLDER OF A CERTIFICATE OR
CERTIFICATES REPRESENTING SHARES OF COMPANY COMMON ISSUED AND OUTSTANDING
IMMEDIATELY PRIOR TO THE EFFECTIVE TIME SHALL AT THE CLOSING, SURRENDER TO SAI
FOR EXCHANGE A CERTIFICATE OR CERTIFICATES, DULY ENDORSED IN BLANK OR
ACCOMPANIED BY DULY EXECUTED STOCK POWERS, REPRESENTING THE NUMBER OF SHARES OF
COMPANY COMMON HELD BY SUCH HOLDER. IN EXCHANGE THEREFOR AND AGAINST RECEIPT
THEREOF, SAI SHALL AT CLOSING ISSUE TO SUCH HOLDER OF COMPANY COMMON A
CERTIFICATE OR
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CERTIFICATES REPRESENTING THE NUMBER AND CLASS OF SHARES OF SAI
PREFERRED TO BE ISSUED TO SUCH HOLDER PURSUANT TO SECTIONS 2.6(A), (B) AND (C),
AS APPLICABLE; AND THE CASH TO BE DELIVERED TO SUCH HOLDER PURSUANT TO SECTIONS
2.6(A), (B) AND (C), AS APPLICABLE. UNTIL SO SURRENDERED AND EXCHANGED, EACH
SUCH CERTIFICATE SHALL REPRESENT SOLELY THE RIGHT TO RECEIVE THE CONSIDERATION
THEREFOR PROVIDED HEREIN, WITHOUT INTEREST, AND SAI SHALL NOT BE REQUIRED TO
ISSUE TO SUCH HOLDER THE STOCK TO WHICH SUCH HOLDER OTHERWISE WOULD BE ENTITLED;
PROVIDED, THAT PROCEDURES ALLOWING FOR PAYMENT AGAINST RECEIPT OF CUSTOMARY AND
APPROPRIATE CERTIFICATIONS AND INDEMNITIES SHALL BE PROVIDED WITH RESPECT TO
LOST OR DESTROYED CERTIFICATES.
(e) A new Section 2.11 is hereby added to the Agreement as follows:
2.11. NONCOMPETITION PAYMENTS. IN CONSIDERATION FOR HIS COVENANTS AND
AGREEMENTS IN SECTION 5.9, SAI SHALL PAY TO FEW, IN IMMEDIATELY
AVAILABLE FUNDS, THE AMOUNT OF $25,000 PER CALENDAR MONTH (OR PARTIAL,
PRORATED MONTH), PAYABLE ON THE LAST DAY OF EACH CONSECUTIVE CALENDAR
MONTH, COMMENCING ON THE LAST DAY OF THE CALENDAR MONTH THAT BEGINS
AFTER THE CLOSING, AND ENDING ON THE LAST DAY OF THE SIXTIETH (60TH)
MONTH AFTER THE CLOSING DATE.
(f) Section 3.5 of the Agreement is hereby amended by replacing the
defined term "SV Option" therein with the defined term "SV NOTE".
(g) The following is added immediately at the end of Section 4.4:
SAI HEREBY REPRESENTS AND WARRANTS TO THE SELLING SHAREHOLDERS THAT SET
FORTH ON SCHEDULE 4.4 IS A LIST SETTING FORTH THE AUTHORIZED AND ISSUED
CAPITAL STOCK, BY CLASS, AND A SUMMARY OF ALL OPTIONS, WARRANTS OR
RIGHTS TO ACQUIRE CAPITAL STOCK OR SECURITIES CONVERTIBLE INTO OR
EXCHANGEABLE FOR CAPITAL STOCK, OF SAI AS OF THE DATE HEREOF AND BEFORE
GIVING EFFECT TO THE TRANSACTIONS CONTEMPLATED HEREBY OR BY THE
INVESTMENT AGREEMENT DATED AS OF MARCH 15, 2001 AMONG THE SELLING
SHAREHOLDERS, SAI, SECURITYVILLAGE AND THE OTHER PARTIES THERETO.
(h) Section 9.5(f) of the Agreement is hereby deleted in its entirety
and the following shall be substituted therefor:
(F) OFFICER'S CERTIFICATE. CERTIFICATES, DATED AS OF THE
CLOSING DATE, RESPECTIVELY, FROM AN OFFICER OF SAI,
CONFIRMING THE SATISFACTION OF THE CONDITIONS
REQUIRED PURSUANT TO SECTIONS 8.1 AND 8.2 AS OF THE
CLOSING;
(i) Section 10.1 (a)(ii) of the Agreement is hereby deleted in its
entirety and the following shall be substituted therefor:
(II) ANY LIABILITY OF THE COMPANY OR ITS SUBSIDIARIES NOT
DISCLOSED IN WRITING PRIOR ON THE DISCLOSURE
SCHEDULES, INCLUDING AS THE DISCLOSURE SCHEDULES ARE
UPDATED IN CONNECTION WITH ANY AMENDMENT TO THIS
AGREEMENT (OTHER THAN
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LIABILITIES OF A SIMILAR TYPE AS THOSE DISCLOSED
WHICH ARISE AFTER SUCH DISCLOSURE AND PRIOR TO THE
CLOSING DATE IN THE ORDINARY COURSE OF BUSINESS, TO
THE EXTENT EXPRESSLY PERMITTED BY THE TERMS OF THIS
AGREEMENT);
II. MISCELLANEOUS
(a) Capitalized terms not otherwise defined in this Amendment shall
have the meanings ascribed to them in the Agreement.
(b) Except as otherwise provided in this Amendment, the Agreement shall
remain in full force and effect unless and until it is terminated pursuant to
its terms.
(a) This Amendment may be executed in one or more
counterparts, each of which shall be deemed an
original, and all of which, taken together, shall
constitute one and the same instrument.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.
SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, the parties have caused this Amendment to Plan and
Agreement of Merger be duly executed on the date first above written.
SECURITY ASSOCIATES
INTERNATIONAL, INC.
By:_____________________________________
Xxxxx X. Xxxxxxx, its President
KING ACQUISITION CORP.
By:_____________________________________
Title:__________________________________
KC ACQUISITION CORP.
By:_____________________________________
Title:__________________________________
SELLING SHAREHOLDERS
________________________________________
Xxxxxx X. Few, Sr.
________________________________________
Xxxxxxx X. XxXxxx
________________________________________
Xxxxx X. Xxxxx
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SCHEDULE 4.4
CAPITALIZATION
Class Authorized Issued
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SAI Common 50,000,000 7,757,657
Series A Convertible Preferred 137,686 137,359
Series B Convertible Preferred 45,000 0
Undesignated Preferred Stock 817,314 0
The Company has reserved for issuance the following amounts of SAI
Common:
Series A Convertible Preferred 13,768,600
Stock Option Plan 2,800,000
Management Incentive Options 11,808
Miscellaneous Options 82,723
S1 Warrants 121,104
S1 Stock 1,388,786
Stock Purchase Plan 350,000
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TOTAL 18,523,021
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