STOCK PURCHASE AGREEMENT
EXHIBIT 4
EXECUTION COPY
STOCK PURCHASE AGREEMENT (this “Agreement”) dated as of January 14, 2014, between Xxxxxxx X. Brand (the “Seller”) and Echo Holdings, LLC (the “Buyer”).
WHEREAS, the Buyer desires to purchase from the Seller, and the Seller desires to sell to the Buyer, 503,477 shares of common stock, $0.0033 par value, per share (the “Stock”) issued by Emrise Corporation (the “Company”), subject to the terms and conditions set forth herein; and
NOW THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Seller and the Buyer hereby agree as follows:
1. Purchase and Sale of the Stock. Subject to the terms and conditions of this Agreement, the Seller shall sell, transfer and deliver or cause to be sold, transferred and delivered to the Buyer, and the Buyer shall purchase from the Seller, the Stock for $0.30 per share or an aggregate purchase price of $151,043.10 (the “Purchase Price”), payable as set forth below in Section 2.
2. Closing. The closing (the “Closing”) of the purchase and sale of the Stock shall be held at the offices of the Buyer, at 10:00 a.m. on January 21, 2014, or, if the conditions to the Closing set forth in Section 3 shall not have been satisfied by such date, as soon as practicable after such conditions shall have been satisfied. At the Closing, the Seller shall deliver or cause to be delivered to the Buyer (i) a copy of an executed letter of intent addressed to the Seller’s broker-dealer (the “Seller Broker”), advising the Seller Broker to deliver the Stock electronically through the DTC (Depository Trust Company) to an account of the Buyer designated in writing by the Buyer to the Seller and (ii) a copy of the legal opinion (a form of which is included in Exhibit B attached hereto), the representation letter or other documents delivered by the Seller (or the Seller’s counsel) in connection with the removal of restrictive legends on the Stock. Upon confirmation of receipt of the Stock by the Buyer’s broker-dealer, the Buyer shall deliver the Purchase Price by wire transfer of immediately available funds to an account of the Seller designated in writing by the Seller to the Buyer. The Seller shall be liable for, and shall pay when due, any transfer, gains, documentary, sales, use, registration, stamp, value added or similar taxes, payable by reason of the transactions contemplated by this Agreement or attributable to the sale, transfer or delivery of the Stock, and the Seller shall, at his own expense, file all necessary tax returns and other documentation with respect to such taxes.
3. Conditions to Closing. (a) The Buyer’s Obligation. The obligation of the Buyer to purchase and pay for the Stock is subject to the satisfaction (or waiver by the Buyer) as of the Closing of the following conditions:
(i) The representations and warranties of the Seller made in this Agreement shall be true and correct in all material respects, as of the date hereof and as of the time of the Closing as though made as of such time. The Seller shall have performed or
complied in all material respects with all obligations and covenants required by this Agreement to be performed or complied with by the Seller by the time of the Closing.
(ii) No statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent injunction or other order enacted, entered, promulgated, enforced or issued by any Federal, state, local or foreign government or any court of competent jurisdiction, administrative agency or commission or other governmental authority or instrumentality, domestic or foreign (a “Governmental Entity”) or other legal restraint or prohibition preventing the purchase and sale of the Stock shall be in effect.
(iii) The Buyer’s satisfactory completion of its due diligence with respect to the Company.
(b) The Seller’s Obligation. The obligation of the Seller to sell and deliver the Stock to the Buyer is subject to the satisfaction (or waiver by the Seller) as of the Closing of the following conditions:
(i) The representations and warranties of the Buyer made in this Agreement shall be true and correct in all material respects, as of the date hereof and as of the time of the Closing as though made as of such time. The Buyer shall have performed or complied in all material respects with all obligations and covenants required by this Agreement to be performed or complied with by the Buyer by the time of the Closing.
(ii) No statute, rule, regulation, executive order, decree, temporary restraining order, preliminary or permanent injunction or other order enacted, entered, promulgated, enforced or issued by any Governmental Entity or other legal restraint or prohibition preventing the purchase and sale of the Stock shall be in effect.
4. Representations and Warranties of the Seller. The Seller hereby represents and warrants to the Buyer as follows:
(a) Authority. The Seller has all requisite power and authority to enter into this Agreement, to perform his obligations hereunder and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by the Seller and constitutes a legal, valid and binding obligation of the Seller, enforceable against the Seller in accordance with its terms.
(b) No Conflicts; Consents. The execution and delivery of this Agreement by the Seller do not, and the consummation of the transactions contemplated hereby and compliance with the terms hereof will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, or give rise to a right of termination, cancelation or acceleration of any obligation or to loss of a material benefit under, or result in the creation of any lien (statutory or other), claim, encumbrance, mortgage, security interest, community property interest, option, charge pledge, condition, equitable interest, right of first refusal, or restriction of any kind on the Stock or, including any restriction on the use, voting, transfer, receipt of income or exercise of any other attribute of ownership of the Stock (collectively, “Encumbrances”) under, any provision of (i) any contract, commitment, agreement or arrangement to which the Seller is a party or by which any shares of the Stock are bound or (ii)
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any judgment, order or decree, or statute, law, ordinance, rule or regulation applicable to the Seller or the Stock. No consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required to be obtained or made by or with respect to the Seller in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby.
(c) The Stock. The Seller has good and valid title to the Stock, free and clear of any Encumbrances of any kind. Assuming the Buyer has the requisite power and authority to be the lawful owner of the Stock, upon delivery to the Buyer at the Closing of the Stock, and upon the Seller’s receipt of the Purchase Price, good and valid title to the Stock will pass to the Buyer, free and clear of any Encumbrances, other than those arising from acts of the Buyer. The Stock is not subject to any voting trust agreement or other contract, agreement, arrangement, commitment or understanding, including any such agreement, arrangement, commitment or understanding restricting or otherwise relating to the voting, dividend rights or disposition of the Stock.
(d) Actions and Proceedings, etc. There are no (i) outstanding judgments, orders, injunctions or decrees of any Governmental Entity or arbitration tribunal against the Seller, (ii) lawsuits, actions or proceedings pending or, to the knowledge of the Seller, threatened against the Seller, or (iii) investigations by any Governmental Entity which are, to the knowledge of the Seller, pending or threatened against the Seller, and which, in the case of each of clauses (i), (ii) and (iii), have a material adverse effect on the ability of the Seller to consummate the transactions contemplated hereby.
(e) Disclosure; Public Information. Neither the Seller nor any representative, agent, attorney or any other person acting on behalf of the Seller has provided the Buyer or its representatives, agents, attorneys or any other person acting on behalf of the Buyer with any information that constitutes or might be reasonably be expected to constitute material, non-public information (for purposes of United States federal and state securities laws) with respect to the Company, its affiliates or any of the securities of the Company or its affiliates.
(f) Entire Position; Recent Sales; Negotiations. The Stock sold hereby constitutes all Stock owned by the Seller and the Seller has not purchased or sold any shares of Stock in the six month period preceding the date of this Agreement. The Seller hereby acknowledges and agrees that the terms and provisions of this Agreement are the result of arm's length and good faith negotiations between the Buyer and the Seller, and the Purchase Price for the Stock is fair and reasonable.
5. Representations and Warranties of the Buyer. The Buyer hereby represents and warrants to the Seller as follows:
(a) Organization and Standing. The Buyer is duly organized, validly existing and in good standing under the laws of the jurisdiction of its formation.
(b) Authority. The Buyer has all requisite power and authority to enter into this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. All acts and other proceedings required to be taken by the Buyer to
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authorize the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby have been duly and properly taken. This Agreement has been duly executed and delivered by the Buyer and constitutes a legal, valid and binding obligation of the Buyer, enforceable against the Buyer in accordance with its terms.
(c) No Conflicts; Consents. The execution and delivery of this Agreement by the Buyer do not, and the consummation of the transactions contemplated hereby and compliance with the terms hereof will not, conflict with, or result in any violation of or default (with or without notice or lapse of time, or both) under, any provision of (i) the organizational documents, of the Buyer, (ii) any contract, commitment, agreement or arrangement to which the Buyer is a party or by which its properties or assets are bound, or (iii) any judgment, order, or decree, or statute, law, ordinance, rule or regulation applicable to the Buyer or its properties or assets. No consent, approval, license, permit, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required to be obtained or made by or with respect to the Buyer in connection with the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby.
(d) Securities Act. The Stock purchased by the Buyer pursuant to this Agreement are being acquired for investment only and not with a view to any public distribution thereof, and the Buyer shall not offer to sell or otherwise dispose of the Stock so acquired by it in violation of any of the registration requirements of the Securities Act of 1933, as amended.
(e) Actions and Proceedings, etc. There are no (i) outstanding judgments, orders, injunctions or decrees of any Governmental Entity or arbitration tribunal against the Buyer, (ii) lawsuits, actions or proceedings pending or, to the knowledge of the Buyer, threatened against the Buyer, or (iii) investigations by any Governmental Entity which are, to the knowledge of the Buyer, pending or threatened against the Buyer, and which, in the case of each of clauses (i), (ii) and (iii), would reasonably be expected to have a material adverse effect on the ability of the Buyer to consummate the transactions contemplated hereby.
(f) No Reliance. The Buyer is a sophisticated investor and has sufficient knowledge and experience in investing in securities to properly evaluate the merits of the transactions contemplated hereby. The Buyer has independently, and without reliance upon the Seller, and based on such information as the Buyer has deemed appropriate, made its own analysis and decision to purchase the Stock pursuant to the terms hereof. It is hereby expressly understood and agreed by the Buyer that the Seller makes no representation or warranty whatsoever with respect to the business, condition (financial or otherwise), properties, prospects, status or affairs of the Company, or with respect to the value of any of the Stock being sold hereunder. The Buyer is able to bear the economic risk of an investment in the Stock and, at the present time, is able to afford a complete loss of such investment.
6. Further Assurances. From time to time, as and when requested by either party hereto, the other party shall execute and deliver, or cause to be executed and delivered, all such documents and instruments and shall take, or cause to be taken, all such further or other actions, as such other party may reasonably deem necessary or desirable to consummate the transactions contemplated by this Agreement.
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7. Indemnity. The Seller hereby agrees to defend, indemnify and hold harmless the Buyer, its members, affiliates, directors and officers (collectively, “Indemnified Parties”), from and against, and shall pay and reimburse each of them for, any and all losses, claims, damages and liabilities (including, without limitation, legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), incurred or sustained by, or imposed upon, the Indemnified Parties based upon, arising out of, with respect to or by reason of:
(a) any inaccuracy in or breach of any of the representations or warranties of the Seller contained in this Agreement or in any certificate or instrument delivered by or on behalf of the Seller pursuant to this Agreement, as of the date such representation or warranty was made or as if such representation or warranty was made on and as of the Closing; or
(b) any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Seller pursuant to this Agreement or any certificate or instrument delivered by or on behalf of the Seller pursuant to this Agreement.
8. Assignment. This Agreement and the rights and obligations hereunder shall not be assignable or transferable by the Buyer or the Seller without the prior written consent of the other party hereto; provided, however, that the Buyer may assign its right to purchase the Stock hereunder to a fund or account under common control with the Buyer without the prior written consent of the Seller; provided further, however, that no assignment shall limit or affect the assignor’s obligations hereunder. Any attempted assignment in violation of this Section 8 shall be void.
9. No Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their permitted assigns and nothing herein expressed or implied shall give or be construed to give to any person, other than the parties hereto and such assigns, any legal or equitable rights hereunder.
10. Termination. (a) Anything contained herein to the contrary notwithstanding, this Agreement may be terminated and the transactions contemplated hereby abandoned at any time prior to the Closing Date:
(i) by mutual written consent of the Seller and the Buyer;
(ii) by the Buyer if any of the conditions set forth in Section 3(a) shall have become incapable of fulfillment, and shall not have been waived by the Buyer;
(iii) by the Seller if any of the conditions set forth in Section 3(b) shall have become incapable of fulfillment, and shall not have been waived by the Seller; or
(iv) by either party hereto if the Closing shall not have occurred by the close of business on February 18, 2014;
provided, however, that the party seeking termination pursuant to clause (ii) or (iii) is not in breach of any of its representations, warranties, covenants or agreements contained in this Agreement.
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(b) If this Agreement is terminated and the transactions contemplated hereby are abandoned as described in this Section 10, this Agreement shall become void and of no further force or effect.
11. Expenses. Whether or not the transactions contemplated hereby are consummated, and except as otherwise specifically provided in this Agreement, all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs or expenses.
12. Amendments. No amendment, modification or waiver in respect of this Agreement shall be effective unless it shall be in writing and signed by both parties hereto.
13. Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) if applicable, on the date sent by e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage prepaid, as follows:
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(i)
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if to the Buyer,
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000 Xxx Xxxx Xxxx, Xxxxx XXXX
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Xxx, XX 00000
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Attention: Xxxxx X. Brand
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With copy to:
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Xxxxxx Xxxx & Xxxxxx LLP
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000 Xxxx Xxxxxx
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Xxx Xxxx, XX 00000
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Attention: Xxxxx X. Xxxxx, Esq.
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xxxxxx@xxxxxxxxxx.xxx
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(ii)
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if to the Seller,
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Xxxxxxx X. Brand
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000 Xxxxxxxx Xxxx
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Xxxxx Xxxx, XX 00000
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With copy to:
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Xxxxxxxx, Xxxxxxxx & Xxxxxx, P.C.
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000 Xxxx Xxxx Xxxx, Xxxxx 000
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Red Bank, NJ 07701
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Attention: Xxxx X. Xxxxxx, Esq.
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xxxxxxx@xxxxxx.xxx
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14. Interpretation. The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
15. Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same agreement, and shall become effective when one or more such counterparts have been signed by each of the parties and delivered to the other party. Transmission of such counterparts by email of PDFs shall constitute effective delivery.
16. Entire Agreement. This Agreement contains the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersede all prior agreements and understandings relating to such subject matter. Neither party shall be liable or bound to any other party in any manner by any representations, warranties or covenants relating to such subject matter except as specifically set forth herein.
17. Severability. If any provision of this Agreement (or any portion thereof) or the application of any such provision (or any portion thereof) to any person or circumstance shall be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision hereof (or the remaining portion thereof) or the application of such provision to any other persons or circumstances.
18. Consent to Jurisdiction. The Buyer and the Seller irrevocably submit to the exclusive jurisdiction of (a) the Supreme Court of the State of New York, New York County, and (b) the United States District Court for the Southern District of New York, for the purposes of any suit, action or other proceeding arising out of this Agreement or any transaction contemplated hereby. The Buyer and the Seller agree to commence any action, suit or proceeding relating hereto either in the United States District Court for the Southern District of New York or if such suit, action or other proceeding may not be brought in such court for jurisdictional reasons, in the Supreme Court of the State of New York, New York County. The Buyer and the Seller further agree that service of any process, summons, notice or document by U.S. registered mail to such party’s respective address set forth above shall be effective service of process for any action, suit or proceeding in New York with respect to any matters to which it has submitted to jurisdiction in this Section 18. The Buyer and the Seller irrevocably and unconditionally waive any objection to the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated hereby in (i) the Supreme Court of the State of New York, New York County, or (ii) the United States District Court for the Southern District of New York, and hereby further irrevocably and unconditionally waives and agrees not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum.
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19. Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of New York applicable to agreements made and to be performed entirely within such State, without regard to the conflicts of law principles of such State.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the date first written above.
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/s/ Xxxxxxx X. Brand
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Xxxxxxx X. Brand
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/s/ Xxxxx X. Brand
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Name: Xxxxx X. Brand
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Title: Managing Member
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EXHIBIT B
Form of legal opinion
000 Xxx Xxxx Xxxx, Xxxxx XXXX
Xxx, XX 00000
Attention: Xxxxx X. Brand
Gentlemen:
We are special counsel to Xxxxxxx X. Brand (the “Holder”) in connection with the sale of capital stock issued by Emrise Corporation (the “Company”). We have been informed that the Holder is selling or intends to sell an aggregate of 503,477 shares of the Company’s common stock, par value $0.0033 per share (the “Shares”) to Echo Holdings, LLC. The Shares were issued by the Company to the Holder pursuant to an exemption from registration under the Securities Act of 1933, as amended (the “Act”). The Company has indicated in the most recent report filed by the Company with the Securities and Exchange Commission (the “Commission”) pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, that it has filed all reports required to be filed thereunder during the preceding twelve months and that it has been subject to the filing requirements thereunder for the past ninety days.
In rendering the within advice, we have reviewed (i) a copy of a Stock Purchase Agreement dated as of January 8, 2014 between Xxxxxxx Brand and Echo Holdings, LLC; (ii) a copy of the broker-dealer account statement of the Holder reflecting the number of Shares owned by the Holder, (iii) a copy of a representation letter, dated January 9, 2014, executed by the Holder, and (iv) a copy of the executed letter of intent addressed to the Holder’s broker-dealer, Xxxxx Securities, Inc., advising Xxxxx Securities, Inc. to deliver the Shares to an account of Echo Holdings, LLC designated in writing by Echo Holdings, LLC to the Holder.
For purposes of this letter, we have assumed the authenticity of such documents, the genuineness of all signatures, the legal capacity of natural persons and the conformity to the originals of all documents submitted to us as copies. We have assumed without independent verification the accuracy of the representations as to factual matters set forth in such documents. We further assume that the Company is not and has never been a shell company as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended, and that the purchaser of the Shares is not and has never been an affiliate of the Company as defined in Rule 405 promulgated under the Securities Act of 1933, as amended.
Based on the foregoing facts and subject to the assumptions and qualifications set forth above, we advise you that no restrictive legend or other notation regarding restrictions on transfers of the Shares pursuant to the Act is required in connection with the sale and transfer of the Shares by the Holder to Echo Holdings, LLC.
The advice set forth herein is based on the federal laws of the United States as the same exist on the date hereof, and no advice is expressed as to the laws of any other jurisdiction. This letter is solely for the benefit of the addressee hereof and is not to be quoted in whole or in
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part or otherwise referred to, nor is it to be filed with any governmental agency or any other person or entity, and no one other than the addressee hereof is entitled to rely on this opinion.
Very truly yours,
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