Exhibit 10.116
STOCK PURCHASE AND SALE AGREEMENT
STOCK PURCHASE AND SALE AGREEMENT ("Agreement") dated September 8,
1999 among Xxxx Security International, a Delaware Corporation ("Seller"), and
Park Equity Partners, a New Jersey general partnership ("Purchaser").
W I T N E S E T H:
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WHEREAS, Seller has common stock with a par value $.0001 per share in
the amount of 238,095 shares available for sale at a price of Eight Dollars and
Forty Cents ($8.40) per share (the "Shares"); and
WHEREAS, Seller wishes to sell, and Purchaser wishes to purchase the
Shares for the purchase price and upon the terms and subject to the conditions
described below;
NOW, THEREFORE, in reliance on the representations, warranties and
agreements and subject to the terms and conditions hereinafter set forth, the
parties hereby agree as follows:
1. SALE AND PURCHASE OF SHARES. Upon the execution of this
Agreement, Seller shall sell, deliver and transfer to Purchaser, and Purchaser
shall purchase from Seller Two Hundred Thirty Eight Thousand Ninety Five
(238,095) Shares for a total purchase price of Two Million ($2,000,000) Dollars,
free and clear of all liens, encumbrances or claims of any kind.
2. PURCHASE PRICE. In full consideration for the Shares, Purchaser
shall pay to Sellers, upon execution of this Agreement, $2,000,000 to Seller by
wire transfer or other good funds.
3. DELIVERIES OF SELLER. Seller shall deliver to Purchaser
certificates evidencing the Shares no latter than three days after the purchase
price of $2,000,000 is paid. Upon execution of this Agreement, Seller shall:
(i) deliver, or shall cause to be delivered to Purchaser, a copy of the
resolutions of the Boards of Directors of Seller authorizing the execution and
delivery of this Agreement and the consummation of the transactions contemplated
herein and (ii) execute and deliver such other documents as Purchaser may
reasonable request. The Shares represented by the Certificates shall be
delivered to Purchaser free and clear of all Claims (as hereinafter defined in
Section 4(h)).
4. REPRESENTATIONS AND WARRANTIES OF SELLER. The Seller represents,
warrants and agrees that:
(a) Organization and Qualification. Seller is a corporation duly
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incorporated and existing in good standing under the laws of the State of
Delaware and has the requisite corporate power to own its properties and to
carry on its business as now being conducted. Seller and each of its
subsidiaries, if any, is duly qualified as a foreign corporation to do business
and is in good standing
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in every jurisdiction in which the nature of the business conducted or property
owned by it makes such qualification necessary other than those in which the
failure so to qualify would not have a Material Adverse Effect. "Material
Adverse Effect", for purposes of this Agreement, means any adverse effect on the
business, operations, properties, prospects, or financial condition of the
entity with respect to which such term is used and which is material to such
entity and other entities controlled by such entity taken as a whole.
(b) Authorization; Enforcement.
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(i) Seller has the requisite corporate power and authority to enter
into and perform this Agreement and to issue the Shares, in accordance with the
terms hereof, (ii) the execution and delivery of this Agreement by Seller and
the consummation by it of the transactions contemplated hereby have been duly
authorized by all necessary corporate action, and no further consent or
authorization of Seller or its Board of Directors or stockholders is required,
(iii) this Agreement has been duly executed and delivered by Seller, (iv) this
Agreement constitutes a valid and binding obligation of Seller enforceable
against Seller in accordance with its terms (except as such enforceability may
be limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation or similar laws relating to, or affecting generally the enforcement
of, creditors' rights and remedies or by other equitable principles of general
application) and (v) prior to the Closing Date, any necessary amendment to
Seller's Articles of Incorporation authorizing Company to issue all of the
Shares will be in full force and effect, enforceable against Seller in
accordance with the terms of such amended Articles of Incorporation.
(c) Issuance of Shares. The issuance of the Shares has been duly authorized
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and, when paid for and issued in accordance with the terms hereof, the Shares
shall be validly issued, fully paid and non-assessable.
(d) No Conflicts. Seller has furnished or made available to the Purchaser
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true and correct copies of Seller's Articles of Incorporation as in effect on
the date hereof (the "Articles"), and Seller's By-Laws, as in effect on the date
hereof (the "By-Laws"). The execution, delivery and performance of this
Agreement by Seller and the consummation by Seller of the transactions
contemplated hereby do not and will not (i) result in a violation of Seller's
Articles or By-Laws or (ii) conflict with, or constitute a default (or an event
which with notice or lapse of time or both would become a default) under, or
give to others any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which Seller or any
of its subsidiaries is a party, or result in a violation of any federal, state,
local or foreign law, rule, regulation, order, judgment or decree (including
Federal and state securities laws and regulations) applicable to Seller or any
of its subsidiaries or by which any property or assets of Seller or any of its
subsidiaries is bound or affected (except for such conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations as would
not, individually or in the aggregate, have a material adverse effect); provided
that, for purposes of such representation as to Federal, state, local or foreign
law, rule or regulation, no representation is made herein with respect to any of
the same applicable solely to the Purchaser and not to Seller. To the best of
Seller's knowledge, the business of Seller is not being conducted in violation
of any law, ordinance or regulations of any governmental entity, except
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for violations which either singly or in the aggregate do not and will not have
a material adverse effect. Seller is not required under Federal, state or local
law, rule or regulation in the United States to obtain any consent,
authorization or order of, or make any filing or registration with, any court or
governmental agency in order for it to execute, deliver or perform any of its
obligations under this Agreement or issue and sell the Shares in accordance with
the terms hereof (other than any SEC, NASD, NASDAQ or state securities filings
which may be required to be made by Seller subsequent to the Closing, and any
registration statement which may be filed pursuant hereto); provided that, for
purposes of the representation made in this sentence, Seller is assuming and
relying upon the accuracy of the relevant representations and agreements of the
Purchaser herein.
(e) SEC Documents, Financial Statements. The Common Stock of Seller is
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registered pursuant to Section 12(g) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and Seller has filed on a timely basis all reports,
schedules, forms, statements and other documents required to be filed by it with
the Securities and Exchange Commission ("SEC") pursuant to the reporting
requirements of the Exchange Act, including material filed pursuant to Section
13(a) or 15(d), in addition to one or more registration statements and
amendments thereto heretofore filed by Seller with the SEC under the Securities
Act (all of the foregoing including filings incorporated by reference therein
being referred to herein as the "SEC Documents"). Seller has delivered to the
Purchaser true and complete copies of the SEC Documents except for the exhibits
and incorporated documents. Seller has not provided to the Purchaser any
information which, according to applicable law, rule or regulation, should have
been disclosed publicly by Seller but which has not been so disclosed, other
than with respect to the transactions contemplated by this Agreement.
As of their respective dates, the SEC Documents complied in all material
respects with the requirements of the Securities Act or the Exchange Act as the
case may be and the rules and regulations of the SEC promulgated thereunder and
other federal, state and local laws, rules and regulations applicable to such
SEC Documents, and neither the Memorandum nor any of the SEC Documents contained
any untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. The financial statements of Seller included in the SEC Documents
comply as to form in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC or other
applicable rules and regulations with respect thereto. Such financial
statements have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis during the periods involved (except (i)
as may be otherwise indicated in such financial statements or the notes thereto
or (ii) in the case of unaudited interim statements, to the extent they may not
include footnotes or may be condensed or summary statements) and fairly present
in all material respects the financial position of Seller as of the dates
thereof and the results of operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).
(f) No General Solicitation. Neither Seller, nor any of its affiliates, or,
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to the best of its knowledge, any person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D under the Securities Act) in connection with the offer
or sale of the Shares.
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(g) No Integrated Offering. Neither Seller, nor any of its affiliates, nor
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any person acting on its or their behalf has, directly or indirectly, made any
offers or sales of any of Seller's securities or solicited any offers to buy any
of such securities, under circumstances that would require registration of the
Shares under the Securities Act.
(h) Ownership of the Shares, Absence of Claims. The Seller has the legal
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authority to issue the Shares, and the Shares are free and clear of any and all
liens, pledges, security interests, options, encumbrances, charges, agreements
or claims of any kind whatsoever (collectively, the "Claims").
(i) Commission Filings. Purchaser has delivered to Seller current (for the
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quarter ending March 30, 1999) and all historical filings made by Seller on
Forms 8-K, 10-K, 10-Q and Proxy Statements timely filed with the SEC for fiscal
year ending December 31, 1998 (the "Public Reports"). The Public Reports
accurately and completely describe, in all material respects, Seller's financial
status, business operations and prospects as of the date of such filings and as
of the date hereof, and do not omit any material facts necessary to make the
information contained in the filings not misleading.
(j) Nasdaq Status. The principal market on which the Shares are currently
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traded is Nasdaq National Market. The Seller is in conformance with all
listing requirements of the Nasdaq Stock Market, Inc. ("Nasdaq"), and has
received no notices of non-compliance from Nasdaq in the twenty-four months
prior to the date of this Agreement.
(k) Capitalization. All of the outstanding shares of the Seller's common
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stock have been validly issued and are full paid and non-assessable. Except for
shares reserved for issuance under the Seller's stock option plan, shares to be
issued in contemplation of this Agreement and contracts requiring Seller to
issue additional shares upon the closing of certain acquisitions currently under
agreement, there are no other scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
exchangeable or convertible into, any shares of capital stock of Seller, or
contracts, commitments, understandings or arrangements by which Seller or
options, warrants, scrip, rights to subscribe to, or commitments to purchase or
acquire, any shares, or securities or rights convertible into shares, of capital
stock of Seller.
(l) No Material Adverse Change. Since December 31, 1998 the date of the
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most recent annual report of Seller on Form 10KSB has been prepared and filed
with the SEC, a copy of which has been supplied to Purchaser, no event which had
or is likely to have a material adverse effect has occurred or exists with
respect to Seller, except as otherwise disclosed or reflected in press releases
or other SEC Documents prepared through or as of a date subsequent to December
31, 1998.
(m) No Litigation. Except as set forth in SEC Documents or otherwise
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disclosed prior to the date of this Agreement, no litigation or claim (including
those for unpaid taxes) against Seller is pending or, to Seller's knowledge
threatened. Seller believes that any litigation or claims that may currently
exist are in the normal course of business and will not have a material adverse
effect upon Seller or effect the transactions contemplated hereby.
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(n) Contravention; Consents and Approvals. No filing, action, consent or
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approval of any person, entity or governmental body is required by the Seller
for the execution and delivery of this Agreement or the consummation of the
transactions contemplated hereby.
5. REPRESENTATIONS AND WARRANTIES OF PURCHASER. Purchaser
represents, warrants and agrees that:
(a) Execution and Effect of Agreement. Purchaser has the full right,
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power and authority to enter into and perform this Agreement. This Agreement
has been duly executed and delivered by Purchaser and is a legal, valid and
binding obligation of Purchaser enforceable in accordance with its terms.
(b) Access to Seller by Purchaser. Purchaser and their
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representatives and advisers have had free and full access during normal
business hours to the Seller's assets, premises, books and records, key
employees and accountants, and have had the opportunity to ask questions and
receive answers about the past performance and current and future prospects of
the Seller's business and assets.
(c) Purchase for Investment. The Purchaser understands and represents
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that: (i) the Purchaser must bear the economic risk of an investment in the
Shares for an indefinite period of time because the Shares have not been
registered under the Securities Act of 1933, as amended (the "1933 Act"), or
under any state securities laws and, therefore, cannot be resold unless they are
subsequently registered under the 1933 Act and the pertinent state securities
laws or unless an exemption from such registration is available; (ii) the
Purchaser is purchasing the Shares for investment for the account of the
Purchaser, not for the account of any other person, and not with any present
view toward resale or other "distribution" thereof within the meaning of the
1933 Act; and (iii) the Purchaser agrees not to resell or otherwise dispose of
all or any part of the Shares, except as permitted by law, including, without
limitation, any and all applicable provisions of this Agreement and any
regulations under the 1933 Act.
(d) Risks of Investment. The Purchaser is aware that an investment in
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the Shares is highly speculative and subject to substantial risks. The
Purchaser is capable of bearing the high degree of economic risk and burdens of
this investment, including the possibility of a complete loss of his investment
and the lack of a public market and limited transferability of the Shares, which
may make the liquidation of this investment impossible for an indefinite period
of time. The financial condition of the Purchaser is such that it is under no
present or contemplated future need to dispose of any of the Shares to satisfy
any existing or contemplated undertaking, need or indebtedness.
(e) Contravention; Consents and Approvals. No filing, action,
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consent or approval of any person, entity or governmental body is required by
the Purchaser for the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
6. BROKERS. Each party represents to the other that it has had no
dealings with any broker or finder in connection with the transactions
contemplated by this Agreement. Should
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any claim be made for a broker's, finder's or similar fee, on account of any
actions or dealings by a party or its agents, such party shall indemnify and
hold the other party harmless from and against any and all liability and
expenses, including reasonable attorneys' fees incurred by reason of any claim
made by such broker.
7. FURTHER ASSURANCES. The parties shall cooperate and take such
actions, and execute such other documents, as either may reasonably request in
order to carry out the provisions or purpose of this Agreement, including
without limitation the execution and delivery by Sellers of additional stock
powers duly executed in blank with respect to the Shares. The parties have
executed even date hereof a Registration Rights Agreement, and a Sales
Restriction Agreement with respect to the Shares.
8. REGISTRATION RIGHTS. The Shares delivered at Closing will not be
registered under the Securities and Exchange Act of 1934 ("Act"). Seller has
provided registration rights pursuant to the Registration Rights Agreement
executed even date with this Agreement.
9. PREEMPTIVE RIGHTS
(a) Seller hereby grants to the Purchaser a first and prior right to
purchase any and all shares of Common Stock, or securities convertible into
Common Stock or containing an option or warrant to purchase Common Stock
("Derivative Securities"), as may hereafter be issued from time to time by
Seller subsequent to the date hereof, except as to Derivative Securities issued
to the Environmental Opportunities Fund II, L.P. and the Environmental
Opportunities Fund II (Institutional), L.P. under a prior preemptive right
contained in a Stock Purchase And Sale Agreement dated June 23, 1999. For
purposes of this Section 9 "Derivative Securities" do not include options or
warrants issued alone and not in combination with another security. Such right
shall exist with respect to all shares of Common Stock and Derivative Securities
originally authorized, shares hereafter authorized, or treasury shares, but
shall not exist with respect to: (i) shares of Common Stock issued by Seller in
a firm commitment or best efforts underwritten offering to the public, (ii)
shares of Commons Stock issued by Seller upon the exercise or conversion of
currently outstanding Derivative Securities, (iii) shares of Common Stock issued
by Seller upon the exercise of stock options or warrants granted to officers,
directors, consultants and employees of Seller, whether or not granted, pursuant
to a stock option plan approved by the stockholders of Seller, (iv) options,
warrants or shares of Common Stock issued by Seller in connection with the
acquisition of the properties, assets, or business of another Person, or (v)
options, warrants or shares of Common Stock issued in connection with bank
financing or equipment leases or similar financing transactions.
(b) The time for exercising the foregoing rights in Section 9(a) may
be established by the Company's Board of Directors but the Purchaser shall have
a minimum of 15 days in which to consider exercising its right.
(c) The foregoing right in Section 9(a) shall terminate on the
earlier of (i) September 8, 2000 or (ii) the date on which the Purchaser has
purchased shares of Common
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Stock or Derivative Securities with an aggregate purchase price of $2,000,000.
10. CONDITIONS OF PURCHASER
The obligations of Purchaser to effect the transaction contemplated by this
Agreement shall be subject to the fulfillment at or prior to the time of Closing
of each of the following items which are conditions to the Closing:
(a) Compliance by Seller. The Seller shall have performed and
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complied with all of the obligations and conditions required by this Agreement
to be performed or complied with by the Seller at or prior to the Closing Date.
All representations and warranties of Seller contained in this Agreement shall
be true and correct at and as of the Closing Date, with the same force and
effect as though made at and as of the Closing Date, except for changes
expressly permitted by this Agreement.
(b) Litigation Affecting This Transaction. There shall be no actual
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or threatened action by or before any court which seeks to restrain, prohibit or
invalidate the transaction contemplated by this Agreement or which might affect
the right of Purchaser to own the Shares, as a result of the transaction
contemplated by this Agreement, might affect such right as to Purchaser or any
affiliate thereof subsequent to the Closing Date and which, in the judgment of
the Purchaser, made in good faith and based upon advice of their counsel, makes
it inadvisable to proceed with the transaction contemplated by this Agreement.
(c) Registration Rights Agreement. The Seller and the Purchaser
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shall have executed and delivered the Registration Rights Agreement and a Sales
Restriction Agreement.
11. CONDITIONS OF SELLER
The obligations of the Seller to transfer the Shares in accordance with
this Agreement shall be subject to the fulfillment at or prior to the time of
Closing of each of the following conditions:
(a) Compliance by Purchaser. The Purchaser shall have performed and
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complied with all of the obligations and conditions required by this Agreement
to be performed or complied with by it at or prior to or at the Closing Date.
All representations and warranties of Purchaser contained in this Agreement
shall be true and correct at and as of the Closing Date, with the same force and
effect as though made at and as of the Closing Date, except for changes
expressly permitted by this Agreement.
(b) Litigation Affecting This Transaction. There shall be no actual
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or threatened action by or before any court which seeks to restrain, prohibit or
invalidate the transaction contemplated by this Agreement or which might affect
the rights of Seller as a result of the transaction contemplated by this
Agreement, might affect such right as to Seller or any affiliate thereof
subsequent to the Closing Date and which, in the judgment of the Seller, made in
good faith and based upon advice of its counsel, makes it inadvisable to proceed
with the transaction
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contemplated by this Agreement.
(c) Registration Rights Agreement. The Seller and the Purchaser
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shall have executed and delivered the Registration Rights Agreement, and a Sales
Restriction Agreement.
12. NOTICES. All notices or other communications in connection with
this Agreement shall be in writing and shall be considered given when personally
delivered or when mailed by registered or certified mail, postage prepaid,
return receipt requested, as follows:
If to Seller:
Xxxx Security International, Inc.
Attn: Xxxxxx X. Xxxxxx, Executive Vice President and General Counsel
Xxxxx 000
0000 Xxxxxxxx Xxxx
Xx., Xxxxxx, Xxx Xxxxxx 00000
000-000-0000
Telecopy: 000-000-0000
If to Purchaser:
Park Equity Partners
at an address to be supplied in writing at a latter date
13. ENTIRE AGREEMENT. This Agreement, together with the Registration
Rights Agreement and the Stock Sale Restriction Agreement, sets forth the
parties' final and entire agreement with respect to its subject matter and
supersedes any and all prior understandings and agreements. This Agreement may
be amended, supplemented or changed, and any provision hereof may be waived,
only by a written instrument making specific reference to this Agreement signed
by the party against whom enforcement of any such amendment, supplement, change
or waiver is sought.
14. GOVERNING LAW. This Agreement shall be governed by and construed
and interpreted in accordance with the internal laws of the State of Delaware
(without reference to its rules as to conflicts of law).
15. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute one and the same instrument.
16. FEES AND EXPENSES. Upon Closing, the Seller shall pay the
reasonable fees and disbursements of one counsel to the Purchaser, in connection
with the review of this Agreement, the Registration Rights Agreement, the Sales
Restriction Agreement, and the transaction contemplated hereby and thereby, and
the costs and out-of-pocket expenses of the Purchaser in connection with its due
diligence investigation of the Seller; provided that the total amount payable
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to the Purchaser or their counsel and representatives hereunder shall not exceed
$5,000.
17. SURVIVAL OF AGREEMENTS. The representations and warranties,
covenants, and agreements made herein in the Registration Rights Agreement and
the Sales Restriction Agreement, as well as in each certificate delivered to the
Purchaser pursuant hereto, shall survive the Closing and remain in effect so
long as the Purchaser own any of the Shares. The Seller agrees to indemnify and
hold the Purchaser harmless from and against and will pay to the Purchaser the
full amount of any loss, damage, liability, cost or expense (including amounts
paid in settlement and reasonable attorneys' fees and expenses) to the Purchaser
resulting either directly or indirectly from any breach of the representations
and warranties, covenants, or agreements of the Seller contained in this
Agreement or the Registration Rights Agreement or the Sales Restriction
Agreement or in any certificate delivered to the Purchaser pursuant hereto or
thereto or in connection herewith or therewith. The Purchaser agrees to
indemnify and hold the Seller harmless from and against and will pay to the
Seller the full amount of any loss, damage, liability, costs, or expense
(including amounts paid in settlement and reasonable attorneys' fees and
expenses) to the Seller resulting either directly or indirectly, from any breach
of the representations, warranties, covenants, or agreements of the Purchaser
contained in this Agreement or the Registration Rights Agreement or in the Sales
Restriction Agreement.
18. SEVERABILITY. Each provision of this Agreement shall be treated
as a separate and independent clause, and the unenforceability of any one clause
shall in no way impair the enforceability of any of the other clauses herein.
If one or more of the provisions contained in this Agreement shall for any
reason be held unenforceable, such provision or provisions shall be construed by
the appropriate judicial body by limiting or reducing it or them, so as to be
enforceable to the maximum extant compatible with applicable law, and no other
provision shall be affected by such holding, limitation, or reduction.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the date first above written.
SELLER:
Xxxx Security International, Inc.
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, Exec. Vice President and General
Counsel
Purchaser:
Park Equity Partners
By: Xxxxxxx Xxxxxx, its General Partner,
/s/ Xxxxxxx Xxxxxx
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