Exhibit 2.4
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Stock Purchase Agreement
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STOCK PURCHASE AGREEMENT
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STOCK PURCHASE AGREEMENT, dated as of March 26, 1999, between XXXXX
XXXXXXX, XX. an individual and the persons designated by Xxxxx Xxxxxxx, if any
(collectively referred to as the "Purchasers" or each , singularly as a
"Purchaser") and XXXX SECURITY INTERNATIONAL, INC., a Delaware corporation with
offices at 000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxxxxx 00000 (the "Seller").
W I T N E S E T H :
- - - - - - - - -
WHEREAS, Purchasers desire to acquire, and the Seller desires to sell,
3,675,000 shares of Seller's common stock, par value $.01 per share (the
"Common Stock") upon the terms and subject to the conditions hereinafter set
forth.
NOW, THEREFORE, the parties hereto, in consideration of the mutual
promises contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, hereby agree as
follows:
ARTICLE I
Definitions
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In addition to terms defined elsewhere in this Agreement, the
following terms when used in this Agreement shall have the meanings indicated
below:
"Affiliate" shall mean, with respect to any Person, any Person that
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directly or indirectly controls, is controlled by or is under common control
with the Person in question, and, in the case of an individual, all minor
children of such individual and all other members of such individual's immediate
family living in such individual's residence.
"Agreement" shall mean this Stock Purchase Agreement, together with
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all exhibits and schedules referred to herein.
"Commission" shall mean the Securities and Exchange Commission.
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"Common Stock" shall have the meaning ascribed thereto in the recitals
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section of this Agreement
"CS-1" shall mean a compound consisting of CS (O-
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chlorobenzalmalononitrile) and a flow agent.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
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amended.
"Financial Statements" shall mean the audited balance sheets of the
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Seller as at December 31, 1998, and the related statements of income, cash flows
and retained earnings for the fiscal years then
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ended, including any related notes, each prepared in accordance with United
States generally accepted accounting principles ("GAAP") consistently applied
with prior periods and the interim unaudited balance sheets, statements of
income, cash flows and retained earnings for each of the fiscal quarters since
December 31, 1998, each of which have been filed with the Commission.
"Knowledge" or Known" shall mean, with respect to the Seller, the
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actual knowledge of chief executive officer and the chief operating l officer of
the Seller, and with respect to any Purchaser, the actual knowledge of the such
Purchaser.
"Person" shall mean any natural person, corporation, unincorporated
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organization, limited liability company, partnership, limited liability
partnership, association, joint stock company, joint venture, trust or
government, or any agency or political subdivision of any government, or any
other entity.
"Securities Act" shall mean the Securities Act of 1933, as amended.
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ARTICLE II
Purchase of Stock ; Consideration
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/S/2.1 Terms of the Purchase.
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On the basis of the representations, warranties, covenants, and
agreements contained in this Agreement and subject to the terms and conditions
of this Agreement:
(a) The Seller shall sell to the Purchasers at the Closing, as
hereinafter defined, 3,675,000 shares of Common Stock (the "Purchased Stock").
(b) The Purchasers shall pay to the Seller the sum of $1.375 per
share, or Five Million Fifty Three Thousand One Hundred Twenty Five and 00/100
Dollars ($5,053,125.00) (the "Purchase Price"), payable at the Closing in
immediately available funds.
/S/2.2 The Closing
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The closing of the transactions contemplated by this Agreement
shall take place at the offices of the Seller at 000 Xxxxxxx Xxx, Xxxxxxxxxx,
XX, at 10:00 A.M., Eastern time on or about May 28, 1999, or such other date,
time or place as the parties may agree (the "Closing Date"). In the alternative,
the Closing may take place by the parties forwarding executed copies of all
documents required to be delivered pursuant to Section 2.3 to be held in escrow
by Xxxxxxxx Xxxxxx, Esq., with the Purchase Price wired to the Seller. The
Purchased Stock, issued in the name(s) designated by the Purchasers, will be
forwarded to the Purchasers by overnight delivery promptly following receipt of
the Purchase Price. The closing of the transactions contemplated by this
Agreement is herein called the "Closing."
/S/2.3 Transactions at the Closing
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The following transactions shall take place at the Closing:
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(a) Purchasers shall deliver the Purchase Price in immediately
available funds, by certified check or wire transfer.
(b) Seller shall deliver to the Purchasers one or more stock
certificates evidencing an aggregate of 3,675,000 shares of Common Stock,
bearing the following legend "These securities have not been registered under
the Securities Act of 1933 and may be reoffered and sold only if so registered
or if an exemption from registration is available."
(c) Seller and Purchasers shall each deliver such evidences of
consent, and other instruments or documents as are required pursuant to Article
VI.
(d) Seller shall have obtained resignation letters from each of
its current Directors, other than Xxx X. Xxxxxxxx. The resignation of the
Directors shall be effective as of the Closing. Xxx X.. Xxxxxxxx shall remain on
the Board.
(e) Xxx X. Xxxxxxxx, as the remaining director, shall appoint
Xxxxx Xxxxxxx, and the persons listed on Exhinit C attached hereto and
incorporated herein by this reference to fill the Board vacancies created by the
resigning Directors.
(f) Xxxxx Xxxxxxx, Xx. (regardless of whether he assigns his
rights as a Purchaser under this Agreement) shall have accepted the position of
President and CEO of the Seller, effective as of the Closing and Seller and Xx.
Xxxxxxx shall have executed and delivered the employment agreement, the form of
which is attached hereto as Exhibit A.
(g) Seller shall deliver the certificates for the Purchased
Stock described in Section 2.1(a) and all conditions to closing shall have been
satisfied or waived.
(h) Purchasers shall deliver the purchase price described in
Section 2.1(b) and all conditions to closing shall have been satisfied or
waived.
ARTICLE III
Representations and Warranties of the Seller
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In order to induce the Purchasers to enter into this Agreement
and the other agreement contemplated herein the Seller makes the
representations, warranties and covenants set forth below to the Purchasers,
which are true and correct as of the date of the Agreement and which will be
true and correct in all material respects as though they had been made at the
date of the Closing.
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/S/3.1 Organization
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The Seller is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. The Seller is duly
qualified to transact business in all jurisdictions where the ownership or
leasing of it assets or the conduct of its business requires such qualification,
except where the failure to so qualify will not have a material adverse effect
on Seller. The Seller has the requisite corporate power and authority to own or
lease and operate its properties and conduct its business as presently
conducted.
/S/3.2 Capitalization.
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The authorized capital stock of Seller consists of 18,000,000
shares of common stock, $.01 par value, of which 6,825,000 shares are issued and
outstanding and 2,000,000 shares of preferred stock, $.01 par value, none of
which are issued and outstanding. All of such issued and outstanding shares are
validly issued, fully paid and non-assessable and are free of preemptive rights.
/S/3.3 Rights, Warrants, Options
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Except as set forth in Schedule 33 hereto, there are no
outstanding (a) securities or instruments convertible into or exercisable for
any of the capital stock or other equity interests of the Seller; (b) options,
warrants, subscriptions or other rights to acquire capital stock or other equity
interests of the Seller; or (c) commitments, agreements or understandings of any
kind, including employee benefit arrangements, relating to the issuance or
repurchase by the Seller of any capital stock or other equity interests of the
Seller.
/S/3.4 Authorization; Enforceability
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The Seller has the corporate power and authority to execute,
deliver and perform this Agreement. This Agreement and all other documents to be
executed and delivered by the Seller pursuant to this Agreement has been or will
be duly authorized, executed and delivered and, when executed and delivered,
will constitute the legal, valid and binding obligations of the Seller
enforceable in accordance with their respective terms, except to the extent that
their enforcement is limited by bankruptcy, insolvency, reorganization or other
laws relating to or affecting the enforcement of creditors' rights generally and
by general principles of equity.
/S/3.5 No Violation or Conflict
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The execution, delivery and performance of this Agreement and
the other documents contemplated herein to be executed by the Seller, and the
consummation by the Seller of the transactions contemplated hereby and thereby:
(a) do not violate or conflict with any provision of law or regulation (whether
federal, state or local), or any writ, order or decree of any court or
governmental or regulatory authority, or any provision of the Seller's
Certificate of Incorporation or Bylaws; and (b) do not, with or without the
passage of time or the giving of notice, or both, result in the breach of, or
constitute a default, cause the acceleration of performance or require any
consent under, or result in the creation of any lien, charge or encumbrance upon
the Purchased Stock pursuant to, any instrument or agreement to which the Seller
is a party or by which the Seller or its properties may be bound or affected,
other than instruments
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or agreements as to which consent shall have been obtained or waived at or prior
to the Closing.
/S/3.6 Consents of Governmental Authorities and Others
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Except for shareholder and director approval and the requirement
that the Seller file with the Commission and distribute to its shareholders a
proxy or information statement as may be required by the NASDAQ Stock Market and
the Commission, no material consent, approval or authorization of, or
registration, qualification or filing with, any federal, state or local
governmental or regulatory authority, or any other Person, is required in
connection with the execution, delivery or performance of this Agreement by the
Seller or the consummation by the Seller of the transactions contemplated
hereby.
/S/3.7 Contingent Liabilities
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Except for the expense of disposing of the stockpile of CS-1
held in the Seller's inventory, which is a hazardous material, Seller has no
knowledge of any contingent liability that could reasonably be expected to have
a material adverse effect on the Seller's financial condition.
/S/3.8 Litigation
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Except as disclosed in the Financial Statements and other
documents filed with the Commission, and in Schedule 3.8 hereto, there are no
actions, suits, investigations, claims or proceedings ("Litigation") pending or,
to the knowledge of the Seller, threatened before any court or by or before any
governmental or regulatory authority or arbitrator which could reasonably be
expected to have a material adverse effect on the financial condition of Seller.
/S/3.9 Financial Statements
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The Financial Statements: (a) have been prepared in accordance
with the books of account and records of the Seller; and (b) fairly present, and
are true and accurate statements in all material respects of the Seller's
financial condition and the results of its operations at the dates and for the
periods specified therein; and (c) with respect to the audited portion of the
Financial Statements only, have been prepared in accordance with GAAP
consistently applied with prior periods.
/S/3.10 Board Approval
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As of the Closing Date, the Board of Directors of the Seller
will have approved this Agreement and the transactions contemplated hereby in
accordance with applicable law.
/S/3.11 Tax Matters
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All material tax returns and tax reports required to be filed by
Seller have been timely filed (or appropriate extensions have been obtained or
the issue has been remedied in accordance with applicable law) with the
appropriate governmental agencies in all jurisdictions in which such returns and
reports are required to be filed, all of the foregoing as filed are true,
correct and complete and, in all material respects, reflect accurately all
liability for taxes of the Seller for the periods to which such returns
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relate, and all amounts shown as owing thereon have been paid. All income,
profits, franchise, sales, use, value added, occupancy, property, excise,
payroll, FICA, FUTA and other taxes (including interest and penalties), if any,
collectible or payable by the Seller or relating to or chargeable against any of
its assets, revenues or income through December 31, 1998, and through the
Closing Date, were fully collected and paid by such date or provided for by
adequate reserves in the December 31, 1998Financial Statements and all similar
items due through the Closing Date will have been fully paid by that date or
provided for by adequate reserves.
/S/3.12 Disclosure
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The Seller has filed within required time periods, in compliance
with applicable law, all reports, registration statements and filings, including
any necessary amendments thereto ("Filings"), required to be filed by it with
the Commission pursuant to the Exchange Act and the Securities Act. No
representation or warranty of the Seller contained in this Agreement, and no
Filing or certificate furnished by or on behalf of the Seller pursuant hereto or
in connection with the transactions contemplated hereby, contains any untrue
statement of a material fact (in light of the circumstances under which they
were made) or omits to state a material fact (in light of the circumstances
under which they were made) necessary to make the statements contained therein
not misleading.
/S/3.13 Fully Paid, Non-Assessable
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Upon payment in full of the Purchase Price therefor, the Purchased
shares will be duly authorized, validly issued and non-assessable.
/S/3.14 Brokers
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Other than Xxxxxxxx & Co., which shall receive, warrants to purchase
300,000 shares of the Purchaser common stock (at an exercise price of $1.375, a
term of three years, and exercisable 120 days following the Closing hereunder)
at the Closing of this transaction as a finder's fee, Seller has not employed or
retained the services of any financial advisor, broker, or finder with respect
to which the Seller will incur any broker's, finder's, investment banking or
similar fees, commissions or expenses, in connection with the transactions
contemplated by this Agreement.
/S/3.15 Contracts, Permits and Material Documents.
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Schedule 3.15 attached hereto lists all of the following material
agreements: (i) leases and purchase agreements for real property and personal
property, in each case, with a purchase price of $100,000 or more or requiring
monthly lease payments of $5,000 or more, (ii) material licenses and
franchises, the failure to possess which could reasonably be expected to have a
material adverse effect on Seller, (iv) promissory notes, guarantees, bonds,
letters of credit, mortgages, liens, pledges, and security agreements under
which the Seller is bound or under which the Seller is a beneficiary that have
initial principal amounts of, or secure obligations of, $100,000 or more, (v)
all material patents, trademarks, trade names, copyrights, trade secrets,
proprietary rights, symbols, service marks, and logos used or usable by Seller
(all of which are owned by Xxxx Trademark Corp., a wholly-owned subsidiary of
Seller), (vi) all material permits, licenses, consents and other approvals from
governments, governmental agencies (federal, state and local) and/or third
parties relating to, used in or required for the operation of the Seller
businesses
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and which the failure to possess could reasonably be expected to have a material
adverse effect on Seller, and (vii) other contracts, agreements and instruments
not listed on another Schedule attached to this Agreement which are binding on
the Seller or any of its property or pursuant to which the Seller derives any
material benefit or has imposed upon it any material detriment. Neither the
Seller nor, to Sellers' knowledge, any person or party to the any of the
documents disclosed on Schedule 3.15 ("Material Documents") or bound thereby is
in material default under any of the Material Documents, and, to Seller's
knowledge, no act or event has occurred which, with notice or lapse of time, or
both, would constitute such a default. The Seller is not a party to, and the
Seller's property is not bound by, any agreement or instrument which is material
to the continued conduct of its business operations as now being conducted and
with respect to which a default might materially and adversely affect its
financial condition, except as listed in Schedule 3.15.
/S/3.16 Title.
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(a) The Assets.
Except as disclosed on Schedule 3.16(a), Seller has good and
marketable title to all of its material assets, including, without limitation,
all of the assets reflected on the Financial Statements (other than intellectual
property). All of such assets are owned by the Seller free and clear of any
mortgage, pledge, lien, encumbrance, charge, claim, security agreement,
agreement regarding or restricting transfer or title retention or other security
arrangement, except for liens and encumbrances listed below in subparagraphs (i)
through (iii) ("Permitted Company Assets Encumbrances").
(i) Liens imposed by law and incurred in the ordinary course of
business for indebtedness not yet due to carriers, warehousemen, laborers or
materialmen and the like;
(ii) Liens in respect of pledges or deposits under worker's
compensation laws or similar legislation; and
Liens for property taxes, assessments, or governmental charges not yet
subject to penalties for nonpayment.
(b) Real Property. The Seller does not own any real property.
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/S/3.17 Employees, Pensions and, ERISA.
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(a) The Seller does not have any contract of employment with an
officer or other employee that is not terminable without penalty on notice of
two weeks or less, except as listed on Schedule 3.17(a). Xxx X. Xxxxxxxx and
Xxxx X. Xxxxxx are the only employees that have employment agreements with the
Seller. No such agreement has a "golden parachute".
(b) No employee of the Seller is represented by any union. There is
no pending or threatened dispute between the Seller and any of its employees
which might materially and adversely affect the continuance of any Company's
business operations.
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The employee benefit plan, fund or program (within the meaning of the
Internal Revenue Code of the United States ("Code") or the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) which is currently maintained
and/or established or sponsored by the Company or to which the Company currently
contributes, or has an obligation to contribute in the future ("Plan") is the
Seller's 401(k) Plan.
The Seller has delivered to the Purchasers (i) a true and complete
copy of its 401(k) Plan, and (ii) a true and complete copy of all annual reports
for such Plan prepared within the past 5 years, and (iii) all filings submitted
to and any correspondence received from any government agency relating to such
Plan within the past 5 years.
(f) Such Plan is administered by Xxxxxxx Xxxxx and, to Seller's
knowledge, such Plan is qualified under Section 401(a) and exempt from tax under
Section 501(a) of the Code. Such Plan is not funded through a trust intended to
be exempt from tax under Section 501(c) of the Code.
(g) The 401(k) Plan is administered by Xxxxxxx Xxxxx. To Seller's
knowledge, no reportable event (as defined in Section 4043 of ERISA or the
regulations thereunder) for which the reporting requirements have not been fully
waived, or accumulated funding deficiency whether or not waived (as defined in
Section 302 of ERISA), or liability to the Pension Benefit Guaranty Corporation
("PBGC") under Section 4062 of ERISA, nor any prohibited transaction (as defined
in Section 406 of ERISA or Section 4975 of the Code), has occurred or exists
with respect to the 401(k) Plan. To Seller's knowledge, such Plan is in
substantial compliance with all applicable provisions of ERISA and the
regulations issued thereunder, as well as with all other law applicable to such
Plan, and, to Seller's knowledge, in all material respects, has been
administered, operated and managed in substantial accordance with the governing
documents of the Plan and the requirements of ERISA. To Seller's knowledge, the
Seller has no unfunded obligations or liabilities with respect to any Plan.
(h) There is no matter, action, audit, suit or claim pending or, to
the best knowledge of Seller, threatened relating to such Plan, fiduciary of
such Plan or assets of such Plan, before any court, tribunal or government
agency.
(i) To Seller's knowledge, the transaction contemplated herein will
not accelerate any liability under such Plan because of an acceleration of any
rights or benefits to which any employee may be entitled thereunder.
(j) The Seller has no obligations with respect to, and makes no
contributions to, any Multi-Employer Pension Plan.
/S/3.18 Legality of Operation.
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In regard to the Seller:
(a) Except as disclosed in Schedule 3.18(a) to this Agreement, and
except as to Environmental Laws, as hereinafter defined, the Seller is in
material compliance with all Federal, state and
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local laws, rules and regulations including, without limitation, the following
laws: land use laws; payroll, employment, labor, or safety laws; or federal,
state or local "anti-trust" or "unfair competition" or "racketeering" laws such
as but not limited to the Xxxxxxx Act, Xxxxxxx Act, Xxxxxxxx Xxxxxx Act, Federal
Trade Commission Act, or Racketeer Influenced and Corrupt Organization Act
("Law") except to the extent the failure to comply could not reasonably be
expected to have a material adverse effect on the Seller's financial condition.
Except as disclosed in Schedule 3.18(a), the Seller is in material compliance
with all permits, franchises, licenses, and orders that have been issued with
respect to the Laws and are or may be applicable to the Seller's property and
operations, except to the extent the failure to so comply could not reasonably
be expected to have a material adverse effect on Seller's financial condition.
Except as set forth on Schedule 3.18(a), with respect to any Law, there are no
claims, actions, suits or proceedings pending, or, to the knowledge of the
Sellers threatened against or affecting the Seller, at law or in equity, or
before or by any federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, wherever located, which
could reasonably be expected to have a material adverse effect on the Seller's
financial condition or which would invalidate this Agreement. Except as
disclosed in Schedule 3.18(a), the Seller has received no notification of any
past or present failure by the Seller to comply with any Law applicable to it or
its assets that could reasonably be expected to have a material adverse effect
on the Seller's financial condition.
Except as disclosed in Schedule 3.18(b) to this Agreement, the Seller
is in material compliance with all Federal, state and local laws, rules and
regulations relating to environmental issues of any kind and/or the receipt,
transport or disposal of any hazardous or non-hazardous waste materials from any
source ("Environmental Law")except for noncompliance that could not reasonably
be expected to have a material adverse effect on the Seller. Except as disclosed
in Schedule 3.18(b), with respect to any Environmental Law the Seller is in
material compliance with all permits, licenses, and orders related thereto or
issued thereunder with respect to Environmental Laws, as are or may be
applicable to the Seller's property and operations, except for such
noncompliance that could not reasonably be expected to have a material adverse
effect on Seller. Except as set forth on Schedule 3.18(b) there are no
Environmental Law related claims, actions, suits or proceedings pending, or, to
the knowledge of the Sellers, threatened against or affecting the Seller, at law
or in equity, or before or by any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
wherever located, which could reasonably be expected to have a material adverse
effect on the Seller or which would invalidate this Agreement. Except as set
forth on Schedule 3.18(b), the Seller has not transported, stored, treated or
disposed, nor has the Seller allowed any third persons, on its behalf, to
transport, store, treat or dispose waste to or at (i) any location other than a
site lawfully permitted to receive such waste for such purpose or, (ii) any
location currently designated for remedial action pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act ("CERCLA") or any similar
federal or state statute; nor has the Seller performed, arranged for or allowed
by any method or procedure such transportation or disposal in contravention of
state or federal laws and regulations or in any other manner which could
reasonably be expected to have a material adverse effect on the Seller; and the
Seller has not disposed, nor has the Seller knowingly allowed third parties to
dispose of waste upon property owned or leased by the Seller other than as
permitted by, and in conformity with, applicable Environmental Law except for
such disposal that could not reasonably be expected to have a material adverse
effect on the Seller. Except as disclosed in Schedule 3.18(b), the Seller has
not received notification of any past or present failure by the Seller to comply
with any Environmental Law applicable to it or its operations or its assets,
except for such notification relating to matters that have been remedied or
could not reasonably be expected to have a material adverse effect on Seller.
The Seller has not received hazardous waste as defined in the Resource
Conservation and Recovery
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Act, 42 USCA Section 6901 et seq., or in any similar federal or state statute.
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(c) Except as disclosed in Schedule 3.18 (e), to Seller's knowledge,
no employee, contractor or agent of the Seller has, in the course and scope of
employment with the Seller, been harmed by exposure to hazardous materials, as
defined under the Laws. No liens with respect to environmental liability have
been imposed against the Seller under CERCLA, any comparable Vermont statute or
other applicable Law, and, to Seller's knowledge, no facts or circumstances
exist which would give rise to the same.
(d) Attached hereto as Schedule 3.18(d) is a list of all Notice of
Violations issued to the Company in the past ten years by any federal, state or
local regulatory agency. There are no outstanding or unremedied notices of
violation either from a federal, state or local authority.
(e) To Seller's knowledge, it is not under investigation by any
District Attorney or similar state or local official or agency or the Justice
Department of the United States of America for the violation of any Laws,
including, without limitation, racketeering, unfair competition, or anti-trust.
To Seller's knowledge, no facts or circumstances exist which would cause the
Seller to be liable for the violation of any Laws including, without limitation,
racketeering, unfair competition, or anti-trust.
(f) Except as set forth in Schedule 3.18(f), all material licenses,
approvals, permits and certificates ("Government Authorizations") needed or
required for the operation of the Seller's business are set forth on Schedule
3.15. To Seller's knowledge, all such Government Approvals are in full force
and effect, the Seller is in compliance with all such Government Approvals, and
all such Government Approvals have been validly and legally obtained by the
Company.
/S/3.19 Corrupt Practices.
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To the Sellers' knowledge, the Seller has not made, offered or agreed
to offer anything of value to any employees of any customers of the Seller for
the purpose of attracting business to the Seller or any foreign or domestic
governmental official, political party or candidate for government office or any
of their respective employees or representatives, nor has the Seller otherwise
taken any action which would cause it to be in violation of the Foreign Corrupt
Practices Act of 1977, as amended.
For purposes of this Article III, a material benefit or material
detriment shall be a direct reduction in an assets or an increase of a liability
of $500,000 or more.
ARTICLE IV
Representations, Warranties and Covenants of the Purchasers
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In order to induce the Seller to enter into this Agreement and to
consummate the transactions contemplated hereby, each Purchaser, with respect to
himself only, makes the representations, warranties and covenants set forth
below to the Seller, which shall be true and accurate as of Closing in all
material respects.
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/S/4.1 Organization; Standing and Power
--------------------------------
The Purchaser is an individual. The Purchaser has all requisite
corporate power and authority to execute, deliver and perform this Agreement and
to consummate the transactions contemplated hereby.
/S/4.2 Authorization; Enforceability
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This Agreement and any and all other documents to be executed
and delivered by the Purchaser pursuant to this Agreement have been duly
executed and delivered by the Purchaser, and constitutes the legal, valid and
binding obligation of the Purchaser, enforceable in accordance with their terms,
except to the extent that their enforcement is limited by bankruptcy,
insolvency, reorganization or other laws relating to or affecting the
enforcement of creditors' rights generally and by general principles of equity.
/S/4.3 No Violation or Conflict
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The execution, delivery and performance by the Purchaser of this
Agreement and the other agreements contemplated hereby: (a) does not violate or
conflict with any provision of law or regulation (whether federal, state or
local), or any writ, order or decree of any court or governmental or regulatory
authority; and (b) do not, with or without the passage of time or the giving of
notice, or both, result in the breach of, or constitute a default, cause the
acceleration of performance or require any consent under, any instrument or
agreement to which the Purchaser or any of its Affiliates is a party or by which
the Purchaser or any of its Affiliates or any of their respective properties may
be bound or affected, other than instruments or agreements as to which consent
shall have been obtained or waived at or prior to the Closing.
/S/4.4 ERISA.
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The execution and delivery of this Agreement and the purchase of
the Purchased Stock by the Purchaser will not involve and prohibited transaction
within the meaning of Section 406 of Employee Retirement Income and Security Act
or Section 4975 of the Internal Revenue Code for which an exemption is not
available by statute or regulation.
/S/4.5 Purchase for Investment
-----------------------
The Purchased Stock to be acquired hereunder is being acquired
for Purchaser's own account and with no intention of distributing or reselling
such Purchased Stock or any part thereof in any transaction which would be in
violation of the securities laws of the United States of America or any State,
without prejudice, however, to Purchaser's right at all times to sell or
otherwise dispose of all or any part of such Purchased Stock under a
registration under the Securities Act or under an exemption from such
registration available under the Securities Act, and subject, nevertheless, to
the disposition of Purchaser's property being at all times within its control.
If Purchaser should in the future decide to dispose of any of the Purchased
Stock, such Purchaser understands and agrees that it may do so only in
compliance with the Securities Act, as then in effect.
/S/4.6 Restrictive Legend
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Purchaser understands and agrees that, so long as appropriate, the
certificates evidencing the Purchased Stock shall bear the of the following
legend: "These securities have not been registered under the Securities Act of
1933 and may be reoffered and sold only if so registered or if an exemption from
registration is available."
/S/4.7 Accredited Investor
-------------------
Purchaser is familiar with the Securities Act and the definition
of "accredited investor" and represents that he is an "accredited investor" as
defined in Rule 501(a) under the Securities Act.
/S/4.8 Brokers
-------
Other than Xxxxxxxx & Co., which shall receive warrants to
purchase 300,000 shares of the Purchaser common stock (at an exercise price of
$1.375, a term of three years and exercisable 120 days following the Closing
hereunder) at the Closing of this transaction as a finder's fee, Seller has not
employed or retained the services of any financial advisor, broker, or finder
with respect to which the Seller will incur any broker's, finder's, investment
banking or similar fees, commissions or expenses, in connection with the
transactions contemplated by this Agreement.
ARTICLE V
ADDITIONAL AGREEMENTS
---------------------
/S/5.1 Survival
--------
All of the respective representations, warranties and obligations of
the parties to this Agreement shall survive consummation of the transactions
contemplated by this Agreement as follows: (i) all representations and
warranties pertaining to federal, state and local taxes shall survive until the
expiration of the applicable statute of limitations on any claim which can be
brought against the Seller by tax authorities or governmental agencies or
governmental units and (ii) all representations and warranties other than set
forth in (i) above shall expire TWELVE months following the Closing Date.
Notwithstanding the prior sentence which provides that the representations and
warranties expire after certain stated periods of time, if within the stated
period of time, a notice of a claim for indemnification or Indemnification
Demand is given, or a suit or action based upon representation or warranty is
commenced, the Indemnified Party shall not be precluded from pursuing such claim
or action, or from recovering from the Indemnifying Party (whether through the
courts or otherwise) on the claim or action, by reason of the expiration of the
representation or warranty.
/S/5.2 Investigation
-------------
Notwithstanding anything to the contrary contained herein,
neither party shall have a claim hereunder for breach of a representation ,
warranty or covenant to the extent such breach was known prior to the Closing
Date by the party seeking to bring the claim.
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/S/5.3 Employment
----------
Seller agrees to appoint Xxxxx Xxxxxxx as a director, to name
him as Chairman of the Board and to appoint him as Seller's chief executive
officer [on substantially the same terms and conditions as are set forth in the
form of employment agreement attached hereto as Exhibit A, effective upon
Closing of the transactions contemplated by this Agreement.
Seller agrees to employ each of Xxxxxx Xxxxxx, Xxxx Krzmien,
Xxxx Xxxxxx, Xxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxx Xxxxxxx, Xxxxxx Xxxxxxx and
Xxxx Xxxxxxx and on substantially the terms and conditions set forth in Exhibit
B attached hereto, with such employment to be effective as of the date hereof.
/S/5.4 Board of Directors
------------------
All current directors, other than Xxx Xxxxxxxx, will resign and
Xxxxx Xxxxxxx and the persons named in Exhibit C attached hereto will be
appointed by the remaining Board member.
/S/5.5 Private Placement
-----------------
Seller agrees to use its best efforts to sell, in a private
placement 1,850,000 shares of its common stock at a purchase price of $2.00 per
share to five individuals or entities to be designated by Xxxxx Xxxxxxx.
ARTICLE VI
Conditions Precedent; Termination
---------------------------------
/S/6.1 Conditions Precedent to the Obligations of the Purchasers
---------------------------------------------------------
Each and every obligation of the Purchasers to consummate the
transactions described in this Agreement and any and all liability of the
Purchasers to the Seller shall be subject to the fulfillment or waiver by
Purchasers on, before or simultaneous with the Closing of the following
conditions precedent:
(a) Representations and Warranties True. Each of the
-----------------------------------
representations and warranties of the Seller contained herein or in any
certificate or other document delivered pursuant to this Agreement or in
connection with the transactions contemplated hereby shall be true and correct
in all material respects as of the Closing Date with the same force and effect
as though made on and as of such date (except for changes specifically permitted
by this Agreement).
(b) Performance. The Seller shall have performed and complied
-----------
in all material respects with all of the agreements, covenants and obligations
under this Agreement to be
A-14
performed or complied with by each of them on or prior to the Closing Date.
(c) No Adverse Change. Except as expressly permitted or
-----------------
contemplated by this Agreement, no event or condition shall have occurred which
has materially adversely affected or may materially adversely affect in any
respect the financial condition since the date hereof.
(d) Certificates. The Seller shall have delivered to the
------------
Purchasers a certificate dated the Closing Date, certifying that the conditions
specified in Section 6.1(a), (b) and (c) above have been fulfilled and as to
such other matters as the Purchasers may reasonably request. The Secretary or
Assistant Secretary of the Seller shall have delivered to the Purchasers a
certificate, dated the Closing Date, certifying the names and signatures of the
officers thereof authorized to sign this Agreement and the Exhibits hereto to
which it is a party.
(e) No Litigation. No litigation, arbitration or other legal or
-------------
administrative proceeding shall have been commenced or be pending by or before
any court, arbitration panel or governmental authority or official, and no
statute, rule or regulation of any foreign or domestic, national or local
government or agency thereof shall have been enacted after the date of this
Agreement, and no judicial or administrative decision shall have been rendered,
which in each case enjoins or prohibits, or seeks to enjoin or prohibit, the
consummation of all or any of the transactions contemplated by this Agreement.
(f) Consents. The Seller shall have obtained all
--------
authorizations, consents, waivers and approvals and given all notices as may be
required to consummate the transactions contemplated by this Agreement
including, but not limited to, approval of the Seller's stockholders, delivery
of the Information Statement or notice to the stockholders, as applicable.
(g) Opinion of Counsel. An opinion letter from counsel to the
------------------
Seller addressed to the Purchasers, in form and substance satisfactory to the
Purchasers, to the effect that the Purchased shares are duly authorized, validly
issued and non-assessable, shall have been delivered to Purchasers at the
Closing.
(h) Board/ Shareholder Approval. The Board of Directors of
---------------------------
Seller shall have approved this Agreement and the transactions contemplated
hereby and the holders of a majority of outstanding shares of Seller shall have
approved the transactions contemplated hereby.
(i) Employment Agreements. Employment Agreements containing
---------------------
substantially the terms and conditions set forth in Exhibit B attached hereto
shall have been executed by and between Seller and each of Xxxxxx Xxxxxx, Xxxx
Krzamien, Xxxx Xxxxxx, Xxxxx Xxxxxxx, Xxxxxxx Xxxxxxx, Xxxxxx Xxxxxxx, Xxxxxx
Xxxxxxx and Xxxx Xxxxxxx as of the date of this Agreement, effective as of the
date of this Agreement.
(j) Board/President and CEO. Xxxxx Xxxxxxx shall have been
------------------------
appointed to serve as Seller's President and CEO on substantially the same terms
as are set forth in the employment agreement attached hereto as Exhibit A hereto
and appointed to the Board, effective as of the Closing, and all current
directors, other than Xxx Xxxxxxxx (the "Resigning Board") shall have submitted
letters of resignation, effective as of the Closing. The remaining director, Xx.
Xxxxxxxx , shall have appointed Xxxxx Xxxxxxx and the persons named on Exhibit C
to fill the vacancies created by the Resigning Board.
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(k) Other Stock Purchases. Purchaser shall have purchased:
---------------------
(a)1,100,000 shares of Common Stock from Xxx Xxxxxxxx at a purchase price of
$1.375 per share or less, and (b) 100,000 shares of Common Stock from each of
two current shareholders at a purchase price of $1.375 per share or less.
(l) NASDAQ. Purchasers shall have received comfort, reasonably
------
acceptable to it, that, upon consummation of the transactions contemplated
hereby, Seller will not lose its listing on the NASDAQ National Market.
(m) No Material Adverse Change. There shall have been no
--------------------------
material adverse change in the financial condition of Seller and the Seller
shall not have suffered any material loss or damage to its assets since the date
of its December 31, 1998 Financial Statements, except as contemplated by
Seller's projections. A material adverse change, for the purposes of this
subsection (m) shall mean a reduction in equity of $1,000,000 or more.
(n) Private Placement. Substantially simultaneously with the
-----------------
Closing hereunder, Seller shall have sold, in a private placement, 1,850,000
shares of its common stock at a purchase price of $2.00 per share to five
individuals or entities designated by Xxxxx Xxxxxxx.
/S/6.2 Conditions Precedent to the Obligations of Seller
-------------------------------------------------
Each and every obligation of Seller to consummate the transactions
described in this Agreement and any and all liability of Seller to the
Purchasers shall be subject to the fulfillment or waiver by Seller on or before
the Closing Date of the following conditions precedent:
(a) Representations and Warranties True. Each of the
-----------------------------------
representations and warranties of the Purchasers contained herein or in any
certificate or other document delivered pursuant to this Agreement or in
connection with the transactions contemplated hereby shall be true and correct
in all respects as of the Closing Date with the same force and effect as though
made on and as of such date.
(b) Performance. The Purchasers have performed and complied in
-----------
all respects with all of the agreements, covenants and obligations required
under this Agreement to be performed or complied with by them on or prior to the
Closing Date.
(c) Certificate. Each Purchaser shall have delivered to the
-----------
Seller a certificate addressed to Seller executed by each Purchaser dated the
Closing Date, certifying that the conditions specified in Sections 6.2(a) and
(b) above have been fulfilled.
(d) Board/Shareholder Approval. The Board of Directors of the
--------------------------
Seller shall have approved this Agreement and the transactions contemplated
hereby and the holders of a majority of outstanding shares Seller shall have
approved the transactions contemplated hereby.
(e) Fairness Opinion. Seller shall have received an opinion
----------------
from an independent investment banking firm that the transactions contemplated
hereby are fair, from a financial point of view, to the shareholders of Seller.
A-16
(f) Board/President and CEO. Xxxxx Xxxxxxx shall have been
-----------------------
appointed to serve as Seller's President and CEO on substantially the same terms
as are set forth in Exhibit A hereto and appointed to the Board, effective as of
the Closing, and all current directors, other than Xxx Xxxxxxxx, (the "Resigning
Board") shall have submitted letters of resignation, effective as of the
Closing. The remaining director, Xx. Xxxxxxxx, shall have appointed Xx. Xxxxxxx
and the persons named in Exhibit C to fill the vacancies created by the
Resigning Board.
(g) NASDAQ. Seller shall have received comfort, reasonably
------
acceptable to it, that, upon consummation of the transactions contemplated
hereby, Seller will not lose its listing on the NASDAQ National Market.
/S/6.3 Best Efforts
------------
Subject to the terms and conditions provided in this Agreement,
each of the parties shall use their respective best efforts in good faith to
take or cause to be taken as promptly as practicable all reasonable actions that
are within its power to cause to be fulfilled those of the conditions precedent
to its obligations or the obligations of the other parties to consummate the
transactions contemplated by this Agreement that are dependent upon its actions,
including obtaining all necessary consents, authorizations, orders, approvals
and waivers. In furtherance of the foregoing, the Seller shall cooperate fully
with Purchaser and the Purchaser shall cooperate fully with the Seller, in
accordance with the terms hereof.
/S/6.4 Termination
-----------
This Agreement and the transactions contemplated hereby may
be terminated (i) at any time by the mutual consent of the parties hereto; (ii)
by the Purchaser at any time at or prior to Closing if any of the
representations or warranties of the Seller in this Agreement are not in all
material respects true, accurate and complete or if the Seller breaches in any
material respect any covenant contained in this Agreement, provided that such
misrepresentation or breach is not cured within ten (10) days or thirty (30)
days if such breach can be cured within such period of time after written notice
thereof.; (iii) by the Seller at any time at or prior to Closing if any of the
representations or warranties of the Purchaser in this Agreement are not in all
material respects true, accurate and complete or if the Purchaser breaches in
any material respect any covenant contained in this Agreement, provided that
such misrepresentation or breach is not cured within ten (10) days or thirty
(30) days if such breach can be cured within such period of time after notice
thereof, but in any event prior to the Termination Date, and (iv) by either
Purchaser or Seller if the conditions to closing are not satisfied or waived on
or prior to July 1, 1999 and the failure to satisfy any condition is not due to
the actions or omissions of the party attempting to terminate this Agreement. If
this Agreement is terminated pursuant to this Section 6.4, written notice
thereof shall promptly be given by the party electing such termination to the
other party and, subject to the expiration of the cure periods provided in
clauses (ii) and (iii) above, this Agreement shall terminate without further
actions by the parties and no party shall have any further obligations under
this Agreement.
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ARTICLE VII
Covenants
---------
/S/7.1 Seller's Interim Operation
--------------------------
During the period from the date of this Agreement to the Closing
Date, except with Purchasers' prior specific written consent or as expressly
contemplated by this Agreement the Seller shall not do any of the following
(unless otherwise expressly contemplated by this Agreement or permitted in
writing by Purchasers):
(i) amend its Certificate of Incorporation or By-Laws;
(ii) issue, sell or authorize for issuance or sale (except pursuant
to its non-qualified stock option plan), shares of any class of
its securities (including, but not limited to, by way of stock
split or dividend) or any subscriptions, options, warrants,
rights or convertible securities, or enter into any agreements
or commitments of any character obligating it to issue or sell
any such securities;
(iii) declare or pay any stock dividend or similar distribution with
respect to its capital stock;
(iv) grant or make any mortgage or pledge or subject itself or any
of its properties or assets to any lien, charge or encumbrance
of any kind, except liens for taxes not currently due;
(v) create, incur or assume any liability or indebtedness in excess
of $100,000.00, except for inventory purchases in the ordinary
course of business;
(vi) alter the manner of keeping its books, accounts or records, or
change in any manner the accounting practices therein
reflected;
(vii) enter into any commitment or transaction other than in the
ordinary course of business including, but not limited to, the
making of any loan to any Person;
(viii) do any act, or omit to do any act, or permit to the extent
within the Seller's control, any act or omission to act which
would cause a material violation or breach of any of the
representations, warranties; agree, whether in writing or
otherwise, to do any of the foregoing.
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/S/7.2 Confidentiality (through Closing Date)
--------------------------------------
Except as otherwise required in the performance of obligations
under this Agreement and except as otherwise required by law, any non-public
information received by a party or its advisors from the other party shall be
kept confidential and shall not be used or disclosed for any purpose other than
in furtherance of the transactions contemplated by this Agreement. The
obligation of confidentiality shall not extend to information (a) which is or
shall become generally available to the public other than as a result of an
unauthorized disclosure by a party to this Agreement or a person to whom a party
has provided such information, (b) which was available to a party to this
Agreement on a nonconfidential basis prior to its disclosure by one party to the
other pursuant to this Agreement or (c) which is disclosed by the Purchasers in
any legal proceeding requiring any such disclosure. Upon termination of this
Agreement, each party shall promptly return any confidential information
received from the other party and, upon request, shall destroy any copies of
such information in its possession. Notwithstanding anything contained herein to
the contrary, the covenants of the parties contained in this Section 7.2 shall
survive any termination of this Agreement until the earlier of (i) three (3)
years from the date hereof, or (ii) the date when such information becomes
generally available to the public.
ARTICLE VIII
Indemnification.
/S/8.1 Indemnification of Purchasers.
------------------------------
In the event the transaction contemplated hereby is consummated,
Seller agrees to defend, indemnify and hold Purchasers and any person claiming
by or through Purchasers and their respective successors and assigns harmless
from and against, and agrees to reimburse them for, any and all demands, claims,
recoveries, obligations, losses, damages, deficiencies and liabilities and all
related costs, expenses (including reasonable attorneys' and accountants' fees
and disbursements), interest and penalties which any of them shall incur or
suffer which arise from, result from or relate to the breach of any of the
representations, warranties, covenants or agreements made by Seller in this
Agreement.
/S/8.2 Indemnification of Seller.
-------------------------
In the event the transaction contemplated hereby is consummated, Purchasers
will defend, indemnify and hold Seller and its officers, directors, employees
and any person claiming by or through Seller and their respective successors and
assigns harmless from and against, and agrees to reimburse them for, any and all
demands, claims, recoveries, obligations, losses, damages, deficiencies and
liabilities and all related costs, expenses (including reasonable attorneys' and
accountants' fees and disbursements), interest and penalties which any of them
shall incur or suffer which arise from, result from or relate to the breach of
any of the representations, warranties, covenants or agreements made by
Purchasers in or under this Agreement.
/S/8.3 Defense and Settlement of Claims.
--------------------------------
A-19
If any person entitled to indemnification pursuant to any provision of this
Agreement (an "Indemnitee") is threatened in writing with any claim by any
Person who is not a party to this Agreement, or any claim is presented in
writing to, or any action or proceeding by is formally commenced against, an
Indemnitee by any Person who is not a party to this Agreement and such claim,
action or proceeding may give rise to the right of indemnification hereunder or
reimbursement, the Indemnitee shall give written notice thereof as promptly as
reasonably practicable to any indemnifying party, provided that any delay by the
Indemnitee in so notifying an indemnifying party shall not relieve any
Indemnitor of any liability to the Indemnitee hereunder except to the extent
severely prejudiced by such delay.
/S/8.4 Procedure and Payment.
----------------------
If after the Closing either Seller or the Purchasers shall become aware of
a loss, damage or claim or shall receive notice of a third party claim or
alleged third party claim asserting the existence of any matter of the nature as
to which the Indemnitee has been indemnified against under this Article VIII by
the other party hereto ( the "Indemnitor"), Indemnitee shall promptly notify
Indemnitor in writing with respect thereto. In the event of any such third
party claim, Indemnitor shall have the right to defend against any such claim
with counsel reasonably satisfactory to Indemnitee, provided (i) Indemnitor
shall, within ten (10) days after the giving of such notice by Indemnitee,
notify Indemnitee that Indemnitor will, at its own cost and expense, defend the
same, and (ii) such defense is instituted and continuously maintained in good
faith by Indemnitor. In such event the defense may, if necessary, be maintained
in the name of Indemnitee. Indemnitee may, if it so elects and at its expense,
designate its own counsel to participate with the counsel selected by Indemnitor
in the conduct of such defense. Indemnitor shall not permit any lien or
execution to attach to any of the assets of the Indemnitee as a result of such
claim, and the Indemnitor shall provide such bonds or deposits as shall be
necessary to prevent the same. In any event, Indemnitor is obligated to keep
Indemnitee fully advised as to the status of such defense. If Indemnitor shall
be given notice of a claim as aforesaid and shall fail to notify Indemnitee of
its election to defend such claim within the time as prescribed herein, or after
having so elected to defend such claim shall fail to institute and maintain such
defense in accordance with the foregoing, then Indemnitee shall defend such
claim and Indemnitor shall reimburse Indemnitee for the costs of such defense
upon demand therefore, which demand shall include a copy of the legal bills and
other costs. Such reimbursement shall be made within ten (10) days of demand
therefore. If such defense shall be unsuccessful then the Indemnitor shall fully
satisfy and discharge the claim within ten (10) days after notice from
Indemnitee requesting Indemnitor to do so. Indemnitor shall not be entitled to
settle any such claim without the consent of Indemnitee.
ARTICLE IX
Miscellaneous
-------------
A-20
/S/9.1 Notices
-------
Any notice, demand, claim or other communication under this
Agreement shall be in writing and shall be deemed to have been given upon the
delivery, mailing or transmission thereof, as the case may be, if delivered
personally or sent by certified mail, return receipt requested, postage prepaid,
or sent by facsimile (transmission confirmed) or prepaid overnight courier to
the parties at the addresses set forth herein (or at such other addresses as
shall be specified by the parties by like notice). A copy of any notices
delivered to the Purchasers shall also be sent to Xxxxxx X. Xxxxxx, 0000 Xxxxx
Xxxxxx, Xxxxx 000, Xxxx xx Xxxxxxx, XX 00000, telephone 000-000-0000, fax 610-
000-0000. A copy of any notices delivered to the Seller shall also be sent to
Xxxxxxxx Xxxxxx, Esq., 00 Xxxxxxxxx Xxx., Xxxxxx, XX 00000, telephone and fax
000-000-0000.
/S/9.2 Entire Agreement
----------------
This Agreement contains every obligation and understanding
between the parties relating to the subject matter hereof and merges all prior
discussions, negotiations and agreements, if any, between them, and none of the
parties shall be bound by any conditions, definitions, understandings,
warranties or representations made prior to the date hereof other than as
expressly provided or referred to herein.
/S/9.3 Binding Effect
--------------
This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors, heirs, personal
representatives, legal representatives, and permitted assigns. It is agreed that
any Purchaser may assign his rights to purchase the Purchased Stock hereunder to
a Person he Controls.
/S/9.4 Waiver and Amendment
--------------------
Any representation, warranty, covenant, term or condition of
this Agreement which may legally be waived, may be waived, or the time of
performance thereof extended, at any time by the party hereto entitled to the
benefit thereof, and any term, condition or covenant hereof (including, without
limitation, the period during which any condition is to be satisfied or any
obligation performed) may be amended by the parties thereto at any time. Any
such waiver, extension or amendment shall be evidenced by an instrument in
writing executed by Xxxxx Xxxxxxx on behalf of Purchasers, or in the case of
Seller, by its President or CFO or other person, who has been authorized by its
Board of Directors to execute waivers, extensions or amendments on its behalf.
No waiver by any party hereto, whether express or implied, of its rights under
any provision of this Agreement shall constitute a waiver of such party's rights
under such provisions at any other time or a waiver of such party's rights under
any other provision of this Agreement
A-21
/S/9.4 No Third Party Beneficiary
--------------------------
Nothing expressed or implied in this Agreement is intended, or
shall be construed, to confer upon or give any Person other than the parties
hereto and their respective heirs, personal representatives, legal
representatives, successors and permitted assigns, any rights or remedies under
or by reason of this Agreement.
/S/9.5 Severability
------------
In the event that any one or more of the provisions contained in
this Agreement shall be declared invalid, void or unenforceable, the remainder
of the provisions of this Agreement shall remain in full force and effect, and
such invalid, void or unenforceable provision shall be interpreted as closely as
possible to the manner in which it was written.
/S/9.6 Expenses
--------
Each party agrees to pay, without right of reimbursement from
the other party, the costs incurred by it incident to the performance of its
obligations under this Agreement and the consummation of the transactions
contemplated hereby, including, without limitation, costs incident to the
preparation of this Agreement, and the fees and disbursements of counsel,
accountants and consultants employed by such party in connection herewith.
/S/9.7 Headings
--------
The section and other headings contained in this Agreement are
for reference purposes only and shall not affect the meaning or interpretation
of any provisions of this Agreement.
/S/9.8 Counterparts
------------
This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
/S/9.9 Governing Law
-------------
A-22
This Agreement has been entered into and shall be construed and
enforced in accordance with the laws of the State of New York without reference
to the choice of law principles thereof. In any litigation in connection with
or arising out or related to this Agreement, any of the documents referred to
herein or transactions contemplated hereby, the Seller irrevocably consents to
and confer personal jurisdiction on the courts of the State of New York or the
United States located within the City of Albany and expressly waive any
objections as to venue in any such courts.
/S/9.10 Participation of Parties
------------------------
The parties hereto acknowledge that this Agreement and all
matters contemplated herein, have been negotiated among all parties hereto and
their respective legal counsel and that all such parties have participated in
the drafting and preparation of this Agreement from the commencement of
negotiations at all times through the execution hereof. The rules of
construction with the "presumption against the drafter" are not applicable as
all parties participated in drafting.
/S/9.11 Further Assurances
------------------
The parties hereto shall deliver any and all other instruments
or documents required to be delivered pursuant to, or take such other action
required to be taken, or necessary or proper in order to give effect to, all of
the terms and provisions of this Agreement including, without limitation, all
necessary instruments of assignment and transfer and such other documents as may
be necessary or desirable to transfer ownership of the Purchased Stock.
/S/9.12 Arbitration
-----------
Any dispute, controversy or claim arising hereunder between the
parties shall be settled by arbitration in Albany, New York, in accordance with
the commercial rules of the American Arbitration Association, by an arbitration
panel consisting of three members, and judgment upon any such arbitration award
rendered by the arbitrators may be entered in any court of competent
jurisdiction. Such arbitrators shall have knowledge and expertise in the
subject matter of the arbitration proceeding. Each of the parties and the
arbitrators shall use its best efforts to keep confidential the existence of any
dispute and arbitration proceedings and all information relating thereto or
submitted in connection therewith and, in the event of judicial proceedings for
the enforcement of this paragraph or any award pursuant thereto, shall cooperate
to seal the record of any such arbitration or judicial proceeding. Each party
to any arbitration shall bear its own expenses in relation thereto, including
but not limited to such party's attorneys' fees, if any; provided however that
the expenses and fees of the arbitration not capable of being attributed to any
one party shall be borne half by the Seller and half by the Purchasers.
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IN WITNESS WHEREOF, the parties hereto have each executed and
delivered this Agreement as of the day and year first above written.
PURCHASER:
/s/ Xxxxx X. Xxxxxxx Xx.
----------------------------------------------
Xxxxx X. Xxxxxxx Xx.
SELLER:
Xxxx Security International, Inc.
By: /s/ Xxx X. Xxxxxxxx
------------------------------------------
Name: Xxx X. Xxxxxxxx
Title: President and CEO
A-24
