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Exhibit 4.3
THIRD AMENDED AND RESTATED
SECURITIES PURCHASE AGREEMENT
THIS THIRD AMENDED AND RESTATED SECURITIES PURCHASE AGREEMENT made as
of the 30th day of September, 1996, by and among MASADA SECURITY HOLDINGS,
INC., a Delaware corporation formerly known as Masada Security, Inc. ("MSH"),
CENTENNIAL FUND III, L.P., a Delaware limited partnership ("Centennial III"),
CRITERION VENTURE PARTNERS III, LIMITED, a Texas limited partnership
("Criterion"), NORWEST EQUITY PARTNERS IV, A MINNESOTA LIMITED PARTNERSHIP
("Norwest IV"), SOUTH ATLANTIC VENTURE FUND II, LIMITED PARTNERSHIP, a Delaware
limited partnership ("South Atlantic II"), and THE O. ▇▇▇▇ ▇▇▇▇▇▇▇ REVOCABLE
TRUST, U/T/A dated September 4, 1992 ("▇▇▇▇▇▇▇"), as successor in interest to
O. ▇▇▇▇ ▇▇▇▇▇▇▇, an individual residing in the State of North Carolina
(Centennial III, Criterion, Norwest IV, South Atlantic II and ▇▇▇▇▇▇▇ being
hereinafter sometimes collectively referred to as the "Initial Purchasers" and
individually as an "Initial Purchaser"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, an individual
residing in the State of Alabama ("▇▇▇▇▇▇▇"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇, an individual
residing in the State of Alabama ("▇▇▇▇▇") (▇▇▇▇▇▇▇ and ▇▇▇▇▇ being hereinafter
sometimes collectively referred to as the "Management Purchasers" and
individually as a "Management Purchaser"), MSAM, INC., a Florida corporation
("MSAM"), ▇▇▇▇▇▇▇ VENTURE PARTNERS IV-DIRECT FUND L.P., a Delaware partnership
("▇▇▇▇▇▇▇"), CENTENNIAL FUND IV, L.P., a Delaware limited partnership
("Centennial IV"), ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, an individual residing in the State of
Georgia ("▇▇▇▇▇▇"), ▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇▇▇, an individual residing in the State of
Colorado ("▇▇▇▇▇▇▇▇"), NORWEST EQUITY PARTNERS V, A MINNESOTA LIMITED LIABILITY
PARTNERSHIP ("Norwest V"), SOUTH ATLANTIC VENTURE FUND III, LIMITED
PARTNERSHIP, a Delaware limited partnership ("South Atlantic III"), and CHASE
VENTURE CAPITAL ASSOCIATES, a California partnership formerly known as Chemical
Venture Capital Associates ("CVCA") (▇▇▇▇▇▇▇, Nordin, Whitaker, Centennial IV,
Norwest V, South Atlantic III and CVCA, together with the Initial Purchasers
and the Management Purchasers, being hereinafter sometimes collectively
referred to as "Purchasers" and individually as a "Purchaser").
WHEREAS, MSH was organized to serve as the sole general partner of
Masada Security Limited Partnership, a Delaware limited partnership (the
"Partnership"), which was formed to serve as the initial investment vehicle for
the acquisition, construction, ownership, operation and management of security
alarm systems by MSH throughout the United States (the "Masada Business");
WHEREAS, MSH, the Initial Purchasers, the Management Purchasers and
MSAM entered into a certain Securities Purchase Agreement, dated as of February
1, 1993 (the "Original Purchase Agreement"), whereby MSH agreed to sell and
each of the Initial Purchasers and the Management Purchasers agreed to purchase
certain securities of MSH described therein upon the terms and conditions set
forth therein;
WHEREAS, MSH changed its name from Masada Security, Inc. to Masada
Security Holdings, Inc. pursuant to a Certificate of Amendment filed with the
Delaware Secretary of State on February 7, 1994;
WHEREAS, MSH formed Masada Security, Inc. ("Masada"), a Delaware close
corporation and wholly-owned subsidiary of MSH, for the purpose of effecting a
merger between the Partnership and Masada, whereby MSH, in its capacity as the
sole general partner and a limited partner of the Partnership, received shares
of stock of Masada in exchange for its Partnership interests, and MSAM, as a
limited
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partner of the Partnership, and the holders of debt securities of the
Partnership received shares of stock of MSH in exchange for their Partnership
interests;
WHEREAS, pursuant to a certain Agreement of Merger between Masada, MSH
and the Partnership dated February 10, 1994, and a Certificate of Merger filed
with the Delaware Secretary of State on February 10, 1994, the Partnership was
merged into Masada and Masada became the surviving entity with respect to the
Masada Business;
WHEREAS, to amend and restate the Original Purchase Agreement, MSH,
the Initial Purchasers, the Management Purchasers, MSAM, ▇▇▇▇▇▇▇, Centennial
IV, ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ entered into an Amended and Restated Securities
Purchase Agreement dated as of February 11, 1994 (the "First Restated Purchase
Agreement") in order to reflect the creation of Masada, the merger of the
Partnership into Masada, the issuance of additional securities of MSH to
certain of the Purchasers and the addition of ▇▇▇▇▇▇▇, Centennial IV, ▇▇▇▇▇▇
and ▇▇▇▇▇▇▇▇ as parties to that agreement;
WHEREAS, to amend and restate the First Restated Purchase Agreement,
MSH, the Initial Purchasers, the Management Purchasers, MSAM, ▇▇▇▇▇▇▇,
Centennial IV, Nordin, Whitaker, Norwest V, South Atlantic III, and CVCA
entered into a Second Amended and Restated Securities Purchase Agreement dated
as of May 31, 1995 (the "Second Restated Purchase Agreement") in order to
reflect the issuance of additional securities of MSH to certain of the
Purchasers and the addition of Norwest V, South Atlantic III and CVCA as
parties to that agreement;
WHEREAS, to further capitalize MSH, which will in turn capitalize
Masada, the Board of Directors of MSH have determined that it is in the best
interest of MSH to issue common stock in the public marketplace ("Initial
Public Offering");
WHEREAS, the Board of Directors of MSH has determined that, in order
to effectuate the Initial Public Offering, MSH must (i) simplify its capital
structure by creating a single class of common stock and effecting the
redemption and/or conversion into common stock of all outstanding shares of
preferred stock and (ii) eliminate certain existing stockholders rights, and to
adopt certain anti-takeover provisions, including a classified board of
directors;
WHEREAS, the Board of Directors of MSH has proposed a Plan of
Recapitalization (the "Plan of Recapitalization"), which provides for (i) the
redemption of all issued and outstanding shares of MSH Class A preferred stock,
(ii) the conversion of all issued and outstanding shares of MSH Class B
convertible preferred stock into shares of MSH Class B common stock, (iii) the
conversion of all issued and outstanding shares of MSH Class C convertible
preferred stock into shares of MSH Class C common stock, (iv) the exchange of
all issued and outstanding shares of MSH Class A common stock, Class B common
stock and Class C common stock (including the Class B common stock and Class C
common stock issued upon the conversion of the Class B Convertible preferred
stock and the Class C convertible preferred stock, respectively) for shares of
a new, single class of MSH common stock, (v) the amendment of MSH's charter to
eliminate certain shareholder rights and to adopt certain anti-takeover
provisions, including a classified board of directors, (vi) the election of
three classes of directors, and (vii) the adoption of new ByLaws for MSH;
WHEREAS, implementation of the Plan of Recapitalization is subject to
satisfaction of several conditions, including the unanimous approval of the
Plan of Recapitalization by the MSH stockholders, the
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approval by the stockholders and the filing with the Delaware Secretary of
State of the Certificate of Amendment to the Certificate of Incorporation of
MSH, a copy of which is attached to the Plan of Recapitalization as Exhibit B
(the "Certificate Amendment"), the unanimous approval of the proposed Fourth
Restated Certificate of Incorporation of MSH, a copy of which is attached to
the Plan of Recapitalization as Exhibit C (the "Fourth Restated Certificate"),
and the execution and delivery of this Agreement by MSH and all MSH
stockholders;
WHEREAS, MSH, MSAM and the Purchasers desire, subject to the
implementation of the Plan of Recapitalization, to amend the Second Restated
Purchase Agreement to reflect the Plan of Recapitalization and the consummation
of the Initial Public Offering;
NOW, THEREFORE, based upon the foregoing and mutual covenants herein
contained, and for other good and sufficient consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto, intending to
be legally bound, hereby, subject to implementation of the Plan of
Recapitalization, agree to amend and restate the Second Restated Purchase
Agreement as follows:
SECTION 1. DEFINITIONS.
For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires: (a) the terms defined in this
Section 1 shall have the meanings assigned to them below, such meanings to be
applicable to singular and plural nouns and verbs of any tense; (b) all
references in this Agreement to designated Sections and other subdivisions are
to the designated Sections and other subdivisions of this Agreement as amended
from time to time; and (c) the words "herein," "hereof," "hereunder" and other
words of similar import refer to this Agreement as a whole.
"A Shares" shall mean the 1,000,500 shares of Common Stock to be
issued pursuant to the Plan of Recapitalization in exchange for the 333,500
shares of Existing A Common Stock presently issued and outstanding; such
1,000,500 A Shares will be issued to the following Persons pursuant to the Plan
of Recapitalization:
▇▇▇▇▇▇▇ 60
▇▇▇▇▇ 60
MSAM 1,000,380
"Act" shall mean the Securities Act of 1933, as amended.
"Agreement" shall mean the Original Securities Purchase Agreement, as
amended and restated by the First Amended and Restated Securities Purchase
Agreement, as further amended and restated by the Second Amended and Restated
Securities Purchase Agreement, as further amended and restated, as of the date
hereof, and any further amendment, modification or restatement thereof made in
accordance with the provisions of Section 3.
"B Shares" shall mean the 2,785,716 shares of New Common Stock to be
issued pursuant to the Plan of Recapitalization in exchange for (i) the 570,240
shares of Existing B Common Stock presently issued and outstanding and (ii) the
358,332 shares of Existing B Common Stock which will be issued pursuant to the
Plan of Recapitalization as a result of the conversion of the 358,332 shares of
Existing B Preferred Stock presently issued and outstanding; such 2,785,716 B
Shares will be issued to the following Persons pursuant to the Plan of
Recapitalization:
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▇▇▇▇▇▇▇ 34,890
▇▇▇▇▇ 34,890
Centennial III 703,365
Centennial IV 263,235
Criterion 199,683
Norwest IV 814,362
South Atlantic II 452,901
▇▇▇▇▇▇▇ 15,414
▇▇▇▇▇▇ 15,414
▇▇▇▇▇▇▇▇ 1,563
▇▇▇▇▇▇▇ 249,999
"ByLaws" shall mean the Amended and Restated ByLaws of MSH as adopted
by the stockholders of MSH, as amended from time to time.
"C Shares" shall mean the 1,640,610 shares of New Common Stock to be
issued pursuant to the Plan of Recapitalization in exchange for 546,870 shares
of Existing C Common Stock, which will be issued pursuant to the Plan of
Recapitalization as a result of the conversion of the 486,111 shares of
Existing C Preferred Stock presently issued and outstanding; such 1,640,610 C
Shares will be issued to the following Persons pursuant to the Plan of
Recapitalization:
▇▇▇▇▇▇▇ 19,287
▇▇▇▇▇ 19,287
Centennial III 28,566
Centennial IV 371,970
Criterion 4,014
Norwest V 282,567
South Atlantic II 78,525
South Atlantic III 78,525
▇▇▇▇▇▇▇ 1,593
▇▇▇▇▇▇ 1,593
▇▇▇▇▇▇▇▇ 4,686
▇▇▇▇▇▇▇ 281,247
CVCA 468,750
"Demand Shares" shall mean the B Shares and/or the C Shares, to the
extent they are involved in a Demand Registration.
"Effective Date" shall mean the date on which the Fourth Restated
Certificate is filed with the Delaware Secretary of State pursuant to the Plan
of Recapitalization.
"Existing A Common Stock" shall mean the 333,500 shares of Class A
common stock of MSH authorized to be issued by the Third Restated Certificate,
all of which are issued and outstanding.
"Existing B Common Stock" shall mean the 1,078,572 shares of Class B
common stock of MSH authorized to be issued by the Third Restated Certificate,
570,240 of which are issued and outstanding.
"Existing C Common Stock" shall mean the 546,875 shares of Class C
common stock of MSH which will be authorized to be issued upon the filing of
the Certificate Amendment, none of which are presently issued and outstanding;
486,111 shares of Class C common stock of MSH are presently authorized to be
issued by the Third Restated Certificate.
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"Existing B Preferred Stock" shall mean the 358,332 shares of Class B
convertible preferred stock of MSH authorized to be issued by the Third
Restated Certificate, all of which are issued and outstanding.
"Existing C Preferred Stock" shall mean the 486,111 shares of Class C
convertible preferred stock of MSH authorized to be issued by the Third
Restated Certificate, all of which are issued and outstanding.
"New Common Stock" shall mean the new, single class of common stock of
MSH to be authorized upon the filing of the Fourth Restated Certificate with
the Delaware Secretary of State.
"Option Shares" shall mean MSH common stock or other securities issued
or issuable pursuant to any stock purchase awards or stock option awards
granted under the 1994 Stock Plan or the 1996 Stock Plan.
"Person" shall mean any individual, corporation, general or limited
partnership, joint venture, association, limited liability company, joint stock
company, trust, business trust bank, trust company or estate (including any
beneficiaries thereof), unincorporated organization, cooperation or association
or government or any agency or political subdivision thereof.
"Shares" shall mean the A Shares, B Shares and C Shares.
"Third Restated Certificate" shall mean the Third Restated Certificate
of Incorporation of MSH filed with the Delaware Secretary of State on July 10,
1996 as it may be amended hereafter and prior to the Effective Date.
"1994 Stock Plan" shall mean the Stock Option/Purchase Plan of Masada
Security Holdings, Inc. adopted and approved in 1994, as amended.
"1996 Stock Plan" shall mean the 1996 Stock Option Plan of Masada
Security Holdings, Inc. adopted and approved in 1996, as amended.
SECTION 2. REGISTRATION RIGHTS.
(a) Demand Registration.
(i) B Shares. The holders of fifty percent (50%) or more
of the aggregate issued and outstanding B Shares may, upon the delivery of a
written notice to MSH, request to register under the Act any of their B Shares
which are not then covered by a currently effective registration statement
under the Act; provided, however, that the proceeds of any such offering shall
not be less than ten million dollars ($10,000,000), without regard to
underwriting or brokerage commissions and discounts and offering expenses.
Such written notice shall specify the number of B Shares intended to be offered
by such electing holders, shall express such holders' present intent to offer
such shares for distribution, shall describe the nature or method of the
proposed offer and sale thereof and shall contain an undertaking of each such
holder to provide all such information and materials and take all such action
as may be required in order to permit MSH to comply with all applicable
requirements of the Securities and Exchange Commission and applicable
securities commissions of the several states and to obtain acceleration of the
effective date of such registration statement. Upon receipt of such request
MSH shall use all reasonable efforts to cause the B Shares so specified in such
request to be so registered to permit the sale by each electing holder of the
number of B Shares specified in the holder's request under the Act and to
permit their trading on the
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NASDAQ National Market System, subject to notice of issuance. The holders of
the B Shares shall have one (1) Demand Registration pursuant to this Section
2(a)(i) only; provided, however, that in the event MSH qualifies for the use of
a Form S-3 (or successor form) registration statement, the number of requests
that may be made for a Demand Registration shall be unlimited so long as each
such request is made by the holders of twenty-five percent (25%) or more of the
B Shares; and provided, further, that a registration requested pursuant to this
Section 2(a)(i) shall not constitute a Demand Registration unless the holders
of B Shares shall have registered and sold 75% of the B Shares requested to be
sold in such offering.
(ii) C Shares. The holders of thirty percent (30%) or
more of the aggregate issued and outstanding C Shares may, upon the delivery of
a written notice to MSH, request to register under the Act any of their shares
of C Shares which are not then covered by a currently effective registration
statement under the Act; provided, however, that the proceeds of any such
offering shall not be less than ten million dollars ($10,000,000), without
regard to underwriting or brokerage commissions and discounts and offering
expenses. Such written notice shall specify the number of C Shares intended to
be offered by such electing holders, shall express such holders' present intent
to offer such shares for distribution, shall describe the nature or method of
the proposed offer and sale thereof and shall contain an undertaking of each
such holder to provide all such information and materials and take all such
action as may be required in order to permit MSH to comply with all applicable
requirements of the Securities and Exchange Commission and applicable
securities commissions of the several states and to obtain acceleration of the
effective date of such registration statement. Upon receipt of such request
MSH shall use all reasonable efforts to cause the C Shares so specified in such
request to be so registered to permit the sale by each electing holder of the
number of C Shares specified in the holder's request under the Act and to
permit their trading on the NASDAQ National Market System, subject to notice of
issuance. The holders of the C Shares shall have two (2) Demand Registrations
pursuant to this Section 2(a)(ii) only; provided, however, that in the event
MSH qualifies for the use of a Form S-3 (or successor form) registration
statement, the number of requests that may be made for a Demand Registration
shall be unlimited so long as each such request is made by the holders of
twenty-five percent (25%) or more of the C Shares; and provided, further, that
a registration requested pursuant to this Section 2(a)(ii) shall not constitute
a Demand Registration unless the holders of C Shares shall have registered and
sold 75% of the C Shares requested to be sold in such offering.
(iii) Any registration accomplished pursuant to the
provisions of this Section 2(a) shall be referred to as a "Demand
Registration."
(b) Piggy-Back Registration. If MSH at any time proposes to file
a registration statement (other than an exchange offering of securities solely
to existing holders of MSH's securities or a registration statement on Form S-4
or Form S-8) with respect to any class of common stock now or hereafter
authorized and the form to be used for such registration may be used for the
registration of Shares, MSH shall give written notice of such proposed
registration to each holder of Shares not then subject to an effective
registration statement at least thirty (30) days before the anticipated filing
date of such registration statement. The notice shall offer the holders of
such Shares the opportunity to include all or a portion of their Shares in the
registration statement proposed to be filed by MSH. Subject to the provisions
which follow, the Shares designated in writing by the holders thereof within
fifteen (15) days of the sending of such notice shall be included in the
registration statement on the same terms and conditions applicable to the
common stock proposed to be registered by MSH or such other terms and
conditions which may be recommended by MSH's managing underwriters (provided
that any such shares may be withdrawn from any such registration statement at
any time if the holder thereof is not satisfied with the terms of the
offering).
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The number of outstanding shares of Shares to be included in the
registration statement shall be reduced pro rata among all selling stockholders
according to the number of Shares requested to be included in the registration
statement if the managing underwriters advise MSH in writing that in their
opinion the number of Shares to be included in the registration statement
exceeds the number of shares which can be sold in the offering without
detrimental effect on the success of the offering or the price obtained for the
shares; provided, however, that there shall be no reduction of the number of
shares of common stock proposed for registration by MSH in an offering other
than pursuant to a Demand Registration. Any registration of Shares
accomplished pursuant to the provisions of this Section 2(b) shall be referred
to as a "Piggy-Back Registration."
(c) Limitations, Conditions and Qualifications to Obligations of
MSH under Registration Covenants. The obligations of MSH to use reasonable
efforts to cause certain Shares to be registered under the Act and to prepare
and file registration statements under the Act to effect such registration are
subject to the following limitations, conditions and qualifications:
(i) In connection with any Demand Registration or
Piggy-Back Registration, all expenses incurred in connection therewith,
including, without limitation, all Securities and Exchange Commission
registration and filing fees, blue sky filing fees, all fees of the National
Association of Securities Dealers, Inc., printing expenses, fees and
disbursements of legal counsel for MSH, fees and disbursements of experts used
by MSH in connection with such registration and expenses of any special audits
incidental to or required by such registration ("MSH Expenses"), shall be borne
by MSH. In all registrations of Demand Shares pursuant to Section 2(a), MSH
shall bear the fees and disbursements of legal counsel to the holders of Demand
Shares requesting registration, transfer taxes on the sale of Demand Shares and
any expenses of the brokers or underwriters of the holders of Demand Shares
requesting registration that are not borne directly by such brokers or
underwriters; provided, that such expenses shall not include underwriting or
brokerage discounts and commissions.
(ii) In connection with any Demand Registration, MSH shall
be entitled to include in any such registration other securities of MSH;
provided, however, that MSH shall also agree to execute and deliver the
underwriting agreement, if any, to be executed and delivered by the holders of
Demand Shares requesting such registration; and, provided, further, that the
holders of Demand Shares requesting such registration may request that any such
other securities of MSH not be included in the registration if such holders of
Demand Shares are advised by the managing underwriter that in their opinion the
inclusion of such other securities by MSH would adversely affect the offering
of the Demand Shares to be sold pursuant to such registration, and MSH shall
comply with such request.
(iii) MSH shall be entitled to postpone for reasonable
periods of time, not to exceed ninety (90) days in any one instance, the filing
of any registration statement in connection with any Demand Registration if MSH
is, at the time it receives a request for registration, (i) conducting or is
about to conduct an offering of its securities and MSH reasonably believes that
such offering by MSH would be adversely affected by the registration so
demanded or (ii) if there exists at the time material non-public information
relating to MSH which, in the reasonable opinion of the board of directors of
MSH, should not be disclosed. Additionally, MSH shall be entitled to postpone,
in accordance with this Section 2(c)(iii), the filing of such a registration
statement for multiple, consecutive ninety (90) day periods.
(iv) In the case of any Demand Registration, MSH shall be
required to file the registration statement within ninety (90) days after the
request is made, except as otherwise provided herein
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or unless such request is made within ninety (90) days prior to the close of
its fiscal year, in which event the registration statement shall be filed by
MSH within ninety (90) days after the close of its fiscal year. Once filed,
MSH shall use all reasonable efforts to cause a registration statement to
become effective and shall cause any such registration statement to remain
effective (including the filing of necessary supplements or post-effective
amendments) during the period commencing on the effective date of such
registration statement and ending sixty (60) days thereafter; provided,
however, that in the event the registration statement is on Form S-3 and
constitutes a shelf registration covering resales of securities and requested
by the holders of Demand Shares, MSH's obligation to maintain such Form S-3
registration statement shall expire 180 days following the effective date of
such registration statement. During the effective period of any such offering
or any Piggy-Back Registration, MSH will furnish to each participating seller
of Shares, such number of copies of any prospectus (including any preliminary
or summary prospectus) as such holders of Shares may reasonably request in
order to effect the offering and sale of the Shares to be offered and sold.
(v) In respect of any proposed disposition by the holders
of Demand Shares pursuant to any Demand Registration, each participating holder
of Demand Shares shall have arranged for the plan of distribution of his Demand
Shares which are to be registered and shall have made all pertinent marketing
arrangements for such Demand Shares and shall have advised MSH of such
distribution and marketing arrangements. If any such plan of distribution
shall involve an investment banking firm as an underwriter, such firm shall be
reasonably satisfactory to MSH.
(vi) MSH's obligations to use all reasonable efforts to
effect registration of Demand Shares pursuant to any Demand Registration shall
include such qualification under applicable blue sky laws as may be necessary
to enable the holders of Demand Shares in whose behalf such registration is to
be effected to offer and sell the Demand Shares which are the subject matter of
their requests; provided, however, that MSH shall not be obligated to qualify
as a foreign corporation to do business under the laws of any jurisdiction in
which it is not then qualified or to file any general consent to service of
process.
(vii) In connection with any Demand Registration or
Piggy-Back Registration, the holders of Shares requesting such registration may
request that securities held by Management Purchasers not be included in the
registration if such holders of Shares are advised by the investment banking
firm managing any underwritten offering that such firm reasonably believes that
the inclusion of such securities would adversely affect the offering of the
Shares to be sold pursuant to such registration, and ▇▇▇▇▇▇▇ and ▇▇▇▇▇ shall
comply with such request.
(viii) (A) In connection with any registration statement
in which the holders of Shares are selling stockholders, MSH shall indemnify
and hold harmless such selling stockholders and their officers, directors,
employees and agents against and in respect of any losses, claims, damages or
liabilities, joint or several (including legal or other fees and expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action) to which any such Person may
become subject under the Act or otherwise insofar as such losses, claims,
damages or liabilities (or actions with respect thereto) arise out of or are
based upon any untrue statement or alleged untrue statement of any material
fact contained in any such registration statement, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not
misleading, except to the extent that any such untrue statement or omission is
based upon written information supplied by the selling stockholders or any of
their respective representatives for use in such registration statement.
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(B) In connection with the filing of any
registration statement in which the holders of Shares participate as selling
stockholders, each such selling stockholder shall individually, and not
jointly, indemnify and hold harmless MSH and its officers, directors, employees
and agents against and in respect of any losses, claims, damages or
liabilities, joint or several (including legal or other fees and expenses
reasonably incurred by any of them in connection with investigating or
defending any such loss, claim, damage, liability or action) which MSH or any
such Persons may become subject under the Act or otherwise insofar as such
losses, claims, damages or liabilities (or actions with respect thereto) arise
out of or are based upon any untrue statement or alleged untrue statement of
any material fact contained in any such registration statement, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but only to the extent that any such untrue statement or
omission is based upon written information supplied by the selling stockholder
or its respective representatives for use in such registration statements;
provided, further, that the liability of each selling stockholder hereunder
shall be limited to the proportion of any such loss, claim, damage, liability
or expense which is equal to the proportion that the public offering price of
the shares sold by such selling stockholder under such registration statement
bears to the total public offering price of all securities sold thereunder, but
not in any event to exceed the proceeds received by such selling stockholder
from the sale of securities covered by such registration statement.
(C) If for any reason the indemnification
provided for in the preceding clauses is unavailable to an indemnified party as
contemplated by the preceding clauses, then the indemnifying party shall
contribute to the amount paid or payable by the indemnified party as a result
of such loss, claim, damage or liability in such proportion as is appropriate
to reflect not only the relative benefits received by the indemnified party and
the indemnifying party, but also the relative fault of the indemnified party
and the indemnifying party, as well as any other relevant equitable
considerations.
(d) Customary Agreements. MSH and each selling stockholder agree
to enter into a written agreement with the managing underwriter selected in the
manner herein provided in such form and containing such provisions, including
lock-up provisions with respect to sales of MSH's common stock, as are
reasonable and customary in the securities business for such an arrangement
between such underwriter and companies of MSH's size and investment stature.
(e) Option Shares. The Shares do not include any Option Shares
and the registration covenants set forth in this Section 2 hereof do not apply
to the Option Shares.
SECTION 3. MISCELLANEOUS.
(a) Amendments. The terms of this Agreement may not be amended
orally or by course of dealing, but only in a writing executed by each of (i)
MSH and (ii) the holders of eighty (80%) of the Shares. The obligations
imposed by this Agreement with respect to, or in favor of, any particular
selling stockholder shall continue until the first to occur of (I) the
termination of this Agreement in the manner required for the making of
amendments hereto as specified in this Section 3(a), (II) all of the remaining
Shares owed by such selling stockholder are freely transferable under Rule 144
of the Act, and (III) December 31, 1998.
(b) Counterparts. This Agreement may be executed in one or more
counterparts and by the different parties hereto under separate counterparts,
any one of which need not contain the signatures of
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more than one party, but all of which when taken together shall constitute one
and the same instrument notwithstanding that all parties have not signed the
same counterpart hereof.
(c) Headings. The Section headings contained in this Agreement
are inserted as a matter of convenience and shall not affect in any way the
construction of the terms of this Agreement.
(d) Third Party Rights. It is the intention of the parties that
nothing in this Agreement shall be deemed to create any right in favor of or
with respect to any Person not a party to this Agreement.
(e) Survival. The representations, warranties, covenants and
agreements made herein or in any certificate or document executed in connection
herewith shall survive the execution and delivery thereof for the period of the
statute of limitations applicable thereto, including any periods of waiver or
extension thereof, and all statements contained in any certificate or document
delivered by any party hereto shall be deemed to constitute a representation
and warranty made herein by such party.
(f) Governing Law. This Agreement shall be governed by and
construed in accordance with the internal laws of the State of Delaware,
without regard to principles of conflicts of law.
(g) Partial Invalidity. If any provision of this Agreement is
found by any competent authority to be void or unenforceable, such provision
shall be modified, if possible, so as to effect the intent of the parties
expressed herein, or if it cannot be so modified, it shall be deemed to be
deleted from this Agreement and the remaining provisions of this Agreement
shall continue in full force and effect.
(h) Force Majeure. No party to this Agreement shall be deemed to
be in breach or in violation of this Agreement if such party is prevented from
performing any of its obligations hereunder (except obligations to pay sums of
money due hereunder) for any reason beyond its control, including without
limitation, acts of God, fire, flood, earthquake, unusually severe weather
conditions, explosion, accident, riot, war, sabotage, requirements or actions
or failure to act on the part of governmental authorities preventing
performance, damage to or break down of necessary facilities beyond the control
of the respective party (a "force majeure event"). Lack of financial resources
shall not under any circumstances constitute a force majeure event. Upon the
occurrence of any one or more such events, the party subject to such force
majeure event shall promptly notify the other party of such event. If such
party is rendered unable, wholly or in part, by the force majeure event to
carry out its obligations under this Agreement, the obligations of such party
(except obligations to pay sums of money due hereunder), so far as they are
affected by such force majeure event, shall be suspended during, but no longer
than the continuance of, such force majeure event. The party affected by such
force majeure event shall use all reasonable` diligence to remedy the effect
upon its ability to perform its obligations hereunder caused by such force
majeure event as promptly as possible.
(i) Notices. All notices and other official communications
between the parties shall be in writing and shall be given by hand delivery or
by a recognized overnight courier who maintains verification of delivery
(deemed to be duly received on a date delivered), or by Express, certified or
registered mail, postage prepaid, return receipt requested (deemed to be duly
received seven (7) days after such mailing) or by telecopy (deemed to be
received on the date sent, provided that the facsimile was properly addressed
and disclosed the number of pages transmitted on its front sheet and that the
transmission report produced indicates that each of the pages of the facsimile
was received at the correct facsimile number) to each of the respective parties
as set forth on Exhibit A attached hereto, or to such other address for any of
the
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parties hereto as from time to time shall be designated by notice given by such
party to the other party in the manner hereinabove provided.
(j) Authority of Signatories. Each signatory to this Agreement in
a representative capacity, whether as an officer, trustee or partner,
represents and warrants that the execution and delivery of this Agreement by
such representative and the performance of the covenants and agreements herein
contained by the Person for whom such representative is acting have been duly
authorized by all necessary action.
(k) Non-Recourse. Notwithstanding anything contained in this
Agreement to the contrary, it is expressly understood and agreed that each and
every covenant, undertaking and agreement made herein by a party hereto that is
not an individual was not made or intended to be made as a personal or
individual undertaking or agreement on the part of any past, present or future
officer, director, shareholder, partner or agent of any party hereto, and no
personal or individual liability or responsibility is assumed by, nor shall any
recourse at any time be asserted or enforced against any such past, present or
future officer, director, shareholder, employee, partner or agent of any party
hereto, or any of them, all such recourse (whether in common law, in equity, by
statute or otherwise), is hereby forever waived and released, and the sole
recourse being to the assets and property of the parties hereto.
(l) Rights of Assignment. All of the terms, covenants and
undertakings contained in this Agreement shall be binding upon and shall inure
to the benefit of the successors and assigns of the parties hereto. Except as
specifically provided otherwise herein, holders of Shares may assign their
rights and delegate their obligations, in whole or in part, to any Person in
connection with the transfer of Shares; provided, however, that any transfer of
such Shares may be made only upon the transferor providing MSH satisfactory
assurance that the provisions of the Act would not be violated thereby, such
assurance to be in the form of an opinion of counsel for the transferor,
reasonably satisfactory to MSH, or a no-action letter from the Securities and
Exchange Commission; and, provided, further, that it shall also be a condition
to any such transfer that the transferee agree in writing to be bound by this
Agreement. If any transfer is made in accordance with the foregoing
requirements, the transferee shall be thereafter deemed and considered as a
holder of Shares under this Agreement.
(m) Legend. It is agreed and acknowledged that all certificates
representing Shares shall contain the following legend until such time as such
Shares are freely transferable, without restriction, under Rule 144(k) of the
Act or shall be registered pursuant to the Act:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
WITH NOR APPROVED OR DISAPPROVED BY THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION NOR BY THE SECURITIES REGULATORY AUTHORITY OF ANY
STATE AND SUCH REGISTRATION IS NOT CONTEMPLATED. THE SHARES
REPRESENTED BY THIS CERTIFICATE MAY NOT BE TRANSFERRED, IN WHOLE OR IN
PART, IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT OR AN
OPINION OF COUNSEL SATISFACTORY TO MASADA SECURITY HOLDINGS, INC. THAT
AN EXEMPTION FROM REGISTRATION IS AVAILABLE.
(n) Effectiveness. This Third Amended and Restated Securities
Purchase Agreement shall not become effective unless and until the Effective
Date of the Plan of Recapitalization. In the event the Plan of
Recapitalization is terminated, this Third Amended and Restated Securities
Purchase Agreement shall be void.
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IN WITNESS WHEREOF, the parties have executed this Third Amended and
Restated Securities Purchase Agreement as of the day and year first above
written.
CENTENNIAL FUND III, L.P. SOUTH ATLANTIC VENTURE FUND II,
By: Centennial Holdings III, L.P., LIMITED PARTNERSHIP
Its General Partner By: South Atlantic Venture Partners II,
Limited Partnership, General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------------------
General Partner By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------------------
General Partner
CENTENNIAL FUND IV, L.P. SOUTH ATLANTIC VENTURE FUND III,
By: Centennial Holdings IV, L.P., LIMITED PARTNERSHIP
Its General Partner By: South Atlantic Venture Partners III,
Limited Partnership, General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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General Partner General Partner
CHASE VENTURE CAPITAL ASSOCIATES THE O. ▇▇▇▇ ▇▇▇▇▇▇▇ REVOCABLE TRUST
By: Chase Capital Partners
Its General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ O. ▇▇▇▇ ▇▇▇▇▇▇▇
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General Partner Trustee
CRITERION VENTURE PARTNERS III, ▇▇▇▇▇▇▇ VENTURE PARTNERS IV-DIRECT
LIMITED FUND, L.P.
By: CVP III General Partner, By: Back Bay Partners XII, L.P.
Its General Partner Its General Partner
By: Criterion Investments, Inc., By: ▇▇▇▇▇▇▇ Venture Partners, Inc.
Its Corporate General Partner Its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇, ▇▇. By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Executive Vice President Vice President
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NORWEST EQUITY PARTNERS IV, NORWEST EQUITY PARTNERS V, A
A MINNESOTA LIMITED PARTNERSHIP MINNESOTA LIMITED LIABILITY PARTNERSHIP
By: Itasca Partners, General Partner By: Itasca Partners, General Partner
By: /s/ ▇▇▇▇▇▇ ▇. Still, Jr. By: /s/ ▇▇▇▇▇▇ ▇. Still, Jr.
---------------------------------------- -------------------------------------------------
General Partner General Partner
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/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇▇▇ /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇. ▇▇▇▇▇
MSAM, INC. MASADA SECURITY HOLDINGS, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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President President
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