EXHIBIT 10.3
STOCK PURCHASE AGREEMENT
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THIS STOCK PURCHASE AGREEMENT (this "Agreement"), is made as of the 7th
day of August 2006, by and between John A. Moore ("Moore"), Richard Rimer
("Rimer" and jointly hereinafter, the "Sellers"), and Data Systems & Software,
Inc., a Delaware corporation (the "Purchaser").
RECITALS
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WHEREAS, in connection with that certain Common Stock Purchase
Agreement, dated as of the date hereof (the "Purchase Agreement"), between
Paketeria GmbH ("Paketeria") and Purchaser, and the transactions contemplated
thereby, the parties hereto are entering into this Agreement;
WHEREAS, the Purchase Agreement states that, as a condition to its
effectiveness, the Sellers and the Purchaser enter into this Agreement;
WHEREAS, the share capital of Paketeria in the aggregate amount of
(euro) 37,450 currently is held as follows:
Shareholder Shares Total Amount of Shares
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Andy Rosch (euro) 18,750
(euro) 4,950 (euro) 23,700
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Ralf Budde (euro) 1,600
(euro) 1,400 (euro) 3,000
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Joseph Benson (euro) 950 (euro) 950
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John Moore (euro) 3,300
(euro) 950
(euro) 650 (euro) 4,900
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Richard Rimer (euro) 3,350
(euro) 900
(euro) 650 (euro) 4,900
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Total 37,450 37,450
The aforementioned shares of Moore in the aggregate nominal amount of (euro)
4,900 and the aforementioned shares of Rimer in the aggregate nominal amount of
(euro) 4,900 are hereinafter, collectively, referred to as the "Securities".
WHEREAS, the Sellers are also entitled to receive new shares of common
stock of Paketeria ("Stammkapital") in the aggregate nominal amount of (euro)
2,000 against payment of its par value of (euro) 2,000 with no agio (the
"Subscription Rights"), of which Moore is entitled to the nominal amount of
(euro) 1,000 and Rimer is entitled to the nominal amount of (euro) 1,000
(collectively, the "Subscription Rights Shares").
WHEREAS, the Sellers have caused Paketeria and their current
shareholders to agree, in the Purchase Agreement, to issue the Subscription
Rights Shares directly to the Purchaser, subject to the parties execution of
this agreement and Purchaser's payment of the par value of the Subscription
Rights Shares of (euro) 2,000 to Paketeria.
WHEREAS, each Seller wishes to sell, transfer and assign to the
Purchaser all of his rights, titles, interests, duties and obligations in, to
and in connection with (i) the Securities, representing all capital stock of
Paketeria held by the Sellers, and (ii) the Subscription Rights, and the shares
issuable with respect thereto, and the Purchaser, subject to the terms of this
Agreement, wishes to purchase and receive from each Seller all of such Seller's
rights, titles, interests, duties and obligations in, to and in connection with,
(i) the Securities and (ii) the Subscription Rights and the shares issuable with
respect thereto, on the terms and conditions set forth herein.
NOW, THEREFORE, the parties hereby agree as follows:
1. SALE, PURCHASE AND ASSIGNMENT.
1.1 Sale and Purchase. Upon the delivery by the Purchaser to each
Seller of a written notice, (the "Exercise Notice") on or before August 7, 2007
(the "Trigger Date"), substantially in the form attached hereto as Exhibit A,
each Seller shall sell, transfer and assign to the Purchaser and its successors
and assigns forever, and the Purchaser shall purchase and accept from each
Seller for itself and its successors and assigns forever, all of such Seller's
rights, titles and interests in and to (i) the Securities, for an aggregate
purchase price of (euro) 496,831 and (ii) the Subscription Rights, for an
aggregate purchase price of (euro) 101,394 (the aggregate purchase price to be
paid for the Securities and Subscription Rights, the "Purchase Price"). The
rights sold include (without limitation) the profit participation right for the
current business year as well as all rights to any undistributed profits (if
any) related to the Securities and the Subscription Rights Shares.
1.2 Form of Consideration. The Purchase Price shall be paid by the
Purchaser to each Seller by the issuance to each Seller, pursuant to their
respective ownership interest in the Securities and the Subscription Rights, of:
(a) a number of validly issued, fully paid and non-assessable
shares of common stock, par value $0.01 per share (the "Common Stock"), of the
Purchaser equal to the Purchase Price divided by Two Dollars and Sixty-Five
Cents ($2.65) (such shares of Common Stock, the "Purchase Price Shares"); and
(b) a stock purchase warrant exercisable for a number of
shares of Common Stock equal to the Purchase Price Shares divided by four (4),
with an exercise price of Two Dollars and Seventy-Eight Cents ($2.78) per share,
in substantially the form issued by the Purchaser to the investors participating
in its most recent private placement of Common Stock that closed on or about
August 1, 2006 (the "Purchase Price Warrant", and together with the Purchase
Price Shares and the shares of common issuable upon exercise of the Purchase
Price Warrant, collectively, the "Purchase Price Securities").
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The conversion rate of Dollars ($) to Euros ((euro)) shall be determined at the
time of delivery of the Exercise Notice by reference to the conversion rate as
set forth in the Wall Street Journal.
1.3 Closing. Following the delivery of the Exercise Notice, a
closing of the transactions described in Section 1.1 (a "Closing") shall take
place before a German notary on whom the Sellers and the Purchaser will mutually
agree, on such date and at such place as the Seller and the Purchaser may
mutually agree, but in any event no later than two weeks after the Exercise
Notice has been delivered to the Seller.
1.4 Closing Deliveries. At the Closing:
(a) the Purchaser shall deliver to each Seller or his
designee, certificates representing such Seller's respective Purchase Price
Shares and a warrant certificate evidencing such Seller's respective Purchase
Price Warrant, in each case, free and clear of all liens, claims or
encumbrances;
(b) each Seller shall assign to the Purchaser by way of
notarial deed all of such Seller's rights, titles and interests in and to the
Securities and the Subscription Rights; and
(c) the Purchaser and each Seller shall have delivered all
other documents, instruments and writing required by the other party to be
delivered to them pursuant to this Agreement, in form and substance satisfactory
to such party.
2. REPRESENTATIONS AND WARRANTIES.
2.1 Construction. For purposes of this Section 2, a person shall be
deemed to have "knowledge" of a particular fact or other matter if the person is
actually aware, or should in the exercise of reasonable judgment be aware, of
such fact or other matter. A person that is a corporation, partnership or other
business entity shall be deemed to have "knowledge" of a particular fact or
other matter if any officer, director, manager, managing member or partner of
such person has knowledge (as described in the preceding sentence) of such fact
or other matter.
2.2 Seller's Representations and Warranties. Each Seller hereby
represents and warrants to the Purchaser as of the date of the Closing, solely
as to himself and his assets (and not as to the other Seller or the other
Seller's assets) as follows:
(a) Authorization; Valid and Binding Agreement. Except for any
notices required to be delivered to the Purchaser in connection therewith and
any consent required to be obtained from the Purchaser, such Seller has all
requisite power and authority to execute and deliver this Agreement, to perform
all of its obligations and undertakings hereunder, and to consummate the
transactions contemplated hereby. The execution and delivery by such Seller of
this Agreement, the performance by such Seller of its obligations and
undertakings hereunder and the consummation by such Seller of the transactions
contemplated hereby, have been duly and validly authorized by all necessary
action of such Seller and no other proceedings on the part of such Seller are
necessary to authorize the execution or delivery by such Seller of this
Agreement, the performance by such Seller of its obligations and undertakings
hereunder, or the consummation by such Seller of the transactions contemplated
hereby. This Agreement has been duly executed and delivered by such Seller, and
constitutes the legal, valid and binding obligations of such Seller, enforceable
against such Seller in accordance with its terms.
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(b) Conflicts; Consents. The execution and delivery by such Seller
of this Agreement, the performance by such Seller of his obligations and
undertakings hereunder, and the consummation by such Seller of the transactions
contemplated hereby, do not and will not conflict with, or result in any
violation of, or default under, or result in the creation of any Lien (as
defined in Section 2.2(c)) on the properties or assets of such Seller under, any
provision of (i) any contract, agreement, instrument or arrangement to which
such Seller is a party or by which any of such Seller's properties or assets are
bound, (ii) any license, franchise, permit or other similar authorization held
by such Seller, or (iii) to the knowledge of such Seller, any judgment, order or
decree, statute, law, ordinance, rule or regulation applicable to such Seller or
such Seller's properties or assets.
(c) Title to Properties and Assets; Liens, Etc. Except for any Lien
arising out of this Agreement, as of the Closing, such Seller is the owner of
all right, title and interest in and to the Securities and the Subscription
Rights owned by such Seller, and such Securities and Subscription Rights are
free of any mortgage, pledge, lien, encumbrance, charge or other adverse claim
(each, a "Lien") other than Liens in favor of the Purchaser.
(d) Securities Law Representations and Warranties of Seller. As a
condition to the issuance of the Purchase Price Securities, except as otherwise
provided, each Seller represents and warrants to the Purchaser that:
(i) Such Seller is acquiring the Purchase Price
Securities for his own account and not with a view to their
distribution within the meaning of Section 2(11) of the Securities Act
of 1933, as amended (the "Securities Act"). Such Seller hereby
acknowledges and agrees that the Purchase Price Securities have not
been registered under the Securities Act or under any state securities
or "blue sky" laws and may not be sold, transferred or otherwise
disposed of except in compliance with the provisions of the Securities
Act and the rules and regulations promulgated thereunder and such state
securities or "blue sky" laws and the Purchase Price Securities contain
a restrictive legend stating that the Purchase Price Securities have
not been registered and may only be sold pursuant to an effective
registration statement or a valid exemption from the registration
requirements of the Securities Act. Moore further understands that he
is an "affiliate" of the Purchaser.
(ii) Such Seller agrees that he will not, under any
circumstances, sell the Purchase Price Securities in violation of any
applicable law or regulation promulgated under the laws of the United
States or any state or jurisdiction. Such Seller acknowledges that,
from time to time and under various circumstances, such laws may
restrict the disposition of Purchase Price Securities or impose
conditions upon such disposition.
(iii) Such Seller is an "accredited investor" as
defined in Regulation D of the Securities Act.
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(iv) Such Seller has such knowledge and expertise in
financial and business matters that he is capable of evaluating the
merits and risks of an investment in the Purchase Price Securities and
of making an informed investment decision.
2.3 Purchaser's Representations, Warranties and Covenants. The
Purchaser hereby represents, warrants and covenants to each Seller as of the
Closing as follows:
(a) Organization and Standing. The Purchaser is a corporation duly
incorporated, validly existing and in good standing under the laws of Delaware.
(b) Authorization; Valid and Binding Agreement. The Purchaser has
all requisite power and authority to execute and deliver this Agreement, to
perform its obligations and undertakings hereunder, and to consummate the
transactions contemplated hereby. The execution and delivery by the Purchaser of
this Agreement, the performance by the Purchaser of its obligations and
undertakings hereunder, and the consummation by the Purchaser of the
transactions contemplated hereby, have been duly and validly authorized by all
necessary action on the part of the Purchaser and no other proceedings on the
part of the Purchaser are necessary to authorize the execution or delivery by
the Purchaser of this Agreement, the performance by the Purchaser of its
obligations and undertakings hereunder or the consummation by the Purchaser of
the transactions contemplated hereby. This Agreement has been duly executed and
delivered by the Purchaser, and constitutes the valid and binding obligations of
the Purchaser, enforceable against the Purchaser in accordance with its terms.
(c) Conflicts; Consents. The execution and delivery by the Purchaser
of this Agreement, the performance by the Purchaser of its obligations and
undertakings contemplated hereunder, and the consummation by the Purchaser of
the transactions contemplated hereby, do not and will not conflict with, or
result in any violation of, or default under or result in the creation of any
Lien on the properties or assets of the Purchaser under, any provision of (i)
the Certificate of Incorporation, Bylaws of the Purchaser, each as the same has
been amended to date, (ii) any contract, agreement, instrument or arrangement to
which the Purchaser is a party or by which any of the Purchaser's properties or
assets are bound, (iii) any license, franchise, permit or other similar
authorization held by the Purchaser, or (iv) to the knowledge of the Purchaser,
any judgment, order or decree, statute, law, ordinance, rule or regulation
applicable to the Purchaser or the Purchaser's properties or assets.
(d) Valid Issuance of Shares. The Purchase Price Shares, when issued
and delivered in accordance with the terms and for the consideration set forth
in this Agreement, will be validly issued, fully paid and nonassessable and free
of any liens or encumbrances or restrictions on transfer. The shares of Common
Stock issuable upon exercise of the Purchase Price Warrant (the "Warrants
Shares") will upon issuance in accordance with the terms of the Purchase Price
Warrant, be validly issued, fully paid and nonassessable and free of any liens
or encumbrances or restrictions on transfer. Assuming the accuracy of the
representations of the Seller in Section 2.2 of this Agreement, the Purchase
Price Shares and the Warrant Shares will be issued in compliance with all
applicable laws.
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3. Repurchase Option.
3.1 Repurchase Option on Subscription Rights Shares. In the event
that the Purchaser does not deliver Exercise Notices on or prior to the Trigger
Date, at any time following such Trigger Date, each Seller shall have the option
to repurchase from the Purchaser one share in the nominal amount of (euro) 1,000
in the common stock of Paketeria (the Subsciption Rights Shares) for a purchase
price of (euro) 1,000 (the "Repurchase Option").
3.2 Exercise of Repurchase Option. The Repurchase Option shall be
exercised by written notice signed by a Seller and delivered or mailed as
provided in Section 4.7 to the Purchaser. Such notice shall notify the Purchaser
of the time, place and date for settlement of such purchase, which shall be
scheduled by the Seller and shall be within ninety (90) days of the written
notice of exercise of the Repurchase Option delivered by such Seller. Such
Seller shall pay for any the Subscription Rights Shares repurchased hereunder at
the Seller's option in cash by certified check or wire transfer. Upon delivery
of such notice and payment of the relevant purchase price by a Seller, the
Purchaser shall take all reasonable action required to transfer such
Subscription Rights Shares to such Seller.
3.3 Covenants. Until the earlier of the date that the Purchaser
delivers an Exercise Notice to each Seller and the Trigger Date, the Purchaser
shall not (i) sell, transfer or otherwise dispose of the Subscription Rights and
the Subscription Rights Shares, or (ii) except as may exist as of the date
hereof, create, incur, assume or suffer to exist any Liens on the Subscription
Rights and the Subscription Rights Shares, without the prior written consent of
each Seller.
4. MISCELLANEOUS.
4.1 Benefits of Agreement. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, be binding upon,
and be enforceable by, the parties hereto and their respective successors and
assigns.
4.2 Assignment. This Agreement and the rights and obligations
hereunder shall not be assignable or transferable by either party without the
prior written consent of the other party. Any instrument purporting to make an
assignment in violation of this Section 3.2 shall be void.
4.3 Entire Agreement. This Agreement (including any Exhibits
hereto), together with the Exercise Notice, constitutes the full and entire
understanding and agreement between the parties with respect to the subject
matter hereof, and any other written or oral agreement relating to the subject
matter hereof existing between the parties is expressly canceled.
4.4 Severability. In case any provision of this Agreement, or
portion hereof, shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
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4.5 Amendment and Waiver. This Agreement and any provision hereof or
right or obligation hereunder may be amended, modified or waived only with the
prior written consent of the Seller and the Purchaser.
4.6 Delays or Omissions; Remedies. It is agreed that no delay or
omission to exercise any right, power or remedy accruing to any party, upon any
breach, default or noncompliance by the other party, shall impair any such
right, power or remedy, nor shall it be construed to be a waiver of any such
breach, default or noncompliance, or any acquiescence therein, or of or in any
similar breach, default or noncompliance thereafter occurring.
4.7 Notices. All notices and other communications given or made
pursuant to this Agreement shall be in writing and shall be deemed effectively
given: (a) upon personal delivery to the party to be notified, (b) when sent by
confirmed electronic mail or facsimile if sent during normal business hours of
the recipient, and if not so confirmed, then on the next business day, (c) five
(5) days after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (d) one business (1) day after deposit with a
nationally recognized overnight courier, specifying next business day delivery,
with written verification of receipt. All communications shall be sent to the
respective parties at their address as set forth on the signature page, or to
such e-mail address, facsimile number or address as subsequently modified by
written notice given in accordance with this Section 3.7. If notice is given to
the Purchaser, a copy shall also be given to Reitler Brown & Rosenblatt LLC, 800
Third Avenue, 21st Floor, New York, New York 10022, (212) 371-5500, Attention:
Scott H. Rosenblatt, Esq.
4.8 Expenses. Except as otherwise provided herein, each party shall
pay all costs and expenses that it incurs with respect to the negotiation,
execution, delivery, performance and consummation of this Agreement.
4.9 Titles and Subtitles. The titles of the sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
4.10 Pronouns. All pronouns contained herein, and any variations
thereof, shall be deemed to refer to the masculine, feminine or neutral,
singular or plural, as the identity of the parties may require.
4.11 Dispute Resolution. The parties (a) hereby irrevocably and
unconditionally submit to the jurisdiction of the state courts of New York and
to the jurisdiction of the United States District Court for the Southern
District of New York for the purpose of any suit, action or other proceeding
arising out of or based upon this Agreement, (b) agree not to commence any suit,
action or other proceeding arising out of or based upon this Agreement except in
such courts, and (c) hereby waive, and agree not to assert, by way of motion, as
a defense, or otherwise, in any such suit, action or proceeding, any claim that
it is not subject personally to the jurisdiction of the above-named courts, that
its property is exempt or immune from attachment or execution, that the suit,
action or proceeding is brought in an inconvenient forum, that the venue of the
suit, action or proceeding is improper or that this Agreement or the subject
matter hereof may not be enforced in or by such court.
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4.12 Waiver of Jury Trial. Each party hereto waives any right it may
have to a trial by jury in any action or proceeding directly or indirectly
arising out of or relating to this Agreement or the transactions contemplated
hereby (whether based on contract, tort, equity or any other theory). Each party
certifies that no representative, agent or attorney of the other party has
represented, expressly or otherwise, that the other party to this Agreement
would not, in the event of litigation, seek to enforce the foregoing waiver and
acknowledges that all parties hereto have been induced to enter into this
Agreement by, among other things, the waivers and certifications contained in
this Section 3.13.
4.13 Delays or Omissions. No delay or omission to exercise any
right, power, or remedy accruing to any party under this Agreement, upon any
breach or default of any other party under this Agreement, shall impair any such
right, power, or remedy of such nonbreaching or nondefaulting party, nor shall
it be construed to be a waiver of or acquiescence to any such breach or default,
or to any similar breach or default thereafter occurring, nor shall any waiver
of any single breach or default be deemed a waiver of any other breach or
default theretofore or thereafter occurring. All remedies, whether under this
Agreement or by law or otherwise afforded to any party, shall be cumulative and
not alternative.
[Signature Page(s) Follow(s)]
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IN WITNESS WHEREOF, each of the undersigned parties has caused this
STOCK PURCHASE AGREEMENT to be duly executed and delivered as of the date first
above written.
SELLERS:
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John A. Moore
Address:
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Richard Rimer
Address:
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PURCHASER:
DATA SYSTEMS & SOFTWARE INC.
By:
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Address:
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Stock Purchase Agreement Signature Page
EXHIBIT A
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Form of Notice of Exercise
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Pursuant to Section 1.1 of the Stock Purchase Agreement, dated as of
August ____, 2006, among John A. Moore, Richard Rimer (collectively, the
"Sellers"), and Data Systems & Software, Inc., a Delaware corporation (the
"Purchaser"), the Purchaser hereby elects to purchase from the Sellers, all
shares of capital stock of Paketeria GmbH (the "Company") held by the Sellers.
Data Systems & Software, Inc.
By:_________________________
Name:
Title: