STOCK PURCHASE AGREEMENT
Exhibit 10.1
This Stock Purchase Agreement (this “Agreement”) is made as of November 12, 2008, by and
among, R & R Consulting Partners, LLC (the “Buyer”), Xxxxx X. Xxxxxxxxx, individually
(“Xxxxxxxxx”), and Digital Angel Corporation f/k/a Applied Digital Solutions, Inc., a Delaware
corporation (the “Seller”).
A. The Seller owns 5,355,556 shares (the “Acquisition Shares”) of the currently issued and
outstanding shares of common stock of VeriChip Corporation, a Delaware corporation (the “Company”),
which constitutes approximately 45.6% of the Company’s issued and outstanding common stock as of
November 12, 2008.
B. The Buyer is willing to purchase from the Seller, and the Seller is willing to sell to the
Buyer, the Acquisition Shares.
For valuable consideration received, the parties agree as follows:
1. Purchase and Sale of the Acquisition Shares.
1.1 Purchase and Sale of the Acquisition Shares. Subject to the terms and conditions
of this Agreement, at the Closing (as defined herein), the Buyer agrees to purchase from the
Seller, and the Seller agrees to sell and convey to the Buyer, all of Seller’s right, title and
interest in the Acquisition Shares, free and clear of all liens, claims, security interests,
pledges and encumbrances of every kind, except restrictions on transfer imposed by this Agreement,
the Securities Act of 1933, as amended (the “Securities Act”), and applicable state securities
laws.
1.2 Closing; Deliveries.
(a) The purchase and sale of the Acquisition Shares (the “Closing”) shall take place at the
offices of the Company in Delray Beach, Florida, as soon as practicable, but no later than November
12, 2008, or at such other time and place as the Buyer and the Seller mutually agree upon, orally
or in writing.
(b) As consideration for the Acquisition Shares, the Buyer shall pay to the Seller, Seven
Hundred Fifty Thousand Dollars ($750,000.00) in immediately available funds (the “Purchase Price”).
(c) The Buyer shall deliver to the Seller such other documents and instruments, in form and
substance reasonably satisfactory to the Seller and its counsel, as shall be necessary or desirable
in order to consummate the transactions contemplated hereby, each dated the date hereof.
(d) At the Closing, the Seller shall deliver to the Buyer: (i) certificates representing the
Acquisition Shares, together with stock powers, duly endorsed in blank in proper form for transfer;
and (ii) such other documents and instruments, in form and substance
reasonably satisfactory to the Buyer and its counsel, as shall be necessary or desirable in
order to consummate the transactions contemplated hereby, each dated the date hereof.
(e) The Seller shall deliver to the Buyer evidence, in form reasonably acceptable to Buyer and
its counsel, indicating that Seller’s lender(s) has/have consented to the transactions contemplated
hereby.
2. Representations and Warranties of the Seller. The Seller represents and warrants
to the Buyer that the following representations are true and complete as of the Closing, except as
otherwise indicated:
2.1 Organization; Authorization. The Seller is a corporation duly incorporated and
organized, validly existing and in good standing under the laws of the State of Delaware. The
Seller has full power and authority to enter into this Agreement. The Agreement, when executed and
delivered by the Buyer and Seller, will constitute valid and legally binding obligations of the
Seller, enforceable in accordance with its terms, except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, and any other laws of general
application affecting enforcement of creditors’ rights generally, and as limited by laws relating
to the availability of a specific performance, injunctive relief, or other equitable remedies.
2.2 Title. Except as set forth on Schedule 2.2, the Acquisition Shares are
free and clear of all pledges, security interests, liens, charges, encumbrances, agreements, claims
and options of whatever nature. Upon consummation of the transaction contemplated hereby, the
Buyer will acquire good and valid title to the Acquisition Shares free and clear of all pledges,
security interests, liens, charges, encumbrances, agreements, claims and options of whatever
nature. To the Seller’s Knowledge, the Acquisition Shares were issued to the Seller in compliance
with all applicable federal and state securities laws and regulations. To Seller’s Knowledge, no
fact or circumstance exists that would preclude or impede the Company from including, post-Closing,
the Acquisition Shares on a registration statement or having such registration statement become
effective. The term “Knowledge” as used in this Agreement shall mean the actual knowledge of
Xxxxxx Xxxxxx, Xxxxxxxx Xxxxxxxx and Xxxxxxxx Xxxxxx.
2.3 No Conflict. Except as set forth on Schedule 2.3, neither the execution
and delivery of this Agreement nor the consummation or performance of any of the transactions
contemplated hereby (i) will violate or conflict with any provision of the Certificate of
Incorporation or Bylaws of the Seller, (ii) is prohibited by or requires the Seller to obtain or
make any consent, approval, registration or filing under any law, regulation, judgment, order,
decree or other restriction of any government, governmental agency, court, body, department,
authority, or other person or entity; or (iii) will result in the creation or imposition of any
lien, claim, charge, restriction or encumbrance of any kind or give to any person (other than the
Buyer) any interest or right in or with respect to the Acquisition Shares. The Seller is not a
party to any contract or subject to any legal restriction that would prevent or restrict complete
fulfillment by the Seller of all of the terms and conditions of this Agreement or compliance with
any of its obligations hereunder.
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3. Representations and Warranties of the Buyer and Xxxxxxxxx. At the Closing, the
Buyer and Xxxxxxxxx represent and warrant to the Seller that:
3.1 Organization and Good Standing. The Buyer is a limited liability company, duly
formed and organized, validly existing and in good standing under the laws of the State of Florida.
3.2 Authorization. The Buyer has full power and authority to enter into this
Agreement. The Agreement, when executed and delivered by the Buyer and Seller, will constitute a
valid and legally binding obligation of the Buyer, enforceable in accordance with its terms, except
as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance,
and any other laws of general application affecting enforcement of creditors’ rights generally, and
as limited by laws relating to the availability of a specific performance, injunctive relief, or
other equitable remedies.
3.3 Purchase Entirely for Own Account. This Agreement is made with the Buyer in
reliance upon the Buyer’s representation to the Seller, which by the Buyer’s execution of this
Agreement, the Buyer hereby confirms, that the Acquisition Shares to be acquired by the Buyer will
be acquired for investment for the Buyer’s own account, not as a nominee or agent, and not with a
view to the resale or distribution of any part thereof, and that the Buyer has no present intention
of selling, granting any participation in, or otherwise distributing the same. By executing this
Agreement, the Buyer further represents that the Buyer does not presently have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant participations to
such person or to any third person, with respect to any of the Acquisition Shares. The Buyer is
knowledgeable and experienced in financial and business matters and is capable of evaluating the
merits and risks of an investment in the Acquisition Shares and has the capacity to protect its own
interests in connection with the purchase of the Acquisition Shares. The Buyer can bear the
economic risks of his investment in the Company including the possible loss of the entire
investment.
3.4 Disclosure of Information. The Buyer has had an opportunity to discuss the
Company’s business, management, financial affairs and the terms and conditions of the offering of
the Acquisition Shares with the Company’s management and has had an opportunity to review the
Company’s facilities. The Buyer understands that such discussions, as well as the Company’s
business plan and any other written information delivered by the Company to the Buyer, were
intended to describe the aspects of the Company’s business which it believes to be material. The
foregoing does not limit or modify the representations and warranties relating to the Company in
Section 2 of this Agreement or the right of the Buyer to rely thereon.
3.5 Restricted Securities. The Buyer understands that the Acquisition Shares are
“restricted securities” under applicable U.S. federal and state securities laws and that, pursuant
to these laws, the Buyer must hold the Acquisition Shares indefinitely unless they are registered
with the Securities and Exchange Commission and qualified by state authorities, or an exemption
from such registration and qualification requirements is available. The Buyer acknowledges that
the Company has no obligation to register or qualify the Acquisition Shares for resale. The Buyer
further acknowledges that if an exemption from registration or qualification is available, it may
be conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the Acquisition Shares, and on
requirements relating to the Company which are outside of the Buyer’s control, and which the
Company is under no obligation and may not be able to satisfy.
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3.6 Accredited Investor. The Buyer is an accredited investor as defined in Rule
501(a) of Regulation D promulgated under the Securities Act.
4. Conditions of the Buyer’s Obligations at the Closing. The obligations of the Buyer
and Xxxxxxxxx to the Seller under this Agreement at the Closing are subject to the fulfillment, on
or before the Closing, of each of the following conditions, unless otherwise waived:
4.1 Representations and Warranties. The representations and warranties of the Seller
contained in Section 2 shall be true and correct in all material respects on and as of the Closing
with the same effect as though such representations and warranties had been made on and as of the
date of the Closing.
4.2 Performance. The Seller shall have performed and complied with all covenants,
agreements, obligations and conditions contained in this Agreement that are required to be
performed or complied with by it on or before the Closing.
4.3 Compliance Certificate. The Seller shall deliver to the Buyer at the Closing a
certificate certifying that the conditions specified in Sections 4.1 and 4.2 have been fulfilled.
4.4 Qualifications. All authorizations, approvals or permits, if any, of any
governmental authority or regulatory body of the United States or of any state that are required in
connection with the sale of the Acquisition Shares pursuant to this Agreement shall be obtained and
effective as of the Closing.
4.5 Proceedings and Documents. All corporate and other proceedings in connection with
the transactions contemplated at the Closing and all documents incident thereto shall be reasonably
satisfactory in form and substance to the Buyer, and the Buyer (or its counsel) shall have received
all such counterpart original and certified or other copies of such documents as reasonably
requested.
4.6 Consents. All necessary third party consents shall have been obtained, including
approval of the transactions contemplated hereby by the Seller’s lenders.
5. Conditions of the Seller’s Obligations at the Closing. The obligations of the
Seller to the Buyer under this Agreement are subject to the fulfillment, on or before the Closing,
of each of the following conditions, unless otherwise waived:
5.1 Representations and Warranties. The representations and warranties of the Buyer
and Xxxxxxxxx contained in Section 3 shall be true and correct in all material respects on and as
of the Closing with the same effect as though such representations and warranties had been made on
and as of the Closing.
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5.2 Performance. The Buyer shall have performed and complied with all covenants,
agreements, obligations and conditions contained in this Agreement that are required to be
performed or complied with by it or him on or before the Closing.
5.3 Compliance Certificate. The Buyer and Xxxxxxxxx shall deliver to the Seller at
the Closing a certificate certifying that the conditions specified in Sections 5.1 and 5.2 have
been fulfilled.
5.4 Qualifications. All authorizations, approvals or permits, if any, of any
governmental authority or regulatory body of the United States or of any state that are required in
connection with the sale of the Acquisition Shares pursuant to this Agreement shall be obtained and
effective as of the Closing.
5.5 Consents. All necessary third party consents shall have been obtained, including
approval of the transactions contemplated hereby by the Seller’s lenders.
5.6 Board Approval. Approval by the board of directors of the Seller authorizing the
transactions contemplated by this Agreement.
5.7 Company Purchase of Assets from Seller. Completion of the asset purchase and sale
transaction among the Company, Seller, and Seller’s wholly-owned subsidiary Destron Fearing
Corporation, based on the terms set forth in Schedule 5.7.
6. Covenants.
6.1 Chairmanship of the Company. Upon Closing, Xx. Xxxxxx Xxxxxx will resign as
Chairman and as a member of the Board of Directors of the Company.
6.2 Limited Release. Seller hereby releases Xxxxxxxxx from and against any and all
claims, actions or suits it may have in connection with his capacity as an employee, officer and
director of Seller. Xxxxxxxxx hereby releases Seller from and against any and all claims, actions
or suits he may have in connection with his capacity as an employee, officer and director of
Seller. The foregoing releases shall specifically exclude: fraud and intentional wrongdoing.
7. [Intentionally omitted.]
8. Indemnification.
8.1 The Seller agrees to hold harmless, defend, and indemnify the Buyer and its respective
officers, directors, employees and agents (the “Buyer Indemnitees”) from and against any and all
claims, losses, demands, causes of action, deficiencies, suits, judgments, debts, damages, expenses
or liabilities, including reasonable attorneys’ fees and costs (the “Losses”), arising from (i) any
inaccuracy in any representation or breach of any warranty of the Seller contained in this
Agreement or in any exhibit or schedule, certificate, instrument or other document or agreement
executed or delivered by the Seller in accordance with this Agreement; or (ii) any failure by the
Seller to perform or observe any covenant, agreement or condition to be
performed or observed by it under this Agreement or under any schedule, certificate,
instrument or other document or agreement executed by it in accordance with this Agreement.
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8.2 The Buyer and Xxxxxxxxx agree to hold harmless, defend, and indemnify the Seller and its
respective officers, directors, employees and agents (the “Seller Indemnitees”) from and against
any and all Losses arising from (i) any inaccuracy in any representation or breach of any warranty
of the Buyer or Xxxxxxxxx contained in this Agreement, in any schedule, certificate, instrument or
other document or agreement executed or delivered by the Buyer in accordance with this Agreement;
or (ii) any failure by the Buyer or Xxxxxxxxx to perform or observe any covenant, agreement or
condition to be performed or observed by it under this Agreement or under any exhibit, schedule,
certificate, instrument or other document or agreement executed by it in accordance with this
Agreement; or (iii) claims related to the Company by third parties based upon post-Closing actions
or decisions of Buyer or Xxxxxxxxx, or based on post-Closing events caused by Buyer or Xxxxxxxxx,
in each case provided that Seller was not also involved in such actions, decisions or events.
9. Survival of Representations, Warranties, Etc.
(a) The representations and warranties and all covenants shall survive the Closing and expire
with the applicable statute of limitations. No person shall be liable for any claim for
indemnification under Section 8 or Section 9 unless such claim arises prior to the applicable
survival period and a claim notice is delivered to the indemnifying party in writing within 5 days
following the expiration of the applicable survival period. No indemnification shall be made to
any Buyer Indemnitee or any Seller Indemnitee under Sections 6, 8 and 9 hereto unless and until the
aggregate amount of Losses by such indemnitee with respect thereto exceeds $10,000. The maximum
liability of the Seller under Sections 8 and 9 hereof shall be $100,000. The maximum liability of
the Buyer and Xxxxxxxxx under Sections 8 and 9 hereof shall be $100,000. Notwithstanding the
preceding two sentences, no maximum shall be applicable to the Buyer or the Seller for
indemnification claims arising out of the representations and warranties set forth in Sections 2.2,
3.3, 3.4, 3.5 or 3.6. The indemnification provided in Sections 7 and 8 is the exclusive remedy for
an inaccuracy or breach of a representation or warranty contained in Sections 2 or 3 hereof.
(b) Each party agrees to give prompt written notice to the other party of the assertion of any
claim or demand for Losses or the institution of any action, suit, or proceeding in respect of
which indemnification may be claimed hereunder and to provide the indemnifying party with an
opportunity to participate in the defense or settlement of such action, suit or proceeding at the
indemnifying party’s own expense.
10. Miscellaneous.
10.1 Transfer; Successors and Assigns. The terms and conditions of this Agreement
shall inure to the benefit of and be binding upon the respective successors and assigns of the
parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as expressly provided in
this Agreement. Neither this Agreement nor any of the rights, interests or obligations
hereunder may be assigned by any of the parties hereto without the prior written consent of
the other party.
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10.2 Governing Law; Jurisdiction and Venue. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Florida applicable to contracts executed in
and to be performed in that state. The parties acknowledge that all of the negotiations,
anticipated performance and execution of this Agreement occurred or shall occur in the State of
Florida, and that, therefore, without limiting the jurisdiction or venue of any other federal or
state courts, each of the parties irrevocably and unconditionally (a) agrees that any suit, action
or legal proceeding arising out of or relating to this Agreement may be brought in the state or
federal courts of record of the Xxxxx xx Xxxxxxx xx Xxxx Xxxxx Xxxxxx; (b) consents to the
jurisdiction of each such court in any suit, action or proceeding; (c) waives any objection which
it may have to the laying of venue of any such suit, action or proceeding in any of such courts;
and (d) agrees that service of any court paper may be effected on such party by mail, as provided
in this Agreement, or in such other manner as may be provided under applicable laws or court rules
in said state.
10.3 Counterparts. This Agreement may be executed in two or more counterparts, each
of which shall be deemed an original and all of which together shall constitute one instrument.
Delivery of an executed counterpart of this Agreement via facsimile transmission shall be effective
as delivery of a manually executed counterpart of this Agreement.
10.4 Titles and Subtitles. The titles and subtitles used in this Agreement are used
for convenience only and are not to be considered in construing or interpreting this Agreement.
10.5 Notices. Any notice required or permitted by this Agreement shall be in writing
and shall be deemed sufficient upon delivery, when delivered personally or by overnight courier or
sent by e-mail (upon confirmation of receipt), or four business days after being deposited in the
U.S. mail, as certified or registered mail, with postage prepaid and return receipt requested,
addressed to the party to be notified at such party’s address as set forth on the signature page,
or as subsequently modified by written notice, and (a) if to the Buyer or Xxxxxxxxx, with a copy to
Xxxxxxx Xxxxxxx, Esq., 000 Xxxxx Xxxxxx Xxxxx, Xxxxxxxxx 0000, Xxxxx Xxxxx, XX 00000;
xxxxxxx@xxxxx.xxx; or (b) if to the Seller, with a copy to with a copy to Xxxxxxxx Xxxxxxxx, Esq.,
000 Xxxxxxxx Xxxxxx, Xxxxx Xx. Xxxx, Xxxxxxxxx, 00000; xxxxxxxxx@xxxxxxxxxxxxxxxx.xxx.
10.6 Finder’s Fee. Each party represents that it neither is nor will be obligated for
any finder’s fee or commission in connection with this transaction. The Buyer will indemnify and
hold harmless the Seller from any liability for any commission or compensation in the nature of a
finder’s fee (and the costs and expenses of defending against such liability or asserted liability)
for which the Buyer is responsible. The Seller will indemnify and hold harmless the Buyer from any
liability for any commission or compensation in the nature of a finder’s fee (and the costs and
expenses of defending against such liability or asserted liability) for which the Seller or any of
its officers, employees or representatives is responsible.
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10.7 Fees and Expenses. Each party shall pay all of his or its own fees and expenses
of experts, consultants and the like and other expenses incurred in connection with performing due
diligence with respect to this Agreement, the documents referred to herein and the transactions
contemplated hereby.
10.8 Attorney’s Fees. If any action at law or in equity (including arbitration) is
necessary to enforce or interpret the terms of any of the Transaction Documents, the prevailing
party shall be entitled to reasonable attorney’s fees, costs and necessary disbursements in
addition to any other relief to which such party may be entitled.
10.9 Amendments and Waivers. Any term of this Agreement may be amended or waived only
with the written consent of the Seller and the Buyer. Any amendment or waiver effected in
accordance with this Section 10.9 shall be binding upon the Buyer and the Seller and each
transferee of the Acquisition Shares, and each future holder of all such securities.
10.10 Severability. If one or more provisions of this Agreement are held to be
unenforceable under applicable law, the parties agree to renegotiate such provision in good
faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement
for such provision, then (a) such provision shall be excluded from this Agreement, (b) the balance
of the Agreement shall be interpreted as if such provision were so excluded and (c) the balance of
the Agreement shall be enforceable in accordance with its terms.
10.11 Delays or Omissions. Except as provided in Section 8, 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 non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such
breach or default, or an acquiescence therein, or of or in 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. Any waiver, permit, consent or approval of
any kind or character on the part of any party of any breach or default under this Agreement, or
any waiver on the part of any party of any provisions or conditions of this Agreement, must be in
writing and shall be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any party, shall be
cumulative and not alternative.
10.12 Entire Agreement. This Agreement, and the documents referred to herein
constitute the entire agreement between the parties hereto pertaining to the subject matter hereof,
and any and all other written or oral agreements relating to the subject matter hereof existing
between the parties hereto are expressly canceled.
10.13 Confidentiality. The Buyer and the Seller each agree that, except with the
prior written permission of the other party, it shall at all times hold in confidence and trust and
not use or disclose the terms of this Agreement. Notwithstanding the foregoing, the Buyer or the
Seller each may disclose the terms of this Agreement: (a) as required by any court or other
governmental body, provided that the Buyer or the Seller provides the other party with prompt
notice of such court order or requirement to enable the other party to seek a protective order or
otherwise to prevent or restrict such disclosure; (b) to legal counsel or the financial advisor of
the
Buyer or the Seller; (c) in connection with the enforcement of this Agreement or rights under
this Agreement; or (d) to comply with applicable law. Notwithstanding anything herein to the
contrary, the Seller have the right, as required by law and the rules and regulations of the
Securities and Exchange Commission and the Nasdaq Stock Market, to publicly disclose this Agreement
and the transactions contemplated hereby without the prior written approval of the Buyer. The
provisions of this Section 10.13 shall survive the termination of this Agreement.
[Signature pages follow.]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above.
| BUYER: | ||||||
| R &R CONSULTING PARTNERS, LLC | ||||||
| By: | /s/ Xxxxx X. Xxxxxxxxx |
|||||
| Print Name: | ||||||
| Title: | Manager | |||||
| Address: | 000 Xxxx Xx. | |||||
| Xxxxxx Xxxxx, XX 00000 | ||||||
| e-mail: | xxxxxxxxxx@xxxxxxxxxx.xxx | |||||
| XXXXXXXXX: | ||||||
| /s/ Xxxxx X. Xxxxxxxxx | ||||||
| Xxxxx X. Xxxxxxxxx | ||||||
| 000 Xxxx Xx. | ||||||
| Xxxxxx Xxxxx, XX 00000 | ||||||
| xxxxxxxxxx@xxxxxxxxxx.xxx | ||||||
| SELLER: | ||||||
| DIGITAL ANGEL CORPORATION | ||||||
| By: | /s/ Xxxxxx X. Xxxxxx |
|||||
| Print Name: | ||||||
| Title: | Chief Executive Officer | |||||
| Address: | 000 Xxxxxxxx Xxxxxx | |||||
| Xxxxx Xx. Xxxx, Xxxxxxxxx, 00000 | ||||||
| e-mail: | ||||||
