EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is made as of this 9th day
of March, 2006 by and among Databit Inc., a Delaware corporation (the
"Company"), Xxxxxxx Xxxxxxxxxxx (the "Purchaser"), and Data Systems & Software
Inc., a Delaware corporation (the "Seller").
In consideration of the mutual covenants set forth herein, and for other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree as follows:
1. Purchase and Sale of Stock.
1.1. Sale of Common Stock.
(a) Subject to the terms and conditions of this Agreement, the
Purchaser agrees to purchase at the Closing and the Seller agrees to sell to
Purchaser at the Closing twenty-five (25) shares of common stock, par value
$0.01 in the Company (the "Shares"), which Shares constitute all of the issued
and outstanding shares of capital stock in the Company, in consideration of the
agreements and arrangements described in Section 1.3 hereof.
1.2. Closing; Delivery.
(a) The closing of the purchase and sale of the Shares shall
take place remotely via the exchange of documents and signatures, at 10:00 a.m.,
on Thursday, March 9, 2006, or at such other time and place as Seller and
Purchaser mutually agree upon, orally or in writing (the "Closing").
(b) At the Closing, Seller shall deliver to Purchaser: (i) a
certificate or certificates representing the Shares, duly endorsed in blank or
accompanied by an appropriate, executed stock power, and (ii) a check or wire
transfer in the amount of $50,000 pursuant to Section 9.2 hereof, against
delivery by Purchaser and the other parties thereto of executed copies of the
Transaction Agreements (as defined in Section 1.6 hereof).
1.3. Consideration for Shares. The parties hereby agree that the
consideration for the purchase of the Shares paid by Purchaser shall consist of
the (i) Purchaser's purchase of the Company subject to the assumption of the
liabilities and obligations of Seller pursuant to Section 1.4 hereof and (ii)
the release by Purchaser of Seller's obligations to him pursuant to Section 1.5
hereof.
1.4. Assumption of Seller Obligations by the Company. Purchaser is
purchasing the Company subject to the assumption by the Company of the following
obligations of Seller:
(a) Any and all obligations of the Seller under the Employment
Agreement/Consulting Agreement dated January 1, 1997 by and between Seller and
Xxxxxx Xxxxxxxxxxx, as amended to date, which agreement shall be further amended
and assigned and assumed in accordance with the Amendment and Assignment
Agreement attached hereto as Exhibit A.
(b) Any and all obligations of the Seller under leases for the
premises at Mahwah, New Jersey, and at 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
through the termination date of said leases.
1.5. Releases of Seller by Purchaser. At the Closing, the Employment
Agreement dated August 19, 2004 by and among Purchaser, Seller and the Company
shall be terminated and Purchaser shall release Seller from any of its
obligations thereunder, pursuant to an amendment substantially in the form set
forth in the Amendment Agreement attached hereto as Exhibit A.
1.6. Defined Terms Used in this Agreement. In addition to the terms
defined above, the following terms used in this Agreement shall be construed to
have the meanings set forth or referenced below.
"GM" means Xxxxxx Xxxxxxxxxxx.
"Material Adverse Effect" means a material adverse effect on the
business, assets (including intangible assets), liabilities, financial
condition, property, prospects or results of operations of the Company.
"Securities Act" means the Securities Act of 1933, as amended.
"Shares" means the shares of Common Stock being transferred to
Purchase in accordance herewith.
"Transaction Agreements" means this Agreement and the other
agreements, instruments or documents which are exhibits hereto and or otherwise
entered into or delivered in connection with the consummation of the
transactions contemplated by this Agreement.
2. Representations and Warranties of Seller. Seller hereby represents and
warrants to Purchaser that the following representations are true and complete
in all material respects as of the date of the Closing, provided, however, that
all of the following representations are qualified in their entirety by anything
to the contrary actually known by Purchaser or GM:
2.1. Organization, Good Standing, Corporate Power; Qualification;
Capitalization. The Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware and has all
requisite corporate power and authority to carry on its business as presently
conducted and as proposed to be conducted. The Company is duly qualified to
transact business and is in good standing in each jurisdiction in which the
failure to so qualify would have a Material Adverse Effect. The authorized
capital of the Company consists of one thousand (1000) shares of Common Stock,
twenty-five (25) shares of which are issued and outstanding. Seller owns all of
the issued and outstanding shares of
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capital stock of the Company. All of the outstanding shares of Common Stock have
been duly authorized, are fully paid and nonassessable and were issued in
compliance with all applicable federal and state securities laws. The Company
holds no treasury stock. There are no outstanding options, warrants, rights
(including conversion or preemptive rights and rights of first refusal or
similar rights) or agreements, orally or in writing, to purchase or acquire from
the Company or Seller any shares of capital stock.
2.2. Subsidiaries. The Company does not currently own or control,
directly or indirectly, any interest in any other corporation, partnership,
trust, joint venture, limited liability company, association, or other business
entity. The Company is not a participant in any joint venture, partnership or
similar arrangement.
2.3. Authorization. All corporate action required to be taken to
authorize the Seller to enter into the Transaction Agreements, and to transfer
the Shares at the Closing, has been taken or will be taken prior to the Closing.
All action on the part of the officers of the Seller necessary for the execution
and delivery of the Transaction Agreements, the performance of all obligations
of the Seller under the Transaction Agreements to be performed as of the
Closing, and the transfer and delivery of the Shares has been taken or will be
taken prior to the Closing. The Transaction Agreements, when executed and
delivered by the Seller, shall constitute valid and legally binding obligations
of the Seller, enforceable against the Seller in accordance with their
respective terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, or other laws of general
application relating to or affecting the enforcement of creditors' rights
generally, or (ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies.
2.4. Governmental Consents and Filings. Assuming the accuracy of the
representations made by the Purchaser in Section 3 of this Agreement, no
consent, approval, order or authorization of, or registration, qualification,
designation, declaration or filing with, any federal, state or local
governmental authority is required on the part of the Company or Seller in
connection with the consummation of the transactions contemplated by this
Agreement.
2.5. Compliance with Other Instruments. The Company is not in
violation or default (i) of any provisions of its Certificate of Incorporation
or By-Laws, (ii) of any instrument, judgment, order, writ or decree, (iii) under
any note, indenture or mortgage, or (iv) under any lease, agreement, contract or
purchase order to which it is a party or by which it is bound or, to its
knowledge, of any provision of any federal or state statute, rule or regulation
applicable to the Company, the violation of which would have a Material Adverse
Effect. The execution, delivery and performance of the Transaction Agreements
and the consummation of the transactions contemplated by the Transaction
Agreements will not result in any such violation or be in conflict with or
constitute, with or without the passage of time and giving of notice, either (i)
a default under any such provision, instrument, judgment, order, writ, decree,
contract or agreement or (ii) an event which results in the creation of any
lien, charge or encumbrance upon any assets of the Company or the suspension,
revocation, forfeiture, or nonrenewal of any material permit or license
applicable to the Company.
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2.6. Absence of Liens. The property and assets that the Company owns
are free and clear of all mortgages, deeds of trust, liens, loans and
encumbrances, except for statutory liens for the payment of current taxes that
are not yet delinquent and encumbrances and liens that arise in the ordinary
course of business and do not materially impair the Company's ownership or use
of such property or assets. With respect to the property and assets it leases,
the Company is in compliance with such leases and, to its knowledge, holds a
valid leasehold interest free of any liens, claims or encumbrances other than
those of the lessors of such property or assets.
2.7. Corporate Documents. The Certificate of Incorporation and
Bylaws of the Company are in the form provided to Purchaser. The copy of the
minute books of the Company provided to Purchaser contains minutes of all
meetings of directors and stockholders and all actions by written consent
without a meeting by the directors and stockholders since the date of
incorporation and accurately reflects in all material respects all actions by
the directors (and any committee of directors) and stockholders with respect to
all transactions referred to in such minutes.
2.8. Disclosure. Seller has made available to the Purchaser all the
information reasonably available to the Company that the Purchaser has requested
for deciding whether to acquire the Shares. No representation or warranty of
Seller contained in this Agreement and no certificate furnished or to be
furnished to Purchaser at the Closing contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances under which they were made. It is understood that this
representation is qualified by the fact that the Seller has not delivered to the
Purchaser, and has not been requested to deliver, a private placement or similar
memorandum or any written disclosure of the types of information customarily
furnished to purchasers of securities.
2.9. Conflicting Agreements. The execution, delivery and performance
of the transactions contemplated by this Agreement and the Transaction
Agreements will not result in any breach, violation or default (with or without
notice or lapse of time, or both) under, or give rise to a right of termination,
cancellation or creation or acceleration of any obligation or right of a third
party or loss of a benefit under, or result in the creation of any lien upon any
of the properties or assets of the Company or Seller under, any loan or credit
agreement, note, bond, mortgage, indenture, lease or other agreement,
instrument, permit, concession, franchise, license or other authorization
applicable to the Company or Seller or their respective properties or assets.
3. Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants to the Seller that:
3.1. Authorization. The Purchaser has full power and authority to
enter into the Transaction Agreements. The Transaction Agreements to which the
Purchaser is a party, when executed and delivered by the Purchaser, will
constitute valid and legally binding obligations of the Purchaser, enforceable
in accordance with their 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
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limited by laws relating to the availability of a specific performance,
injunctive relief, or other equitable remedies.
3.2. Purchase Entirely for Own Account. This Agreement is made with
the Purchaser in reliance upon the Purchaser's representation to the Company,
which by the Purchaser's execution of this Agreement, the Purchaser hereby
confirms, that the Securities to be acquired by the Purchaser will be acquired
for investment for the Purchaser'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
Purchaser has no present intention of selling, granting any participation in, or
otherwise distributing the same. By executing this Agreement, the Purchaser
further represents that the Purchaser 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
Shares.
3.3. Restricted Securities. The Purchaser understands that the
Shares have not been, and will not be, registered under the Securities Act, by
reason of a specific exemption from the registration provisions of the
Securities Act which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of the Purchaser's representations as
expressed herein. The Purchaser understands that the Shares are "restricted
securities" under applicable U.S. federal and state securities laws and that,
pursuant to these laws, the Purchaser must hold the 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 Purchaser 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 Shares, and on requirements relating to the
Company which are outside of the Purchaser's control, and which the Company is
under no obligation and may not be able to satisfy.
3.4. No Public Market. The Purchaser understands that no public
market now exists for the Shares, and that there are no assurances that a public
market will ever exist for the Shares.
3.5. Legends. The Purchaser understands that the Shares and any
securities issued in respect of or exchange for the Shares, may bear one or all
of the following legends:
(a) "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A FORM
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OF 1933."
(b) Any legend set forth in, or required by, the other
Transaction Agreements.
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(c) Any legend required by the securities laws of any state to
the extent such laws are applicable to the Shares represented by the certificate
so legended.
3.6. Accredited Investor. The Purchaser is an accredited investor as
defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
4. Additional Representations and Warranties of Purchaser. The Purchaser
hereby represents, warrants and acknowledges to the Seller that:
4.1. Nonreliance by Purchaser. The Purchaser is personally familiar
with the Company's business, management, financial affairs and the terms and
conditions of the transaction contemplated hereby. Purchaser acknowledges that
none of the Seller, its Board of Directors, or any of its officers or
representatives has made any recommendation to Purchaser as to whether to enter
into the transactions contemplated hereby or whether the consideration described
herein is fair and reasonable, and Purchaser has made its own independent
determination, together with its attorneys and financial advisors, with respect
thereto
4.2. Disclosure of Information. In the ordinary course of his duties
as President of the Company, Purchaser has made known to the CFO and other
financial management of Seller, all material facts known to him with respect to
the business, management, and financial affairs of the Company. During the
course of negotiations leading up to the transactions described herein, the
Purchaser has provided to (i) the Seller, (i) the Special Committee of the Board
of Directors of Seller and the financial and legal advisers to the Committee, a
full opportunity to meet with, ask questions of and to receive answers from
Purchaser regarding any matters relating to the business, management, and
financial condition of the Company.
4.3. Ordinary Course. Since September 30, 2005, the Company has
conducted its business in the ordinary course consistent with past practices and
there has not been any transaction out of the ordinary course nor any material
change or any event, occurrence, development or state of circumstances or facts
which could reasonably be expected to result in a material change to the
Company, its business or operations.
4.4. Amount of Net Trade Receivables Plus Cash. The amount of trade
recivables less trade payables plus cash as of the date hereof is, and as of the
Closing Date shall be, not greater than $1.5 million.
5. Conditions to the Purchaser's Obligations at Closing. The obligation of
the Purchaser to purchase Shares at the Closing is subject to the fulfillment,
on or before such Closing, of each of the following conditions, unless otherwise
waived:
5.1. Representations and Warranties. The representations and
warranties of the Seller contained in Section 2 shall be true and correct in all
material respects as of such Closing.
5.2. Performance. The Company 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
such Closing.
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5.3. 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 lawful issuance and sale of
the Shares pursuant to this Agreement shall be obtained and effective as of such
Closing.
5.4. Secretary's Certificate. The Secretary of the Seller shall have
delivered to the Purchaser at the Closing a certificate certifying resolutions
of the Board of Directors of Seller approving the Transaction Agreements and the
transactions contemplated under the Transaction Agreements.
5.5. 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 Purchaser, and Purchaser (or its counsel) shall have received all
such counterpart original and certified or other copies of such documents as
reasonably requested. Such documents may include good standing certificates.
6. Conditions to Seller's Obligations at Closing. The obligations of the
Company to sell Shares to the Purchaser at the Closing are subject to the
fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived:
6.1. Representations and Warranties. The representations and
warranties of the Purchaser contained in Sections 3 and 4 shall be true and
correct in all material respects as of the Closing.
6.2. Performance. The Purchaser 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 him on or before
the Closing.
6.3. 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 lawful sale of the Shares
pursuant to this Agreement shall be obtained and effective as of the Closing.
7. Conditions to Both Parties' Obligations at Closing. The obligations of
each party to consummate the transactions contemplated hereby are subject to the
fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived:
7.1. Approval by Independent Members of the Board. The transactions
contemplated hereby, this Agreement and the other agreements referred to herein
shall have been approved by the independent members of Seller's Board of
Directors.
7.2. Amendment and Termination of Purchaser Employment Agreement.
The Employment Agreement dated August 19, 2004 by and among Purchaser, Seller
and the Company shall be terminated and the parties thereto released from any
further duties or obligations owing and from any claims arising thereunder by
aTermination and Release Agreement substantially in the form attached hereto as
Exhibit A.
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7.3. Amendment of GM Employment Agreement. The GM Employment
Agreement shall be amended by an amendment substantially in the form of the
Amendment and Assignment Agreement attached hereto as Exhibit B.
7.4. Amendment to Restricted Stock Agreement. The Restricted Stock
Award Agreement and Stock Option Agreement each dated August 19, 2004 by and
between Purchaser and Seller shall be amended substantially as set forth in the
Amendment Agreement attached hereto as Exhibit C.
7.5. Amendment to GM Option and Restricted Stock Agreement. The
option agreement dated December 30, 2004 and the Restricted Stock Agreement
dated as of July 1994, by and between Seller and GM shall be amended
substantially as set forth in the Amendment Agreement attached hereto as Exhibit
D.
7.6. New GM Consulting Agreement. GM and Seller shall enter into a
consulting agreement substantially in the form attached hereto as Exhibit E.
7.7. Delivery of Covenants Not to Xxx. Xxxx Xxxxx ("JM") and each
other party to the Schedule 13D dated June 30, 2005, as amended, filed with
respect to securities of Seller shall have entered into a Consent Agreement with
respect to the transactions contemplated hereby substantially in the form
attached hereto as Exhibit F, or shall have delivered such other document
satisfactory to GM and Purchaser to evidence their consent to said transactions
and their intentions not to object to said transactions after consummation
thereof.
7.8. Intercompany Debt. The approximately $212,000 in intercompany
debt owed by Seller to Company shall be contributed to the capital of Company
prior to Closing.
8. Transitional Services. The Company agrees to provide Seller with
transitional services in the form of bookkeeping, financial and other services,
which Company previously provided to Seller, for a price of $20,000 per year,
payable quarterly. Such services may be terminated by either party upon the
giving of 30 days written notice in the manner described in Section 13.6.
9. Assumption of Leases
9.1. Assumption by the Company.
(a) Effective the Closing, the Company hereby assumes any and
all obligations of Seller under the lease to the premises in Mahwah, New Jersey
from and after the Closing. In connection with such assumption, Seller agrees to
transfer the security deposit of $7,000, which security deposit relates to the
lease of the premises. If Seller cannot assign the premises to the Company,
Seller agrees to sublet premises to the Company.
(b) Effective the Closing, the Company hereby assumes any and
all obligations of Seller under the lease to the premises at 000 Xxxxx Xxxxxx,
Xxx Xxxx, XX from and after the Closing. If Seller cannot assign the premises,
Seller agrees to sublet the premises to the Company. If neither option is
available to the Seller, Seller agrees to work in good faith with the Company in
order to arrive at an agreeable form of constructive assignment. The Seller will
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retain the right to the security deposit of $34,000, which security deposit
relates to the lease of the premises.
(c) Effective the Closing, the Company hereby assumes any and
all obligations of the seller with respect to the leasing of certain vehicles
used by Company and Company employees set forth on Exhibit G hereto. With
respect to those vehicles set forth on Exhibit G that are owned by Seller,
Company agrees to assume such vehicles subject to the associated loans thereto.
9.2. Payment. Seller shall make a payment of $50,000 to the Company
to cover a portion of the first year's rent of the leased premises at 000 Xxxxx
Xxxxxx, Xxx Xxxx, XX.
10. Indemnification From Liability Under the Assumed Leases. The Company
agrees to indemnify and hold harmless Seller, its agents, successors and assigns
from and against any and all damages, claims, losses and expenses (including,
without limitation, reasonable attorneys' fees and disbursements) reasonably
incurred by such party from and after the Closing arising from or out of the
nonperformance or breach of any covenant, agreement or obligation to be
performed by Company pursuant hereto under Seller's leases to the premises and
vehicles described in Section 9.1 above from and after the Closing.
11. Assumption of Employment Agreement/Consulting Agreement. The Company
shall assume any and all obligations of the Seller under the Employment
Agreement/Consulting Agreement dated January 1, 1997 by and between Seller and
GM, as amended to date, which agreement shall be further amended and assigned
and assumed in accordance with the Amendment and Assignment Agreement attached
hereto as Exhibit B.
12. Indemnification for Post Closing Liabilities of the Company. The
Company shall indemnify and hold harmless Seller, its agents, successors,
assigns, and attorneys ("Seller Indemnified Parties") from and against any and
all damages, claims, losses and expenses (including, without limitation,
reasonable attorneys' fees and disbursements) reasonably incurred by the Seller
Indemnified Parties (all amounts for which the Company shall be liable shall
hereinafter be referred to as the "Damages") arising from or out of (i) any
liability of the Company arising on or after the date of Closing and (ii) the
nonperformance or breach of any covenant, agreement or obligation of Purchaser
or the Company contained in this Agreement which has not been waived in writing
by Seller.
13. Miscellaneous.
13.1. Survival of Warranties. Unless otherwise set forth in this
Agreement, the representations and warrants of Seller and Purchaser contained in
or made pursuant to this Agreement shall survive the execution and delivery of
this Agreement and the Closing and shall in no way be affected by any
investigation of the subject matter thereof made by or on behalf of Seller or
Purchaser.
13.2. 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
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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.
13.3. Governing Law. This Agreement shall be governed by and
construed in accordance with the General Corporation Law of the State of
Delaware as to matters within the scope thereof, and as to all other matters
shall be governed by and construed in accordance with the internal laws of the
State of New York, without regard to its principles of conflicts of laws.
13.4. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument. This Agreement may also
be executed and delivered by facsimile signature and in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
13.5. 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.
13.6. 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 (1) day after deposit with a nationally
recognized overnight courier, specifying next 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 13.6.
13.7. No Finder's Fees. Each party represents that it neither is nor
will be obligated for any finder's fee or commission in connection with this
transaction. Purchaser agrees to indemnify and to hold harmless the Company from
any liability for any commission or compensation in the nature of a finder's fee
arising out of this transaction (and the costs and expenses of defending against
such liability or asserted liability) for which Purchaser or any of its
officers, employees, or representatives is responsible. The Company agrees to
indemnify and hold harmless Purchaser from any liability for any commission or
compensation in the nature of a finder's or broker's fee arising out of this
transaction (and the costs and expenses of defending against such liability or
asserted liability) for which the Company or any of its officers, employees or
representatives is responsible.
13.8. 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 Agreements, 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.
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13.9. Amendments and Waivers. Any term of this Agreement may be
amended, terminated or waived only with the written consent of the parties
hereto.
13.10. Severability. The invalidity of unenforceability of any
provision hereof shall in no way affect the validity or enforceability of any
other provision.
13.11. 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 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.
13.12. Entire Agreement. This Agreement (including the Exhibits
hereto) and the other Transaction Agreements constitute 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 are expressly canceled.
[Remainder of Page Intentionally Left Blank]
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SIGNATURE PAGE TO STOCK PURCHASE AGREEMENT
The parties have executed this Stock Purchase Agreement as of the date
first written above.
SELLER:
DATA SYSTEMS & SOFTWARE INC.
By: /s/ Xxxxxxx Xxxxx
------------------------------------------------
Name: Xxxxxx Xxxxxxxxxxx
-----------------------------------------------
(print)
Title:Chief Financial Officer
-----------------------------------------------
Address: 000 Xxxxx 00
Xxxxxx, Xxx Xxxxxx 00000
PURCHASER:
/s/ Xxxxxxx Xxxxxxxxxxx
-----------------------------------------------------
Xxxxxxx Xxxxxxxxxxx
Address: 0 Xxxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000
COMPANY:
DATABIT, INC.
By: /s/ Xxxxxxx Xxxxxxxxxxx
------------------------------------------------
Name: Xxxxxxx Xxxxxxxxxxx
------------------------------------------------
(print)
Title: President
---------------------------------------------
Address: 000 Xxxxx 00
Xxxxxx, Xxx Xxxxxx 00000
EXHIBITS
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Exhibit A Termination and Release Agreement
Exhibit B Amendment Agreement to GM Employment Agreement
Exhibit C Amendment Agreement to Purchaser Option Agreements and
Restricted Stock Award Agreement
Exhibit D Amendment Agreement to GM Option Agreements and Restricted
Stock Agreement
Exhibit E Consulting Agreement
Exhibit F Consent Agreement
Exhibit G List of Seller Leased Vehicles and Seller Owned Vehicles
EXHIBIT A TO STOCK PURCHASE AGREEMENT
TERMINATION AND RELEASE AGREEMENT
This Termination and Release Agreement is made as of this 9th day of
March, 2006, by and among Data Systems & Software Inc. ("DSSI"), Databit Inc.
(the "Company") and Xxxxxxx Xxxxxxxxxxx ("Xxxxxxxxxxx").
R E C I T A L S:
WHEREAS, the parties hereto are parties to a Stock Purchase Agreement
dated March 9, 2006 providing for the purchase by Xxxxxxxxxxx of all of the
issued and outstanding capital stock of the Company (the "Databit Stock") from
DSSI;
WHEREAS, the parties hereto are parties to an Employment Agreement dated
August 19, 2004 providing for the employment of Xxxxxxxxxxx by the Company (the
"Employment Agreement"); and
WHEREAS, part of the consideration for the purchase and sale of the
Databit Stock is the agreement of the parties as set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Termination. The parties to the Employment Agreement hereby mutually
agree to the termination of such agreement effective the date hereof.
2. Release and Waiver. (a) Xxxxxxxxxxx, for himself and his heirs,
executors, administrators and assigns (collectively, the "Employee Parties"),
forever waives, releases and discharges DSSI, and its affiliates, successors and
assigns and past and present officers, directors, employees and agents, and any
fiduciaries of any employee benefit plan or policy of any of the foregoing
(collectively, the "Employer Parties"), from, any and all claims, demands,
causes of actions, fees and liabilities and expenses (inclusive of attorneys'
fees) of any kind whatsoever, whether known or unknown, which Xxxxxxxxxxx ever
had or now has against any of the Employer Parties by reason of any actual or
alleged act, omission, transaction, practice, conduct, occurrence, or other
matter up to and including the date of this Agreement, including but not limited
to, any claims under any Federal, state, local or foreign law (statutory or
decisional), regulation, or ordinance; provided however, that this release and
waiver shall note affect Xxxxxxxxxxx'x continuing rights to stock options or
restricted stock as set forth in the Amendment to Stock Option Agreements and
Restricted Stock Agreement dated the date hereof.
(b) DSSI, for itself and the Employer Parties, forever waives, releases
and discharges Xxxxxxxxxxx and the Employee Parties, from any and all claims,
demands, causes of actions, fees and liabilities and expenses (inclusive of
attorneys' fees) of any kind whatsoever, whether known or unknown, which the
Employer Parties ever had or now have against Xxxxxxxxxxx or any of the Employee
Parties by reason of any actual or alleged act, omission, transaction, practice,
conduct, occurrence, or other matter up to and including the date of this
Agreement, including but not limited to, any claims under any Federal, state,
local or foreign law (statutory or decisional), regulation, or ordinance.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
DATA SYSTEMS & SOFTWARE INC.
By:______________________________
Print Name and Title:
_________________________________
_________________________________
XXXXXXX XXXXXXXXXXX
DATABIT INC.
By:______________________________
Print Name and Title:
_________________________________
SIGNATURE PAGE TO TERMINATION AND RELEASE AGREEMENT
EXHIBIT B TO STOCK PURCHASE AGREEMENT
AMENDMENT AND ASSIGNMENT OF EMPLOYMENT AGREEMENT
This Amendment and Assignment of Employment Agreement is made as of this
9th day of March, 2006, by and among Data Systems & Software Inc. ("DSSI"),
Databit Inc. (the "Company") and Xxxxxx Xxxxxxxxxxx ("Xxxxxxxxxxx").
R E C I T A L S:
WHEREAS, the parties hereto are parties to a Stock Purchase Agreement
dated March 9, 2006 providing for the purchase by Xxxxxxx Xxxxxxxxxxx of all of
the issued and outstanding capital stock of the Company (the "Databit Stock")
from DSSI;
WHEREAS, Xxxxxxxxxxx and DSSI are parties to an Employment Agreement dated
January 1, 1997, as amended on May 17, 2001; March 13, 2002; and December 30,
2004 and as supplemented by letter agreement dated March 16, 2005 (as so amended
and supplemented, the "Employment Agreement"); and
WHEREAS, part of the consideration for the purchase and sale of the
Databit Stock is the agreement of the parties as set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. DSSI shall pay to Xxxxxxxxxxx on the date hereof the sum of $600,000 via
wire transfer or certified check.
2. The Employment Agreement is hereby amended such that the aggregate
compensation payable to Xxxxxxxxxxx pursuant to the Employment Agreement
is reduced by $600,000, to be deducted from the next payment due
thereunder or as otherwise agreed to by the Company and Xxxxxxxxxxx
3. DSSI hereby transfers and assigns unto the Company all of DSSI's right,
title and interest in, to and under the Employment Agreement. DSSI hereby
agrees to indemnify, protect, defend and hold the Company harmless from
and against any and all claims, demands, damages, losses, liabilities,
costs and expenses (including reasonable attorneys' fees) arising in
connection with the Employment Agreement if the action giving rise to such
claims, demands, damages, losses, liabilities, costs and expenses occurred
before the date hereof. The Company hereby accepts the foregoing
assignment and agrees to assume any executory obligations of DSSI in
connection with the Employment Agreement and to indemnify, protect, defend
and hold DSSI harmless from and against any and all claims, demands,
damages, losses, liabilities, costs and expenses (including reasonable
attorneys' fees) arising in connection with the Employment Agreement if
the action giving rise to such claims, demands, damages, losses,
liabilities, costs and expenses occurs after the date hereof.
DSSI hereby covenants that it will, at any time and from time to time upon
written request and without the assumption of any additional liability,
execute and deliver to the Company, and its successors and assigns, any
new or confirmatory instruments and take such further acts as the Company
may reasonably request to fully evidence the assignment contained herein
and to enable the Company, and its successors and assigns, to fully
realize and enjoy the rights and interests assigned hereby.
4. Xxxxxxxxxxx hereby consents to the foregoing assignment and assumption.
5. Release and Waiver.
(a) Xxxxxxxxxxx, for himself and his heirs, executors,
administrators and assigns (collectively, the "Employee Parties"), forever
waives, releases and discharges DSSI, and its affiliates, successors and
assigns and past and present officers, directors, employees and agents,
and any fiduciaries of any employee benefit plan or policy of any of the
foregoing (collectively, the "Employer Parties"), from, any and all
claims, demands, causes of actions, fees and liabilities and expenses
(inclusive of attorneys' fees) of any kind whatsoever, whether known or
unknown, which Xxxxxxxxxxx ever had or now has against any of the Employer
Parties by reason of any actual or alleged act, omission, transaction,
practice, conduct, occurrence, or other matter up to and including the
date of this Agreement, including but not limited to, any claims under any
Federal, state, local or foreign law (statutory or decisional),
regulation, or ordinance; provided however, that this release and waiver
shall not affect Xxxxxxxxxxx'x continuing rights to stock options or
restricted stock as set forth in the Amendment to Stock Option Agreements
or the Consulting Agreement both as dated the date hereof.
(b) DSSI, for itself and the Employer Parties, forever waives,
releases and discharges Xxxxxxxxxxx and the Employee Parties, from any and
all claims, demands, causes of actions, fees and liabilities and expenses
(inclusive of attorneys' fees) of any kind whatsoever, whether known or
unknown, which the Employer Parties ever had or now have against
Xxxxxxxxxxx or any of the Employee Parties by reason of any actual or
alleged act, omission, transaction, practice, conduct, occurrence, or
other matter up to and including the date of this Agreement, including but
not limited to, any claims under any Federal, state, local or foreign law
(statutory or decisional), regulation, or ordinance.
6. As amended and assigned hereby, the Employment Agreement is in full force
and effect as of the date hereof.
2
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
DATA SYSTEMS & SOFTWARE INC.
By:________________________________
Print Name and Title:
___________________________________
XXXXXX XXXXXXXXXXX
___________________________________
DATABIT INC.
By:________________________________
Print Name and Title:
___________________________________
SIGNATURE PAGE TO AMENDMENT AND ASSIGNMENT OF EMPLOYMENT
EXHIBIT C TO STOCK PURCHASE AGREEMENT
AMENDMENT TO STOCK OPTION AGREEMENTS AND RESTRICTED STOCK AGREEMENT
This Amendment to Stock Option Agreements and Restricted Stock Agreement
is made as of this 9th day of March, 2006, by and between Data Systems &
Software Inc. ("DSSI") and Xxxxxxx Xxxxxxxxxxx ("Xxxxxxxxxxx").
R E C I T A L S:
WHEREAS, the parties hereto are parties to a Stock Purchase Agreement
dated March 9, 2006 providing for the purchase by Xxxxxxxxxxx of all of the
issued and outstanding capital stock of Databit, Inc., a wholly-owned subsidiary
of DSSI;
WHEREAS, part of the consideration for the purchase and sale of said stock
is the agreement of the parties as set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. The Stock Option Agreement between DSSI and Xxxxxxxxxxx dated August
19, 2004 is hereby amended such that the option to purchase 305,000
shares of common stock of DSSI granted thereunder (the "Option") is
exercisable as of the date hereof. The Option may be exercised at
any time from and after the date hereof until the date which is 18
months after the date of this Amendment.
2. The Stock Option Agreement between DSSI and Xxxxxxxxxxx dated August
19, 2004 is hereby further amended so as to delete paragraphs 4(b)
and 5 thereof.
3. All other option grants by DSSI to Xxxxxxxxxxx, which are listed on
Schedule A attached hereto, are hereby amended so as to allow
exercise thereof by Xxxxxxxxxxx at any time from and after the date
hereof until the date which is 18 months after the date of this
Amendment. All of such option grants are further hereby amended so
as to delete any provisions contained therein regarding a change of
control of DSSI or regarding any stated exercise period or
termination date.
4. The Restricted Stock Award Agreement between DSSI and Xxxxxxxxxxx
dated August 19, 2004 is hereby amended such that all shares granted
therein are vested in full as of the date hereof and no longer
subject to forfeiture. When issued, DSSI agrees to issue such shares
without restrictive legend, except for legends required under
applicable securities laws.
5. The Restricted Stock Award Agreement between DSSI and Xxxxxxxxxxx
dated August 19, 2004 is hereby further amended so as to delete
paragraph 5 thereof.
6. As amended hereby, the agreements described herein are in full force
and effect as of the date hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
DATA SYSTEMS & SOFTWARE INC.
By:______________________________
Print Name and Title:
_________________________________
XXXXXXX XXXXXXXXXXX
_________________________________
SIGNATURE PAGE TO AMENDMENT TO STOCK OPTION AGREEMENTS
AND RESTRICTED STOCK AGREEMENT
Schedule A
XXXXXXX XXXXXXXXXXX
OPTION SCHEDULE
Date Options Exercise Vesting Expiration Options non-
Granted Granted Price Date Date Outstanding vested vested
--------- --------- --------- --------- ---------- ----------- --------- ---------
6-Feb-01 2,500 4.8000 31-Dec-01 31-Dec-06 2,500 - 2,500
6-Feb-01 2,500 4.8000 31-Dec-02 31-Dec-06 2,500 - 2,500
6-Feb-01 2,500 4.8000 31-Dec-03 31-Dec-06 2,500 - 2,500
24-Apr-01 6,666 4.8000 31-Dec-01 31-Dec-06 6,666 - 6,666
24-Apr-01 6,667 4.8000 31-Dec-02 31-Dec-06 6,667 - 6,667
24-Apr-01 6,667 4.8000 31-Dec-03 31-Dec-06 6,667 - 6,667
27,500 - 27,500
SIGNATURE PAGE TO AMENDMENT TO STOCK OPTION AGREEMENTS
EXHIBIT D TO STOCK PURCHASE AGREEMENT
AMENDMENT TO STOCK OPTION AGREEMENTS
This Amendment to Stock Option Agreements is made as of this 9th day of
March, 2006, by and between Data Systems & Software Inc. ("DSSI") and Xxxxxx
Xxxxxxxxxxx ("Xxxxxxxxxxx").
R E C I T A L S:
WHEREAS, the parties hereto are parties to a Stock Purchase Agreement
dated March 9, 2006 providing for the purchase by Xxxxxxx Xxxxxxxxxxx of all of
the issued and outstanding capital stock of Databit, Inc., a wholly-owned
subsidiary of DSSI;
WHEREAS, part of the consideration for the purchase and sale of said stock
is the agreement of the parties as set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. The Stock Option Agreement between DSSI and Xxxxxxxxxxx dated
December 30, 2004 is hereby amended such that the option granted
thereunder (the "Option") is exercisable in full as of the date
hereof.
2. The restrictions relating to the 20,000 shares of DSSI's common
stock granted under the Restricted Stock Agreement dated August 31,
1998 are hereby removed and DSSI agrees to reissue certificates
representing these shares to Xxxxxxxxxxx without restrictive legend,
except for legends required under applicable securities laws.
3. Further, all option grants by DSSI to Xxxxxxxxxxx, including the
grant referred to in Section 1 and those listed on Schedule A
attached hereto, are amended so as to allow exercise thereof by
Xxxxxxxxxxx at any time from and after the date hereof until the
later of the date which is 18 months from the cessation of his
services as director of DSSI or as a consultant under the Consulting
Agreement dated the date hereof or September 2009; provided however
that the Option shall in no event be exercisable later than the
stated expiration date of December 30, 2009. All such option grants
are further hereby amended so as to delete any provisions contained
therein regarding a change of control of DSSI or regarding any
stated exercise period or termination date.
4. As amended hereby, the agreements described herein are in full force
and effect as of the date hereof.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date and year first above written.
DATA SYSTEMS & SOFTWARE INC.
By:______________________________
Print Name and Title:
_________________________________
XXXXXX XXXXXXXXXXX
_________________________________
SIGNATURE PAGE TO AMENDMENT TO STOCK OPTION AGREEMENTS
Schedule A
XXXXXX XXXXXXXXXXX
OPTION SCHEDULE
Date Options Exercise Vesting Expiration Options
Granted Granted Price Date Date Outstanding vested
--------- ----------- ----------- ----------- ----------- ----------- -----------
1-Apr-01 150,000 6.0000 1-Jan-00 31-Mar-06 150,000 150,000
24-Apr-01 16,666 4.8000 31-Dec-01 31-Dec-06 16,666 16,666
24-Apr-01 16,667 4.8000 31-Dec-02 31-Dec-06 16,667 16,667
24-Apr-01 16,667 4.8000 31-Dec-03 31-Dec-06 16,667 16,667
200,000 200,000
EXHIBIT E TO STOCK PURCHASE AGREEMENT
CONSULTING AGREEMENT
This Consulting Agreement is made as this 9th day of March, 2006, by and
between Data Systems & Software Inc. (the "Company") and Xxxxxx Xxxxxxxxxxx
("Consultant").
R E C I T A L S:
WHEREAS, the parties hereto are parties to a Stock Purchase Agreement
dated March 9, 2006 providing for the purchase by Xxxxxxx Xxxxxxxxxxx of all of
the issued and outstanding capital stock of Databit Inc. (the "Databit Stock")
from the Company; and
WHEREAS, part of the consideration for the purchase and sale of the
Databit Stock is the agreement of the parties as set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. Engagement. The Company hereby agrees to continue to engage
Consultant to render the consulting services described herein, and
Consultant hereby accepts such engagement.
2. Term. The engagement of Consultant by the Company as provided in
Section 1 shall commence on the date hereof and through March 31,
2008 unless further extended or earlier terminated as hereinafter
provided (the period of such engagement, the "Term").
3. Services. Consultant shall render consulting services to the Company
from time to time as requested by the Company with respect to the
business operations of the Company's subsidiary. The Consultant
shall be expected to make four (4) business trips to Israel per year
for the purpose of providing the services hereunder.
4. Compensation and Expenses.
(a) Salary. The Company shall pay to Consultant compensation in
the amount of $1.00 per annum during the Term. Such
compensation shall be payable in accordance with the regular
payroll practices of the Company.
(b) Automobile Loan and Title. On the date of execution of this
Agreement, the Company shall assign, and Consultant shall
assume, the obligations of the Company pursuant to the auto
loan described in Schedule A attached hereto and the Company
shall make a payment of $25,000 towards the paydown of such
loan and transfer to Consultant title to the automobile
subject to the remaining balance of said loan, all pursuant to
documents reasonably satisfactory to the Company and
Consultant.
(c) Expenses. The Company shall pay Consultant a non-accountable
expense allowance of $65,000 per annum, to be made in equal
monthly payments. The Consultant shall not be entitled to any
further reimbursement for any expenses incurred in connection
with the consulting services rendered pursuant hereto, unless
otherwise specifically agreed to in writing.
(d) Benefits. Consultant shall not be entitled to any insurance or
other benefits in connection with the consulting services
rendered pursuant hereto.
5. Termination. Either party may terminate the Term for any or no
reason upon thirty (30) days' notice to the other party, provided
however, that in the event of termination by the Company, Consultant
shall still be entitled to the expense allowance provided for in
Section 4(b) through the end of the given Term.
6. Covenants of Consultant.
(a) Consultant recognizes that the knowledge of, information
concerning and relationship with customers, suppliers and
agents, and the knowledge of the Company's business methods,
systems, plans and policies which Consultant will establish,
receive or obtain as a consultant to the Company, are valuable
and unique assets of the business of the Company. Consultant
will not, during or within two (2) years after the Term, use
or disclose any such knowledge or information pertaining to
the Company, its customers, suppliers, agents, policies or
other aspects of its business, for any reason or purpose,
whatsoever except pursuant to Consultant's duties hereunder or
as otherwise authorized by the Company in writing. The
foregoing restriction shall not apply, following termination
of Consultant's engagement hereunder, to knowledge or
information which (i) is in or enters the public domain
without violation of this Agreement or other obligations of
confidentiality by Consultant or his agents or
representatives, (ii) Consultant can demonstrate was in his
possession on a nonconfidential basis prior to the
commencement of his engagement with the Company, or (iii)
Consultant can demonstrate was received or obtained by him on
a non-confidential basis from a third party who did not
acquire it wrongfully or under an obligation of
confidentiality, subsequent to the termination of his
engagement hereunder.
(b) All memoranda, notes, records or other documents made or
compiled by Consultant or made available to Consultant while
engaged concerning customers, suppliers, agents or personnel
of the Company, or the Company's business methods, systems,
plans and policies, shall be the Company's property and shall
be delivered to the Company on termination of Consultant's
engagement or at any other time on request.
(c) During the term of Consultant's engagement and for two (2)
years thereafter, Consultant shall not, except pursuant to and
in furtherance of his duties hereunder, directly or indirectly
solicit or initiate contact with any employee of the Company
with a view to inducing or encouraging such employee to leave
the employ of the Company for the purpose of being hired by
Consultant, an employer affiliated with him or any competitor
of the Company.
2
(d) Consultant acknowledges that the provisions of this section
are reasonable and necessary for the protection of the Company
and that the Company will be irrevocably damaged if such
covenants are not specifically enforced. Accordingly,
Consultant agrees that, in addition to any other relief to
which the Company may be entitled in the form of actual or
punitive damages, the Company shall be entitled to seek and
obtain injunctive relief from a court of competent
jurisdiction for the purposes of restraining Consultant from
any actual or threatened breach of such covenants.
7. Entire Agreement. This Agreement contains the entire understanding
of the parties with respect to the subject matter hereof. It is
hereby acknowledged that the Employment Agreement to which the
parties hereto were previously parties has this date been assigned
by the Company to, and assumed by, Databit Inc. by separate
agreement. This Agreement may not be modified or extended except by
a writing signed by both parties hereto. This Agreement shall be
binding upon and inure to the benefit of the parties and their
respective legal representatives, executors, heirs, administrators,
successors and assigns.
8. Governing Law. This Agreement and all matters and issues collateral
thereto shall be governed by the laws of The State of New York
applicable to contracts performed entirely therein.
9. Severability. If any provision of this Agreement, as applied to
either party or to any circumstance, shall be adjudged by a court to
be void and unenforceable, the same shall in no way affect any other
provision of this Agreement or the validity or enforceability
thereof.
10. Notices. All notices or other communications hereunder shall be
given in writing and shall be deemed given if served personally or
mailed by registered or certified mail, return receipt requested, to
the parties at the addresses below, or at such other address or
addresses as they may hereafter designate in writing.
If to the Company:
Data Systems & Software Inc.
000 Xxxxx 00
Xxxxxx, Xxx Xxxxxx 00000
If to Consultant:
Xxxxxx Xxxxxxxxxxx
0 Xxxxxxx Xxxxx
Xxxxxx, Xxx Xxxx 00000
[Remainder of page intentionally left blank]
3
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first above written.
DATA SYSTEMS & SOFTWARE INC.
By:______________________________
Print Name and Title:
_________________________________
XXXXXX XXXXXXXXXXX
_________________________________
SIGNATURE PAGE TO CONSULTING AGREEMENT
Schedule A
Loan of $44,123 for the purchase of a 2005 Acura RL, vin# JH4KB16555C 006165.
EXHIBIT F TO STOCK PURCHASE AGREEMENT
CONSENT AGREEMENT
This Consent Agreement is made as of this 9th day of March, 2006, by the
certain stockholder of Databit Systems & Software Inc., a Delaware corporation
("DSSI"), residing at the address set forth below such stockholders name on the
signature page hereto ("Stockholder"), in favor of DSSI, Databit Inc.
("Databit"), Xxxxxx Xxxxxxxxxxx ("GM") and Xxxxxxx Xxxxxxxxxxx ("SM").
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Stockholder hereby agrees as follows:
1. Stockholder is familiar with the transactions among DSSI, Databit,
GM and SM described in the Term Sheet dated March 8, 2006, attached
as Exhibit A hereto (the "Transactions"). Stockholder has had an
opportunity to ask questions regarding the Transactions of GM, SM,
and management of DSSI and Databit and all such questions have been
answered to his satisfaction. Stockholder has been provided access
to all information which he deems relevant or material to his
determination to enter into this Agreement.
2. Stockholder hereby consents to the Transactions.
3. Stockholder agrees that Stockholder shall not institute any action
or suit at law or in equity against any of DSSI, Databit, GM or SM,
or any of their officers, directors, shareholders, agents,
successors or assigns, nor institute, prosecute, join or in any way
aid in the institution or prosecution of any claim, demand, action,
or cause of action against any of them for any liability, claims,
actions, interest, demands, rights, damages, costs, loss of
services, attorneys' fees, proceedings, debts, dues, sums of money,
rents, improvements, contracts, agreements, controversies, expenses
and compensation, arising from the consummation of the Transactions
or any other agreement or understanding executed or otherwise agreed
to in connection therewith.
4. DSSI represents that the following actions have been taken effective
as of the date of consummation of the Transactions:
(a) The board of directors of DSSI has been expanded by one member
and Xxxx X. Xxxxx has been appointed to the board of
directors;
(b) Xxxx X. Xxxxx has been appointed Chief Executive Officer of
DSSI;
(c) Xxxx X. Xxxxx has been designated as DSSI's representative on
the Board of Directors of Comverge Inc.;
(d) Xxxx X. Xxxxx has been appointed as a member of the
Nominations Committee to select the slate of nominees to
appear on the management proxy for the 2006 annual shareholder
meeting; and
(e) GM and SM have each executed unconditional releases in favor
of DSSI releasing any claims they may have at such time or in
the future against DSSI or its past or present affiliates,
officers, directors, partners, divisions, shareholders,
subsidiaries, predecessors, successors and assigns, and their
respective past and present agents, attorneys,
representatives, employees, consultants, heirs, executors,
administrators, successors and assigns, other than as may
relate to the obligations of DSSI under the Transactions, a
copy of which has been delivered to Xxxx X. Xxxxx.
5. Notwithstanding anything to the contrary contained herein, if any
condition set forth below in this paragraph 5 is not satisfied, the
consent set forth in paragraph 2 and the agreements set forth in
paragraph 3 above shall be void and of no effect:
(a) DSSI shall file with the Securities and Exchange Commission
("SEC"), if required, a preliminary proxy statement with
respect to its 2006 annual meeting of shareholders ("2006
Annual Meeting") on or before April 17, 2006 and shall send a
notice to its stockholders for such Meeting to be called for
as soon as practicable and in no event for a date after the
later of (i) April 30, 2006 and (ii) the date that is
forty-five days after the date on which any preliminary proxy
statement submitted to the SEC is "cleared" for distribution
to shareholders ;
(b) Subject to the actions of the Nominations Committee, the board
of directors of DSSI shall approve the nomination of the
following slate of directors for inclusion in the proxy
statement for the 2006 Annual Meeting: Xxxx X. Xxxxx, GM,
Xxxxx XxXxxxxxxxx, Xxxxxxx Xxxxx, Xxx Xxx and Xxxxxx Xxxxxxx
(collectively, the "New Slate"), with such changes, if any,
thereto as shall be approved by Xxxx X. Xxxxx in writing or at
a meeting of the board of directors;
(c) The board of directors of DSSI shall take no action to
nominate any individual to the slate of directors for
inclusion in the proxy statement for the 2006 Annual Meeting
other than those set forth above under the New Slate without
the prior approval of Xxxx X. Xxxxx, in writing or at a
meeting of the board of directors;
(d) The proxy statement relating to the 2006 Annual Meeting shall
include proposals to eliminate DSSI's "poison pill" (unless
the same shall have expired prior thereto on its own terms)
and other provisions blocking changes of corporate control,
unless approved by Xxxx X. Xxxxx in writing or at a meeting of
the board of directors; and
(e) SM and GM and each of their respective affiliates shall agree,
in a writing delivered to Xxxx X. Xxxxx within 10 days of the
date hereof, to irrevocably vote all shares held by such
stockholders of DSSI in favor of the New Slate.
6. DSSI agrees to take such further action as shall necessary
(including obtaining any consents of third parties, government
agencies, etc.) to achieve satisfy the conditions set forth in
paragraph 4 and 5.
2
7. This Consent Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware. Each of the
parties hereby irrevocably and unconditionally submits to the
jurisdiction of the courts of the State of New York and of the
Federal courts sitting in the State of New York in any action or
proceeding directly or indirectly arising out of or relating to this
Consent Agreement or the transactions contemplated hereby (whether
based in contract, tort, equity or any other theory). Each of the
parties agrees that all actions or proceedings arising out of or
relating to this agreement must be litigated exclusively in any such
State or, to the extent permitted by law, Federal court that sits in
the County of New York, and accordingly, each party irrevocably
waives any objection which it may now or hereafter have to the
laying of the venue of any such action or proceeding in any such
court.
8. This Consent Agreement may be amended, modified or waived only with
the prior written consent of each party to this Consent Agreement
9. This Consent Agreement may be executed in any number of counterparts
(facsimile or otherwise), each of which shall be an original, but
all of which together shall constitute one instrument.
3
SIGNATURE PAGE TO CONSENT AGREEMENT
IN WITNESS WHEREOF, the undersigned has executed this Consent Agreement
under seal as of the day and year first above written.
Stockholder:
__________________________
Name:
Address:__________________
__________________________
__________________________
CONFIRMED AND AGREED:
DATA SYSTEMS & SOFTWARE INC.
By:__________________________
Xxxxxx Xxxxxxxxxxx
EXIHIBIT G
DSSI Leased & Owned Vehicles
3/9/2006
Year Make & Model VIN Lease Purchase
---- ------------ ----------------- ----- --------
2005 Honda Odyssey 0XXXX00000X000000 X
2003 Infiniti X
2005 Toyota Sienna X
2005 Honda CRV XXXXX00000X000000 X
2002 Honda Civic 0XXXX00000X000000 X
SIGNATURE PAGE TO CONSENT AGREEMENT
