EXHIBIT 10.2
RESTRICTED STOCK PURCHASE AGREEMENT
THIS RESTRICTED STOCK PURCHASE AGREEMENT (this "AGREEMENT"), dated as of
the 1st day of September, 2001, is made by and between DATA SYSTEMS & SOFTWARE
INC., a Delaware corporation (the "COMPANY"), with its principal place of
business at 000 Xxxxx 00, Xxxxxx, Xxx Xxxxxx 00000, and XXXXXX X. XXXXXX, an
individual residing at 00000 Xxxxxx Xxxx, Xxxxxxx, Xxxxx 00000 (the
"PURCHASER").
WITNESSETH
WHEREAS, the Purchaser has entered into an employment agreement of
even date hereof with Comverge, Inc. ("COMVERGE") (a subsidiary of the Company)
(the "COMVERGE EMPLOYMENT AGREEMENT"), pursuant to which the Purchaser will be
the Chief Executive Officer and Vice Chairman of Comverge;
WHEREAS, pursuant to paragraph 2(c) of the Comverge Employment
Agreement and as a condition to the employment of the Purchaser by Comverge,
Comverge agreed to cause the Company to issue and sell to the Purchaser 50,000
shares (the "SHARES") of common stock, par value $0.01, of the Company ("COMMON
STOCK") at purchase price of $5.95 per Share for an aggregate purchase price of
$297,500 (the "PURCHASE PRICE"); and
WHEREAS, the Company desires that the Purchaser serve as the Chief
Executive Officer and Vice Chairman of Comverge pursuant to the Comverge
Employment Agreement and is willing to sell the Shares to the Purchaser on the
terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual agreements and
considerations set forth herein, the parties hereby agree as follows.
1. SALE AND PURCHASE OF SHARES.
1.1 PURCHASE OF STOCK. Subject to the terms and conditions
stated herein, the Purchaser hereby subscribes for and agrees to purchase, and
the Company agrees to sell to the Purchaser, the Shares in consideration of the
payment by the Purchaser of the Purchase Price by the assignment and endorsement
by the Purchaser of $297,500 in principal amount from a 6% subordinated note,
dated September 29, 2000, made by Xxxxxx Services Corp. in favor of the
Purchaser in the principal amount of $1,752,277 (the "PSC Note").
1.2 DELIVERY. At the Closing (as defined below), the Purchaser
shall deliver to the Company a PSC Note in the principal amount of $297,500 made
in favor of and registered in the name of the Company (the "COMPANY'S PSC NOTE")
and accompanied by an executed assignment in form and substance reasonably
satisfactory to the Company of the date hereof. Upon receipt of the Company's
PSC Note, the Company shall issue and deliver to the Purchaser one or more stock
certificate(s) registered in the Purchaser's name for the Shares being purchased
hereunder.
1.3 CLOSING. The closing of the purchase and sale of the Shares
(the "CLOSING") shall take place on such date and time as shall be mutually
agreed to by the parties hereto and at such place as shall be mutually agreed to
by the parties hereto. The date and time of the Closing is referred to as the
"CLOSING DATE."
2. REPRESENTATIONS OF THE PURCHASER. The Purchaser makes the
following representations and warranties to the Company, each and all of which
shall survive the execution and delivery of this Agreement and the Closing
hereunder:
2.1 INVESTMENT INTENT. The Purchaser represents that he is
acquiring the Shares for investment for his own account and not with a view to,
or for resale in connection with, the distribution or other disposition thereof.
The Purchaser agrees that he will not, directly or indirectly, offer, transfer,
sell, assign, pledge, hypothecate or otherwise dispose of (each a "TRANSFER")
any of the Shares unless such Transfer complies with the provisions of this
Agreement (including, but not limited to, Section 4.1 hereof) and (A) the
Transfer is pursuant to an effective registration statement under the Securities
Act of 1933, as amended, and the rules and regulations in effect thereunder (the
"SECURITIES ACT"), (B) such Transfer is made in accordance with Rule 144 under
the Securities Act, or (C) counsel for the Purchaser shall have furnished the
Company with an opinion, reasonably acceptable to the Company, that no such
registration is required because of the availability of an exemption under the
Securities Act.
2.2 ACCREDITED INVESTOR. The Purchaser is an "Accredited
Investor" (as that term is defined in Rule 501 of Regulation D under the
Securities Act) and by reason of his business and financial experience, the
Purchaser has such knowledge, sophistication and experience in business and
financial matters as to be capable of evaluating the merits and risks of the
prospective investment in the Shares and making an informed investment decision
with respect thereto. The Purchaser is able to bear the economic risk of his
investment in the Shares and is able to afford a complete loss of such
investment; and he has made an independent investigation of the Company and
relied upon his own due diligence, valuation analysis and other analyses in
determining to purchase the Shares.
2.3 SHARES NOT REGISTERED. The Purchaser acknowledges that the
Shares have not been registered under the Securities Act or the securities laws
of any state or other jurisdiction and cannot be Transferred unless the Shares
are subsequently registered under the Securities Act and any applicable state
laws or an exemption from such registration is available. The Purchaser also
acknowledges and agrees that he has no registration rights with respect to the
Shares.
2.4 CAPACITY. The Purchaser has the capacity to enter into and
perform his obligations under this Agreement and each agreement, document and
instrument to be executed and delivered by or on behalf of the Purchaser
(including the assignment and endorsement of the PSC Note), or as contemplated
by this Agreement and to carry out the transactions contemplated hereby and
thereby, including, without limitation, the assignment of a portion of the
principal of the PSC Note to the Company.
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2.5 NO VIOLATION; NO CONSENT. This Agreement constitutes, and
each other agreement, document and instrument to be executed and delivered by
the Purchaser pursuant to or as contemplated by this Agreement will, when
executed and delivered by the Purchaser, constitute, a valid and binding
obligation of the Purchaser, enforceable against the Purchaser in accordance
with its terms. The execution and delivery by the Purchaser of this Agreement
and each agreement, document and instrument to be executed and delivered by the
Purchaser pursuant to or as contemplated by this Agreement and the performance
by the Purchaser of the transactions contemplated hereby and thereby, including
the assignment and endorsement of a portion of the principal of the PSC Note to
the Company, do not and will not: (A) violate, conflict with or result in a
default (whether after the giving of notice, lapse of time or both) under the
Indenture (as defined below) or any material contract or obligation to which the
Purchaser is a party or by which the Purchaser or his assets are bound and which
have not been waived; (B) to the Purchaser's knowledge, violate or result in a
violation of, or constitute a default under, any provision of any material law,
regulation or rule, or any order of, or any restriction imposed by, any court or
governmental agency applicable to the Purchaser; (C) require from the Purchaser
any notice to, declaration or filing with, or consent or approval of any
governmental authority or third party other than as may be required to secure an
exemption from registration or qualification of the offer and sale of the Shares
under the Securities Act, and applicable state or foreign securities and blue
sky laws; or (D) accelerate any obligation under, or give rise to a right of
termination of, any material agreement, permit, license or authorization to
which the Purchaser is a party or by which the Purchaser is bound.
2.6 PSC NOTE AND THE COMPANY'S PSC NOTE. To the best of the
Purchaser's knowledge, the Company's PSC Note constitutes a valid and binding
obligation of Xxxxxx Services Corp. ("PSC"), enforceable against PSC in
accordance with its terms, and PSC is not in a default under the PSC Note or the
Company's PSC Note and no event has occurred which, after the giving of notice,
lapse of time or both, would constitute a default under the PSC Note or the
Company's PSC Note. The Purchaser has not pledged or created a security interest
in or otherwise encumbered whatsoever the PSC Note or the Company's PSC Note,
and the Purchaser has not made any prior assignments or any other Transfer of
the PSC Note or the Company's PSC Note. Except as contained in or provided by
the PSC Note or the Company's PSC Note, the Purchaser has not executed any
agreement subordinating or affecting the priority of or reducing payments under
the PSC Note or the Company's PSC Note. The Purchaser has delivered to the
Company a full, complete and correct copy of the indenture governing the PSC
Note and the Company's PSC Note (the "INDENTURE"), which Indenture, to the best
of the Purchaser's knowledge, has not been amended, modified or waived and
remains (and shall continue to remain by its terms until fully paid) in full
force and effect. By their terms, the PSC Note and the Company's PSC Note can be
assigned and endorsed to the Company without the prior consent of PSC or any
other third party. Upon the Purchaser's delivery of the Company's PSC Note to
the Company, the Company will be the legal and valid registered holder of the
Company's PSC Note free and clear of all liens, security interests, claims,
charges or any other encumbrances, and the Company shall be entitled to all
rights and benefits provided under the Indenture to the Holders (as defined
therein) and to the receipt of all payments of interest and principal under the
Company's PSC Note.
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3. COMPANY'S REPRESENTATIONS AND WARRANTIES.
3.1 ORGANIZATION AND CORPORATE POWER. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Company has all required corporate power and
authority to carry on its business as presently conducted, to enter into and
perform this Agreement and to carry out the transactions contemplated hereby,
including the issuance and sale of the Shares.
3.2 AUTHORIZATION. The Company has all requisite power and
authority to issue, sell and deliver the Shares in accordance with and upon the
terms and conditions set forth in this Agreement, and all corporate action
required to be taken by the Company for the due and proper authorization,
issuance and delivery of the Shares will, upon delivery thereof, have been
taken. The Shares, when sold and paid for as contemplated in this Agreement,
will be duly authorized, validly issued, fully paid and non-assessable and,
except as otherwise provided by applicable law, free of all liens, claims and
encumbrances.
3.3 NO VIOLATION; NO CONSENT. This Agreement constitutes a
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms. The execution and delivery by the Company of this
Agreement and the performance by the Company of the transactions contemplated
hereby and thereby, including the issuance and delivery of the Shares, do not
and will not: (A) violate, conflict with or result in a default (whether after
the giving of notice, lapse of time or both) under any material contract or
obligation to which the Company is a party or by which it or its assets are
bound and which have not been waived, or any provision of the articles of
incorporation or bylaws of the Company; (B) to the Company's knowledge, violate
or result in a violation of, or constitute a default under, any provision of any
material law, regulation or rule, or any order of, or any restriction imposed
by, any court or governmental agency applicable to the Company; (C) require from
the Company any notice to, declaration or filing with, or consent or approval of
any governmental authority or third party other than as may be required to
secure an exemption from registration or qualification of the offer and sale of
the Shares under the Securities Act and applicable state or foreign securities
and blue sky laws; or (D) accelerate any obligation under, or give rise to a
right of termination of, any material agreement, permit, license or
authorization to which the Company is a party or by which the Company is bound.
3.4 SECURITIES LAWS. In reliance on the investment
representations of the Purchaser contained in Sections 2.1 and 2.2 hereof, the
offer, issuance, sale and delivery of the Shares, as provided in this Agreement,
are exempt from the registration requirements of the Securities Act and all
applicable state securities laws, and are otherwise in compliance with such laws
in all material respects. Neither Company nor any person acting on its behalf
has taken or will take any action which might subject the offering, issuance or
sale of the Shares to the registration requirements of Section 5 of the
Securities Act.
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4. COVENANTS.
4.1 PROCEDURE FOR TRANSFERS. Any Transfer by the Purchaser of
any of the Shares shall be conditioned upon compliance by the Purchaser with the
provisions of Section 2.1 hereof.
4.2. LEGEND. The Purchaser agrees that the following legend (or
substantially similar legends) shall be placed on each certificate evidencing
the Shares:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED WITH
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSIONS AND MAY NOT BE OFFERED, SOLD, TRANSFERRED,
HYPOTHECATED OR OTHERWISE ASSIGNED EXCEPT (1) PURSUANT TO A
REGISTRATION STATEMENT WITH RESPECT TO SUCH SECURITIES WHICH IS
EFFECTIVE UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT")
OR (2) PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER
THE ACT AND UNDER APPLICABLE STATE SECURITIES AND BLUE SKY LAWS,
PROVIDED THAT AN OPINION OF COUNSEL TO SUCH EFFECT IS PROVIDED TO
THE COMPANY IN CONNECTION THEREWITH.
5. CONDITIONS TO CLOSING. The Company's condition to Closing is the
execution and delivery by the Purchaser of the Comverge Employment Agreement.
The Purchaser's condition to Closing is the execution and delivery by the
Company of this Agreement.
6. MISCELLANEOUS.
6.1 NOTICES. All notices and other communications provided
herein shall be in writing. Notice shall be deemed delivered (i) three (3) days
after the deposit in the U.S. mail of a writing addressed as above and sent
first class mail, certified, return receipt requested, (ii) upon hand delivery,
(iii) one business day after deposit with Federal Express or other recognized
over-night courier service, or (iv) when actually received. Either party may
change the address for notice by notifying the other party of such change in
accordance with this Section 6.1
6.2 COUNTERPARTS; ENTIRE AGREEMENT. This Agreement may be
executed in counterparts. This Agreement constitutes the entire agreement
between the parties hereto with respect tot he subject matter hereof.
6.3 BINDING EFFECT. The provisions of this Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors and assigns.
6.4 AMENDMENT; WAIVER. This Agreement may be amended only by a
written instrument signed by the parties hereto which specifically states that
it is amending this Agreement, and no term of this Agreement may be waived
except in writing signed by the party waiving such term. No waiver by the
parties hereto of any default or breach of any term,
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condition or covenant of this Agreement shall be deemed to be a waiver of any
subsequent default or breach of the same or any other term, condition or
covenant contained herein.
6.5 APPLICABLE GOVERNING LAW; JURISDICTION. This Agreement and
the rights and obligations of the parties hereto shall be governed by and
constructed and enforced in accordance with, the laws of the State of New
Jersey. Each party hereby irrevocably consents and agrees that any legal or
equitable action or proceeding based upon, arising under or relating to this
Agreement shall be brought exclusively in any Federal or state court in the
County of Bergen, State of New Jersey. Each party hereby irrevocably consents to
the personal jurisdiction of each such court.
6.6 HEADINGS. The headings herein are for convenience of
reference only, do not constitute a part of this Agreement, and shall not be
deemed to limit, expand or otherwise affect any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
DATA SYSTEMS & SOFTWARE, INC.
By: /s/ Xxxxxx Xxxxxxxxxxx
-----------------------------------
Name: Xxxxxx Xxxxxxxxxxx
Title: President and
Chief Executive Officer
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
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