PURCHASE AGREEMENT
EXHIBIT
99.4
This
PURCHASE AGREEMENT (this “Agreement”) dated November 14, 2007, by and between
Xxxxxxxx Xxxx Xxxx (“Ofir”), Xxxxxxxx Xxxxx (“Rigbi”; collectively the
“Sellers”), and TSSS, Inc., a Delaware corporation (the
“Purchaser”).
RECITALS
WHEREAS,
Ofir is the record and beneficial owner of [30,952,997] shares of common stock
of DCI USA, Inc., a Delaware corporation (“DCI”),
WHEREAS,
Rigbi is the record and beneficial owner of 6,135,000 shares of common stock
of
DCI,
WHEREAS,
the Sellers desire to sell, and the Purchaser desires to purchase Sellers’
shares of common stock of DCI (the “Purchased Shares”) on the terms and
provisions contained in this Agreement;
WHEREAS,
Ofir has made a series of loans to DCI (collectively, the “Loans”) reflected in
the books of DCI as being in the aggregate principal amount of $752,343.00
plus
accrued interest of $19,868.17 as of the date hereof (said amount hereinafter
referred to as the “DCIU Loan Amount”),
WHEREAS,
Ofir desires to sell, and the Purchaser desires to purchase, the Loans on the
terms and provisions as contained in this Agreement.
NOW,
THEREFORE, in consideration of the covenants, promises and representations
set
forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, the parties agree as follows:
1. Purchase
and Sale.
1.1 Purchase
and Sale of the Purchased Sales.
Subject
to the terms and conditions of this Agreement, at the Closing (hereafter
defined), Seller shall sell, assign, transfer, convey, and deliver to Purchaser,
and Purchaser shall accept and purchase, the Purchased Shares and any and all
rights in the Purchased Shares to which Sellers are entitled, and by doing
so
Sellers shall be deemed to have assigned all of their respective rights, title
and interest in and to the Purchased Shares to Purchaser. Such sale of the
Purchased Shares shall be evidenced by stock certificates, duly endorsed in
blank or accompanied by stock powers, or other instruments of transfer in form
and substance reasonably satisfactory to Purchaser. The Purchased Shares shall
be payable at the Closing by the issuance and delivery by Sellers to Purchaser
of stock certificates dated as of the date of Closing registered in the names
and in such amounts as set forth herein.
1.2 Purchase
Price for the Purchased Shares. The
aggregate purchase price to be paid by Purchaser at the Closing for the
Purchased Shares shall be Two Milion Five Hundred Ninety Six Thousand One
Hundred Fifty Nine Dollars and eighty cents ($2,596,159.80) Dollars, or seven
cents ($0.07) per Purchased Share.
1.3 Payment
of Purchase Price for the Purchased Shares. Purchaser
shall pay the purchase price at the Closing as follows: (a) $2,166,709.80 by
wire transfer, certified or bank check made payable to Ofir and (b) $429,450
by
wire transfer, certified or bank check made payable to Rigbi.
2. Purchase
and Sale of the Loans.
2.1 Purchase
and Sale of the Loans.
Subject
to the terms and conditions of this Agreement, at the Closing, Ofir shall sell,
assign, transfer, convey, and deliver to Purchaser, and Purchaser shall accept
and purchase, the Loans and any and all rights in the Loans to which Ofir is
entitled, and by doing so Ofir shall be deemed to have assigned all of his
rights, title and interest in and to the Loans to Purchaser. Such sale of the
Loans shall be evidenced by the execution and delivery of the Assignment and
Indemnification Agreement in the form attached hereto as Exhibit A (the
“Assignment Agreement”).
2.2 Purchase
Price for the Loans. The
purchase price to be paid by Purchaser at the Closing to Ofir for the Loans
shall be the DCIU Loan Amount less $150,000, or Six Hundred Twenty Two Thousand
Two Hundred Eleven and 17/100 ($622,211.17) Dollars.
2.3 Payment
of Purchase Price for the Loans. Purchaser
shall pay the purchase price for the Loans at the Closing by execution and
delivery of a six -month promissory note (the “Note”) in the form attached
hereto as Exhibit B. Interest shall accrue on the unpaid principal of the Note
at the rate of 1% per month.
3. Closing.
3.1 Date
and Location.
The
closing of the transactions contemplated by this Agreement (the “Closing”) shall
be held simultaneously with the execution of this Agreement at such place as
the
parties hereto may agree.
3.2 Deliveries.
(a) At
the
Closing, Sellers shall deliver to Purchaser, (i) stock certificates evidencing
the Purchased Shares, duly endorsed in blank or accompanied by stock powers,
or
other instruments of transfer in form and substance reasonably satisfactory
to
Purchaser, (ii) any documentary evidence of the due recordation in the Company’s
share register of Purchaser’s full and unrestricted title to the Purchased
Shares, (iii) the Assignment Agreement, duly executed by Ofir, (iv) the
resignation of
-2-
Ofir
and
Rigbi from all their positions with DCI, and (v) such other documents as may
be
required under applicable law or reasonably requested by Purchaser.
(b) At
the
Closing, Purchaser shall deliver to the Sellers (i) the purchase price for
the
Purchased Shares as provided in Section 1.3, (ii) the Note, (iii) the Assignment
Agreement, (iv) board resolutions authorizing this Agreement, the Note, the
Assignment Agreement and the transactions contemplated hereby and thereby and
(v) such other documents as may be required under applicable law or reasonably
requested by Purchaser.
4. Representations
and Warranties of Sellers.
As an
inducement to Purchaser to enter into this Agreement and to consummate the
transactions contemplated herein, each of the Sellers jointly, but not
severally, represents and warrants to Purchaser as follows:
4.1 Authority.
Sellers
have the right, power, authority and capacity to execute and deliver this
Agreement, to consummate the transactions contemplated hereby and to perform
their obligations under this Agreement. This Agreement constitutes the legal,
valid and binding obligations of Sellers, enforceable against Sellers in
accordance with the terms hereof.
4.2 Ownership.
Sellers
are the sole record and beneficial owners of the Purchased Shares, have good
and
marketable title to the Purchased Shares, free and clear of all Encumbrances
(hereafter defined), other than applicable restrictions under applicable
securities laws, and have full legal right and power to sell, transfer and
deliver the Purchased Shares to Purchaser in accordance with this Agreement.
“Encumbrances” means any liens, pledges, hypothecations, charges, adverse
claims, options, preferential arrangements or restrictions of any kind,
including, without limitation, any restriction of the use, voting, transfer,
receipt of income or other exercise of any attributes of ownership. Upon the
execution and delivery of this Agreement, Purchaser will receive good and
marketable title to the Purchased Shares, free and clear of all Encumbrances,
other than restrictions imposed pursuant to any applicable securities laws
and
regulations. Ofir
is
the sole owner of the Loans, has good and marketable title to the Loans, free
and clear of all Encumbrances, and has full legal right and power to sell,
transfer and deliver the Loans to Purchaser in accordance with this Agreement
and the Assignment Agreement. Upon the execution and delivery of this Agreement
and the Assignment Agreement, Purchaser shall receive good and marketable title
to the Loans.
4.3 Interest
in DCI.
Effective as of the Closing, neither Seller will have any direct or indirect
interest in any capital stock or other equity of DCI or any direct or indirect
indebtedness to or from DCI.
4.4 SEC
Filings. Sellers
represent and warrant that they will file with the Securities and Exchange
Commission (“SEC”) all requisite forms and filings to which the Sellers may be
subject as a result of the transactions contemplated herein. Specifically,
Sellers shall file or caused to be filed Form 4s disclosing the
transactions
-3-
contemplated
herein pursuant to the rules and regulations of the SEC.
4.5 Broker.
Except
for Xxxxx Xxxxxxxxx, no person or entity has acted, directly or indirectly,
as a
broker or finder for the Sellers in connection with the transactions
contemplated by this Agreement and no person or entity is entitled to any fee
or
commission or like payment in respect thereof. The Sellers shall be responsible
for the payment of such fee.
5. Representations
and Warranties of Purchaser.
As an
inducement to Sellers to enter into this Agreement and to consummate the
transactions contemplated herein, Purchaser represents and warrants to the
Sellers as follows:
5.1 Authority.
Purchaser has the right, power, authority and capacity to execute and deliver
this Agreement, to consummate the transactions contemplated hereby and to
perform its obligations under this Agreement. This Agreement constitutes the
legal, valid and binding obligations of Purchaser, enforceable against Purchaser
in accordance with the terms hereof.
5.2 No
Consent.
No
consent, approval, authorization or order of, or any filing or declaration
with
any governmental authority or any other person is required for the consummation
by the Purchaser of any of the transactions on its part contemplated under
this
Agreement.
5.3 No
Conflict.
None of
the execution, delivery, or performance of this Agreement, and the consummation
of the transactions contemplated hereby, conflicts or will conflict with, or
(with or without notice or lapse of time, or both) result in a termination,
breach or violation of (i) any instrument, contract or agreement to which
Purchaser is a party or by which they are bound; or (ii) any federal, state,
local or foreign law, ordinance, judgment, decree, order, statute, or
regulation, or that of any other governmental body or authority, applicable
to
Purchaser.
5.4 Non-Affiliate.
Purchaser
represents and warrants that it is not an Affiliate (hereafter defined) of
either of the Sellers, DCI or any Affiliate of DCI. Purchaser has no direct
or
indirect interest in DCI, nor any of its assets or properties other than the
transactions contemplated by this Agreement. For purposes of this section,
“Affiliate” shall mean any person or entity which, directly or indirectly,
controls or is controlled by that person or entity, or is under common control
with that person or entity. For the purposes of this definition, “control”
(including, with correlative meaning, the terms “controlled by” and “under
common control with”), as used with respect to any person or entity, shall mean
the pos-ses-sion, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such person or entity, whether
through the ownership of voting securities or by contract or
otherwise.
5.5 Investment
Intent.
Purchaser is acquiring the Purchased Shares and the Loans for its own account
as
principal, not as a nominee or agent, for investment purposes only, and not
with
a view to, or for, resale, distribution or fractionalization
-4-
thereof
in whole or in part and no other person has a direct or indirect beneficial
interest in such Purchased Shares, the Loans or any portion thereof. Further,
the Purchaser does not 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 the Purchased Shares or the Loans which are
being purchased herein or any part thereof.
5.6 Applicability
of Exemption.
Purchaser understands that the Purchased Shares and Loans are being offered
and
sold to Purchaser in reliance on an exemption from the registration requirements
of United States federal and state securities laws under Regulation D
promulgated under the Securities Act of 1933, as amended (the “Securities Act”),
and that the Sellers are relying upon the truth and accuracy of the
representations, warranties, agreements, acknowledgments and understandings
of
the Purchaser set forth herein in order to determine the applicability of such
exemptions and the suitability of the Purchaser to acquire the Purchased Shares.
5.7 Accredited
Investor.
The
Purchaser is an “accredited investor” as that term is defined in Rule 501 of the
General Rules and Regulations under the Securities Act by reason of Rule
501(a)(3).
5.8 Potential
Loss of Investment.
The
Purchaser understands that an investment in the Purchased Shares and Loans
is a
speculative investment which involves a high degree of risk and the potential
loss of its entire investment.
5.9 Restricted
Securities.
Purchaser understand that the Purchased Shares have not been registered under
the Securities Act or registered or qualified under any the securities laws
of
any state or other jurisdiction, are “restricted securities,” and cannot be
resold or otherwise transferred unless they are registered under the Securities
Act, and registered or qualified under any other applicable securities laws,
or
an exemption from such registration and qualification is available. Each
certificate for any Purchased Shares shall bear a legend to the foregoing
effect.
5.10 Review
of SEC Documents.
Purchaser has reviewed or received copies of all reports and other documents
filed by DCI and its officers and directors with the Securities and Exchange
Commission and any other documents or information requested by Purchaser.
5.11 No
Reliance.
Other than as set forth herein, Purchaser is not relying upon any other
information, representation or warranty by Sellers, DCI, or any representative
of Sellers in determining to invest in the Purchased Shares other than those
expressly provided in Section 4. Purchaser has consulted, to the extent
deemed appropriate by Purchaser, with the Purchaser’s own advisers as to the
financial, tax, legal and related matters concerning an investment in the
Purchased Shares and Loans and on that basis believes that its investment in
the
Purchased Shares and Loans is suitable and appropriate for
Purchaser.
-5-
5.12 SEC
Filings. Purchaser
represents and warrants that it will file with the SEC all requisite forms
and
filings to which the Purchaser may be subject as a result of the transactions
contemplated herein. Specifically, Purchaser shall file or caused to be filed
a
Current Report on Form 8-K, a Schedule 13D and Form 3s disclosing the
transactions contemplated herein pursuant to the rules and regulations of the
SEC.
5.13 Broker.
No
person
or entity has acted, directly or indirectly, as a broker or finder for the
Purchaser in connection with the transactions contemplated by this Agreement
and
no person or entity is entitled to any fee or commission or like payment in
respect thereof.
6. Indemnification;
Survival.
6.1 Indemnification.
Sellers, on the one hand, and Purchaser, on the other hand, shall jointly and
severally indemnify and hold harmless the other party and such other party’s
agents, beneficiaries, affiliates, representatives and their respective
successors and assigns (collectively, the “Indemnified Persons”) from and
against any and all damages, losses, liabilities, taxes and costs and expenses
(including, without limitation, attorneys’ fees and costs) (collectively,
“Losses”) resulting directly or indirectly from (a) any inaccuracy,
misrepresentation, breach of warranty or non-fulfillment of any of the
representations and warranties of such party in this Agreement, or any actions,
omissions or statements of fact inconsistent with in any material respect any
such representation or warranty and (b) any failure by such party to perform
or
comply with any agreement, covenant or obligation in this Agreement.
6.2 Survival.
All
representations, warranties, covenants and agreements of the parties contained
herein or in any other certificate or document delivered pursuant hereto shall
survive the date hereof until the expiration of the applicable statute of
limitations.
7. Miscellaneous.
7.1 Further
Assurances.
From
time to time, whether at or following the Closing, each party shall make
reasonable commercial efforts to take, or cause to be taken, all actions, and
to
do, or cause to be done, all things reasonably necessary, proper or advisable,
including as required by applicable laws, to consummate and make effective
as
promptly as practicable the transactions contemplated by this
Agreement.
7.2 Notices.
All
notices or other communications required or permitted hereunder shall be in
writing shall be deemed duly given (a) if by personal delivery, when so
delivered, (b) if mailed, three (3) business days after having been sent by
registered or certified mail, return receipt requested, postage prepaid and
addressed to the intended recipient as set forth below, or (c) if sent through
an overnight delivery service in circumstances to which such service guarantees
next day delivery, the day following being so sent:
-6-
(1) If
to
Sellers:
Xxxxxxxx
Xxxx Xxxx
_______________
_______________
and
Xxxxxxxx
Xxxxx
_______________
_______________
(2) If
to
Purchaser:
TSSS,
Inc.
________________________
________________________
Any
party
may change the address to which notices and other communications hereunder
are
to be delivered by giving the other parties notice in the manner herein set
forth.
7.3 Choice
of Law.
This
Agreement shall be governed, construed and enforced in accordance with the
laws
of the State of New York, without giving effect to principles of conflicts
of
law.
7.4 Jurisdiction.
The
parties hereby irrevocably consent to the in personam jurisdiction of the state
or federal courts located in the State of New York, in connection with any
action or proceeding arising out of or relating to this Agreement or the
transactions and the relationships established thereunder.
7.5 Entire
Agreement.
This
Agreement sets forth the entire agreement and understanding of the parties
in
respect of the transactions contemplated hereby and supersedes all prior and
contemporaneous agreements, arrangements and understandings of the parties
relating to the subject matter hereof. No representation, promise, inducement,
waiver of rights, agreement or statement of intention has been made by any
of
the parties which is not expressly embodied in this Agreement.
7.6 Assignment.
Each
party's rights and obligations under this Agreement shall not be assigned or
delegated, by operation of law or otherwise, without the other party's prior
written consent, and any such assignment or attempted assignment shall be void,
of no force or effect, and shall constitute a material default by such party.
7.7 Amendments.
This
Agreement may be amended, modified, superseded or cancelled, and any of the
terms, covenants, representations, warranties or conditions hereof may be
waived, only by a written instrument executed by the parties
hereto.
-7-
7.8 Waivers.
The
failure of any party at any time or times to require performance of any
provision hereof shall in no manner affect the right at a later time to enforce
the same. No waiver by any party of any condition, or the breach of any term,
covenant, representation or warranty contained in this Agreement, whether by
conduct or otherwise, in any one or more instances shall be deemed to be or
construed as a further or continuing waiver of any such condition or breach
or a
waiver of any other term, covenant, representation or warranty of this
Agreement.
7.9 Counterparts.
This
Agreement may be executed simultaneously in two or more counterparts and by
facsimile, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.
7.10 Severability.
If any
term, provisions, covenant or restriction of this Agreement is held by a court
of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party. Upon such determination, the parties shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner in order
that the transactions contemplated hereby be consummated as originally
contemplated to the fullest extent possible.
7.11 Interpretation.
The
parties agree that this Agreement shall be deemed to have been jointly and
equally drafted by them, and that the provisions of this Agreement therefore
shall not be construed against a party or parties on the ground that such party
or parties drafted or was more responsible for the drafting of any such
provision(s). The parties further agree that they have each carefully read
the
terms and conditions of this Agreement, that they know and understand the
contents and effect of this Agreement and that the legal effect of this
Agreement has been fully explained to its satisfaction by counsel of its own
choosing.
7.12 Headings.
The
section headings contained in this Agreement are solely for the purpose of
reference, are not part of the Agreement of the Parties and shall not in any
way
affect the meaning or interpretation of this Agreement. All references in this
Agreement
to Sections, and Schedules are to sections, and schedules to this Agreement,
unless otherwise indicated.
-8-
IN
WITNESS WHEREOF, the undersigned have duly executed this Stock Purchase
Agreement as of the date first above written.
/s/
Xxxxxxxx Xxxx Xxxx
XXXXXXXX
XXXX XXXX
/s/
Xxxxxxxx Xxxxx
XXXXXXXX
XXXXX
TSSS,
INC.
By:/s/
Xxxx
Xxxxx
Name:
Xxxx Xxxxx
Title:
Member
of
the Board
-9-
