AMENDMENT NO. 1 TO
STOCK PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT (this
"Amendment"), dated as of December 14, 2000, is made and entered into between
and among Applied Digital Solutions, Inc., a Missouri corporation ("Buyer"), and
Xxxx X. Xxxxxxxxxxx, Xxxxxxxxx Xxxxxxxxxxx, and Bearpen Limited Partnership
(collectively, the "Sellers").
W I T N E S S E T H T H A T :
WHEREAS, Buyer ands Sellers entered into that certain Stock
Purchase Agreement, dated as of November 13, 2000 (such Stock Purchase
Agreement, as modified hereby, and as it may be amended, modified, supplemented
or restated from time to time in the future, being hereinafter referred to as
the "Purchase Agreement"), pursuant to which Buyer agreed to acquire certain
securities of SysComm International Corporation (the "Company") on the terms and
conditions set forth therein;
WHEREAS, on the date hereof, Buyer and Seller have agreed to
waive certain conditions to Closing and to modify the terms previously agreed to
in order to realize the benefits of the transactions contemplated by the
Purchase Agreement, all as specified in more detail herein;
NOW, THEREFORE, in consideration of the terms, conditions and
considerations contained herein, and other good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
hereby agree as follows:
1. Amendment to Article I of the Purchase Agreement. The
Purchase Agreement is hereby amended by deleting the entire Article I thereof
and replacing it with the following:
ARTICLE I
PURCHASE AND SALE
1.1. The SYCM Shares. Upon the terms and subject to the
conditions set forth in this Agreement, on the date hereof (the "Escrow Date"),
the Sellers shall sell to the Buyer and deliver to the Escrow Agent (as defined
below), upon the terms and conditions set forth in that certain Escrow Agreement
executed concurrently herewith in form and substance identical to Exhibit C
attached hereto, by the Buyer and Sellers (among others), free and clear of all
security interests, claims, and restrictions, and Buyer shall purchase and
accept from Sellers, the shares of SYCM common stock reflected on Schedule 1.1
consisting of an aggregate of two million five hundred seventy thousand
(2,570,000) shares of SYCM common stock now held by Sellers (the "SYCM Shares").
The term "Escrow Agent" shall have the meaning ascribed thereto in the Escrow
Agreement.
1.2 Consideration. (a) The consideration that Buyer shall pay
Sellers for the SYCM Shares, the obligations of Sellers under Article VI, and
the other rights of Buyer hereunder, to be allocated 74.71% to Spielberger,
1.94% to Xxxxxxxxx Xxxxxxxxxxx, and 23.35% to Bearpen Limited Partnership, shall
be an aggregate value of $4,500,000, payable (i) in part either in shares of the
Buyer's common stock or by promissory note, and (ii) in part in cash. Concurrent
with the execution hereof, Buyer will deliver to the Escrow Agent (a) cash in an
amount (the "Cash") equal to One Million Seven Hundred Forty-Six Thousand, Four
Hundred Sixty-One and NO/100 Dollars ($1,746,461.00), (b) One Million Six
Hundred Ninety-Nine Thousand Seven Hundred Fifteen (1,699,715) shares of the
Buyer's common stock with an aggregate value equal to the difference between
Four Million Five Hundred Thousand Dollars ($4,500,000) and the value of the
Cash (the "ADS Shares"), with the number of the ADS Shares to be delivered to
the Escrow Agent having been calculated using as the per share value thereof the
average of the closing price for the Buyer's common stock for the five (5)
consecutive trading days ending on December 7, 2000 (the "Escrow Date Average
Price"), and (c) a promissory note in form and substance identical to Exhibit D
attached hereto in principal amount equal to the difference between Four Million
Five Hundred Thousand Dollars ($4,500,000) and the value of the Cash.
(b) In further consideration for the SYCM Shares, if, on or
prior to, May 31, 2001, the Escrow Agent releases the ADS Shares to the Sellers
pursuant to the Escrow Agreement, and if the closing price for the Buyer's
common stock on the second trading day prior to the release of the ADS Shares
from the Escrow Agent to the Sellers (the "Release Date Price") is less than the
Escrow Date Average Price, the following price protection provisions shall
apply: additional shares of the Buyer's common stock (the "Price Protection
Shares") shall be issued to Sellers within ten business days thereafter, so
that, after such issuance, the aggregate value of the ADS Shares together with
the Price Protection Shares, all valued at the Release Date Price, shall be
equal to the aggregate value of the original number of the ADS Shares valued at
the Escrow Date Average Price. If Buyer is required to deliver the Price
Protection Shares as described in this paragraph which Price Protection Shares
exceed the number of ADS Shares included in the Registration Statement (referred
to in Section 7.1), Buyer shall cause such excess Price Protection Shares to be
included in the Registration Statement, by post-effective amendment or otherwise
as agreed to by the Parties.
1.3 [Omitted.].
1.4 Deliveries of Sellers. Subject to the conditions to
Sellers' obligations in Article V, at the Escrow Date, Sellers shall deliver to
the Escrow Agent a certificate or certificates evidencing the SYCM Shares, duly
endorsed or accompanied by a duly executed stock power, and to the Buyer the
documents identified in Article IV, together with the Escrow Agreement, and a
Proxy with respect to the SYCM Shares in form and substance satisfactory to the
Buyer, duly executed by Sellers.
1.5 Deliveries of Buyer. Subject to the conditions to Buyer's
obligations in Article IV, at the Escrow Date, Buyer shall deliver to the Escrow
Agent the Cash, by wire transfer of immediately available funds, a certificate
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or certificates evidencing the ADS Shares, newly issued or duly endorsed or
accompanied by a duly executed stock power, the Promissory Note, and to Sellers
the Escrow Agreement and the documents identified in Article V, duly executed by
Buyer.
1.6 Reconciliation. The parties acknowledge that the amount of
the cash received by the Buyer under the IPC Agreement may be subject to
adjustment thereunder. In the event such amount is adjusted, a similar
adjustment shall be made under this Agreement, pursuant to which Buyer shall be
entitled to reimbursement in cash by the Escrow Agent for the excess amount paid
by Buyer on the date hereof, with a corresponding increase in the number of ADS
Shares to be delivered to the Escrow Agent.
2. Amendment to Sections 4.8, 5.5, 5.6, 7.1, 7.6, 7.7 and 9.6.
The Purchase Agreement is hereby amended by deleting Sections 4.8, 5.5, 5.6,
7.1, 7.6, 7.7 9.6 and 9.8 thereof and replacing each of them, respectively, with
the following:
4.8 Board Resignations. All members of the Board of Directors
of the Company, including Xxxx X. Xxxxxxxxxxx, shall have resigned and Xxxxx X.
Loppert and Anat Ebbenstein shall have been appointed thereto.
5.5 [omitted.]
5.6 Agreement with Company. The Company shall have executed an
employment or consulting agreement providing Spielberger on terms no less
favorable to Spielberger than the following: (i) a five year term; (ii) payment
at a rate of $120,000 per year; (iii) the ability to keep the two vehicles
currently being provided to Spielberger and have reasonable expenses in
connection therewith reimbursed, so long as Spielberger is actively consulting
for the Company; and (iv) the granting of the right to acquire 300,000 shares of
the common stock of the Company at a per share exercise price equal to the
closing market price of the Buyer's common stock on November 13, 2000 in form
attached hereto as Exhibit B.
7.1 Mandatory Registration. The Buyer shall use its best
reasonable efforts to cause a registration statement on Form S-3 (or such other
form as is available for such a registration) covering the resale of at least
One Million Six Hundred Ninety-Nine Thousand Seven Hundred Fifteen (1,699,715)
of the ADS Shares (the "Registration Statement") to be filed with the SEC on or
before February 15, 2001, and declared effective as soon as practicable
thereafter, and to remain effective for at least one year following the
effective date thereof. If any Price Protection Shares are issued to the Sellers
pursuant to Section 1.2(b), the Buyer shall use its reasonable best efforts to
include such excess shares in another registration statement as promptly as
practical following the date of issuance but in any event no later than August
31, 2001, and will cause such registration statement to remain effective for at
least one year following its effective date.
7.6 [Omitted.]
7.7 [Omitted.]
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9.6 Expenses. Sellers (and not the Company) shall pay all
costs and expenses incurred on behalf of themselves or the Company in connection
with the negotiation, preparation and execution of this Agreement and the
consummation of the transactions contemplated hereby, including, without
limitation, fees and expenses of attorneys, investment bankers and accountants.
Notwithstanding the foregoing, on the Escrow Date, the Buyer shall cause to be
paid the reasonable attorney's and accountant's fees incurred by Sellers in
connection herewith, up to a maximum of $75,000.
9.8 Governing Law. This Agreement shall in all respects be
construed in accordance with and governed by the substantive laws of the State
of Florida, without reference to its conflict of law rules.
3. Substitution of "Escrow Date" for "Closing". The Purchase
Agreement is hereby further amended by deleting, in each instance where they
appear throughout the Purchase Agreement, the defined terms "Closing" and
"Closing Date" and substituting therefor the defined term "Escrow Date."
4. Address for Notice to Sellers. The address for notice to
the Sellers under Section 9.1 of the Purchase Agreement is hereby amended to
read as follows:
c/o Xxxx X. Xxxxxxxxxxx
000 Xxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxx 00000
5. Governing Law. This Amendment shall be deemed to have been
made in the State of Florida, and shall be governed by, and construed and
enforced in accordance with, the laws of the State of Florida applicable to
contracts made and to be performed solely within such State, without giving
effect to its conflicts of laws principles or rules.
6. Section Headings. The section headings contained in this
Amendment are and shall be without substance, meaning or content of any kind
whatsoever and are not a part of the agreement between the parties hereto.
7. Counterparts. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
[Remainder of page intentionally blank.]
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IN WITNESS WHEREOF, this Amendment has been duly executed as
of the day and year first above written.
APPLIED DIGITAL SOLUTIONS, INC.
By: /s/ Xxxxx X. Loppert
----------------------------
Name: Xxxxx X. Loppert
Title: Senior Vice-President
By: /s/ Xxxx X. Xxxxxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxxxxx
By: /s/ Xxxxxxxxx Xxxxxxxxxxx
----------------------------
Name: Xxxxxxxxx Xxxxxxxxxxx
BEARPEN LIMITED PARTNERSHIP
By: /s/ Xxxx X. Xxxxxxxxxxx
----------------------------
Name: Xxxx X. Xxxxxxxxxxx
Title: a General Partner
By: /s/ Xxxxxxxxx Xxxxxxxxxxx
----------------------------
Name: Xxxxxxxxx Xxxxxxxxxxx
Title: a General Partner
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