EX-10 3 ex10-8for10ksb123102.txt Exhibit 10.8 TRANSLATION ----------- SHARES BUY-SELL AGREEMENT In the city of Guadalajara, Jalisco, this 30th day of September 2002, and before the witnesses undersigning at the end appeared: I.- On one hand DIGITAL POWER CORPORATION, represented in this act by DAVID AMITAI hereinafter and for the purposes of this contract referred to as SELLER. II.- On the other LOGANMEX, S.A. DE C.V. through their attorney OMAR OSORIO HERNANDEZ hereinafter referred to and during this contract referred to as the BUYER. Persons known by the witnesses whom I acknowledge that I know as well as their legal capacity to contract and be bound in the terms of this contract and who declared their legal will to execute this SHARES BUY SELL AGREEMENT which will be in accordance with the following representations and clauses: REPRESENTATIONS I.- The SELLER through their attorney represents that: 1.- In public indenture No. 29,887 dated August 4th, 1986, given by Carlos de Pablo Serna, Notary Public No. 137 of Mexico City, which is duly registered under register number 56-57 of volume 243, Book first of the registry of Commerce of this Judicial District, there was an incorporation of the corporation called "PODER DIGITAL" SOCIEDAD ANONIMA DE CAPITAL VARIABLE, which has a capital stock structure as follows: FACE VALUE $l,000.00 STOCKHOLDER SHARES AMOUNT SERIES A SERIES B Digital Power Corporation 49 150 $199,000.00 David Amitai $1,000.00 ------- ------- ----------- 50 150 $200,000.00 2.- That the share certificates were made later. 3.- That his principal owns 49 common nominal shares of capital stock series A and 150 common nominal shares of capital stock series B with a face value of $1,000.00 Pesos each. 4.- That they are presently registered and recognized in the Book of Registry of Shares as owners of the shares described above. 5.- That the shares which are the subject matter of this contract are not subject to any limitation in their voting rights, in accordance with the General Trade Corporations Act (Ley General de Sociedades Mercantiles) and the Corporate Indenture. 6.- That in accordance with the provisions of article II of the by laws, they have previously obtained the authorization to sell their shares since none of the stockholders showed interest to buy the shares subject matter of this operation, so they are free to execute this contract. II.- The BUYER through their attorney, represents: 1.- That his principal is a trade corporation incorporated in accordance with the laws of Mexico in public No. 3,127 dated July 27th, 2000 given by Francisco Castellanos Guzman, Public Notary No. 20 registered in business file 5430 of the Book first of the registry of commerce of this judicial district and that their corporate objective includes the execution of contracts like this one. 2.- That he has the widest capacity to bind his principal, which have not been revoked, limited or restricted in any manner. 3.- That he knows the financial, accounting and administrative situation of the corporation called PODER DIGITAL SOCIEDAD ANONIMA DE CAPITAL VARIABLE which he accepts and approves in full. 4.- That they are interested in acquiring the shares of the SELLER at their face value, which he considers fare and in accordance with the assets of the company that the shares of this contract belong to. 5.- That they have the legal and financial capacity to face the liabilities of this contract. Having said the above, the parties agree on the following: CLAUSES FIRST.- OBJECTIVE OF THE CONTRACT ------------------------- The corporation called DIGITAL POWER CORPORATION represented by DAVID AMITAI SELLS to the corporation called LOGANMEX SOCIEDAD ANONIMA DE CAPITAL VARIABLE, through OMAR OSORIO FERNANDEZ who BUYS all the shares owned by the former which are described in number 3 of Representation I of this instrument. As a consequence of the previously described buy-sale, the capital stock of the corporation called PODER DIGITAL, SOCIEDAD ANONIMA DE CAPITAL VARIABLE, will be as follows FACE VALUE $l,000.00 STOCKHOLDER SHARES AMOUNT SERIES A SERIES B Loganmex S.A. de C.V. 49 150 $199,000.00 David Amitai 1 $1,000.00 --------- --------- ----------- TOTAL 50 150 $200,000.00 SECOND.- PRICE OF THE OPERATION The sales price is the amount of USD $19,900.00 that the BUYER shall pay with 12 checks for the amount of USD $1,658.33 each, which shall be collected on the 5th day of each calendar month counted from the 5th of January 2003 to finish on December 5th, 2003. THIRD.- ENDORSEMENT AND DELIVERY OF THE CERTIFICATES. The SELLER shall, at the time of executing this contract, endorse the property of the shares to the BUYER since they are transferred in this contract. FOURTH.- REGISTRATION OF THE TRANSFER. The BUYER shall transact before the relevant entities of the corporation their registration in the book of registry of stockholders so that the corporation may recognize them as such. FIFTH.- METHOD FOR THE TRANSFER The sale is under the concept that the sold shares are fully released by the corporation, free of any encumbrance or ownership limitation, so the SELLER shall remediate in case of eviction, as of the moment in which the shares transferred hereunder are fully paid for. SIXTH.- TERMS OF THE OPERATION 1- The BUYER shall pay all tax, legal,lease and any liabilities before any authorities that the corporation may have up to September 30, 2002 for up to an amount of USD $85,000.00 in the understanding that any debt or set of debts that exceed the above amount shall be paid by the SELLER to the BUYER immediately in order for the former to pay them at once. Any liability not mentioned in the above paragraph shall be paid for by the BUYER. 2.- The SELLER assumes labor liability for 3 of the 42 employees that work at the company presently, their names are Oliver Jimenez Rodriguez who has quit, Josue Ivan Duran Santibanez and Salvador Viurquiz Arevalo who will be terminated due to this operation, the rest of the workers will continue working for the company under the liability of the BUYER. 3.- The SELLER hereby transfers the debt that Poder Digital Sociedad Anonima de Capital Variable has with them for the amount of USD $1,147,000.00 or the one obtained from the books of PODER DIGITAL up to September 30th, 2002 to the BUYER which is subrogated as creditor and will be able to handle the accounting of that waiver as they deem convenient. 4.- It is hereby noted that Poder Digital Sociedad Anonima de Capital Variable has approximately USD $1,300,000.00 of tax losses which shall be certified by a letter from their accountants and auditors of the company. 5.- The SELLER shall also deliver the tax opinion for the fiscal year of 2001 and the financial statements up to September 30th, of this year, documents that have so far duly delivered to the BUYER. 6.- It is also hereby certified that within the facilities of Poder Digital Sociedad Anonima de Capital Variable there is a large amount of materials and finished components that entered the country in 2001 which fire duly legalized as described in attachment C hereof, which must be protected and stored by the BUYER and the SELLER shall have the right to move them, take them out or dispose off them as considered pertinent and must instruct the BUYER in due time to cooperate in the management of this material. 7.- Presently the company called Poder Digital Sociedad Anonima de Capital Variable filed before the Ministry of the Treasury (Secretaria de Hacienda y Credito Publico) an application for the return of the Value Added Tax (Inpuesto al Lavo Agregado) for the amount described in the document issued by the office called KPMG dated October 2nd of this year, Attachment 2. 8.- Lastly the SELLER shall be liable for the payment of any claim of any nature due to liabilities incurred up to September 30th, 2002, and the BUYER shall deliver all the documents and information in a timely manner so that any claim may be handled timely, it is hereby provided that in case the BUYER fails to deliver the necessary information or to notify in order to face this liability, the SELLER shall be relieved of the liability. SEVENTH.- EXPENSES. Expenses, fees and taxes generated by the sale shall be paid by the party that is liable for them. EIGHT.- COURTS AND JURISDICTION. For the interpretation and enforcement of this contract, the parties are expressly subject to the jurisdiction of the counts of this city of Guadalajara, Jalisco and thus waive any other jurisdiction that they may be entitled to due to their present or future address. NINTH.- HEADINGS OF THE CLAUSES. The headings of the clauses of this contract are only for easy reading and have no content of liability. Having read the contract, the parties expressed their agreement with the content, ratified and signed together with the witnesses in the date hereof. SELLER (SIGNED) DIGITAL POWER CORPORATION Represented by DAVID AMITAI BUYER (SIGNED) LOGANMEX S.A. DE C.V. Represented by OMAR OSORIO HERNANDEZ WITNESS WITNESS END OF TRANSLATION I, MARIA ESTHER ZATARAIN MARTINEZ, Official Expert Translator duly Authorized with Reg. Number: ZMME-0609-144, by the Supreme Tribunal of Justice and the General Council of the Judicial Power, both of the State of Jalisco, Mexico, CERTIFY: That this is a true and correct translation into English, to the best of my knowledge, of the enclosed document in Spanish. Guadalajara, Jalisco, Mexico, October 17th, 2002. LIC. MA. ESTHER ZATARAIN MARTINEZ