EXHIBIT 10.38
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LETTER AGREEMENT
November 9, 0000
Xxxx X. Xxxxxxx Revocable Living Trust (the "Trust")
00000 Xxxxx 00xx Xxxx Xxxxxx
Xxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx, Trustee
Dear Sir:
In order to induce the Trust to loan to Heartsoft, Inc. $250,000 (the
"Loan") as evidenced by that certain Promissory Note of even date ("Promissory
Note") secured by a security interest in certain collateral pursuant to that
certain Joint Security Agreement of even date ("Joint Security Agreement"),
Heartsoft, Inc. agrees to issue to the Trust 125,000 shares of common stock (the
"Shares"), par value $0.0005 per share, of Heartsoft, Inc., a Delaware
corporation ("Heartsoft"), on the following terms and conditions.
1. The Trust acknowledges that the Shares are not registered under the
Act or any state securities laws. The Trust agrees that the Shares will not be
sold, offered for sale, pledged, hypothecated or otherwise transferred
(collectively, "Transfer"), except in compliance with the Securities Act of 1933
(the "Act") and applicable state securities laws. The Trust hereby consents to
the placing of appropriate restrictive legends upon the certificates
representing the Shares, and the placing of stop transfer orders with any
transfer agent with respect to the Shares.
2. To induce Heartsoft to issue the Shares, the Trust hereby represents
and warrants to Heartsoft that:
(a) the Trust is duly authorized to execute this Agreement, and when
executed and delivered by the Trust, will constitute a legal, valid and binding
obligation enforceable against the Trust in accordance with its terms;
(b) the Shares are being acquired by the Trust for investment purposes
only, for the account of the Trust and not with the view to any resale or
distribution thereof;
(c) the Trust has such knowledge and experience in financial and
business matters that the Trust is capable of evaluating the merits and risks of
an investment in Heartsoft and can afford a complete loss of its investment in
Heartsoft and the Trust has received all information about Heartsoft that it has
asked for; and
(d) the Trust is an "accredited investor" as that term is defined in
the Act.
Xxxx X. Xxxxxxx Revocable Living Trust
November 9, 2000
Page 2
3. To induce the Trust to enter into this Agreement, to make the Loan
and to acquire the Shares, Heartsoft hereby represents and warrants to the Trust
as follows:
(a) Heartsoft is a corporation validly existing and in good standing
under the laws of the State of Delaware and has the requisite power and
authority to own or lease its properties and to carry on its business as it is
now being conducted. Heartsoft has the requisite power and authority to issue
the Shares and to perform its obligations under this Agreement.
(b) The Shares, when issued and delivered pursuant to terms of this
Agreement, will be duly authorized, validly issued, fully paid and
nonassessable.
(c) This Agreement, the Joint Security Agreement of even date, the Loan
and the issuance of the Shares contemplated hereby have been duly authorized by
all necessary action on behalf of Heartsoft. This Agreement, the Joint Security
Agreement of even date and the Promissory Note evidencing the Loan have been
duly executed and delivered by authorized officers of Heartsoft, are valid and
binding agreements on the part of Heartsoft and are enforceable against
Heartsoft in accordance with their respective terms. All actions necessary to
the authorization, issuance and delivery of the Shares as contemplated by this
Agreement have been taken by Heartsoft.
4. Heartsoft agrees to take all necessary action to cause the issuance
of such stock to the Trust, including the issuance of appropriate instructions
to its transfer agent.
5. The Trust and Heartsoft agree that each will execute such other
documents as may be necessary or desirable in connection with the transactions
contemplated hereby including the Promissory Note and the Joint Security
Agreement.
6. This Agreement shall be governed by and construed in accordance with
the laws of the State of Oklahoma, without regard to the conflicts of laws
principles thereunder.
HEARTSOFT, INC.
By: /s/ Xxxxxxxx X. Xxxxx
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Xxxxxxxx Xxxxx, Chairman and CEO
ACCEPTED AND AGREED TO:
XXXX X. XXXXXXX REVOCABLE LIVING TRUST
By: /s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx, Trustee
Employer I.D. No.
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Date: November 9, 2000
