STOCK PURCHASE AGREEMENT
Exhibit
10.34
THIS
STOCK PURCHASE AGREEMENT (this “Agreement”)
is dated as of February 11, 2010, and is entered into by and among each of the
investors whose names are set forth below (each individually, an “Investor”
and collectively, the "Investors")
and NeoMagic Corporation, a Delaware corporation (the “Company”),
with the Company and each of the Investors hereinafter being referred to
collectively as the “Parties”
and individually as a “Party.”).
RECITALS
WHEREAS,
subject to the terms and conditions set forth in this Agreement and pursuant to
Section 4(2) of the Securities Act of 1933, as amended (the “Act”),
the Company desires to issue and sell to each Investor, and each Investor
desires to purchase from the Company, common stock to be issued by the Company
as more fully described below in this Agreement, including the exhibits
hereto;
WHEREAS,
the Company and each Investor are executing and delivering this
Agreement in reliance upon an exemption from securities registration pursuant to
Section 4(2) and/or Rule 505 of Regulation D (“Regulation
D”) as promulgated by the U.S. Securities and Exchange Commission (the
“SEC”)
under the Act;
WHEREAS,
the Parties desire that, upon the terms and subject to the conditions contained
herein, including payment by the Investors, in accordance with Exhibit 1, of an
aggregate consideration of Three Hundred and Twenty Thousand Dollars (U.S.
$320,000), the Company shall issue and sell to Investors, and the Investors
shall purchase Six Million Four Hundred Thousand (6,400,000) Shares of the
Company’s common stock, par value $0.001 (the “Common
Stock)
WHEREAS,
the aggregate consideration payable by the Investors shall be based on a
purchase price of Five Cents ($.05) (the “Purchase
Price”) for one share of Common Stock, (the "Stock");
and
WHEREAS,
contemporaneously with the execution and delivery of this Agreement the Parties
may be executing and delivering other contemporaneous agreements executed by the
Parties, which together with this Agreement shall be collectively
referred to as the “Transaction
Documents”);
NOW,
THEREFORE, in consideration of the mutual agreements hereinafter set forth, and
such other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Parties hereto do hereby covenant, agree, represent
and warrant as follows:
ARTICLE
1
PURCHASE
AND SALE OF SECURITIES
1.1 Incorporation
of Recitals. The recitals to this
Agreement set forth above are hereby incorporated by reference into this
Agreement.
1.2 Purchase
of Stock. Subject to the satisfaction (or waiver) of the terms and
conditions of this Agreement, each Investor agrees to purchase at the Closing
and the Company agrees to sell and issue to such Investor at the Closing the
Stock set forth opposite its name in Exhibit 1 hereto.
1.3 Closing Date.
The closing (the “Closing”)
of the purchase and sale of the Common Stock shall take place at 11:00 a.m.,
Pacific Time on February 11, 2010, subject to any required notification of
satisfaction of the conditions to the Closing set forth herein, or on such later
date as is mutually agreed to by the Company and the Investors (the “Closing
Date”). The Closing shall occur on the Closing Date at the offices
of the Company at 0000-X Xxxx Xxxxx, Xxx Xxxx, Xxxxxxxxxx 95131(or such other
place as is mutually agreed to by the Company and the Investors).
1.4 Closing Deliveries.
(a) At the Closing, the Company
shall deliver or cause to be delivered to each Investor the following (the
“Company
Deliverable”):
(i)
irrevocable instructions addressed to the Company’s transfer agent instructing
it to issue a certificate or to make an appropriate book entry evidencing the
Shares, registered in the name of such Investor;
(b) At the Closing, each Investor
shall deliver or cause to be delivered to the Company the consideration set
forth below on the Investor's signature page, in immediately available funds, by
wire transfer to the following bank account:
NeoMagic
Corporation
Checking
account No. 4127386647
Xxxxx
Fargo Bank
000 Xxxx
Xxxxxx Xxxxx,
Xxx Xxxx,
Xx 00000
Routing
and Transit #ABA: 000000000
SWIFT:
XXXXXX0X
ARTICLE
2
REPRESENTATIONS
AND WARRANTIES
OF
THE INVESTORS
Each of
the Investors represents and warrants to the Company that, as of the date hereof
and as of the Closing:
2.1
Status of
Investor.
(a) Investor has such
knowledge and experience in financial and business matters that it is capable of
evaluating the merits and risks of an investment in the Stock.
(b)
Investor is an “accredited investor” as defined in Rule 501(a) under
the Act. Such Investor is not a registered broker-dealer under
Section 15 of the Securities Exchange Act of 1934, as amended (the "1934
Act").
(c)
Investor is acquiring the Stock as principal for its own account for investment
purposes only and not with a view to or with the intent of distributing or
reselling such Stock or any part thereof, without prejudice, however, to such
Investor’s right at all times to sell or otherwise dispose of all or
any part of such Stock in compliance with the one year holding period set forth
in Rule 144 promulgated under the Act and in compliance with other applicable
federal and state securities laws. Subject to the immediately preceding
sentence, nothing contained herein shall be deemed a representation or warranty
by such Investor to hold the Stock for any period of time. Such Investor
is acquiring the Stock hereunder in the ordinary course of its business.
Such Investor does not have any agreement or understanding, directly or
indirectly, with any person to distribute any of the Securities.
(d)
Investor has not directly or indirectly, nor has any person acting on behalf of
or pursuant to any understanding with such Investor, engaged in any transactions
in the securities of the Company (including, without limitation, any short sales
as defined in Rule 200 promulgated under Regulation SHO under the 1934 Act
and all types of direct and indirect stock pledges, forward sale contracts,
options, puts, calls, short sales, swaps and similar arrangements (including on
a total return basis), and sales and other transactions through non-US broker
dealers or foreign regulated brokers (“Short
Sales”) involving the Company’s securities) since the 30th day prior to
the date of this Agreement. Such Investor covenants that neither it nor
any person acting on its behalf or pursuant to any understanding with it will
engage in any transactions in the securities of the Company (including Short
Sales) prior to the time that the transactions contemplated by this Agreement
are publicly disclosed.
2.2 Access to
Information. Investor has been furnished with such materials and
has been given access to such information relating to the Company as it its
representative has requested and has been afforded the full opportunity to ask
questions regarding the Company and the Stock, all to the extent that the
Investor has found necessary to make an informed decision regarding the
Investor’s entering into this Agreement. In particular, Investor specifically
confirms that all of the Company's filings, including its Form10-K's, 10-Q and
8-K's for 2007 through the date hereof have been made available to the Investor
at xxx.xxx.xxx.
Investor also confirms that it has been advised that the proceeds of this
offering are to be utilized as provided in Section 4.1 below.
2.3 Understanding of
Risks Associated with the Acquisition of the Stock. Investor
understands that an investment in the Stock is speculative and subject to
numerous risks, including but not limited to the risks set forth in the
Company’s filings with the U.S. Securities and Exchange Commission under the
heading “Risk Factors.”
2.4 Understanding of
Nature of Stock. Investor understands
that:
(a)
the Stock have not been registered by the Company under the Act or any State Act
(as defined below), and the Company does not intend to register the Stock for
sale under the Act or any State Act in reliance, among other things, on the
exemptions from registration available under Regulation D and under Section
25102(f) of the California Corporate Securities Law of 1968, as
amended.
(b)
the shares of Stock are “restricted securities” as that term is defined in
Rule 144 under the Act.
(c) the
certificates, if any, evidencing the Stock shall include provisions
substantially in the form of the legend set forth below, which Investor has
read, understands and agrees to be bound by:
THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
OR UNDER APPLICABLE STATE SECURITIES ACTS (THE “STATE ACTS”). NOR IS SUCH
REGISTRATION CONTEMPLATED. SUCH SECURITIES MAY NOT BE SOLD, ASSIGNED,
PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED UNLESS REGISTERED UNDER THE ACT
OR THE STATE ACTS, EXCEPT UPON DELIVERY TO THE COMPANY OF AN OPINION OF COUNSEL
SATISFACTORY TO THE BOARD OF DIRECTORS OF THE COMPANY AND TO LEGAL COUNSEL FOR
THE COMPANY THAT REGISTRATION IS NOT REQUIRED FOR SUCH TRANSFER OR THE
SUBMISSION TO THE BOARD OF DIRECTORS AND SUCH COUNSEL SATISFACTORY EVIDENCE THAT
ANY SUCH TRANSFER WILL NOT BE IN VIOLATION OF THE ACT OR STATE ACTS OR ANY RULE
OR REGULATION PROMULGATED THEREUNDER.
(d) the
Company may, from time to time, make stop transfer notations in the Company’s
records to ensure compliance with the Act and any applicable State
Acts.
(e)
Investor agrees, prior to any transfer of the Stock, to give written notice to
the Company expressing its desire to effect such transfer and describing briefly
the proposed transfer. Upon receiving such notice, the Company shall
present copies thereof to counsel for the Company and the following provisions
shall apply:
(i)
If, in the opinion of such counsel, the proposed transfer of such Stock may be
effected without registration of such Stock under the Act and the State Acts,
the Company shall promptly thereafter notify the person desiring to transfer
such Stock, whereupon such person shall be entitled to transfer such Stock, all
in accordance with the terms of the notice delivered by such person to the
Company and upon such further terms and conditions as shall be required by the
Company to ensure compliance with the Act and the State Acts.
(ii)
If, in the opinion of such counsel, the proposed transfer of such Stock may not
be effected without registration of such Stock under the Act and the State Acts,
a copy of such opinion shall be promptly delivered to the person who has
proposed such transfer, and such proposed transfer shall not be made unless such
registration is then in effect.
2.5 Investment
Intent. Investor represents and warrants that:
(a)
Investor is acquiring the Stock for the Investor’s own account and not on behalf
of any other person.
(b)
Investor is the sole party in interest in this investment in the Stock and is
acquiring the Stock for investment and not for distribution or with the intent
of dividing Investor’s participation with others or of selling, assigning,
transferring or otherwise disposing of the Stock.
2.6 Further Assurances.
Investor will execute and deliver to the Company any document, or do any other
act or thing, which the Company may reasonably request in connection with the
acquisition or transfer of the Stock.
2.7 Non-disclosure. Except as expressly
permitted by its current non-disclosure agreement with the Company, Investor has
not distributed to any person any written materials furnished to Investor by the
Company.
2.8 Ability to
Bear Economic Risk. Investor has adequate means of providing for
its current needs and possible future contingencies, and has no need, and
anticipates no need in the foreseeable future, to sell the Stock which it is
acquiring pursuant to this Agreement. Investor is able to bear the economic
risks related to the acquisition of the Stock and, consequently, without
limiting the generality of the foregoing, is able to hold the Stock for an
indefinite period of time and has sufficient net worth to sustain a loss of its
entire interest in the Company in the event such loss should occur.
Investor has no need for liquidity with respect to the Stock being purchased
hereunder.
2.9 Tax Matters.
Investor has reviewed with Investor’s own tax advisors the federal, state, local
and foreign tax consequences arising in connection with the acquisition of the
Stock (including any tax consequences that may result under recently enacted tax
legislation). Investor is relying solely on such advisors and not on any
statements or representations of the Company or any of its agents and
understands that Investor (and not the Company) shall be responsible for
Investor’s own tax liability that may arise as a result of this
transaction.
2.10 Accuracy
of Representations. All of the representations and information
provided herein and any additional information that Investor has furnished to
the Company or its agents with respect to Investor’s financial position and
business experience is accurate and complete as of the date of this
Agreement. If there should be any material adverse change in any such
representation or information prior to the Closing, Investor will immediately
furnish accurate and complete information concerning any such material change to
the Company.
2.11 Piggyback Registration
Rights. If at any time following the Closing Date the Company
proposes to register any of the Stock under the Act (other than an underwritten
public offering or a registration on Form S-8 or S-4, or any successor
forms, relating to Common Stock issuable upon exercise of employee or consultant
stock options or otherwise in connection with any employee benefit or similar
plan of the Company or in connection with a direct or indirect acquisition by
the Company of another entity), whether or not for sale for its own account, the
Company shall each such time give prompt notice at least ten (10) days
prior to the anticipated filing date of the registration statement relating to
such registration to Investor, which notice shall offer Investor the opportunity
to include in such registration statement the number of shares of Stock such
Investor may request. Upon the request of Investor made within five
(5) days after the receipt of notice from the Company (which request shall
specify the number of shares of the Stock intended to be registered
by Investor, , the Company shall use all reasonable efforts to effect the
registration under the Act of all Stock that the Company has been so requested
to register by the Investors, to the extent requisite to permit the disposition
of the Stock so to be registered, provided that if, at any time after giving
notice of its intention to register any Stock pursuant to this Section 2.11 and
prior to the effective date of the registration statement filed in connection
with such registration, the Company shall determine for any reason not to
register such Stock, the Company shall give notice to Investor and, thereupon,
shall be relieved of its obligation to register any Stock in connection with
such registration. The obligations under this Section 2.11 shall expire
when all of the shares of Stock are saleable by Investors pursuant to
Rule 144 without limitation as to volume.
ARTICLE
3
REPRESENTATIONS
AND WARRANTIES
OF THE COMPANY
The
Company represents and warrants to each of the Investors that, as of the date
hereof and as of the Closing:
3.1 Issuance
of Stock. The issuance of the Stock has been duly authorized
by all necessary corporate action and, when paid for and issued in accordance
with the terms of the Transaction Documents, the Stock will be duly and validly
issued, free and clear of all liens and encumbrances of the
Company. Assuming the accuracy of each of the representations and
warranties set forth in Section 2 of this Agreement, the Company's offer and
issuance of the Stock to the Investors pursuant to this Agreement shall be
exempt from registration under the Act.
3.2 No
Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated thereby)will not (i) result in a violation of any
certificate of incorporation, certificate of designation or bylaws or any other
constituent document of the Company, or (ii) conflict with, or constitute a
default (or an event which with notice or lapse of time or both would become a
default) in any respect under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any material agreement, indenture or
instrument to which the Company is a party, or (iii) result in a violation of
any federal or state law, rule, regulation, order, judgment or decree (including
securities laws applicable to the Company) by which any property or asset of the
Company is bound or affected.
3.3 Consents. The
Company is not required to obtain any consent, authorization or order of, or
make any filing or registration with, any court, governmental agency or any
regulatory or self-regulatory agency or any other person in order for it to
execute, deliver or perform any of its obligations under or contemplated by the
Transaction Documents, in each case in accordance with the terms thereof, except
for (a) the filing with the SEC of (i) a Form D with respect to the transactions
contemplated hereby and (ii) any registration statements in accordance with
Section 2.11 and (b) the filing with the California Department of Corporations
of a Notice pursuant to Section 25102(f) of the California Corporate Securities
Act of 1968, as amended.
3.4 No
General Solicitation. Neither
the Company, nor any of its Affiliates( as defined below), nor any Person acting
on its or their behalf, has engaged in any form of general solicitation or
general advertising (within the meaning of Regulation D) in connection with the
offer or sale of the Stock.
3.5 Delisting
from NASDAQ; No Integrated Offering. The Company has been
delisted from NASDAQ. In addition, none of the Company any of their Affiliates,
and any person acting on their behalf has, directly or indirectly, made any
offers or sales of any security or solicited any offers to buy any security,
under circumstances that would require registration of the issuance of any of
the Stock under the Act, whether through integration with prior offerings or
otherwise. Neither the Company, its Affiliates and any person acting
on their behalf will take any action or steps referred to in the preceding
sentence that would require registration of the issuance of any of the Stock
under the Act or cause the offering of the Stock to be integrated with other
offerings.
3.6 SEC
Documents; Financial Statements. During the two (2) years
prior to the date hereof, the Company has filed all reports, schedules, forms,
statements and other documents required to be filed by it with the SEC pursuant
to the reporting requirements of the 1934 Act (all of the foregoing filed prior
to the date hereof and all exhibits included therein and financial statements,
notes and documents incorporated by reference therein being hereinafter referred
to as the "SEC
Documents"). True, correct and complete copies of the SEC
Documents have been made available to the Investors through the XXXXX
system. As of their respective filing dates, the SEC Documents
complied in all material respects with the requirements of the 1934 Act and the
rules and regulations of the SEC promulgated thereunder applicable to the SEC
Documents, and none of the SEC Documents, at the time they were filed with the
SEC, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. As of their respective filing dates, the financial
statements of the Company included in the SEC Documents complied as to form in
all material respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto. Such financial
statements have been prepared in accordance with generally accepted accounting
principles, consistently applied, during the periods involved (except (i) as may
be otherwise indicated in such financial statements or the notes thereto, or
(ii) in the case of unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly present in all
material respects the financial position of the Company as of the dates thereof
and the results of its operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end audit
adjustments).
3.7 Foreign
Corrupt Practices. Since January 1,
2007, neither the Company nor any director, officer, agent, employee or other
person acting on behalf of the Company has, in the course of its actions for, or
on behalf of, the Company (i) used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses relating to
political activity; (ii) made any direct or indirect unlawful payment to any
foreign or domestic government official or employee from corporate funds; (iii)
violated any provision of the U.S. Foreign Corrupt Practices Act of
1977, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence
payment, kickback or other unlawful payment to any foreign or domestic
government official or employee.
3.8 Xxxxxxxx-Xxxxx
Act. The Company is
currently exempt from most of requirements of the Xxxxxxxx-Xxxxx Act of
2002.
3.9
Employee
Relations The Company is in compliance with all federal, state and local
laws and regulations respecting labor, employment and employment practices and
benefits, terms and conditions of employment and wages and hours, except where
failures to be in compliance would not, in the aggregate, reasonably be expected
to result in a Material Adverse Effect (as defined in Section 3.12
below).
3.10 Intellectual
Property Rights
(a) The Company owns or possesses
adequate rights or licenses to use all trademarks, trade names, service marks
and all applications and registrations therefor, patents, patent rights,
copyrights, original works of authorship (including computer software) and all
applications and registrations therefor, inventions, trade secrets and other
intellectual property rights ("Intellectual Property
Rights")
necessary to conduct their respective businesses as now conducted.
(b) The
Company does not have any knowledge of any infringement by the Company of
Intellectual Property Rights of others. No claim, action or
proceeding has been brought, or to the knowledge of the Company, has been
threatened, by or against the Company regarding the infringement,
misappropriation or other violation of any Intellectual Property Rights, other
than any claim, action or proceeding which has since been
resolved. The Company is not aware of any existing facts which are
likely to give rise to any infringement of Intellectual Property Rights of
others or infringement claims, actions or proceedings. The Company
has taken reasonable security measures to protect the secrecy, confidentiality
and value of its material Intellectual Property Rights.
3.11 Internal
Accounting and Disclosure Controls. Subject to the disclosures contained
in the SEC Documents, the Company maintains a system of internal accounting
controls sufficient to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation of financial
statements in conformity with generally accepted accounting principles and to
maintain asset and liability accountability, (iii) access to assets or
incurrence of liabilities is permitted only in accordance with management's
general or specific authorization and (iv) the recorded accountability for
assets and liabilities is compared with the existing assets and liabilities at
reasonable intervals and appropriate action is taken with respect to any
difference. Subject to the disclosures contained in the SEC Documents , the
Company maintains disclosure controls and procedures (as such term is defined in
Rule 13a-14 under the 0000 Xxx) that are designed to ensure that information
required to be disclosed by the Company in the reports that it files or submits
under the 1934 Act is recorded, processed, summarized and reported, within the
time periods specified in the rules and forms of the SEC, including, without
limitation, controls and procedures designed to ensure that information required
to be disclosed by the Company in the reports that it files or submits under the
1934 Act is accumulated and communicated to the Company's management, including
its principal executive officer or officers and its principal financial officer
or officers, as appropriate.
3.12 Manipulation
of Price. The Company has not, and to its knowledge no one
acting on its behalf has, (i) taken, directly or indirectly, any action designed
to cause or to result, or that could reasonably be expected to cause or result,
in the stabilization or manipulation of the price of any security of the Company
to facilitate the sale or resale of any of the Stock, (ii), sold, bid for,
purchased, or paid any compensation for soliciting purchases of, any of the
Stock or (iii) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other stock of the Company.
3.13 Material
Adverse Effect. As used herein the
term, "Material
Adverse Effect" means any material adverse effect on the business,
properties, assets, operations, results of operations or financial condition of
the Company, taken as a whole, or on the transactions contemplated hereby or in
the other Transaction Documents, or on the authority or ability of the Company
to perform its obligations under the Transaction Documents.
ARTICLE
4
COMPANY
COVENANTS
4.1 Use of
Proceeds. The Company will
use the proceeds from the sale of the Stock for general corporate purposes,
including general and administrative expenses and payment of outstanding
liabilities, and not for the redemption or repurchase of any of its equity
securities.
4.2 Disclosure
of Transactions and Other Material Information. On or before
the fourth business day following the Closing Date, the Company shall issue a
press release and file a Current Report on Form 8-K, in compliance with
applicable SEC regulations.
ARTICLE
5
INDEMNIFICATION
The
Investors recognizes that the Company’s entering into this Agreement will be
based to a material extent upon the Investors' representations and warranties
set forth herein and Investors agree to indemnify and hold harmless the Company
and its officers, directors, counsel, employees and other agents from and
against any and all loss, damages, liabilities or expenses including reasonable
attorneys’ fees which any such person may incur by reason of or in connection
with any misrepresentation made by Investors in this Agreement or otherwise, any
breach by Investors of their agreements with the Company or any sale or
distribution of any Stock by Investors in violation of the Act or State
Acts. All representations and warranties of Investors contained in this
Agreement shall survive this Agreement.
ARTICLE
6
MISCELLANEOUS
PROVISIONS
6.1 Captions
and Headings. The Article and Section headings throughout
this Agreement are for convenience of reference only and shall in no way be
deemed to define, limit, or alter any provision of this Agreement.
6.2 Entire
Agreement; Amendment. This Agreement, together with any previously
executed non-disclosure agreements applicable to this transaction being entered
into at the Closing set forth the entire agreement and understanding of the
Parties and shall supersede all prior agreements and understandings. No
amendment of the Agreement shall be made without the express written consent of
the Parties.
6.3 Severability.
The invalidity or unenforceability of any particular provision of this Agreement
shall not affect any other provision hereof, and all other provisions hereof
shall continue to be enforceable to the maximum extent permitted by
law.
6.4 Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without reference to
principles of conflicts of laws.
6.5 Notices.
All notices, requests, demands, consents, and other communications hereunder
shall be transmitted in writing and shall be deemed to have been duly given when
hand-delivered or sent by certified mail, postage prepaid, with return receipt
requested, addressed to the Parties as follows:
To
the Company:
0000-X Xxxx Xxxxx, Xxx Xxxx, Xxxxxxxxxx
00000
Attention: President
and Interim Chief Executive Officer; and
To
each Investor:
As set forth on Exhibit 1
Any
Party may change its address for purposes of this Section by giving notice
as provided herein.
6.6 Counterparts. This
Agreement may be executed in two or more identical counterparts, all of which
shall be considered one and the same agreement and shall become effective when
all counterparts have been signed by each Party and delivered to the other
Parties; provided that a facsimile signature shall be considered due execution
and shall be binding upon the signatory thereto with the same force and effect
as if the signature were an original.
IN WITNESS WHEREOF, this
Agreement has been duly executed and delivered by the Parties hereto as of the
date first above written.
| NEOMAGIC CORPORATION | |
| By: | |
| Xxxx Xxxxx, President and Interim Chief Executive Officer | |
