EXHIBIT 10.2
KIBOGA / GREYSTONE
STOCK PURCHASE AGREEMENT
On this date May 16, 2001 (the "Agreement Date") GreyStone Technology
Inc. ("GTI"), a wholly owned subsidiary of GreyStone Digital Technology Inc.
("GSTN" or the "Lessee") agrees to lease from Kiboga Software Systems, Inc.
("Kiboga" or the "Lessor"), under the terms and conditions set forth below, the
exclusive right to receive 80% (eighty percent) of all revenues generated by the
Lessor (the "Kiboga Business").
TERM OF THE LEASE AGREEMENT
The Lease Agreement shall commence on the Agreement Date and be in
full force and effect until and including 5:00 PM CST April 30, 2100 (the
"Termination Date"). The terms and conditions of this Lease Agreement may only
be extended, abbreviated, or amended by written mutual agreement of the parties
to this Lease Agreement.
LESSEE'S RIGHTS UNDER THE LEASE AGREEMENT
The Lessee will have the right to use the Kiboga Software to conduct
and manage the Kiboga Business for the purpose of deriving the commercial
benefits and profit opportunities that an owner of the Kiboga Business can
reasonably expect to enjoy from providing software applications to the needs of
customers engaged in defense, law enforcement, and intelligence activities. The
Lessee assumes the costs, expenses, and liabilities of financing, operating, and
managing the Kiboga Business and has the right to receive 80% (eighty percent)
of the revenues and any and all profits that it may earn from the operation of
the Kiboga Business. The Lessor does not indemnify or guarantee the success of
the Kiboga Business (either directly or indirectly) or the costs, liabilities,
or risks of operating and managing the Kiboga Business in any way what so ever.
The Lessee will only assume Lessor's obligations to pay royalty's and fees under
existing agreements that the Lessor has disclosed to the Lessee as set forth in
Exhibit A attached hereto.
KIBOGA BUSINESS SUBJECT TO THE LEASE
The definition of "Kiboga Business" subject to the Lease Agreement
shall mean all applications of and developed from the Kiboga Software source
code that is used for the purposes of domestic, national, regional, state and
international government and law enforcement authorities and agencies, police
security and surveillance authorities, intelligence agencies and authorities,
and any and all domestic, national, state, and international military agencies,
departments and authorities. The applications of Kiboga software developed for
commercial and business customers by Elagent is not part of the
Kiboga Business. Kiboga Business subject to the lease also includes all other
sources of revenues that Kiboga (the "Lessor") generates from its business
activities including the revenues from any acquired entities.
LEASE PAYMENTS
The Lessee agrees to make the following payments to the Lessor for the
exclusive right to conduct and to benefit from the Kiboga Business.
1. Thirty days after the Agreement Date the Lessee will make a cash
payment of $700,000 to the Lessor its assignee.
2. On the Agreement Date the Lessee will make a payment to the Lessor of
15,000,000 shares of common stock of the Lessee subject to standard
anti-dilution provisions in favor of the Lessor.
3. At the first day of the twenty-fifth month following the Agreement
Date the Lessee will pay to the Lessor and additional number of shares
of common stock of the Lessee based upon the earnings before interest,
taxes, depreciation, amortization, and corporate overhead expenses
(EBITDAOH) that the Kiboga Business earns as accounted for according
to generally accepted accounting principles ("GAAP") and as determined
and audited by a recognized independent certified public accounting
firm. The number of shares issued shall be based upon the EBITDAOH
earned from the Kiboga Business over the first twenty-four months
following the Agreement Date as set forth on the schedule attached
hereto as Exhibit B. Such additional shares shall be issued to the
Lessor only if and when the EBITDAOH earned from the Kiboga Business
over the first twenty-four months following the Agreement Date is not
less than 50% of the Lessee's total EBITDAOH earned by the Lessee over
the first twenty-four months following the Agreement Date.
4. In the event that the Kiboga Revenues are less than $6,000,000 (six
million dollars) for the first twelve months immediately following
the Agreement Date the Lessor shall return 5,000,000 (five million)
shares of common stock of the Lessee to the Lessee.
The parties witness their agreement to the provisions of the Agreement below
subject to the approval by their respective boards of directors.
Kiboga Software Systems, Inc. GreyStone Digital Technology, Inc.
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxxxxx X. Xxxxx
------------------------- ------------------------------
Xxxx X Xxxxxx, CEO Xxxxxxx X. Xxxxx, Chmn and CEO
Date: May 16, 2001 Date: May 16, 2001
EXHIBIT A
LESSOR'S PRE-EXISTING OBLIGATIONS
TO BE ASSUMED BY
THE LESSEE
EXHIBIT B
ADDITIONAL COMMON SHARES THAT
LESSEE WILL ISSUE TO LESSOR
BASED UPON 24 MONTHS OF GAAP
EARNINGS (EBITDAOH) FROM
THE KIBOGA BUSINESS**
Shares to Issue to the If Kiboga Business over First
Lessor** 24 Months is:
------------------------------------------------------
0 $ 0
1,000,000 $ 8,572,727
2,000,000 $10,072,727
3,000,000 $11,572,727
4,000,000 $13,072,727
5,000,000 $14,572,727
6,000,000 $16,072,727
7,000,000 $17,572,727
8,000,000 $19,072,727
9,000,000 $20,572,727
10,000,000 $22,072,727
11,000,000 $23,572,727
12,000,000 $25,072,727
13,000,000 $26,572,727
14,000,000 $28,072,727
15,000,000 $29,572,727
** These number of additional shares are only issued if and when the EBITDAOH
earned from the Kiboga Business over the first 24 months after the Agreement
Date is not less than 50% of all EBITDAOH earned by the entire business of the
Lessee.
