STOCK AND WARRANT PURCHASE AGREEMENT
THIS STOCK AND WARRANT PURCHASE AGREEMENT (this "Agreement") is made as
of October 19, 2000, by and among EBIZ ENTERPRISES, INC., a Nevada corporation
(the "Company"), THE CANOPY GROUP, INC., a Utah corporation (the "Purchaser")
and JEM VENTURES EBIZ, LLC, a Delaware limited liability company (the "Seller").
RECITALS:
A. Purchaser desires to purchase 2,500,000 shares of the issued and
outstanding common stock of the Company (the "Shares");
B. Seller holds a debenture (the "Debenture") issued by the Company
that is convertible into shares of the Company's common stock;
C. Company desires to cause the holder of the Debenture to convert
the Debenture in accordance with its terms, and benefits from
such conversion as a result of a decrease in Company debt and
release of certain collateral securing the Debenture.
D. In order to accomplish the foregoing, the parties hereto hereby
make and enter into this Agreement.
AGREEMENT:
The parties hereby agree as follows:
1. PURCHASE AND SALE OF COMMON STOCK AND WARRANT
1.1 Purchase and Sale of Common Stock. Subject to the terms
and conditions of this Agreement, at the Closing, Purchaser agrees to purchase
from Seller and Seller agrees to sell to Purchaser the Shares for the purchase
price of $1.00 per share (the "Purchase Price"), for an aggregate purchase price
of $2,500,000, payable by wire transfer.
1.2 Issuance of Warrants. Subject to the terms and conditions
of this Agreement, at the Closing, the Company shall issue to Purchaser warrants
to purchase 850,000 shares of the common stock of the Company at $1.00 per share
and warrants to purchase an aggregate of 500,000 shares of Common Stock of the
Company at $1.10 per share (the "Warrants") and shall execute warrant agreements
in the forms attached hereto as Exhibit A and Exhibit B (collectively, the
"Warrant Agreements"). The shares of common stock issued to Purchaser pursuant
to the Warrant Agreements shall be hereinafter referred to as the "Warrant
Shares."
1.3 Closing; Deliveries.
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(a) The purchase and sale of the Shares and Warrants
shall take place at the offices of Purchaser on or before October 20, 2000, or
at such other time and place as the parties may mutually agree, orally or in
writing (which time and place are designated as the "Closing").
(b) At the Closing, Purchaser shall cause a wire
transfer in the amount of the Purchase Price to be made to a bank account
designated in writing by Seller.
(c) At the Closing, Seller shall deliver written
instructions for the conversion of portions of principal of the Debenture in
exchange for the Shares together with written instructions authorizing and
directing the Company to transfer the Shares into Purchaser's name on the books
of the Company.
(d) At the Closing, the Company shall deliver to
Purchaser the executed Warrant Agreements.
(e) At the Closing, the Company and Purchaser shall
execute an investors' rights agreement in the form attached hereto as Exhibit C
(the "Investor Rights Agreement"). ---------
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
As an inducement for the Purchaser to purchase the Shares, such
purchase being of material benefit to the Company, the Company hereby
represents, warrants and covenants to Purchaser as of the date of this Agreement
and as of Closing, the following:
2.1 Organization, Good Standing and Qualification. The Company
is a corporation duly organized, validly existing and in good standing under the
laws of the State of Nevada and has all requisite corporate power and authority
to carry on its business as now conducted and as proposed to be conducted. The
Company is duly qualified to transact business and is in good standing in each
jurisdiction in which the failure so to qualify would have a material adverse
effect on the business, properties, prospects, condition (financial or
otherwise) or results of operations of the Company and its subsidiaries taken as
a whole or on the consummation of any of the transactions contemplated by this
Agreement (a "Material Adverse Effect").
2.2 Authorization. All corporate action on the part of the
Company, its officers, directors and shareholders necessary for the
authorization, execution and delivery of this Agreement, the Warrant Agreements
and the Investor's Rights Agreement (this Agreement, the Warrant Agreements and
the Investor's Rights Agreement are collectively referred to herein as the
"Transaction Agreements"), the performance of all obligations of the Company
hereunder and thereunder and the authorization, issuance and delivery of the
Warrant Shares have been taken or will be taken prior to the Closing. Each of
the Transaction Agreements has been duly and validly executed and delivered by
the Company and each Transaction Agreement constitutes a valid and binding
obligation of the Company enforceable against it in accordance with its terms,
subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally and except as rights to indemnity and contribution may be
limited by federal or state securities laws or the public policy underlying such
laws.
2.3 Valid Issuance of Securities. The Shares, when issued upon
conversion of the Debenture as specified above, will be validly issued, fully
paid and nonassessable and free of restrictions on transfer. The Warrants and
the Warrant Shares, when sold, issued and delivered in accordance with the terms
hereof for the consideration expressed herein, will be validly issued, fully
paid and nonassessable and free of restrictions on transfer other than
restrictions on transfer under this Agreement and applicable state and federal
securities laws. Based in part upon the representations of Purchaser in this
Agreement, the Warrants and the Warrant Shares will be issued in compliance with
applicable federal securities and state securities laws.
2.4 Capitalization.
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(a) Authorized and Outstanding Capital Stock. The
authorized capital stock of the Company consists of: 70,000,000 shares of common
stock and 5,000,000 shares of preferred stock of which 22,596,544 shares of
common stock and 7,590 shares of preferred stock, designated as Series A 10%
Convertible Preferred are outstanding or have been designated to be issued by
the Company. The Company has outstanding stock options to purchase 1,507,450
shares of common stock and anticipates issuing additional options to purchase
5,400,000 shares of common stock. The Company has outstanding warrants to
purchase 5,308,254 shares of common stock. The Company has assumed debentures
outstanding that will be converted, with accrued interest, into 2,509,810 shares
of common stock in January 2001 and has outstanding the Debenture, which is
convertible into common stock at variable prices. The exercise price for each of
such outstanding options, warrants and debentures is accurately set forth on
Schedule 2.4(a) hereto.
(b) No Other Rights. Except as disclosed on Schedule
2.4(b) hereto, there are no preemptive, subscription, "call," right of first
refusal or other similar rights to acquire any capital stock or other voting
securities of the Company or any of its subsidiaries that have been issued or
granted to any person and no other obligations of the Company or any of its
subsidiaries to issue, grant, extend or enter into any security, option,
warrant, "call," right, commitment, agreement, arrangement or undertaking with
respect to any of their respective capital stock.
(c) Subsidiaries. Schedule 2.4(c) hereto lists all
the subsidiaries of the Company. Except as disclosed on Schedule 2.4(c) hereto,
the Company does not own or control, directly or indirectly, any interest in any
other corporation, partnership, limited liability company, unincorporated
business organization, association, trust or other business entity.
2.5 Reporting Company Status/Share Registration. The Company
has registered its common stock pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). The Company has
registered the Shares for resale by the Seller pursuant to the applicable
provision of the Securities Act of 1933, as amended ("Securities Act") and the
rules and regulations thereunder and has caused the registration statement
related to the Shares to be declared effective by the Securities and Exchange
Commission ("Commission"). Upon issuance, the certificate representing the
Shares will be issued free of any restrictive legend thereon.
2.6 Recent Stock Issuances. Schedule 2.6 hereto sets forth (i)
all issuances and sales by the Company since January 1, 2000, of its capital
stock, and other securities convertible into or exercisable or exchangeable for
capital stock of the Company, (ii) the amount of such securities sold, including
the amount of any underlying shares of capital stock, (iii) purchaser thereof,
and (iv) the amount paid therefor.
2.7 Issuance of Additional Stock, Options or Warrants.
Notwithstanding anything to the contrary contained in this Agreement, the
Company agrees that if it issues, during the next 18 months after Closing, any
additional common stock or warrants or options to purchase any additional common
stock of the Company (excluding common stock underlying any outstanding
debentures, options, warrants, convertible securities or the like), and if the
purchase price of the common stock or the strike or exercise price for the
warrants or options is less than the Purchase Price (the "Lesser Price"), then
the Company shall forthwith either (i) issue additional shares of common stock
to Purchaser sufficient to increase the number of shares Purchaser receives
under this Agreement to the amount it would have received if the Purchase Price
had been equal to the Lesser Price, or (ii) refund the difference in cash to
Purchaser.
2.8 Non-contravention. Except as set forth on Schedule 2.8,
the execution and delivery by the Company of the Transaction Agreements, the
issuance of the Shares, the issuance of the Warrants and the consummation by the
Company of the other transactions contemplated hereby and thereby, do not, and
compliance with the provisions of the Transaction Agreements will not, conflict
with, or result in any violation of, or default (with or without notice or lapse
of time, or both) under, or give rise to a right of termination, cancellation or
acceleration of any obligation or loss of a material benefit under, or result in
the creation of any lien upon any of the properties or assets of the Company or
any of its subsidiaries under, or result in the termination of, or require that
any consent be obtained or any notice be given with respect to, (i) the
Certificate of Incorporation or Bylaws of the Company or the comparable charter
or organizational documents of any of its subsidiaries, (ii) any loan or credit
agreement, note, bond, mortgage, indenture, lease, contract or other agreement,
instrument or permit applicable to the Company or any of its subsidiaries or
their respective properties or assets, or (iii) any law applicable to, or any
judgment, decree or order of any court or government body having jurisdiction
over, the Company or any of its subsidiaries or any of their respective
properties or assets.
2.9 Approvals. No authorization, approval or consent of any
court or public or governmental authority is required to be obtained by the
Company for the purchase and sale of the Shares or the issuance of the Warrants,
except such authorizations, approvals and consents as have been obtained by the
Company prior to the date hereof.
2.10 Commission Filings. The Company has properly and timely
filed with the Commission all reports, proxy statements, forms and other
documents required to be filed with the Commission under the Exchange Act since
January 2000 (the "Commission Filings"). As of their respective dates, (i) the
Commission Filings complied in all material respects with the requirements of
the Exchange Act and the rules and regulations of the Commission promulgated
thereunder applicable to such Commission Filings, and (ii) none of the
Commission Filings contained at the time of its filing 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 light of the
circumstances under which they were made, not misleading. The financial
statements of the Company included in the Commission Filings, as of the dates of
such documents, were true and complete in all material respects and complied
with applicable accounting requirements and the published rules and regulations
of the Commission with respect thereto, were prepared in accordance with
generally accepted accounting principles in the United States ("GAAP") (except
in the case of unaudited statements permitted under the Exchange Act) applied on
a consistent basis during the periods involved (except as may be indicated in
the notes thereto) and fairly presented the consolidated financial position of
the Company and its subsidiaries as of the dates thereof and the consolidated
results of their operations and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal year-end audit adjustments that
in the aggregate are not material and to any other adjustment described
therein).
2.11 Absence of Certain Changes. Except as disclosed in
Schedule 2.11, since the most recent date of the financial statements contained
in the Commission Filings, there has not occurred any change, event, development
or condition in the business, financial condition, prospects or results of
operations of the Company and the subsidiaries, having or reasonably likely to
have a Material Adverse Effect and the Company and its subsidiaries have
conducted their respective businesses only in the ordinary course.
2.12 Full Disclosure. There is no fact known to the Company
(other than general economic or industry conditions known to the public
generally) that has not been disclosed in writing to Purchaser that (i)
reasonably could be expected to have a Material Adverse Effect on the Company,
(ii) reasonably could be expected to materially and adversely affect the ability
of the Company to perform its obligations pursuant to the Transaction Agreements
or (iii) reasonably affect Purchaser's decision to purchase the Shares.
2.13 Absence of Litigation. Except as set forth on Schedule
2.13, there are (i) no suits, actions or proceedings pending or, to the
knowledge of the Company, threatened against the Company or any of its
subsidiaries, (ii) no complaints, lawsuits, charges or other proceedings pending
or, to the knowledge of the Company, threatened in any forum by or on behalf of
any present or former employee of the Company or any of its subsidiaries, any
applicant for employment or classes of the foregoing alleging breach of any
express or implied contract of employment, any applicable law governing
employment or the termination thereof or other discriminatory, wrongful or
tortious conduct in connection with the employment relationship, and (iii) no
judgments, decrees, injunctions or orders of any court or other governmental
entity or arbitrator outstanding against the Company or any subsidiary.
2.14 Absence of Events of Default. No "Event of Default" (as
defined in any agreement or instrument to which the Company is a party) and no
event which, with notice, lapse of time or both, would constitute an Event of
Default (as so defined), has occurred and is continuing.
2.15 Financial Statements; No Undisclosed Liabilities. The
Company has delivered to Purchaser true and complete copies of the audited
balance sheets of the Company as of June 30, 2000 and 1999, and the related
audited statements of income, changes in stockholders' equity and cash flows for
the fiscal year then ended including the related notes and schedules thereto
(the "Financial Statements"). The Financial Statements are complete and correct
in all material respects, have been prepared in accordance with GAAP, and fairly
present the financial position, results of operations and cash flows of the
Company as of the dates and for the periods indicated. For purposes hereof, the
balance sheet of the Company as of June 30, 2000 is hereinafter referred to as
the "Balance Sheet" and June 30, 2000 is hereinafter referred to as the "Balance
Sheet Date." The Company has no indebtedness, obligations or liabilities of any
material nature (whether accrued, absolute, contingent or otherwise, and whether
due or to become due), which was not fully reflected in, reserved against or
otherwise described in the Balance Sheet or the notes thereto or incurred in the
ordinary course of business consistent with the Company's past practices since
the Balance Sheet Date.
2.16 Compliance with Laws; Permits. Each of the Company and
its subsidiaries is in compliance with all laws, rules, regulations, codes,
ordinances and statutes (collectively, "Laws") applicable to it or to the
conduct of its business. The Company possesses all material permits, approvals,
authorizations, licenses, certificates and consents from all public and
governmental authorities which are necessary to conduct its business.
2.17 Related Party Transactions. Except as set forth in the
Commission Filings, neither the Company nor any of its officers, directors or
"Affiliates" (as such term is defined in Rule 12b-2 under the Exchange Act) nor
any family member of any officer, director or Affiliate of the Company has
borrowed any moneys from or has outstanding any indebtedness or other similar
obligations to the Company or any of the subsidiaries. Except as set forth in
the Commission Filings, neither the Company nor any of its officers, directors
or Affiliates nor any family member of any officer, director or Affiliate of the
Company (i) owns any direct or indirect interest constituting more than a 1%
equity (or similar profit participation) interest in, or controls or is a
director, officer, partner, member or employee of, or consultant or lender to or
borrower from, or has the right to participate in the profits of, any person or
entity which is (a) a competitor, supplier, customer, landlord, tenant, creditor
or debtor of the Company or any subsidiary, (b) engaged in a business related to
the business of the Company or any subsidiary, or (c) a participant in any
transaction to which the Company or any subsidiary is a party or (ii) is a party
to any contract, agreement, commitment or other arrangement with the Company or
any subsidiary.
2.18 Intellectual Property. The Company owns or possesses
adequate and enforceable rights to use all patents, patent applications,
trademarks, trademark applications, trade names, service marks, copyrights,
copyright applications, licenses, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems
or procedures) and other similar rights and proprietary knowledge (collectively,
"Intangibles") necessary for the conduct of its business as now being conducted.
The Company has all right, title and interest in all of the Intangibles, free
and clear of any and all liens, security interests or other encumbrances. The
Company is not infringing upon or in conflict with any right of any other person
with respect to any Intangibles. Except as disclosed on Schedule 2.13 hereto,
(i) no claims have been asserted by any individual, partnership, corporation,
unincorporated organization or association, limited liability company, trust or
other entity (collectively, a "Person") contesting the validity, enforceability,
use or ownership of any Intangibles, and the Company has no knowledge of any
basis for such claim, and (ii) neither the Company nor the subsidiaries has any
knowledge of infringement or misappropriation of the Intangibles by any third
party.
2.19 Contracts. All contracts, agreements, notes, instruments,
franchises, leases, licenses, commitments, arrangements or understandings,
written or oral (collectively, "Contracts") which are material to the business
and operations of the Company and the subsidiaries are in full force and effect
and constitute legal, valid and binding obligations of the Company and the
subsidiaries and, to the best knowledge of the Company, the other parties
thereto; the Company and the subsidiaries and, to the best knowledge of the
Company, each other party thereto, have performed in all material respects all
obligations required to be performed by them under the Contracts, and no
material violation or default exists in respect thereof, nor any event that with
notice or lapse of time, or both, would constitute a default thereof, on the
part of the Company and the subsidiaries or, to the best knowledge of the
Company, any other party thereto; none of the Contracts is currently being
renegotiated; and the validity, effectiveness and continuation of all Contracts
will not be materially adversely affected by the transactions contemplated by
this Agreement.
2.20 Registration Rights. Except as set forth on Schedule
2.20, no Person has, and as of the Closing, except as provided in the Investors'
Rights Agreement, no Person shall have, any demand, "piggy-back" or other rights
to cause the Company to file any registration statement under the Securities
Act, relating to any of its securities or to participate in any such
registration statement.
2.21 Business Plan. Any business information of the Company
previously submitted to Purchaser in any form, including the projections
contained therein, was prepared by the senior management of the Company in good
faith and is based on assumptions that the Company believes are reasonable.
Except as disclosed in writing to Purchaser, the Company is not aware of any
fact or condition that could reasonably be expected to result in the Company not
achieving the results described in such business plan.
2.22 Note Repayment. Within seven days of the Closing, Company
shall repay the indebtedness plus all accrued interest owed to Purchaser by
Company in the original principal amount of $500,000 and by LinuxMall, Inc. in
the original principal amount of $500,000. Purchaser agrees to extend the term
of payment of each note representing such indebtedness to the date seven days
from the Closing.
2.23 Board Representation. So long as Purchaser holds at least
1,875,000 of the Shares purchased under this Agreement or the Warrants (adjusted
for stock splits, stock dividends, recapitalization and similar capital
adjustments), Purchaser shall have the right to designate a person with the
approval of the Company which approval shall not be unreasonably withheld who
shall be appointed a member to the Company's Board of Directors. Upon
designation, Company shall cause such designee to be appointed to the Board of
Directors and shall use its best efforts to cause such designee (or successor
designee) to be reelected to as a member of the Board of Directors of the
Company. Upon exercise of Purchaser's right of designation, the Company may
increase the number of members of its Board of Directors by one from the then
existing total or may appoint such designee to fill any vacancy in the existing
Board of Directors. The initial person designated by Purchaser is Xxxxxx Love,
who has also been designated to serve as a member of the Company's Board of
Directors by Caldera Systems, Inc. In the event that Xxxxxx Love declines or
fails to serve as Purchaser's designee, or in the event Purchaser determines to
designate a different person, then the designee shall be such other person as
Purchaser shall designate with the approval of the Company which approval shall
not be unreasonably withheld. The designation of a person other than Xxxxxx Love
by Purchaser shall not affect or alter the rights of Caldera Systems, Inc. to
continue to designate Xxxxxx Love to serve as a member of the Board of Directors
of the Company.
2.24 No Misrepresentation. No representation or warranty of
the Company contained in this Agreement or any of the other Transaction
Agreements, any schedule, annex or exhibit hereto or thereto or any agreement,
instrument or certificate furnished by the Company to Purchaser pursuant to this
Agreement contains any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.
3. REPRESENTATIONS AND WARRANTIES OF SELLER
Seller hereby represents, warrants and covenants to the Company and the
Purchaser as of the date of this Agreement and as of Closing, the following:
3.1 Authorization. All action on the part of Seller and its
managers and members as necessary for the authorization, execution and delivery
of this Agreement and the performance of all obligations of Seller hereunder
have been taken or will be taken prior to the Closing.
3.2 Ownership. Seller owns all right, title and interest in
and to the Shares and the sale and transfer of the Shares to Purchaser in
accordance with the terms of this Agreement shall be free and clear of any
liens, security interests or other encumbrances, including any restrictions on
transfer imposed by federal or state securities law.
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser hereby represents, warrants and covenants to the Company and
the Seller as of the date of this Agreement and as of Closing, the following:
4.1 Authorization. All corporate action on the part of
Purchaser, its officers, directors and shareholders necessary for the
authorization, execution and delivery of the Transaction Agreements, the
performance of all obligations of Purchaser hereunder and thereunder has been
taken or will be taken prior to the Closing.
4.2 Purchase Entirely for Own Account; Ability to Bear Risk.
This Agreement is made with Purchaser in reliance upon Purchaser's
representation to the Company, which by Purchaser's execution of this Agreement,
Purchaser hereby confirms, that the Warrants and the Warrant Shares will be
acquired for investment for Purchaser's own account, not as a nominee or agent,
and not with a view to the resale or distribution of any part thereof, and that
Purchaser has no present intention of selling, granting any participation in, or
otherwise distributing the same. Purchaser further represents that it has not
been formed for the specific purpose of acquiring the Warrants or the Warrant
Shares, and Purchaser does not presently have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participation to such person or to any third person, with respect to the
Warrants or any portion of the Warrant Shares. Purchaser's present financial
condition is such that it is under no present or contemplated future need to
dispose of the Warrants or Warrant Shares, or any portion thereof to satisfy any
existing or contemplated undertaking, need, or indebtedness. Purchaser is
capable of bearing the economic risk and the burden of this venture, including,
but not limited to, the possibility of the complete loss of the purchase amount
and the limited transferability of the Warrants and the Warrant Shares, which
may make the liquidation of the Warrants and the Warrant Shares impossible for
the indefinite future.
4.3 Restricted Securities. Purchaser understands that the
Warrants and the Warrant Shares have not been, and will not be, registered under
the Securities Act, by reason of a specific exemption from the registration
provisions of the Securities Act which depends upon, among other things, the
bona fide nature of the investment intent and the accuracy of Purchaser's
representations as expressed herein. Purchaser understands that the Warrants and
Warrant Shares are characterized as "restricted securities" under the federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations the Warrants and the Warrant Shares may be resold without
registration under the Securities Act only in certain limited circumstances.
4.4 Legends. Purchaser understands that the Warrants and the
Warrant Shares, and any securities issued in respect thereof or exchange
therefor, may bear a restrictive legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 (THE "ACT") OR ANY
STATE SECURITIES LAWS IN RELIANCE UPON CERTAIN EXEMPTIONS FROM
REGISTRATION, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT
WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE
EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED
THERETO OR UNLESS THE COMPANY RECEIVED AN OPINION OF COUNSEL
SATISFACTORY TO IT THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER THE ACT.
In addition, the Warrants and the Warrant Shares, and any securities issued in
respect thereof or exchange therefor, may bear any legend required by the Blue
Sky laws of any state to the extent such laws are applicable to the Warrants or
the Warrant Shares represented by the certificate so legended.
4.5 Accredited Investor. Purchaser is an accredited investor
as defined in Rule 501 (a) of Regulation Dpromulgated under the Securities Act.
4.6 Knowledge and Experience. Purchaser is experienced in
evaluating and making speculative investments, and has the capacity to protect
its interests in connection with the purchase of the Warrants and the Warrant
Shares. Purchaser has such knowledge and experience in financial and business
matters in general, and investments in particular, that it is capable of
evaluating the merits and risks of its purchase of the Warrants and the Warrant
Shares.
4.7 Manner of Sale. Purchaser has had the opportunity to ask
questions of and receive answers from the Company concerning the terms and
conditions of this transaction. At no time was Purchaser presented with or
solicited by or through any leaflet, public promotional meeting, television
advertisement or any other form of general advertising.
5. CONDITIONS OF PURCHASER'S OBLIGATIONS AT CLOSING
The obligations of Purchaser to the Company and Seller under this
Agreement are subject to the fulfillment, on or before the Closing, of each of
the following conditions, unless otherwise waived:
5.1 Representations and Warranties. The representations and
warranties of the Company and the Seller contained in Sections 2 and 3,
respectively, shall be true and correct on and as of the Closing with the same
effect as though such representations and warranties had been made on and as of
the date of the Closing.
5.2 Performance. The Company and the Seller shall have
performed and complied with all covenants, agreements, obligations and
conditions contained in this Agreement that are required to be performed or
complied with by it on or before the Closing.
5.3 Qualifications. All authorizations, approvals or permits,
if any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful sale and transfer
of the Shares and the issuance of the Warrants pursuant to this Agreement shall
be obtained and effective as of the Closing.
5.4 Warrant Agreements. The Company shall have executed and
delivered the Warrant Agreements, in substantially the form attached hereto as
Exhibit A and Exhibit B.
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5.5 Investor's Rights Agreement. The Company and Purchaser
shall have executed and delivered the Investor's Rights Agreement, in
substantially the form attached hereto as Exhibit C.
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6. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING
The obligations of the Company to Purchaser and Seller under this
Agreement are subject to the fulfillment, on or before the Closing, of each of
the following conditions, unless otherwise waived:
6.1 Representations and Warranties. The representations and
warranties of Seller and Purchaser contained in Sections 3 and 4, respectively,
shall be true and correct on and as of the Closing with the same effect as
though such representations and warranties had been made on and as of the
Closing.
6.2 Performance. All covenants, agreements and conditions
contained in this Agreement to be performed by Purchaser and Seller on or prior
to the Closing shall have been performed or complied with in all material
respects.
6.3 Qualifications. All authorizations, approvals or permits,
if any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful sale and transfer
of the Shares and the issuance of the Warrants pursuant to this Agreement shall
be obtained and effective as of the Closing.
6.4 Debenture Modification. The Company and Seller have
executed and delivered the letter agreement, in substantially the form attached
hereto as Exhibit D.
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7. CONDITIONS OF THE SELLER'S OBLIGATIONS AT CLOSING
The obligations of the Seller to the Company and Purchaser under this
Agreement are subject to the fulfillment, on or before the Closing, of each of
the following conditions, unless otherwise waived:
7.1 Representations and Warranties. The representations and
warranties of the Company and Purchaser contained in Sections 2 and 4,
respectively, shall be true and correct on and as of the Closing with the same
effect as though such representations and warranties had been made on and as of
the Closing.
7.2 Performance. All covenants, agreements and conditions
contained in this Agreement to be performed by the Company and Purchaser on or
prior to the Closing shall have been performed or complied with in all material
respects.
7.3 Qualifications. All authorizations, approvals or permits,
if any, of any governmental authority or regulatory body of the United States or
of any state that are required in connection with the lawful sale and transfer
of the Shares and the issuance of the Warrants pursuant to this Agreement shall
be obtained and effective as of the Closing.
8. MISCELLANEOUS
8.1 Survival of Warranties. Unless otherwise set forth in this
Agreement, the warranties, representations and covenants of the Company and
Purchaser contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing.
8.2 Transfer; Successors and Assigns. The terms and conditions
of this Agreement shall inure to the benefit of and be binding upon the
respective successors and assigns of the parties. Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties
hereto or their respective successors and assigns any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, except as
expressly provided in this Agreement.
8.3 Governing Law. This Agreement and all acts and
transactions pursuant hereto and the rights and obligations of the parties
hereto shall be governed, construed and interpreted in accordance with the laws
of the State of Utah, without giving effect to principles of conflicts of law.
8.4 Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
8.5 Expenses. Each party to this Agreement shall pay its own
expenses incurred with respect to this Agreement, the documents referred to
herein and the transactions contemplated hereby and thereby, irrespective of
whether such transactions are consummated; provided, however, that if the
transactions are consummated, Company shall reimburse Purchaser up to $5,000 of
its legal fees incurred in the transaction.
8.6 Attorney's Fees. If any action at law or in equity
(including arbitration) is necessary to enforce or interpret the terms of any of
the Transaction Agreements, the prevailing party shall be entitled to reasonable
attorney's fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.
8.7 Entire Agreement. This Agreement, and the documents
referred to herein constitute the entire agreement between the parties hereto
pertaining to the subject matter hereof, and any and all other written or oral
agreements existing between the parties hereto are expressly canceled.
8.8 Other Agreements. Except as specifically set forth in this
Agreement, no provision herein shall adversely affect or be deemed a waiver of
the provisions of any other agreement of the parties or their rights and
obligation as set forth in such agreements.
8.9 Notices. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when received if
personally delivered; when transmitted if transmitted by telecopy; the day after
it is sent, if sent for next day delivery to a domestic address by recognized
overnight delivery service (e.g., Federal Express); and upon receipt, if sent by
certified or registered mail, return receipt requested. In each case notice
shall be sent to the parties at the addresses specified below their respective
signatures, or to such other addresses as the parties may specify in writing
from time to time.
[Signature page follows]
IN WITNESS WHEREOF, the parties have executed this Stock and Warrant
Purchase Agreement as of the date first written above.
COMPANY:
EBIZ ENTERPRISES, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Address: 00000 Xxxxx 00xx Xxx
Xxxxxxxxxx, Xxxxxxx 00000
SELLER:
JEM VENTURES EBIZ, LLC
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address: 000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxxxx 00000
PURCHASER:
THE CANOPY GROUP, INC.
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address: 000 Xxxx Xxxxxx Xxxxxx
Xxxx, Xxxx 00000
EXHIBIT A
WARRANT AGREEMENT
EXHIBIT B
WARRANT AGREEMENT
EXHIBIT C
INVESTOR'S RIGHTS AGREEMENT
EXHIBIT D
LETTER AGREEMENT REGARDING DEBENTURE
