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Exhibit 10.11
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into effective this 28th day of
June, 2000, by and between InteRosa, Inc., a Delaware corporation located at
0000 Xxxxxx Xxxxx, Xxxxxxxx Xxxxxxx, XX 00000, ("InteRosa" or the "Company"),
and XXXX.XXX, Inc., a Delaware corporation ("XXXX.XXX"). If not otherwise
designated, XXXX.XXX shall be referred to as the "INVESTOR". The term "Investor"
shall specifically be understood to include any successor, transferee or
assignee of Investor's rights under this Agreement or any other document or
instrument entered into pursuant hereto, as applicable.
RECITALS
WHEREAS, the Company has authorized the sale and issuance of up to an
aggregate of 1,432,662 shares (the "Shares") of its Series C Preferred Stock
(the "Preferred") to Investor;
WHEREAS, Investor desires to purchase the Shares on the terms and
conditions set forth herein; and
WHEREAS, the Company desires to issue and sell the Shares to the
Investor, on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises hereinafter set forth, the parties hereto agree as follows:
1. AGREEMENT TO SELL AND PURCHASE SHARES. Subject to the terms and
conditions hereof, at the Closing (as hereinafter defined), the Company hereby
agrees to issue and sell to the Investor the Shares and Investor agrees to
purchase from the Company the Shares at a purchase price of $1.745 per share.
The Shares have the rights, preferences and privileges set forth in the Second
Restated and Amended Certificate of Incorporation substantially in the form
attached hereto as EXHIBIT A (the "Amended Articles").
2. CLOSING. CLOSING. The closing for the sale and purchase of 1,432,662 Series C
Preferred Shares (the "Closing") shall take place at the offices of Xxxxxx
Xxxxxxx PC at 2:00 p.m. (Mountain Daylight Time) on June 28, 2000, or at such
other place and on such other date as may be mutually agreeable to the Company
and the Investor. At the Closing, subject to the terms and conditions hereof,
the Company will deliver to the Investor certificates representing the number of
Shares to be purchased at the Closing by the Investor, against payment of the
purchase price therefore by certified check or wire transfer of immediately
available funds.
3. APPLICATION OF INVESTMENT PROCEEDS: The proceeds of the Investment
shall be used by InteRosa substantially in accordance with the guidelines set
forth on EXHIBIT C or as otherwise determined by the Board of Directors
(including the representative elected by the Preferred).
4. GOVERNING LAW: This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado and the state and federal
courts located in Colorado shall have the exclusive jurisdiction and venue of
any litigation involving or construing this or any related agreement.
5. RIGHT OF FIRST REFUSAL: Investor shall have the right to participate
in any and all future rounds of financing as set forth in Section 4 the Investor
Rights Agreement substantially in the form attached hereto as EXHIBIT D (the
"Investor Rights Agreement").
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6. REGISTRATION RIGHTS AND INDEMNIFICATION: The Company shall grant
registration rights for the Shares as set forth in Section 2.2 of the Investor
Rights Agreement and indemnification rights set forth in Section 2.10 thereof.
7. COVENANTS, REPRESENTATIONS AND WARRANTIES OF THE COMPANY: Except as
specifically noted in EXHIBIT E (the "Schedule of Exceptions"), InteRosa
represents and warrants that the following provisions of this Section 7 are
complete, true and correct as of the date of signing this Agreement and as of
the date of closing hereof with the knowledge and expectation that Investor will
rely, and is relying, thereon in making this investment in InteRosa contemplated
by this Agreement.
a. Upon the filing of the Amended Articles, the authorized
capital stock of the Company consists of forty million (40,000,000) shares, of
which (i) the authorized Common Stock is thirty three million three hundred five
thousand (33,305,000) shares with a par value of $.001 per share; (ii) the
authorized Series A Preferred Stock is three million three hundred thousand
(3,300,000) shares with a par value of $.001 per share; (iii) the authorized
Series B Preferred Stock is one million three hundred ninety five thousand
(1,395,000) shares with a par value of $.001 per share; (iv) the authorized
Series C Preferred Stock is one million four hundred thirty two thousand six
hundred sixty two (1,432,662) shares with a par value of $.001 per share; and
(v) authorized but undesignated Preferred in the amount of five hundred sixty
seven thousand three hundred thirty eight (567,338) shares with a par value of
$.001 per share, none of which shall be issued as Common, Series A, B or C
Preferred Stock, or with any rights greater than the Series C stock without the
consent of the Investor. Prior to the Closing the following shares are issued
and outstanding:
Common Stock 1,104,618
Series A Preferred Stock 3,300,000
Series B Preferred Stock 1,080,000
The Company has reserved for issuance the following shares under the following
conditions:
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Shares Person Condition of Issuance
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1,432,662 Series C Preferred Investor At the Closing of this Agreement
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2,190,000 Common NSO options reserved for issuance Vesting and Exercise
outside the 1999 Stock Option Plan
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1,710,000 Common Options reserved for issuance under the Board Approval of Grants; Stockholder
1999 Stock Option Plan approval of Plan
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1,432,662 Common Investor Conversion of Series C Preferred Stock
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3,300,000 Common Envision Development Corporation Conversion of Series A Preferred Stock
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1,395,000 Common Envision Development Corporation and Conversion of Series B Preferred Stock
Rock and Warrants
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315,000 Series B Preferred Rock Exercise of Rock Warrants
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The Company initially reserved a total of 3,900,000 shares of Common Stock for
issuance upon option exercise. Prior to the adoption of the Company's Option
Plan, the Company granted a total of 2,190,000 NSO options to employees and
consultants at exercise prices between $.01 and $1.00, of which 994,848
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have been exercised. The remaining 1,710,000 were reserved for issuance pursuant
to the Company's Option Plan, of which 902,700 have been granted and of which
19,770 have been exercised.
b. InteRosa is a corporation duly organized, existing and in
good standing under the laws of the State of Delaware. InteRosa is duly licensed
or qualified to do business and is in good standing as a foreign corporation in
all jurisdictions where InteRosa's activities or ownership of assets would
require such licensing or qualification.
c. InteRosa has been duly authorized to enter into this
transaction with Investor and all actions on the part of InteRosa, its officers,
directors, agents and stockholders necessary and required for the execution,
delivery and performance of this Agreement have been taken such that this
Agreement and any documents issued pursuant hereto will be fully valid and
enforceable in accordance with their terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights, or (ii) as limited by
general principles of equity that restrict the availability of equitable
remedies. InteRosa has obtained any necessary consents to enter into this
Agreement and the transactions contemplated herein. InteRosa has, and from and
after the date hereof shall, reserve and keep available at all times, solely for
issuance and delivery upon conversion of the Shares sufficient shares to fully
discharge InteRosa's obligation to issue shares in the event of Investor's right
to convert any shares of Series C Preferred Stock held by it, including the
Shares. Further, InteRosa has, and from and after the date hereof shall reserve
and keep available at all times, sufficient shares to fully discharge InteRosa's
obligation to issue shares in the event of exercise of any rights contained in
any other convertible security issued by InteRosa, including but not limited to,
debentures, options or warrants, which security is outstanding at the time of
this Agreement or thereafter;
d. The Shares, when issued in compliance with the provisions
of this agreement, will be validly issued, fully paid and nonassessable and will
have the rights, preferences and privileges described in the Amended Articles.
The InteRosa Common Stock that the Preferred Stock is convertible into (the
"Conversion Stock") has been duly and validly reserved and, when issued in
compliance with the provisions of this Agreement and the Amended Articles, will
be validly issued, fully paid and nonassessable; and the Preferred Stock and
Conversion Stock will be free of any adverse claims (assuming that the Investor
is a "protected purchaser" within the meaning of C.R.S. 4-8-303) or preemptive
or similar rights; provided however that the Preferred Shares and the Conversion
Stock will be subject to restrictions on transfer under state and/or federal
securities laws as set forth herein;
e. This transaction has been reviewed by the InteRosa Board
and by legal counsel and is fair and commercially reasonable to InteRosa and to
all of its stockholders under all of the circumstances applicable to this
transaction at the time of its consummation;
f. InteRosa has made available to Investor all information
relating to its finances and plans which is material in making an investment in
InteRosa, specifically including the information listed on the attached EXHIBIT
F ("Due Diligence Materials"). InteRosa hereby certifies that such disclosures
have been complete, true and correct in all material respects and that there are
no contracts, agreements, circumstances, other financial information not
disclosed to Investor, or changes in business status and outlook which could
have any material effect upon InteRosa's business outlook, financial well-being
or Investor's decision to invest funds in InteRosa;
g. The list attached as EXHIBIT G (the "List of Stockholders
and Share Equivalent Holders") names or describes all Investors in InteRosa
stock, and of securities or instruments (including options) convertible or
exchangeable to InteRosa stock and of contractual rights to receive stock
(contingent or otherwise) and the number of shares or share-equivalents and
expiration dates pertainable thereto, as of the date of closing (excluding
issuances at the Closing);
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h. All offers, sales, and issuances of shares of InteRosa
stock, or of securities convertible into shares of InteRosa stock, outstanding
prior to the closing of this transaction are exempt from all registration
provisions of state and federal securities laws, rules, regulations, orders and
restrictions and have been effected in such a way that there are outstanding no
rights of rescission under state or federal law with respect to such offers
sales, and issuances;
i. This Agreement is not in conflict with any prior agreement,
instrument, security, or other document to which InteRosa is a party, or with
any obligation contained therein, and InteRosa's ability to enter into this
Agreement and issue the Preferred Stock required by this Agreement is not
limited in any way by any such agreement, instrument, security or other
document;
j. To the best of its knowledge, InteRosa owns or possesses,
or has made all necessary contractual or other arrangements to use, all patents,
designs, technical information and know-how necessary to economically produce
and distribute its software in commercial quantities for sale to unrelated
parties. To the best of its knowledge, InteRosa's proposed sale and continued
development of the software does not conflict with, or infringe on, any
intangible property rights of any type or sort whatsoever which are owned,
possessed or used by any third party.
k. There are no actions, investigations, litigation, charges,
suits, or other legal proceedings of any type or sort whatsoever, civil,
criminal or administrative, pending or threatened against InteRosa, nor is there
any basis for any such proceedings;
l. InteRosa is not a party to any agreements, contracts or
transactions from which it could expect to be exposed to any contingent
liability or obligation in excess of Fifty Thousand Dollars;
m. To the best of the Company's knowledge, no employee of the
company is in violation of any term of any employment contract, patent
disclosure agreement or any other contract or agreement relating to the
relationship of such employee with the Company or any other party because of the
nature of the business conducted or to be conducted by the Company;
n. The Company has no outstanding indebtedness for borrowed
money or owed money, and is not a guarantor or otherwise liable for any
indebtedness for borrowed or owed money. The Company is not indebted, directly
or indirectly, to any of its employees, officers, directors, or stockholders or
to their respective spouses or children, in any amount whatsoever other than
compensation accrued during the current payroll period as specifically itemized
by persons;
o. The Company has not made loans to any of its employees,
officers or directors;
p. Set forth in Section 7p. of the Schedule of Exceptions is a
list of all agreements, contracts, indebtedness, liabilities and other
obligations to which the Company is a party or by which it is bound that are
material to the conduct and operation of its business and properties, which
provide for payments to or by the company in excess of $10,000; which obligate
the company to share, license or develop any product or technology; or which
involve transactions or proposed transactions between the company and its
officers, directors, affiliates or any affiliate thereof. Copies of such
agreements have been and will continue to be made available for inspection by
Investor and its counsel;
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q. The Company has not incurred, and will not incur, directly
or indirectly, as a result of any action taken by the Company, any liability for
brokerage or finders' fees or agents' commissions or any similar charges in
connection with this agreement;
r. This Agreement with the exhibits hereto and the Company's
Business Plan included in the due diligence materials delivered to the Investor
do not contain any untrue statement of a material fact or omit to state any
material fact. The Business Plan and the financial projections contained in the
Business Plan were prepared in good faith; however, the Company does not warrant
that it will achieve such financial projections;
s. The Company maintains insurance policies as set forth in
Section S of the Schedule of Exceptions. Such policies are in full force and
effect;
t. The Company does not maintain or have any obligations with
respect to any employee benefit plan except as set forth in Section 7t. of the
Schedule of Exceptions;
u. The Company has all permits and licenses or other similar
authority necessary for the conduct of its business as now being conducted by it
and as planned to be conducted as described in the Business Plan;
v. The Company is not party to or aware of any voting trust,
voting agreement, stockholders agreement, pledge agreement, buy-sell agreement
or first refusal or preemptive rights agreement relating to securities of the
Company, or control positions in the company such as Board of Director seats.
8. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR: Investor represents
and warrants to the Company as of the Closing, as follows:
a. It has been duly authorized to enter into this transaction
with Company and all actions on the part of Itself, its officers, directors,
agents and stockholders necessary and required for the execution, delivery and
performance of this Agreement have been taken such that this Agreement and any
documents issued pursuant hereto will be fully valid and enforceable in
accordance with their terms except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other laws of general application
affecting enforcement of creditors' rights, or (ii) as limited by general
principles of equity that restrict the availability of equitable remedies.
Investor has obtained any necessary consents to enter into this Agreement and
the transactions contemplated herein.
b. It understands that the Shares have not been registered
under the Securities Act. Investor also understands that the Shares are being
offered and sold pursuant to an exemption from registration contained in the
Securities Act based in part upon Investor's representations contained in the
Agreement. Investor hereby represents and warrants as follows:
(i) It has substantial experience in evaluating and
investing in private placement transactions of securities in companies similar
to the Company so that it is capable of evaluating the merits and risks of its
investment in the Company and has the capacity to protect its own interests.
Investor must bear the economic risk of this investment indefinitely unless the
Shares are registered pursuant to the Securities Act, or an exemption from
registration is available.
(ii) Investor is acquiring the Shares for Investor's
own account for investment only, and not as a nominee and not with a view
towards their distribution. Investor's right to assign or
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designate its ownership without InteRosa approval shall be limited to an
assignment and/or distribution to affiliated entities who have substantially the
same beneficial ownership and control as Investor.
(iii) Investor or its counsel has received and read
the due diligence materials delivered to it by the Company and has had an
opportunity to discuss the Company's business, management and financial affairs
with directors, officers and management of the Company and has had the
opportunity to review the Company's operations and facilities. Investor has also
had the opportunity to ask questions of, and receive answers from, the Company
and its management regarding the terms and conditions of this investment and,
without limiting any of the representations of the Company, such questions have
been answered to the satisfaction of the Investor.
9. CONDITIONS PRECEDENT TO CLOSING:
a. Investor Conditions: The Initial Closing of the
transactions contemplated by this Agreement is expressly conditioned on the
following conditions precedent first being fully met to the reasonable
satisfaction of Investor; these conditions shall not apply to each Subsequent
Closing:
(i) Investor shall complete its due diligence review
of InteRosa's financial and business conditions and affairs, fully satisfying
itself with regard thereto;
(ii) InteRosa shall have procured from all key
management and employees employment agreements requiring said personnel to keep
all information regarding InteRosa's trade secrets confidential during their
employment by InteRosa and for a period of at least two years after they leave
InteRosa's employ;
(iii) There has been no material adverse change in
InteRosa's financial position, corporate structure, ownership, staffing, or
business;
(iv) InteRosa shall provide Investor at Closing with
an opinion of counsel in the form attached hereto as EXHIBIT H;
(v) The Amended Articles shall have been filed with
the Secretary of State of the State of Delaware.
b. Company Conditions: The Company's obligation to issue and
sell the Shares at the Closing and to issue the Rock Warrant at the Closing is
subject to the satisfaction, on or prior to the Closing, of the following
conditions:
(i) The representations and warranties made by the
Investor shall be true and correct in all material respects at the date of the
Closing;
(ii) The Amended Articles shall have been filed with
the Secretary of State of the State of Delaware and shall be in full force and
effect.
(iii) Investor shall have delivered to the Company
the purchase price for the Shares.
10. MISCELLANEOUS
a. SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, assigns, heirs,
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executors, and administrators of the parties hereto and shall inure to the
benefit of and be enforceable by each person.
b. ENTIRE AGREEMENT. This Agreement, the Exhibits and
Schedules hereto, the Investor Rights Agreement and the other documents
delivered pursuant to each such Agreement constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and no party shall be liable or bound to any other in any manner by any
representations, warranties, covenants and agreements except as specifically set
forth herein and therein. Notwithstanding the foregoing, an amendment, waiver,
discharge or termination enforceable against the Investor(s), may be obtained by
a written instrument signed by the holders of two-thirds of the then outstanding
Shares.
c. SEVERABILITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision hereof unless the effect of the declaration of invalidity or
unenforceabilty is to reduce the value of the Investor's investment, in which
event the court declaring any provision unenforceable shall be required to
reform the Agreement so as to protect the Investor from any reduction in the
value of its investment in a manner as nearly identical to the original
provision declared invalid as may be possible.
d. AMENDMENT AND WAIVER. Except as otherwise expressly
provided, this Agreement may be amended or modified only upon the written
consent of the Company and the Investor.
e. DELAYS OR OMISSIONS. It is agreed that no delay or omission
to exercise any right, power, or remedy accruing to any party, upon any breach,
default or noncompliance of the other party under this Agreement shall impair
any such right, power, or remedy, nor shall it be construed to be a waiver of
any such breach, default or noncompliance, or any acquiescence therein, or of
any similar breach, default or noncompliance thereafter occurring. It is further
agreed that any waiver, permit, consent, or approval of any kind or character on
any party's part of any breach, default or noncompliance under the Agreement or
any waiver on such party's part of any provisions or conditions of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, by law, or otherwise afforded to the parties, shall be cumulative and
not alternative.
f. NOTICES. All notices required or permitted hereunder shall
be in writing and shall be deemed effectively given: (a) upon personal delivery
to the party to be notified, (b) e-mail if confirmed under subsection (d) below,
(c) when sent by confirmed telex or facsimile if sent during normal business
hours of the recipient; if not, then on the next business day, (d) five (5) days
after having been sent by registered or certified mail, return receipt
requested, postage prepaid, or (e) one (1) day after deposit with a nationally
recognized overnight courier, specifying next day delivery, with written
verification of receipt. All communications shall be sent to the party to be
notified at the address as set forth above or at such other address as such
party may designate by ten (10) days advance written notice to the other parties
hereto.
g. ATTORNEYS' FEES. In the event that any suit or action is
instituted to enforce any provision in this Agreement, the prevailing party in
such dispute shall be entitled to recover from the losing party all fees, costs
and expenses of enforcing any right of such prevailing party under or with
respect to this Agreement, including without limitation, such reasonable fees
and expenses of attorneys and accountants, which shall include, without
limitation, all fees, costs and expenses of appeals.
h. TITLES AND SUBTITLES. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
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i. REPRESENTED BY COUNSEL. Company and Investor acknowledge
that Sparks Xxxxxxx Xxxxxx Xxxxxx and Xxxxxxx, PC ("Xxxxxx") is special counsel
to the Company for the purposes of this transaction, and that Sparks has not
undertaken representation of Investor in this, or any other, transaction. The
Company and Investor has been advised of the facts that Sparks represents
affiliates of the Company in unrelated transactions and hereby waive any
conflict of interest, if any.
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j. COUNTERPARTS. This Agreement may be executed in any number
of counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Stock and
Warrant Purchase Agreement as of the date set forth in the first paragraph
hereof.
COMPANY: INVESTORS:
INTEROSA, INC. XXXX.XXX, INC.
By: /s/ Xxxxx Xxxxxxxx By: /s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxx, CEO Printed Name: Xxxxx Xxxxxxxxx
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