IBS SOFTWARE, INC.
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made this 31st day of January 1997 to be effective as
of December 31, 1996, between IBS Software, Inc., a California corporation (the
"Company") and EDnet, Inc., a Colorado corporation (the "Purchaser").
1. Sale of Stock. The Company hereby agrees to sell to the Purchaser
and the Purchaser hereby agrees to purchase an aggregate of Two Million
(2,000,000) shares of the Company's Series A Preferred Stock (the "Shares"), for
an aggregate purchase price of Six Hundred and Five Thousand Dollars ($605,000).
The rights, preferences and privileges of the Shares are provided in the Amended
and Restated Articles of the Company attached hereto as Exhibit A (the
"Articles").
2. Payment of Purchase Price. The purchase price for the Shares is
composed of the following: (a) previous expenditures made the Purchaser in
connection with the development of certain software by a predecessor to the
Company; and (b) the execution and delivery at the time of execution of this
Agreement of that certain license attached hereto as Exhibit B.
3. Issuance of Shares. Upon receipt by the Company of the purchase
price, the Company shall issue and deliver to the Purchaser a duly executed
certificate evidencing the Shares in the name of the Purchaser.
4. Representations and Warranties of the Company.
(a) The Company is a corporation duly organized and validly
existing under, and by virtue of, the laws of the State of California and is in
good standing under such laws. The Company has requisite corporate power and
authority to own and operate its properties and assets, and to carry on its
business as presently conducted.
(b) The Company has all requisite legal and corporate power
and authority to execute and deliver this Agreement. All corporate action on the
part of the Company, its officers, directors and shareholders necessary for the
authorization, execution and delivery of this Agreement shall be taken prior to
the execution of this Agreement.
(c) The Articles shall be filed with the California Secretary
of State prior to the execution of this Agreement.
(d) The Series A Preferred Stock that is being purchased by
the Purchaser hereunder, when issued, sold, and delivered in accordance with the
terms of this Agreement for the consideration expressed herein, will be duly and
validly issued, fully paid, and nonassessable, and will be free of restrictions
on transfer other than restrictions on transfer under
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this Agreement and under applicable state and federal securities laws. The
Common Stock issuable upon conversion of the Series A Preferred Stock being
purchased under this Agreement has been duly and validly reserved for issuance
and, upon issuance in accordance with the terms of the Articles, will be duly
and validly issued, fully paid, and nonassessable and will be free of
restrictions on transfer under this Agreement and under applicable state and
federal securities laws.
5. Investment Representations.
(a) In connection with the purchase of the Shares, the
Purchaser represents to the Company the following:
(i) It is aware of the Company's business affairs and
financial condition and has acquired sufficient information about the Company to
reach an informed and knowledgeable decision to acquire the securities. It is
purchasing these securities for investment for its own account only and not with
a view to, or for resale in connection with, any "distribution" thereof within
the meaning of the Securities Act of 1933 (the "Securities Act").
(ii) It understands that the securities have not been
registered under the Securities Act by reason of a specific exemption therefrom,
which exemption depends upon, among other things, the bona fide nature of its
investment intent as expressed herein. In this connection, it understands that,
in view of the Securities and Exchange Commission ("Commission"), the statutory
basis for such exemption may not be present if its representations meant that
its present intention was to hold these securities for a minimum capital gains
period under the tax statutes, for a deferred sale, for a market rise, for a
sale if the market does not rise, or for a year or any other fixed period in the
future.
(iii) It further acknowledges and understands that the
securities must be held indefinitely unless they are subsequently registered
under the Securities Act or an exemption from such registration is available. It
further acknowledges and understands that the Company is under no obligation to
register the securities. It understands that the certificate evidencing the
securities will be imprinted with a legend which prohibits the transfer of the
securities unless they are registered or such registration is not required in
the opinion of counsel for the Company.
(iv) It is aware of the adoption of Rule 144 by the
Commission, promulgated under the Securities Act, which permits limited public
resale of securities acquired in a non-public offering subject to the
satisfaction of certain conditions.
(v) It further acknowledges that in the event all of
the requirements of Rule 144 are not met, compliance with Regulation A or some
other registration exemption will be required; and that although Rule 144 is not
exclusive, the staff of the Commission has expressed its opinion that persons
proposing to sell private placement securities other than in a registered
offering and other than pursuant to Rule 144 will have a substantial burden of
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proof in establishing that an exemption from registration is available for such
offers or sales and that such persons and the brokers who participate in the
transactions do so at their own risk.
(b) The Purchaser agrees, in connection with the Company's
initial public offering of the Company's securities, (i) not to sell, make short
sales of, loan, grant any options for the purchase of, or otherwise dispose of
any shares of capital stock of the Company held by the Purchaser (other than
those shares included in the registration) without the prior written consent of
the Company or the underwriters managing such initial underwritten public
offering of the Company's securities for one hundred eighty (180) days from the
effective date of such registration and (ii) further agrees to execute any
agreement reflecting (i) above as may be requested by the underwriters at the
time of the public offering.
6. Purchaser's Rights.
(a) The Purchaser shall be entitled to the registration rights
equal to such rights afforded to future investors in the equity of the Company.
(b) The Purchase shall have a right of first refusal to
purchase its pro rata share of all Equity Securities (as defined below) that the
Company may, from time to time, propose to sell and issue after the date of this
Agreement. The term "Equity Securities" shall mean (i) any Common Stock,
Preferred Stock or other security of the Company, (ii) any security convertible,
with or without consideration, into any Common Stock, Preferred Stock or other
security (including any option to purchase such a convertible security), (iii)
any security carrying any warrant or right to subscribe to or purchase any
Common Stock, Preferred Stock or other security or (iv) any such warrant or
right. If the Company proposes to issue any Equity Securities, it shall give the
Purchaser written notice of its intention, describing the Equity Securities, the
price and the terms and conditions upon which the Company proposes to issue the
same. The Purchaser shall have fifteen (15) days from the giving of such notice
to agree to purchase its pro rata share of the Equity Securities for the price
and upon the terms and conditions specified in the notice by giving written
notice to the Company and stating therein the quantity of the Equity Securities
to be purchased.
(c) If either Xxxxxx Xxxxx or Xxxxxxx Xxxxxxx (a "Founder")
proposes to sell or transfer any shares of Common Stock or Preferred Stock, the
Founder shall promptly give written notice (the "Notice") to the Purchaser at
least thirty (30) days prior to the closing of such sale or transfer. The Notice
shall describe in reasonable detail the proposed sale or transfer including,
without limitation, the number of shares of stock to be sold or transferred, the
nature of such sale or transfer, the consideration to be paid, and the name and
address of each prospective purchaser or transferee. The Purchaser shall have
the right, exercisable upon written notice to such Founder within fifteen (15)
days after the Notice, to participate on a pro rata basis in such sale of stock
on the same terms and conditions. Such notice shall indicate the number of
shares of stock the Purchaser wishes to sell under its right to participate. Any
sale of stock in violation of this Section 6(c) shall be null and void.
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7. Legends. The share certificate evidencing the Shares issued
hereunder shall be endorsed with the following legends:
(a) "THE SHARES REPRESENTED BY THIS CERTIFICATE 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 AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS
NOT REQUIRED UNDER THE SECURITIES ACT OF 1933".
(b) Any legend required to be placed thereon by the California
Commissioner of Corporations or any other applicable state securities laws.
8. Adjustment for Stock Split. All references to the number of Shares
and the purchase price of the Shares in this Agreement shall be appropriately
adjusted to reflect any stock split, stock dividend or other change in the
Shares which may be made by the Company after the date of this Agreement.
9. General Provisions.
(a) This Agreement shall be governed by the internal laws of
the State of California. This Agreement represents the entire agreement between
the parties with respect to the purchase of the Shares by the Purchaser, may
only be modified or amended in writing signed by both parties and satisfies all
of the Company's obligations to the Purchaser with regard to the issuance or
sale of securities.
(b) Any notice, demand or request required or permitted to be
given by either the Company or the Purchaser pursuant to the terms of this
Agreement shall be in writing and shall be deemed given when delivered
personally or deposited in the U.S. mail, First Class with postage prepaid, and
addressed to the parties at the addresses of the parties set forth at the end of
this Agreement or such other address as a party may request by notifying the
other in writing.
(c) The rights and benefits of the Company under this
Agreement shall be transferable to any one or more persons or entities, and all
covenants and agreements hereunder shall inure to the benefit of, and be
enforceable by the Company's successors and assigns. The rights and obligations
of the Purchaser under this Agreement may only be assigned with the prior
written consent of the Company.
(d) Either party's failure to enforce any provision or
provisions of this Agreement shall not in any way be construed as a waiver of
any such provision or provisions, nor prevent that party thereafter from
enforcing each and every other provision of this Agreement. The rights granted
both parties herein are cumulative and shall not constitute a
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waiver of either party's right to assert all other legal remedies available to
it under the circumstances.
(e) The Purchaser agrees upon request to execute any further
documents or instruments necessary or desirable to carry out the purposes or
intent of this Agreement.
(f) SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS
AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE
STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR
RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO SUCH QUALIFICATION IS
UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE QUALIFICATION BY
SECTION 25100, 25102, OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS
OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH
QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS SO EXEMPT.
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of
the day and year first set forth above.
COMPANY: PURCHASER:
IBS SOFTWARE, INC. EDNET, INC.
a California corporation
By: /s/ Xxxxxx X. Xxxxx By: /s/ Xxx Xxxxxxxxx
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Title: Chairman Title: Chairman & CEO
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0000 Xxxxxxxx Xxxxx One Xxxxx Xxxxxx, 0xx Xxxxx
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(Address) (Address)
Xxxxxxxx Xxxx, XX 00000 Xxx Xxxxxxxxx, XX 00000
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The undersigned hereby consent to the terms of this Agreement:
/s/ Xxxxxx X. Xxxxx /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxx Xxxxxxx X. Xxxxxxx
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