EXHIBIT 10.1
BLUEBOOK INTERNATIONAL HOLDING COMPANY
SERIES C CONVERTIBLE REDEEMABLE PREFERRED STOCK PURCHASE AGREEMENT
August 19, 2002
BLUEBOOK INTERNATIONAL HOLDING COMPANY
SERIES C CONVERTIBLE REDEEMABLE PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES C CONVERTIBLE REDEEMABLE PREFERRED STOCK PURCHASE AGREEMENT
(the "Agreement") is made as of August 19, 2002, by and between The Bluebook
International Holding Company, a Delaware corporation (the "Company), Xxxx X.
Xxxxxxxxxx, Xxxxxx X. Xxxxxxxxxx, Xxxxxx X. Xxxxxxxxxx and Xxxxxxx X. Xxxxxxxxxx
(each, a "Founder" and collectively, the "Founders") and Cotelligent, Inc., a
Delaware corporation (the "Purchaser").
RECITALS
A. Purchaser desires to invest up to $3,000,000 in cash (a portion of which
may include the conversion of a bridge loan from Purchaser to the Company) and
up to $2,100,000 in forgiveness of accounts receivable for services rendered to
the Company, for a total investment of up to $5,100,000 in the Company in
exchange for shares of Series C Convertible Redeemable Preferred Stock $0.0001
par value (the "Stock").
Intending to incorporate the foregoing as binding, the parties hereby agree
as follows:
1. Purchase and Sale of Stock.
1.1 Sale and Issuance of Stock.
(a) The Company shall adopt and file with the Secretary of State
of Delaware on or before the First Closing (as defined below) the
Series C Certificate of Designation in the form attached hereto as
Exhibit A (the "Series C Certificate of Designation"), providing for
the rights, privileges and preferences of the Stock.
(b) Subject to the terms and conditions of this Agreement, the
Purchaser agrees to purchase at the First Closing and the Company
agrees to sell and issue to the Purchaser at the First Closing that
number of shares of Stock set forth opposite the Purchaser's name for
the First Closing on Schedule 1 at a purchase price of $0.959241 per
share for the total purchase price set forth opposite the Purchaser's
name on Schedule 1 (the "First Closing Purchase Price").
(c) Subject to the terms and conditions of this Agreement and the
fulfillments of the Company's obligations relating to the Second
Closing, Purchaser agrees to purchase at the Second Closing, and the
Company agrees to sell and issue to the Purchaser at the Second
Closing, that number of shares of Stock set forth opposite the
Purchaser's name for the Second Closing on Schedule 1 at a purchase
price of $0.959241 per share for the total purchase price set forth
opposite the Purchaser's name on Schedule 1 (the "Second Closing
Purchase Price").
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1.2 Closing; Delivery.
(a) The purchase and sale of the Stock pursuant to the First Closing
shall take place at the offices of Xxx, Xxxxxxx & Xxxxx LLP, counsel to the
Company, in Irvine, California, at 10:00 a.m. Pacific Daylight Savings Time
on August 19, 2002, or at such other time and place as the Company and the
Purchaser mutually agree, orally or in writing (the foregoing time and
place are designated as the "First Closing"). At the First Closing, the
Company shall deliver to the Purchaser a certificate representing the Stock
being purchased thereby against payment of the First Closing Purchase Price
therefor, by wire transfer to the trust account of Xxx, Xxxxxxx & Xxxxx
LLP, (cancellation of indebtedness) and if applicable, the original
Convertible Promissory Note dated July 29, 2002, with the Company as maker
and Purchaser as holder (the "Convertible Note") with a written Demand for
Conversion thereof.
(b) The purchase and sale of the Stock pursuant to the Second Closing
shall take place at the offices of Xxx, Xxxxxxx & Xxxxx LLP, counsel to the
Company, in Irvine, California, at 11:00 a.m. Pacific Daylight Savings Time
on the date five business days following the first sale of B.E.S.T. 7 as
evidenced by a copy of a fully-executed contract for such sale, or at such
other time and place as the Company and the Purchaser mutually agree,
orally or in writing (the foregoing time and place are designated as the
"Second Closing"). At the Second Closing, the Company shall deliver to the
Purchaser a certificate representing the Stock being purchased thereby
against payment of the Second Closing Purchase Price therefor, by wire
transfer to the Company's bank account or certified check payable to the
Company.
2. Representations and Warranties of the Company and the Founders. The
Company and each of the Founders hereby represents and warrants to the Purchaser
that, except as set forth in the Company's Schedule of Exceptions to
Representations and Warranties attached hereto as Schedule 2 (the "Disclosure
Schedule"):
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 Delaware and has all requisite corporate power and
authority to carry on its business as now conducted and as proposed to be
conducted, to execute and deliver this Agreement, the Investor Rights
Agreement in the form attached as Exhibit B (the "Investor Rights
Agreement") and the Alliance Agreement in the form attached as Exhibit C
(the "Alliance Agreement"), the Voting Agreement in the form attached as
Exhibit D (the "Voting Agreement") and the Right of First Refusal Agreement
in the form attached as Exhibit E (the "ROFR Agreement") and to issue and
sell the Series C Convertible Preferred Stock and to carry out the
provisions of this Agreement, the Investor Rights Agreement, the Alliance
Agreement, the Voting Agreement and the ROFR Agreement. 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
its business or properties.
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2.2 Capitalization.
(a) The authorized capital of the Company consists, or will consist,
immediately prior to the First Closing and the Second Closing of:
(i) Series B Convertible Preferred Stock. Two Thousand and Fifty
(2,050) shares of Series B Convertible Preferred Stock (the "Series B
Preferred") all of which are issued and outstanding immediately prior
to the First Closing and the Second Closing. The Company has reserved
1,900,000 shares of Common Stock for issuance upon conversion of the
Series B Preferred. The rights, privileges and preferences of the
Series B Preferred currently are as stated in the Series B Certificate
of Determination attached as Exhibit F (the "Series B Certificate of
Determination").
(ii) Common Stock. Fifty million (50,000,000) shares of Common
Stock ("Common Stock") of which Thirty-eight Million Seven Hundred
Thirty-three Thousand Four Hundred and Eleven (38,733,411) shares are
issued and outstanding immediately prior to the First Closing.
Concurrent with the First Closing and immediately prior to the Second
Closing (assuming with respect to the Second Closing no conversion of
the Series B Preferred or the Stock into Common Stock has occurred)
Twenty-eight Million Seven Hundred Thirty-Three Thousand Four Hundred
and Eleven (28,733,411) shares of Common Stock shall be issued and
outstanding.
(iii) Series C Convertible Redeemable Preferred Stock. 4,997,950
shares of Stock prior to the First Closing, none of which will be
issued and outstanding immediately prior to the First Closing and of
which only those issued in accordance with this Agreement will be
issued and outstanding immediately prior to the Second Closing, and
5,316,704 immediately prior to the Second Closing.
Except as set forth on the Disclosure Schedule, all of the shares
of (A) Series B Preferred, and (B) Common Stock issued on or after
October 1, 2001, are duly and validly authorized and issued, fully
paid and nonassessable and, were issued in compliance with the
registration or qualification provisions of the Securities Act of
1933, as amended (the "Act") and any relevant state securities laws or
pursuant to valid exemption therefrom.
(b) An accurate list of the Company's record shareholders and their
holdings as of August 15, 2002, is set forth in Section 2.2 of the
Disclosure Schedule.
(c) Except for the conversion privileges of the Series B Preferred as
set forth in the Series B Certificate of Determination (and the conversion
privileges to be provided for in the Series C Certificate of Designation)
and as otherwise set forth in Section 2.2 of the Disclosure Schedule, there
are no outstanding options, warrants, rights (including conversion or
preemptive rights) or agreements, orally or in writing, for the purchase or
acquisition from the Company of any shares of its capital stock. Except as
contemplated in the Voting Agreement, the Company is not a party or subject
to any agreement or understanding, and there is no agreement or
understanding between any persons that affects or relates to the voting or
giving of written consents with respect to any security or the voting by a
director of the Company.
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2.3 Subsidiaries. The Company does not currently own or control, directly
or indirectly, any interest in any other corporation, association or other
business entity except its wholly-owned subsidiary, The Bluebook International,
Inc.
2.4 Authorization. All action on the part of the Founders, and 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 Investor Rights Agreement, the ROFR Agreement, the Voting
Agreement and the Alliance Agreement (collectively, the "Ancillary Agreements"),
the performance of all obligations of the Company and the Founders hereunder and
thereunder and the authorization, issuance and delivery of the Stock has been
taken or will be taken prior to each of the First Closing and the Second
Closing, and this Agreement and each of the Ancillary Agreements, when executed
and delivered by the Company and the Founders, shall constitute valid and
legally binding obligations of the Company and the Founders, enforceable against
the Company and the Founders in accordance with their respective terms except
(i) as limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, and other laws of general application affecting
enforcement of creditor's rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief, or other equitable
remedies, or (iii) to the extent the indemnification provisions contained in the
Investor Rights Agreement may be limited by applicable federal or state
securities laws or public policy considerations. The Stock, when issued, sold
and delivered in compliance with the provisions of this Agreement, will be
validly issued and will be fully paid and nonassessable and will have the
rights, preferences and privileges described in the Series C Certificate of
Designation. The Stock will be free of restrictions on transfer other than the
restrictions on transfer under this Agreement, the Ancillary Agreements, and
under the applicable state and federal securities laws. The shares issuable upon
conversion of the Stock purchased under this Agreement have been duly and
validly reserved for issuance and, upon issuance in accordance with the terms of
the Series C Certificate of Designation, will be validly issued, fully paid and
nonassessable and will be free of restrictions on transfer other than
restrictions on transfer under this Agreement, the Ancillary Agreements, and
under applicable securities laws.
2.5 Governmental Consents. No consent, approval, order or authorization of,
or registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority or other third party on the part
of the Company is required in connection with the consummation of the
transactions contemplated by this Agreement, except (i) the filing of the Series
C Certificate of Designation with the Delaware Secretary of State, (ii) approval
of an amendment to the Series B Certificate of Designation by all of the holders
of Series B Preferred, and (iii) such filings as may be required under
applicable state and federal securities laws, which filings will be timely filed
within the applicable periods therefor.
2.6 Litigation. There is no action, suit, claim, proceeding or
investigation pending in any court or agency to which the Company has received
service or other notice, or to the best of Company's knowledge, currently
overtly threatened against the Company, that questions the validity of this
Agreement and the Ancillary Agreements or the right of the Company to enter into
each of such agreements, or to consummate the transactions contemplated hereby
or thereby, or that might result, either individually or in the aggregate, in
any material adverse changes in the assets, condition or affairs of the Company,
financially or otherwise, or
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any change in the current equity ownership of the Company and, to the Company's
knowledge, there is no reasonable basis for any such action, suit, claim,
proceeding or investigation. The Company is not a party or subject to the
provisions of any order, writ, injunction, judgment or decree of any court or
government agency or instrumentality. There is no action, suit, proceeding or
investigation by the Company currently pending or which the Company intends to
initiate.
2.7 Registration Rights. Except as contemplated in the Investor Rights
Agreement, the Company has not granted or agreed to grant any registration
rights, including piggyback rights, to any person or entity.
2.8 Intellectual Property.
(a) Except as otherwise set forth in Section 2.8 of the Disclosure
Schedule, the Company owns or possesses sufficient legal rights to all
copyrights, trade secrets, licenses, information and proprietary rights and
processes, patents, trademarks, service marks and trade names necessary for its
business as currently conducted without any conflict with, or infringement of,
the rights of others. There are no outstanding options, licenses or agreements
of any kind relating to the foregoing, nor is the Company bound by or a party to
any options, licenses or agreements of any kind with respect to patents,
trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information, proprietary rights and processes of any other person or entity. The
Company has not received any communications alleging that the Company has
violated or, by conducting its business, would violate any of the patents,
trademarks, service marks, trade names, copyrights, trade secrets or other
proprietary rights or processes of any other person or entity and, to the
Company's knowledge, there are no such claims which are reasonably likely to be
asserted against the Company, or which have been asserted against others by any
person challenging the Company's use or distribution of any trademarks, trade
names, copyrights, works of authorship, trade secrets, software, technology,
know-how or processes utilized by the Company or challenging or questioning the
validity or effectiveness of any license or agreement relating thereto.
(b) To the Company's knowledge, none of its employees is obligated under
any contract (including licenses, covenants or commitments of any nature) or
other agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with the use of such employee's best
efforts to promote the interest of the Company or that would conflict with the
Company's business. Neither the execution or delivery of this Agreement, nor the
carrying on of the Company's business by the employees of the Company, nor the
conduct of the Company's business as proposed, will, to the Company's knowledge,
conflict with or result in a breach of the terms, conditions, or provisions of,
or constitute a default under, any contract, covenant or instrument under which
any such employee is now obligated. The Company does not believe it is or will
be necessary to use any inventions of any of its employees (or persons it
currently intends to hire) made prior to their employment by the Company.
(c) The Company has at all times used commercially reasonable efforts to
treat its trade secrets as confidential and has not disclosed or otherwise dealt
with such items in such a manner as to cause the loss of such trade secrets by
release into the public domain.
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2.9 Compliance with Other Instruments. To the Company's knowledge. the
Company is not in violation or default of any provisions of its certificate of
incorporation or bylaws or of any instrument (including any mortgages,
indentures, loan agreements, agreements, contracts), judgment, order, writ,
decree or contract to which it is a party or by which it is bound or of any
provision of federal or state statute, rule or regulation applicable to the
Company. The execution, delivery and performance of this Agreement and the
Ancillary Agreements and the consummation of the transactions contemplated
hereby or thereby will not result in any such violation or be in conflict with
or constitute, with or without the passage of time and giving of notice, either
a default under any such provision, instrument (including any mortgages,
indentures, loan agreements, agreements, contracts), judgment, order, writ,
decree or contract that, to the Company's knowledge, the Company is bound. or an
event which results in the creation of any lien, charge or encumbrance upon any
assets of the Company or the suspension, revocation, impairment, forfeiture or
non-renewal of any material permit, license, authorization, or approval
applicable to the Company, its business or operations or any of its assets or
properties.
2.10 Financial Statements. The Company has made available to the Purchaser
its unaudited balance sheet as of June 30, 2002, and its unaudited income
statement for the six months ended June 30, 2002, attached hereto as Schedule
2.10 and its audited financial statements for the year ended December 31, 2001
(collectively, the "Financial Statements"). The Financial Statements have been
prepared in accordance with general accepted accounting principles applied
consistently throughout the periods indicated and with each other. The Financial
Statements fairly present the financial condition and operating results of the
Company as of the dates, and for the periods, indicated therein. Except as set
forth in the Financial Statements and as evidenced by the Convertible Note, the
Company has no material liabilities, contingent or otherwise, other than (i)
liabilities incurred in the ordinary course of business subsequent to June 30,
2002, or (ii) obligations under contracts and commitments incurred in the
ordinary course of business and not required under United States generally
accepted accounting principles to be reflected in the Financial Statements,
which, in both cases, individually and in the aggregate, are not material to the
financial condition or operating results of the Company.
2.11 Changes. Except as otherwise set forth in the Disclosure Schedule,
since June, 2002, there has not been:
(a) any change in the assets, liabilities, financial condition or
operating results of the Company from that reflected in the Financial
Statements, except changes in the ordinary course of its business that have
not been, in the aggregate, materially adverse to the Company;
(b) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the business, properties,
prospects, or financial condition of the Company;
(c) any waiver or compromise by the Company of a valuable right or of
a material debt owed to it;
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(d) any satisfaction or discharge of any lien, claim, or encumbrance
or payment of any obligation by the Company, except in the ordinary course
of its business and that is not material to the business, properties,
prospects or financial condition of the Company;
(e) any change to a material contract or agreement by which the
Company or any of its assets is bound or subject or any new material
contract to which the Company or any of its assets is bound or subject;
(f) any material change in any compensation arrangement or agreement
with any employee, officer, director or shareholder other than in the
ordinary course of its business;
(g) any sale, assignment or transfer of any of the Company's patents,
trademarks, copyrights, trade secrets or other intangible assets, except
licenses in the ordinary course of business;
(h) any resignation or termination of employment of any officer or key
employee of the Company; and the Company is not aware of any impending
resignation or termination of employment of any such officer or key
employee;
(i) any mortgage, pledge, transfer of a security interest in, or lien,
created by the Company, with respect to any of its material properties or
assets, except liens for taxes not yet due or payable;
(j) any loans or guarantees made by the Company to or for the benefit
of its employees, officers or directors, or any members of their immediate
families, other than travel advances and other advances made in the
ordinary course of its business and not in excess of $5,000 in the
aggregate;
(k) except as contemplated by or otherwise expressly set forth in this
Agreement, any declaration, setting aside or payment or other distribution
in respect to any of the Company's capital stock, or any direct or indirect
redemption, purchase, or other acquisition of any of such stock by the
Company;
(l) to the Company's knowledge, any other event or condition of any
character that might materially and adversely affect the business,
properties, prospects or financial condition of the Company;
(m) any amount borrowed or incurred, nor has the Company become
subject to any liability (absolute or contingent), except liabilities under
contracts entered into or incurred in the ordinary course of its business;
(n) any material change in the manner of business or operations of the
Company; or
(o) any arrangement or commitment by the Company to do any of the
things described in this Section 2.11.
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2.12 No Brokers or Finders. Except for any fees owed to Amerivet
Securities, Inc. pursuant to a letter agreement with the Company dated
September, 2001, no person has or will have, as a result of the transactions
contemplated by this Agreement, any right, interest or claim against or upon the
Company for any commission, fee or other compensation as a finder or broker
because of any act or omission by the Company.
2.13 Related Party Transactions. Except as disclosed in the Financial
Statements or the Disclosure Schedule, the Company is not indebted, directly or
indirectly, to any of its officers, directors, or any person owning 5% or more
of the capital stock of the Company, or to their respective spouses or children,
in any amount whatsoever other than in connection with expenses or advances of
expenses incurred in the ordinary course of business or relocation expenses of
employees. Except as set forth on the Disclosure Schedule, none of the Company's
officers, directors, or any person known to the Company to own 5% or more of the
capital stock of the Company, or any members of their immediate families, are,
directly or indirectly, indebted to the Company or have any direct or indirect
ownership interest in any firm or corporation with which the Company is
affiliated or, to the Company's knowledge, any firm or corporation which
competes with the Company, except that officers, directors and/or shareholders
of the Company or any subsidiary may own stock in (but not exceeding one percent
of the outstanding capital stock of) any publicly traded companies that may
compete with the Company. None of the Company's officers, directors, or any
person known to the Company to own 5% or more of the capital stock of the
Company, or any members of their immediate families are, directly or indirectly,
interested in any material contract with the Company. The Company is not a
guarantor or indemnitor of any indebtedness of any other person, firm or
corporation, nor has the Company assured any indebtedness for any other person.
2.14 Agreements; Actions.
(a) Except for the agreements explicitly contemplated by the Ancillary
Agreements, there are no agreements, understandings or proposed transactions
between the Company and any of its officers, directors, affiliates, or any
affiliate thereof.
(b) Except for agreements explicitly contemplated by this Agreement or the
Ancillary Agreements or as otherwise disclosed in Section 2.14 of the Disclosure
Schedule (the "Contracts"), there are no agreements, understandings,
instruments, contracts or proposed transactions to which the Company is a party
or by which it is bound that involve obligations (contingent or otherwise) of,
or payments to, the Company in excess of $50,000 and that cannot be terminated
upon thirty (30) days notice. Copies of all of the Contracts have been made
available to the Purchaser. To the Company's knowledge, all of the Contracts are
valid and binding obligations of the Company, as the case may be, and in full
force and effect in all material respects and enforceable by the Company, as the
case may be, in accordance with their respective terms in all material respects,
except as such enforceability may be limited (i) by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, and other laws of
general application affecting enforcement of creditors' rights generally, or
(ii) by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies. The Company is not in material default
under any of such Contracts. To the Company's knowledge, no other party to any
of the Contracts is in material default thereunder.
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(c) Except as disclosed in Section 2.14 of the Disclosure Schedule, the
Company has not (i) declared or paid any dividends, or authorized or made any
distribution upon or with respect to any class or series of its capital stock,
(ii) incurred any indebtedness for money borrowed or incurred any other
liabilities individually in excess of $25,000 or in excess of $50,000 in the
aggregate, (iii) made any loans or advances to any person, other than ordinary
advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of
any of its assets or rights, other than the sale of its inventory in the
ordinary course of business.
2.15 Offering. Subject in part to the truth and accuracy of Purchaser's
representations set forth in this Agreement, the offer, sale and issuance of the
Stock and Common Stock issuable upon the conversion thereof as contemplated by
this Agreement are exempt from the registration requirements of the 1933 Act,
and neither the Company nor any authorized agent acting on its behalf will take
any action hereafter that would cause the loss of such exemption.
2.16 Disclosure. The Company has fully provided the Purchaser with all the
information that the Purchaser has requested for deciding whether to acquire the
Stock and all information that the Company believes is reasonably necessary to
enable the Purchaser to make such a decision. No representation or warranty of
the Company contained in this Agreement and the schedules and exhibits attached
hereto (when read together) contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances under
which they were made.
2.17 Title to Property and Assets. Section 2.17 of the Disclosure Schedule
sets forth the addresses and uses of all real property that the Company owns,
leases or subleases, and in the case of each lease or sublease, specifies the
name of the lessor or sublessor, as the case may be, and the lease term. Copies
of all leases have been made available to the Purchaser if so requested. The
Company owns its property and assets free and clear of all mortgages, liens,
loans and encumbrances, except such encumbrances and liens which arise in the
ordinary course of business and do not materially impair the Company's ownership
or use of such property or assets. There are no defaults by the Company nor, to
its knowledge, by any other party thereto, which might curtail in any material
respect the current use of the Company's property listed in Section 2.17 of the
Disclosure Schedule. With respect to the property and assets it leases, the
Company is in compliance with such leases and holds a valid leasehold interest
free of any liens, claims or encumbrances created by or through the Company.
2.18 Permits. The Company has all franchises, permits, licenses, and any
similar authority necessary for the conduct of its business as now being
conducted by it, the lack of which could materially and adversely affect the
business, properties, prospects or financial condition of the Company and
believes it can obtain, without undue burden or expense, any similar authority
for the conduct of its business as planned to be conducted. The Company is not
in default in any material respect under any such franchises, permits, licenses
or similar authority.
2.19 Manufacturing and Marketing Rights. Except as set forth in the
Disclosure Schedule, the Company has not granted rights to license, market, or
sell its products
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to any other person and is not bound by any agreement that affects the
Company's exclusive right to develop, distribute, market, or sell its
products.
2.20 Labor Agreements and Actions. There is no strike, or labor
dispute or union organization activities pending or threatened between the
Company and its employees. None of the Company's employees belongs to any
union or collective bargaining unit. To the Company's knowledge, the
Company has complied in all material respects with all applicable state and
federal equal employment opportunity and other laws related to employment,
and the Company has not received notice of any claims to the contrary. No
employee of the Company is in violation of any judgment, decree or order,
or any term of any employment contract, patent disclosure agreement or
other contract or agreement relating to the relationship of any such
employee with the Company or any other party because of the nature of the
business conducted or to be conducted by the Company or to the utilization
by the employee of his best efforts with respect to such business. Except
for the employment agreements identified on the Disclosure Schedule (the
"Employment Agreements"), the Company is not party to or bound by any
currently effective employment contract, deferred compensation agreement,
bonus plan, incentive plan, profit sharing plan, retirement agreement, or
other employee compensation agreement. The Company is not aware that any
officer or key employee or that any group of key employees, intends to
terminate their employment with the Company, nor does the Company have a
present intention to terminate the employment of any of the foregoing.
Except as subject to the Employment Agreements, the employment of each
officer and employee of the Company is terminable at the will of the
Company.
2.21 Employee Benefit Plans. The Company does not have any Employee
Benefit Plans as defined in the Employee Retirement Income Security Act of
1974.
2.22 Tax Returns, Payments, and Elections. The Company has filed all
tax returns and reports as required by law. The returns and reports filed
on or after October 1, 2001, are true and correct in all material respects
and to the knowledge of the Company, the returns and reports filed prior to
October 1, 2001, are true and correct in all material respects. The Company
has paid all taxes and other assessments dues, except those contested by it
in good faith or not yet past due. The provision for taxes of the Company
as shown in the Financial Statements is adequate for taxes due or accrued
as of the date thereof. The Company has not elected pursuant to the
Internal Revenue Code of 1986, as amended (the "Code"), to be treated as an
S corporation or a collapsible corporation pursuant to Section 341(f) of
Section 1362(a) of the Code, nor has it made any other elections pursuant
to the Code (other than elections which relate solely to methods of
accounting, depreciation or amortization) which would have a material
effect on the business, properties, prospects or financial condition of the
Company. The Company has never had any tax deficiency proposed or assessed
against it and has not executed any waiver of any statute of limitations on
the assessment or collection of any tax or governmental charge. To the
Company' knowledge, none of the Company's federal income tax returns and
none of its state income or franchise tax or sales or use tax returns has
ever been audited by governmental authorities. Since the date of the
Financial Statements, the Company has made adequate provisions on its books
of account for all taxes, assessments and governmental charges with respect
to its business, properties and operations for such period. The Company has
withheld or collected from each payment made to each of its employers, the
amount of all taxes (including, but not limited to, federal income taxes,
Federal Insurance Contribution Act taxes and Federal
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Unemployment Tax Act taxes) required to be withheld or collected therefrom,
and has paid the same to the proper tax receiving officers or authorized
depositaries.
2.23 Insurance. The Company has in full force and effect fire and
casualty insurance policies, with extended coverage, sufficient in amount
(subject to reasonable deductibles) to allow it to replace any of its
properties that might be damaged or destroyed. The Company has in full
force and effect products liability insurance in amounts customary for
companies similarly situated.
2.24 Environmental and Safety Laws. To the Company's knowledge, the
Company is not in violation of any applicable statute, law, or regulation
relating to the environment or occupational health and safety and has not
received any notice of any claim to the contrary, and to the best of its
knowledge, no material expenditures are or will be required in order to
comply with any such existing statute, law, or regulation.
2.25 Forfeiture. No shareholders of the Company have purchased any
shares of the Company's capital stock subject to a risk of forfeiture.
2.26 Minute Books. The copy of the minute books of the Company
provided to the Purchaser for the period from and after October 1, 2001,
and to the Company's knowledge for the period prior to October 1, 2001,
contain minutes of all meetings of directors and stockholders and all
actions by written consent without a meeting by the directors and
stockholders since the time of incorporation and reflect all actions by the
directors (and any committee of directors) and stockholders with respect to
all transactions referred to in such minutes accurately in all material
respects.
2.27 Knowledge. For the purposes of this Section 2, the phrase "to the
Company's knowledge" shall mean to any of the Founders' actual current
knowledge, or knowledge that should have been known after reasonable
investigation under the circumstances.
3. Representations and Warranties of the Purchaser. The Purchaser hereby
represents and warrants to the Company that:
3.1 Authorization. The Purchaser has full power and authority to enter
into this Agreement and the Ancillary Agreements. This Agreement and the
Ancillary Agreements, when executed and delivered by the Purchaser, will
constitute valid and legally binding obligations of the Purchaser,
enforceable in accordance with their terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, and other laws of general application affecting enforcement of
creditor's rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief, or other equitable
remedies, or (iii) to the extent the indemnification provisions contained
in the Investor Rights Agreement may be limited by applicable federal or
state securities laws or public policy considerations.
3.2 Purchase Entirely for Own Account. This Agreement is made with the
Purchaser in reliance upon the Purchaser's representations to the Company,
which by the Purchaser's execution of this Agreement the Purchaser hereby
confirms, that the Stock (or the shares issuable upon conversion thereof)
to be acquired by the Purchaser will be acquired for
11
investment for the 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
the Purchaser has no present intention of selling, granting any
participation in, or otherwise distributing the same. By executing this
Agreement, the Purchaser further represents that the Purchaser does not
presently have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participations to such person or to any
third person, with respect to any of the Stock or the shares issuable upon
conversion thereof. The Purchaser understands that the Stock and the shares
issuable upon conversion thereof have not been, and will not be, registered
under the Act by reason of a specific exemption from the registration
provisions of the Act which depends upon, among other things, the bona fide
nature of the investment intent and the accuracy of the Purchaser's
representations as expressed herein. The Purchaser realizes that the basis
for the exemption may not be present if, notwithstanding such
representations, the Purchaser has in mind merely acquiring shares of the
Stock for a fixed or determinable period in the future, or for a market
rise, or for sale if the market does not rise and the Purchaser has no such
intention. To the extent the Purchaser is an entity, the Purchaser has not
been formed for the specific purpose of acquiring the Stock or the shares
issuable upon conversion thereof.
3.3 Investment Experience; Economic Risk. The Purchaser has such
knowledge and experience in financial or business matters that the
Purchaser is capable of evaluating the merits and risks of its investment
in the Company and has the capacity to protect its own interests. The
Purchaser is able to bear the economic risks of its investment in the Stock
for an indefinite period of time, including the risks of a complete loss of
the Purchaser's investment in such securities. The foregoing does not,
however, limit or modify the representations and warranties of the Company
set forth in Section 2 of this Agreement, or the right of the Purchaser to
rely thereon.
3.4 Restricted Securities. The Purchaser understands that the Stock
and the shares issuable upon conversion thereof 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 such Stock and
the shares issuable upon conversion thereof may be resold without
registration under the Act only in certain limited circumstances. The
Purchaser acknowledges that the Stock and the shares issuable upon
conversion thereof must be held indefinitely unless subsequently registered
under the Act and under applicable state securities laws or an exemption
from such registration is available. The Purchaser is aware of the
provisions of Rule 144 promulgated under the Act which limit resale of
shares purchased in a private placement without the satisfaction of certain
conditions, including, among other things, the existence of a public market
for the shares, the availability of certain current public information
about the Company, the resale occurring not less than one year after a
party has purchased and paid for the security to be sold, the sale being
effected through a "broker's transaction" or in transactions directly with
a "market maker" (as provided by Rule 144(f)) and the number of shares
being sold during any three-month period not exceeding specified
limitations.
3.5 Legends. The Purchaser understands that the Stock and the shares
issuable upon conversion thereof, and any securities issued in respect
thereof or exchange therefor, may bear one or all of the following legends:
12
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS (A) (1) THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH COMPLIANCE WITH
SECURITIES, OR (2) THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER
THE ACT AND (B) THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE
HOLDER OF THE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY AND
ITS COUNSEL STATING THAT SUCH SALE IS EXEMPT FROM THE REGISTRATION AND
PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT."
(b) Any legend required by the laws of the State of Delaware.
(c) Any legend required by the Blue Sky laws of any other state
to the extent such laws are applicable to the shares represented by
the certificate so legended.
3.6 Accredited Investor. The Purchaser is an accredited investor as
defined in Rule 501(a) of Regulation D promulgated under the Act as
presently in effect.
3.7 Access to Information. Purchaser has had full access to all
financial and other information concerning the Company which might in any
way affect the consideration for which Purchaser would pay for the Stock;
Purchaser has not requested any information regarding the Company or the
Company's property, assets, indebtedness or liabilities, which has not been
provided to Purchaser; and Purchaser is satisfied that Purchaser has
sufficient information to evaluate the fairness of the Purchase Price and
terms of the transactions contemplated by this Agreement.
4. Indemnification.
4.1 Company's Indemnification. The Company covenants and agrees to
defend, indemnify, save and hold harmless the Purchaser, together with its
officers, directors, partners, employees, trustees, attorneys and
representatives and each person who controls the Purchaser within the
meaning of the Securities Act or the Securities Exchange Act of 1934, as
amended (the "Securities Exchange Act"), from and against any and all
losses, costs, expenses, liabilities, claims or legal damages (including,
without limitation, reasonable fees and disbursements of counsel and
accountants and other costs and expenses incident to any actual or
threatened claim, suit, action or proceeding, whether incurred in
connection with a claim against the Company or a third party claim, except
any claim, suit, action or proceeding brought by Purchaser) (collectively,
"Losses") arising out of or resulting from (i) any inaccuracy in or breach
of any representation or warranty made by the Company or any Founder in
this Agreement; or (ii) any legal, administrative or other proceedings
brought by a third party arising out of the transactions contemplated by
this Agreement (excluding the Alliance Agreement). Notwithstanding the
foregoing, in no event shall the total indemnity under this subsection
exceed the total gross proceeds received by the Company from Purchaser
pursuant to the Bridge Loan Agreement and this Agreement. In the event of a
breach of any representation or warranty set forth in Section 2 and its
related subsections made by the Company or any Founder, no Founders shall
have any personal liability for any breach of such representation or
warranty.
13
4.2 Purchaser's Indemnification. The Purchaser covenants and agrees to
defend, indemnify, save and hold harmless the Company, together with its
officers, directors, partners, employees, trustees, attorneys and
representatives and each person who controls the Company within the meaning
of the Securities Act or the Securities Exchange Act of 1934, as amended
(the "Securities Exchange Act"), from and against any and all losses,
costs, expenses, liabilities, claims or legal damages (including, without
limitation, reasonable fees and disbursements of counsel and accountants
and other costs and expenses incident to any actual or threatened claim,
suit, action or proceeding, whether incurred in connection with a claim
against the Purchaser or a third party claim, but only to the extent such
legal fees and expenses would be payable pursuant to Section 10.8 of this
Agreement) (collectively, "Losses") arising out of or resulting from any
inaccuracy in or breach of any representation or warranty made by the
Purchaser in this Agreement.
4.3 Procedure. The party seeking indemnification under this Section 4
(the "Indemnified Party") shall notify the Indemnifying Party against whom
indemnification is sought (the "Indemnifying Party") in writing of any
action against the Indemnified Party or its officers, directors, partners,
employees, trustees, attorneys, representatives or person who controls the
Indemnified Party within the meaning of the Securities Act or Securities
Exchange Act, entitled to be indemnified pursuant to Section 4.1, in
respect of which the Indemnifying Party is or may be obligated to provide
indemnification on account of this Section 4, promptly after the receipt of
notice of the commencement thereof. In case any such action shall be
brought against any Indemnified Party and it shall notify the Indemnifying
Party of the commencement thereof, the Indemnifying Party shall be entitled
to participate therein and, to the extent that the Indemnifying Party may
wish, to assume the defense thereof, and after notice from the Indemnifying
Party to such Indemnified Party of its or their election so to assume the
defense thereof, the Indemnifying Party will not be liable to such
Indemnified Party under Section 4.1 for any legal or other expense
subsequently incurred by such Indemnified Party in connection with the
defense thereof nor for any settlement thereof entered into without the
consent of the Indemnifying Party; provided, however, that (i) if the
Indemnifying Party shall elect not to assume the defense of such claim or
action or (ii) if the Indemnified Party reasonably determines (x) that
there may be a conflict between the positions of the Indemnifying Party and
of the Indemnified Party in defending such claim or action or (y) that
there may be legal defenses available to such Indemnified Party different
from or in addition to those available to the Indemnifying Party, then
separate counsel for the Indemnified Party reasonably acceptable to the
Indemnifying Party shall be entitled to participate in and conduct the
defense of the Indemnified Party's claims, in the case of (i) and (ii)(x),
or such different defenses, in the case of (ii)(y), and the Indemnifying
Party shall be liable for any reasonable legal or other expenses incurred
by the Indemnified Party in connection with the defense.
4.4 Indemnification Non-Exclusive. The foregoing indemnification
provisions are in addition to, not in derogation of, any statutory,
equitable or common-law remedy any party may have for breach of any
representation, warranty, covenant or agreement, subject to applicable laws
regarding election of remedies. Notwithstanding the foregoing, in no event
will either party's total liability to the other party under any theory,
including, but not limited to, statutory, tort, negligence, breach of
contract, breach of warranty, indemnification or any other legal theory
under this Agreement and the Ancillary Agreements, exceed the total gross
14
proceeds received by the Company from Purchaser pursuant to the Bridge Loan
Agreement and this Agreement.
5. Conditions of the Purchaser's Obligations at First Closing. The
obligations of the Purchaser to the Company to purchase Stock at the First
Closing under this Agreement are subject to the fulfillment, on or before the
First Closing, of each of the following conditions, unless otherwise waived by
the Purchaser:
5.1 Representations and Warranties. The representations and warranties
of the Company contained in Section 2 shall be true on and as of the First
Closing with the same effect as though such representations and warranties
had been made on and as of the date of the First Closing.
5.2 Performance. The Company 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 First Closing.
5.3 Compliance Certificate. The President of the Company shall deliver
to Purchaser at the First Closing a certificate certifying that the
conditions specified in Sections 5.1 and 5.2 have been fulfilled and
stating that there shall have been no adverse change in the business,
affairs, operations, properties or assets, or condition of the Company
since the date of its Financial Statements.
5.4 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 issuance and sale
of the Stock pursuant to this Agreement shall be obtained and effective as
of the First Closing.
5.5 Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated at the First Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to the Purchaser, and the Purchaser shall have received all such
counterpart originals and certified or other copies of such documents as it
may reasonably request.
5.6 Series C Certificate of Designation. The Company shall have filed
the Series C Certificate of Designation with the Delaware Secretary of
State on or prior to the First Closing, which shall continue to be in full
force and effect as of the First Closing.
5.7 Investor Rights Agreement. The Company and the Purchaser shall
have executed and delivered the Investor Rights Agreement.
5.8 Alliance Agreement. The Company and the Purchaser shall have
executed and delivered the Alliance Agreement.
5.9 Right of First Refusal Agreement. The Purchaser, the Company and
each of the Founders shall have executed the ROFR Agreement.
15
5.10 Voting Agreement. The Company, the Purchaser and each of the
Founders shall have executed and delivered the Voting Agreement.
5.11 Assignment of Inventions, Confidentiality and Nonsolicitation
Agreement. The Founders and each of Company's employees shall have executed
an Assignment of Inventions, Confidentiality and Nonsolicitation Agreement
with the Company satisfactory to the Purchaser and the Company.
5.12 Opinion of Company Counsel. The Purchaser shall have received
from Xxx, Xxxxxxx & Xxxxx LLP, counsel for the Company, an opinion, dated
as of the First Closing, in substantially the form of Exhibit G.
5.13 Board of Directors. Immediately prior to the First Closing, Xxxxx
Xxxxxxx shall have been elected as a member of the Company's Board of
Directors.
5.14 Indemnification. The Company and Xxxxx Xxxxxxx shall have entered
into an Indemnification Agreement in the form attached hereto as Exhibit H
and the Company shall have provided evidence satisfactory to Xx. Xxxxxxx
and the Purchaser that the Company then maintains with respect to Xx.
Xxxxxxx directors and officers insurance as called for in the Investor
Rights Agreement.
5.15 Retirement of Share. The Company shall have retired 10,000,000
shares of Common Stock on terms and conditions acceptable to Purchaser in
its sole discretion.
5.16 Purchaser Approval. The Company's Board of Directors shall have
approved this Agreement, the Ancillary Agreements and the consummation of
the transactions contemplated herein and therein.
5.17 Company Approval. The Company shall have obtained all necessary
corporate, shareholder and regulatory consents to the consummation of the
transactions contemplated herein, including, without limitation, the
consent of the holders of the Series B Preferred.
6. Conditions to the Purchaser's Obligations at the Second Closing. The
obligations of the Purchaser to the Company to purchase Stock at the Second
Closing under this Agreement are subject to the fulfillment, on or before the
Second Closing, of each of the following conditions, unless otherwise waived by
the Purchaser:
6.1 First Closing. The First Closing shall have occurred.
6.2 Representations and Warranties. The representations and warranties
of the Company contained in Section 2 shall be true on and as of the Second
Closing with the same effect as though such representations and warranties
had been made on and as of the date of the Second Closing.
6.3 Performance. The Company 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 Second Closing.
16
6.4 Compliance Certificate. The President of the Company shall deliver
to Purchaser at the Second Closing a certificate certifying that the
conditions specify in Sections 6.2 and 6.3 have been fulfilled and stating
that there shall have been no adverse change in the business, affairs,
operating properties or assets, or condition of the Company since the First
Closing.
6.5 Material Adverse Change. There shall have been no material adverse
change in the business, affairs, operating properties or assets or
condition of the Company since the First Closing.
6.6 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 issuance and sale
of the Stock pursuant to this Agreement shall be obtained and effective as
of the Second Closing.
6.7 Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated at the Second Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to the Purchaser, and the Purchaser shall have received all such
counterpart originals and certified or other copies of such documents as it
may reasonably request.
6.8 Completion of B.E.S.T. 7. The B.E.S.T. 7 program shall have been
completed and the first sale of the program shall have occurred as
evidenced by the signing of a contract therefor.
7. Conditions to the Company's Obligations at First Closing. The
obligations of the Company to the Purchaser under this Agreement with respect to
the First Closing are subject to the fulfillment, on or before the First
Closing, of each of the following conditions, unless otherwise waived by the
Company:
7.1 Representations and Warranties. The representations and warranties
of the Purchaser contained in Section 3 shall be true on and as of the
First Closing with the same effect as though such representations and
warranties had been made on and as of the First Closing.
7.2 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 issuance and sale
of the Stock pursuant to this Agreement shall be obtained and effective as
of the First Closing.
7.3 Performance. All covenants, agreements and conditions contained in
this Agreement to be performed by the Purchaser on or prior to the First
Closing shall have been performed or complied with, including without
limitation, payment of the Purchase Price.
7.4 Series C Certificate of Designation. The Company shall have filed
the Series C Certificate of Designation with the Delaware Secretary of
State on or prior to the First Closing, which shall continue to be in full
force and effect as of the First Closing.
17
7.5 Investor Rights Agreement. The Company and the Purchaser shall
have executed and delivered the Investor Rights Agreement.
7.6 Alliance Agreement. The Company and the Purchaser shall have
executed and delivered the Alliance Agreement.
7.7 Right of First Refusal Agreement. The Purchaser and each of the
Founders shall have executed the Right of First Refusal Agreement.
7.8 Voting Agreement. The Company, the Purchaser and each of the
Founders shall have executed and delivered the Voting Agreement.
7.9 Consent of Series B Convertible Preferred Stock Holders. The
holders of the Series B Convertible Preferred Stock outstanding prior to
the Closing shall have consented to the transactions contemplated herein
and shall have approved the Series C Certificate of Designation.
7.10 Invoice. Purchaser shall deliver an invoice for the services
rendered that constitute the consideration pursuant to Section 1.1(b),
showing payment in full upon the First Closing.
8. Conditions to Company's Obligations at Second Closing. The obligations
of the Company to Purchaser under this Agreement with respect to the Second
Closing are subject to the fulfillment, on or before the Second Closing, of each
of the following conditions unless otherwise waived by the Company.
8.1 First Closing. The First Closing shall have occurred.
8.2 Representations and Warranties. The representations and warranties
of the Purchaser contained in Section 3 shall be true on and as of the
Second Closing with the same effect as though such representations and
warranties had been made on and as of the Second Closing.
8.3 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 issuance and sale
of the Stock pursuant to this Agreement shall be obtained and effective as
of the Second Closing.
8.4 Performance. All covenants, agreements and conditions contained in
this Agreement to be performed by the Purchaser on or prior to the Second
Closing shall have been performed or complied with, including without
limitation, payment of the Purchase Price.
9. Covenants.
9.1 Covenants of the Company. From the date hereof until the Second
Closing, the Company shall not, without the prior written consent of
Purchaser, operate or take any action except in the ordinary course of
business.
18
9.2 Royalty. The Company represents and covenants that (i) the Royalty
Payment (as such term is defined in the Amended and Restated Asset Purchase
and Sale Agreement by and between The Bluebook International, Inc. and
Xxxxxx X. Xxxxxxxxxx and Xxxxxxx X. Xxxxxxxxxx, dated September 15, 2001
(the "Asset Purchase Agreement")), is intended to be calculated and shall
be calculated as set forth in Exhibit 9.2 (the "Royalty Calculation") (ii)
it shall not take a position inconsistent with the Royalty Calculation and
(iii) it shall use commercially reasonable efforts to effect an amendment
of the Asset Purchase Agreement to clarify that the methodology used to
calculate the Royalty Payment is consistent with the Royalty Calculation.
10. Miscellaneous.
10.1 Survival of Warranties. The warranties, representations and
covenants of the Company, the Founders and the Purchaser contained in or
made pursuant to this Agreement shall survive the execution and delivery of
this Agreement and the closing of the transactions contemplated hereby.
10.2 Transfer; Successors and Assigns. Neither party may assign the
rights or obligations under this Agreement, except that Purchaser may
assign its rights and obligations to a successor-in-interest by merger or
sale of substantially all of the asset or stock of Purchaser. Subject to
the foregoing, 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.
10.3 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of California.
10.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.5 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
10.6 Notices. All notices under this Agreement must be in writing and
will be effective (a) immediately upon delivery in person or by messenger
to the address stated below, (b) the next business day after deposit with a
commercial courier or delivery service for next day delivery, (c) upon
receipt by facsimile as established by evidence of successful transmission
or (d) five business days after deposit with the United States Postal
Service, certified mail, return receipt requested, postage prepaid. All
notices must be properly addressed to the address set forth below, or at
such other addresses as either party may subsequently designate by written
notice given in the manner provided in this Section.
19
If to the Company or the Founders:
The Bluebook International Holding Company
00000 Xxxx Xxxxxxx, Xxxxx 000
Xxxx Xxxxxx, XX 00000
Attention: Xx. Xxxx X. Xxxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxx, Xxxxxxx & Xxxxx LLP
00000 Xxx Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxxx X. Xxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
If to the Purchaser:
Cotelligent, Inc.
000 Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
Xxxxxxx Xxxxx + Xxxxxx LLP
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
10.7 Expenses. Each of the Company, the Founders and the Purchaser shall
bear his or its own expenses incurred with respect to this Agreement and the
transactions contemplated hereby, provided, however that at the Closing the
Company shall reimburse the Purchaser for its reasonable out-of-pocket expenses
incurred in its due diligence investigation of the Company and the preparation,
negotiation and execution of this Agreement, the Convertible Note, the Ancillary
Agreements, the structuring of the transaction and the transactions contemplated
hereby up to a maximum of $50,000. The foregoing reimbursable expenses shall
include without limitation, the Purchaser's consulting, investment banking,
legal and travel expenses incurred in its due diligence investigation and the
preparation, negotiation and execution of this Agreement, the Ancillary
Agreements and the transactions contemplated hereby and the legal fees and
expenses of its counsel, Xxxxxxx Xxxxx + Xxxxxx LLP. The legal fees and expense
of Xxxxxxx Xxxxx + Xxxxxx LLP shall be payable by check or wire transfer to
Xxxxxxx
20
Xxxxx + Xxxxxx LLP at the Closing by the Purchaser, the amount of such check or
wire transfer being deducted from the aggregate Purchase Price to be paid by the
Purchaser for the Stock to be purchased hereunder.
10.8 Attorneys' Fees. If any action at law or in equity (including
arbitration) is necessary to enforce or interpret the terms of this Agreement or
any of the Ancillary Agreements, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and necessary disbursements in addition to any
other relief to which such party may be entitled as determined by such court,
equity or arbitration proceeding.
10.9 Amendments and Waivers. Neither the Agreement nor any term hereof may
be amended, waived, discharged or terminated other than by a written instrument
signed by the party against whom enforcement of any such amendment, waiver,
discharge or termination is sought. Any amendment or waiver effected in
accordance with this paragraph shall be binding upon each holder of any Stock
purchased under the Agreement at the time outstanding, each future holder of all
such Stock and the Company.
10.10 Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, portions of such provisions, or such
provisions in their entirety, to the extent necessary, shall be severed from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
10.11 Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to any holder of any of the Stock, upon any breach or
default of either party under this Agreement shall impair any such right, power
or remedy of such holder nor shall it be construed to be a waiver of any such
breach or default, or an acquiescence therein, or of or in any similar breach or
default thereafter occurring; nor shall any waiver of any single breach or
default be deemed a waiver of any other breach or default theretofore or
thereafter occurring. Any waiver, permit, consent or approval of any kind or
character on the part of any holder of any breach or default under this
Agreement, or any waiver on the part of any holder 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 or by law or otherwise afforded to any holder shall be cumulative
and not alternative.
10.12 Finder's Fee. The Company agrees to indemnify and hold harmless the
Purchaser from any liability for any commission or compensation in the nature of
a finder's fee (and the costs and expenses of defending against such liability
or asserted liability) for which the Company or any of its officers, employees
or representatives is responsible.
10.13 Entire Agreement. The Agreement and the Ancillary Agreements
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.
10.14 Termination. Either Purchaser or the Company shall have the right to
terminate this Agreement at any time on or after August 31, 2002 upon written
notice to the
21
other party if all of the conditions to such party's closing specified in
Section 5 (Conditions of the Purchaser's Obligations at First Closing) or
Section 7 (Conditions to the Company's Obligations at the First Closing),
respectively, have not been waived or satisfied on or prior to August 31, 2002
and the other party is not unconditionally prepared to close immediately on
August 31, 2002. Either Purchaser or the Company shall have the right to
terminate this Agreement at any time on or after December 31, 2002 upon written
notice to the other party if all of the conditions to such party's closing set
forth in Section 6 (Conditions to the Purchaser's Obligations at Second Closing)
and Section 8 (Conditions to the Company's Obligations at the Second Closing),
respectively, have not been waived or satisfied on or prior to December 31,
2002, and the other party is not unconditionally prepared to close immediately
on December 31, 2002.
[Signature Page Follows]
22
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COMPANY:
BLUEBOOK INTERNATIONAL HOLDING COMPANY,
a Delaware corporation
By: /s/ XXXX X. XXXXXXXXXX
---------------------------
Xxxx X. Xxxxxxxxxx
Chief Executive Officer and President
FOUNDERS:
/s/ XXXX X. XXXXXXXXXX
------------------------------
Xxxx X. Xxxxxxxxxx
/s/ XXXXXX X. XXXXXXXXXX
------------------------------
Xxxxxx X. Xxxxxxxxxx
/s/ XXXXXX X. XXXXXXXXXX
------------------------------
Xxxxxx X. Xxxxxxxxxx
/s/ XXXXXXX X. XXXXXXXXXX
------------------------------
Xxxxxxx X. Xxxxxxxxxx
PURCHASER:
COTELLIGENT, INC., a Delaware corporation
By: /s/ XXXXXX X. MACHIORLETTE
---------------------------
Xxxxxx X. Machiorlette,
Senior Vice President
*** STOCK PURCHASE AGREEMENT ***
23
