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EXHIBIT 10.4.10
EXECUTION COPY
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is dated June 30, 1998,
between Easyriders, Inc., a Delaware corporation (the "Company") and Xxxx X.
Xxxxxx (the "Buyer").
R E C I T A L S:
WHEREAS, subject to the terms and conditions set forth in this
Agreement, the Company desires to issue and sell to the Buyer and the Buyer
desires to acquire from the Company, an aggregate of 4,036,797 shares (the
"Shares") of the Company's common stock, $.001 par value per share (the "Common
Stock").
NOW, THEREFORE, in consideration of the foregoing and of the mutual
agreements, covenants, representations and warranties hereinafter contained, the
parties hereby agree as follows:
SECTION 1. Purchase and Sale of Shares. Subject to the terms and
conditions of this Agreement, on the Closing (as defined in Section 2 hereof)
the Company shall issue and sell to the Buyer, and the Buyer shall purchase from
the Company:
(a) 1,623,377 shares of Common Stock in exchange for a promissory note
in the amount of $5,000,000 in the form attached hereto as Exhibit A;
(b) 746,753 shares of Common Stock in exchange for a promissory note in
the amount of $2,300,000 in the form attached hereto as Exhibit B; and
(c) 1,666,667 shares of Common Stock in exchange for a cash payment in
the amount of $5,000,000.
SECTION 2. Closing.
2.1 Time and Place. The closing ("Closing") of the purchase of the
Shares shall be held at the offices of Xxxx, Scholer, Fierman, Xxxx & Handler,
LLP, 0000 Xxxxxx xx xxx Xxxxx, Xxxxx 0000, Xxx Xxxxxxx, Xxxxxxxxxx on the date
that the last to be satisfied of the conditions specified in Section 4 is
satisfied or waived. The date of the Closing is sometimes referred to herein as
the "Closing Date."
2.2 Deliveries. On the Closing Date, the Company shall deliver to the
Buyer certificates representing all of the Shares, registered in the name of the
Buyer and the Buyer shall deliver to the Company an aggregate of Twelve Million
Three Hundred Thousand Dollars ($12,300,000) as follows: (a) a promissory note
executed by the Buyer in favor of the Company in the amount of Five Million
Dollars ($5,000,000) in the form attached hereto as Exhibit A,
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(b) a promissory note executed by the Buyer in favor of the Company in the
amount of Two Million Three Hundred Thousand Dollars ($2,300,000) in the form
attached hereto as Exhibit B and (c) Five Million Dollars ($5,000,000) in United
States dollars in immediately available funds by wire transfer to an account
designated in writing by the Company prior to the Closing or by certified check.
SECTION 3. Representations and Warranties of the Buyer.
The Buyer represents and warrants to the Company as follows, which
representations and warranties shall survive the Closing:
3.1 Necessary Authority. The Buyer has legal competence, full power and
authority to enter into, deliver and perform this Agreement. The Buyer has duly
executed and delivered this Agreement, and this Agreement constitutes his legal,
valid and binding obligation, enforceable against the Buyer in accordance with
its terms, except as the same may be limited by bankruptcy, insolvency,
reorganization or other laws affecting the enforcement of creditors' rights
generally now or hereafter in effect, and subject to the availability of
equitable remedies.
3.2 Investment Intent. The Buyer is acquiring the Shares for his own
account for investment purposes only and not with a view towards the resale or
distribution thereof.
3.3 Buyer Status. At the time the Buyer was offered the Shares to be
purchased by him hereunder, he was, and at the date hereof, is, and at the
Closing Date, will be, an "accredited investor" as defined in Rule 501(a) under
the Securities Act of 1933, as amended (the "Securities Act").
3.4 Experience of the Buyer; Reliance. The Buyer either alone or
together with his representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Shares and has so
evaluated the merits and risks of such investment. The Buyer has relied on the
advice of, or has consulted with, his own tax, investment, legal or other
advisors and has not relied upon the Company or any of its affiliates, officers,
directors, attorneys, accountants or any representatives, agents or employees of
any of the foregoing for advice or other information, whether written or oral.
3.5 Ability of Buyer to Bear Risk of Investment. The Buyer is able to
bear the economic risk of an investment in the Shares and, at the present time,
is able to afford a complete loss of such investment.
3.6 Restricted Securities. The Buyer understands that (a) the Shares
have not been registered under the Securities Act or the securities laws of any
state, based upon an exemption from such registration requirements for
non-public offerings pursuant to an exemption under the Securities Act; (b) the
Shares will be "restricted securities", as said term is defined in Rule 144 of
the Rules and Regulations promulgated under the Securities Act; (c) the Shares
may not be sold or otherwise transferred unless they have first been registered
under the Securities Act and all
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applicable state securities laws, or unless exemptions from such registration
provisions are available with respect to said resale or transfer; (d) other than
as set forth herein, the Company is under no obligation to register the Shares
under the Securities Act or any state securities laws, or to take any action to
make any exemption from any such registration provisions available; (e) the
certificates for the Shares will bear a legend to the effect that the transfer
of the securities represented thereby is subject to the provisions hereof; and
(f) stop transfer instructions will be placed with the transfer agent for the
Shares.
3.7 Transfer Restriction.The Buyer will not sell or otherwise transfer
the Shares unless and until (a) the Shares shall have first been registered
under the Securities Act and all applicable state securities law or (b) the
Buyer shall have first delivered to the Company a written opinion of counsel
(which counsel and opinion (in form and substance) shall be satisfactory to the
Company), to the effect that the proposed sale or transfer is exempt from the
registration provisions of the Securities Act and all applicable state
securities laws.
3.8 Access to Information. The Buyer has been furnished with the Annual
Report on Form 10-KSB for the fiscal year ended December 31, 1997 of Newriders,
Inc., a Nevada corporation ("Newriders") and the Quarterly Report on Form 10-QSB
for the period ended March 31, 1998 of Newriders, as well as all additional
information regarding Newriders or the Company that the Buyer has requested. The
Buyer acknowledges that the Company will, upon written request, provide such
additional documents which may reasonably be requested by the Buyer. The Buyer
acknowledges that an investment in the Shares is highly speculative, and has
carefully considered the risks associated with such investment.
3.9 Legend. The Buyer acknowledges that the certificates for the Shares
will contain a legend substantially as follows:
THE SECURITIES WHICH ARE REPRESENTED BY THIS CERTIFICATE HAVE NOT BEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR UNDER THE
PROVISIONS OF ANY STATE SECURITIES LAWS. THE SECURITIES HAVE BEEN ACQUIRED BY
THE REGISTERED HOLDER HEREOF FOR ITS OWN ACCOUNT FOR INVESTMENT PURPOSES ONLY
AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT BE SOLD, TRANSFERRED,
MADE SUBJECT TO A SECURITY INTEREST, PLEDGED, HYPOTHECATED, ASSIGNED OR
OTHERWISE DISPOSED OF UNLESS AND UNTIL REGISTERED UNDER THE SECURITIES ACT AND
ANY APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL SATISFACTORY TO
THE COMPANY IS RECEIVED THAT REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES
ACT.
SECTION 4. Representations and Warranty of the Company.
4.1 Corporate Authority. The Company is a corporation duly organized,
validly existing and in good standing under the laws of Delaware. The Company
has all requisite
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corporate power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby.
4.2 Shares. The Shares to be issued, when issued and delivered, will be
duly authorized, validly issued, fully paid and nonassessable and free of any
preemptive rights or any liens, charges, claims or encumbrances (other than
pursuant to the transactions contemplated hereby or arising from the acts or
omissions of xxxxxx). The Company makes no representation as to the market price
which Xxxxxx will realize upon the ultimate disposition of the Shares, it being
acknowledged by Xxxxxx that such shares will constitute "restricted securities"
under applicable securities laws and the market price of publicly traded
securities will be affected by many factors which are outside the control of the
Company and as to which the Company can offer no assurance.
SECTION 5. Closing Conditions for the Benefit of the Company and the Buyer.
Each and every obligation of the Company and the Buyer under this
Agreement shall be subject to the satisfaction, on or prior to the Closing, of
each of the following conditions, any of which may be waived in writing by the
Company and the Buyer.
5.1 Representations and Warranties of the Buyer. The representations and
warranties of the Buyer shall be true and correct and shall be deemed to have
been made again at and as of the Closing and shall then be true and correct.
5.2 Consummation of the Transactions. The transactions contemplated by
(i) the Stock Contribution and Sale Agreement, by and among Newriders, the
Company, Easyriders Sub II, Inc., a California corporation, Paisano
Publications, Inc., a California corporation, Easyriders of Columbus, Inc., an
Ohio corporation, Easyriders Franchising, Inc., a California corporation,
Xxxxxx, Inc., a California corporation, Bros Club, Inc., a California
corporation, Associated Rodeo Riders On Wheels, a California corporation and
Xxxxxx Xxxxxx, (ii) the LLC Interest Contribution Agreement, by and among
Newriders, the Company, Xxxxxxx and Xxxxx Xxxxxxx, the Buyer and M & B
Restaurants, L.C., a Texas limited liability company, and (iii) the Agreement
and Plan of Merger and Reorganization, by and among Newriders, the Company and
Easyriders Sub, Inc., a Nevada corporation and wholly-owned subsidiary of the
Company shall have closed prior to or simultaneous with the Closing.
5.3 Easyriders Plan. The Easyriders 1998 Executive Incentive
Compensation Plan, in substantially the form presented to Xxxxxx herewith, shall
have been approved by the stockholders of Newriders, Inc.
5.4 No Prohibition. No order of any court or administrative agency shall
be in effect which restrains or prohibits the transactions contemplated by this
Agreement, and no suit, action or other proceeding by any governmental body or
other person shall have been instituted which questions the validity or legality
of the transactions contemplated by this Agreement.
SECTION 6. General.
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6.1 Execution of Counterparts. For the convenience of the parties, this
Agreement may be executed in one or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
document.
6.2 Notices. All notices which are required or may be given pursuant to
the terms of this Agreement shall be in writing and shall be sufficient in all
respects if delivered personally, by overnight courier or by registered or
certified mail, postage prepaid, as follows:
If to the Company to: Easyriders, Inc.
000 Xxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxxx
If to the Buyer to: Xxxx Xxxxxx
000 Xxx Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxxx, XX 00000
or to such other address as shall be furnished in like manner by any party to
the others. Any such notice shall be deemed to have been given when received if
sent by overnight courier or mailed or on the date personally delivered.
6.3 Assignment, Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. No party shall assign any of its rights or obligations
hereunder without the prior written consent of the other party.
6.4 Applicable Laws. This Agreement shall be governed by, construed and
enforced in accordance with the internal laws of the State of California without
taking into account provisions regarding choice of law, except to the extent
that certain matters may be governed as a matter of law by federal law.
6.5 Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto, and no party hereto shall be bound by any
communications between them on the subject matter hereof unless such
communications are in writing and bear a date contemporaneous with or subsequent
to the date hereof.
6.6 Headings. The headings in the sections of this Agreement are
inserted for convenience only and shall not constitute a part hereof or affect
the meaning or interpretation hereof.
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6.7 Waiver, Discharge, etc. This Agreement may not be released,
discharged or modified except by an instrument in writing signed on behalf of
each of the parties hereto. The failure of a party to enforce any provision of
this Agreement shall not be deemed a waiver by such party of any other provision
or subsequent breach of the same or any other obligation hereunder.
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IN WITNESS WHEREOF, each of the parties has executed this Agreement as
of the day and year first above written.
EASYRIDERS, INC.
By:
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Name: Xxxxxxx X. Xxxxxxx
Title: President
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Xxxx X. Xxxxxx
[Stock Purchase Agreement - signature page]
