EXHIBIT 10(i)
STOCK PURCHASE AGREEMENT
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SERIES A CONVERTIBLE PREFERRED, $5.00 PAR VALUE
STOCK PURCHASE AGREEMENT
This Agreement, dated June 15, 1999, is entered into by and between
XXXXXXXX.XXX, Inc. a California corporation (the "Company"), and TERTIARY
PARTNERS LIMITED, a corporation organized under the laws of the Republic of
Vanuatu, (the "Purchaser") with respect to the following facts:
The Company is a California corporation which intends to engage in the
business of providing university-level courses and assessment via the
Internet. The Purchaser wishes to purchase shares of the Company's
Series A Convertible Preferred Stock $5.00 par value, and the Company
is willing to sell such shares to the Purchaser, subject to the terms
set forth below.
The parties agree as follows:
1. Agreement to Purchase. The Company agrees to sell to the Purchaser, and the
Purchaser agrees to buy, 50,000 shares of the Preferred Stock of the Company
(the "Shares") at a price of $US5.00 per share (the "Purchase Price"), subject
to the terms and conditions set forth below.
2. Closing. The purchase and sale of the Shares shall take place on July 15,
1999, at the business address of the Purchaser, located at the address set forth
below the signature of the Purchaser on this Agreement, or at such other time
and place and in such other manner as the parties deem mutually acceptable. At
the Closing, the Company shall issue one or more certificates, in amounts
designated by the Purchaser, to the Purchaser, in exchange for the payment by
the Purchaser by cashier's check, certified check or wire transfer of the
Purchase Price in lawful currency of the United States of America.
3. Representations and Warranties of Company. The Company hereby represents and
warrants to the Purchaser as follows:
3.1. Organization. The Company is a corporation which is duly existing
and in good standing under the laws of the State of California. The Company has
the requisite power to own and operate its properties and assets, and to carry
on its business as presently conducted and as it proposes to conduct its
business, and is duly qualified to do business in each jurisdiction in which the
failure to be so qualified would have a materially adverse impact on the
business or financial condition of the Company.
3.2. Due Authorization -- Corporate Power. The Company has all
requisite legal power to execute and deliver this Agreement, to sell and issue
the Shares and to perform its obligations under this Agreement.
3.3. Binding Obligation. This Agreement is a valid and binding
obligation of the Company.
3.4. Shares. The Company currently is authorized under its Articles of
Incorporation to issue _______________ shares of Common Stock, of which
4,000,000 are presently outstanding, and _______________ shares of Preferred
Stock, of which none are presently outstanding. Upon full payment by the
Purchaser of the Purchase Price, the Shares shall be fully paid, nonassessable
and free of any preemptive rights and restrictions other than those contained in
this Agreement or which may be imposed by applicable securities laws.
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4. Representations and Warranties of Purchaser. The Purchaser hereby represents
and warrants as follows:
4.1. Authorization -- Binding Obligation. All actions on the part of
the Purchaser for the authorization, execution, delivery and performance by the
Purchaser of this Agreement has been taken, and this Agreement constitutes a
valid and binding obligation of the Purchaser.
4.2. Experienced Investor The Purchaser acknowledges that he has
substantial experience in investing in start-up ventures such as the Company.
The Purchaser has a preexisting business relationship with the Company which
allows the Purchaser to evaluate the business risks of the Company and business
and financial acumen of its management.
4.3. High Risk Investment. The Purchaser understands that his purchase
of the Shares represents a speculative, high-risk investment. Among these risks
are: (i) the Company has not yet begun full operations; (ii) the Company has not
yet received the capital required to begin the operations contemplated in its
business plan and has not yet received any binding commitments from any third
party to provide such capital; (iii) the full amount of the Purchaser's
investment will not be sufficient, by itself, to allow the Company to begin full
operations; and (iv) the Company proposes to conduct its business in an
intensely competitive industry, and many of its competitors have, and will
continue to have, substantially greater financial resources than the Company.
The Purchaser has had an opportunity to ask questions of management of the
Company concerning these matters and others related to the business, financial
condition and management of the Company, and these questions were answered to
the satisfaction of the Purchaser. The Purchaser understands that such
discussions and written materials were intended to describe certain aspects of
the Company's business and prospects and were not a thorough or complete
description.
4.4. No Broker. The Company has not incurred and will not incur,
directly or indirectly, as a result of any action taken by the Purchaser, any
liability for brokerage or finders' fees or agents' commissions or any similar
charges in connection with this Agreement.
4.5. Purchase for Investment - Not Resale. The Purchaser represents
that he is purchasing the Shares for his own account and not with a view to or
for sale in connection with any distribution of the Shares.
4.6. No Registration/Compliance with Regulation S. The Purchaser
understands that the Shares are not being registered under the Securities Act of
1933, as amended, (the "Act") pursuant to the exemption to the registration
requirements contained in Regulation S of the Securities and Exchange Commission
("Regulation S"). The Purchaser represents that it does not reside in the United
States and that it is not purchasing the Shares for the account of or for
distribution to any "U.S. Person." For the purposes of this Agreement, a "U.S.
Person" is: (i) any natural person residing in the United States; (ii) any
partnership, corporation or other business entity organized or incorporated in
the United States; (iii) any estate of which the executor or administrator is a
U.S. Person; (iv) any trust of which any trustee is a U.S. Person; (v) any
agency or branch of a foreign entity located in the United States; (v) any
non-discretionary account or similar account (other than an estate or trust)
held by a dealer or other fiduciary for the benefit or account of a U.S. Person;
(vi) any discretionary account or similar account (other than an estate or
trust) held by a dealer or other fiduciary organized, incorporated or resident
in the United States; and (vii) any partnership or corporation if: (A) organized
or incorporated under the laws of any non-U.S. jurisdiction; and (B) formed by a
U.S. Person principally for the purpose of investing in securities not
registered under the Securities Act of 1933, as amended, unless it is organized
and incorporated, and owned by, persons defined as "Accredited Investors" under
Regulation D of the Securities and Exchange Commission who are not natural
persons, estates or trusts.
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5. Restrictions on Resale of Shares. The Purchaser agrees that the Shares may
not be offered or sold to any U.S. Person for a period of one year after the
date of this Agreement and that the Shares may not be sold other than in full
compliance with the requirements of, and subject to the restrictions of,
Regulation S. The Company shall refuse to register any transfer of the Shares on
its shareholder records unless the holder thereof can demonstrate, to the
reasonable satisfaction of the Company, that the sale or other transfer of the
Shares is being made in accordance with Regulation S, pursuant to registration
under the Securities Act or pursuant to an available exemption to registration
under the Securities Act. The certificate or certificates evidencing the Shares
shall bear a restrictive legend substantially in the following form
THESE SECURITIES HAVE BEEN ISSUED WITHOUT REGISTRATION UNDER THE
U.S.SECURITIES ACT OF 1933, AS AMENDED, (THE "ACT") PURSUANT TO
REGULATION S OF THE SECURITIES AND EXCHANGE COMMISSION ("REGULATION
S"). FOR A PERIOD OF ONE YEAR AFTER THE DATE THESE SECURITIES WERE
ORIGINALLY ISSUED BY THE CORPORATION, THESE SHARES MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED TO ANY U.S. PERSON (AS DEFINED IN REGULATION S).
IN ADDITION, THESE SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED
UNLESS THE HOLDER CAN DEMONSTRATE THAT THE TRANSFER IS BEING MADE IN
ACCORDANCE WITH THE REQUIREMENTS OF REGULATION S, PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF THE ACT.
6. Indemnification.
6.1. Company. The Company will indemnify and hold the Purchaser
harmless for all claims, costs, liabilities and damages arising from or in
connection any violation by the Company of the terms of this Agreement or gross
negligence or willful misconduct by the Company in the performance of the terms
of this Agreement.
6.2. Purchaser. The Purchaser will indemnify and hold the Company
harmless against all claims, losses, damages, costs, expenses and liabilities
which result from the Purchaser making any false statement, including but not
limited to those false statements or omissions which cause the exemptions to the
registration or qualification requirements of state and federal securities laws
under which the Company is selling the Shares to be unavailable or which result
in the violation of any such securities laws by the Company.
7. Miscellaneous.
7.1. Amendment -- Waiver. No provision of this Agreement may be amended
unless such amendment is in writing and is signed by both parties to this
Agreement. No right under this Agreement will be deemed waived unless that
waiver is set forth in a written instrument signed by the party who has waived
that right. The waiver of any right under this Agreement will not constitute the
waiver of any right of any party under this Agreement.
7.2. Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the successors and assigns of each party.
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7.3. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California and the federal laws of
the United States of America, exclusive of the application of any conflicts of
laws principles which would require the application of the laws of another
jurisdiction.
7.4. Entire Agreement. This Agreement and the exhibits attached hereto
constitute the entire understanding and agreement with respect to the subject
matter herein and supersedes entirely all previous and contemporaneous
agreements, whether oral or written, with respect to such subject matter.
7.5. Notices. Any notice or report herein required or permitted to be
given shall be given by personal delivery, by Federal Express (paid for by
sender) or by depositing the same in the mail, postage prepaid and addressed to
the parties set forth below their signatures on this Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed
and delivered as of the date first above written.
XXXXXXXX.XXX, INC. TERTIARY PARTNERS LIMITED
/s/Xxxxxx X. Xxxxxxx ___________________________________
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Xxxxxx X. Xxxxxxx, President By: _______________________________
Address: Address:
000 Xxxxxxxxxx Xxxxxx, Xxxxx 000 ___________________________________
Xxx Xxxxxxxxx, XX 00000 ___________________________________
UNITED STATES OF AMERICA ___________________________________
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