EXHIBIT 10.26
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is made and entered into as of
the 14th day of April, 1997 by and between ZYCAD CORPORATION, a Delaware
corporation ("Zycad"), and EDISON VENTURE FUND III, L.P., a Delaware limited
partnership ("Edison"), for the purchase of 2,420,000 shares of the common stock
of QSS, INC., a Delaware corporation ("QSS").
RECITALS
WHEREAS, Zycad is a corporation duly organized and existing under the laws
of the State of Delaware and is the owner and holder of 2,420,000 shares of the
issued and outstanding shares of the common stock of QSS ("The Zycad Shares");
and
WHEREAS, QSS is a corporation duly organized and existing under the laws of
the State of Delaware with authorized capital stock consisting of 15,000,000
shares of common stock, $.01 par value ("Common Stock"), of which 11,000,000
shares are issued and outstanding and 3,000,000 shares of undesignated preferred
stock; $.01 par value ("Preferred Stock"), of which no shares are issued and
outstanding.
WHEREAS, Edison is a partnership duly organized and existing under the laws
of the State of Delaware; and
WHEREAS, the Board of Directors of Zycad and the Partners of Edison have
determined that it is advisable that The Zycad Shares of QSS be sold to Edison
on the terms and conditions set forth herein and such Board and Partners have,
by resolution, duly adopted, approved and authorized the execution and delivery
of this Agreement; and
WHEREAS, Zycad and Edison reach an agreement in principle in March 1997 for
the respective sale and purchase of The Zycad Shares and QSS subject only to the
completion of due diligence; and
WHEREAS, Zycad and Xxxxxx xxxx it advisable to set forth in this Agreement
the representations and warranties of each party and certain other undertakings
and understandings in connection with the stock purchase.
AGREEMENT
NOW, THEREFORE, in consideration of the promises and of the mutual
covenants herein contained, the parties hereto agree as follows:
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ARTICLE ONE
AGREEMENT TO SELL AND BUY
Zycad agrees to sell and Edison agrees to purchase all of The Zycad Shares
of QSS free from all liens and encumbrances, together with all dividends and
rights thereof, for the purchase price specified in Article Two.
ARTICLE TWO
PURCHASE PRICE AND MANNER OF PAYMENT
Edison shall pay to Zycad for the QSS Stock the sum of Three Million Five
Hundred Thousand Dollars ($3,500,000) for all 2,420,000 shares of QSS common
stock, payable by wire transfer in next day federal funds to the bank account
specified in writing by Zycad on the Closing Date as hereinafter defined.
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES OF ZYCAD
As inducement to the execution of this Agreement by the parties hereto,
Zycad represents and warrants that the following statements are true and correct
on the date hereof:
3.1 Organization and Standing of QSS
QSS is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware. QSS has the corporate
power and authority to own, operate and dispose of its properties and to
conduct its business as now being conducted.
3.2 Organization and Standing of Zycad
Zycad is a corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware. Zycad has the corporate
power and authority to own, operate and dispose of its properties and to
conduct its business as now being conducted.
3.3 Capitalization
QSS's authorized capital stock consists of 15,000,000 shares of QSS Common
Stock, $.01 par value, of which 11,000,000 shares are issued and
outstanding and 3,000,000 shares of undesignated preferred stock, $.01 par
value of which no shares are issued and outstanding. No QSS Stock is held
in the treasury of QSS. All outstanding shares of QSS Stock are duly and
validly authorized and issued, fully paid and nonassessable, and the
issuance and sale of all such QSS securities has been in compliance with
all federal and state securities laws.
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3.4 Share Ownership
Zycad is the beneficial and record owner and holder of 2,420,000 shares of
the common stock of QSS, which shares will be sold to Edison free and clear
of any claims, liens, charges, equities and encumbrances or other
restrictions.
3.5 Authority of Zycad
Zycad has the legal power and authority to enter into and perform this
Agreement and the transactions contemplated herein. The execution, delivery
and performance of this Agreement and the other agreements contemplated
herein by Zycad have been duly authorized by Zycad's Board of Directors.
Zycad has the corporate power and authority to consummate the sale of the
QSS Stock pursuant to this Agreement. This Agreement has been duly and
validly authorized by all necessary corporate action of Zycad and will
constitute the legal, valid and binding obligation of Zycad, enforceable in
accordance with its terms. Neither the execution and delivery of this
Agreement, nor the consummation of the transactions contemplated herein,
will violate any statute, regulation or ordinance of any governmental
authority, herein, or conflict with or result in the breach of any term,
condition or provision of the Certificate of Incorporation or By-Laws of
QSS or Zycad, or of any agreement, deed, contract, mortgage, indenture,
writ, order, decree, legal obligation or instrument to which QSS or Zycad
is a party or by which Zycad or QSS or any of their respective assets or
properties are or may be bound, or constitute a default (or an event which,
with the lapse of time or the giving of notice, or both, would constitute a
default) thereunder, or result in the creation or imposition of any lien,
charge or encumbrance, or restriction of any nature whatsoever with respect
to any properties or assets of either QSS or Zycad, or give to others any
interest or rights, including rights of termination, acceleration or
cancellation in or with respect to any of the properties, assets, contracts
or business of QSS, except for such violations, conflicts, breaches,
defaults, liens, restrictions, interests and rights that are cured, waived
or terminated prior to the Closing Date. QSS and other stockholders of QSS
have rights of first refusal which must be satisfied prior to the Closing.
No consent, approval, authorization, order, registration or qualification
of or with any court or any regulatory authority or any other governmental
body is required for the consummation by Zycad and which have not been
obtained of the transactions contemplated by this Agreement except those
contemplated by this Agreement.
3.6 Title to The Zycad Shares of QSS
Zycad has good and marketable title to The Zycad Shares of QSS, free and
clear of all easements, mortgages, pledges, liens, encumbrances, security
interests, equities, charges, clouds and restrictions of any nature
whatsoever. By virtue of the deliveries made at the Closing, Edison will
obtain good and marketable title to The Zycad Shares of QSS, free and clear
of all easements, mortgages, pledges, liens, encumbrances, security
interests, charges, equities, clouds and restrictions of any nature
whatsoever.
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3.7 Brokers
Neither Edison nor anyone acting on their behalf has or will have, as a
result of any act or omission of QSS or Zycad, any liability to any broker,
finder, agent or other person (other than legal and accounting advisors) in
connection with the transactions contemplated hereby, nor has Zycad or
anyone acting on its behalf, agreed to pay any brokerage, finder's,
consulting or investment banking fee or commission, whether payable in
cash, securities or in any other form with any person, firm or entity with
respect to the transactions contemplated hereby.
3.8 Disclosure
No representation or warranty by Zycad in this Agreement, nor any statement
or certificate furnished or to be furnished to Edison pursuant hereto, or
in connection with the transactions contemplated hereby, contains or will
contain any untrue statement of a material fact, or omits or will omit to
state a material fact necessary to make the statements contained herein or
therein not misleading.
3.9 Representations and Warranties
Zycad's representations and warranties contained in this Agreement shall be
true at the time of closing as though such representations and warranties
were made at closing.
ARTICLE FOUR
REPRESENTATIONS AND WARRANTIES OF EDISON
As inducement to the execution of this Agreement by the parties hereto,
Edison represents and warrants that the following statements are true and
correct on the date hereof:
4.1 Organization and Standing of Xxxxxx
Xxxxxx is a limited partnership duly domiciled, validly existing and in
good standing under the laws of the state of Delaware. Edison has the
power and authority to own, operate and dispose of its properties, to
conduct its business as now being conducted, to enter into, deliver and
perform its obligations and undertakings under this Agreement and to
complete the transactions contemplated herein.
4.2 Authority of Xxxxxx
Xxxxxx has the legal power and authority to enter into and perform this
Agreement and the transactions contemplated herein. The execution,
delivery and performance of this Agreement and the other agreements
contemplated herein by Edison have been duly authorized by Edison's
partners. Edison has the power
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and authority to consummate the purchase of The Zycad Shares of QSS
pursuant to this Agreement. This Agreement has been duly and validly
authorized by all necessary partner action of Edison and constitutes
the legal, valid and binding obligation of Edison, enforceable in
accordance with its terms. Neither the execution and delivery of
this Agreement, nor the consummation of the transactions contemplated
herein, will violate any statute, regulation or ordinance of any
governmental authority, or conflict with or result in the breach of any
term, condition or provision of the Edison Limited Partnership Agreement,
or of any agreement, deed, contract, mortgage, indenture, writ, order,
decree, legal obligation or instrument to which Edison is a party or by
which Edison or any of its assets or properties are or may be bound, or
constitute a default (or an event which, with the lapse of time or the
giving of notice, or both, would constitute a default) thereunder, or
result in the creation or imposition of any lien, charge or encumbrance, or
restriction of any nature whatsoever with respect to any properties or
assets of Edison, or give to others any interest or rights, including
rights of termination, acceleration or cancellation in or with respect to
any of the properties, assets, contracts or business of Edison, except for
such violations, conflicts, breaches, defaults, liens, restrictions,
interests and rights that are cured, waived or terminated prior to the
Closing Date. No consent, approval, authorization, order, registration or
qualification of or with any court or any regulatory authority or any other
governmental body is required for the consummation by Edison of the
transactions contemplated by this Agreement except those contemplated by
this Agreement.
4.3 Purchase for Investment
Edison is acquiring The Zycad Shares of QSS solely for its own account, for
investment, and not with a view to any further distribution thereof.
4.4 Access to Information
Edison has been provided with all information about QSS requested by it; it
has had an opportunity to perform a due diligence investigation of QSS and
its business and it has been provided the opportunity to ask questions of
and receive answers from QSS and its management and has been supplied all
information and documentary material deemed necessary by it to verify the
accuracy of such information. Edison (and its staff, attorneys,
accountants, consultants and other representatives) shall hold all such
information and documents received from QSS or any of its affiliates in
strictest confidence, pursuant to the terms and conditions of the
Confidentiality and Nondisclosure Agreement between QSS and Edison. All
such information in written form and all such documents shall be returned
to QSS in the event the transactions contemplated by this Agreement are not
completed.
4.5 Brokers
Neither Zycad nor anyone acting on their behalf has or will have as a
result of any act or omission by Edison any liability to any broker,
finder, agent or other person
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(other than legal and accounting advisors) in connection with the
transactions contemplated thereby, nor has Edison or anyone acting on
its behalf agreed to pay any brokerage, finder's, consulting or
investment banking fee or commission, whether payable in cash,
securities or in any other form with any person, firm or entity with
respect to the transactions contemplated hereby.
ARTICLE FIVE
COVENANTS OF ZYCAD
5.1 No Further Negotiations
Until the Closing Date, or the earlier termination of this Agreement, Zycad
will not sell, offer to sell or solicit offers to purchase any of The Zycad
Shares of QSS.
5.2 Public Disclosure
Neither Zycad nor Edison, nor any of its affiliates shall make any public
announcement or issue any press release concerning the proposed stock sale
without the prior consent of Edison, except as may be otherwise required by
Law.
ARTICLE SIX
CLOSING
The closing of the sale (the "Closing") of the 2,420,000 shares of common
stock of QSS shall take place on or before April 30, 1997 (the "Closing Date")
at a mutually agreeable time and place (or such other time and place as may be
mutually agreeable).
6.1 At the Closing, Zycad shall deliver to Edison, free and clear of all
encumbrances or restrictions, certificates for 2,420,000 shares of QSS
Stock in negotiable form, endorsed in blank with all transfer stamps
required by government authorities attached thereto subject to any legends
required by federal securities laws. Upon such delivery, Edison shall
transfer to Zycad the purchase price for the shares as provided for in
Article Two of this Agreement.
ARTICLE SEVEN
CONDITIONS TO EDISON'S OBLIGATION TO CLOSE
The obligation of Edison to consummate the purchase of The Zycad Shares of
QSS Stock is subject to satisfaction , on or prior to the Closing Date, of the
following conditions:
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7.1 Zycad shall have delivered to Edison:
a. a certified copy of the resolution or resolutions duly adopted by the
Board of Directors of Zycad authorizing execution of this Agreement
and the consummation by Zycad of the transactions contemplated
thereby.
b. Stock certificate for 2,420,000 shares of QSS Stock with a stockpower
duly endorsed.
c. A form of waiver of first rights of refusal signed by QSS and
stockholders of QSS.
d. Side letter of agreement relative to a board seat for Edison on the
Board of Directors of QSS.
7.2 The sale of QSS Stock pursuant to this Agreement shall not violate any
order, decree or judgment of any court or government body having competent
jurisdiction, and no law, rule, regulation or order shall have been
adopted, by any such body, prohibiting or enjoining the transactions
contemplated by this Agreement or which would, in the reasonable judgment
of Edison, render it impossible or inadvisable for Edison to consummate the
transactions contemplated hereby or to own, operate or control the assets,
properties or business of QSS.
ARTICLE EIGHT
CONDITIONS TO ZYCAD'S OBLIGATION TO CLOSE
The obligation of Zycad to consummate the Stock Purchase is subject to the
satisfaction, on or prior to the Closing Date, of the following conditions:
8.1 Edison shall have delivered to Zycad:
a. a certified copy of the resolution or resolutions duly adopted by the
Partners of Edison authorizing the execution of this Agreement and
the consummation by Edison of the transactions contemplated thereby.
ARTICLE NINE
TERMINATION
9.1 Termination by Mutual Consent
At any time on or prior to the Closing Date, this Agreement may be
terminated by mutual written consent of the Board of Directors of Zycad and
Partners of Edison, without liability on the part of any party.
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9.2 Additional Rights of Termination
In addition to the other terms of this Article Nine, this Agreement may be
terminated by written notice from either the Partners of Edison or the
Board of Directors of Zycad to the other parties hereto, without liability
on the part of either party, if the purchase of The Zycad Shares of QSS
Stock has not been consummated by April 30, 1997 for any reason whatsoever.
9.3 Expenses on Termination
Upon termination for any reason pursuant to this Article Nine, each party
shall bear all of its out-of-pocket expenses incurred in connection with
the transactions contemplated by this Agreement, including without
limitation all legal, accounting, printing, travel and other similar fees
and expenses.
ARTICLE TEN
MISCELLANEOUS
10.1 Amendment
This Agreement may be amended, modified or supplemented in whole or in part
at any time by an instrument in writing executed in the same manner as this
Agreement after due authorization by the respective Board of Directors or
the Partners of the parties hereto.
10.2 Headings
The Article and Section headings in this Agreement and in the Index are
solely for the convenience and reference of the parties hereto, and are not
intended to be descriptive of the entire contents of any such Articles or
Sections and shall not limit or otherwise affect any of the terms or
provisions hereof.
10.3 Entire Agreement
This Agreement and the documents, schedules and exhibits described herein
or attached or delivered pursuant hereto set forth the entire agreement
between the parties hereto with respect to the transactions contemplated
hereby and supersede all prior agreements, arrangements and understandings
relating to the subject matter hereof. Except as expressly set forth
herein, no party is entitled to rely on any statement not contained herein
or any writing not specifically furnished pursuant hereto.
10.4 Counterparts
This Agreement may be executed in one or more counterparts each of which
shall be deemed to constitute an original and shall become effective when
each of the
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parties hereto has signed and delivered to the other parties a copy
of this Agreement, whether or not all parties have signed the same
copy.
10.5 Notices
All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given when received, or when sent by
certified or registered mail, return receipt requested, or by prepaid telex
or telegram, as follows:
a. If to Zycad:
Zycad Corporation
Attention: General Counsel
00000 Xxxxxxx Xxxxxxx
Xxxxxxx, XX 00000
b. If to Edison:
Edison Venture Fund
Attention: Xxxx X. Xxxxxxxxx
000 Xxxxx Xxxxx, #0
Xxxxxxxxxxxxx, XX 00000
or to such other address as shall be designated by any of such parties to
the others by such a notice.
10.7 Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of the State of Delaware. Any litigation commenced by Zycad or Edison
concerning this Agreement shall be brought in Xxxxxx County or Xxxxxx
County, New Jersey. The prevailing party shall be entitled to reasonable
attorneys' fees and costs incurred in connection with such litigation.
10.8 Waiver
No waiver of any provision of this Agreement or any rights or obligations
of either party hereunder shall be effective, except pursuant to a written
instrument signed by the party or parties waiving compliance, and any such
waiver shall be effective only in the specific instance and for the
specific purpose stated in such writing.
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IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
signed in its corporate or partner name by its duly authorized officers or
partners all as of the date first above written.
ZYCAD CORPORATION
By /s/ Xxxxxxxx X. Xxxxx
------------------------------
Xxxxxxxx X. Xxxxx
President and CEO
EDISON VENTURE FUND III, L.P.
General Partner
By /s/ Xxxx X. Xxxxxxxxx
------------------------------
Xxxx X. Xxxxxxxxx
Managing Partner
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AMENDMENT NO. 1 TO STOCK PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 dated as of April 16, 1997 (the "Amendment") to the
Stock Purchase Agreement dated as of April 14, 1997 (the "Agreement"), by and
between Zycad Corporation, a Delaware Corporation ("Zycad") and Edison Venture
Fund III, L.P., a Delaware Corporation ("Edison").
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, and intending to be legally bound hereby, the parties hereto
agree as follows:
1. AMENDMENT. Any and all references in the Agreement to the date of
April 30, 1997 are hereby revised to reference a date of May 31, 1997.
2. EFFECT ON THE AGREEMENT. Except as expressly amended by this
Amendment, the Agreement shall remain in full force and effect.
3. GOVERNING LAW. This Amendment shall be governed by and construed in
accordance with the laws of the State of Delaware. Any litigation commenced by
Zycad or Edison concerning this Amendment shall be brought in Xxxxxx County or
Xxxxxx County, New Jersey. The prevailing party shall be entitled to reasonable
attorneys' fees and costs incurred in connection with such litigation.
4. COUNTERPARTS. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute a single instrument.
IN WITNESS WHEREOF, the parties have executed and delivered this Amendment
as of the date first above written.
ZYCAD CORPORATION
By: /s/ Xxxxxxxx X. Xxxxx
------------------------------
Xxxxxxxx X. Xxxxx
President and Chief Executive Officer
EDISON VENTURE FUND III, L.P.
GENERAL PARTNER
By: /s/ Xxxx X. Xxxxxxxxx
------------------------------
Xxxx X. Xxxxxxxxx
Managing Partner
