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EXHIBIT 4.7
FEE AGREEMENT
This FEE AGREEMENT (the "Agreement") dated as of 11th January 1999, by
and between International Microcomputer Software, Inc. a California corporation
("IMSI"), and Law Offices of Xxxx Xxxxx, Inc., a law firm ("LAW OFFICES OF XXXX
XXXXX").
WHEREAS, IMSI currently owes LAW OFFICES OF XXXX XXXXX an amount to date
equal to $100,000.00 (the "Initial Attorney Fees") pursuant to a Retainer
between IMSI and LAW OFFICES OF XXXX XXXXX (the "Retainer"), and
WHEREAS, IMSI and LAW OFFICES OF XXXX XXXXX now desire to set forth
certain terms and provisions with respect to the payment by IMSI of the Initial
Attorney Fees:
NOW, THEREFORE in consideration of the foregoing and for other good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the parties hereto hereby agree as follows:
1. Payment of the Fees. Notwithstanding anything to the contrary in the Retainer
with respect to the form and timing of payment of the Initial Attorney Fees, the
obligations to pay the Initial Attorney Fees shall the satisfied in full by
compliance by IMSI with the terms and provisions of this Agreement. On the date
that the stock first becomes free to trade on the NASDAQ, or other exchange upon
which it may then be listed ("Valuation Date"). An amount of $100,000 will
become the IMSI account value ("Account Value") at the LAW OFFICES OF XXXX
XXXXX. The Account Value shall be debited for any fees due and not yet paid to
the LAW OFFICES OF XXXX XXXXX as of that date. Any surplus in the Account Value,
shall be a credit to be utilized against future fees for work to be performed by
the LAW OFFICES OF XXXX XXXXX for IMSI. In the event that the fees then due to
the LAW OFFICES OF XXXX XXXXX total more then the Account Value, IMSI shall
immediately make up the difference between that amount and $100,000 in a lump
sum cash payment to the LAW OFFICES OF XXXX XXXXX.
2. Issuance of the Shares. As soon as reasonably practicable after
execution of this Agreement, IMSI will issue to LAW OFFICES OF XXXX XXXXX,
eleven thousand one hundred twelve (11,112) shares of IMSI's Common Stock (the
"Common Stock"), no par value (collectively, the "Shares") based on a trading
price of nine dollars ($9.00) per share.
3. Sale.
a. Sale. The Shares may be sold by one or more of the following means of
distribution (subject to the provisions of this Agreement): (a) a block trade in
which the broker-dealer so engaged will attempt to sell Shares as agent, but may
position and resell a portion of the block as principal to facilitate the
transaction; (b) purchases by a
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broker-dealer as principal and resale by such broker-dealer for its own account;
(c) an over-the-counter distribution in accordance with the rules of Nasdaq; (d)
ordinary brokerage transactions and transactions in which the broker solicits
purchasers; and (e) in privately negotiated transactions.
4. Representations, Warranties and Covenants of IMSI. IMSI represents
and warrants to and covenants with LAW OFFICES OF XXXX XXXXX as follows:
a. Registration. IMSI shall use its reasonable best efforts to
cause the shares of IMSI Common Stock that are issuable pursuant to this Fee
Agreement to be registered on a registration statement (or to be issued pursuant
to a then-effective registration statement) on Form S-3 (or successor form)
promulgated by the Securities and Exchange Commission ("SEC") under the 1933
Act, as soon as reasonably practicable after the Closing. IMSI expects to file a
Registration Statement on or about 28th February 1999. Nothing herein shall
require IMSI to seperately register the Shares.
b. At the date the Registration Statement becomes effective
under the Securities Act (the "Effective Date") or the time of effectiveness of
any post-effective amendment to the Registration Statement, at the time the
Prospectus is first filed with the Commission pursuant to Rule 424 (b) of the
Regulations (if a Rule 424 (b) filing is required), at the time any supplement
to or amendment of the Prospectus is filed with the Commission and at the time
any document filed under the Exchange Act is filed, the Registration Statement
and the Prospectus and any amendments thereof and supplements thereto complied
or will comply in all material respects with the applicable provisions of the
Securities Act and the Regulations or the Exchange Act and the respective rules
and regulations thereunder and do not or will not contain an untrue statement of
a material fact and do not or will not omit to state any material fact required
to be stated therein or necessary in order to make the statements therein (i) in
the case of the Registration Statement, not misleading and (ii) in the case of
the Prospectus, in the light of the circumstances under which they were made,
not misleading.
c. The Shares, when issued and delivered in accordance with this
Agreement, will be duly and validly issued and outstanding, fully paid and
non-assessable and will not have been issued in violation of any preemptive
rights.
d. If at any time when a prospectus relating to the Shares is
required to be delivered under the Securities Act any event shall occur as a
result of which the Prospectus as then amended or supplemented, in the judgment
of IMSI or LAW OFFICES OF XXXX XXXXX, includes an untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, or if it shall be necessary at any
time to amend or supplement the Prospectus or Registration Statement to comply
with the Securities Act or the Regulations, or to file under the Exchange Act so
as to comply therewith any document incorporated by reference in the
Registration Statement or the Prospectus or in any amendment thereof or
supplement
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thereto, (i) IMSI will notify LAW OFFICES OF XXXX XXXXX promptly and prepare and
file with the Commission an appropriate amendment or supplement (in form and
substance satisfactory to LAW OFFICES OF XXXX XXXXX) which will correct such
statement or omission or which will effect such compliance and will use its best
efforts to have any amendment to the Registration Statement docked declared
effective by the Commission as soon as possible and (ii) LAW OFFICES OF XXXX
XXXXX shall suspend trading in the Shares until (A) such amendment or supplement
to the Prospectus has been filed or (B) any amendment to the Registration
Statement has been declared effective by the Commission.
e. IMSI will pay all fees and expenses with respect to the
preparation and filing of the Registration Statement and the registration of the
Shares. If however, LAW OFFICES OF XXXX XXXXX requests that the Shares be
registered independently from another IMSI registration ("Accelerated
Registration), then LAW OFFICES OF XXXX XXXXX shall pay all fees and expenses
with respect to the preparation and filing of the Registration Statement and the
registration of the Shares that are a result of such Accelerated Registration.
5. Indemnification.
a. IMSI agrees to indemnify and hold harmless LAW OFFICES OF XXXX XXXXX, against
any and all losses, liabilities, claims, damages and expenses incurred
(including but not limited to attorneys' fees), to which it may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such losses,
liabilities, claims, damages or expenses (or actions in respect thereof) arise
solely out of any untrue statement of a material fact contained in the
Registration Statement, as originally filed or any amendment thereof, or the
Prospectus, or in any supplement thereto or amendment thereof, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading; provided, however, that IMSI shall not be liable to LAW OFFICES
OF XXXX XXXXX for any such losses, liabilities, claims, damages or expenses
which arise out of or are based upon an untrue statement or alleged untrue
statement or omission or alleged omission contained or made in the Registration
Statement or the Prospectus or any amendment thereof or Supplement thereto in
reliance upon and in conformity with information furnished to IMSI by LAW
OFFICES OF XXXX XXXXX.
b. Promptly after receipt by any indemnified party under
subsection a. above of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the party against whom
indemnification is to be sought in writing of the commencement thereof. In case
any such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent it may elect by written
notice delivered to the indemnified party promptly after receiving the aforesaid
notice from such indemnified party, to assume the defense thereof.
Notwithstanding the foregoing, the
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indemnified party or parties shall have the right to employ its own counsel in
any such case, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the employment of such counsel shall have
been authorized in writing by the indemnifying party in connection with the
defense of such action, (ii) the indemnifying party shall not have employed
counsel to have charge of the defense of such action within a reasonable time
after notice of commencement of the action, or (iii) such indemnified party
shall have reasonably concluded that there may be defenses available to it or
them which are different from or additional to those available to the
indemnifying party (in which case the indemnifying party shall not have the
right to direct the defense of such action on behalf of the indemnified party or
parties), in any of which events such fees and expenses shall be borne by the
indemnifying party. Anything in this subsection to the contrary notwithstanding,
the indemnifying party shall not be liable for any settlement of any claim or
action effected without its written consent: provided, however, that such
consent was not unreasonably withheld.
6. Entire Agreement. This Agreement and the retainer (to the extent not
inconsistent herewith) constitute the entire agreement between the parties
hereto with respect to the subject matter hereof and supersede all prior written
agreements and negotiations and oral understandings, if any, with respect
thereto. This Agreement may not be amended or supplemented except by an
instrument in writing signed by each of the parties hereto.
7. Notices. All notices, requests and other communications hereunder
shall be in writing and delivered in person or by registered or certified mail
(postage prepaid, return receipt requested), overnight courier or facsimile,
addressed as follows:
if to LAW OFFICES OF XXXX XXXXX , to:
Law Offices of Xxxx Xxxxx
if to IMSI, to:
International Microcomputer Software, Inc.
00 Xxxxxxx Xxx
Xxxxxx, XX 00000
Attn: Legal Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
The address of a party, for the purposes of this Section 8, may be changed by
giving written notice to the other party of such change in the manner provided
herein for giving notice. All notices, requests, demands and other
communications hereunder shall be
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deemed to have been duly given: at the time delivered by hand, if personally
delivered; five calendar days mailing, if sent by registered or certified mail;
the next business clay after timely delivery to the courier, if sent by
overnight courier; and when receipt is acknowledged, if sent by facsimile
transmission (except that a notice of change of address shall not be deemed to
have been given until actually received by the addressee).
8. Governing Law. This Agreement shall be construed in accordance with
and governed by the laws of California, without regard to the conflicts of law
principles thereof.
9. Investment Representations. LAW OFFICES OF XXXX XXXXX represents and
warrants that it is an "accredited investor" as defined by Regulation D: that it
is acquiring the Shares for its own account, for the purpose of investment and
not with a view to, or resale in connection with, any distribution thereof; that
LAW OFFICES OF XXXX XXXXX has had access to all information regarding IMSI and
its present business, assets, liabilities and financial condition, that LAW
OFFICES OF XXXX XXXXX reasonably considers important in making the decision to
acquire the Shares under this Agreement; and that LAW OFFICES OF XXXX XXXXX
understands that the Shares are restricted securities and may not be sold except
pursuant to the Form S-3, some other registration statement, or pursuant to an
applicable exemption from federal and state registration requirements.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as
of the date first set forth above.
Law Offices of Xxxx Xxxxx, Inc. INTERNATIONAL MICROCOMPUTER
SOFTWARE, INC.
By: _________________________ By: ______________________________
Name: Xxxx Xxxxx Name: Xxxxxxxx X. Xxxxxxx
Title: Chief Operating Officer
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