EXHIBIT 10.6
OPTION PURCHASE AGREEMENT
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This Agreement is made and entered into as of the 11th day of January,
2008, between HEB LLC ("Selling Shareholder" or the "Seller"), a NVlimited
liability company, and T Squared Investments LLC, a Delaware limited liability
company, or its registered assigns ("Buyer").
PREAMBLE
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Selling Shareholder desires to grant options to purchase Shares ("Option
Shares") to Buyer, and Buyer desires to purchase from Selling Shareholder, up to
One Million Two Hundred Thousand (1,200,000) Shares of MB Software Corporation
(the "Company") common stock held by Selling Shareholder. Selling Shareholder
also agrees to use their reasonable efforts to cause the Company to register the
Option Shares acquired by Buyer pursuant hereto in order to permit Buyer to sell
its Option Shares publicly in the future. Therefore, with the intent to be
legally bound, the parties agree as follows:
AGREEMENT
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1.1 Sale of Option Shares ("Option 1"). Selling Shareholder hereby grant to
Buyer, for a period of thirty-six (36) months, or twenty-four (24) months post
registration going effective, whichever longer, ("Option 1 Period"), the option
to purchase up to Three Hundred Thousand (300,000) Shares at the price of One
Dollar ($1.00) per Share, or a total of up to Three Hundred Thousand Dollars
($300,000) representing the purchase price of the Shares covered by Option 1
(the "Option 1 Shares Payment"). The Selling Shareholder, upon execution of this
Agreement, shall deposit the shares underlying the Option Shares with an escrow
agent for the duration of the Option 1 Period. Upon exercise of Option 1, the
Buyer shall send a check or wire for the Shares Payment payable to the account
of the escrow agent, who will then immediately take action to cause to be to
delivered to Buyer as soon as reasonably possible a stock certificate(s)
representing the Shares either in the name of T Squared Investments LLC or
accompanied by stock powers duly endorsed under medallion signature guaranties.
There should also be delivered to the Buyer an opinion of counsel addressed to
the Company, the transfer agent, and the Buyer, that the Shares may be
transferred without compliance with the registration requirements of the 1933
Act and of any applicable state securities laws. The Option 1 Shares Payment
shall be released from the escrow to the Selling Shareholders upon Buyer's
receipt of the Shares covered by Option 1.
1.2 Sale of Option Shares ("Option 2"). Selling Shareholder hereby grant to
Buyer, for a period of thirty-six (36) months, or twenty-four (24) months post
registration going effective, whichever longer, ("Option 2 Period"), the option
to purchase up to Three Hundred Thousand (300,000) Shares at the price of One
Dollar and Fifty Cents ($1.50) per Share, or a total of up to Four Hundred and
Fifty Thousand Dollars ($450,000) representing the purchase price of the Shares
covered by Option 2 (the "Option 2 Shares Payment"). The Selling Shareholder,
upon execution of this Agreement, shall deposit the shares underlying the Option
Shares with an escrow agent for the duration of the Option 2 Period. Upon
exercise of Option 2, the Buyer shall send a check or wire for the Shares
Payment payable to the account of the escrow agent, who will then immediately
take action to cause to be to delivered to Buyer as soon as reasonably possible
a stock certificate(s) representing the Shares either in the name of T Squared
Investments LLC or accompanied by stock powers duly endorsed under medallion
signature guaranties. There should also be delivered to the Buyer an opinion of
counsel addressed to the Company, the transfer agent, and the Buyer, that the
Shares may be transferred without compliance with the registration requirements
of the 1933 Act
and of any applicable state securities laws. The Option 2 Shares Payment shall
be released from the escrow to the Selling Shareholders upon Buyer's receipt of
the Shares covered by Option 2.
1.3 Sale of Option Shares ("Option 3"). Selling Shareholder hereby grant to
Buyer, for a period of thirty-six (36) months, or twenty-four (24) months post
registration going effective, whichever longer, ("Option 3 Period"), the option
to purchase up to Three Hundred Thousand (300,000) Shares at the price of Two
Dollars ($2.00) per Share, or a total of up to Six Hundred Thousand Dollars
($600,000) representing the purchase price of the Shares covered by Option 3
(the "Option 3 Shares Payment"). The Selling Shareholder, upon execution of this
Agreement, shall deposit the shares underlying the Option Shares with an escrow
agent for the duration of the Option 3 Period. Upon exercise of Option 3, the
Buyer shall send a check or wire for the Shares Payment payable to the account
of the escrow agent, who will then immediately take action to cause to be to
delivered to Buyer as soon as reasonably possible a stock certificate(s)
representing the Shares either in the name of T Squared Investments LLC or
accompanied by stock powers duly endorsed under medallion signature guaranties.
There should also be delivered to the Buyer an opinion of counsel addressed to
the Company, the transfer agent, and the Buyer, that the Shares may be
transferred without compliance with the registration requirements of the 1933
Act and of any applicable state securities laws. The Option 3 Shares Payment
shall be released from the escrow to the Selling Shareholders upon Buyer's
receipt of the Shares covered by Option 3.
1.4 Sale of Option Shares ("Option 4"). Selling Shareholder hereby grant to
Buyer, for a period of thirty-six (36) months, or twenty-four (24) months post
registration going effective, whichever longer, ("Option 4 Period"), the option
to purchase up to Three Hundred Thousand (300,000) Shares at the price of Two
Dollars and Fifty Cents ($2.50) per Share, or a total of up to Seven Hundred and
Fifty Thousand Dollars ($750,000) representing the purchase price of the Shares
covered by Option 4 (the "Option 4 Shares Payment"). The Selling Shareholder,
upon execution of this Agreement, shall deposit the shares underlying the Option
Shares with an escrow agent for the duration of the Option 4 Period. Upon
exercise of Option 4, the Buyer shall send a check or wire for the Shares
Payment payable to the account of the escrow agent, who will then immediately
take action to cause to be to delivered to Buyer as soon as reasonably possible
a stock certificate(s) representing the Shares either in the name of T Squared
Investments LLC or accompanied by stock powers duly endorsed under medallion
signature guaranties. There should also be delivered to the Buyer an opinion of
counsel addressed to the Company, the transfer agent, and the Buyer, that the
Shares may be transferred without compliance with the registration requirements
of the 1933 Act and of any applicable state securities laws. The Option 4 Shares
Payment shall be released from the escrow to the Selling Shareholders upon
Buyer's receipt of the Shares covered by Option 4.
1.5 Exercise of Option Shares. Buyer shall complete an attached "Form of
Election to Purchase" and follow the procedures outlined in Sections 2.1 and
2.2, as applicable, for the exercise of the Option Shares. Notwithstanding
anything in this Agreement to the contrary, it is understood and agreed that:
(i) if the certificates and executed stock powers required to be
delivered to Buyer in connection with the exercise of any Option hereunder
have not been received by Buyer within ten (10) days following the receipt
of the purchase price by the escrow agent, the exercise of the Option will,
at the written election of Buyer, be voided and the full amount of the
Purchase Price paid to the escrow agent shall be returned to Buyer. Notice
of such written election to void such Option exercise shall be delivered to
the Selling Shareholders and escrow agent promptly.
1.6 Maximum Exercise. The Buyer shall not be entitled to exercise this
Option on a Date of Exercise in connection with that number of shares of Common
Stock which would be in excess of the sum of (i) the number of shares of Common
Stock beneficially owned by the Buyer and its affiliates on an exercise date,
and (ii) the number of shares of Common Stock issuable upon the exercise of this
Option with respect to which the determination of this limitation is being made
on an exercise date, which would result in beneficial ownership by the Buyer and
its affiliates of more than 4.9% of the outstanding shares of Common Stock on
such date. This Section 1.4 may be waived or amended only with the consent of
the Buyer and the consent of holders of a majority of the shares of outstanding
Common Stock of the Company who are not Affiliates. For the purposes of the
immediately preceding sentence, the term "Affiliate" shall mean any person: (a)
that directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the Company; or (b) who
beneficially owns (i) any shares of convertible preferred stock, (ii) common
stock purchase warrants (iii) convertible debt, or (iv) any other convertible
security or derivative. For the purposes of the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Securities Exchange Act of 1934, as amended, and Regulation 13d-3 thereunder.
1.7 Shares. Means the total Option Shares of the Seller sold to Buyer
pursuant to this Agreement. As to any particular Option Shares, such securities
will cease to be Option Shares when the Buyer has effectively exercised the
purchase option for any or all of the Option Shares pursuant to the terms of
this Agreement.
1.8 Right To Include ("Piggy-Back") Option Shares. Provided that the Option
Shares have not been registered, if at any time after the date hereof, the
Selling Shareholder will use its reasonable efforts to propose to Company to
provide piggy-back rights with the registration of any of the Company's
securities under the 1933 Act (other than by a registration in connection with
an acquisition in a manner which would not permit registration of Option Shares
for sale to the public, on Form S-8, or any successor form thereto, on Form S-4,
or any successor form thereto), on an underwritten basis (either best-efforts or
firm-commitment.
1.9 Call by the Seller. This Option contains a callable feature requiring
the automatic exercise at any time prior to the Expiration Date if the volume
weighted average public market price of the Company's common stock is equal to
or in excess of the callable price of $3.50 per share for a period of twenty
(20) consecutive days and if there is an effective registration in place for the
shares underlying this Option. Upon occurrence of the Automatic Exercise, the
Seller shall provide Buyer with notice of such Automatic Conversion ("Automatic
Exercise Notice"). Upon receipt of the Automatic Exercise Notice, Buyer must
exercise, in whole or in part, this Option within ten (10) days. In the event
that this Option is exercised, Buyer must deliver to Seller at its principal
office, on or before 5:00 p.m., Eastern Time, on the required date, (i) Form of
Election to Purchase properly executed and completed by Buyer or an authorized
officer thereof, (ii) a check payable to the order of Seller, in an amount equal
to the product of the Exercise Price multiplied by the number of Option Shares
specified in the Exercise Notice, and (iii) this Option. In no event may Seller
require Buyer to exercise any such option that would force the Investor to
violate the 4.9% provision in this Option.
1.10 Expenses. The Selling Shareholders will pay all Registration expenses
in connection with any registration required by Sections 1.8 herein.
developments the disclosure of which the Board of Directors of the Company, in
its reasonable judgment exercised in good faith, believes would be detrimental
to the Company, the Company may instruct the holders of Registrable Securities
covered by the Registration Statement to suspend all sales of such securities
for a period of up to 180 days (a "Black-out Period"). The Black-out Period
shall not terminate until such holders have been given notice by the Company
that they may resume sales under the Registration Statement. No sales of
Registrable Securities shall be made by the holders thereof under such
Registration Statement or otherwise during such Black-out Period and such
holders shall keep confidential the fact of the Black-out Period and any facts
or circumstances related thereto of which they may have become aware.
1.12 Representations and Warranties of Selling Shareholder. The Selling
Shareholder hereby represents and warrants to Buyer as follows:
(a) Such Selling Shareholder has the full power and legal capacity to
execute, deliver and carry out the terms and provisions of this Agreement
and to consummate the transactions contemplated hereby.
(b) Such Selling Shareholder is the lawful owner of his/her Option
Shares being sold, free and clear of any liens, pledges, security
interests, prior assignments or encumbrances (except for applicable
securities law restrictions and stock resale restrictive legend).
(c) Such Selling Shareholder is an officer and director of the
Company.
(d) All material information concerning the Company is set forth in
the Company's reports and statements filed with the Securities and Exchange
Commission and those reports and statements do not misstate any material
facts or omit to state any material facts necessary to make the statements
made in such reports and statements, in light of the circumstances in which
they were made, not misleading.
(e) This Agreement constitutes a valid, legally binding and
enforceable obligation of such Selling Shareholder.
1.13 Representations and Warranties of Buyer. Buyer represents and warrants
to the Selling Shareholders that:
(a) Buyer is a partnership or other legally recognized entity duly
organized, validly existing and in good standing under the Laws of State of
Delaware, and has all requisite power and authority to enter into this
Agreement and perform its obligations hereunder. Buyer was not formed for
the primary purpose of investing in the Option Shares.
(b) The execution, delivery and performance of this Agreement by Buyer
have been duly and effectively authorized by all necessary partnership or
other actions of Buyer and the consummation of the transactions
contemplated hereby do not result in a violation of Partnership's
partnership agreement or other applicable governing terms or standards.
This Agreement constitutes a valid, legally binding and enforceable
obligation of Buyer.
(c) Buyer is an "accredited investor" within the meaning of Rule 501
of Regulation D of the Securities Act, is experienced in making investments
of the kind contemplated by this Agreement, has had access to all material
information related to the business and operations of the Company, and is
capable, by reason of its business and financial experience, of evaluating
the relative merits and risks of an investment in the Option Shares.
(d) The Option Shares are being acquired by Buyer for its own account
for investment purposes only, and not with a view to the sale or
distribution of any part thereof. Buyer understands that the offer and sale
of the Option Shares to Buyer pursuant to this Agreement have not been
registered under the 1933 Act or any applicable state securities act, and
that none of these securities may be resold except pursuant to the
Registration Statement, the provisions of Rule 144 or any other
transactions which, in the opinion of counsel for the Company, are exempt
from the registration requirements of the 1933 Act and any applicable state
securities acts. Buyer agrees that a legend to this effect may be included
on the certificates evidencing the Shares delivered to it pursuant to this
Agreement.
1.14 Miscellaneous.
(a) This Agreement constitutes the entire agreement, and supersedes
all prior agreements and understandings, whether oral or written, among the
parties hereto with respect to the subject matter hereof. This Agreement
may be amended only by an instrument in writing signed by each of the
parties to this Agreement.
(b) This Agreement may be executed in any number of counterparts, each
of which shall, when executed, be deemed to be an original and all of which
shall be deemed to be one and the same instrument. Delivery of an executed
counterpart of a signature page to this Agreement by facsimile transmission
shall be as effective as delivery of a manually executed counterpart of
this Agreement.
(c) Each of the parties hereto shall, without further consideration,
execute and deliver to any other party hereto such instruments of transfer,
and shall perform such other actions, as such party may reasonably request
to carry out the transactions contemplated hereby.
(d) In case any one or more of the provisions of this Agreement shall
be invalid or unenforceable in any respect, the validity and enforceability
of the remaining terms and provisions of this Agreement shall not in any
way be affected or impaired thereby and the parties will attempt in good
faith to agree upon a valid and enforceable provision which shall be a
commercially reasonably substitute therefore, and upon so agreeing, shall
incorporate such substitute provision in this Agreement.
(e) This Agreement shall be governed by, construed and enforced in
accordance with the internal laws of the State of New York without regard
to the principles of conflicts of law thereof.
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IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this
Agreement on the date first written above.
HEB LLC
/s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title:
1/11/08
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Date
T SQUARED INVESTMENTS LLC
/s/ Xxxxxx Xxxxx
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Name: Xxxxxx X. Xxxxx
Title: Managing Member
1/11/08
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Date
FORM OF ELECTION TO PURCHASE OPTION
To be executed by the Option Shares holder to exercise the right to purchase
shares of MB Software Corporation Common Stock or its successors under the
foregoing Agreement.
To:
In accordance with the Agreement enclosed with this Form of Election to
Purchase, the undersigned hereby irrevocably elects to purchase
_______________________ shares of Common Stock ("Common Stock"), $0.001 par
value, of MB Software Corporation or its successors and encloses__________
dollars and___________cents ($________________) for each Option Share being
purchased or an aggregate of ____________in cash, wire, or official bank check
or checks.
The undersigned requests that certificates for the shares of Common Stock
issuable upon this exercise be issued in the name of:
T Squared Investments LLC
c/o T Squared Capital LLC
0000 Xxxxx Xxxxxx, Xxxxx 00
Xxx Xxxx, XX 00000
__________________________
(Tax Identification Number)
If the number of shares of Common Stock issuable upon this exercise shall not be
all of the shares of Common Stock which the undersigned is entitled to purchase
in accordance with the enclosed Agreement, the undersigned requests that an
amendment to the Agreement evidencing the right to purchase the shares of Common
Stock not issuable pursuant to the exercise evidenced hereby be issued in the
name of and delivered to:
T Squared Investments LLC
c/o T Squared Capital LLC
0000 Xxxxx Xxxxxx, Xxxxx 00
Xxx Xxxx, XX 00000
Dated: Name of Options Shares Holder:
(Print) ___________________________
(By:) ___________________________
(Name:) ___________________________
(Title:)___________________________
