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EXHIBIT 4.5
STOCK TRANSFER AGREEMENT
This STOCK TRANSFER AGREEMENT (the "Agreement") dated as of 5th April
1999, by and between International Microcomputer Software, Inc. a California
corporation ("IMSI"), and Americ Disc USA-California Inc., a California
corporation ("Americ Disc").
WHEREAS, IMSI and AMERIC DISC now desire to set forth certain terms and
provisions with respect to the payment by IMSI of $700,000 (the "Obligation") of
that certain sum of money owed:
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 Obligation. The Obligation shall be satisfied in full
by compliance by IMSI with the terms and provisions of this Agreement.
2. Issuance of the Shares and Warrants. As soon as reasonably
practicable after execution of this Agreement, but in no event later then April
9th 1999, IMSI will issue to AMERIC DISC a number of shares of IMSI's no par
value Common Stock (the "Common Stock"), equal to the result of the amount of
the Obligation divided by the average closing price per share of the Common
Stock for the thirty day period prior to the date hereof (the "Market Price").
The shares of Common Stock to be issued to AMERIC DISC shall be referred to
herein as the "Shares." If, at the time the registration statement including the
Shares (the "Registration Statement") is declared effective under the Securities
Act of 1933 (the "1933 Act"), and, as applicable, California securities law,
(the "Effective Date") the average closing price per share of the Common Stock
for the thirty day period prior to the Effective Date is less than the Market
Price, the number of Shares issued to AMERIC DISC shall be increased to an
amount such that the total number of Shares is equal to the result of the amount
of the Obligation divided by the average closing price per share of Common Stock
for the thirty day period prior to the Effective Date (the "Adjusted Market
Price"). Notwithstanding the foregoing, the total number of shares of Common
Stock issued to AMERIC DISC shall not exceed the result of the amount of the
Obligation divided by $8.00. When hereinafter used herein, the term Market Price
shall refer to the Market Price, Adjusted Market Price, or $8.00, as the case
may be, in accordance herewith.
AMERIC DISC shall also receive warrants to purchase 13,000 shares of Common
Stock at 130% of the Market Price for a period of four years from the date of
execution of this Agreement.
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3. Sale.
a. Sale. IMSI acknowledges that AMERIC DISC intends to sell the Shares
upon the Effective Date, and that AMERIC DISC is not an affiliate of IMSI. 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 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 AMERIC DISC as follows:
a. Registration. IMSI shall use its reasonable best efforts to
cause the Shares to be registered (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, but in no event later then May 10th
1999. IMSI will diligently pursue the registration until it is declared
effective.
b. At the Effective Date, the time of effectiveness of any
post-effective amendment to the Registration Statement, the time any prospectus
related to the Registration Statement ("Prospectus") is first filed with the
SEC, the time any supplement to or amendment of the Prospectus is filed with the
SEC and at any time any document filed under the Securities and Exchange Act of
1934 (the "Exchange Act") is filed, the Registration Statement and the
Prospectus and any amendments thereof and supplements thereto will be in
compliance with all applicable provisions of the 1933 Act, the Exchange Act, the
respective rules and regulations promulgated thereunder (referred to herein as
the "Regulations") and California securities law, and all of the same will not
contain an untrue statement of a material fact and will not omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading.
c. As of the Effective Date, the Shares will not be restricted
securities, will be freely tradeable by AMERIC DISC and may be sold by AMERIC
DISC without restriction.
d. 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.
e. If at any time when a Prospectus is required to be delivered
under the Securities Act any event shall occur as a result of which the
Prospectus as then
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amended or supplemented, in the judgment of IMSI or AMERIC DISC, 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 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 1933 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 thereto, (i) IMSI will notify AMERIC DISC promptly and prepare and
file with the SEC an appropriate amendment or supplement (in form and substance
satisfactory to AMERIC DISC) which will correct such statement or omission or
which will effect such compliance and will use its best efforts to have any
amendment or supplement to the Registration Statement declared effective by the
SEC as soon as possible and (ii) AMERIC DISC 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
SEC. The foregoing shall in no way imply or impose a duty or obligation on the
part of AMERIC DISC to review or in any way be involved in the preparation of
any securities related document or filing of IMSI.
f. IMSI will pay all fees and expenses with respect to the
preparation and filing of the Registration Statement and the registration of the
Shares.
5. Indemnification.
a. IMSI agrees to indemnify and hold harmless AMERIC DISC,
against any and all losses, liabilities, claims, damages and expenses incurred
(including but not limited to attorneys' fees), to which it may become subject,
insofar as such losses, liabilities, claims, damages or expenses (or actions in
respect thereof) arise 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
AMERIC DISC 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 in writing to IMSI by AMERIC
DISC.
b. Promptly after AMERIC DISC becomes aware of the commencement
of any action or claim against it for which it seeks indemnification, AMERIC
DISC shall notify IMSI in writing of the commencement thereof. In case any such
action or claim is brought against AMERIC DISC, and it notifies IMSI of the
commencement thereof, IMSI will be entitled to participate therein and, to the
extent it may elect by written notice delivered to AMERIC DISC promptly after
receiving the
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aforesaid notice from AMERIC DISC, to assume the defense thereof using counsel
reasonably acceptable to AMERIC DISC. Notwithstanding the foregoing, AMERIC DISC
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 AMERIC DISC unless (i)
the employment of such counsel shall have been authorized in writing by IMSI in
connection with the defense of such action, (ii) IMSI shall not have employed
reasonably acceptable counsel to have charge of the defense of such action
within a reasonable time after notice of commencement of the action, or (iii)
AMERIC DISC shall have reasonably concluded that there may be defenses available
to it or them which are different from or additional to those available to IMSI
(in which case IMSI shall not have the right to direct the defense of such
action on behalf of AMERIC DISC), in any of which events such fees and expenses
shall be borne by IMSI. Anything in this subsection to the contrary
notwithstanding, if IMSI should elect to assume the defense of a claim or
action, IMSI 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 constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes 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 AMERIC DISC, to:
ATTN: Controller
0000 Xxxxxxxxxx Xxx
Xxxxxxx, XX 00000
With a copy to:
ATTN: VP Finance
Americ Disc Inc.
0000 Xxxxxxxx
Xxxxxxxxxxxxx, XX X0X 0X0
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
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The address of a party, for the purposes of this Section 7, 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 deemed to have been duly given: at the time
delivered by hand, if personally delivered; five calendar days after 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. AMERIC DISC represents and warrants that,
subject to its intent to sell the shares as set forth in paragraph 3 hereof, 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
AMERIC DISC has had access to all information regarding IMSI and its present
business, assets, liabilities and financial condition, that AMERIC DISC
reasonably considers important in making the decision to acquire the Shares
under this Agreement; and that AMERIC DISC understands that the Shares, when
initially issued, may be restricted securities and may not be sold except
pursuant to the Registration Statement, some other registration statement, or
pursuant to an applicable exemption from federal and state registration
requirements.
10. Opinion of Counsel. On or before the date the Securities are issued
to AMERIC DISC, IMSI shall provide AMERIC DISC with an opinion of counsel,
addressed to and for the exclusive benefit of AMERIC DISC, that as of the
Effective Date, the Shares will not be restricted securities, will be freely
tradable and may be sold by AMERIC DISC without restriction.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as
of the date first set forth above.
AMERIC DISC USA-CALIFORNIA INC. INTERNATIONAL MICROCOMPUTER
SOFTWARE, INC.
By: _________________________ By: ______________________________
Name: Marcel Xxxxxx Xxxxxxx Name: Xxxxxxx Xxxxxxx
VP Finance Title: Chief Financial Officer
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