1
EXHIBIT 10.1
MULTICOM PUBLISHING, INC.
COMMON STOCK PURCHASE AGREEMENT
This Agreement is entered into as of February 7, 1997 by and among
Multicom Publishing, Inc., a Washington corporation (the "Company") and each of
the undersigned purchasers of Common Stock of the Company (collectively the
"Purchasers" and individually a "Purchaser") listed on the Schedule of
Purchasers attached hereto as Exhibit A.
In consideration of the mutual promises, covenants and conditions set
forth below, the parties mutually agree as follows:
1. Authorization and Sale of the Shares.
1.1 Authorization. The Company has authorized the issuance
and sale of up to $1,600,000 worth of shares of its Common Stock pursuant to the
terms and conditions of this Agreement. The term "Common Shares" means shares of
Common Stock which equal a value of $1,600,000.
1.2 Issuance and Sale. Subject to the terms and conditions
of this Agreement, at the Closing (as defined below), the Company will issue and
sell to the Purchasers and the Purchasers will purchase from the Company, up to
$1,600,000 worth of shares of Common Stock, at a price per share equal to the
average of the closing sale prices of the Company's Common Stock as reported in
the Wall Street Journal based upon information provided by the Nasdaq SmallCap
Market for each of the 20 consecutive trading days ending on the business day
immediately preceding the Initial Closing Date. The Company's agreement with
each Purchaser hereunder is a separate agreement, and the sale of Common Shares
to each of the Purchasers is a separate sale.
2. Closing Date; Delivery.
2.1 Initial Closing Date. The closing (the "Closing") of the
purchase and sale of certain of the Common Shares (as shown on Exhibit A) of
Common Stock to the Purchasers will be held at the offices of Multicom
Publishing, Inc., 000 Xxxxxxxxxxx, 0xx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000.
The Closing shall be held on February 7, 1997 at 10:00 a.m., or at such other
time and place as the Company and the Purchasers may agree.
2.2 Delivery. Subject to the terms of this Agreement, at the
Closing, the Company will deliver to the Purchasers stock certificate(s)
representing the number of Common Shares set forth in the applicable provision
of Section 1 above, against delivery to the Company by each Purchaser at Closing
of a check or wire transfer for the purchase price therefor, as shown on Exhibit
"A".
1
2
3. Representations and Warranties of the Company. Except as set
forth on a Schedule of Exceptions attached to this Agreement as Exhibit B
("Schedule of Exceptions to Representations and Warranties of Company"), the
Company represents and warrants to the Purchasers as follows:
3.1 Organization and Standing; Articles and Bylaws. The
Company is a corporation duly organized and validly existing and in good
standing under the laws of the State of Washington and has full right, power,
authority and capacity to enter into this Agreement and to consummate the
transactions contemplated hereby.
3.2 Capitalization. As of the date of the Closing, the
authorized capital stock of the Company will consist of 40,000,000 shares of
Common Stock and 300,000 shares of Preferred Stock. Immediately prior to the
Closing there will be issued and outstanding approximately 5,600,000 shares of
Common Stock and no shares of Preferred Stock. As of the Closing, there will be
no outstanding rights, plans, options, warrants, conversion rights or agreements
for the purchase or acquisition from the Company of any shares of its capital
stock, except that an aggregate of 204,991 warrants are outstanding and an
aggregate of 1,249,400 shares of Common Stock have been reserved for issuance
upon exercise of outstanding options.
3.3 Authorization.
(a) All corporate action on the part of the Company,
its officers, directors and shareholders necessary for (i) the sale and issuance
of the Common Shares pursuant hereto, and (ii) the execution, performance and
delivery by the Company of the Agreement has been taken or will be taken prior
to the Closing. The Agreement is a valid and binding obligation of the Company,
enforceable against it in accordance with its terms except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application relating to or affecting enforcement of creditors' rights
and rules or laws concerning equitable remedies.
(b) The Common Shares, when issued in compliance
with the provisions of this Agreement, will be validly issued, fully paid and
nonassessable, and will be free of any liens or encumbrances; provided, however,
that the Common Shares may be subject to restrictions on transfer under state
and/or federal securities laws as set forth herein or otherwise required by such
laws at the time a transfer is proposed.
(c) The outstanding shares of Common Stock are all
duly and validly authorized and issued, fully paid and nonassessable, and were
issued in compliance with all applicable federal and state securities laws.
(d) No shareholder of the Company has any right of
first refusal or any preemptive rights in connection with the issuance of the
Common Shares.
3.4 No Conflict. The execution and delivery by the Company
of this Agreement, and the performance of the Company's duties hereunder and of
all other acts necessary or appropriate for the consummation of the transaction
contemplated hereunder, will not violate the Company's Articles of Incorporation
or Bylaws, or any material contract,
2
3
agreement, understanding, arrangement or instrument by which the Company is
bound or to which the Company is a party.
3.5 Securities and Exchange Commission Filings; Financial
Statements. The company has made available to the Purchasers a true and complete
copy of its Annual Report on Form 10-K for the year ended June 30, 1996 (the
"Form 10-K") and its Quarterly Report on Form 10-Q for the quarter ended
September 30, 1996 (the "Form 10-Q"). The financial statements contained in the
Form 10-K and the Form 1O-Q were prepared in accordance with generally accepted
accounting principles, consistently applied throughout the periods covered
thereby.
3.6 Governmental Consent, etc. No consent, approval or
authorization of or designation, declaration or filing with any governmental
authority on the part of the Company is required in connection with the valid
execution and delivery of the Agreement, or the offer, sale or issuance of the
Common Shares or the consummation of any other transaction contemplated hereby,
except, if required, qualifications or filings under the Securities Act of 1933
(the "Securities Act"), the California Corporate Securities Law of 1968 (the
"California Law") and other applicable blue sky laws, which qualifications or
filings, if required, will be obtained or made and will be effective within the
period required by law.
4. Representations and Warranties of Purchasers; Indemnity by
Purchasers; Restrictions on Transfer.
4.1 Investor Representations and Warranties by Each
Purchaser. Each Purchaser represents and warrants to the Company as follows:
(a) Purchaser realizes that the purchase of Common
Shares is a highly speculative investment.
(b) Purchaser is able, without impairing Purchaser's
financial condition, to bear the economic risk of the purchase of the Common
Shares pursuant to the terms of this Agreement, to hold the Common Shares for an
indefinite period of time and to suffer a complete loss of Purchaser's
investment.
(c) The Purchaser has such knowledge and experience
in financial and business matters that the Purchaser is capable of (i)
evaluating the merits and risks of the purchase of the Common Shares pursuant to
the terms of this Agreement and (ii) protecting the Purchaser's interests in
connection therewith.
(d) The Purchaser and the Purchaser's
representatives have been solely responsible for such Purchaser's own "due
diligence" investigation of the Company and its management and business, for
such Purchaser's own analysis of the merits and risks of this investment, and
for such Purchaser's own analysis of the fairness and desirability of the terms
of the investment; in taking any action or performing any role relative to the
arranging of the proposed investment, the Purchaser has acted solely in the
Purchaser's own interest.
(e) The Purchaser and its representatives and legal
counsel have been afforded full and free access to corporate books, financial
statements, records, contracts,
3
4
documents, other information concerning the Company and its offices and
facilities, have been afforded an opportunity to ask such questions of the
Company's officers, employees, agents, accountants and representatives
concerning the Company's business, operations, financial condition, assets,
liabilities and other relevant matters as they have deemed necessary or
desirable, and have been given all such information as has been requested, in
order to evaluate the merits and risks of the prospective investments
contemplated herein.
(f) The Common Shares are being acquired for the
Purchaser's own account, in each case for investment and not with a view to, or
for resale in connection with, any distribution or public offering thereof
within the meaning of the Securities Act.
(g) The Purchaser understands that the Common Shares
have not been registered under the Securities Act by reason of their issuance in
a transaction exempt from the registration and prospectus delivery requirements
of the Securities Act pursuant to Section 4(2) of the Securities Act and/or
Regulation D promulgated under the Securities Act, that the Company has no
present intention of registering the Common Shares, that the Common Shares must
be held by the Purchaser indefinitely, and that the Purchaser must therefore
bear the economic risk of such investment indefinitely, unless a subsequent
disposition thereof is registered under the Securities Act or is exempt from
registration. The Purchaser understands that the Common Shares are restricted
Common Shares within the meaning of Rule 144 under the Securities Act, which
allows limited resale of such Common Shares under certain conditions; that, in
any event, such exemption from registration under Rule 144 will not be available
for at least two years, and even then will not be available unless the other
conditions of Rule 144 are complied with.
(h) Purchaser (i) represents and warrants that
Purchaser has retained no finder or broker in connection with the transactions
contemplated by this Agreement and (ii) hereby agrees to indemnify and to hold
the Company harmless of and from any liability for any commission or
compensation in the nature of a finder's fee to any broker or other person or
firm (and the costs and expenses of defending against such liability or asserted
liability) for which Purchaser, or any of Purchaser's employees or
representatives, are responsible.
4.2 Legends. Each certificate or instrument representing the
Common Shares will be endorsed with the following legends:
(a) THE COMMON SHARES EVIDENCED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE
IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH
COMMON SHARES, THE TRANSFER IS MADE IN COMPLIANCE WITH RULE 144
PROMULGATED UNDER SUCH ACT OR THE COMPANY RECEIVES AN OPINION OF COUNSEL
FOR THE HOLDER OF THESE COMMON SHARES WHICH IS REASONABLY SATISFACTORY
TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR
HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY
REQUIREMENTS OF SUCH ACT.
4
5
(b) Any other legends required by California law,
Washington law or other applicable state blue sky laws.
The Company need not register a transfer of any Common Shares, and may also
instruct its transfer agent not to register the transfer of the Common Shares,
unless the conditions specified in this Agreement are satisfied.
4.3 Removal of Legend and Transfer Restrictions.
(a) Any legend endorsed on a certificate pursuant to
Section 4.2 and any stop transfer instructions applicable to such certificate
regarding the restrictions set forth in such legend will be removed and the
Company will issue a certificate without such legend to the holder thereof if
such Common Shares are registered under the Securities Act and a prospectus
meeting the requirements of Section 10 of the Securities Act is available, if
such legend may be properly removed under the terms of Rule 144 promulgated
under the Securities Act, or if such holder provides the Company with an opinion
of counsel for such holder which opinion is reasonably satisfactory to legal
counsel for the Company, to the effect that a public sale, transfer or
assignment of such Common Shares may be made without registration.
(b) Any legend endorsed on a certificate pursuant to
Section 4.2 and the stop transfer instructions with respect to such Common
Shares will be removed upon receipt by the Company of an order of the California
Department of Corporations or other appropriate blue sky authority authorizing
such removal.
5. Registration Rights.
5.1 Definitions. As used in this Agreement, the following
terms shall have the following respective meanings:
(a) The terms "register", "Registered" and
"registration" refer to a registration effected by preparing and filing a
registration statement in compliance with the Securities Act, and the
declaration or ordering of the effectiveness of such registration statement.
(b) The term "Registrable Securities" means (i) the
Common Shares issued and sold by the company pursuant to this Agreement; (ii)
stock issued in lieu thereof in any reorganization, which has not been sold to
the public; or (iii) stock issued in respect of the stock referred to in (i) and
(ii) as a result of a stock split, stock dividend, recapitalization or the like,
which has not been sold to the public.
(c) The terms "Holder" or "Holders" means any person
or persons to whom Registrable Securities were originally issued or qualifying
transferees under Section 5.7 hereof who hold Registrable Securities.
(d) The term "SEC" means the Securities and Exchange
Commission.
(e) The term "Registration Expenses" shall mean all
expenses incurred by the Company in complying with Sections 5.2 and 5.3 hereof,
including, without limitation, all
5
6
accounting fees and expenses, all registration, qualification and filing fees,
printing expenses, escrow fees, fees and disbursements of counsel for the
company, blue sky fees and expenses, and the expense of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of the Company which shall be paid in any event by the
Company.)
5.2 Requested Registration.
(a) The Holders shall have the "demand" registration
rights with respect to the Registrable Securities provided in this Section 5.2.
Any Holder or Holders may exercise their demand registration rights at any time
or times after the date which is nine months from the date of the Closing. If
the Company shall receive from any Holder or Holders holding in the aggregate
not fewer than 60% of the Registrable Securities, a written request that the
Company effect any registration with respect to all or a part of the Registrable
Securities having an aggregate offering price, net of underwriting discounts and
expenses, equal to or exceeding $500,000, the Company will, as soon as
practicable, use its best efforts to effect such registration (including,
without limitation, filing post-effective amendments, appropriate qualifications
under applicable blue sky or other state securities laws, and appropriate
compliance with the Securities Act) as would permit or facilitate the sale and
distribution of all or such portion of such Registrable Securities as are
specified in such request. The Holders shall be entitled to exercise these
demand registration rights only twice.
(b) The Company shall file a registration statement
covering the Registrable Securities so requested to be registered as soon as
practicable after receipt of the request or requests of the Holder or Holders;
provided, however, that if (i) in the good faith judgment of the Board of
Directors of the Company, such registration would be seriously detrimental to
the Company and the Board of Directors of the Company concludes, as a result,
that it is essential to defer the filing of such registration statement at such
time, and (ii) the Company shall furnish to the Holder or Holders a certificate
signed by the President of the Company stating that in the good faith judgment
of the Board of Directors of the Company, it would be seriously detrimental to
the Company for such registration statement to be filed in the near future and
that it is, therefore, essential to defer the filing of such registration
statement, then the Company shall have the right to defer such filing for the
period during which such disclosure would be seriously detrimental, provided
that the Company may not defer the filing for a period of more than 180 days
after receipt of the request of the Holder or Holders, and, provided further,
that the Company shall not defer its obligation in this manner more than once in
any twelve-month period.
The registration statement filed pursuant to the request
of the Holder or Holders may include other securities of the Company, with
respect to which registration rights have been granted, and may include
securities of the Company being sold for the account of the Company.
5.3 Company Registration.
(a) The Holders shall have the "piggyback"
registration rights with respect to the Registrable Securities provided in this
Section 5. If the Company shall determine
6
7
to register any of its securities either for its own account or the account of a
security holder or holders exercising their respective demand registration
rights, the Company will:
(i) promptly give to the Holders written
notice thereof, and
(ii) include in such registration (and any
related qualification under blue sky laws or other compliance), except as set
forth in Section 5.3(b) below, and in any underwriting involved therein, all the
Registrable Securities specified in a written request or requests, made by any
Holder within twenty (20) days after the written notice from the Company
01described in clause (i) above is given. Such written request may specify all
or a part of the Holder's Registrable Securities.
(b) If the registration of which the Company gives
notice is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as a part of the written notice given
pursuant to Section 5.3(a)(i). In such event, the right of any Holder to
registration pursuant to this Section 5.3 shall be conditioned upon the Holder's
participation in such underwriting and the inclusion of the Holder's Registrable
Securities in the underwriting to the extent provided herein. The Holder, if
proposing to distribute its securities through such underwriting shall (together
with the Company and the other holders of securities of the Company with
registration rights to participate therein distributing their securities through
such underwriting) enter into an underwriting agreement in customary form with
the representative of the underwriter or underwriters selected by the Company.
Notwithstanding any other provision of this Section 5.3, if the underwriter
determines that marketing factors require a limitation of the number of shares
to be underwritten, the underwriter may limit the amount of securities to be
included in the registration and underwriting by the Company's shareholders;
provided however, the number of Registrable Securities to be included in such
registration and underwriting under this Section 5.3(b) shall not be reduced to
less than twenty percent (20%) of the aggregate securities included in such
registration without the prior consent of at least a majority of the Holders who
have requested their shares to be included in such registration and
underwriting. The Company shall so advise all Holders of Registrable Securities
which would otherwise be registered and underwritten pursuant hereto, and the
number of shares of Registrable Securities that may be included in the
registration and underwriting shall be allocated among Holders requesting
registration in proportion, as nearly as practicable, to the respective amounts
of Registrable Securities held by each of such Holders as of the date of the
notice pursuant to this Section. If any Holder disapproves of the terms of any
such underwriting, he may elect to withdraw therefrom by written notice to the
Company and the underwriter. Any Registrable Securities excluded or withdrawn
from such underwriting shall be withdrawn from such registration.
5.4 Registration Expenses. All Registration Expenses
incurred in connection with any registration, qualification or compliance
pursuant to Section 5.3 hereof, and the first two registrations pursuant to
Section 5.2 hereof, all selling commissions and underwriter discounts on the
shares sold by the Holder or Holders, and reasonable fees of counsel for the
Holder or Holders, as selling stockholders, shall be borne by the Company.
5.5 Form S-3. The Company shall use its best efforts to
qualify for
7
8
registration on Form S-3 or any comparable or successor form or forms. After the
Company has qualified for the use of Form S-3, in addition to the rights
contained 0in the foregoing provisions of this Section 5, the Holders shall have
the right to request registrations on Form S-3 (such requests shall be in
writing and shall state the number of shares of Registrable Securities to be
disposed of and the intended methods of disposition of such shares by the
Holder), provided, however, that the Company shall not be obligated to effect
any such registration if: (i) the Holder, together with the holders of any other
securities of the Company entitled to inclusion in such registration, propose to
sell Registrable Securities and such other securities (if any) on Form S-3 at an
aggregate price to the public of less than $250,000; or (ii) in the event that
the Company shall furnish the certification described in Section 5.2(b) (but
subject to the limitations set forth therein); or (iii) in a given twelve-month
period, after the Company has effected one such registration in any such period.
5.6 Registration Procedures. In the case of each
registration effected by the Company pursuant to this Section 5, the Company
will keep the Holders advised in writing as to the initiation of each
registration and as to the completion thereof. At its expense, the Company will
use its best efforts to:
(a) Keep such registration effective for a period of
one hundred twenty (120) days or until the Holder or Holders has completed the
distribution described in the registration statement relating thereto, whichever
first occurs; provided, however, in the case of any registration of Registrable
Securities on Form S-3 which are intended to be offered on a continuous or
delayed basis, such 120-day period shall be extended, if necessary, to keep the
registration statement effective until all such Registrable Securities are sold,
provided that Rule 415, or any successor rule under the Securities Act, permits
an offering on a continuous or delayed basis, and provided further that
applicable rules under the Securities Act governing the obligation to file a
post-effective amendment permit, in lieu of filing a post-effective amendment
that: (i) includes any prospectus required by Section 10(a)(3) of the Securities
Act; or (ii) reflects facts or events representing a material or fundamental
change in the information set forth in the registration statement, the
incorporation by reference of information required to be included in (i) and
(ii) above to be contained in periodic reports filed pursuant to Section 13 or
15(d) of the Exchange Act in the registration statement;
(b) Prepare and file with the Commission such
amendments and supplements to such registration statement and the prospectus
used in connection with such registration statement as may be necessary to
comply with the provisions of the Securities Act with respect to the disposition
of all securities covered by such registration statement;
(c) Furnish such number of prospectuses and other
documents incident thereto, including any amendment of or supplement to the
prospectus, as the Holder from time to time may reasonably request;
(d) Notify the Holder, if a seller of Registrable
Securities covered by such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act of the
happening of any event as a result of which the prospectus included in such
registration statement, as then in effect, includes an untrue statement of a
material fact or omits to state a material fact required to be stated therein or
necessary to
8
9
make the statements therein not misleading or incomplete in the light of the
circumstances then existing, and at the request of any such seller, prepare and
furnish to such seller a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such shares, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading or
incomplete in the light of the circumstances then existing;
(e) Cause all such Registrable Securities registered
pursuant hereunder to be listed on each securities exchange and each over the
counter market on which similar securities issued by the Company are then listed
or quoted;
(f) Provide a transfer agent and registrar for all
Registrable Securities registered pursuant to such registration statement and a
CUSIP number for all such Registrable Securities, in each case not later than
the effective date of such registration;
(g) To the extent economically feasible, use its
best efforts to comply with all applicable rules and regulations of the
Commission, and make available to its security holders, as soon as reasonably
practicable, an earnings statement covering the period of at least twelve
months, but not more than eighteen months, beginning with the first month after
the effective date of the Registration Statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act; and
5.7 Indemnification.
(a) The Company will indemnify the Holders and each
of its officers, directors, legal counsel, and accountants and each person
controlling each Holder within the meaning of Section 15 of the Securities Act,
with respect to which registration, qualification, or compliance has been
effected pursuant to this Section 5, and each underwriter, if any, and each
person who controls within the meaning of Section 15 of the Securities Act any
underwriter, against all expenses, claims, losses, damages, and liabilities (or
actions, proceedings, or settlements in respect thereof) arising out of or based
on any untrue statement (or alleged untrue statement) or a material fact
contained in any prospectus, offering circular, or other document (including any
related registration statement, notification, or the like) incident to any such
registration, qualification, or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, or any violation by the
Company of the Securities Act or any rule or regulation thereunder applicable to
the Company and relating to action or inaction required of the Company in
connection with any such registration, qualification, or compliance, and will
reimburse each Holder, each of its officers, directors, legal counsel, and
accountants, each such underwriter, and each person who controls any such
underwriter, for any legal and any other expenses reasonably incurred in
connection with investigating and defending or settling any such claim, loss,
damage, liability, or action, provided that the Company will not be liable in
any such case to the extent that any such claim, loss, damage, liability, or
expense arises out of or is based on any untrue statement or omission based upon
written information furnished to the Company by the Holder and stated to be
specifically for use therein. It is agreed that the indemnity agreement
contained in this Section 5.7(a) shall not apply to amounts paid in settlement
of any such loss, claim,
9
10
damage, liability, or action if such settlement is effected without the consent
of the Company (which consent has not been unreasonably withheld).
(b) Each Holder will, if Registrable Securities held by it
are included in the securities as to which such registration, qualification, or
compliance is being effected, indemnify the Company, each of its directors,
officers, legal counsel, and accountants and each underwriter, if any, of the
Company's securities covered by such a registration statement, each person who
controls the Company or such underwriter within the meaning of Section 15 of the
Securities Act, against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular, or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Company and directors, officers, legal counsel, and accountants, persons,
underwriters, or control persons for any legal or any other expenses reasonably
incurred in connection with investigating or defending any such claim, loss,
damage, liability, or action, in each case to the extent, but only to the
extent, that such untrue statement (or alleged untrue statement) or omission (or
alleged omission) is made in such registration statement, prospectus, offering
circular, or other document in reliance upon and in conformity with written
information furnished to the Company by the Holder stated to be specifically for
use therein provided, however, that the obligations of each Holder hereunder
shall not apply to amounts paid in settlement of any such claims, losses,
damages, or liabilities (or actions in respect thereof) if such settlement is
effected without the consent of the Holder (which consent shall not be
unreasonably withheld).
(c) Each party entitled to indemnification under
this Section 5.7 (the "Indemnified Party") shall give written notice to the
party required to provide indemnification (the "Indemnifying Party") promptly
after such Indemnified Party has actual knowledge of any claim as to which
indemnity may be sought, and shall permit the Indemnifying Party to assume the
defense of such claim or any litigation resulting therefrom, provided that
counsel for the Indemnifying Party, who shall conduct the defense of such claim
or any litigation resulting therefrom, shall be approved by the Indemnified
Party (whose approval shall not unreasonably be withheld), and the Indemnified
Party may participate in such defense at such party's expense, and provided
further that the failure of any Indemnified Party to give notice as provided
herein shall not relieve the Indemnifying Party of its obligations under this
Section 5, to the extent such failure is not prejudicial. No Indemnifying Party,
in the defense of any such claim or litigation, shall, except with the consent
of each Indemnified Party, consent to entry of any judgment or enter into any
settlement that does not include as an unconditional term thereof the giving by
the claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation. Each Indemnified Party shall
furnish such information regarding itself or the claim in question as an
Indemnifying Party may reasonably request in writing and as shall be reasonably
required in connection with defense of such claim and litigation resulting
therefrom.
(d) If the indemnification provided for in this
Section 5.7 is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage, or expense
referred to therein, then the Indemnifying Party, in lieu of indemnifying such
Indemnified Party hereunder, shall contribute to the amount paid or payable by
such Indemnified Party as a result of such loss, liability, claim, damage, or
expense in such
10
11
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and of the Indemnified Party on the other in connection
with the statements or omissions that resulted in such loss, liability, claim,
damage, or expense as well as any other relevant equitable considerations. The
relative fault of the Indemnifying Party and of the Indemnified Party shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission to state a material fact
relates to information supplied by the Indemnifying Party or by the Indemnified
Party and the parties' relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission.
(e) Notwithstanding the foregoing, to the extent
that the provisions on indemnification and contribution contained in the
underwriting agreement entered into in connection with the underwritten public
offering are in conflict with the foregoing provisions, the provisions in the
underwriting agreement shall control.
5.8 Rule 144 Reporting. With a view to making available the
benefits of certain rules and regulations of the Commission that may permit the
sale of restricted securities to the public without registration, the Company
agrees to use its best efforts to:
(a) File with the Commission in a timely manner all
reports and other documents required of the Company under the Securities Act and
the Exchange Act at any time after it has become subject to such reporting
requirements;
(b) So long as any Holder owns any restricted
securities, furnish to the Holder upon request, a written statement by the
Company as to its compliance with the reporting requirements of Rule 144 and of
the Securities Act and the Exchange Act, routinely mail to each Holder a copy of
the most recent annual or quarterly report of the Company, and upon request,
furnish such other reports and documents as the Holder may reasonably request in
availing itself of any rule or regulation of the Commission allowing the Holder
to sell any such securities without registration.
5.9 Market Stand-Off. Each Holder agrees not to sell or
otherwise dispose of any securities of the Company (other than securities
included in the applicable registration statement) up to a 180-day period
following the effective date of a public offering of the Company filed under the
Securities Act that includes securities to be sold on the Company's behalf to
the public in an underwritten offering; provided that a majority of the officers
and directors on the effective date of the public offering have executed written
agreement to be similarly bound.
5.10 Transfer of Registration Rights. Holders' rights to
cause the Company to register their securities granted to them by the Company
under Section 5.2, may be assigned to a transferee or assignee of at least
50,000 shares (as adjusted for stock splits, stock dividends, recapitalization
and like events) of a Holder's Registrable Securities not sold to the public,
provided that the Company is given written notice by such Holder at the time of
or within a reasonable time after said transfer, stating the name and address of
said transferee or assignee and identifying the securities with respect to which
such registration right are being assigned. The Company may prohibit the
transfer of any Holders' rights under this Section 5.10 to any proposed
transferee or assignee who the Company reasonably believes is a competitor of
the Company.
11
12
6. Conditions to Closing.
6.1 Conditions to Obligations of the Purchasers. The
obligation of each Purchaser to purchase Common Shares at the Closing is subject
to the fulfillment of the following conditions, any of which may be waived by
the Purchasers:
(a) Representations and Warranties Correct;
Performance of Obligations. The representations and warranties made by the
Company in Section 3 hereof will be true and correct in all material respects
when made, and will be true and correct in all material respects on the date of
the Closing with the same force and effect as if they had been made on and as of
the date of the Closing, and the Company will have performed all obligations and
conditions herein required to be performed or observed by it on or prior to the
date of the Closing.
(b) Corporate Proceedings; Waivers and Consents. All
corporate and other proceedings to be taken and all waivers, consents and
permits necessary or appropriate for consummation of the transactions
contemplated by this Agreement and the Exhibits attached hereto will have been
taken or obtained.
(c) Compliance Certificate. The Company will have
delivered to the Purchasers a Certificate, executed by the President of the
Company and dated the date of the Closing, certifying as to the fulfillment of
the conditions specified in Sections (a) and (b) of this Section 6.1.
(d) Legal Investment. At the time of the Closing,
the purchase of the Common Shares by the Purchasers hereunder will be legally
permitted by all laws and regulations to which the Purchasers and the Company
are subject.
(e) Blue Sky Matters. All consents, approvals,
qualifications and/or registrations required to be obtained or effected under
any applicable state Common Shares or blue sky laws in connection with the
issuance, sale and delivery of the Common Shares will have been obtained or
effected.
6.2 Conditions to Obligations of the Company. The Company's
obligation to sell and issue the Common Shares at the Closing is subject to the
fulfillment on or prior to the date of the Closing of the following conditions,
any of which may be waived by the Company:
(a) Incorporation of Conditions. The conditions set
forth in Sections (b), (d), and (e) of Section 6.1 shall have been fulfilled.
(b) Representations and Warranties Correct;
Performance of Obligations. The representations and warranties made by the
Purchasers in Section 4 hereof will be true and correct when made, and will be
true and correct on the date of the Closing with the same force and effect as if
they had been made on and as of the date of the Closing, and the Purchasers will
have performed all obligations and conditions herein required to be performed or
observed by them on or prior to the date of the Closing.
12
13
(c) Compliance Certificate. Each Purchaser will have
delivered to the Company a Certificate, executed by the Purchaser and dated the
date of the Closing, certifying as to the fulfillment of the conditions
specified in Section 6.1(b).
7. Miscellaneous.
7.1 Waivers and Amendments. With the written consent of the
Holders of all of the Registrable Securities, the obligations of the Company and
the rights of the Holders under this Agreement may be waived (either generally
or in a particular instance, either retroactively or prospectively and either
for a specified period of time or indefinitely), and with the same consent the
Company, when authorized by resolution of its Board of Directors, may enter into
a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Agreement;
provided, however, that no such waiver or supplemental agreement shall reduce
the aforesaid percentage of Registrable Securities the Holders of which are
required to consent to any waiver or supplemental agreement without the consent
of all of the Holders. Neither this Agreement nor any provision hereof may be
changed, waived, discharged or terminated orally, but only by a statement in
writing signed by the party against which enforcement of the change, waiver,
discharge or termination is sought, except to the extent provided in this
Section 7.1.
7.2 Governing Law. This Agreement will be governed in all
respects by the laws of the State of California as such laws are applied to
agreements between California residents entered into and to be performed
entirely within California.
7.3 Survival. The representations, warranties, covenants and
agreements made herein will survive the execution of this Agreement and the
Closing of the transactions contemplated hereby.
7.4 Successors and Assigns. Except as otherwise expressly
provided herein, the provisions hereof will inure to the benefit of, and be
binding upon, the successors, assigns, heirs, executors and administrators of
the parties hereto. The Purchaser may not assign its rights to purchase the
Common Shares and the Company may not assign its rights to receive the proceeds
of such purchase.
7.5 Entire Agreement. This Agreement, the exhibits to this
Agreement and the other documents delivered pursuant hereto or incorporated by
reference herein constitute the full and entire understanding and agreement
among the parties with regard to the subjects hereof and thereof and supersede
all prior oral and written understandings, agreements and commitments with
regard to such subjects by or among the parties hereto.
7.6 Notices, etc. All notices and other communications
required or permitted hereunder will be in writing and will be mailed by
certified or registered mail, postage prepaid, addressed (a) if to the
Purchasers, at the address of each Purchaser set forth on its signature page to
the Agreement, or at such other address as the Purchaser will have furnished to
the Company in writing, or (b) if to the Company, at 000 Xxxxxxxxxxx, 0xx Xxxxx,
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000, Attn: General Counsel, or at such other address
as the Company will have furnished
13
14
to the Purchasers.
7.7 No Waivers. No failure on the part of any party to
exercise or delay in exercising any right hereunder will be deemed a waiver
thereof, nor will any such failure or delay, or any single or partial exercise
of any such right, preclude any further or other exercise of such right or any
other right.
7.8 Separability. If any provision of this Agreement, or the
application thereof, is for any reason and to any extent determined by a court
of competent jurisdiction to be invalid or unenforceable, the remainder of this
Agreement and the application of such provision to other persons or
circumstances will be interpreted so as best to reasonably effect the intent of
the parties hereto. The parties agree to use their best efforts to replace such
void or unenforceable provision of this Agreement with a valid and enforceable
provision which will achieve, to the extent greatest possible, the economic,
business and other purposes of the void or unenforceable provision.
7.9 Expenses. The Company and the Purchasers shall each bear
their respective expenses and legal fees incurred with respect to this Agreement
and the transactions contemplated hereby.
7.10 Titles and Subtitles. The titles of the Sections of this
Agreement are for convenience of reference only and are not to be considered in
construing this Agreement.
7.11 Counterparts. This Agreement may be executed in any
number of counterparts, each of which will be an original, but all of which
together will constitute one instrument.
The parties have executed this Agreement as of the day and year first
above written.
COMPANY:
Multicom Publishing, Inc.
By: ____________________________
Xxxxxxxx X. Xxxx
Its: General Counsel
14
15
PURCHASER'S COUNTERPART SIGNATURE PAGE
MULTICOM PUBLISHING, INC. COMMON STOCK
PURCHASE AGREEMENT
February ___, 1997
"PURCHASER"
If Purchaser is an entity:
By:_________________________________
Title:______________________________
Signature:__________________________
If Purchaser is an individual:
____________________________________
(Signed Name)
15
16
Exhibit A
Schedule of Purchasers
Name Amount
---- ------
Xxxxxx X. and Xxxx X. Xxxxxx $ 740,000
Friar, Xxxxxx & Xxxxxx 250,000
Xxxxx Xxxxxxxx 50,000
Xxxxxxxx Corporation 400,000
Xxxxxx Xxxxxxxxx, Viking Capital 150,682
----------
Total $1,590,682
A-1
17
Exhibit B
Schedule of Exceptions
To
Representations and Warranties of Multicom Publishing, Inc.
in Common Stock Purchase Agreement
Dated as of February , 1997
None
B-1
