EXHIBIT 1.2
STANDBY STOCK PURCHASE AGREEMENT
BY AND BETWEEN
MIAMI COMPUTER SUPPLY CORPORATION
AND
ZENGINE, INC.
DATED JUNE __, 2000
STANDBY STOCK PURCHASE AGREEMENT
THIS STANDBY STOCK PURCHASE AGREEMENT (the "Agreement") is made and
entered into on this June _, 2000 between Miami Computer Supply Corporation, an
Ohio corporation ("MCSi"), and Zengine Inc., a Delaware corporation (the
"Company").
BACKGROUND
A. The Company is contemplating an initial public offering (the "Public
Offering") of its common stock, no par value (the "Common Stock"), through an
underwritten public offering lead by Xxxxxxx Xxxxx & Company as the
representative of the several underwriters (the "Underwriters").
B. In connection with the Public Offering the Company will offer
_______ shares of its Common Stock (the "Program Shares") directly to the
shareholders of MCSi pursuant to a share subscription program (the "Program").
C. If and to the extent any of the Program Shares are not subscribed
for or, if subscribed for, are not purchased by the shareholders of MCSi under
the Program, MCSi has agreed to purchase all such Program Shares directly from
the Company for its own account for investment purposes only on the terms and
subject to the conditions set forth herein.
D. Registrar and Transfer Company ("R&T") will act as the offering
agent for the Program and as the Company's transfer agent. The offering agent
will determine the record date shareholders eligible to participate in the
Program and will collect subscriptions and subscription payments from eligible
MCSi shareholders until 5:00 p.m. on the third business day following the date
the Company determines the initial public offering price for the Common Stock.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, intending to be legally bound hereby, the parties
hereto hereby agree as follows:
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ARTICLE 1
THE TRANSACTION
1.1. Purchase and Purchase Price.
(a) In the event that any of the Program Shares are not subscribed for
or, if subscribed for are not purchased by the shareholders of
MCSi under the Program, MCSi shall, or shall cause any of its
wholly owned subsidiaries to, purchase these remaining shares.
(b) The purchase price for the Program Shares (the "Purchase Price")
shall be equal to the product of multiplying (i) the aggregate
number of Program Shares, by (ii) the price per share of Common
Stock sold pursuant to the Public Offering (the "IPO Price").
(c) MCSi shall transfer, or MCSi shall cause its wholly owned
subsidiary, to transfer, or shall cause R&T to pay out of
subscription funds received on behalf of MCSi's shareholders
participating in the Program, to the Company, an amount equal to
the Purchase Price on the day of the closing of the Public
Offering by wire transfer.
1.2. Closing.
(a) Time and Place. The closing under this Agreement (the "Closing")
will take place on the same date as the closing of the Public
Offering, at the offices of Elias, Matz, Xxxxxxx & Xxxxxxx L.L.P.,
or at such other time, date or place as the parties shall mutually
agree. The date on which the Closing occurs is sometimes referred
to herein as the "Closing Date."
(b) Deliveries and Proceedings to the Offering Agent. On the Closing
Date, the Company shall instruct R&T to accept instructions from
___________, or her designee at MCSi, for:
(i) delivery of the subscription funds collected by the offering
agent to the extent not paid to the Company at the Closing.
(c) Deliveries and Proceedings to the Transfer Agent. On the Closing
Date, the Company shall instruct R&T to accept instructions from
____________, or her designee at MCSi, for:
(i) delivery of the shares of Program Shares purchased in the
Program; and
(ii)delivery to MCSi of the Program Shares not purchased by MCSi
shareholders.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to MCSi as follows:
2.1 Organization. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware.
2.2. Power and Authority. The Company has full corporate power and authority
to make, execute, deliver and perform this Agreement and the
transactions contemplated hereby.
2.3. Authorization and Enforceability. The execution, delivery and
performance of this Agreement by the Company have been duly authorized
by all necessary corporate action on the part of the Company,
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and this Agreement constitutes the legal, valid and binding obligation
of the Company, enforceable against the Company in accordance with its
terms.
ARTICLE 3
REPRESENTATION AND WARRANTIES OF MCSI
MCSi represents and warrants to the Company as follows:
3.1 Organization. MCSi is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Ohio.
3.2. Power and Authority. MCSi has full corporate power and authority to
make, execute, deliver and perform this Agreement and the transactions
contemplated hereby.
3.3. Authorization and Enforceability. The execution, delivery and
performance of this Agreement by MCSi have been duly authorized by all
necessary corporate action on the part of MCSi, and this Agreement
constitutes the legal, valid and binding obligation of MCSi,
enforceable against MCSi in accordance with its terms.
3.4 Authorization and Approvals. All consents, approvals, authorizations
and orders necessary for the execution and delivery of this Agreement;
and MCSi, or an affiliate have full rights, power and authority to
enter into this Agreement as provided hereunder.
3.5 Investment Intent. MCSi represents, warrants and covenants that it is
acquiring the Program Shares for its own account, as a long-term
investment, and not with the view to resale or redistribution.
ARTICLE 4
CONDITIONS TO CLOSING; TERMINATION
4.1 Conditions Precedent to Obligations of MCSi. The obligations of MCSi to
proceed with the Closing are subject to the fulfillment prior to or at
Closing of the following conditions (any one or more of which may be
waived in whole or in part by MCSi at MCSi's option):
(a) Bringdown of Representations and Warranties. The representations and
warranties of the Company contained in this Agreement shall be true and
correct on and as of the time of Closing, with the same force and
effect as though such representations and warranties had been made on,
as of and with reference to such time, and MCSi shall have received a
certificate, signed by an executive officer of the Company, to such
effect.
(b) Performance and Compliance. The Company shall have performed all of the
covenants and complied with all of the provisions required by this
Agreement to be performed or complied with by it on or before the
Closing, and MCSi shall have received a certificate, signed by any
executive officer, to such effect.
(c) Public Offering. The Closing of the Public Offering shall have
occurred.
4.2. Conditions Precedent to the Obligations of the Company. The obligations
of the Company to proceed with the Closing hereunder are subject to the
fulfillment prior to or at Closing of the following conditions (any one
or more of which may be waived in whole or in part by the Company at
the Company's option):
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(a) Bringdown of Representations and Warranties. The representations and
warranties of MCSi contained in this Agreement shall be true and
correct on and as of the time of Closing, with the same force and
effect as though such representations and warranties had been made on,
as of and with reference to such time, and MCSi shall have delivered to
the Company a certificate, signed by an executive officer of MCSi, to
such effect.
(b) Performance and Compliance. MCSi shall have performed all of the
covenants and complied with all the provisions required by this
Agreement to be performed or complied with by it on or before the
Closing and MCSi shall have delivered to the Company a certificate,
signed by any executive officer of MCSi, to such effect.
(c) Public Offering. The closing of the Public Offering shall have
occurred.
4.3. Termination.
(a) When Agreement May Be Terminated. This Agreement may be terminated at
any time prior to Closing:
(i) by mutual consent of MCSi and the Company; or
(ii) by MCSi or the Company, if the Company shall have withdrawn its
Registration Statement on Form S-1 relating to the Public
Offering.
(b) Effect of Termination. In the event of termination of this Agreement by
either MCSi or the Company, as provided above, this Agreement shall
forthwith terminate and there shall be no liability on the part of
either MCSi or the Company, except for liabilities arising from a
breach of this Agreement prior to such termination; provided, however,
that the obligations set forth in Article 5 hereof shall survive such
termination.
ARTICLE 5
CERTAIN ADDITIONAL COVENANTS
5.1 Indemnification.
(a) MCSi hereby agrees to indemnify the Company and its underwriters,
affiliates, officers, employees, representatives and directors (the
"Indemnified Persons") against, and hold them harmless from, any loss,
liability, claim, damage or expense, joint or several ("Losses"),
arising directly or indirectly, out of or in connection with, the
Program, including, without limitation,
(i) costs and expenses associated with the failure of any shareholders
of MCSi to consummate purchases of Program Shares for which they
have subscribed and (ii) any claims by shareholders of MCSi or
other persons arising from the Program, and expenses, arising from
the establishment, execution and performance of the Program.
Notwithstanding the foregoing, MCSi shall not indemnify the
Company against liabilities arising from any untrue or allegedly
untrue statement of a material fact, or omission or alleged
omission of a material fact required to be stated to make the
statements not misleading, in the prospectus contained in the
Company's Registration Statement on Form S-1 (the "Prospectus"),
except for statements or omissions regarding the Program and
except for any materials related to the Program delivered to
MCSi's shareholders and not to other recipients of the Prospectus
generally. MCSi agrees to reimburse the Indemnified Persons, as
incurred, for any reasonable legal or other expenses reasonably
incurred by them in connection with investigating or defending any
Losses.
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(b) Promptly after receipt by an Indemnified Person of notice of the
commencement of any action for which indemnification or contribution
may be sought hereunder, such Indemnified Person will notify MCSi in
writing of the commencement thereof. The failure to so notify MCSi will
not relieve MCSi from liability under Section 5.1(a) above unless and
to the extent that MCSi did not otherwise learn of such action and such
failure results in the forfeiture of substantial rights and defenses.
MCSi shall be entitled to appoint counsel at MCSi's expense to
represent the Indemnified Person in any action for which
indemnification is sought (in which case MCSi shall not thereafter be
liable for the fees and expenses of separate counsel retained by the
Indemnified Person except as set forth below); provided, however, that
such counsel shall be reasonably satisfactory to the Indemnified
Person. Notwithstanding MCSi's election to appoint counsel to represent
the Indemnified Person in an action, the Indemnified Person shall have
the right to employ separate counsel (including local counsel), and
MCSi shall bear the reasonable fees, costs and expenses of such counsel
if (i) the use of counsel chosen by MCSi to represent the Indemnified
Person would present such counsel with a conflict of interest, (ii) the
actual or potential defendants in, or targets of, any such action
include both MCSi and the Indemnified Person and the Indemnified Person
shall have reasonably concluded that there may be legal defenses
available to it that are different from or in addition to those
available to MCSi, (iii) MCSi shall not have employed counsel
reasonably satisfactory to the Indemnified Person within a reasonable
time after notification of the commencement of such action or (iv) MCSi
shall have authorized the Indemnified Person to employ separate counsel
at the expense of MCSi.
(c) MCSi shall not, without the prior written consent of the relevant
Indemnified Person, settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim, action, suit
or proceeding in respect of which indemnification or contribution may
be sought hereunder unless such settlement, compromise or consent
includes an unconditional release of such Indemnified Person from all
liability arising from such claim, action, suit or proceeding. An
Indemnified Person may not settle or compromise or consent to the entry
of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder without the consent of MCSi, such
consent not to be unreasonably withheld.
(d) In the event that the indemnity provided for in this Article 5 is
unavailable to or insufficient to hold harmless an Indemnified Person
for any reason, the Indemnified Persons and MCSi shall contribute to
the Losses (including the legal and other expenses attributable to
investigating or defending same) to which the Indemnified Person may be
subject in such proportion as is appropriate to reflect the relative
fault of the Indemnified Person and MCSi in connection with the
statements or omissions that resulted in such Losses as well as any
other relevant equitable considerations, including that the Company
performed the Program as an accommodation to MCSi without any legal
obligation to do so. Relative fault shall be determined by reference
to, among other things, whether any untrue or allegedly untrue
statement of a material fact or the omission or alleged omission to
state a material fact relates to information provided by the
Indemnified Person or MCSi, the intent of the Indemnified Person and
MCSi, and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission.
The parties agree that it would not be just and equitable if
contribution was determined by any method of allocation that does not
take into account the equitable considerations discussed above.
ARTICLE 6
MISCELLANEOUS
6.1. Nature and Survival of Representations. The representations,
warranties, covenants and agreements of MCSi and the Company contained
in this Agreement, and all statements contained in this
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Agreement or any exhibit hereto or any certificate or other document
delivered pursuant to this Agreement or in connection with the
transactions contemplated hereby, shall be deemed to constitute
representations, warranties, covenants and agreements of the respective
party delivering the same. All such representations, warranties,
covenants and agreements shall survive the Closing.
6.2. Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly
given if personally delivered or, if mailed, when mailed by United
States first-class, certified or registered mail, postage prepaid, to
the other party at the following addresses (or at such other address as
shall be given in writing by any party to the other):
(a) If to MCSi, to:
Miami Computer Supply Corporation
0000 Xxxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000
Attention: Xxxxxxx X. Xxxxxx
(b) If to the Company, to:
Zengine, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
With a required copy to:
Elias, Matz, Xxxxxxx & Xxxxxxx LLP
000 00xx Xxxxxx, X.X..
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx
6.3. Third Party Beneficiaries. MCSi acknowledges that each of the
Underwriters of the Public Offering shall be a third party beneficiary
entitled to exercise the rights and remedies provided for herein
directly against MCSi. The Company shall cooperate with and assist each
of the Underwriters of the Public Offering with respect to any action
such Underwriters take to exercise such rights and remedies directly
against MCSi.
6.4. Successors and Assigns. This Agreement, and all rights and powers
granted hereby, will bind and inure to the benefit of the parties
hereto and their respective successors and permitted assigns but shall
not be assignable or delegable by any party without the prior written
consent of the other party.
6.5. Governing Law. This Agreement shall be governed by and construed in
accordance with the internal laws of Delaware, without giving effect to
its principles of conflicts of laws or choice of forum.
6.6. Headings. The headings preceding the text of the sections and
subsections hereof are inserted solely for convenience of reference,
and shall not constitute a part of this Agreement, nor shall they
affect its meaning, construction or effect.
6.7. Counterparts. This Agreement may be executed in two counterparts, each
of which shall be deemed an original, but which together shall
constitute one and the same instrument. Each such copy shall be
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deemed an original and it shall not be necessary in making proof of
this Agreement to produce or account for more than one such
counterpart.
6.8. Further Assurances. Each party shall cooperate and take such action as
may be reasonably requested by the other party in order to carry out
the provisions and purposes of this Agreement and the transactions
contemplated hereby.
6.9. Amendment and Waiver. The parties may by mutual agreement amend this
Agreement in any respect, and either party, as to such party, may (a)
extend the time for the performance of any of the obligations of the
other party, (b) waive any inaccuracies in representations by the other
party, (c) waive compliance by the other party with any of the
agreements contained herein and performance of any obligations by the
other party, and (d) waive the fulfillment of any condition that is
precedent to the performance by such party of any of its obligations
under this Agreement. To be effective, any such amendment or waiver
must be in writing and be signed by the party against whom enforcement
of the same is sought.
6.10. Entire Agreement. This Agreement sets forth all of the promises,
covenants, agreements, conditions and undertakings between the parties
hereto with respect to the subject matter hereof, and supersedes all
prior and contemporaneous agreements and understandings, inducements or
conditions, express or implied, oral or written.
6.11. Interpretations. No party to this Agreement shall be considered the
draftsman. This Agreement has been reviewed, negotiated and accepted by
all parties and their attorneys and shall be construed and interpreted
according to the ordinary meaning of the words used so as fairly to
accomplish the purposes and intentions of all parties hereto.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
MIAMI COMPUTER SUPPLY CORPORATION
By:______________________________________________
Name:
Title:
ZENGINE, INC.
By:________________________________________________
Name:
Title:
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