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EXHIBIT 10.2
STOCK PURCHASE AND TERMINATION OF
LOAN AGREEMENT
This Agreement is made this 13th day of December, 1996, by and among ARI Network
Services, Inc. (The "Company"), QUAESTUS Limited Partnership ("QLP") and WITECH
Corporation ("WITECH").
1. Stock Purchase. QLP agrees to pay to the Company Three Hundred Thirty
Three Thousand Dollars ( $333,000) to purchase One Hundred Forty Eight
(148,000) shares of Common Stock of the Company. WITECH agrees to pay
to the Company Six Hundred Sixty Seven Thousand Dollars ($667,000) to
purchase Two Hundred Ninety Six Thousand Four Hundred and Forty-four
(296,444) Shares of Common Stock of the "Shares." The Company agrees
to deliver certificates for the Shares within five (5) business days,
which certificates shall bear a legend relating to the restriction on
transfer imposed by applicable law.
2. Acknowledgments. QLP and WITECH each acknowledge that the Shares have
not been registered under the Securities Act of 1933, as amended, and
each represents and warrants to and agrees with the Company as
follows:
a) It is acquiring the Shares for its own account and not with a
view to the distribution thereof.
b) It will not offer, sell, pledge or otherwise dispose of the
Shares except pursuant to an effective registration statement or
an exemption from registration under the Securities Act.
3. Loan Pay-off. The Company agrees to pay in full all principal,
interest and other amounts payable under that certain Loan Agreement
(the "Loan Agreement") dated December 2, 1994, as amended, by and
among the parties hereto. The amount so payable is agreed to be One
Million Four Hundred Sixty Five Thousand Seventy Three Dollars and
Twenty-five Cents ($1,465,073.25) plus accrued interest as of the date
hereof. The Company may apply all or any portion of the purchase
price of the Shares toward payment of such amount. Upon payment
thereof, the Loan Agreement shall be terminated and of no further
force or effect.
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4. Closing. The Purchase and sale of the Shares and the pay-off of the
Loan Agreement shall occur simultaneously upon execution hereof.
5. Piggyback Registration Rights.
(a) If at anytime the Company proposes to register any shares of
Common Stock under the Securities Act of 1933 (the "Act") for sale for cash
(otherwise than in connection with the registration of securities issuable
pursuant to an employee stock option, director stock option, stock purchase
or similar plan or pursuant to a merger, exchange offer or in a transaction
of the type specified in Rule 145(a) under the Act), the Company shall give
WITECH and QLP (individually an "Investor" or collectively the "Investors")
notice of such proposed registration at least thirty (30) days prior to the
filling of the registration statement. At the written request of either
Investor delivered to the Company within fifteen (15) days after the
receipt of the notice from the Company, which request shall state the
number of Shares that the Investor wishes to sell or distribute publicly
under the registration statement proposed to be filed by the Company, the
Company shall use its reasonable best efforts to register under the Act
such Shares, and to cause such registration (the "Piggyback Registration")
to become and remain effective as provided in Paragraph 6, below.
(b) If a Piggyback Registration is an underwritten primary
registration on behalf of the Company, and the managing underwriters
thereof advise the Company in writing that in their opinion the number of
securities requested to be included in such registration exceeds the number
which can be sold in such offering, the Company will include in such
registration (i) first, the securities the Company proposes to sell and
(ii) second, the securities the Investor(s) and any other stockholder of
the Company proposes top sell in proportion to the number of shares such
proposes to sell.
(c) If a Piggyback Registration is an underwritten secondary
registration on behalf of holders of the Company's securities, and the
managing underwriters thereof advise the Company in writing that in their
opinion the number of securities requested to be included in such
registration exceeds the number which can be sold in such offering, the
Company will include in such registration the securities Investor(s) and
any other stockholders of the Company proposes to sell in proportion to the
number of shares each proposes to sell. In the event the Company
subsequently desires to participate in such a registration of securities,
the provisions of Section 5(b) (and not of this Section 5 (c) shall apply
with respect to determining priority on such registration.
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6. Registration Covenants of the Company. In the event that Investors
elect to exercise their registration rights, the Company covenants and
agrees that the Company will use its reasonable best efforts to effect
the registration and cooperate in the sale of the Shares to be
registered (the "Registered Shares") and will as expeditiously as
possible:
a) prepare and file with the SEC a registration statement with
respect to the Registration Shares (as well as any necessary
amendments or supplements thereto) (a "Registration Statement") which
Registration Statement will state that the holders of Registration
Shares covered thereby may sell such Registration Shares either under
such Registration Statement or pursuant to Rule 144 (or any similar
rule then in effect), and use its reasonable best efforts to cause
such Registration Statement to become effective;
b) furnish to the Investor(s) copies of the Registration
Statement and any amendments or supplements thereto and any prospectus
forming a part thereof prior to filing, which documents will be
subject to the review of counsel for the Investors (but not approval
of such counsel except with respect to any statement in the
Registration Statement which relates to the Investor);
c) notify the Investor, promptly after the Company shall receive
notice thereof, of the time when said Registration Statement became
effective or when any amendment or supplement to any prospectus
forming a part of said Registration Statement has been filed;
d) notify the Investors promptly of any request by the SEC or any
state securities administrator for the amending or supplementing of
such Registration Statement or prospectus or for additional
information;
e) advise the Investors after the Company shall receive notice or
obtain knowledge thereof of the issuance of any order by the SEC or
any state securities administrator suspending the effectiveness of any
such Registration Statement or amendment thereto or of the initiation
or threatening of any proceeding for that purpose, and promptly use
its reasonable best efforts to prevent the issuance of any stop order
or to obtain its withdrawal promptly if such stop order should be
issued;
f) prepare and file with the SEC such amendments and supplements
to such Registration Statement and the prospectus forming a part
thereof as may be necessary to keep such Registration Statement
effective for the least of (i) a period of time necessary to permit
Investor(s) pursuant to such
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Registration to dispose of all of such Registration Shares, (ii) six
months and (iii) the maximum period of time permitted by law to keep
effective a registration statement, and comply with the provisions of
the Act with respect to the disposition of all securities covered by
such Registration Statement during such period in accordance with the
intended methods of dispositions by Investor(s) set forth in such
Registration Statement;
g) furnish to the Investors such number of copies of the
Registration Statement, each amendment and supplement thereto, the
prospectus included in such Registration Statement (including such
preliminary prospectus) and other documents as the Investors may
reasonably request in order to facilitate the disposition of the
Registration Shares;
h) use its reasonable best efforts to register or qualify the
Registration Shares under such other securities or blue sky laws of
jurisdictions as determined by the underwriter after consultation with
the Company and the Investors and do any and all others acts and
things which may be reasonably necessary or advisable to enable the
Investors to consummate the disposition in such jurisdictions of the
Registration Shares (provided that the Company will not be required to
(i) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this paragraph,
(ii) subject itself to taxation in any such jurisdiction or (iii)
consent to general service of process in any such jurisdiction);
i) notify the Investors at any time when a prospectus relating
thereto is required to be delivered under the Act, of the happening of
any event as a result of which such Registration Statement contains
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 not misleading and, at the request of the Investors, prepare a
supplement or amendment to such Registration Statement so that such
Registration Statement will not contain, to the Company's knowledge,
an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading;
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j) cause all Registration Shares to be listed on each securities
exchange on which similar securities issued by the Company are then
listed or, if similar securities are not then listed, take all
reasonable action either to list the Registration Shares on a
securities exchange or facilitate the reporting of the securities on
the National Association of Securities Dealers, Inc. Automated
Quotation System;
k) enter into such customary agreements (including an
underwriting agreement in customary form) and take all such other
actions as the investors or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of the
Registration Shares;
l) make available for inspection by the Investors, any
underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney, accountant or other agent
retained by the Investors or such underwriter, all financial and other
records, pertinent corporate documents and properties of the Company,
and cause the Company's officers, directors and employees to supply
all information reasonably requested by the Investors, such
underwriter, attorney, accountant or agent in connection with such
Registration Statement; and
m) Either Investor may assign all or any part of its rights under
this Section 6 to anyone to whom such Investor transfers the Shares.
Any registration of Investor's Shares may include shares of the
Company's Common Stock owned by other shareholders of the Company with
demand and/or piggyback registration rights.
7. Conditions. If the Company determines, in its good faith judgment
that because of the existence of, or in anticipation of, any
acquisition or financing activity, the unavailability of any required
financial statements, or the existence of any other material
non-public information (a "Disadvantageous Condition"), it would be
significantly disadvantageous to the Company for the Registration
Statement to be maintained effective, or to be filed and become
effective, or for Registration Shares to be sold under the
Registration Statement, then anything herein to the contrary
notwithstanding, the Company shall be entitled, until such
Disadvantageous Condition no longer exists, to (i) cause such
Registration Statement to be withdrawn and the effectiveness of such
Registration Statement to be delayed or terminated; (ii) notify
Investors not to make any sales under the Registration Statement; or
(iii) in the event no Registration Statement has yet been filed, to
refuse to file any such
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Registration Statement, upon receipt of any notice of a
Disadvantageous Condition and until notified by the Company that such
Disadvantageous Condition no longer exists, the Investors must
discontinue offers or sales of Registration Shares.
8. Indemnification and Contribution. In connection with the registration
of the Registration Shares, the Company and the Investors will enter
into customary indemnification and contribution arrangements with
respect to information provided by each of them.
9. Investors Cooperation in Registration. In connection with a
registration of the Shares, Investors will (a) cooperate with the
Company and the underwriter for the Registration shares, if any, in
preparing the Registration Statement and execute all such agreements
as the underwriter may deem reasonably necessary, (b) promptly supply
the Company and the underwriter with all information, documents,
representations and agreements as the underwriter or the Company may
deem reasonably necessary, (c) discontinue sales of the Registration
Shares upon notification of any stop order or suspension of the
effectiveness of the Registration Statement, (d) notify the Company
immediately upon any change in the plan of distribution or other
information concerning the Investors described in the prospectus, and
(e) discontinue use of any prospectus following notification by the
Company that the prospectus must be amended or supplemented.
10. Expenses. The Company shall pay all of the expenses in connection
with the registration of Registration Shares pursuant to the exercise
of these demand registration rights, including, without limitation,
costs of complying with federal and state securities laws and
regulations, attorney's and accounting fees of the Company, printing
expenses and Federal and State filing fees, except for transfer taxes,
underwriting commissions and discounts, and fees and expenses of
counsel for the Investors.
11. Registration Period Defined. For purposes hereof, the term
"Registration Period" shall mean the period commencing the date of
this agreement through December 31, 1998.
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IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date first above written.
ARI NETWORK SERVICES
By: /s/ Xxxxx Xxxxxxx
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Xxxxx X. Xxxxxxx
President and Chief Executive Officer
QUAESTUS LIMITED PARTNERSHIP
By: /s/ Xxxxxxx Xxxxxxx
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Xxxxxxx Xxxxxxx, Managing Partner
WITECH CORPORATION
By: /s/ Xxxxxxx Xxxxxxxxxx
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Xxxxxxx Xxxxxxxxxx, President
