Xxxxxxx 0
XXXXX XXXXXXXXXX AGREEMENT
This Stock Repurchase Agreement (the "Agreement") is executed to be
effective as of February 15, 2006 (the "Effective Date") by and between Island
Pacific, Inc., a Delaware corporation ("Purchaser" or the "Company"), and The
Sage Group plc, a company organized under the laws of England and Wales
("Seller"), as follows:
1. Recitals.
1.1. Seller is the owner of 141,000 of Series A Convertible
Preferred Stock, par value $0.0001 (the "Series A Stock"), 8,923,915 shares of
the common stock, par value $0.0001 (the "Common Stock") (the Common Stock
together with the Series A Stock, the "Shares") and an option to purchase
71,812 shares of Common Stock (the "Option") of the Company.
1.2. Upon the terms and conditions set forth in this Agreement,
Seller desires to sell and Purchaser desires to repurchase the Shares and any
shares of Common Stock issued upon conversion of the Series A Stock (the
"Conversion Shares") owned by Seller.
2. Consideration.
2.1. Purchase and Sale. Seller agrees to sell and Purchaser agrees
to re-purchase from Seller the Shares and the Conversion Shares upon the terms
and conditions set forth in this Agreement.
2.2. Purchase Price and Payments. Purchaser shall repurchase the
Shares, and the Conversion Shares from Seller, free and clear of security
interests, liens, encumbrances, liabilities or adverse claims (other than as
may have been created by or attached to Purchaser) for cash consideration of
Seven Hundred Fifty Thousand Dollars ($750,000) (the "Purchase Price"). The
Purchase Price shall be paid in monthly payments of One Hundred Thousand
Dollars ($100,000) by the last day of each month for seven consequent months
and in the eighth month an additional payment of Fifty Thousand Dollars
($50,000) (the "Payment" or the "Payments"). The Payments shall commence on
the Effective Date. Interest on the unpaid Payments shall accrue beginning on
the Effective Date at a rate of six percent (6%) per annum. Accrued interest
shall be due and payable on the date the last Payment is made by Purchaser to
Seller in satisfaction of the Purchase Price, as set forth in this Section
2.2. The Company has the right from time to time to prepay, without premium or
penalty; all or part of the outstanding Payments and accrued interest to the
date of prepayment on the amount being prepaid. In consideration for the
Purchase Price, Seller also agrees to cancel the Option as set forth in
Section 3 herein.
The Payments shall be paid by Company wire transfer to a bank
account designated by Seller at the Closing.
3. Closing and Closing Date. The closing for the transaction (the
"Closing") shall take place at the offices of the Xxxxxxx Xxxx Seidenwurm &
Xxxxx, LLP, 000 X Xxxxxx, Xxxxx 0000, Xxx Xxxxx, Xxxxxxxxxx 00000 on the
Effective Date (the "Closing Date"). At the Closing, Purchaser shall deliver
to Seller the first Payment. Seller shall return the documentation for the
Option marked cancelled by Seller, if the Option is evidenced by a written
instrument; provided that, if the Option is not evidenced by a written
instrument the Seller shall execute an assignment separate from certificate in
substantially the form attached hereto as Exhibit A (the "Assignment"). Upon
receipt of either the documentation for the Option or the Assignment, the
Company shall be entitled to cancel the Option in its books and records.
Seller shall retain the share certificates for the Shares and shall retain
record title to the Shares as security until all Payments, including accrued
interest, are made. The Company shall not transfer record title to the Shares
in its books and records until the last Payment is made. On the day the last
Payment is paid, including all accrued interest, Seller shall deliver the
share certificates for the Shares executed for transfer.
4. Voting Rights. Starting on the Closing Date, Seller will exercise its
voting rights in accordance with the voting agreement, dated as of the date
hereof, by and between Purchaser and Seller, attached to this Agreement as
Exhibit B (the "Voting Agreement").
5. Covenants, Representations and Warranties of Seller. Seller for the
benefit of Purchaser, warrants, represents and agrees as follows:
5.1. Stock Ownership. Seller is the record and beneficial owner of
the Shares, any Conversion Shares and the Option which are free and clear of
all liens, encumbrances, security interests, options, equities and
restrictions on transfer and Seller has the legal power and authority to sell,
transfer and deliver the Shares, Conversion Shares and the Option pursuant to
this Agreement without the necessity of obtaining the consent of any person or
entity.
5.2. Other Agreements. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby, nor
compliance by Seller with any of the provisions hereof, will:
5.2.1. violate, conflict with, result in a breach of any
provisions of, constitute a default (or prevent a default which, with notice
or lapse of time or both, would constitute a default) under, or result in the
termination of, accelerate the performance required by or result in the
creation of any lien, security interest, charge or encumbrance upon any of the
Shares under any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, deed of trust, license, lease or other instrument or
obligation to which any Seller is a party, or by which Seller or any of
Seller's properties or assets may be bound or affected, other than any consent
required to be obtained from Midsummer Investments Limited; or
5.2.2. violate any order, writ, injunction, decree, or any
statute, rule or regulation, applicable to Seller or any of Seller's
properties or assets.
5.3. Enforceability. This Agreement, and the agreements and
instruments referred to in this Agreement, each constitute valid and legally
binding obligations of Seller and are enforceable in accordance with their
respective terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally, and (ii) as limited by laws
relating to the availability of specific performance, injunctive relief, or
other equitable remedies.
6. Covenants, Representations and Warranties of Purchaser. Purchaser for
the benefit of Seller, warrants, represents, covenants and agrees as follows:
6.1. Authority and Validity. Purchaser has the corporate power and
authority to execute, deliver and perform its obligations under this
Agreement. The execution, delivery and performance of this Agreement has been
duly authorized by the Board of Directors of Purchaser and no further
corporate action on the part of Purchaser is necessary to authorize this
Agreement and the performance of the transactions contemplated hereby.
6.2. Other Agreements; Consents. Neither the execution and delivery
of this Agreement nor the consummation of the transactions contemplated
hereby, nor compliance by Purchaser with any of the provisions hereof, will:
6.2.1. violate any order, writ, injunction, decree, or any
statute, rule or regulation, applicable to Purchaser or any of Purchaser's
properties or assets;
6.2.2. require the approval or consent of any third party or
governmental entity;
6.2.3. contravene any provision of Purchaser's Certificate of
Incorporation or Bylaws; or
6.2.4. violate or conflict with any provision of an agreement
or other instrument or obligation to which Purchaser is a party or by which it
may be bound or affected.
6.3. No Impairment. The capital of Purchaser is not impaired and
will not become impaired as a result of the purchase of the Shares by
Purchaser, within the meaning of Section 160(a) (1) of the Delaware General
Corporation Law, as amended (the "DGCL") and the capital of Purchaser would
not become impaired, within the meaning of Section 160(a) (1) of the DGCL, in
the event the obligations of Purchaser to purchase the Shares under this
Agreement were accelerated and Purchaser purchased all Shares owned by Seller
at the applicable purchase price specified in Section 2.2 on the date hereof.
6.4. Enforceability. This Agreement, and the agreements and
instruments referred to in this Agreement, each constitute valid and legally
binding obligations of Purchaser and are enforceable in accordance with their
respective terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, and other laws of general application affecting
enforcement of creditors' rights generally, and (ii) as limited by laws
relating to the availability of specific performance, injunctive relief, or
other equitable remedies.
6.5. No Action. There is no action, suit, proceeding or to the
knowledge of Purchaser, investigation pending or currently threatened against
Purchaser that questions the validity of this Agreement and the agreements and
instruments referred to in this Agreement, or the right of Purchaser to enter
into this Agreement, or to consummate the transactions contemplated hereby or
thereby, nor is Purchaser aware that there is any basis for the foregoing.
7. Ancillary Covenants.
7.1. Confidential Information. For a period of two (2) years
beginning on the Effective Date, Seller agrees that Seller will not disclose
to any unauthorized persons or use for his own account or for the benefit of
any third party any Confidential Information, without the Company's written
consent. As used herein Confidential Information means any material,
information or data which the Company has identified as "confidential" or
which a reasonable person being apprised of all relevant facts would conclude
is intended to be confidential, including but not limited to: (a) proprietary,
technical, developmental, marketing, sales, operating, planning, cost,
pricing, customer or supplier information, methodologies, employee
information; (b) business practices or relationships; (c) products, systems,
discoveries, designs, ideas, concepts, inventions, technical know-how,
software source codes and all record-bearing media containing such
information; provided, however, that Confidential Information shall not
include any information which (i) is in the public domain and is readily
available as of the Closing Date or which hereafter enters the public domain
and becomes readily available, through no improper action by Seller, (ii) was
in the possession of Seller or known by Seller prior to receipt from
Purchaser, (iii) was rightfully disclosed to Seller by a third party without
restriction, (iv) is independently developed by Seller without use of or
reliance on Confidential Information disclosed by Purchaser or (v) is required
to be disclosed by law, valid legal process or by any listing agreement with
or listing rules of a national securities exchange or trading market or
inter-dealer quotation system or by the listing rules of The London Stock
Exchange.
7.2. Injunctive Relief. Without limiting the right of Purchaser to
pursue all other legal and equitable rights available for violation of Section
7.1 by Seller, it is agreed that other remedies cannot fully compensate
Purchaser for such a violation and that Purchaser shall be entitled to seek
injunctive relief without bond to prevent violation or continuing violation
thereof.
7.3. Release. Beginning on the day that all Payments, including
accrued interest, required hereunder have been paid in full by Purchaser to
Seller and record title to the Shares and Conversion Shares has been
transferred to the Purchaser by Seller, Seller and Purchaser shall release
each other and their respective officers, directors, shareholders, agents,
attorneys, representatives, employees, affiliated entities, successors and
assigns from any and all claims or liabilities whether known or unknown,
existing or pre-existing arising directly or indirectly from any omissions,
acts or facts that have occurred up until and including the date the last
Payment is made, including, without limitation, in any manner related to the
Shares and the Option including, with respect to Seller, related to Seller's
rights as a shareholder of the Company or otherwise.
7.4. Section 1542 Waiver. Each of Seller and the Company understand
and acknowledge that after execution of this Agreement it may incur or suffer
loss, damage or injuries which are in some way caused by or related to the
matters released in this Agreement, but which are unknown or unanticipated at
the time this Agreement is executed. Further there is a risk that loss or
damage presently known may be or become greater than any party now expects or
anticipates. Seller and the Company therefore expressly waive all rights under
Section 1542 of the California Civil Code which provides as follows and any
similar state or federal law which may be applicable:
A general release does not extend to claims which the creditor
does not know or suspect to exist in his favor at the time of
executing the release, which if known by him must have
materially affected his settlement with debtor.
8. Actions Prior to Closing. The parties each agree and covenant to use
their best efforts and to cooperate fully to assure that all actions which are
necessary or appropriate in order to consummate the transaction contemplated
by this agreement are accomplished in the manner and at the times set forth in
this Agreement.
9. Default; Termination
9.1. Default. If either party materially defaults in the performance
of any provision of this Agreement, then the non-defaulting party may give
written notice to the defaulting party that if the default is not cured within
thirty (30) days, the Agreement will be terminated. If the defaulting party
fails to cure the default within such thirty (30) day period and (a) Seller is
the defaulting party, Purchaser may terminate this Agreement and shall be
deemed to have purchased and Seller shall be deemed to have sold and shall
deliver to Purchaser share certificates representing the number of Shares
determined by multiplying (w) the total number of Shares (treating the Series
A Stock as if it has been converted to Common Stock for the purposes of the
calculation) by (x) the quotient determined by dividing (y) the total of the
Payments made at the time of termination of this Agreement by (z) the Purchase
Price; or (b) Purchaser is the defaulting party, Seller shall have the option
to either (i) rescind the sale and return the total Payments received by
Seller at the time of termination less an amount equal to Seller's reasonable
costs incurred in connection with the Agreement plus a termination payment
equal to thirty percent (30%) of the total Payments received by Seller at the
time of termination or (ii) to retain all of the Payments received by Seller
at the time of termination and deliver to Purchaser share certificates
representing the number of Shares determined by multiplying (w) the total
number of Shares (treating the Series A Stock as if it has been converted to
Common Stock for the purposes of the calculation) by (x) the quotient
determined by dividing (y) the total of the Payments made at the time of
termination of this Agreement by (z) the Purchase Price.
9.2. Termination. The parties shall be entitled to terminate this
Agreement by mutual agreement of the parties.
10. Miscellaneous Provisions.
10.1. Governing Law; Jurisdiction. This Agreement is governed by and
construed in accordance with the laws of the State of California, irrespective
of California's choice-of-law principles. The parties irrevocably consent to
the exclusive jurisdiction of the state and federal courts located in San
Diego County, California for the purpose of any action brought in connection
with this Agreement.
10.2. Counterparts and Exhibits. This Agreement may be executed in
counterparts, each of which is deemed an original and all of which together
constitute one document. All exhibits attached to and referenced in this
Agreement are incorporated into this Agreement.
10.3. Modification. This Agreement may be modified only by a
contract in writing executed by the party to this Agreement against whom
enforcement of the modification is sought.
10.4. Headings. The section headings in this Agreement: (a) are
included only for convenience, (b) do not in any manner modify or limit any of
the provisions of this Agreement, and (c) may not be used in the
interpretation of this Agreement.
10.5. Prior Understandings. This Agreement and all documents
specifically referred to and executed in connection with this Agreement: (a)
contain the entire and final agreement of the parties to this Agreement with
respect to the subject matter of this Agreement, and (b) supersede all
negotiations, stipulations, understandings, agreements, representations and
warranties, if any, with respect to such subject matter, which precede or
accompany the execution of this Agreement.
10.6. Interpretation. Whenever the context of this Agreement
requires, all words used in the singular shall be construed to have been used
in the plural, and vice versa, and the use of any gender specific pronoun
shall include any other appropriate gender. The term "person" shall refer to
any individual, corporation or legal entity having standing to bring an action
in its own name under applicable state law. The conjunctive "or" shall mean
"and/or" unless otherwise required by the context in which the conjunctive
"or" is used. Each party has had the opportunity to be represented by
independent legal counsel and hereby waives any benefit under any rule of law
or legal decision that would require interpretation of any ambiguities in this
Agreement against the party drafting it. The provisions of this Agreement
shall be interpreted in a reasonable manner to effect the purposes of the
parties and this Agreement.
10.7. Partial Invalidity. Each provision of this Agreement is valid
and enforceable to the fullest extent permitted by law. If any provision of
this Agreement (or the application of such provision to any person or
circumstance) is or becomes invalid or unenforceable, the remainder of this
Agreement, and the application of such provision to persons or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected by such invalidity or unenforceability.
10.8. Successors-in-Interest and Assigns; Assignment. This Agreement
is binding upon and inures to the benefit of the successors-in-interest and
assigns of each party to this Agreement. This Agreement and the rights,
interests and obligations hereunder may not be assigned by either party
without the prior written consent of the other party hereto.
10.9. Notices. All notices or other communications required or
permitted to be given to a party to this Agreement shall be in writing and
shall be personally delivered, sent by fax, or sent by an express courier
service that provides written confirmation of delivery, such as United Parcel
Service, Federal Express or DHL, to such party at its address as set forth
below its signature to this Agreement. Each such notice or other communication
shall be deemed given, delivered and received upon its actual receipt, except
that if it is sent by express courier service in accordance with this Section,
then it shall be deemed given, delivered and received three days after the
date such notice or other communication is deposited with the express courier
service in accordance with this Section. Any party to this Agreement may give
a notice of a change of its address to the other party to this Agreement.
10.10. Waiver. Any waiver of a default or provision under this
Agreement must be in writing. No such waiver constitutes a waiver of any other
default or provision concerning the same or any other provision of this
Agreement. No delay or omission by a party in the exercise of any of its
rights or remedies constitutes a waiver of (or otherwise impairs) such right
or remedy. A consent to or approval of an act does not waive or render
unnecessary the consent to or approval of any other or subsequent act.
10.11. Survival of Representations, Warranties, Covenants, Etc. All
representations, warranties, covenants and agreements of the parties contained
in this Agreement, or in any instrument, certificate or other writing provided
for in it, shall survive the Closing.
10.12. Further Acts. Following the Closing, each party agrees to
perform such further acts and execute, acknowledge and deliver such further
instruments as may be reasonably requested by any other party to further
document or effectuate the transactions contemplated by this Agreement.
10.13. Attorney's Fees. In the event any litigation, arbitration,
mediation, or other proceeding ("Proceeding") is initiated by any party
against any other party to enforce, interpret or otherwise obtain judicial or
quasi judicial relief in connection with this Agreement, the prevailing party
in such Proceeding shall be entitled to recover from the unsuccessful party
all costs, expenses, reasonable attorney's and expert witness fees, relating
to or arising out of (1) such Proceeding (whether or not such Proceeding
proceeds to judgment), and (2) any post judgment or post award proceeding
including without limitation one to enforce any judgment or award resulting
from any such Proceeding.
[Signatures on following page]
SELLER:
THE SAGE GROUP PLC
a company organized under the laws of England and Wales
By: /s/ Xxxx Xxxxxxxx
-----------------
Name: Xxxx Xxxxxxxx
Title: Finance Director
Address: Attn: General Counsel
Xxxxx Xxxx
Xxxxxxxxx xxxx Xxxx
XX00 0XX
Xxxxxxx
Facsimile: x00 (000) 000-0000
PURCHASER:
ISLAND PACIFIC, INC.
a Delaware corporation
/s/ Xxxxx Xxxxxxxxx
--------------------------
Xxxxx Xxxxxxxxx, Chief Executive Officer
Address: Attn: Xxxxx Xxxxxxxxx
00000 XxxXxxxxx Xxxxxxxxx
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
EXHIBIT A
Assignment Separate From Certificate
ASSIGNMENT SEPARATE FROM CERTIFICATE
For value received, The Sage Group, plc, a company organized under the
laws of England and Wales ("Sage"), assigns and transfers to Island Pacific,
Inc., a Delaware corporation (the "Company"), its option to purchase
Seventy-One Thousand Eight Hundred Twelve (71,812) shares of the Company's
Common Stock (the "Option"), standing in Sage's name on the books of the
Company and does hereby irrevocably constitute and appoint each and every
officer of the Company, as attorney-in-fact solely for purposes of recording
the transfer and/or cancellation of the Option on the books of the Company
with full power of substitution.
THE SAGE GROUP, PLC
a company organized under the
laws of England and Wales
Dated Effective: February 15, 2006 By: /s/ Xxxx Xxxxxxxx
----------------- -----------------------
Name: Xxxx Xxxxxxxx
Title: Finance Director
