EXHIBIT 10.1
COMMON STOCK PURCHASE AGREEMENT
BETWEEN
MB SOFTWARE CORPORATION
AND
T SQUARED INVESTMENTS LLC
DATED
January 11th, 2008
COMMON STOCK PURCHASE AGREEMENT BETWEEN
MB SOFTWARE CORPORATION AND T SQUARED INVESTMENTS LLC
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COMMON STOCK PURCHASE AGREEMENT
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This COMMON STOCK PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of the 11 th day of January, 2008 (the "Effective Date"), between MB
Software Corporation, a corporation organized and existing under the laws of the
State of Texas ("MBSB" or the "Company") and T Squared Investments LLC, a
Delaware limited liability company, ("T Squared Investments" or "Investor").
PRELIMINARY STATEMENT:
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WHEREAS, the Investor wishes to purchase from the Company, upon the terms
and subject to the conditions of this Agreement, Eighty Six Thousand Two Hundred
and Seven (86,207) shares of common stock of the Company for the Purchase Price
set forth in Section 1.3.12 hereof. In addition, the Company will issue to the
Investor two Common Stock Purchase Warrants (the "Warrants") to purchase up to
an additional One Million Five Hundred Thousand (1,500,000) shares of common
stock of the Company at exercise prices as stated in the Warrants; and
WHEREAS, the parties intend to memorialize the purchase and sale of such
Common Stock and the Warrants.
NOW, THEREFORE, in consideration of the mutual covenants and premises
contained herein, and for other good and valuable consideration, the receipt and
adequacy of which are hereby conclusively acknowledged, the parties hereto,
intending to be legally bound, agree as follows:
COMMON STOCK PURCHASE AGREEMENT BETWEEN
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ARTICLE I
INCORPORATION BY REFERENCE, SUPERSEDER AND DEFINITIONS
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1.1 Incorporation by Reference. The foregoing recitals and the Exhibits and
Schedules attached hereto and referred to herein, are hereby acknowledged to be
true and accurate, and are incorporated herein by this reference.
1.2 Superseder. This Agreement, to the extent that it is inconsistent with any
other instrument or understanding among the parties governing the affairs of the
Company, shall supersede such instrument or understanding to the fullest extent
permitted by law. A copy of this Agreement shall be filed at the Company's
principal office.
1.3 Certain Definitions. For purposes of this Agreement, the following
capitalized terms shall have the following meanings (all capitalized terms used
in this Agreement that are not defined in this Article 1 shall have the meanings
set forth elsewhere in this Agreement):
1.3.1 "1933 Act" means the Securities Act of 1933, as amended.
1.3.2 "1934 Act" means the Securities Exchange Act of 1934, as amended.
1.3.3 "Affiliate" means a Person or Persons directly or indirectly, through
one or more intermediaries, controlling, controlled by or under common control
with the Person(s) in question. The term "control," as used in the immediately
preceding sentence, means, with respect to a Person that is a corporation, the
right to the exercise, directly or indirectly, of more than 50 percent of the
voting rights attributable to the shares of such controlled corporation and,
with respect to a Person that is not a corporation, the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such controlled Person.
1.3.4 "Articles" means the Certificate of Incorporation of the Company, as
the same may be amended from time to time.
1.3.5 "Closing" shall mean the Closing of the transactions contemplated by
this Agreement on the Closing Date.
1.3.6 [Reserved]
1.3.7 "Common Stock" means shares of common stock of the Company, par value
$0.001 per share.
1.3.8 "Exempt Issuance" means the issuance of (a) shares of Common Stock or
options to employees, officers, or directors of the Company pursuant to any
stock or option plan duly adopted by a majority of the non-employee members of
the Board of Directors of the Company or a majority of the members of a
committee of non-employee directors established for
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such purpose, (b) securities upon the exercise of or conversion of any
securities currently issued and outstanding or issued hereunder, and (c)
securities issued pursuant to acquisitions or strategic transactions, provided
any such issuance shall only be to a Person which is, itself or through its
subsidiaries, an operating company in a business synergistic with the business
of the Company and in which the Company receives benefits in addition to the
investment of funds, but shall not include a transaction in which the Company is
issuing securities primarily for the purpose of raising capital or to an entity
whose primary business is investing in securities.
1.3.9 "Material Adverse Effect" shall mean any adverse effect on the
business, operations, properties or financial condition of the Company that is
material and adverse to the Company and its subsidiaries and affiliates, taken
as a whole and/or any condition, circumstance, or situation that would prohibit
or otherwise materially interfere with the ability of the Company to perform any
of its material obligations under this Agreement or the Registration Rights
Agreement or to perform its obligations under any other material agreement.
1.3.10 "Texas Act" means the Texas Business Corporation Act, as amended.
1.3.11 "Person" means an individual, partnership, firm, limited liability
company, trust, joint venture, association, corporation, or any other legal
entity.
1.3.12 "Purchase Price" means the Fifty Thousand ($50,000) Dollars paid by
the Investor to the Company for the Common Stock and the Warrants.
1.3.13 "Registration Rights Agreement" shall mean the registration rights
agreement between the Investor and the Company attached hereto as Exhibit A.
1.3.14 "Registration Statement" shall mean the registration statement under
the 1933 Act to be filed with the Securities and Exchange Commission for the
registration of the Shares pursuant to the Registration Rights Agreement
attached hereto as Exhibit A.
1.3.15 "SEC" means the Securities and Exchange Commission.
1.3.16 "SEC Documents" shall mean the Company's latest Form 10-K or 10-KSB
as of the time in question, all Forms 10-Q or 10-QSB and 8-K filed thereafter,
and the Proxy Statement for its latest fiscal year as of the time in question
until such time as the Company no longer has an obligation to maintain the
effectiveness of a Registration Statement as set forth in the Registration
Rights Agreement.
1.3.17 "Shares" shall mean, collectively, the shares of Common Stock of the
Company and those shares of Common Stock issuable to the Investor upon exercise
of the Warrants.
1.3.18 "Subsequent Financing" shall mean any offer and sale of any equity
security or debt that is initially convertible into shares of Common Stock.
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1.3.19 "Transaction Documents" shall mean this Agreement, all Schedules and
Exhibits attached hereto and all other documents and instruments to be executed
and delivered by the parties in order to consummate the transactions
contemplated hereby, including, but not limited to the documents listed in
Sections 3.2 and 3.3 hereof.
1.3.20 "Warrants" shall mean the Common Stock Purchase Warrants in the form
attached hereto Exhibit B.
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ARTICLE II
SALE AND PURCHASE OF COMPANY COMMON STOCK AND WARRANTS
PURCHASE PRICE
2.1 Sale of Common Stock and Issuance of Warrants.
(a) Upon the terms and subject to the conditions set forth herein, and in
accordance with applicable law, the Company hereby sells to the Investor, and
the Investor hereby purchases from the Company, on the Closing Date Eighty Six
Thousand Two Hundred and Seven (86,207) shares of Common Stock and the Warrants
for the price (the "Purchase Price") of Fifty Thousand ($50,000) Dollars. The
Purchase Price shall be paid by the Investor to the Company on the Effective
Date by a wire transfer or check of the Purchase Price. The Company shall cause
the Common Stock and the Warrants to be issued to the Investor upon receipt of
the wire by the Company. The Company shall register the shares of Common Stock
and the shares underlying the Warrants pursuant to the terms and conditions of a
Registration Rights Agreement attached hereto as Exhibit A.
(b) Upon execution and delivery of this Agreement and the Company's receipt
of the Purchase Price, the Company shall issue to the Investor the Warrant to
purchase an aggregate of One Million Five Hundred Thousand (1,500,000) shares of
Common Stock at exercise prices as stated in the Warrants, all pursuant to the
terms and conditions of the form of Warrants attached hereto as Exhibit B;
provided, however, that the Investor shall not be entitled to exercise the
Warrants and receive shares of Common Stock that would result in beneficial
ownership by the Investor and its affiliates of more than 4.9% of the then
outstanding number of shares of Common Stock on such date. For the purposes of
the immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, and Regulation 13d-3 thereunder.
2.2 Purchase Price. The Purchase Price shall be delivered by the Investor in the
form of a check or wire transfer made payable to the Company in United States
Dollars from the Investor to the Company on the Closing Date.
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ARTICLE III
CLOSING DATE AND DELIVERIES AT CLOSING
3.1 Closing. The closing of the transactions contemplated by this Agreement (the
"Closing"), shall occur upon complete execution of this Agreement by the
parties.
3.2 Deliveries by the Company. In addition to and without limiting any other
provision of this Agreement, on or prior to the Effective Date, the Company
shall deliver, or cause to be delivered the following:
(a) An executed Agreement with all exhibits and schedules attached hereto;
(b) At or prior to Closing, an executed Warrant in the name of the
Investor in the form attached hereto as Exhibit B;
(c) The executed Registration Rights Agreement;
(d) Evidence of approval of the Board of Directors of the Company of the
Transaction Documents and the transactions contemplated hereby;
(e) Certificates of Existence or Authority to Transact Business of the
Company issued by each of the Secretaries of State for Texas;
(f) An opinion from the Company's counsel concerning the Transaction
Documents and the transactions contemplated hereby in form and
substance reasonably acceptable to Investor;
(g) Stock Certificate in the name of Investor evidencing the Common Stock.
(h) Certifications in form and substance acceptable to the Company and the
Investor from any and all brokers or agents involved in the
transactions contemplated hereby as to the amount of commission or
compensation payable to such broker or agent as a result of the
consummation of the transactions contemplated hereby and from the
Company or Investor, as appropriate, to the effect that reasonable
reserves for any other commissions or compensation that may be claimed
by any broker or agent have been set aside;
(i) Copies of all current executive employment agreements;
(j) All past and present financing documentation or other documentation
where stock could potentially be issued or issued as payment;
(k) All past and present litigation documents and historical financials;
and
(1) Such other documents or certificates as shall be reasonably requested
by Investor or its counsel.
3.3 Deliveries by Investor. In addition to and without limiting any other
provision of this Agreement, the Investor agrees to deliver, or cause to be
delivered, the following:
(a) The Purchase Price, paid in accordance with Section 2.2;
(b) The executed Agreement with all Exhibits and Schedules attached
hereto;
(c) The executed Registration Rights Agreement; and
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(d) Such other documents or certificates as shall be reasonably requested
by the Company or its counsel.
In the event any document provided to the other party in Paragraphs 3.2 and 3.3
herein are provided by facsimile, the party shall forward an original document
to the other party within seven (7) business days.
3.4 Further Assurances. The Company and the Investor shall, upon request, on or
after the Closing Date, cooperate with each other (specifically, the Company
shall cooperate with the Investor, and the Investor shall cooperate with the
Company) by furnishing any additional information, executing and delivering any
additional documents and/or other instruments and doing any and all such things
as may be reasonably required by the parties or their counsel to consummate or
otherwise implement the transactions contemplated by this Agreement.
3.5 Waiver. The Investor may waive any of the requirements of Section 3.2 of
this Agreement, and the Company at its discretion may waive any of the
provisions of Section 3.3 of this Agreement.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF
COMPANY
The Company represents and warrants to the Investor as of the date hereof
and as of Closing (which warranties and representations shall survive the
Closing regardless of what examinations, inspections, audits and other
investigations the Investor has heretofore made or may hereinafter make with
respect to such warranties and representations) as follows:
4.1 Organization and Qualification. The Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Texas, and
has the requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as it is now being conducted and is duly
qualified to do business in any other jurisdiction by virtue of the nature of
the businesses conducted by it or the ownership or leasing of its properties,
except where the failure to be so qualified will not, when taken together with
all other such failures, have a Material Adverse Effect on the business,
operations, properties, assets, financial condition or results of operation of
the Company and its subsidiaries taken as a whole.
4.2 Articles of Incorporation and By-Laws. The complete and correct copies of
the Company's Articles and By-Laws, as amended or restated to date which have
been filed with the Securities and Exchange Commission are a complete and
correct copy of such document as in effect on the date hereof and as of the
Closing Date.
4.3 Capitalization.
4.3.1 The authorized and outstanding capital stock of the Company is set
forth in The Company's Annual Report on Form I0-KSB, filed on December 3rd, 2007
with the Securities and Exchange Commission and updated on all subsequent SEC
Documents. All shares of capital stock have been duly authorized and are validly
issued, and are fully paid and no assessable, and free of preemptive rights.
4.3.2 Except pursuant to this Agreement and as set forth in Schedule 4.3
hereto, and as set forth in the Company's SEC Documents, filed with the SEC, as
of the date hereof and as of the Closing Date, there are not now outstanding
options, warrants, rights to subscribe for, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into or
exchangeable for, shares of any class of capital stock of the Company, or
agreements, understandings or arrangements to which the Company is a party, or
by which the Company is or may be bound, to issue additional shares of its
capital stock or options, warrants, scrip or rights to subscribe for, calls or
commitment of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for, any shares of any class of its capital
stock. The Company agrees to inform the Investors in writing of any additional
warrants granted prior to the Closing Date.
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4.3.3 The Company on the Closing Date (i) will have full right, power, and
authority to sell, assign, transfer, and deliver, by reason of record and
beneficial ownership, to the Investor, the Common Stock sold to Investor
pursuant to this Agreement, free and clear of all liens, charges, claims,
options, pledges, restrictions, and encumbrances whatsoever; and (ii) upon
exercise of the Warrants, the Investor will acquire good and marketable title to
such Shares, free and clear of all liens, charges, claims, options, pledges,
restrictions, and encumbrances whatsoever, except as otherwise provided in this
Agreement as to the limitation on the voting rights of such Shares in certain
circumstances.
4.4 Authority. The Company has all requisite corporate power and authority to
execute and deliver this Agreement, the Common Stock, and the Warrants, to
perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The execution and delivery of this
Agreement by the Company and the consummation of the transactions contemplated
hereby have been duly authorized by all necessary corporate action and no other
corporate proceedings on the part of the Company is necessary to authorize this
Agreement or to consummate the transactions contemplated hereby except as
disclosed in this Agreement. This Agreement has been duly executed and delivered
by the Company and constitutes the legal, valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms.
4.5 No Conflict; Required Filings and Consents. The execution and delivery of
this Agreement by the Company does not, and the performance by the Company of
their respective obligations hereunder will not: (i) conflict with or violate
the Articles or By-Laws of the Company; (ii) conflict with, breach or violate
any federal, state, foreign or local law, statute, ordinance, rule, regulation,
order, judgment or decree (collectively, "Laws") in effect as of the date of
this Agreement and applicable to the Company; or (iii) result in any breach of,
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, give to any other entity any right of
termination, amendment, acceleration or cancellation of, require payment under,
or result in the creation of a lien or encumbrance on any of the properties or
assets of the Company pursuant to, any note, bond, mortgage, indenture,
contract, agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company is a party or by the Company or any of its
properties or assets is bound. Excluding from the foregoing are such violations,
conflicts, breaches, defaults, terminations, accelerations, creations of liens,
or incumbency that would not, in the aggregate, have a Material Adverse Effect.
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4.6 Report and Financial Statements. The Company's Annual Report on Form 10-KSB,
filed on December 3rd, 2007 with the SEC contains the audited financial
statements of the Company for year end December 31st, 2006. The Company has
previously provided to the Investor the audited financial statements of the
Company for the three months ended September 30th, 2007 and for the nine months
ended September 30th, 2007 (collectively, the "Financial Statements"). Each of
the balance sheets contained in or incorporated by reference into any such
Financial Statements (including the related notes and schedules thereto) fairly
presented the financial position of the Company, as of its date, and each of the
statements of income and changes in stockholders' equity and cash flows or
equivalent statements in such Financial Statements (including any related notes
and schedules thereto) fairly presents, changes in stockholders' equity and
changes in cash flows, as the case may be, of the Company, for the periods to
which they relate, in each case in accordance with United States generally
accepted accounting principles ("U.S. GAAP"), as applied by the SEC,
consistently applied during the periods involved, except in each case as may be
noted therein, subject to normal year-end audit adjustments in the case of
unaudited statements. The books and records of the Company have been, and are
being, maintained in all material respects in accordance with U.S. GAAP and any
other applicable legal and accounting requirements and reflect only actual
transaction.
4.7 Compliance with Applicable Laws. The Company is not in violation of, or, to
the knowledge of the Company is under investigation with respect to or has been
given notice or has been charged with the violation of any Law of a governmental
agency, except for violations which individually or in the aggregate do not have
a Material Adverse Effect.
4.8 Brokers. Except as set forth on Schedule 4.8, no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
Commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Company.
4.9 SEC Documents. The Company acknowledges that the Company is a publicly held
company and has made available to the Investor after demand true and complete
copies of any requested SEC Documents. The Company has registered its Common
Stock pursuant to Section 12(d) or 15(d) of the 1934 Act, and the Common Stock
is quoted and traded on the OTC Bulletin Board of the National Association of
Securities Dealers, Inc. The Company has received no notice, either oral or
written, with respect to the continued quotation or trading of the Common Stock
on the OTC Bulletin Board. [Note: This is already included under Section 4.14]As
of their respective dates, the SEC Documents complied in all material respects
with the requirements of the 1934 Act, and rules and regulations of the SEC
promulgated thereunder and the SEC Documents did not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
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4.10 Litigation. To the knowledge of the Company, no litigation, claim, or other
proceeding before any court or governmental agency is pending or to the
knowledge of the Company, threatened against the Company, the prosecution or
outcome of which may have a Material Adverse Effect.
4.11 Exemption from Registration. Subject to the accuracy of the Investor's
representations in Article V, except as required pursuant to the Registration
Rights Agreement, the sale of the Common Stock and Warrants by the Company to
the Investor will not require registration under the 1933 Act, but may require
registration under New York state securities law if applicable to the Investor.
Upon exercise of the Warrants in accordance with their terms, the Shares
underlying the Warrants will be duly and validly issued, fully paid, and
non-assessable. The Company is issuing the Common Stock and the Warrants in
accordance with and in reliance upon the exemption from securities registration
afforded, inter alia, by Rule 506 under Regulation D as promulgated by the SEC
under the 1933 Act, and/or Section 4(2) of the 1933 Act; provided, however, that
certain filings and registrations may be required under state securities "blue
sky" laws depending upon the residency of the Investor.
4.12 No General Solicitation or Advertising in Regard to this Transaction.
Neither the Company nor any of its Affiliates nor, to the knowledge of the
Company, any Person acting on its or their behalf (i) has conducted or will
conduct any general solicitation (as that term is used in Rule 502(c) of
Regulation D as promulgated by the SEC under the 0000 Xxx) or general
advertising with respect to the sale of the Common Stock or Warrants, or (ii)
made any offers or sales of any security or solicited any offers to buy any
security under any circumstances that would require registration of the Common
Stock or Warrants, under the 1933 Act, except as required herein.
4.13 No Material Adverse Effect. Except as set forth in Schedule 4.13 attached
hereto, no event or circumstance resulting in a Material Adverse Effect has
occurred or exists with respect to the Company. No material supplier or customer
has given notice, oral or written, that it intends to cease or reduce the volume
of its business with the Company from historical levels. No event or
circumstance has occurred or exists with respect to the Company or its
businesses, properties, prospects, operations or financial condition, that,
under any applicable law, rule or regulation, requires public disclosure or
announcement prior to the date hereof by the Company but which has not been so
publicly announced or disclosed in writing to the Investor.
4.14 Material Non-Public Information. The Company has not disclosed to the
Investors any material non-public information that (i) if disclosed, would
reasonably be expected to have a material effect on the price of the Common
Stock or (ii) according to applicable law, rule or regulation, should have been
disclosed publicly by the Company prior to the date hereof but which has not
been so disclosed.
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4.15 Internal Controls And Procedures. The Company maintains books and records
and internal accounting controls which provide reasonable assurance that (i) all
transactions to which the Company or any subsidiary is a party or by which its
properties are bound are executed with management's authorization; (ii) the
recorded accounting of the Company's consolidated assets is compared with
existing assets at regular intervals; (iii) access to the Company's consolidated
assets is permitted only in accordance with management's authorization; and (iv)
all transactions to which the Company or any subsidiary is a party or by which
its properties are bound are recorded as necessary to permit preparation of the
financial statements of the Company in accordance with U.S. generally accepted
accounting principles.
4.16 Full Disclosure. No representation or warranty made by the Company in this
Agreement and no certificate or document furnished or to be furnished to the
Investor pursuant to this Agreement contains or will contain any untrue
statement of a material fact, or omits or will omit to state a material fact
necessary to make the statements contained herein or therein not misleading.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE INVESTOR
The Investor represents and warrants to the Company that:
5.1 Organization and Standing of the Investor. The Investor is a limited
liability company duly formed, validly existing and in good standing under the
laws of the State of Delaware. The state in which any offer to purchase shares
hereunder was made or accepted by such Investor is the state shown as such
Investor's address. The Investor was not formed for the purpose of investing
solely in the Common Stock, the Warrants or the shares of Common Stock which are
the subject of this Agreement.
5.2 Authorization and Power. The Investor has the requisite power and authority
to enter into and perform this Agreement and to purchase the securities being
sold to it hereunder. The execution, delivery and performance of this Agreement
by the Investor and the consummation by the Investor of the transactions
contemplated hereby have been duly authorized by all necessary partnership
action where appropriate. This Agreement and the Registration Rights Agreement
have been duly executed and delivered by the Investor and at the Closing shall
constitute valid and binding obligations of the Investor enforceable against the
Investor in accordance with their terms, except as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
liquidation, conservatorship, receivership or similar laws relating to, or
affecting generally the enforcement of, creditors' rights and remedies or by
other equitable principles of general application.
5.3 No Conflicts. The execution, delivery and performance of this Agreement and
the consummation by the Investor of the transactions contemplated hereby or
relating hereto do not and will not (i) result in a violation of such Investor's
charter documents or bylaws where appropriate or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of any agreement, indenture or
instrument to which the Investor is a party, or result in a violation of any
law, rule, or regulation, or any order, judgment or decree of any court or
governmental agency applicable to the Investor or its properties (except for
such conflicts, defaults and violations as would not, individually or in the
aggregate, have a Material Adverse Effect on such Investor). The Investor is not
required to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it to execute,
deliver or perform any of such Investor's obligations under this Agreement or to
purchase the securities from the Company in accordance with the terms hereof;
provided that for purposes of the representation made in this sentence, the
Investor is assuming and relying upon the accuracy of the relevant
representations and agreements of the Company herein.
5.4 Financial Risks. The Investor acknowledges that such Investor is able to
bear the financial risks associated with an investment in the securities being
purchased by the Investor
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from the Company and that it has been given full access to such records of the
Company and the subsidiaries and to the officers of the Company and the
subsidiaries as it has deemed necessary or appropriate to conduct its due
diligence investigation. The Investor is capable of evaluating the risks and
merits of an investment in the securities being purchased by the Investor from
the Company by virtue of its experience as an investor and its knowledge,
experience, and sophistication in financial and business matters and the
Investor is capable of bearing the entire loss of its investment in the
securities being purchased by the Investor from the Company.
5.5 Accredited Investor. The Investor is (i) an "accredited investor" as that
term is defined in Rule 501 of Regulation D promulgated under the 1933 Act by
reason of Rule 501(a)(3) and (6), (ii) experienced in making investments of the
kind described in this Agreement and the related documents, (iii) able, by
reason of the business and financial experience of its officers (if an entity)
and professional advisors (who are not affiliated with or compensated in any way
by the Company or any of its affiliates or selling agents), to protect its own
interests in connection with the transactions described in this Agreement, and
the related documents, and (iv) able to afford the entire loss of its investment
in the securities being purchased by the Investor from the Company.
5.6 Brokers. Except as set forth in Schedule 4.8, no broker, finder or
investment banker is entitled to any brokerage, finder's or other fee or
Commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of the Investor.
5.7 Knowledge of Company. The Investor and such Investor's advisors, if any,
have been, upon request, furnished with all materials relating to the business,
finances and operations of the Company and materials relating to the offer and
sale of the securities being purchased by the Investor from the Company. The
Investor and such Investor's advisors, if any, have been afforded the
opportunity to ask questions of the Company and have received complete and
satisfactory answers to any such inquiries.
5.8 Risk Factors. The Investor understands that such Investor's investment in
the securities being purchased by the Investor from the Company involves a high
degree of risk. The Investor understands that no United States federal or state
agency or any other government or governmental agency has passed on or made any
recommendation or endorsement of the securities being purchased by the Investor
from the Company. The Investor warrants that such Investor is able to bear the
complete loss of such Investor's investment in the securities being purchased by
the Investor from the Company.
5.9 Full Disclosure. No representation or warranty made by the Investor in this
Agreement and no certificate or document furnished or to be furnished to the
Company pursuant to this Agreement contains or will contain any untrue statement
of a material fact, or omits or will omit to state a material fact necessary to
make the statements contained herein or therein not misleading. Except as set
forth or referred to in this Agreement, Investor does not have any agreement or
understanding with any person relating to acquiring, holding, voting or
disposing of any equity securities of the Company.
COMMON STOCK PURCHASE AGREEMENT BETWEEN
MB SOFTWARE CORPORATION AND T SQUARED INVESTMENTS LLC
PAGE 15 OF 30
ARTICLE VI
COVENANTS OF THE COMPANY
6.1 Registration Rights. The Company shall cause the Registration Rights
Agreement to remain in full force and effect according to the provisions of the
Registration Rights Agreement and the Company shall comply in all material
respects with the terms thereof.
6.2 Reservation of Common Stock. As of the date hereof, the Company has reserved
and the Company shall continue to reserve and keep available at all times, free
of preemptive rights, shares of Common Stock for the purpose of enabling the
Company to issue the shares of Common Stock and the shares of Common Stock
underlying the Warrants.
6.3 Compliance with Laws. The Company hereby agrees to comply in all respects
with the Company's reporting, filing and other obligations under the Laws.
6.4 Exchange Act Registration. The Company (a) will continue its obligation to
report to the SEC under Section E 12(d) of the 1934 Act and will use its best
efforts to comply in all respects with its reporting and filing obligations
under the 1934 Act, and will not take any action or file any document (whether
or not permitted by the 1934 Act or the rules thereunder) to terminate or
suspend any such registration or to terminate or suspend its reporting and
filing obligations under the 1934 until the Investors have disposed of all of
their Shares.
6.5 Corporate Existence; Conflicting Agreements. The Company will take all steps
necessary to preserve and continue the corporate existence of the Company. The
Company shall not enter into any agreement, the terms of which agreement would
restrict or impair the right or ability of the Company to perform any of its
obligations under this Agreement or any of the other agreements attached as
exhibits hereto.
COMMON STOCK PURCHASE AGREEMENT BETWEEN
MB SOFTWARE CORPORATION AND T SQUARED INVESTMENTS LLC
PAGE 16 OF 30
ARTICLE VII
COVENANTS OF THE INVESTOR
7.1 Compliance with Law. The Investor's trading activities with respect to
shares of the Company's Common Stock will be in compliance with all applicable
state and federal securities laws, rules and regulations and rules and
regulations of any public market on which the Company's Common Stock is listed.
7.2 Transfer Restrictions. The Investor's acknowledge that (1) the Common Stock,
Warrants and shares underlying Warrants have not been registered under the
provisions of the 1933 Act, and may not be transferred unless (A) subsequently
registered thereunder or (B) the Investor shall have delivered to the Company an
opinion of counsel, reasonably satisfactory in form, scope and substance to the
Company, to the effect that the Common Stock, Warrants and shares underlying
Warrants to be sold or transferred may be sold or transferred pursuant to an
exemption from such registration; and (2) any sale of the Common Stock, Warrants
and shares underlying the Warrants made in reliance on Rule 144 promulgated
under the 1933 Act may be made only in accordance with the terms of said Rule
and further, if said Rule is not applicable, any resale of such securities under
circumstances in which the seller, or the person through whom the sale is made,
may be deemed to be an underwriter, as that term is used in the 1933 Act, may
require compliance with some other exemption under the 1933 Act or the rules and
regulations of the SEC thereunder.
7.3 Restrictive Legend. The Investor acknowledges and agrees that the Common
Stock, the Warrants and the Shares underlying the Warrants, and, until such time
as the Common Stock and Shares underlying and Warrants have been registered
under the 1933 Act and sold in accordance with an effective Registration
Statement, certificates and other instruments representing any of the Shares,
shall bear a restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of any such securities):
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER SUCH
SHARES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, PLEDGED,
ASSIGNED OR OTHERWISE TRANSFERRED UNLESS (1) A REGISTRATION STATEMENT
WITH RESPECT THERETO IS EFFECTIVE UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS, OR (2) IN ACCORDANCE WITH THE
PROVISIONS OF REGULATIONS, OR (3) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT."
COMMON STOCK PURCHASE AGREEMENT BETWEEN
MB SOFTWARE CORPORATION AND T SQUARED INVESTMENTS LLC
PAGE 17 OF 30
ARTICLE XI
GENERAL PROVISIONS
11.1 Transaction Costs. Except as otherwise provided herein, each of the parties
shall pay all of his or its costs and expenses (including attorney fees and
other legal costs and expenses and accountants' fees and other accounting costs
and expenses) incurred by that party in connection with this Agreement.
11.2 Indemnification. The Investor agrees to indemnify, defend and hold the
Company (following the Closing Date) and its officers and directors harmless
against and in respect of any and all claims, demands, losses, costs, expenses,
obligations, liabilities or damages, including interest, penalties and
reasonable attorney's fees, that it shall incur or suffer, which arise out of or
result from any breach of this Agreement by such Investor or failure by such
Investor to perform with respect to any of its representations, warranties or
covenants contained in this Agreement or in any exhibit or other instrument
furnished or to be furnished under this Agreement. The Company agrees to
indemnify, defend and hold the Investor harmless against and in respect of any
and all claims, demands, losses, costs, expenses, obligations, liabilities or
damages, including interest, penalties and reasonable attorney's fees, that it
shall incur or suffer, which arise out of, result from or relate to any breach
of this Agreement or failure by the Company to perform with respect to any of
its representations, warranties or covenants contained in this Agreement or in
any exhibit or other instrument furnished or to be furnished under this
Agreement. In no event shall the Company or the Investors be entitled to recover
consequential or punitive damages resulting from a breach or violation of this
Agreement nor shall any party have any liability hereunder in the event of gross
negligence or willful misconduct of the indemnified party. In the event of a
breach of this Agreement by the Company, the Investor shall be entitled to
pursue a remedy of specific performance upon tender into the Court an amount
equal to the Purchase Price hereunder. The indemnification by the Investor shall
be limited to $10,000.00.
11.3 Headings. The table of contents and headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
11.4 Entire Agreement. This Agreement (together with the Schedule, Exhibits,
Warrants and documents referred to herein) constitute the entire agreement of
the parties and supersede all prior agreements and undertakings, both written
and oral, between the parties, or any of them, with respect to the subject
matter hereof.
11.5 Notices. All notices and other communications hereunder shall be in writing
and shall be deemed to have been given (i) on the date they are delivered if
delivered in person; (ii) on the date initially received if delivered by
facsimile transmission followed by registered or certified mail confirmation;
(iii) on the date delivered by an overnight courier service; or (iv) on the
third
COMMON STOCK PURCHASE AGREEMENT BETWEEN
MB SOFTWARE CORPORATION AND T SQUARED INVESTMENTS LLC
PAGE 18 OF 30
business day after it is mailed by registered or certified mail, return receipt
requested with postage and other fees prepaid as follows:
If to the Company:
MB Software Corporation
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxx
With a copy to:
Colbert Xxxxxxxx LLP
0000 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxxx, Xxxxx 00000
Facsimile No.: 000-000-0000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
If to the Investor:
T Squared Investments LLC
c/o T Squared Capital LLC
0000 Xxxxx Xxxxxx, Xxxxx 00
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx X. Xxxxx
11.6 Severability. If any term or other provision of this Agreement is invalid,
illegal or incapable of being enforced by any rule of law or public policy, all
other conditions and provisions of this Agreement shall nevertheless remain in
full force and effect so long as the economic or legal substance of the
transactions contemplated hereby is not affected in any manner materially
adverse to any party. Upon such determination that any such term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that the transactions contemplated hereby are fulfilled to the extent
possible.
11.7 Binding Effect. AU the terms and provisions of this Agreement whether so
expressed or not, shall be binding upon, inure to the benefit of, and be
enforceable by the parties and their respective administrators, executors, legal
representatives, heirs, successors and assignees.
COMMON STOCK PURCHASE AGREEMENT BETWEEN
MB SOFTWARE CORPORATION AND T SQUARED INVESTMENTS LLC
PAGE 19 OF 30
11.8 Preparation of Agreement. This Agreement shall not be construed more
strongly against any party regardless of who is responsible for its preparation.
The parties acknowledge each contributed and is equally responsible for its
preparation.
11.9 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to
applicable principles of conflicts of law.
11.10 Jurisdiction. This Agreement shall be exclusively governed by and
construed in accordance with the laws of the State of New York. If any action is
brought among the parties with respect to this Agreement or otherwise, by way of
a claim of counterclaim, the parties agree that in any such action, and on all
issues, the parties irrevocably waive their right to a trial by jury. Exclusive
jurisdiction and venue for any such action shall be the Federal Courts serving
the State of New York. In the event suite or action is brought by any party
under this Agreement to enforce any of its terms, or in any appeal therefrom, it
is agreed that the prevailing party shall be entitled to reasonable attorneys
fees to be fixed by the arbitrator, trial court, and/or appellate court.
11.11 Preparation and Filing of Securities and Exchange Commission filings. The
Investor shall reasonably assist and cooperate with the Company in the
preparation of all filings with the SEC after the Closing Date due after the
Closing Date.
11.12 Further Assurances, Cooperation. Each party shall, upon reasonable request
by the other party, execute and deliver any additional documents necessary or
desirable to complete the transactions herein pursuant to and in the manner
contemplated by this Agreement. The parties hereto agree to cooperate and use
their respective best efforts to consummate the transactions contemplated by
this Agreement.
11.13 Survival. The representations, warranties, covenants and agreements made
herein shall survive the Closing of the transaction contemplated hereby.
11.14 Third Parties. Except as disclosed in this Agreement, nothing in this
Agreement, whether express or implied, is intended to confer any rights or
remedies under or by reason of this Agreement on any persons other than the
parties hereto and their respective administrators, executors, legal
representatives, heirs, successors and assignees. Nothing in this Agreement is
intended to relieve or discharge the obligation or liability of any third
persons to any party to this Agreement, nor shall any provision give any third
persons any right of subrogation or action over or against any party to this
Agreement.
11.15 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay
on the part of any party hereto in the exercise of any right hereunder shall
impair such right or be construed to be a waiver of, or acquiescence in, any
breach of any representation, warranty, covenant or agreement herein, nor shall
nay single or partial exercise of any such right preclude
COMMON STOCK PURCHASE AGREEMENT BETWEEN
MB SOFTWARE CORPORATION AND T SQUARED INVESTMENTS LLC
PAGE 20 OF 30
other or further exercise thereof or of any other right. All rights and remedies
existing under this Agreement are cumulative to, and not exclusive of, any
rights or remedies otherwise available.
11.16 Counterparts. This Agreement may be executed in one or more counterparts,
and by the different parties hereto in separate counterparts, each of which when
executed shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement. A facsimile transmission of this
signed Agreement shall be legal and binding on all parties hereto.
[SIGNATURES ON FOLLOWING PAGE]
COMMON STOCK PURCHASE AGREEMENT BETWEEN
MB SOFTWARE CORPORATION AND T SQUARED INVESTMENTS LLC
PAGE 21 OF 30
IN WITNESS WHEREOF, the Investors and the Company have as of the
date first written above executed this Agreement.
THE COMPANY:
MB Software Corporation
/s/ Xxxxx Xxxxx
---------------
By: Xxxxx X. Xxxxx
Title: Chief Executive Officer
INVESTOR:
T Squared Investments LLC
By: T Squared Capital LLC, Managing Member
By: /s/ Xxxxxx Xxxxx
--------------------
Xxxxxx Xxxxx Managing Member
0000 Xxxxx Xxxxxx, Xxxxx 00
Xxx Xxxx XX 00000
COMMON STOCK PURCHASE AGREEMENT BETWEEN
MB SOFTWARE CORPORATION AND T SQUARED INVESTMENTS LLC
PAGE 22 OF 30
Schedule A
----------
NUMBER OF
SHARES AMOUNT OF NUMBER OF SHARES UNDERLYING
NAME AND ADDRESS INVESTMENT OF COMMON STOCK WARRANTS
---------------- ---------- --------------- --------
T Squared Investments LLC
0000 Xxxxx Xxxxxx, Xxxxx 00
Xxx Xxxx, Xxx Xxxx 00000 $50,000 86,207 1,500,000
Attn: Xxxxxx X. Xxxxx
COMMON STOCK PURCHASE AGREEMENT BETWEEN
MB SOFTWARE CORPORATION AND T SQUARED INVESTMENTS LLC
PAGE 23 OF 30
Schedule 4.8 -- List of Brokers
-------------------------------
COMMON STOCK PURCHASE AGREEMENT BETWEEN
MB SOFTWARE CORPORATION AND T SQUARED INVESTMENTS LLC
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Schedule 4.13 -- Material Adverse Effect
----------------------------------------
COMMON STOCK PURCHASE AGREEMENT BETWEEN
MB SOFTWARE CORPORATION AND T SQUARED INVESTMENTS LLC
PAGE 25 OF 30
Exhibit A
---------
Registration Rights Agreement
-----------------------------
COMMON STOCK PURCHASE AGREEMENT BETWEEN
MB SOFTWARE CORPORATION AND T SQUARED INVESTMENTS LLC
PAGE 26 OF 30
Exhibit B
---------
Warrants
--------
COMMON STOCK PURCHASE AGREEMENT BETWEEN
MB SOFTWARE CORPORATION AND T SQUARED INVESTMENTS LLC
PAGE 27 OF 30
