Exhibit 10.27
STOCK ISSUANCE AGREEMENT AND RELEASE
THIS STOCK ISSUANCE AGREEMENT (this "Agreement"), dated as of February 5,
2003, is executed by and between TenFold Corporation (the "Company") and Xxxxxx
X. Xxxxxx Trust (the "Purchaser").
WHEREAS, the Company has agreed to issue certain shares of its Common
Stock, $0.001 par value, calculated pursuant to Section 1 below (the "Shares"),
to the Purchaser in exchange for payment by the Purchaser of the amounts set
forth in Section 1 below (the "Purchase Funds") and the services rendered by
Purchaser.
NOW, THEREFORE, in respect of the foregoing premises and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Issuance. Upon payment by the Purchaser of $700,000 USD and subject to
the other terms and conditions of this Agreement, the Company hereby agrees to
sell, and Purchaser hereby agrees to buy 3,888,889 Shares for $0.18 per share.
2. Closing. The Closing will occur on or before February 7, 2003.
3. Mechanics and Delivery. At Closing, the Purchaser shall pay the Purchase
Funds to the Company via wire transfer and the Company shall electronically
transfer the Shares to the Purchaser's designated brokerage account, with all
necessary transfer taxes paid or other revenue stamp affixed thereto.
4. Representations, Warranties and Covenants of the Purchaser. The
Purchaser hereby represents, warrants and covenants to the Company as follows:
(a) The Purchaser has full capacity, power and authority to execute and
deliver this Agreement.
(b) Purchaser understands that the Shares have not been registered under
the Securities Act of 1933, as amended (the "Act"), or any state securities laws
and are being issued to the Purchaser in a transaction that is exempt from the
registration requirements of the Act and any such laws.
(c) The Purchaser is an "accredited investor," as defined in Regulation
D under the Act, and has such knowledge and experience in financial and business
matters that it is capable of evaluating the merits and risks of investments in
the Shares and it is able to bear the economic risks of such an investment.
(d) The Purchaser understands that the Purchaser is responsible for
making its own independent review of such information as it deems relevant to
its investment decision and
it has had the opportunity to ask questions of and receive answers from the
Company concerning the purchase of the Shares and all matters relating thereto
or any additional information deemed necessary to its decision to purchase the
Shares.
(e) The Purchaser is acquiring the Shares for investment for its own
account and not with a view to any distribution of such Shares (but without
prejudice to its right at all times to sell or otherwise dispose of the Shares
in accordance with clause (i) below);
(f) The Purchaser understands that the certificates evidencing the
Shares purchased by the Purchaser will bear one or more appropriate restrictive
legends;
(g) The Purchaser has not offered or sold any Shares to, or solicited
offers to buy any Shares from, any person, or otherwise approached or negotiated
with any person with respect thereto;
(h) The Purchaser agrees not to make any disposition of all or any
portion of any Shares unless and until:
(i) there is then in effect a registration statement under the Act
covering such proposed disposition and such disposition is made in accordance
with such registration statement and any applicable requirements of state
securities laws; or
(ii) the Company shall have (1) been notified of the proposed
disposition, (2) been furnished with a detailed statement of the circumstances
surrounding the proposed disposition and (3) been furnished with a written
opinion of counsel, reasonably satisfactory to the Company, that such
disposition will not require registration of any securities under the Act or the
consent of (or a permit from) any authority under any applicable state
securities laws; provided, however, that the Company will not require opinions
of counsel for transactions made pursuant to Rule 144 under the Act if the
Company receives (x) all certificates and other information it may reasonably
request to permit it to determine that the subject disposition is, in fact,
exempt from the registration requirements of the Act pursuant to Rule 144 and
(y) a copy of any Form 144 filed with the SEC with respect to such transaction
as well as a letter from the executing broker satisfactory to the Company
evidencing compliance with Rule 144;
5. Representations, Warranties and Covenants of the Company. The Company
hereby represents, warrants and covenants to the Purchaser as follows:
(a) The Company has full capacity, power and authority to execute and
deliver this Agreement. All corporate action on the part of the Company, its
officers, directors and shareholders necessary for the performance of all
obligations of the Company under the Agreement and the authorization, issuance
and delivery of the Shares has been taken or will be taken prior to the Closing;
(b) The Shares, when issued in accordance with the terms and conditions
hereof, will be duly and validly issued, fully paid and non-assessable and free
of restrictions on transfer other than restrictions on transfer under this
Agreement, and applicable state and federal securities laws. Based in part upon
the representations of Purchaser in this Agreement, the
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Shares will be issued in compliance with all applicable federal and state
securities laws. Upon the consummation of the transactions contemplated by this
Agreement, the Purchaser will acquire title to the Shares, free and clear of all
liens.
(c) Issuance of certificates for the Shares to the Purchaser shall be
made without charge to the Purchaser for any issue or transfer tax, or other
incidental expense, in respect of such issuance or delivery of such certificates
or the Shares represented thereby, all of which taxes and expenses shall be paid
by the Company;
(d) The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and is duly qualified to
carry on its business as now being conducted. The Company is duly qualified to
transact business and is in good standing in each jurisdiction in which the
failure so to qualify would have a material adverse affect on the Company and
its subsidiaries, taken as a whole;
(e) The Agreement has been duly executed and delivered on behalf of the
Company and constitutes the legal, valid and binding obligation of the Company
enforceable in accordance with their respective terms in accordance with its
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;
(f) No consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any federal, state or
local governmental authority on the part of the Company is required in
connection with the consummation of the transactions contemplated by the
Agreement, except for filings as may be required by federal and state securities
laws;
6. Further Assurances. After the date hereof, the Company and the Purchaser
shall each execute, acknowledge and deliver or cause to be delivered such
instruments and take such other action as may be necessary or advisable to
assure to the other the rights, titles, interests, estates, and privileges
intended to be assigned, delivered, or reserved to such party and to consummate
the transactions to carry out their obligations under this Agreement and under
any document, certificate, or other instrument delivered pursuant hereto.
7. Amendments; Waivers. Any term of this Agreement may be amended only in a
writing by the Company and the Purchaser. Any amendment effected in accordance
with this section shall be binding upon the Purchaser and the Company. No
waivers of, or exceptions to, any term, condition or provision of this
Agreement, in any one or more instances, shall be deemed to be, or construed as,
a further or continuing waiver of any such term, condition or provision and
shall not be valid unless in writing.
8. Entire Agreement. This Agreement embodies the entire understanding
between the Company, and the Purchaser, and supersedes any prior understandings,
agreements and arrangements between the Company and the Purchaser, respecting
the subject matter hereof. There are no representations, warranties, agreements,
arrangements or understandings, oral or
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written, between the Company, and the Purchaser, relating to the subject matter
of this Agreement that are not fully expressed herein.
9. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The execution and delivery of signatures for this
Agreement may occur via telecopy, and such telecopied signature pages shall have
the force and effect of original signature pages.
10. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Utah without giving effect to the
principles of conflicts of law.
11. Cooperation/Documentation. The Parties will, at their own cost and
expense, execute such other instruments, documents, information and data as may
be reasonably necessary for the purposes of and to effectuate the terms of this
Agreement.
12. Independent Legal Advice. Each of the Parties does hereby represent and
warrant that in executing this Agreement it does so with full knowledge of the
rights it may have in respect of the other parties to this Agreement and that it
has received independent legal advice as to these rights.
13. Address of Record. The following address shall serve as the address of
record for Purchaser with respect to the Shares until the same is modified by
the Purchaser in a written notice delivered to the Company's executive offices:
Xxxxxx X. Xxxxxx Trust
0000 Xxxxx Xxx
Xxxxxxxx, XX 00000
Fax No. (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
[Signature page follows]
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IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed
by its officer thereunto duly authorized as of the date first set forth above.
The Company:
TENFOLD CORPORATION
By: __________________________
Its: _________________________
The Purchaser:
XXXXXX X. XXXXXX TRUST
By: __________________________
Its: _________________________
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