Stock Purchase Agreement - Butterfly Software and E-City Software Inc.
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made and entered into this
10th day of August 2000 between Butterfly Software, a Canadian Corporation
("Seller"), and E-City Software, Inc., a Nevada corporation ("Buyer").
RECITALS
WHEREAS, Seller, who is engaged in the development of interactive mapping
software ("Business") desires to sell to Buyer at the Closing, as hereinafter
defined, and Buyer desires to purchase from Seller 100% of the issued and
outstanding stock of Seller upon and subject to the terms and conditions
contained in this Agreement.
NOW, THEREFORE, IN CONSIDERATION of the premises and the mutual representations,
warranties and covenants which are made and to be performed by the respective
parties, it is agreed as follows:
ARTICLE 1.
PURCHASE AND SALE OF STOCK
1.1. Purchase and Sale of Stock. Subject to the terms and conditions of this
Agreement, at the Closing, Seller shall sell, transfer, convey, assign and
deliver to Buyer and Buyer shall purchase, acquire and accept from Seller 100%
of the issued and outstanding stock of Seller ("Stock").
1.2. No Liabilities. Except as specifically set forth in Schedule 1.2 hereof,
and anything in this Agreement to the contrary notwithstanding, there are no
debts, claims, obligations, commitments, or other liabilities of Seller or any
other person or entity whatsoever relating in any way to the operation of the
Business prior to the Closing Date.
<PAGE>
ARTICLE 2.
CONSIDERATION
2.1. Purchase Price.The purchase price to be paid for the Stock shall consist of
the issuance of the Shares as described below (the "Purchase Price"). The
Purchase Price shall be paid according to Section 2.2 below.
2.2. Payment of Purchase Price. At the Closing, Buyer shall deliver to Seller
50,000 fully paid, validly issued,
-------------------------
non-assessable shares of its common stock (the "E-City Stock").
2.3 E-City Stock. The E-City Stock shall have the same rights, privileges and
preferences of any other stock issued to the "founders" of E-City Software.
2.4 Transfer and Similar Taxes. Seller agrees to pay all sale, transfer and
similar taxes ("Transfer Taxes") relating to the sale and purchase of the Stock
pursuant to this Agreement. Buyer and Seller shall cooperate to minimize all
such Transfer Taxes.
2.5 Immediate Transfer. Buyer and Seller agree that the E-City Stock shall be
issued to the shareholders of Seller as
------------------
directed by Seller immediately prior to the Closing.
ARTICLE 3.
CLOSING: OBLIGATIONS OF THE PARTIES
3.1. Closing Date. The closing (the "Closing") shall take place and be effective
for all purposes at 10:00 a.m., local time, on a date to be specified by the
parties, which shall in no event be later than August 15, 2000 (the "Closing
Date"), at the offices of Butterfly Software, unless another date or place is
agreed to in writing by the parties hereto.
3.2. Obligations of the Parties at the Closing
(a) At the Closing, Buyer shall deliver to Seller (or Seller's agent):
(i) the Purchase Price in the form of the E-City Stock, complete with
certificates, properly in the name of shareholders of the Seller as supplied by
the Seller immediately prior to the Closing;
(ii) a copy of resolutions of the Board of Directors of Buyer, certified by
Buyer's Secretary or Assistant Secretary, authorizing the execution, delivery
and performance of this Agreement and the other documents referred to herein to
be executed by Buyer, and the consummation of the transactions contemplated
hereby;
(iii) a certificate of Buyer certifying as to the accuracy of Buyer's
representations and warranties at and as of the Closing and that Buyer has
performed or complied with all of the covenants, agreements, terms, provisions
and conditions to be performed or complied with by Buyer at or before the
Closing;
(iii) such other certificates and documents as Seller or its counsel may
reasonably request; and
(b) At the Closing, Seller will deliver to Buyer:
(i) certificates with appropriately executed transfer documents showing that the
Stock has been issued to E-City; (vii) such other certificates and documents as
Buyer or its counsel may reasonably request;
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES BY SELLER
Except as set forth in Seller's disclosure letter (the "Seller Disclosure
Letter") delivered by Seller to Buyer herewith (which letter may be updated in
an immaterial manner up to the Closing), including items in the Seller
Disclosure Letter referred to as "Items" below, Seller hereby represents and
warrants to Buyer as follows:
4.1. Authorization. Seller has obtained full title and authority to transfer the
Stock free and clear of any encumbrance, lien, security interest, debt or claim
of any kind by any third party, and transfers the Stock without violation of any
contractual rights of any third party.
4.2. No Violation. The execution and delivery of this Agreement by Seller does
not, and the consummation of the transactions contemplated hereby will not, (a)
violate any provision of, or result in the creation of any lien or security
interest under, any agreement, indenture, instrument, lease, security agreement,
mortgage or lien to which Seller is a party or by which any of the Stock are
bound; or (b) violate any other contractual or legal obligation or restriction
to which Seller is subject.
4.3. No Undisclosed Liability. Except as set forth in Item 4.3, Seller does not
have any liabilities or obligations of any nature, whether absolute, accrued,
contingent or otherwise and whether due or to become due (including, without
limitation, liabilities for taxes and interest, penalties and other charges
payable with respect thereto) in respect of the Stock or the Business.
4.4. Intellectual Property. To best of Seller's belief and knowledge, Seller has
sufficient title to and ownership of all technology and marks, or adequate
licenses and rights to use the technology or marks of others on reasonable
terms, which is necessary for the conduct of the Business. The Business is being
carried on without conflicts with the registered patents, patent applications,
licenses, trademarks, copyrights or trade names of others, other than as set
forth in Item 4.4. Seller has full right to sell, convey, transfer, assign and
deliver any and all of its right, title and interest in and to such technology
and marks, free and clear of any mortgage, pledge, lien, security interest,
conditional sale agreement, encumbrance or charge of any kind.
4.5. Professional Fees. Seller has not done anything to cause or incur any
liability or obligation for investment banking, brokerage, finders, agents or
other fees, commissions, expenses or charges in connection with the negotiation,
preparation, execution or performance of this Agreement or the consummation of
the transactions contemplated hereby, and Seller does not know of any claim by
anyone for such a fee, commission, expense or charge.
4.6. Taxes All United States, foreign, state and local tax returns and reports
required to be filed to date with respect to the operations of the Business have
been accurately prepared and duly filed, or an extension therefrom has been duly
obtained, and, except for taxes contested in good faith and disclosed in Item
4.6, all taxes payable have been paid when due; there is no examination or audit
known to Seller or any claim, asserted deficiency or assessment for additional
taxes in progress, pending, or threatened, nor is there any reasonable basis for
the assertion of any such claim, deficiency or assessment; no material special
charges, penalties, fines, liens, or similar encumbrances have been asserted
against Seller in connection with the operation of the Business with respect to
payment of or failure to pay any taxes which have not been paid or resolved
without further liability to Seller. Seller has not executed or filed with any
taxing authority any agreements extending the period for assessment or
collection of any taxes in connection with the operation of the Business. Proper
amounts have been withheld by Seller from the Business's employees' compensation
payments for all periods in compliance with the tax withholding provisions of
applicable federal and state laws.
4.7. Consents and Approvals. Seller has, or will have by Closing, obtained all
consents, approvals, authorizations or orders of third parties, including
governmental authorities, necessary for the authorization, execution and
performance of this Agreement by Seller.
4.8. Full Disclosure. Neither this Agreement, when considered together with the
Seller Disclosure Letter, the Schedules, exhibits, lists, certificates or other
instruments and documents furnished or to be furnished by Seller to Buyer
pursuant to this Agreement, contains any untrue statement of a material fact or
omits to state any material fact required to be stated herein or therein or
necessary to make the statements and information contained herein or therein not
misleading.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES BY BUYER
Except as set forth in Buyer's disclosure letter (the "Buyer Disclosure Letter")
delivered by Buyer to Seller herewith (which letter may be updated in an
immaterial manner up to the Closing), including items in the Buyer Disclosure
Letter referred to as "Items" below, Buyer hereby represents and warrants to
Seller as follows:
5.1. Authorization. Buyer has full corporate power and authority to enter into
this Agreement and perform its obligations hereunder and carry out the
transactions contemplated hereby. The Board of Directors of Buyer has taken all
action required by law, its Articles of Incorporation, its Bylaws and otherwise
to authorize the execution and delivery by Buyer of this Agreement and the
consummation by Buyer of the transactions contemplated hereby. This Agreement
constitutes a valid and binding agreement of Buyer, enforceable against Buyer in
accordance with its terms.
5.2. Organization and Good Standing. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada and
has full corporate power and authority to enter into this Agreement and to carry
out the transactions contemplated hereby.
5.3. No Violation. The execution and delivery of this Agreement by Buyer does
not, and the consummation of the transactions contemplated hereby will not, (a)
violate any provision, or result in the creation of any lien or security
interest under, any agreement, indenture, instrument, lease, security agreement,
mortgage or lien to which Buyer is a party or by which it is bound; (b) violate
any provision of Buyer's Articles of Incorporation or Bylaws; (c) violate any
order, arbitration award, judgment, writ, injunction, decree, statute, rule or
regulation applicable to Buyer; or (d) violate any other contractual or legal
obligation or restriction to which Buyer is subject.
5.4. Professional Fees. Buyer has not done anything to cause or incur any
liability for investment banking, brokerage, finders, agents or other fees,
commissions, expenses or charges in connection with the negotiation,
preparation, execution and performance of this Agreement or the consummation of
the transactions contemplated hereby, and Buyer does not know of any claim by
anyone for such a commission or fee, except with respect to certain commissions
which may be due in the course of Buyer's financing arrangements and which would
be borne exclusively by Buyer.
5.5. Consents and Approvals. Buyer has obtained all consents, approvals,
authorizations or orders of third parties,
----------------------
including governmental authorities, necessary for the authorization,
execution and performance of this Agreement by Buyer.
5.6. Full Disclosure. Neither this Agreement, nor any certificate or other
instrument or document furnished or to be furnished by Buyer to Seller pursuant
to this Agreement, contains any untrue statement of a material fact or omits to
state a material fact required to be stated herein or therein or necessary to
make the statements and information contained herein or therein not misleading.
ARTICLE 6.
COVENANTS AND AGREEMENTS OF SELLER
Seller agrees that from the date hereof until the Closing, and thereafter if so
specified, to fulfill the following covenants and agreements unless otherwise
consented to by Buyer in writing:
6.1. Schedules. Seller shall have the continuing obligation to supplement or
amend promptly the Seller Disclosure Letter with respect to any matter hereafter
arising or discovered which, if existing or known at the date of this Agreement,
would have been required to be set forth or described therein.
ARTICLE 7.
COVENANTS AND AGREEMENTS OF BUYER
Buyer agrees that from the date hereof until the Closing, unless otherwise
consented to by Seller in writing, it will fulfill the following covenants and
agreements:
7.1. Return of Materials. In the event the transactions contemplated by this
Agreement are not consummated, for any reason, Buyer promptly will return to
Seller all records and information provided to Buyer from Seller, and Buyer will
treat all such records and information as confidential.
7.2. Schedules. Buyer shall have the continuing obligation to supplement or
amend promptly the Buyer Disclosure Letter with respect to any matter hereafter
arising or discovered which, if existing or known at the date of this Agreement,
would have been required to be set forth or described therein.
7.3. Consents and Approvals. Buyer shall, in a timely, accurate and complete
manner, take all necessary corporate and other action and obtain and deliver at
Closing all consents, approvals, permits, licenses and amendments of agreements
required of Buyer to carry out the transactions contemplated in this Agreement.
ARTICLE 8.
COVENANTS AND AGREEMENTS OF BOTH SELLER AND BUYER
8.1. Confidentiality and Disclosure. Neither party shall, nor shall permit any
of its representatives to, issue any press release or otherwise publicly
disseminate any document or other written material relating to this Agreement or
any of the other transactions contemplated by this Agreement unless (a) each
party shall have approved such press release or written material (it being
understood that neither party shall unreasonably withhold or delay its approval
of any such press release or written material), or (b) a party shall have been
advised by its outside legal counsel that the issuance of such press release or
the dissemination of such written material is likely required by any applicable
law or regulation, and such party shall have consulted with the other and
modified such release so that it is reasonably acceptable to the other prior to
issuing such press release or disseminating such written material; provided,
however, that Buyer shall be entitled to file with the SEC, after the execution
and delivery of this Agreement, a report on Form 8-K (together with a copy of
this Agreement, including the exhibits hereto) and the press release (all of
which shall have been approved by the other party as described above) announcing
this Agreement. Each party shall use reasonable, diligent efforts to ensure that
none of its representatives makes any public statement, whether oral or written,
that is materially inconsistent with any press release issued or any written
material approved in advance by any part and publicly disseminated by such party
with respect to this Agreement or with respect to any of the other transactions
contemplated by this Agreement. Each party will take all reasonable precautions
to prevent any trading in the securities of any party by any officer, director,
employee or agent of such party having knowledge of any material information
regarding this Agreement provided hereunder, or any disclosure by any such
persons to anyone outside of the parties of any material non-public information
concerning any party or the transactions contemplated by this Agreement, until
the information in question has been adequately and publicly disclosed.
ARTICLE 9.
CONDITIONS TO BUYER'S OBLIGATIONS
All obligations of Buyer hereunder are subject to the fulfillment, prior to or
at the Closing, of each of the following conditions:
9.1. Representations and Warranties. The representations and warranties made by
Seller in this Agreement and the statements contained in the Seller Disclosure
Letter and in the Schedules attached hereto or in any instrument, list,
certificate or writing delivered by Seller pursuant to this Agreement shall be
true in all material respects when made and at and as of the time of the Closing
as though such representations and warranties were made at and as of the
Closing.
9.2. Performance by Seller. Seller shall have performed and complied with all
covenants, agreements, obligations and
---------------------
conditions required by this Agreement to be so complied with or performed.
9.3. Certificate of Seller. Seller shall have delivered to Buyer a certificate,
dated the Closing Date, certifying as to
---------------------
the fulfillment of the conditions specified in Sections 9.1 and 9.2 hereof.
9.4. Closing Deliveries. All other documents and items specified in this
Agreement to be delivered by Seller at the
------------------
Closing shall be so delivered, and shall be in form and substance satisfactory
to Buyer and its counsel.
9.5. Consents and Approvals. Buyer shall have received from Seller executed
counterparts of all consents required for the consummation of the transactions
contemplated hereby, including without limitation all consents of third parties
relating to the Stock or the Assumed Liabilities, all of which consents shall be
in form and substance satisfactory to Buyer and its counsel.
ARTICLE 10.
CONDITIONS TO SELLER'S OBLIGATIONS
All obligations of Seller under this Agreement are subject to the fulfillment,
prior to or at the Closing, of each of the following conditions:
10.1. Representations and Warranties. The representations and warranties made by
Buyer in this Agreement and the statements contained in the Buyer Disclosure
Letter and in the Schedules attached hereto or in any instrument, list,
certificate or writing delivered by Buyer pursuant to this Agreement shall be
true in all material respects when made and at and as of the time of the Closing
as though such representations and warranties were made at and as of the
Closing.
10.2. Performance by Buyer. Buyer shall have performed and complied with all
agreements, obligations and conditions
--------------------
required by this Agreement to be so complied with or performed.
10.3. Certificate of Buyer. Buyer shall have delivered to Seller a Certificate,
dated the Closing Date, certifying as to
--------------------
the fulfillment of the conditions specified in Sections 10.1 and 10.2 hereof.
10.4. Closing Deliveries. All other documents and items specified in this
Agreement to be delivered by Buyer at the
------------------
Closing shall be so delivered, and shall be in form and substance satisfactory
to Seller and its counsel.
10.5. Consents and Approvals. Seller shall have received from Buyer executed
counterparts of all consents required for the consummation of the transactions
contemplated hereby, including without limitation all consents of third parties
relating to the Stock or the Assumed Liabilities, all of which consents shall be
in form and substance satisfactory to Seller and its counsel.
<PAGE>
ARTICLE 11.
INDEMNIFICATION
11.1. Indemnification by Seller. Seller hereby agrees to defend, indemnify and
hold harmless Buyer, and each of Buyer's stockholders, affiliates, officers,
directors, employees, agents, successors and assigns ("Buyer's Indemnified
Persons") and shall reimburse Buyer's Indemnified Persons for, from and against
each claim, loss, liability, cost and expense (including without limitation,
interest, penalties, costs of preparation and investigation, and the reasonable
fees, disbursements and expenses of attorneys, accountants and other
professional advisors) (collectively, "losses"), directly or indirectly relating
to, resulting from or arising out of:
(a) Any untrue representation, misrepresentation, breach of warranty or
non-fulfillment of any covenant,
agreement or other obligation by or of Seller contained herein, any Schedule
hereto or in any certificate, document or instrument delivered to Buyer pursuant
hereto;
(b) Any other loss incidental to any of the foregoing.
11.2. Indemnification by Buyer. Buyer hereby agrees to defend, indemnify and
hold harmless Seller, and each of Seller's stockholders, affiliates, officers,
directors, employees, agents, successors and assigns ("Seller's Indemnified
Persons") and shall reimburse Seller's Indemnified Persons for, from and against
losses directly or indirectly relating to, resulting from or arising out of:
(a) Any untrue representation, misrepresentation, breach of warranty or
nonfulfillment of any covenant,
agreement or other obligation by Buyer contained herein or in any certificate,
document or instrument delivered to Seller pursuant
hereto; and
(b) Any other loss incidental to the foregoing.
11.3. Survival. All representations and warranties by the parties contained in
this Agreement or in any certificate delivered pursuant hereto shall survive the
Closing and any investigation at any time made by or on behalf of any party
hereto solely for purposes of Section 11.1 and 11.2 and shall terminate on the
date which is twelve months after the Closing Date.
NOTWITHSTANDING THE FOREGOING, NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY
CONSEQUENTIAL OR INCIDENTAL DAMAGE IN CONNECTION WITH THE PERFORMANCE OF THIS
AGREEMENT EVEN IF ADVISED IN ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES AND THIS
AGREEMENT INCLUDES ALL REPRESENTATIONS AND WARRANTIES GIVEN BY ONE PARTY TO
ANOTHER, EACH PARTY HEREBY WAIVING ANY IMPLIED WARRANTIES SUCH AS WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, COURSE OF DEALING OR TRADE
PRACTICE.
ARTICLE 12.
TERMINATION OF AGREEMENT
12.1. Termination of Agreement. This Agreement may be terminated at any time
prior to the Closing:
------------------------
(a) By mutual agreement of Seller and Buyer.
(b) By Buyer, if there has been a material violation or breach by Seller of any
of the agreements,
representations or warranties contained in this Agreement which has not been
waived in writing, or if any of the conditions set forth in Article 9 hereof
have not been satisfied by the Closing or have not been waived in writing by
Buyer.
(c) By Seller, if there has been a material violation or breach by Buyer of any
of the agreements,
representations or warranties contained in this Agreement which has not been
waived in writing, or if any of the conditions set forth in Article 9 hereof
have not been satisfied by the Closing or have not been waived in writing by
Seller.
(d) By either Buyer or Seller, if the transactions contemplated by this
Agreement shall not have been consummated on or before October 15, 2000.
(e) By either Buyer or Seller, if the other makes an assignment for the benefit
of creditors, files a voluntary petition in bankruptcy or seeks or consents to
any reorganization or similar relief under any present or future bankruptcy act
or similar law, or is adjudicated a bankrupt or insolvent, or if a third party
commences any bankruptcy, insolvency, reorganization or similar proceeding
involving the other.
ARTICLE 13.
MISCELLANEOUS ARTICLE
13.1. Fees and Expenses. All fees and expenses incurred by Seller, including
without limitation legal fees of its retained counsel and expenses, in
connection with this Agreement will be borne by Seller and all fees and expenses
incurred by Buyer, including without limitation, legal fees and expenses, in
connection with this Agreement will be borne by Buyer.
13.2. Assignability: Parties in Interest. Neither Buyer nor Seller may assign,
transfer or otherwise dispose of any of its rights hereunder without the prior
written consent of the other party. Any such assignee shall assume all of
Assignor's duties, obligations and undertakings hereunder, but the assignor
shall remain liable thereunder. All the terms and provisions of this Agreement
shall be binding upon, shall inure to the benefit of and shall be enforceable by
the respective heirs, successors, assigns and legal or personal representatives
of the parties hereto.
13.3. Allocation of Purchase Price. The Purchase Price for the Stock shall be
allocated as set forth in Schedule 13.3
----------------------------
attached hereto. The parties hereto agree to follow such allocation for Federal
and State income tax purposes.
13.4. Entire Agreement: Amendments. This Agreement, including the exhibits,
Schedules, lists and other documents and writings referred to herein or
delivered pursuant hereto, which form a part hereof, contains the entire
understanding of the parties with respect to its subject matter. There are no
restrictions, agreements, promises, warranties, covenants or undertakings other
than those expressly set forth herein or therein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to its
subject matter. This Agreement may be amended only by a written instrument duly
executed by all parties or their respective heirs, successors, assigns or legal
personal representatives. Any condition to a party's obligations hereunder may
be waived but only by a written instrument signed by the party entitled to the
benefits thereof. The failure or delay of any party at any time or times to
require performance of any provision or to exercise its rights with respect to
any provision hereof, shall in no manner operate as a waiver of or affect such
party's right at a later time to enforce the same.
13.5. Headings. The section and paragraph headings contained in this Agreement
are for reference purposes only and shall
--------
not affect in any way the meaning or interpretations of this Agreement.
13.6. Severability. The invalidity of any term or terms of this Agreement shall
not affect any other term of this
------------
Agreement, which shall remain in full force and effect.
13.7. Notices. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered in person, by electronic facsimile transmission, cable, telegram,
telex, or other standard form of telecommunications, by overnight courier or
registered or certified mail, postage prepaid, return receipt requested as
follows:
If to Buyer: E-City Software
Anis Jessa
1201 First Avenue South
Suite 330
Seattle, WA 98134
(206) 264-9715 Tel
(520) 441-8755 Fax
If to Seller: Butterfly Software
Daryl Brooks
#302 - 343 Railway Street
Vancouver, B.C. Canada V6A 1A4
(604) 605-1130 Tel
(604) 605-1132 Fax
or to such other address as any party may have noticed to the others in writing
in accordance herewith, except that notices of change of address shall only be
effective upon receipt.
13.8. Governing Law This Agreement shall be governed by and construed and
enforced in accordance with the laws of the
--------------
State of Nevada, without regard to its conflict of laws rules. Venue shall be
Clark County, Nevada.
13.9. Counterparts. This Agreement may be executed simultaneously in
counterparts, with the same effect as if the signatories executing the several
counterparts had executed one counterpart; provided, however, that the several
executed counterparts shall together have been signed by Buyer and Seller. All
such executed counterparts shall together constitute one and the same
instrument.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by duly
authorized officers of Buyer and Seller on the date first above written.
BUYER:
E-City Software, INC.
By: /s/ Anis Jessa
Title: President
SELLER:
Butterfly Software, Inc.
By: /s/ Daryl Brooks
<PAGE>
STOCK PURCHASE AGREEMENT
BY AND BETWEEN
E-City Software , INC.
AND
Butterfly Software, Inc.
August 10, 2000