Stock Purchase Agreement - Bay Area Multimedia Inc. and Philip L. Rosenberg
BAY AREA MULTIMEDIA, INC.
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made and entered into effective as of December 30, 1999,
by and between Bay Area Multimedia, Inc., a California corporation (the
"CORPORATION"), and Philip L. Rosenberg, an individual (the "PURCHASER").
THE PARTIES AGREE AS FOLLOWS:
1. Sale of Stock. The CORPORATION hereby agrees to sell to the PURCHASER
and the PURCHASER hereby agrees to purchase 50,000 shares of the CORPORATION's
Common Stock (the "SHARES"), at the price of $0.10 per share (the "PURCHASE
PRICE"), for an aggregate purchase price of $5,000. PURCHASER has rendered
services equal to and/or provided funds by cash or check for the PURCHASE PRICE,
receipt of which is hereby acknowledged.
2. Closing. Upon execution of this AGREEMENT, the CORPORATION shall deliver
a duly issued stock certificate for the SHARES to PURCHASER.
3. RIGHT OF FIRST REFUSAL.
3.1. Right to Purchase. In the event PURCHASER or a subsequent holder
of the SHARES (collectively, "HOLDER") proposes to sell, pledge or otherwise
transfer any or all of the shares owned by him or her (the "TRANSFER SHARES"),
whether voluntarily or involuntarily, the CORPORATION, or its assignee shall
have the right to acquire all, but not less than all, of the TRANSFER SHARES
under the terms and subject to the conditions set forth in this Section 3 (the
"RIGHT OF FIRST REFUSAL").
3.2. Transfer Notice. Prior to any proposed transfer of the TRANSFER
SHARES, the HOLDER shall give a written notice (the "TRANSFER NOTICE") to the
CORPORATION describing fully the proposed transfer, including the number of
TRANSFER SHARES, the name and address of the proposed transferee (the "PROPOSED
TRANSFEREE"), and the proposed transfer price. The TRANSFER NOTICE shall be
signed by both the HOLDER and the PROPOSED TRANSFEREE and must constitute a
binding commitment of the HOLDER and the PROPOSED TRANSFEREE for the transfer of
the TRANSFER SHARES subject only to the RIGHT OF FIRST REFUSAL.
3.3. CORPORATION's Option. Within 30 days of receiving the TRANSFER
NOTICE, the CORPORATION shall notify the HOLDER as to whether it will exercise
its right to purchase the TRANSFER SHARES.
3.4. Consummation. If the CORPORATION wishes to exercise the RIGHT OF
FIRST REFUSAL, the CORPORATION shall so notify the HOLDER within 30 days of
receiving the TRANSFER NOTICE and the CORPORATION shall thereupon consummate the
sale of the TRANSFER SHARES to the CORPORATION for the FIRST REFUSAL PRICE and
on the terms set forth in the TRANSFER NOTICE within 60 days of (i) receiving
the TRANSFER NOTICE or (ii) within thirty (30) days of the determination of the
FIRST REFUSAL PRICE pursuant to Section 4 below, whichever is later.
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3.5. FIRST REFUSAL PRICE.
a. Price Offered by PROPOSED TRANSFEREE. Subject to Sections
3.6.b and 3.6.c, the "FIRST REFUSAL PRICE" shall be the price described in the
TRANSFER NOTICE.
b. Not Reflective of Fair Market Value. If the proposed transfer
of the TRANSFER SHARES is to be made without consideration, is not a bona fide
arm's length transaction (e.g., a transfer to a competitor of the CORPORATION),
or does not involve a price freely set by the HOLDER and the PROPOSED
TRANSFEREE, the FIRST REFUSAL PRICE shall be the fair market value of the
TRANSFER SHARES as determined by the Board of Directors in good faith.
c. Cash Equivalent. If the TRANSFER NOTICE provides for the
payment for the TRANSFER SHARES other than in cash, the CORPORATION and/or the
OTHER SHAREHOLDERS shall have the option of paying for the TRANSFER SHARES by
the discounted cash equivalent of the consideration described in the TRANSFER
NOTICE, as reasonably determined by the Board.
3.6. Failure of Exercise. If the CORPORATION fails to purchase all of
the TRANSFER SHARES in the time period contemplated above, the CORPORATION shall
have no right to purchase any of the TRANSFER SHARES and the HOLDER may, not
later than 120 days following delivery to the CORPORATION of the TRANSFER
NOTICE, conclude a transfer to the PROPOSED TRANSFEREE of the TRANSFER SHARES on
the terms and conditions described in the TRANSFER NOTICE. Any proposed transfer
on terms and conditions different from those described in the TRANSFER NOTICE,
as well as any subsequent proposed transfer by the HOLDER or the PROPOSED
TRANSFEREE, shall again be subject to the RIGHT OF FIRST REFUSAL.
3.7. Assignment of Right of First Refusal. The CORPORATION may assign
the RIGHT OF FIRST REFUSAL to one or more persons approved by the Board of
Directors, who shall have the right to exercise the RIGHT OF FIRST REFUSAL in
his own name for his own account.
3.8. Excluded Transfers. The RIGHT OF FIRST REFUSAL shall not apply to
a transfer to a trustee for the benefit of the HOLDER's brothers, sisters,
ancestors, descendants or spouse, provided that the transferring HOLDER retains
full control with respect to the voting rights of such shares and that such
transferee shall agree in writing (in a form satisfactory to the Board) to take
the stock subject to all the terms of this Section 3 providing for a RIGHT OF
FIRST REFUSAL with respect to any subsequent transfer.
3.9. Termination of RIGHT OF FIRST REFUSAL. Notwithstanding anything
in this Section 3, this RIGHT OF FIRST REFUSAL shall terminate upon the earlier
of:
(i) public sale or registration of the SHARES; or
(ii) corporate reorganization of the CORPORATION as defined in
Internal Revenue Code Section 368(a)(1)(A), (B), or (D).
4. Investment Representations; Restrictions on Transfer. The PURCHASER
represents and warrants to the CORPORATION that:
a. The PURCHASER is aware of the CORPORATION's business affairs and
financial condition and has acquired sufficient information about the
CORPORATION to reach an
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informed and knowledgeable decision to acquire the SHARES. The PURCHASER has
received all information from the CORPORATION which the PURCHASER has requested
and deems relevant to an evaluation of the risks and merits of this investment.
The PURCHASER has such knowledge and experience in financial and business
matters that the PURCHASER is capable of evaluating the merits and risks of
investment in the SHARES. The PURCHASER is purchasing the SHARES for investment
for the PURCHASER's own account only and not with a view to, or for resale in
connection with, any "distribution" within the meaning of the Securities Act of
1933, as amended (the "SECURITIES ACT").
b. The PURCHASER understands that an investment in the CORPORATION is
speculative, that any possible benefits from the investment are uncertain, and
that the PURCHASER must bear the economic risks of the investment in the
CORPORATION for an indefinite period of time. The PURCHASER is able to bear
these economic risks and to hold the SHARES for an indefinite period of time.
c. The PURCHASER acknowledges and understands that the SHARES
constitute "restricted securities" under the SECURITIES ACT and must be held
indefinitely unless they are subsequently registered under the SECURITIES ACT or
an exemption from such registration is available. The PURCHASER further
acknowledges and understands that the CORPORATION is under no obligation to
register the SHARES. The PURCHASER understands that the certificate evidencing
the SHARES will be imprinted with a legend which prohibits the transfer of the
SHARES unless they are registered or such registration is not required in the
opinion of counsel satisfactory to the CORPORATION.
d. The PURCHASER is familiar with the provisions of Rule 701 and Rule
144, each promulgated under the SECURITIES ACT, which, in substance, permit
limited public resale of "restricted securities" acquired in a non-public
offering, subject to the satisfaction of certain conditions. The PURCHASER
understands that the CORPORATION may not be satisfying, and is not obligated to
satisfy, any requirement of Rule 144 at such time as the PURCHASER might wish to
sell any of the SHARES, and, if so, the PURCHASER might be precluded from
selling any of the SHARES under Rule 144.
e. The PURCHASER is a resident of the state of Illinois.
5. Legend. The share certificate evidencing the SHARES issued hereunder
shall be endorsed with the following legend (in addition to any legends required
under applicable state securities laws):
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR OTHERWISE
TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS
TO THE SECURITIES OR AN OPINION OF COUNSEL SATISFACTORY TO THE
CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.
THESE SECURITIES ARE SUBJECT TO RIGHTS OF FIRST REFUSAL AND OTHER
RESTRICTIONS UPON TRANSFER, AS SET FORTH IN ONE OR MORE AGREEMENTS
BETWEEN THE REGISTERED HOLDER, THE CORPORATION, AND/OR CERTAIN OF THE
OTHER SHAREHOLDERS, COPIES OF WHICH ARE ON FILE AT THE PRINCIPAL
OFFICE OF THE CORPORATION.
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6. General Provisions.
6.1. Governing Law/Entire Agreement. This AGREEMENT shall be governed
by the laws of the State of California. This AGREEMENT represents the entire
agreement between the parties with respect to the purchase of Common Stock by
the PURCHASER and may only be modified or amended in a writing signed by both
parties.
6.2. Notices. Any notice, demand or request required or permitted to
be given by either the CORPORATION or the PURCHASER pursuant to the terms of
this AGREEMENT shall be in writing and shall be deemed given when delivered
personally or deposited in the U.S. mail, First Class with postage prepaid, and
addressed to the parties at the addresses of the parties set forth at the end of
this AGREEMENT or such other address as a party may request by notifying the
other in writing.
6.3. Attorneys' Fees. Should any litigation be commenced between the
parties concerning the rights or obligations of the parties under this
AGREEMENT, the party prevailing in such litigation shall be entitled, in
addition to such other relief as may be granted, to a reasonable sum as and for
its attorneys' fees in such litigation, This amount shall be determined by the
court in such litigation or in a separate action brought for that purpose.
6.4. Post Judgment. In addition to any amount received as attorneys'
fees, the prevailing party or parties also shall be entitled to receive from the
party or parties held to be liable, an amount equal to the attorneys' fees and
costs incurred in enforcing any judgement against such party or parties. This
Section is severable from the other provisions of this AGREEMENT and survives
any judgment and is not deemed merged into any judgment.
6.5. Severability. In case any provision of this AGREEMENT shall be
invalid, illegal or unenforceable, such provision shall be modified to the
minimum extent necessary to make such provision enforceable, and the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
IN WITNESS WHEREOF, the parties have duly executed this AGREEMENT effective
as of the date first set forth above.
CORPORATION:
Bay Area Multimedia, Inc.
20760 Monte Sunset Drive
San Jose, CA 95120
By: /s/ RAYMOND C. MUSCI
--------------------------------
Raymond C. Musci, President
PURCHASER:
/s/ PHILIP L. ROSENBERG
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Philip L. Rosenberg
2075 Hidden Ridge
Highland Park IL 60035
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SPOUSAL CONSENT
The undersigned certifies as follows:
1. I am the spouse of Philip L. Rosenberg.
2. I have received, read and approved the provisions of the foregoing Stock
Purchase Agreement between the CORPORATION and my spouse, to which this CONSENT
is attached.
3. I agree to be bound by and accept the provisions of the Stock Purchase
Agreement, as it may be amended from time to time insofar as those provisions
may affect any interest I may have in the CORPORATION, whether the interest is
community property or otherwise. I further agree that amendment of the Stock
Purchase Agreement shall not require my consent.
4. My spouse shall have full power of management of the shares purchased
pursuant to this Stock Purchase Agreement, including any portion of those
interests that are our community property; and my spouse has the full right,
without my further approval, to exercise my spouse's voting rights as a
shareholder in the CORPORATION, and to sell, transfer, encumber, and deal in any
manner with such shares.
Executed effective as of 12-30, 1999.
/s/ Mindy Rosenberg
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Signature of spouse
Mindy Rosenberg
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Printed name