EXHIBIT 10.6
EDUCATIONAL MODULES, INC.
STOCK PURCHASE AGREEMENT
Board of Directors December , 1992
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Educational Modules, Inc.
Gentlemen:
The undersigned (the
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"Purchaser") hereby purchases shares of the Common Stock of
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Educational Modules, Inc., a New York corporation (the "Company") at a purchase
price of $9.00 per share for an aggregate purchase price of $ .
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Summary
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The Company was organized in March, 1969, as a New York corporation.
Pursuant to its Articles of Incorporation, as amended, (the "Articles of
Incorporation"), the Company is authorized to issue 2,000,000 shares of Common
Stock, $.05 par value, of which 585,313 shares are currently outstanding. The
Company is offering for sale up to 84,278 shares of its Common Stock. Upon
completion of this Offering, assuming all 84,278 shares are sold, there will be
outstanding 669,541 shares of Common Stock.
The Offering
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The Company is raising from the sale of the shares $758,502. The shares
will not be registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any other state or federal securities laws, on the grounds
that the transaction in which the shares are to be issued qualifies for
applicable exemptions from the securities registration requirements of such
statutes. The exemptions being claimed include, but are not necessarily limited
to, those available under Sections 3(b) and 4(2) of the Securities Act and, the
reliance by the Company upon the exemptions from the securities registration
requirements of federal and state securities laws is predicated in part on the
representations, understandings and covenants set forth in this Stock Purchase
Agreement.
Company Representations and Warranties
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The Company hereby represents and warrants to each Purchaser as
follows:
1. To the best of its knowledge, there is no action, suit, customer
claim, proceeding or investigation at law or in equity or by or before any
court, governmental instrumentality or other agency now pending or threatened
against or affecting the Company, nor does the Company know of any valid basis
therefor which, if proven, would be reasonably expected to materially and
adversely affect the Company's business, properties, assets, prospects or
condition (financial or otherwise).
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2. To the best of its knowledge, the Company is not in default (a)
under its Articles of Incorporation or Bylaws, or any indenture, mortgage,
lease, purchase or sales order, or any other contract, agreement or instrument
to which the Company is a party or by which it or any of its property is bound
or affected or (b) with respect to any order, writ, injunction or decree of any
court or any federal, state, municipal or other domestic or foreign governmental
department, commission, board, bureau, agency or instrumentality. The Company
does not know of any condition, event or act which constitutes, or which after
notice, lapse of time, or both, would constitute, a default under any of the
foregoing.
3. To the best of its knowledge, the Company has complied in all
material respects with all federal, state, local and foreign laws, ordinances,
regulations and orders applicable to it, its business or the ownership of its
assets.
4. The execution, delivery and performance by the Company of this
Agreement, have been duly authorized by all requisite corporate action by the
Company; and, this Agreement constitutes the valid and binding obligation of the
Company, enforceable in accordance with its terms, except to the extent that
enforcement hereof is limited by or contrary to (i) bankruptcy, insolvency or
other similar laws affecting the enforcement of creditors' rights generally, or
(ii) general equitable principles. The execution, delivery and performance of
this Agreement, will not (a) violate any provision of present law, statute, rule
or regulation, or any present ruling, writ, injunction, order, judgment or
decree of any court, administrative agency or other governmental body applicable
to the Company or any of its properties or assets or (b) to the best of its
knowledge, conflict with or result in any breach of any of the terms, conditions
or provisions of, or constitute (with due notice or lapse of time, or both) a
default (or give rise to any right of termination, cancellation or acceleration)
under or result in the creation of any lien, security interest, charge or
encumbrance upon any of the properties or assets of the Company under the
Articles of Incorporation or Bylaws, or any note, indenture, mortgage, lease
agreement or other contract, agreement or instrument to which the Company is
presently a party or by which it or any of its property is presently bound or
affected.
5. The issuance, sale and delivery of the Shares have been duly
authorized by all requisite corporate action of the Company, and when issued,
sold and delivered in accordance with this Agreement, the shares of Common Stock
will be validly issued and outstanding, fully paid and nonassessable, and not
subject to preemptive or any other similar rights of the stockholders of the
Company or others except as provided herein or in a document referred to herein.
6. No brokers or finders are being utilized by the Company in
connection with this Offering, and no commissions or fees of any kind will be
paid by the Company to any person in connection with this Offering.
7. The Company has maintained, and the Company will continue to
maintain at all times, insurance coverage for the Company and its properties to
the extent that the Company reasonably determines to be appropriate under the
circumstances and in accordance with practices in the industry.
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CONDITIONS TO CLOSING OF PURCHASER
As a condition to closing the Company hereby agrees to the following:
Registration Rights
1. Incidental Registration. If the Company at any time
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proposes for any reason to register any of its securities under the
Securities Act (other than pursuant to a registration statement on Form
S-8, S-4 or similar or successor form (collectively, "Excluded Forms")),
it shall at such time promptly give written notice to all Purchasers of
its intention so to do, and, upon the written request, given within 30
days after receipt of any such notice, of any such Purchaser to register
any shares of Common Stock (which request shall specify the shares
intended to be sold or disposed of and shall state the intended method of
disposition of such shares), the Company shall use its best efforts to
cause all such shares of Common Stock to be registered under the
Securities Act promptly upon receipt of the written request of such
holders for such registration, all to the extent requisite to permit the
sale or other disposition (in accordance with the intended methods
thereof, as aforesaid) by the prospective seller or sellers of the Common
Stock so registered. In the event that the proposed registration by the
Company is, in whole or in part, an underwritten public offering of
securities of the Company, any request pursuant to this Section 1 to
register Common Stock may specify that such shares are to be included in
the underwriting (a) on the same terms and conditions as those on which
any Common Stock is otherwise being sold through underwriters under such
registration or (b) on terms and conditions comparable to those normally
applicable to offerings of common stock in reasonably similar
circumstances in the event that no shares of Common Stock are being sold
through underwriters under such registration; provided, however, that
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if the managing underwriter determines and advises in writing that the
inclusion of all Common Stock proposed to be included in the underwritten
public offering and other issued and outstanding shares of Common Stock
proposed to be included therein by persons other than those owned by
Purchasers (the "Other Shares") would interfere with the successful
marketing of such securities, then the number of shares of Common Stock
and Other Shares to be included in such underwritten public offering
shall be reduced, pro rata; provided, however, that in no event may
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such reduction have the effect of not permitting at least 33-1/3% of the
shares of Common Stock subject to this Agreement to be included in the
underwritten public offering.
2. Preparation and Filing. If and whenever the
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Company is under an obligation pursuant to the provisions of Section 1
to use its best efforts to effect the registration of any
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Common Stock, the Company shall, as expeditiously as practicable:
(a) prepare and file with the Securities and Exchange Commission (the
"Commission") a registration statement with respect to such securities and use
its best efforts to cause such registration statement to become and remain
effective in accordance with Section 2(b);
(b) prepare and file with the Commission such amendments and supplements to
such registration statement and the prospectus used in connection therewith as
may be necessary to keep such registration statement effective until the earlier
of the date on which (i) all Common Stock registered pursuant thereto shall have
been sold, (ii) the holders of said Purchaser's Common Stock being so registered
agree to terminate said registration, (iii) the registration rights hereunder
terminate and (iv) 90 days from the date such registration statement shall have
become effective, and to comply with the provisions of the Securities Act with
respect to the sale or other disposition of all Common Stock covered by such
registration statement;
(c) furnish to each selling stockholder such number of copies of a summary
prospectus or other prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act, and such other documents
to facilitate the public sale or other disposition of such Common Stock;
(d) use its best efforts to register or qualify the Common Stock covered by
such registration statement under the securities or "blue sky" laws of such
jurisdictions as each such seller reasonably request (provided, however, that
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the Company shall not be required to consent to general service of process for
all purposes in any jurisdiction where it is not then qualified) and do any and
all other acts or things which may be necessary or advisable to enable such
seller to consummate the public sale or other disposition in such jurisdictions
of such securities;
(e) notify each seller of Common Stock covered by such registration
statement, at any time when a prospectus relating thereto covered by such
registration statement is required to be delivered under the Securities Act
within the appropriate period mentioned in Section 2(b), of the happening of any
event as a result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material fact or
omits to state a material fact required to be
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stated therein or necessary to make the statements therein not misleading in the
light of the circumstances then existing, and, at the request of such seller,
prepare and furnish to such seller a reasonable number of copies of a supplement
to or an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such shares, such prospectus shall not include an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading in
the light of the circumstances then existing; and
(f) furnish, at the request of any holder or holders requesting registration
of Common Stock pursuant to Section 1, on the date that such Common Stock is
delivered to the underwriters for sale in connection with such registration, if
such securities are being sold through underwriters, or, if such securities are
not being sold through underwriters, on the date that the registration statement
with respect to such securities become effective, (i) an opinion, dated such
date, of the counsel representing the Company for the purposes of such
registration, in form and substance as is customarily given to underwriters in
an underwritten public offering, addressed to the underwriters, if any, and to
the Company; and (ii) a letter dated such date, from the independent certified
public accountants of the Company, in form and substance as is customarily given
by independent certified public accountants to underwriters in an underwritten
public offering, addressed to the underwriters, if any, and to the holder or
holders making such request.
3. Expenses. All expenses incurred by the Company in complying with
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Section 2, including, without limitation, all registration and filing fees
(including all expenses incident to filing with the National Association of
Securities Dealers, Inc.), fees and expenses of complying with securities and
"blue sky" laws, printing expenses and fees and disbursements of counsel,
including with respect to each registration effected pursuant to Section 1, and
the Company's independent certified public accounts (but excluding the
compensation of regular employees of the Company which shall be paid in any
event by the Company) shall be paid by the Company. In the case of a
registration under Section 1, the selling stockholders will bear all incremental
costs that would not be incurred except for the exercise by the Purchaser of
their rights under Section 1.
4. Indemnification. In the event of any registration of any Common Stock
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under the Securities Act pursuant to Section 1, the Company shall indemnify and
hold harmless the seller of
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such shares, each broker or any other person acting on behalf of such seller and
each other person, if any, who controls any of the foregoing persons, within the
meaning of the Securities Act, against any losses, claims, damages or
liabilities, joint or several, to which any of the foregoing persons may become
subject under the Securities Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or alleged untrue statement of a material fact
contained in any registration statement under which such Common Stock was
registered under the Securities Act, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereto, or any
document prepared and/or furnished by the Company incident to the registration
or qualification of any Common Stock, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading or,
with respect to any prospectus, necessary to make the statements therein in
light of the circumstances under which they were made not misleading, or any
violation by the Company of the Securities Act or state securities or "blue
sky" laws applicable to the Company and relating to action or inaction
required of the Company in connection with such registration or qualification
under such state securities blue sky laws; and shall reimburse such seller, such
underwriter, broker or other person acting on behalf of such seller and each
such controlling person for any legal or any other expenses reasonably incurred
by any of them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company shall
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not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in said registration
statement, said preliminary prospectus or said prospectus or said amendment or
supplement or any document incident to the registration or qualification of any
Common Stock in reliance upon and in conformity with written information
furnished to the Company through an instrument duly executed by such seller or
such underwriter specifically for use in the preparation thereof.
Before Common Stock held by any prospective seller shall be included in any
registration pursuant to this Agreement, such prospective seller and any
underwriter acting on its behalf shall have agreed to indemnify and hold
harmless (in the same manner and to the same extent as set forth in the
preceding paragraph) the Company, each director of the Company, each officer of
the Company who shall sign such registration statement and any person who
controls the Company within the meaning of the Securities Act, with respect to
any untrue statements or omission from such registration statement, any
preliminary prospectus or final prospectus contained therein, or any amendment
or supplement thereto, if such untrue statement or omission was
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made in reliance upon and in conformity with written information furnished to
the Company through an instrument duly executed by such seller or such
underwriter specifically for use in the preparation of such registration
statement, preliminary prospectus, final prospectus or amendment or supplement;
provided that the maximum amount of liability in respect of such
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indemnification shall be limited, in the case of each prospective seller of
Common Stock, to an amount equal to the net proceeds actually received by such
prospective seller from the sale of Common Stock effected pursuant to such
registration.
Promptly after receipt by an indemnified party of notice of the commencement
of any action involving a claim referred to in the preceding paragraphs of this
Section 4, such indemnified party will, if a claim in respect thereof is made
against an indemnifying party, give written notice to the latter of such claim
and/or the commencement of such action. In case any such action is brought
against an indemnified party, the indemnifying party will be entitled to
participate in and to assume the defense thereof, jointly with any other
indemnifying party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such indemnified party, and after notice from
the indemnifying party to such indemnified party of its election so to assume
the defense thereof, the indemnifying party shall be responsible for any legal
or other expenses subsequently incurred by the latter in connection with the
defense thereof; provided that if any indemnified party shall have reasonably
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concluded that there may be one or more legal defenses available to the
indemnifying party, or that such claim or litigation involves or could have an
effect upon matters beyond the scope of the indemnity agreement provided in this
Section 4, the indemnifying party shall not have the right to assume the defense
of such action on behalf of such indemnified party and such indemnifying party
shall reimburse such indemnified party and any person controlling such
indemnified party for that portion of the fees and expenses of any counsel
retained by the indemnified party which are reasonably related to the matters
covered by the indemnity agreement provided in this Section 4.
The indemnifying party shall not make any settlement of any claims
indemnified against hereunder without the written consent of the indemnified
party or parties, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing provisions of this Section 4, if pursuant to
an underwritten public offering the Company, the selling shareholders and the
underwriters enter into an underwriting or purchase agreement relating to such
offering which contains provisions of indemnification, this Section 4 shall be
deemed inoperative for purposes of such offering.
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5. Securities Act Registration Statements. Except for securities of the
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Company registered on Excluded Forms, the Company shall not file any
registration statement under the Securities Act covering any securities unless
it shall first have given each Purchaser written notice thereof. The Company
further covenants that each Purchaser shall have the right, at any time when it
may be deemed by the Company to be a controlling person of the Company, to
participate in the preparation of such registration statement and to request the
insertion therein of material furnished to the Company in writing which in each
Purchaser's judgment should be included. In connection with any registration
statement referred to in this Section 5, the Company will indemnify, to the
extent permitted by law, the Purchaser, their partners, officers and directors
and each person, if any, who controls such Purchaser within the meaning of
Section 15 of the Securities Act, against all losses, claims, damages,
liabilities and expenses caused by any untrue statement or alleged untrue
statement of a material fact contained in any registration statement or
prospectus or any preliminary prospectus or any amendment thereto or supplement
thereto or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such losses, claims, damages,
liabilities or expenses are caused by any untrue statement or alleged untrue
statement or omission contained in written information furnished to the Company
by such Purchaser expressly for use in such registration statement. If, in
connection with any such registration statement, such Purchaser shall furnish
written information to the Company expressly for use in the registration
statement, such Purchaser will indemnify to the extent permitted by law the
Company, the directors, each of its officers who sign such registration
statement and each person, if any, who controls the Company within the meaning
of the Securities Act against all losses, claims, damages, liabilities and
expenses caused by any untrue statement or alleged untrue statement of a
material fact or any omission or alleged omission of a material fact required to
be stated in the registration statement or prospectus or any preliminary
prospectus or any amendment thereof or supplement thereto or necessary to make
the statement therein not misleading, buy only to the extent that such untrue
statement or alleged untrue statement or such omission or alleged omission is
contained in information so furnished in writing by such Purchaser for use
therein. In the event that any Purchaser selling Common Stock pursuant to a
registration statement filed by the Company shall furnish to the Company and
such other parties as the Company may designate such information and execute
such documents regarding the Common Stock held by and to be sold or otherwise
disposed of by such Purchaser as the Company shall request.
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Miscellaneous
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1. Notices. Any notice required hereunder shall be given in writing and
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shall be sent by registered or certified mail, return receipt requested to the
parties hereto at their addresses as set forth in the books and records of the
Company.
2. Binding Effect. This Agreement shall be binding upon the parties,
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their heirs, legal representatives, successors and assigns.
3. Governing Law. This Agreement shall be interpreted under the laws of
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the State of New York and the venue of any litigation shall be in a court of
competent jurisdiction in Monroe County, State of New York.
4. Amendment. This Agreement may not be amended, altered or revoked at
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any time unless in writing signed by all parties hereto.
5. Counterpart Execution. This Agreement may be executed in two or more
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identical counterparts, each of which need be signed by only one of the parties
hereto, and all of such counterparts together shall constitute an Agreement.
6. Purchaser's Legal Action. In the event of any legal action brought
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against the Company by the Purchaser for breach of this agreement or for any
matter related to the sale of stock herein, any recovery will be limited to the
original purchase price of the Purchaser's shares of Common Stock. In addition,
if the Company is successful in the defense of any such litigation, the
Purchaser shall bear the Company's legal expenses and other cost of litigation.
7. The Purchaser Representation and Warranty attached hereto is incorporated
herein and made a part hereof.
BY:________________________________
Signature of Purchaser
Agreed to and accepted this ___
day of _________, 199_, by
EDUCATIONAL MODULES, INC.
By:____________________________
Authorized Officer
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