Exhibit 10.4
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SECURITIES PURCHASE AGREEMENT
By and among
PROSOFTTRAINING.COM
and
THE INVESTORS NAMED HEREIN
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Dated as of June 27, 2000
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SECURITIES PURCHASE AGREEMENT
This Securities Purchase Agreement (this "Agreement") is made as of
June 27, 2000 by and among ProsoftTraining.com, a Nevada corporation (the "the
Company"), and the parties identified on the signature page hereof as the
Investors (the "Investors").
WHEREAS, the Company desires to sell, and the Investors desire to
purchase, an aggregate of up to 2,000,000 shares of the Company's common stock,
$0.001 par value (the "Common Stock") upon the terms and subject to the
conditions contained in this agreement.
NOW, THEREFORE, in consideration of the mutual covenants, agreements,
representations and warranties set forth herein, the parties hereby agree as
follows:
ARTICLE I
AUTHORIZATION AND SALE OF SHARES
1.1 Authorization. The Company has authorized the issuance and sale
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to the Investors of an aggregate of up to 2,000,000 shares of Common Stock (the
"Shares"). The number of Shares to be issued and sold to each Investor shall be
the amounts indicated on the signature page opposite such Investor's name.
1.2 Issuance and Sale of Shares. Upon the terms and subject to the
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conditions set forth herein, in reliance on the representations and warranties
of the Investors contained herein, the Company will issue and sell to each
Investor and, in reliance on the representations and warranties of the Company
contained herein, such Investor will purchase from the Company, the number of
Shares to be purchased by such Investor, for a purchase price of $11.00 per
Share (the "Purchase Price").
ARTICLE II
CLOSING
2.1 Closing Date. The first closing (the "Initial Closing") of the
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purchase and sale of the Shares shall take place on the date of this Agreement
(the date of the Initial Closing, "Initial Closing Date"). The purchase and sale
of the Shares may be completed in one or more closings in addition to the
Initial Closing (each such closing, the "Closing" and the date of each such
Closing, the "Closing Date"). The Closing shall be held at such place as agreed
to by the Company and the Investors. Delivery of the Shares to be purchased by
each Investor shall be made at the Closing by the Company delivering to such
Investor, against payment of the Purchase Price, one certificate representing
the appropriate number of Shares (registered in the name of such Investor or its
nominee). Payment of the Purchase Price for the Shares to be purchased by each
Investor shall be made by such Investor to the Company by delivery by wire
transfer of immediately available funds equal to the Purchase Price for such
Shares.
2.2 Opinion of Counsel. In connection with the Closings, each
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Investor shall receive an opinion of Hewitt & McGuire, LLP, counsel to the
Company, dated the Initial Closing Date substantially in the form attached
hereto as Exhibit A.
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2.3 Further Assurances. From time to time following the Closing, upon
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the request of any Investor, the Company shall execute and deliver, or cause to
be executed and delivered, to such Investor such other instruments and take such
other action as may be reasonably necessary to more effectively vest in such
Investor and put such Investor in possession of the Shares purchased by such
Investor.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
As an inducement to the Investors to enter into this Agreement and to
consummate the transactions contemplated hereby, the Company represents and
warrants to the Investors, as of the date of this Agreement, as follows:
3.1 Organization and Qualification. The Company and each of the
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Subsidiaries (as hereinafter defined) is a corporation, duly organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. The Company and each of the Subsidiaries has all requisite
corporate power and authority, and has been duly authorized by all necessary
consents, approvals, authorizations, orders, registrations, qualifications,
licenses and permits of and from all public, regulatory or governmental agencies
and bodies, to own, lease and operate its assets and properties and to conduct
its business as it is now being conducted and is duly qualified or licensed to
do business and in good standing in each jurisdiction in which the nature of its
business or the ownership, leasing or operation of its assets and properties
makes such qualification or licensing necessary.
3.2 Subsidiaries.
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(a) The only direct or indirect subsidiaries of the Company
are those listed on Schedule 3.2(a). Except for the ownership interests set
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forth in Schedule 3.2(a), the Company does not own or control, directly or
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indirectly, any capital stock interest in a corporation, any partnership
interest in a partnership, or a membership interest in a limited liability
company, association or other entity or project. The entities listed on
Schedule 3.2(a) are hereinafter referred to as the "Subsidiaries."
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(b) All of the issued and outstanding shares of capital stock
of or other equity interests in each Subsidiary have been validly issued, are
fully paid and nonassessable and are owned, directly or indirectly, by the
Company free and clear of any pledges, liens, claims, encumbrances, security
interests, charges and options of any nature whatsoever ("Liens") and there are
no outstanding subscriptions, options, calls, contracts, voting trusts, proxies
or other commitments, understandings, restrictions, arrangements, rights or
warrants, including any right of conversion or exchange under any outstanding
security, instrument or other agreement, obligating any Subsidiary to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
its capital stock or obligating it to grant, extend or enter into any such
agreement or commitment.
3.3 Capitalization. As of the date hereof, the authorized, issued and
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outstanding capital stock of the Company is as set forth on Schedule 3.3
attached hereto. All of the outstanding shares of capital stock of the Company
are duly authorized, validly issued, fully paid
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and nonassessable, have been issued in compliance with all federal and state
securities laws and were not issued and are not now in violation of or subject
to any preemptive rights or other rights to subscribe for or purchase
securities. Except as set forth on Schedule 3.3 attached hereto, and except for
the transactions contemplated hereby, (i) there are not authorized, issued,
reserved for issuance or outstanding (A) any shares of capital stock or other
voting securities of the Company, (B) any securities convertible into or
exchangeable or exercisable for shares of capital stock or other voting
securities of the Company, or any obligation of the Company to issue any capital
stock or other voting securities, or (C) any warrants, calls, options or other
rights to acquire from the Company or any obligation of the Company to issue,
any capital stock, voting securities or securities convertible into or
exchangeable or exercisable for capital stock or voting securities of the
Company, and (ii) there are no outstanding obligations of the Company to
repurchase, redeem or otherwise acquire any such securities or to issue, deliver
or sell, or cause to be issued, delivered or sold, any such securities.
3.4 Authority. The Company has all necessary corporate power and
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authority to enter into this Agreement and the other agreements, documents and
instruments to be executed by the Company in furtherance of the transactions
contemplated hereby (the "Transaction Documents"), and to consummate the
transactions contemplated hereby. The execution and delivery of the Transaction
Documents and the consummation by the Company of the transactions contemplated
thereby have been duly authorized by all necessary corporate action on the part
of the Company. The Shares have been duly authorized by the Company. The Shares,
when issued, sold and delivered in accordance with this Agreement, will be
validly issued, fully paid and nonassessable. No preemptive rights or other
rights to subscribe for or purchase securities exist with respect to the
issuance and sale of the Shares by the Company pursuant to the Transaction
Documents.
3.5 Consents and Approvals; Non-Contravention. The execution and
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delivery by the Company of the Transaction Documents, the performance of its
obligations thereunder and the consummation by it of the transactions
contemplated thereby do not and will not (a) require the consent, approval,
authorization, order, registration, filing, qualification, license or permit of
or with any court or any government agency or body, domestic or foreign,
applicable to the Company or any of its properties or assets, (b) require the
consent or approval of any party other than a court or government agency or
body, (c) result in a breach of any of the terms and provisions of, or
constitute a default (or an event which with notice or lapse of time, or both,
would constitute a default) under, or result in the creation or imposition of
any Lien upon any property or assets of the Company pursuant to any agreement,
instrument, franchise, license or permit to which the Company is a party or by
which the Company or its properties or assets may be bound or (d) violate any
judgment, decree, order, statute, rule or regulation of any court or any
federal, state, local or foreign government, court, administrative, regulatory
or other governmental agency, commission or authority or any non-governmental
self-regulatory agency, commission or authority (a "Governmental Entity") or
body applicable to the Company or any of its properties or assets. The
execution, delivery and performance of the Transaction Documents by the Company
and the consummation of the transactions contemplated thereby do not and will
not violate or conflict with any provision of the certificate of incorporation
or by-laws, of the Company, as currently in effect.
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3.6 Enforceability of Transaction Documents. This Agreement has been,
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and each of the other Transaction Documents to be executed and delivered by the
Company, has been or will be, duly and validly authorized, executed and
delivered by the Company. This Agreement is, and such other Transaction
Documents when so executed and delivered will be, valid and binding obligations
of the Company, enforceable against it in accordance with their terms, except as
such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws from time to time affecting the
enforcement of creditors' rights generally.
3.7 SEC Reports. The Company has timely filed all documents required
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to be filed with the Securities and Exchange Commission (the "SEC")
(collectively, including all exhibits and schedules thereto and documents
incorporated therein by reference, the "SEC Reports"). As of their respective
dates, (a) the SEC Reports complied in all material respects with the
requirements of the Securities Act of 1933, as amended (including the rules and
regulations promulgated thereunder, the "Securities Act"), and the Securities
Exchange Act of 1934, as amended (including the rules and regulations
promulgated thereunder, the "Exchange Act"), as applicable, and (b) none of the
SEC Reports contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein in order to make the
statements contained therein, in light of the circumstances under which they
were made, not misleading.
3.8 Financial Statements. The consolidated financial statements of
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the Company included in the SEC Reports (collectively, the "Financial
Statements"), including without limitation the consolidated financial statements
included in the Annual Report on Form 10-K of the Company for the year ended
July 31, 1999 (the "Form 10-K") and the Quarterly Report on Form 10-Q of the
Company for the quarter ended April 30, 2000 (the "Third Quarter 10-Q"),
complied as to form, as of their respective dates, in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in accordance with generally
accepted accounting principles (except, in the case of interim financial
statements, as permitted by Form 10-Q of the SEC) applied on a consistent basis
during the periods involved (except as may be indicated in the notes thereto)
(collectively, "GAAP") and fairly present the consolidated financial position of
the Company and its consolidated subsidiaries as of the dates thereof and the
consolidated results of operations and cash flows for the periods then ended
(subject, in the case of interim financial statements, to normal year-end audit
adjustments).
3.9 Absence of Certain Material Changes. Since April 30, 2000, there
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has been no material adverse change in the business, properties, prospects,
operations, financial condition or results of operations of the Company and its
subsidiaries, taken as a whole (a "Material Adverse Change"), whether or not
arising from transactions in the ordinary course of business.
3.10 Actions. Except as set forth in the SEC Reports, there is no
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action, suit, inquiry, proceeding or investigation by or before any court or
governmental or other regulatory or administrative agency or commission,
domestic or foreign, to which the Company or any of the Subsidiaries is a party
or to which any property of the Company or any of the Subsidiaries is subject in
which there is a reasonable possibility of an adverse decision which would
result in a Material Adverse Change, and to the knowledge of the Company, there
is no valid basis for any such action, suit, inquiry, proceeding or
investigation. Neither the Company nor any of the
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Subsidiaries is subject to any judgment, order or decree which could reasonably
be expected to result in a Material Adverse Change.
3.11 No Undisclosed Liabilities. Except (a) as set forth in the SEC
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Reports filed prior to the date of this Agreement, or (b) as incurred in the
ordinary course of business of the Company, neither the Company nor any of the
Subsidiaries has any liabilities or obligations (direct or indirect, contingent
or absolute, known or unknown, matured or unmatured), whether arising out of
contract, tort, statute or otherwise ("Liabilities"). The reserves reflected on
the balance sheet dated April 30, 2000 and the balance sheet dated July 31, 1999
are appropriate and reasonable and have been calculated in a manner consistent
with past practice.
3.12 Investment Company Act. Neither the Company nor any of the
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Subsidiaries is (a) an "investment company" or a company "controlled" by an
investment company within the meaning of the Investment Company Act of 1940, as
amended, (b) a "holding company" or a "subsidiary company" of a holding company
or an "affiliate" thereof within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or (c) subject to regulation under the Federal
Power Act or the Interstate Commerce Act.
3.13 Reporting. The Company is subject to Section 13 of the Exchange
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Act and is in compliance in all material respects with the provisions of such
section.
3.14 Registration and Qualification. Assuming the accuracy of the
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representations and warranties made by the Investors set forth in Article IV
hereof, it is not necessary in connection with the offer, sale and delivery of
the Shares to the Investors in the manner contemplated by this Agreement to
register the Shares under the Securities Act or the securities laws of any state
thereof.
3.15 No Defaults. Neither the Company nor any of the Subsidiaries is
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in violation or default under any provision of its certificate of incorporation,
by-laws, or other organizational documents, or is in breach of or default with
respect to any provision of any agreement, judgment, decree, order, mortgage,
deed of trust, lease, franchise, license, indenture, permit or other instrument
to which it is a party or by which it or any of its properties are bound, except
for breaches or defaults which would not result in a Material Adverse Change;
and there does not exist any state of facts which would constitute an event of
default on the part of any of the Company or the Subsidiaries as defined in such
documents which, with notice or lapse of time or both, would constitute a
default which would result in a Material Adverse Change.
3.16 Violations of Law. Except where failure to comply would not
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result in a Material Adverse Change, the Company and each of the Subsidiaries is
in compliance and has complied in all material respects and at all times during
the past three years with all applicable federal, state and local statutes,
codes, ordinances, rules and regulations, judgments, decrees, orders, writs and
injunctions of the United States and all other countries and subdivisions
thereof to the extent applicable, and during such three year period, no notice,
charge, claim, action or assertion has been received by the Company or the
Subsidiaries or has been filed, commenced or, to the knowledge of the Company
and the Subsidiaries, threatened against the Company or the Subsidiaries
alleging any violation of any of the foregoing. Neither the Company nor any of
the Subsidiaries has at any time (a) made any unlawful contribution to any
candidate for domestic or
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foreign office or failed to disclose fully any contribution in violation of law
or (b) made any payment to any federal or state governmental officer or
official, or other person charged with similar public or quasi-public duties,
other than payments required or permitted by the laws of the United States or
any jurisdiction thereof.
3.17 Intellectual Property. The Company and the Subsidiaries have
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sufficient trademarks, trade names, patent rights, copyrights, licenses,
approvals and governmental authorizations to conduct their businesses as now
conducted; and neither the Company nor any of the Subsidiaries has knowledge of
any infringement by it of any trademark, trade name, patent, copyright, license,
trade secret or other similar rights of others, and there is no claim being made
against the Company or any of the Subsidiaries regarding trademark, trade name,
patent, copyright, license, trade secret or other infringement.
3.18 Taxes.
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(a) The Company has timely filed all Tax Returns required to be
filed by it under applicable law, and all such Tax Returns were and are true,
complete and correct in all material respects. Except to the extent adequately
reserved for in accordance with GAAP and reflected on the balance sheets of the
Company dated July 31, 1999, all Taxes due and payable by the Company have been
timely paid in full.
(b) There are no Tax Liens upon the assets of the Company
except Liens for Taxes not yet due.
(c) The Company has complied with the provisions of the
Internal Revenue Code of 1986, as amended (the "Code"), relating to the
withholding of Taxes, as well as similar provisions under any other laws, and
have, within the time and in the manner prescribed by law, withheld, collected
and paid over to the proper governmental authorities all amounts required.
(d) No audits or other administrative proceedings or court
proceedings are presently pending or, to the knowledge of the Company, asserted
with regard to any Taxes or Tax Returns of the Company.
(e) The Company has not received a written ruling of a taxing
authority relating to Taxes or entered into a written and legally binding
agreement with a taxing authority relating to Taxes with any taxing authority.
(f) The Company has not requested any extension of time within
which to file any Tax Return, which Tax Return has not since been filed, and the
statute of limitations for the assessment of federal, state, local and foreign
income Taxes has expired for all applicable returns of the Company or those
returns have been examined by the appropriate taxing authorities for all
periods.
(g) The Company is not a party to any agreement providing for
the allocation or sharing of Taxes or indemnification by the Company of any
other person in respect of Taxes.
(h) As used in this Section 3.18, (i) the term "Taxes" means
any federal, state, county, local or foreign taxes, charges, fees, levies or
other assessments, including all net
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income, gross income, sales and use, ad valorem, transfer, gains, profits,
excise, franchise, real and personal property, gross receipt, capital stock,
production, business and occupation, disability, employment, payroll, license,
estimated, stamp, custom duties, severance or withholding taxes or charges
imposed by any Governmental Entity, and includes any interest and penalties
(civil or criminal) on or additions to any such taxes, and (ii) the term "Tax
Return" means a report, return or other information required to be supplied to a
Governmental Entity with respect to Taxes including, where permitted or
required, combined or consolidated returns for any group of entities that
includes the Company or any of the Subsidiaries.
3.19 ERISA.
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(a) All material contributions and other payments required to have
been made by the Company or any of the Subsidiaries to any employee benefit
plans within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and any employment, retention,
severance or change in control agreement, in each case that is sponsored,
maintained or contributed to or required to be contributed to by the Company or
by any trade or business, whether or not incorporated (an "ERISA Affiliate")
that, together with either the Company or any of the Subsidiaries, would be
deemed a "single employer" within the meaning of Section 4001(b) of ERISA
(collectively, the "Benefit Plans") (or to any person pursuant to the terms
thereof) have been made or the amount of such payment or contribution obligation
has been reflected in the financial statements in the Third Quarter 10-Q.
(b) Each of the Benefit Plans intended to be "qualified" within the
meaning of Section 401(a) or Section 501(c)(9) of the Code has been determined
by the IRS to be so qualified, and no circumstances exist that could reasonably
be expected to result in the revocation of any such determination. The Company
and each of the Subsidiaries and any ERISA Affiliate is in compliance in all
material respects with, and each of the Benefit Plans is and has been operated
in all material respects in compliance with, all applicable laws, rules and
regulations governing such plan, including, without limitation, ERISA and the
Code. Each Benefit Plan intended to provide for the deferral of income, the
reduction of salary or other compensation, or to afford other income tax
benefits, complies with the requirements of the applicable provisions of the
Code or other laws, rules and regulations required to provide such income tax
benefits. No prohibited transactions (as defined in Section 406 or 407 of ERISA
or Section 4975 of the Code) have occurred for which a statutory exemption is
not available with respect to any Benefit Plan, and which could give rise to
liability on the part of the Company, any of the Subsidiaries, any ERISA
Affiliate, any Benefit Plan, or any fiduciary, party in interest or disqualified
person with respect thereto that would be material to either of the Company or
would be material to the Company if it were its liability.
(c) With respect to the Benefit Plans, individually and in the
aggregate, no event has occurred, there does not now exist any condition or set
of circumstances, that could subject the Company, any of the Subsidiaries or any
ERISA Affiliate to any material liability arising under the Code, ERISA or any
other applicable law, or under any indemnity agreement to which the Company, any
of the Subsidiaries or any ERISA Affiliate is a party, excluding liability
relating to benefit claims and funding obligations payable in the ordinary
course.
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(d) Other than continuation coverage required to be provided under
Section 4980B of the Code or Part 6 of Title I of ERISA or otherwise as provided
by state law, none of the Benefit Plans that are "welfare plans," within the
meaning of Section 3(1) of ERISA, provides for any benefits with respect to
current or former employees for periods extending beyond their retirement or
other termination of service.
3.20 Environmental Matters.
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(a) The Company and each of the Subsidiaries has been and is in
material compliance with all applicable Environmental Laws (as defined in
Section 3.20(g)) and neither the Company nor any of the Subsidiaries has
received any written communication from any person or governmental authority
that alleges that any of them have not been and is not in compliance with
applicable Environmental Laws. Compliance with all applicable Environmental Laws
will not require the Company or the Subsidiaries to incur material costs.
(b) The Company and each Subsidiary has obtained or has applied for
all environmental, health and safety permits and governmental authorizations
(collectively, the "Environmental Permits") necessary for the conduct of their
operations, and all such Environmental Permits are in effect or, where
applicable, a renewal application has been timely filed and is pending agency
approval, and the Company and each Subsidiary has been and is in material
compliance with all terms and conditions of all such Environmental Permits.
(c) There is no Environmental Claim (as defined in Section 3.20(g))
pending (i) against the Company or the Subsidiaries, (ii) against any person or
entity whose liability for any Environmental Claim the Company or the
Subsidiaries has retained or assumed either contractually or by operation of
law, or (iii) against any real or personal property or operations which the
Company or the Subsidiaries own, lease or manage, in whole or in part.
(d) There have been no Releases (as defined in Section 3.20(g)) of
any Hazardous Material (as defined in Section 3.20(g)) that could reasonably
form the basis of any Environmental Claim against the Company or the
Subsidiaries or against any person or entity whose liability for any
Environmental Claim the Company or the Subsidiaries has retained or assumed
either contractually or by operation of law.
(e) No remediation of Releases has occurred on any property owned,
leased or managed by the Company or the Subsidiaries that could result in the
assertion or creation of a Lien on said property by any governmental body
pursuant to an applicable Environmental Law, nor has any such assertion of a
Lien been made with respect thereto.
(f) To the knowledge of the Company, there are no past, present or
anticipated future events, conditions, circumstances, activities, practices,
incidents, actions, or plans relating to the Company or the Subsidiaries that
may interfere with or prevent compliance or continued compliance with applicable
Environmental Laws or which may give rise to any liability under the
Environmental Laws, or otherwise form the basis of any Environmental Claim.
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(g) As used in this Section 3.20:
(i) "Environmental Claim" means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
orders, claims, Liens, investigations, proceedings or notices of noncompliance
or violation by any person or entity (including any governmental authority)
alleging potential liability (including, without limitation, potential
responsibility for or liability for enforcement, investigatory costs, cleanup
costs, governmental response costs, removal costs, remediation costs, natural
resources damages, property damages, personal injury, bodily injury, wrongful
death or penalties) arising out of, based on or resulting from (A) the presence,
Release or threatened Release of any Hazardous Materials at any location,
whether or not owned, operated, leased or managed by the Company or the
Subsidiaries; or (B) circumstances that form the basis of any violation or
alleged violation of any Environmental Law.
(ii) "Environmental Laws" means all federal, state and local
laws, rules and regulations relating to pollution, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface or
subsurface strata) or protection of human health and safety, including, without
limitation, laws and regulations relating to Releases or threatened Releases of
Hazardous Materials, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
Hazardous Materials.
(iii) "Hazardous Materials" means (A) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation and transformers or other equipment
that contain dielectric fluid containing polychlorinated biphenyls ("PCBs"); (B)
any chemicals, materials or substances which are now defined as or included in
the definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "extremely hazardous wastes," "restricted hazardous wastes," "toxic
substances," "toxic pollutants," or words of similar import under any
Environmental Law and (C) any other chemical, material, substance or waste,
exposure to which is now prohibited, limited or regulated under any
Environmental Law in a jurisdiction in which the Company or any of the
Subsidiaries operate.
(iv) "Release" means any spill, emission, leaking, injection,
deposit, disposal, discharge, dispersal or leaching into the atmosphere, soil,
surface water or groundwater.
3.21 Labor Matters. (a) Neither the Company nor any of the Subsidiaries is
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a party to, or bound by, any collective bargaining agreement, contract or other
agreement or understanding with a labor union or labor organization; (b) to
knowledge of the Company, no union claims to represent the employees of the
Company or the Subsidiaries; (c) none of the employees of the Company or the
Subsidiaries is represented by any labor organization and the Company has no
knowledge of any current union organizing activities among the employees of the
Company or any of the Subsidiaries, nor does any question concerning
representation exist concerning such employees; (d) neither the Company nor any
of the Subsidiaries is the subject of any proceeding asserting that it has
committed an unfair labor practice or seeking to compel it to bargain with any
labor organization as to wages or conditions of employment; (e) there is no
strike, work stoppage, lockout or other labor dispute involving the Company or
the Subsidiaries pending or
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threatened; (f) no action, suit, complaint, charge, arbitration, inquiry,
proceeding or investigation by or before any Governmental Entity brought by or
on behalf of any employee, prospective employee, former employee, retiree, labor
organization or other representative of its employees is pending or, to the
knowledge of the Company, threatened against the Company or the Subsidiaries;
(g) to the knowledge of the Company, no grievance is threatened against the
Company or the Subsidiaries; and (h) neither the Company nor any of the
Subsidiaries is a party to, or otherwise bound by, any consent decree with, or
citation by, any Governmental Entity relating to employees or employment
practices.
3.22 Brokers and Finders. No agent, broker, investment banker, financial
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advisor or other firm or person is or will be entitled to any broker's or
finder's fee or any other commission or similar fee in connection with any of
the transactions contemplated by the Transaction Documents, except for Suntrust
Equitable Securities.
3.23 Private Placement Memorandum. The Company has furnished to each
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Investor a Confidential Private Placement Memorandum dated June 12, 2000 (the
"PPM"). The information contained in the PPM is true and correct in all material
respects and does not omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading. The historical financial
information regarding ComputerPREP, Inc. ("ComputerPREP") included in the PPM
(the "ComputerPREP Information") is based on the historical audited annual
financial statements and unaudited interim financial statements of ComputerPREP
provided by ComputerPREP to the Company. The Company has no reason to question
the accuracy of the historical financial statements of ComputerPREP and has used
reasonable assumptions in light of its present knowledge to prepare the
ComputerPREP Information, however, the Company makes no other representation or
warranty with respect to the ComputerPREP Information.
3.24 Eligibility to Use Form S-3. The Company is eligible to register the
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resale of the Shares by the Investors under the Securities Act using a
registration statement on Form S-3.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE INVESTORS
As an inducement to the Company to enter into this Agreement and to
consummate the transactions contemplated hereby, each Investor, severally but
not jointly with the other Investors, hereby represents and warrants to the
Company as follows:
4.1 Investment. Each Investor is acquiring Shares for investment for its
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own account, and not with a view to any distribution thereof in violation of the
securities laws. Each Investor understands that such Shares have not been
registered under the Securities Act by reason of specific exemptions therefrom
which depend upon, among other things, the bona fide nature of the investment
intent and the accuracy of the Investor's representations as expressed herein.
Each Investor's financial condition and investments are such that it is in a
position to hold such Shares for an indefinite period, bear the economic risks
of the investment and withstand the complete loss of the investment. Each
Investor has extensive knowledge and experience in financial and business
matters and has the capability to evaluate the merits and risks of such
10
Shares. Each Investor qualifies as an "accredited investor" as such term is
defined in Section 2(15) of the Securities Act and Regulation D promulgated
thereunder.
4.2 Rule 144. Each Investor acknowledges that the Shares to be purchased by
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the Investors must be held indefinitely unless subsequently registered under the
Securities Act or any applicable state securities laws or unless exemptions from
such registrations are available. Each Investor is aware of the provisions of
Rule 144 promulgated under the Securities Act which permit limited resale of
securities purchased in a private placement subject to the satisfaction of
certain conditions.
4.3 Organization of the Investors. Each Investor is duly organized and
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validly existing under the laws of the jurisdiction of its organization.
4.4 No Voting Agreements. Except as disclosed in Section 4.4 of the
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Investor Disclosure Letter, the Investors have not entered into any voting
agreement relating to the Shares prior to the date hereof.
4.5 Authority of the Investors.
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(a) Each Investor has the power and authority to execute and deliver
this Agreement, to consummate the transactions contemplated hereby and to comply
with the terms, conditions and provisions hereof.
(b) The execution, delivery and performance of this Agreement by each
Investor has been duly authorized and approved by such Investor and does not
require any further authorization or consent of such Investor or its beneficial
owners. This Agreement is the legal, valid and binding agreement of the
Investor, enforceable against the Investor in accordance with its terms, except
as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws from time to time affecting the
enforcement of creditors' rights generally.
4.6 Non-Contravention. The execution, delivery and performance of this
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Agreement by the Investors and the consummation of any of the transactions
contemplated hereby by the Investors will not (a) conflict with or result in a
breach of any of the terms and provisions of, or constitute a default (or an
event which with notice or lapse of time, or both, would constitute a default)
under, or result in the creation or imposition of any Lien, charge or
encumbrance upon any property or assets of the Investors pursuant to any
agreement, instrument, franchise, license or permit to which the Investors are a
party or by which any of its properties or assets may be bound or (b) violate or
conflict with any judgment, decree, order, statute, rule or regulation of any
court or any public, governmental or regulatory agency or body applicable to
each Investor or any of its properties or assets, other than such breaches,
defaults or violations that are not reasonably expected to impair the ability of
each Investor to consummate the transactions contemplated by this Agreement. The
execution, delivery and performance of this Agreement by each Investor and the
consummation of the transactions contemplated hereby by each Investor does not
and will not violate or conflict with any provision of the organizational
documents of such Investor, as currently in effect. No consent, approval,
authorization, order, registration, filing, qualification, license or permit of
or with any court or any government agency or body
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applicable to the Investors is required for the execution, delivery and
performance of this Agreement or the consummation of the transactions
contemplated hereby.
4.7 Brokers and Finders. No agent, broker, investment banker, financial
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advisor or other firm or person is or will be entitled to any broker's or
finder's fee or any other commission or similar fee in connection with any of
the transactions contemplated by the Transaction Documents.
ARTICLE V
RESTRICTIONS ON TRANSFERABILITY OF SECURITIES
5.1 Restrictive Legend. Each certificate representing (a) the Shares, and
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(b) any other securities issued in respect of the Shares upon any stock split,
stock dividend, recapitalization, merger, consolidation or similar event (each
of the foregoing securities in clauses (a) and (b) being referred to herein as
"Restricted Securities"), shall (unless otherwise permitted by the provisions of
Section 6.2) be stamped or otherwise imprinted with a legend substantially in
the following form (in addition to the legend required under any applicable
state securities laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR ANY APPLICABLE STATE SECURITIES
LAWS. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR EXEMPTION THEREFROM UNDER SAID
ACT OR LAWS.
The Company will promptly, upon request, remove any such legend when no
longer required by the terms of this Agreement or by applicable law.
ARTICLE VI
MISCELLANEOUS
6.1 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
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ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS (WITHOUT GIVING EFFECT TO
CONFLICTS OF LAW PRINCIPLES THEREOF).
6.2 Jurisdiction; Forum; Service of Process; Waiver of Jury Trial. With
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respect to any suit, action or proceeding ("Proceeding") arising out of or
relating to this Agreement each of the Company hereby irrevocably:
(a) consents to service of process in any Proceeding by the mailing of
copies thereof by registered or certified mail, postage prepaid, or by
recognized international express carrier or delivery service, to the Company or
the Investors at their respective addresses referred to in Section 6.5 hereof;
provided, however, that nothing herein shall affect the right of any party
hereto to serve process in any other manner permitted by law; and
(b) waives, to the fullest extent permitted by law, any right it may
have to a trial by jury in any Proceeding.
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6.3 Successors and Assigns. Except as otherwise provided herein, the
----------------------
provisions hereof shall inure to the benefit of, and be binding upon, the
successors by operation of law and permitted assigns of the parties hereto. No
assignment of this Agreement may be made by any party at any time, whether or
not by operation of law, without the other parties' prior written consent.
6.4 Entire Agreement; Amendment. This Agreement and the other Transaction
---------------------------
Documents constitute the full and entire understanding and agreement between the
parties with regard to the subjects hereof. Except as expressly provided herein,
neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the Company and by each
Investor.
6.5 Notices, Etc. All notices and other communications provided for or
------------
permitted hereunder shall be made in writing by hand delivery, telex,
telecopier, or any courier guaranteeing overnight delivery (i) if to the
Investor, at the most current address given by the Investor to the Company by
means of a notice given in accordance with the provisions of this Section 6.5,
which address initially is, with respect to the Investor as of the date hereof,
the address set forth next to Investor's name on the signature pages hereof, and
(ii) if to the Company such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is confirmed, if telecopied; and on
the next business day, if timely delivered to a courier guaranteeing overnight
delivery
6.6 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which may be executed by only one of the parties hereto,
each of which shall be enforceable against the party actually executing such
counterpart, and all of which together shall constitute one instrument.
6.7 Severability. In the event that any provision of this Agreement becomes
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or is declared by a court of competent jurisdiction to be illegal, unenforceable
or void, this Agreement shall continue in full force and effect without said
provisions; provided that no such severability shall be effective if it
materially changes the economic benefit of this Agreement to any party.
6.8 Massachusetts Business Trust. The names "Westcore Trust" and "Trustees
----------------------------
of Westcore Trust" refer respectively to the Trust created and the Trustees, as
Trustees but not individually or personally, acting from time to time under an
Amended and Restated Declaration Trust dated November 19, 1987, which is hereby
referred to and a copy of which is on file at the office of the State Secretary
of the Commonwealth of Massachusetts and at the principal office of the Trust.
The obligations of "Westcore Trust" entered into in the name of or on behalf of
any of the Trustees, representatives or agents are made not individually, but in
such capacities, and are not binding upon any of the Trustees, shareholders, or
representatives of the Trust personally, but bind only the Trust Property, and
all persons dealing with any class of shares of the Trust must look solely on
the Trust Property belonging to such class for the enforcement of any claims
against the Trust.
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IN WITNESS WHEREOF, each of the undersigned has caused the foregoing
Agreement to be executed under seal by one of its duly authorized officers as of
the date first above written.
PROSOFTTRAINING.COM, a Nevada corporation
By:
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Name:
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Title:
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INVESTORS:
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(Print Name of Investor)
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(Signature)
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(Title of Signatory)
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(Address)
Number of Shares of Common Stock
Acquired __________________________________
EXHIBIT A
FORM OF LEGAL OPINION