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Exhibit 10.12
EXCHANGE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made as of the 30th
day of April 2000 by and between Venture Catalyst Incorporated, a Utah
corporation ("Issuer"), and Jonathan Ungar ("Ungar") and Alan Henry Woods
("Woods" and, together with Ungar, "Purchasers").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock.
A. Subject to the terms and conditions of this Agreement, Purchasers
agree to purchase and Issuer agrees to sell to Purchasers an aggregate of
579,105 shares (the "Shares") of Common Stock, $0.001 par value per share (the
"Common Stock"), of Issuer and warrants ("the Warrants") to purchase up to an
aggregates of 144,775 shares of Common Stock. The allocation of the Shares and
the Warrants is as set forth on Exhibit A attached hereto. The Warrants will be
in substantially the form attached hereto as Exhibit B.
B. Purchase Price. Upon the terms and subject to the conditions set
forth in this Agreement, in reliance upon the representations, warranties,
covenants and agreements of Purchasers contained herein, and in exchange for the
Shares, Issuer agrees to issue to Purchasers the Shares and the Warrants in full
accord and satisfaction of (i) the two promissory notes of Issuer issued to
Purchasers dated September 5, 1999 (the "1999 Notes"), each in the initial
principal amount of $1,000,000, including all accrued and unpaid interest
thereon (ii) the $589,517 principal payment due September 2000 pursuant to that
certain promissory note of Issuer issued to Ungar dated September 30, 1996 (the
"1996 Note") in the initial principal amount of $1,768,550 and (iii) all
interest, whether accrued or accruing, through September 2000 on the 1996 Note
and the two promissory notes of Issuer issued to Ungar dated September 15, 1997
and September 15, 1998 (the "Remaining Notes") each in the initial principal
amount of $1,000,000. The 1999 Notes, the 1996 Note and the Remaining Notes are
referred to as the Notes.
2. Representations and Warranties of Purchaser.
Each Purchaser, severally and not jointly, hereby represents and
warrants to Issuer as follows:
(a) Such Purchaser is the legal and beneficial owner and holder
of the Notes originally issued to such Purchaser, free and clear of any
lien, pledge and encumbrance or any claim of any third party. No rights
in any of the Notes have been transferred other than as contemplated by
this Agreement.
(b) This Agreement constitutes a valid and legally binding
obligation of such
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Purchaser, enforceable in accordance with its terms except (i) as
limited by applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting enforcement
of creditors' rights generally, and (ii) as limited by laws relating to
the availability of specific performance, injunctive relief, or other
equitable remedies.
(c) The transactions contemplated by this Agreement do not
violate any of the rights of such Purchaser, whether under that certain
Stock Purchase and Settlement Agreement dated September 27, 1996 or
otherwise. Such Purchaser agrees to, and hereby does, waive any claims
such Purchaser may have, whether now or in the future, as a result of
the transactions contemplated by this Agreement.
(d) Purchaser has not entered into any contract, arrangement or
understanding with any person or firm which may result in the obligation
of Issuer to pay any finder's fees, brokerage or agent's commissions or
other like payments in connection with the negotiations leading to this
Agreement or the consummation of the transactions contemplated hereby,
and Purchaser is not aware of any claim or basis for any claim for
payment of any finder's fees, brokerage or agent's commissions or other
like payments in connection with negotiations leading to this Agreement
or the consummation of the transactions contemplated hereby. Purchaser
shall indemnify Issuer for any claims arising out of any breach of the
foregoing representation.
(e) Purchaser represents that he understands that (i) the Shares
and Warrants being acquired by Purchaser pursuant to this Agreement have
not been registered under the Securities Act of 1933, as amended (the
"1933 Act") and is being issued in reliance upon the exemption afforded
by Section 4(2) thereof for transactions by an issuer not involving any
public offering, (ii) such Shares and Warrants must be held indefinitely
unless a subsequent disposition thereof is registered under the 1933 Act
or is exempt from such registration, (iii) such Shares and Warrants will
bear a legend to such effect, and (iv) Issuer will make a notation on
its transfer books to such effect. Purchaser further represents that (i)
such Shares and Warrants are being acquired for investment and without
any present view toward distribution thereof to any other person, (ii)
he will not sell or otherwise dispose of the Shares and Warrants except
in compliance with the registration requirements or exemption provisions
under the 1933 Act, the rules and regulations thereunder, and as
otherwise set forth by the Securities and Exchange Commission (the
"Commission"), (iii) he has knowledge and experience in financial and
business matters and that he is capable of evaluating the risks and
merits of an investment in the Shares and Warrants, (iv) he has
consulted with counsel, to the extent deemed necessary, as to all
matters covered by this Agreement and has not relied upon Issuer for any
explanation of the application of the various federal or state
securities laws with regard to the acquisition of such Shares and
Warrants, (v) he has investigated and is familiar with the affairs,
financial condition and prospects of Issuer, and has been given
sufficient access to and has acquired sufficient information about
Issuer to reach an informed and knowledgeable decision to acquire such
Shares and Warrants, and (vi) he is able to bear the economic risks of
such an investment.
3. Representations and Warranties of Issuer.
Issuer hereby represents and warrants to Purchasers as follows:
(a) Issuer has the necessary corporate power and authority to
enter into this
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Agreement and this Agreement constitutes a valid and legally binding
obligation of Issuer, enforceable in accordance with its terms, except
(i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting enforcement
of creditors' rights generally, and (ii) as limited by laws relating to
the availability of specific performance, injunctive relief, or other
equitable remedies. The Shares, when issued in accordance with this
Agreement, have been duly issued and shall be fully paid and
non-assessable. The shares of Common Stock underlying the Warrants, when
issued in accordance with the terms of the Warrants, will be duly
issued, fully paid and non-assessable.
(b) Issuer has not entered into any contract, arrangement or
understanding with any person or firm which may result in the obligation
of Purchasers to pay any finder's fees, brokerage or agent's commissions
or other like payments in connection with the negotiations leading to
this Agreement or the consummation of the transactions contemplated
hereby, and Issuer is not aware of any claim or basis for any claim for
payment of any finder's fees, brokerage or agent's commissions or other
like payments in connection with negotiations leading to this Agreement
or the consummation of the transactions contemplated hereby. Issuer
shall indemnify Purchasers for any claims arising out of any breach of
the foregoing representation.
4. Registration Rights.
4.1 Registration Procedures. The Issuer shall:
(a) within five days after the filing of Issuer's Annual Report
on Form 10-KSB for the period ended June 30, 2000, prepare and file with
the Commission a registration statement on appropriate form (the
"Registration Statement") pursuant to the 1933 Act relating to the
resale of the Shares by the Purchasers;
(b) use its best efforts, subject to receipt of necessary
information from Purchasers, to cause the Registration Statement to
become effective no later than 60 days after the Registration Statement
is filed by Issuer;
(c) prepare and file with the Commission such amendments and
supplements to the Registration Statement and the prospectus used in
connection therewith as may be necessary to keep the Registration
Statement effective until the earlier of (i) twelve months after the
effective date of the Registration Statement or (ii) the date on which
all of the Shares have been sold by Purchasers pursuant to the
Registration Statement or Rule 144 under the 1933 Act or any other rule
of similar effect;
(d) furnish to the Purchasers with respect to the Shares
registered under the Registration Statement such reasonable number of
copies of prospectuses in order to facilitate the public sale or other
disposition of all or any of the Shares by the Purchasers; provided,
however, that the obligation of Issuer to deliver copies of prospectuses
to Purchasers shall be subject to the receipt by Issuer of reasonable
assurances from Purchasers that Purchasers will comply with the
applicable provisions of the 1933 Act and of such other securities or
blue sky laws as may be applicable in connection with any use of such
prospectuses;
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(e) file documents required of Issuer for normal blue sky
clearance in states reasonably requested in writing by Purchasers;
provided, however, that Issuer shall not be required to qualify to do
business or consent to service of process in any jurisdiction in which
it is not now so qualified or has not so consented; and
(f) notify Purchasers at any time when a prospectus relating
thereto is required to be delivered under the 1933 Act of the happening
of any event as a result of which the prospectus included the
Registration Statement, as then in effect includes an untrue statement
of a material fact or omits 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.
(g) bear all expenses in connection with the procedures in
paragraphs (a) through (e) of this Section 4.1 and the registration of
the Shares pursuant to the Registration Statement, other than fees and
expenses, if any, of counsel or other advisers to Purchasers or
underwriting discounts, brokerage fees and commissions incurred by the
Purchasers, if any.
4.2 Transfer of Shares After Registration. Purchasers agree that they will
not effect any disposition of the Shares or Warrants or their right to
purchase Common Stock that would constitute a sale within the meaning of
the Securities Act, except as contemplated in the Registration Statement
referred to in Section 4.1, and that it will promptly notify Issuer of
any changes in the information set forth in the Registration Statement
regarding such Purchaser or its Plan of Distribution.
4.3 Indemnification.
(a) Issuer agrees to indemnify and hold harmless Purchasers and
each person, if any, who controls a Purchaser within the meaning of the
1933 Act, against any losses, claims, damages, liabilities or expenses,
joint or several, to which a Purchaser or such controlling person may
become subject, under the Securities Act, the Securities Exchange Act of
1934, as amended (the "1934 Act"), or any other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the
written consent of Issuer), insofar as such losses, claims, damages,
liabilities or expenses (or actions in respect thereof as contemplated
below) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Registration
Statement, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state in any of them
a material fact required to be stated therein or necessary to make the
statements in any of them, in light of the circumstances under
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which they were made, not misleading, and will reimburse a Purchaser and
each such controlling person for any legal and other expenses as such
expenses are reasonably incurred by such Purchaser or such controlling
person in connection with investigating, or defending, compromising or
paying any such loss, claim, damage, liability, expense or action;
provided, however, that Issuer will not be liable in any such case to
the extent that any such loss, claim, damage, liability or expense
arises out of or is based upon (i) an untrue statement or alleged untrue
statement or omission or alleged omission made in the Registration
Statement, the Prospectus or any amendment or supplement thereto in
reliance upon and in conformity with written information furnished to
Issuer by or on behalf of a Purchaser expressly for use therein, or (ii)
the failure of a Purchaser to comply with the covenants and agreements
contained in Section 4.2 hereof respecting sale of the Shares, or (iii)
any statement or omission in any prospectus that is corrected in any
subsequent prospectus that was delivered to Purchasers prior to the
pertinent sale or sales by such Purchaser.
(b) Purchasers will severally indemnify and hold harmless
Issuer, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls Issuer
within the meaning of the 1933 Act, against any losses, claims, damages,
liabilities or expenses to which Issuer, each of its directors, each of
its officers who signed the Registration Statement or controlling person
may become subject, under the 1933 Act, the 1934 Act, or any other
federal or state statutory law or regulation (including in settlement of
any litigation, if such settlement is effected with the written consent
of Purchasers) insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof as contemplated below) arise out
of or are based upon (i) any failure to comply with the covenants and
agreements contained in Section 4.2 hereof respecting the sale of the
Shares or (ii) any untrue or alleged untrue statement of any material
fact contained in the Registration Statement, the prospectus, or any
amendment or supplement thereto, 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, in each case to the extent, but only to the extent, that
such untrue statement or alleged untrue statement or omission or alleged
omission was made in the Registration Statement, the prospectus, or any
amendment or supplement thereto, in reliance upon and in conformity with
written information furnished to Issuer by or on behalf of a Purchaser
expressly for use therein, and will reimburse Issuer, each of its
directors, each of its officers who signed the Registration Statement or
controlling person for any legal and other expense reasonably incurred
by Issuer, each of its directors, each of its officers who signed the
Registration Statement or controlling person in connection with
investigating, defending, settling, compromising or paying any such
loss, claim, damage, liability, expense or action.
4.4 Certain Information. With a view to making available to Purchasers the
benefits of certain rules and regulations of the Commission which may
permit the sale of the Shares to the public without registration. Issuer
agrees to use its best efforts to:
(a) make and keep public information available, as those terms
are understood and defined in Rule 144 or any similar or
analagous rule promulgated under the 1933 Act, at all times;
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(b) file with the Commission, in a timely manner, all reports
and other documents required of Issuer under the 1934 Act; and
(c) furnish to Purchasers upon request a written statement by
Issuer as to its compliance with the reporting requirements of
said Rule 144 and of the 1934 Act, a copy of the most recent
annual or quarterly report of Issuer, and such other reports and
documents as Purchasers may reasonably request in availing
himself of any rule or regulation of the Commission allowing him
to sell any such securities without registration.
5. Miscellaneous.
(a) Neither Issuer nor Purchasers nor any of their respective
successors, agents, affiliates, directors, officers, employees or
assigns shall issue any press release or other form of public comment
relating to the matters set forth in this Agreement without the prior
consent of the other party, which consent shall not be unreasonably
withheld; provided, however, nothing herein shall be construed to
restrict any party from any disclosure required by law, following prior
written notice to the other party. Nothing in this Paragraph 5 (a) shall
be construed as creating any liability on any other party for the
disclosure made by a party, with or without such other party's prior
consent.
(b) The parties hereto will at any time, and from time to time
after the Closing, upon request of the other party, execute, acknowledge
and deliver all such further acts, deeds, assignments, transfers,
conveyances, powers of attorney and assurances as may be required to
carry out the intent of this Agreement, and to transfer and vest title
to any Shares being transferred hereunder, and to protect the right,
title and interest in and enjoyment of all of the Shares sold, granted,
assigned, transferred, delivered and conveyed pursuant to this
Agreement; provided, however, that this Agreement shall be effective
regardless of whether any such additional documents are executed.
(c) This Agreement shall be binding upon Purchasers, Issuer,
their respective administrators, legal representatives, successors, and
permitted assigns. Nothing in this Agreement, expressed or implied, is
intended to confer upon any person, other than the parties hereto, any
rights or remedies under or by reason of this Agreement.
(d) The representations and warranties contained herein shall
survive the execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and remain in full
force and effect, notwithstanding any investigation at any time made by
or on behalf of the parties.
(e) This Agreement shall be construed in accordance with and
governed by the laws of the State of California, without regard to
principles of conflicts of laws.
(f) The parties to this Agreement hereby agree that an award of
damages alone is inadequate to remedy a breach of the terms of this
Agreement, and that specified performance, injunctive relief, or other
equitable remedy is the only way by which the intent of this Agreement
may be adequately realized upon breach by one or more of the
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parties hereto. Such remedy shall, however, be cumulative and not
exclusive, and shall be in addition to any other remedy which the
parties may have.
(g) This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof, and may be
amended only by a writing executed by all of the parties.
(h) If for any reason whatsoever, any one or more of the
provisions of this Agreement shall be held or deemed to be inoperative,
unenforceable or invalid as applied to any particular case or in all
cases, such circumstances shall not have the effect of rendering such
provision invalid in any other case or of rendering any of the other
provisions of this Agreement inoperative, unenforceable or invalid.
(i) Neither this Agreement nor any of the parties' rights
hereunder shall be assignable by any party hereto without the prior
written consent of the other parties hereto and any purported assignment
without such consent shall be null and void.
(j) This Agreement may be executed in any number of
counterparts, each of which shall be considered an original but all of
which shall constitute the agreement by and among the parties.
(k) Each of the parties hereto shall be responsible for its own
fees and expenses, including all legal and accounting fees incurred in
connection with this transaction.
IN WITNESS WHEREOF, the Purchasers and Seller have duly executed and
delivered this Agreement as of the date first above written.
VENTURE CATALYST INCORPORATED,
a Utah corporation
By: /s/ Kevin McIntosh
---------------------------------
Title: VP and CFO
/s/ Jonathan Ungar
------------------------------------
JONATHAN UNGAR
/s/ Alan Woods
------------------------------------
ALAN HENRY WOODS
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EXHIBIT A
<TABLE>
<CAPTION>
Shares Warrants
------- -------
<S> <C> <C>
Jonathan Ungar 358,587 144,775
Alan Henry Woods 220,518 0
------- -------
Total 579,105 144,775
</TABLE>
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