Stock Purchase Agreement - Legal Research Center Inc., The Law Office Inc., Gordon and Sydney Jones, and William and Lorie Harris
AMENDMENT NO. 1
TO
STOCK PURCHASE AGREEMENT
THIS AMENDMENT NO. 1 (the 'Amendment') is effective as of the 13th day of
May, 1996, by and among LEGAL RESEARCH CENTER, INC., a Minnesota corporation
('LRC' or 'Buyer'), THE LAW OFFICE, INC., a Washington corporation (the
'Company'), GORDON AND SYDNEY JONES, each an individual (the 'Joneses'), WILLIAM
AND LORIE HARRIS, each an individual (the 'Harrises'), and JOSEPH GIBERSON, an
individual ('Giberson').
WHEREAS, LRC, the Joneses and the Harrises are the owners of all of the
issued and outstanding shares of the common stock of the Company;
WHEREAS, the Company, LRC, the Joneses and the Harrises entered in the
Stock Purchase Agreement dated January 31, 1996 (the 'Stock Purchase Agreement')
whereby LRC agreed to purchase and the Joneses and the Harrises agreed to sell
to LRC, all of the common stock of the Company owned by the Joneses and the
Harrises (the 'Shares') on the terms and conditions stated therein (the
'Transaction'), which Transaction has not yet been consummated; and
WHEREAS, the Stock Purchase Agreement states that each of LRC, the Joneses
and the Harrises own 25 shares of common stock of the Company, however, as of
that date, the Joneses owned 50 shares of common stock of the Company;
WHEREAS, since the date of the Stock Purchase Agreement and until this
date, the parties have adjusted their ownership in the Company so that the
Harrises now own 25 shares of common stock of the Company; and
WHEREAS, the shareholdings of the Company are now owned equally by each of
LRC, the Joneses and the Harrises and the parties desire to consummate the
Transaction;
WHEREAS, Joseph Giberson has been employed by the Company since August 24,
1995 as its Vice President, Product Development and pursuant to the terms and
conditions of Giberson's employment as set forth in correspondence between
Gordon Jones and Giberson dated August 10, 1995 and August 16, 1995, it was
agreed that Giberson would receive a total of 4% of the common stock of the
Company over a period of one year commencing with his date of employment (the
'Giberson Shares'), none of which has been issued yet to Giberson; and
WHEREAS, in lieu of Giberson receiving the Giberson Shares, and to
effectuate the Transaction so that the Company is a wholly owned subsidiary of
LRC, the Company, LRC, the Joneses and the Harrises desire that Giberson receive
an equivalent interest in LRC as set forth herein, and Giberson is willing to
receive such interest in LRC in lieu of the Giberson Shares; and
WHEREAS, the parties desire to amend the Stock Purchase Agreement to
include the payment to Giberson of an interest in LRC as part of the
consideration from LRC for the purchase by it of the Shares, to delete the
exhibits and add a disclosure statement to the Stock Purchase Agreement and to
otherwise amend such agreement as provided for herein. Unless otherwise defined
herein, capitalized terms used herein shall have the same meaning as set forth
in the Stock Purchase Agreement.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the adequacy and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. AMENDMENT TO STOCK PURCHASE AGREEMENT. Unless otherwise provided for in
this Amendment, all rights and obligations of the parties and all terms and
conditions of the Stock Purchase Agreement shall remain in full force and
effect. The parties agree that the Stock Purchase Agreement shall be amended by
the following provisions:
1.1 GIBERSON ADDED AS PARTY. Giberson is hereby made a party to the Stock
Purchase Agreement and shall be referred to as 'Giberson.'
1.2 CONSIDERATION FROM BUYER AT EXECUTION/CLOSING. Section 1.2 of the
Stock Purchase Agreement is hereby amended to read in its entirety as follows:
'1.2 CONSIDERATION FROM BUYER AT EXECUTION/CLOSING. As
payment for the transfer of the Shares from Sellers to
Buyer, Buyer shall pay to the Sellers and Giberson at the
Closing the following:
(i) LRC STOCK. A total of One Hundred Twenty One Thousand
Eight Hundred (121,800) shares of its fully paid and
nonassessable Common Stock payable as set forth below:
Holder Number of LRC Shares
------ --------------------
The Harrises 58,200
The Joneses 56,400
Giberson 7,200
------------ -------
Total: 121,800
(ii) LRC STOCK OPTION. Immediately exercisable stock
options to purchase a total of One Hundred One Thousand Five
Hundred (101,500) shares of LRC Common Stock. Such options
shall be exercisable for a period commencing immediately and
ending three years from the date of grant, in whole or in
part, from time to time, and at anytime throughout the
option period at the closing
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high bid price for LRC Common Stock as reported on the NASDAQ SmallCap
Market for the date of the Letter of Intent (December 14, 1995, which
was $3.50 per share) issuable as follows:
Holder Number of LRC Stock Options
------------ ---------------------------
The Harrises 48,500
The Joneses 47,000
Giberson 6,000
------------ -------
Total: 101,500
(iii) CASH. A total of Fifty Thousand Seven Hundred Fifty
Dollars ($50,750), payable on the Closing as follows:
Payee Cash Amount
------------ -----------
The Harrises $ 0
The Joneses 0
Giberson 3,000
------------ --------
The Harrises hereby acknowledge the they have already
received $24,250 from LRC consisting of an original payment
by LRC of $25,000 reduced by a repayment from the Harrises
to LRC of $750. The Joneses hereby acknowledge the they
have already received $23,500 from LRC consisting of an
original payment by LRC of $25,000 reduced by a repayment
from the Joneses to LRC of $1,500.
Total: $50,750 (including payment already made to the Joneses and
the Harrises)
1.3 AUTHORITY AND CONSENT. Section 2.12 of the Stock Purchase Agreement
is hereby amended to delete the words 'subject to the stock grant to Joe
Giberson as reflected in exhibit 2.12' in the third sentence thereof.
1.4 CAPITAL STRUCTURE. Section 2.20 of the Stock Purchase Agreement is
hereby amended in its entirety to read as follows:
'2.20 CAPITAL STRUCTURE. The authorized capital stock of
the Company consists of 50,000 shares of Common Stock, no
par value, of which 75 shares are issued and outstanding and
held by the Sellers and LRC. All outstanding shares are
validly issued, fully paid and non-assessable and such
shares have been issued in full compliance with all federal
and state securities laws. There are no outstanding
subscriptions, options, rights, warrants,
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convertible securities, or other agreements or commitments obligating
the Company to issue or transfer any additional shares of its capital
stock of any class.'
1.5 TITLE TO SHARES. Section 2.22 of the Stock Purchase Agreement is
hereby amended by adding the following to the end thereof:
'No option, pledge or other right to transfer any interest
in the Company Giberson may have as a result of his
employment with the Company has been granted by Giberson to
any third party.'
1.6 DISCLOSURE STATEMENT. Information required to be set forth on an
exhibit to the Stock Purchase Agreement shall not be attached as an exhibit
thereto. LRC acknowledges that it has received a separate disclosure statement
containing all of the information required to be set forth on any exhibit to the
Stock Purchase Agreement (the 'Disclosure Statement'). Each reference in the
Stock Purchase Agreement to 'Exhibit' is hereby amended by replacing such term
with 'the Disclosure Statement' and each sentence shall be appropriately amended
to accommodate such change.
2. TERMINATION OF AGREEMENTS. Upon the execution of this Agreement and the
consummation of the transaction contemplated by the Stock Purchase Agreement and
this Agreement, the following agreements shall no longer be in full force and
effect and shall be terminated: (i) Stock Option Agreement dated November 9,
1995 between the Buyer and LRC, (ii) Shareholder and Director Agreement dated
May 3, 1995 between LRC, the Company, the Joneses and the Harrises, and (iii)
the Shareholders' Buy/Sell Agreement dated May 17, 1995 between the Buyer, the
Joneses and the Harrises.
3. ENTIRE AGREEMENT; MODIFICATION; WAIVER. Except as amended herein, the Stock
Purchase Agreement shall remain in full force and effect. This Amendment
constitutes the entire agreement between the parties pertaining to the subject
matter contained herein and supersedes all prior and contemporaneous agreements,
representations and understandings of the parties respecting the subject matter
contained herein. No supplement, modification or amendment of this Amendment
shall be binding unless executed in writing by all of the parties. No waiver
shall be binding unless executed in writing by the party making the waiver.
4. GOVERNING LAW. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of Washington.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
day and year first above written.
BUYER: LEGAL RESEARCH CENTER, INC.
By: /s/ Christopher Ljungkull
--------------------------------
Name: Christopher Ljungkull
Title: Chief Executive Officer
THE COMPANY: THE LAW OFFICE, INC.
By:
--------------------------------
Name:
Title:
SELLERS:
-----------------------------------
Gordon Jones
-----------------------------------
Sydney Jones
-----------------------------------
William Harris
-----------------------------------
Lorie Harris
ADDITIONAL PARTY:
-----------------------------------
Joseph Giberson
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
day and year first above written.
BUYER: LEGAL RESEARCH CENTER, INC.
By:
--------------------------------
Name: Christopher Ljungkull
Title: Chief Executive Officer
THE COMPANY: THE LAW OFFICE, INC.
By: /s/ Gordon S. Jones
--------------------------------
Name: Gordon S. Jones
Title: President
SELLERS: /s/ Gordon S. Jones
-----------------------------------
Gordon Jones
/s/ Sydney J. Jones
-----------------------------------
Sydney Jones
-----------------------------------
William Harris
-----------------------------------
Lorie Harris
ADDITIONAL PARTY:
-----------------------------------
Joseph Giberson
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
day and year first above written.
BUYER: LEGAL RESEARCH CENTER, INC.
By:
--------------------------------
Name: Christopher Ljungkull
Title: Chief Executive Officer
THE COMPANY: THE LAW OFFICE, INC.
By:
--------------------------------
Name:
Title:
SELLERS:
-----------------------------------
Gordon Jones
-----------------------------------
Sydney Jones
/s/ William Harris
-----------------------------------
William Harris
/s/ Loretta A. Harris
-----------------------------------
Lorie Harris
ADDITIONAL PARTY:
-----------------------------------
Joseph Giberson
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
day and year first above written.
BUYER: LEGAL RESEARCH CENTER, INC.
By:
--------------------------------
Name: Christopher Ljungkull
Title: Chief Executive Officer
THE COMPANY: THE LAW OFFICE, INC.
By:
--------------------------------
Name:
Title:
SELLERS:
-----------------------------------
Gordon Jones
-----------------------------------
Sydney Jones
-----------------------------------
William Harris
-----------------------------------
Lorie Harris
ADDITIONAL PARTY: /s/ Joseph Giberson
-----------------------------------
Joseph Giberson
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