0001104659-04-010584.txt : 20040420 0001104659-04-010584.hdr.sgml : 20040420 20040420120555 ACCESSION NUMBER: 0001104659-04-010584 CONFORMED SUBMISSION TYPE: SC 13D/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20040420 SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: MAI SYSTEMS CORP CENTRAL INDEX KEY: 0000760436 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 222554549 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-38111 FILM NUMBER: 04742194 BUSINESS ADDRESS: STREET 1: 26110 ENTERPRISE WAY CITY: LAKE FOREST STATE: CA ZIP: 92630 BUSINESS PHONE: 714 598-6000 MAIL ADDRESS: STREET 1: 26110 ENTERPRISE WAY CITY: LAKE FOREST STATE: CA ZIP: 92630 FORMER COMPANY: FORMER CONFORMED NAME: MAI BASIC FOUR INC DATE OF NAME CHANGE: 19901205 FORMER COMPANY: FORMER CONFORMED NAME: BSIC SUBSIDIARY INC DATE OF NAME CHANGE: 19850106 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: RESSLER RICHARD S CENTRAL INDEX KEY: 0000904290 FILING VALUES: FORM TYPE: SC 13D/A BUSINESS ADDRESS: STREET 1: MAI SYSTEMS CORP STREET 2: 9601 JERONIMO ROAD CITY: IRVINE STATE: CA ZIP: 92618 BUSINESS PHONE: 3109661660 MAIL ADDRESS: STREET 1: 10960 WILSHIRE BOULEVARD STREET 2: SUITE 500 CITY: LOS ANGELES STATE: CA ZIP: 90024 SC 13D/A 1 a04-4614_1sc13da.htm SC 13D/A

	UNITED STATES
	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549

	SCHEDULE 13D

Under the Securities Exchange Act of 1934
(Amendment No. 6)*

MAI Systems Corporation

(Name of Issuer)

Common Stock

(Title of Class of Securities)

552620 20 5

(CUSIP Number)

Richard R. Ressler, c/o W. Brian Kretzmer, c/o MAI Systems Corporation, Enterprise Way, Lake Forest, CA 92630

(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)

April 9, 2004

(Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. o

Note: Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See §240.13d-7 for other parties to whom copies are to be sent.

^* The remainder of this cover page shall be filled out for a reporting person’s initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed to be “filed” for the purpose of Section 18 of the Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes).

CUSIP No. 552620 20 5

	1.	Names of Reporting Persons. I.R.S. Identification Nos. of above persons (entities only) Richard S. Ressler

	2.	Check the Appropriate Box if a Member of a Group (See Instructions)
		(a)			o
		(b)			o

	3.	SEC Use Only

	4.	Source of Funds (See Instructions) PF

	5.	Check if Disclosure of Legal Proceedings Is Required Pursuant to Items 2(d) or 2(e) o

	6.	Citizenship or Place of Organization

Number of Shares Beneficially Owned by Each Reporting Person With			7.	Sole Voting Power 3,341,333 - See Item 5 herein.

			8.	Shared Voting Power

			9.	Sole Dispositive Power 3,341,333 - See Item % herein

			10.	Shared Dispositive Power

	11.	Aggregate Amount Beneficially Owned by Each Reporting Person 3,341,333

	12.	Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See Instructions) o

	13.	Percent of Class Represented by Amount in Row (11) 22.7% - See Item 5 herein

	14.	Type of Reporting Person (See Instructions) IN

Item 1.	Security and Issuer
State the title of the class of equity securities to which this statement relates and the name and address of the principal executive offices of the issuer of such securities. No Change

Item 2.	Identity and Background
If the person filing this statement or any person enumerated in Instruction C of this statement is a corporation, general partnership, limited partnership, syndicate or other group of persons, state its name, the state or other place of its organization, its principal business, the address of its principal office and the information required by (d) and (e) of this Item. If the person filing this statement or any person enumerated in Instruction C is a natural person, provide the information specified in (a) through (f) of this Item with respect to such person(s).
	(a)	Name; No Change
	(b)	Residence or business address; No Change
	(c)	Present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment is conducted; No Change
	(d)	Whether or not, during the last five years, such person has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) and, if so, give the dates, nature of conviction, name and location of court, and penalty imposed, or other disposition of the case; No Change
	(e)	Whether or not, during the last five years, such person was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws; and, if so, identify and describe such proceedings and summarize the terms of such judgment, decree or final order; and No Change
	(f)	Citizenship. No Change

Item 3.	Source and Amount of Funds or Other Consideration
State the source and the amount of funds or other consideration used or to be used in making the purchases, and if any part of the purchase price is or will be represented by funds or other consideration borrowed or otherwise obtained for the purpose of acquiring, holding, trading or voting the securities, a description of the transaction and the names of the parties thereto. Where material, such information should also be provided with respect to prior acquisitions not previously reported pursuant to this regulation. If the source of all or any part of the funds is a loan made in the ordinary course of business by a bank, as defined in Section 3(a)(6) of the Act, the name of the bank shall not be made available to the public if the person at the time of filing the statement so requests in writing and files such request, naming such bank, with the Secretary of the Commission. If the securities were acquired other than by purchase, describe the method of acquisition.
$243,333 Cash derived from personal sources.

Item 4.	Purpose of Transaction
State the purpose or purposes of the acquisition of securities of the issuer. Describe any plans or proposals which the reporting persons may have which relate to or would result in:
	(a)	The acquisition by any person of additional securities of the issuer, or the disposition of securities of the issuer; The purpose of this transaction, combined with additional actions contemplated by the Reporting Person and others, is to improve the issuer’s debt structure. In conjunction with this transaction, this Reporting Person and others will have the opportunity, subject to shareholder approval, to invest an additional $1,000,000 in the issuer and receive 10 million shares therefore, and convert $3,194,156 of issuer indebtedness into 31,941,560 shares of the common stock of the issuer.
	(b)	An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the issuer or any of its subsidiaries; the transactions described in (a) above, upon consummation, will result in a ‘change of control’, giving the Reporting Person approximately 77.5% beneficial control of the issuer.
	(c)	A sale or transfer of a material amount of assets of the issuer or any of its subsidiaries;
	(d)	Any change in the present board of directors or management of the issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board;
	(e)	Any material change in the present capitalization or dividend policy of the issuer;
	(f)	Any other material change in the issuer’s business or corporate structure including but not limited to, if the issuer is a registered closed-end investment company, any plans or proposals to make any changes in its investment policy for which a vote is required by section 13 of the Investment Company Act of 1940;
	(g)	Changes in the issuer’s charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the issuer by any person;
	(h)	Causing a class of securities of the issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association; the acquisition of control of the issuer by the Reporting Person may impede the acquisition of control of the issuer by any third party
	(i)	A class of equity securities of the issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Act; or
	(j)	Any action similar to any of those enumerated above.

Item 5.	Interest in Securities of the Issuer
	(a)	State the aggregate number and percentage of the class of securities identified pursuant to Item 1 (which may be based on the number of securities outstanding as contained in the most recently available filing with the Commission by the issuer unless the filing person has reason to believe such information is not current) beneficially owned (identifying those shares which there is a right to acquire) by each person named in Item 2. The above mentioned information should also be furnished with respect to persons who, together with any of the persons named in Item 2, comprise a group within the meaning of Section 13(d)(3) of the Act; (a) As of April 9, 2004, and after giving effect to transactions reported in Item 5(c) herein, the Reporting Person was the beneficial owner of an aggregate of 3,341,333 shares of MAI common stock which constituted 22.7% of the common stock. The foregoing beneficial ownership includes 306,250 shares of MAI Common Stock underlying options, warrants and other derivative securities (collectively, "options") held by the Reporting Person. The foregoing percentage reflects a total of 14,675,752 shares of Common Stock outstanding as reported in MAI’s Report on Form 10-K for the year ended December 31, 2003, and also assumes the exercise of the options held by the Reporting Person, but not the exercise of options held by other persons with respect to the Common Stock (i.e. the denominator for calculating such percentage is 14,692,152 shares).
	(b)	For each person named in response to paragraph (a), indicate the number of shares as to which there is sole power to vote or to direct the vote, shared power to vote or to direct the vote, sole power to dispose or to direct the disposition, or shared power to dispose or to direct the disposition. Provide the applicable information required by Item 2 with respect to each person with whom the power to vote or to direct the vote or to dispose or direct the disposition is shared; The Reporting Person has sole power to vote and to dispose of the shares beneficially owned.
	(c)	Describe any transactions in the class of securities reported on that were effected during the past sixty days or since the most recent filing of Schedule 13D (§240.13d-191), whichever is less, by the persons named in response to paragraph (a). On April 9, 2004 the Reporting Person acquired beneficial ownership of an additional 2,433,333 shares of the common stock of the issuer at a purchase price of $.10 per share, pursuant to a private purchase agreement between HIS Holding, LLC, a Delaware limited liability company and CSA Private Limited, a subsidiary of Computer Science Corporation. A Schedule 13D filing has also been made by HIS Holding as of April 19, 2004 to report this transaction.
	Instruction. The description of a transaction required by Item 5(c) shall include, but not necessarily be limited to: (1) the identity of the person covered by Item 5(c) who effected the transaction; (2) the date of the transaction; (3) the amount of securities involved; (4) the price per share or unit; and (5) where and how the transaction was effected.
	(d)	If any other person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, such securities, a statement to that effect should be included in response to this item and, if such interest relates to more than five percent of the class, such person should be identified. A listing of the shareholders of an investment company registered under the Investment Company Act of 1940 or the beneficiaries of an employee benefit plan, pension fund or endowment fund is not required.
		See Item 6 below.
	(e)	If applicable, state the date on which the reporting person ceased to be the beneficial owner of more than five percent of the class of securities.
	Instruction. For computations regarding securities which represent a right to acquire an underlying security, see Rule 13d-3(d)(1) and the note thereto.

Item 6.	Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer
Describe any contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in Item 2 and between such persons and any person with respect to any securities of the issuer, including but not limited to transfer or voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies, naming the persons with whom such contracts, arrangements, understandings or relationships have been entered into. Include such information for any of the securities that are pledged or otherwise subject to a contingency the occurrence of which would give another person voting power or investment power over such securities except that disclosure of standard default and similar provisions contained in loan agreements need not be included.
As described above in Item 5(c), HIS Holding, LLC acquired 2,433,333 shares of the issuer on April 9, 2004. Pursuant to the Operating Agreement of HIS Holding, LLC, the Reporting Person, through Orchard Capital Corporation, its affiliate, holds 100% voting and disposition control over these shares. The other members of this limited liability company are Canyon Capital Advisors, LLC, an existing 10% or more shareholder, and W. Brian Kretzmer and James W. Dolan, the Chief Executive Officer and Chief Financial and Operating Officer, respectively, of MAI Systems Corporation. Additionally in conjunction with this transaction, the Reporting Person and the aforementioned parties, subject to shareholder approval, will have the opportunity to invest an additional $1,000,000 in the issuer and receive 10 million shares therefore and convert $3,194,156 of issuer indebtedness held by HIS Holding, LLC into 31,941,560 shares of the common stock of the issuer.

Item 7.	Material to Be Filed as Exhibits
The following shall be filed as exhibits: copies of written agreements relating to the filing of joint acquisition statements as required by §240.13d-1(k) and copies of all written agreements, contracts, arrangements, understandings, plans or proposals relating to: (1) the borrowing of funds to finance the acquisition as disclosed in Item 3; (2) the acquisition of issuer control, liquidation, sale of assets, merger, or change in business or corporate structure or any other matter as disclosed in Item 4; and (3) the transfer or voting of the securities, finder’s fees, joint ventures, options, puts, calls, guarantees of loans, guarantees against loss or of profit, or the giving or withholding of any proxy as disclosed in Item 6
Exhibits: (a) Stock Purchase Agreement dated March 31, 2004 between CSA Private Limited and HIS Holding, LLC; and (b) Stock Purchase Agreement between MAI Systems Corporation and HIS Holding, LLC for acquisition of 10,000,000 shares of MAI common stock (undated draft - to be executed if the transaction is approved by the shareholders). Reference is also made to Proposal No. 2 of MAI’s Preliminary Proxy Statement filed with the Commission on April 6, 2004, which discusses these transactions in further detail.

Signature

After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

	April 19, 2004
	Date
	/s/ Richard S. Ressler
	Signature
	Richard S. Ressler
	Name/Title

Instructions for Cover Page

(1)		Names and I.R.S. Identification Numbers of Reporting Persons — Furnish the full legal name of each person for whom the report is filed – i.e., each person required to sign the schedule itself – including each member of a group. Do not include the name of a person required to be identified in the report but who is not a reporting person. Reporting persons that are entities are also requested to furnish their I.R.S. identification numbers, although disclosure of such numbers is voluntary, not mandatory (see “SPECIAL INSTRUCTIONS FOR COMPLYING WITH SCHEDULE 13D” below).

(2)		If any of the shares beneficially owned by a reporting person are held as a member of a group and the membership is expressly affirmed, please check row 2(a). If the reporting person disclaims membership in a group or describes a relationship with other persons but does not affirm the existence of a group, please check row 2(b) [unless it is a joint filing pursuant to Rule 13d-1(k)(1) in which case it may not be necessary to check row 2(b)].

(3)		The 3rd row is for SEC internal use; please leave blank.

(4)		Classify the source of funds or other consideration used or to be used in making purchases as required to be disclosed pursuant to Item 3 of Schedule 13D and insert the appropriate symbol (or symbols if more than one is necessary) in row (4):

Category of Source		Symbol

Subject Company (Company whose securities are being acquired)		SC

Bank		BK

Affiliate (of reporting person)		AF

Working Capital (of reporting person)		WC

Personal Funds (of reporting person)		PF

Other		OO

(5)		If disclosure of legal proceedings or actions is required pursuant to either Items 2(d) or 2(e) of Schedule 13D, row 5 should be checked.

(6)		Citizenship or Place of Organization - Furnish citizenship if the named reporting person is a natural person. Otherwise, furnish place of organization. (See Item 2 of Schedule 13D.)

(7)-(11), (13)		Aggregate Amount Beneficially Owned by Each Reporting Person, etc. — Rows (7) through (11) inclusive, and (13) are to be completed in accordance with the provisions of Item 5 of Schedule 13D. All percentages are to be rounded off to nearest tenth (one place after decimal point).

(12)		Check if the aggregate amount reported as beneficially owned in row (11) does not include shares which the reporting person discloses in the report but as to which beneficial ownership is disclaimed pursuant to Rule 13d4 [17 CFR 240.13d-4] under the Securities Exchange Act of 1934.

(14)		Type of Reporting Person — Please classify each “reporting person” according to the following breakdown and place the appropriate symbol (or symbols, i.e., if more than one is applicable, insert all applicable symbols) on the form:

Category		Symbol

Broker-Dealer		BD

Bank		BK

Insurance Company		IC

Investment Company		IV

Investment Adviser		IA

Employee Benefit Plan, Pension Fund, or Endowment Fund		EP

Parent Holding Company		HC

Corporation		CO

Partnership		PN

Individual		IN

Other		OO

Notes: Attach as many copies of the second part of the cover page as are needed, one reporting person per page.

Filing persons may, in order to avoid unnecessary duplication, answer items on the schedules (Schedule 13D, 13G or 14D-1) by appropriate cross references to an item or items on the cover page(s). This approach may only be used where the cover page item or items provide all the disclosure required by the schedule item. Moreover, such a use of a cover page item will result in the item becoming a part of the schedule and accordingly being considered as “filed” for purposes of Section 18 of the Securities Exchange Act or otherwise subject to the liabilities of that section of the Act.

Reporting persons may comply with their cover page filing requirements by filing either completed copies of the blank forms available from the Commission, printed or typed facsimiles, or computer printed facsimiles, provided the documents filed have identical formats to the forms prescribed in the Commission’s regulations and meet existing Securities Exchange Act rules as to such matters as clarity and size (Securities Exchange Act Rule 12b12).

SPECIAL INSTRUCTIONS FOR COMPLYING WITH SCHEDULE 13D

Under Sections 13(d) and 23 of the Securities Exchange Act of 1934 and the rules and regulations there under, the Commission is authorized to solicit the information required to be supplied by this schedule by certain security holders of certain issuers.

Disclosure of the information specified in this schedule is mandatory, except for I.R.S. identification numbers, disclosure of which is voluntary. The information will be used for the primary purpose of determining and disclosing the holdings of certain beneficial owners of certain equity securities. This statement will be made a matter of public record. Therefore, any information given will be available for inspection by any member of the public.

Because of the public nature of the information, the Commission can utilize it for a variety of purposes, including referral to other governmental authorities or securities self-regulatory organizations for investigatory purposes or in connection with litigation involving the Federal securities laws or other civil, criminal or regulatory statutes or provisions. I.R.S. identification numbers, if furnished, will assist the Commission in

identifying security holders and, therefore, in promptly processing statements of beneficial ownership of securities.

Failure to disclose the information requested by this schedule, except for I.R.S. identification numbers, may result in civil or criminal action against the persons involved for violation of the Federal securities laws and rules promulgated thereunder.

General Instructions

A.		The item numbers and captions of the items shall be included but the text of the items is to be omitted. The answers to the items shall be so prepared as to indicate clearly the coverage of the items without referring to the text of the items. Answer every item. If an item is inapplicable or the answer is in the negative, so state.

B.		Information contained in exhibits to the statements may be incorporated by reference in answer or partial answer to any item or sub-item of the statement unless it would render such answer misleading, incomplete, unclear or confusing. Material incorporated by reference shall be clearly identified in the reference by page, paragraph, caption or otherwise. An express statement that the specified matter is incorporated by reference shall be made at the particular place in the statement where the information is required. A copy of any information or a copy of the pertinent pages of a document containing such information which is incorporated by reference shall be submitted with this statement as an exhibit and shall be deemed to be filed with the Commission for all purposes of the Act.

C.		If the statement is filed by a general or limited partnership, syndicate, or other group, the information called for by Items 2-6, inclusive, shall be given with respect to (i) each partner of such general partnership; (ii) each partner who is denominated as a general partner or who functions as a general partner of such limited partnership; (iii) each member of such syndicate or group; and (iv) each person controlling such partner or member. If the statement is filed by a corporation or if a person referred to in (i), (ii), (iii) or (iv) of this Instruction is a corporation, the information called for by the above mentioned items shall be given with respect to (a) each executive officer and director of such corporation; (b) each person controlling such corporation; and (c) each executive officer and director of any corporation or other person ultimately in control of such corporation.

Item 1.	Security and Issuer

State the title of the class of equity securities to which this statement relates and the name and address of the principal executive offices of the issuer of such securities.

Item 2.	Identity and Background

If the person filing this statement or any person enumerated in Instruction C of this statement is a corporation, general partnership, limited partnership, syndicate or other group of persons, state its name, the state or other place of its organization, its principal business, the address of its principal office and the information required by (d) and (e) of this Item. If the person filing this statement or any person enumerated in Instruction C is a natural person, provide the information specified in (a) through (f) of this Item with respect to such person(s).

	(a)	Name;

	(b)	Residence or business address;

	(c)	Present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment is conducted;

	(d)	Whether or not, during the last five years, such person has been convicted in a criminal proceeding (excluding traffic violations or similar misdemeanors) and, if so, give the dates, nature of conviction, name and location of court, and penalty imposed, or other disposition of the case;

	(e)	Whether or not, during the last five years, such person was a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws; and, if so, identify and describe such proceedings and summarize the terms of such judgment, decree or final order; and

	(f)	Citizenship.

Item 3.	Source and Amount of Funds or Other Consideration

State the source and the amount of funds or other consideration used or to be used in making the purchases, and if any part of the purchase price is or will be represented by funds or other consideration borrowed or otherwise obtained for the purpose of acquiring, holding, trading or voting the securities, a description of the transaction and the names of the parties thereto. Where material, such information should also be provided with respect to prior acquisitions not previously reported pursuant to this regulation. If the source of all or any part of the funds is a loan made in the ordinary course of business by a bank, as defined in Section 3(a)(6) of the Act, the name of the bank shall not be made available to the public if the person at the time of filing the statement so requests in writing and files such request, naming such bank, with the Secretary of the Commission. If the securities were acquired other than by purchase, describe the method of acquisition.

Item 4.	Purpose of Transaction

State the purpose or purposes of the acquisition of securities of the issuer. Describe any plans or proposals which the reporting persons may have which relate to or would result in:

	(a)	The acquisition by any person of additional securities of the issuer, or the disposition of securities of the issuer;

	(b)	An extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving the issuer or any of its subsidiaries;

	(c)	A sale or transfer of a material amount of assets of the issuer or any of its subsidiaries;

	(d)	Any change in the present board of directors or management of the issuer, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board;

	(e)	Any material change in the present capitalization or dividend policy of the issuer;

	(f)	Any other material change in the issuer’s business or corporate structure including but not limited to, if the issuer is a registered closed-end investment company, any plans or proposals to make any changes in its investment policy for which a vote is required by section 13 of the Investment Company Act of 1940;

	(g)	Changes in the issuer’s charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the issuer by any person;

	(h)	Causing a class of securities of the issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association;

	(i)	A class of equity securities of the issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Act; or

	(j)	Any action similar to any of those enumerated above.

Item 5.	Interest in Securities of the Issuer

	(a)	State the aggregate number and percentage of the class of securities identified pursuant to Item 1 (which may be based on the number of securities outstanding as contained in the most recently available filing with the Commission by the issuer unless the filing person has reason to believe such information is not current) beneficially owned (identifying those shares which there is a right to acquire) by each person named in Item 2. The above mentioned information should also be furnished with respect to persons who, together with any of the persons named in Item 2, comprise a group within the meaning of Section 13(d)(3) of the Act;

	(b)	For each person named in response to paragraph (a), indicate the number of shares as to which there is sole power to vote or to direct the vote, shared power to vote or to direct the vote, sole power to dispose or to direct the disposition, or shared power to dispose or to direct the disposition. Provide the applicable information required by Item 2 with respect to each person with whom the power to vote or to direct the vote or to dispose or direct the disposition is shared;

	(c)	Describe any transactions in the class of securities reported on that were effected during the past sixty days or since the most recent filing of Schedule 13D (§240.13d-191), whichever is less, by the persons named in response to paragraph (a).

		Instruction. The description of a transaction required by Item 5(c) shall include, but not necessarily be limited to: (1) the identity of the person covered by Item 5(c) who effected the transaction; (2) the date of the transaction; (3) the amount of securities involved; (4) the price per share or unit; and (5) where and how the transaction was effected.

	(d)	If any other person is known to have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, such securities, a statement to that effect should be included in response to this item and, if such interest relates to more than five percent of the class, such person should be identified. A listing of the shareholders of an investment company registered under the Investment Company Act of 1940 or the beneficiaries of an employee benefit plan, pension fund or endowment fund is not required.

	(e)	If applicable, state the date on which the reporting person ceased to be the beneficial owner of more than five percent of the class of securities.

		Instruction. For computations regarding securities which represent a right to acquire an underlying security, see Rule 13d-3(d)(1) and the note thereto.

Item 6.	Contracts, Arrangements, Understandings or Relationships with Respect to Securities of the Issuer

Describe any contracts, arrangements, understandings or relationships (legal or otherwise) among the persons named in Item 2 and between such persons and any person with respect to any securities of the issuer, including but not limited to transfer or voting of any of the securities, finder’s fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies, naming the persons with whom such contracts, arrangements, understandings or relationships have been entered into. Include such information for any of the securities that are pledged or otherwise subject to a

contingency the occurrence of which would give another person voting power or investment power over such securities except that disclosure of standard default and similar provisions contained in loan agreements need not be included.

Item 7.		Material to Be Filed as Exhibits

The following shall be filed as exhibits: copies of written agreements relating to the filing of joint acquisition statements as required by §240.13d-1(k) and copies of all written agreements, contracts, arrangements, understandings, plans or proposals relating to: (1) the borrowing of funds to finance the acquisition as disclosed in Item 3; (2) the acquisition of issuer control, liquidation, sale of assets, merger, or change in business or corporate structure or any other matter as disclosed in Item 4; and (3) the transfer or voting of the securities, finder’s fees, joint ventures, options, puts, calls, guarantees of loans, guarantees against loss or of profit, or the giving or withholding of any proxy as disclosed in Item 6.

EX-99.1 3 a04-4614_1ex99d1.htm EX-99.1

Exhibit 99.1

STOCK PURCHASE AGREEMENT

This stock purchase agreement (“Agreement”) is made as of March 31, 2004, at Lake Forest, California, among CSA Private Limited, a Singapore business entity (the “Seller”), and HIS Holding, LLC, a Delaware Limited Liability Company (“Buyer”), regarding Seller’s ownership of shares of common stock of MAI Systems Corporation (“MAI”).

Seller has represented that it owns 2,433,333 shares of the outstanding stock of Corporation. Buyer desires to purchase from Seller, and Seller desires to sell to Buyer, all of its shares of the Corporation (the “Seller’s Shares”). This sale is being consummated concurrently with the purchase by Buyer of all but $500,000 of MAI’s indebtedness, including any and all accrued interest, to Seller, pursuant to the Note Purchase Agreement attached as Exhibit A to this Agreement (the “Note Purchase Agreement”).

In consideration of the mutual covenants, agreements, representations, and warranties contained in this agreement, the parties agree as follows:

ARTICLE 1
PURCHASE AND SALE OF SHARES AND PURCHASE PRICE

1.1 Purchase and Sale of Shares. Subject to the terms and conditions of this Agreement, on the Closing Date (as defined in Section 2.1), the Seller shall sell, transfer, convey, assign and deliver (“Transfer”) to the Purchaser, and the Purchaser shall purchase, acquire and accept from the Seller all of the Seller’s right, title and interest in and to the Seller’s Shares, free and clear of all Liens (as defined in Section 3.5(b).

1.2 Purchase Price. The aggregate purchase price to be paid for the Seller’s Shares shall be Two Hundred Forty Three Thousand Dollars ($243,000) (the “Purchase Price”) by Purchaser’s payment of the Purchase Price in cash on the Closing Date.

ARTICLE 2
CLOSING

2.1 Closing. The closing (the “Closing”) of the transactions contemplated by this Agreement will be on April 9, 2004, or such earlier date as the parties hereto may mutually agree upon.

2.2 Instruments of Conveyance and Transfer.

(a) At the Closing, the Purchaser shall deliver to the Seller the consideration required under Section 1.2 herein.

(b) At the Closing, the Seller shall deliver to the Purchaser certificates representing the Seller’s Shares (the “Seller’s Stock Certificate”) accompanied by stock powers of transfer, duly executed, conveying full ownership therein to Purchaser (the “Seller’s Stock Powers”).

ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE SELLER

The Seller hereby represents and warrants to Purchaser that the following representations and warranties are true and correct at the date hereof:

3.1 Existence. The Seller is duly organized and validly existing under the laws of the jurisdiction of its formation and has full power and authority to conduct its business as it is now being conducted and to own or lease all of its properties and assets.

3.2 Power and Authority. The Seller has full power and authority to enter into this Agreement, perform its obligations hereunder, Transfer the Seller’s Shares and carry out the transactions contemplated hereby. The execution and delivery of this Agreement, the performance by the Seller of its obligations hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all actions on the part of the Seller required by applicable law, its formation documents, or otherwise. This Agreement constitutes the legal, valid and binding obligation of the Seller, enforceable against it in accordance with its terms, except (i) as the same may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to creditors’ rights generally and (ii) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

3.4 Seller’s Shares. There are no outstanding options, warrants, rights (including conversion, registration or preemptive rights), proxy or shareholder agreements, or agreements of any kind for the purchase or acquisition from Seller of Seller’s Shares. Seller has not granted any options, warrants, rights (including conversion, registration or preemptive rights), proxy or shareholder agreements, or agreements of any kind concerning the Seller’s Shares.

3.5 Title to Seller’s Shares.

(a) Seller has good and marketable title to Seller’s Shares. Seller’s Shares are not subject to any Lien.

(b) When used in this Agreement, “Lien” or “Liens” shall mean any mortgage, pledge, security interest, conditional sale or other title retention agreement, encumbrance, lien, easement, claim, right, covenant, restriction, right of way, warrant, option or charge of any kind.

3.6 Litigation. There is no Action pending, or, to Seller’s knowledge, after due inquiry and reasonable investigation, threatened, against the Seller regarding its ownership of Seller’s Shares, before any court, arbitrator or administrative or governmental body, which questions or challenges the validity of this Agreement or any Action taken or proposed to be taken by the Seller pursuant to this Agreement or in connection with the transactions contemplated hereby. The Seller is not subject to any judgment, order or decree entered in any

lawsuit or proceeding which has affected, or which can reasonably be expected to affect, the Seller’ Shares.

ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

The Purchaser hereby represents and warrants to the Seller as follows:

4.1 Existence. The Purchaser is a duly organized and validly existing Delaware Limited Liability Company, and has full power and authority to conduct its business as it is now being conducted and to own or lease all of its properties and assets.

4.2 Power and Authority. The Purchaser has full power and authority to enter into this Agreement, perform its obligations hereunder, acquire and own the Seller’s Shares and carry out the transactions contemplated hereby. The execution and delivery of this Agreement, the performance by the Purchaser of its obligations hereunder and the consummation of the transactions contemplated hereby have been duly authorized by all actions on the part of the Purchaser required by applicable law, its formation documents, or otherwise. This Agreement constitutes the legal, valid and binding obligation of the Purchaser, enforceable in accordance with its terms, except (i) as the same may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws now or hereafter in effect relating to creditors’ rights generally and (ii) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefor may be brought.

4.3 Litigation. There is no Action pending, or, to the Purchaser’s knowledge, after due inquiry and reasonable investigation, threatened, against the Purchaser before any court, arbitrator or administrative or governmental body, which questions or challenges the validity of this Agreement or any Action taken or proposed to be taken by the Purchaser pursuant to this Agreement or in connection with the transactions contemplated hereby.

ARTICLE 5
MISCELLANEOUS PROVISIONS

5.1 Fees and Expenses. Except as otherwise provided in this Agreement, each of the parties hereto shall bear and pay its own costs and expenses incurred in connection with the origin, preparation, negotiation, execution and delivery of this Agreement and the agreements, instruments, documents and transactions referred to in or contemplated by this Agreement (whether or not such transactions are consummated) including, without limitation, any fees, expenses or commissions of any of its Advisors, attorneys, agents, finders or brokers. The Purchaser shall indemnify the Seller against any claims of third parties for any brokerage, finder’s, agent’s or similar fees or commissions in connection with the transactions contemplated hereby insofar as such claims are alleged to be based on arrangements or contacts made by, to or with the Purchaser or its Advisors or representatives prior to the Closing. The Seller shall

indemnify the Purchaser against all such claims insofar as they are alleged to be based on arrangements or contacts made by, to or with the Seller or its Advisors or representatives.

5.2 Governing Law; Consent to Jurisdiction and Venue. This Agreement and the legal relations between the parties hereto shall be governed by and construed in accordance with the internal laws of the State of California, without giving effect to the conflicts of laws principles thereof. Any dispute concerning this Agreement and the transactions contemplated hereby shall be heard and decided in the Federal and state courts of Orange County, California.

5.3 No Third Party Beneficiaries. Nothing in this Agreement is intended, nor shall anything in this Agreement be construed, to confer any rights, legal or equitable, in any Person (other than the parties hereto and their respective heirs, distributees, beneficiaries, executors, successors and assigns), including, without limitation, any employee of the Seller or any beneficiary of such employee.

5.4 Affiliate. When used in this Agreement, “Affiliate” or “Affiliates” shall mean, with respect to any individual, partnership, corporation, association, business trust, joint venture, governmental entity or other entity of any nature (“Person”), any Person that controls, is controlled by, or is under common control with, such Person.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

“SELLER”:	CSA Private Limited, a business entity organized under the laws of the Singapore


	By:	/s/ Paul Tucker
		Paul Tucker


“PURCHASER”:	HIS HOLDING, LLC, a Delaware limited liability company


	By:	/s/ James W. Dolan
		James W. Dolan

EX-99.2 4 a04-4614_1ex99d2.htm EX-99.2

Exhibit 99.2

STOCK PURCHASE AGREEMENT

Each of the Purchasers named
on the Signature Pages Herein

Dear Sir/Madams:

MAI Systems Corporation, a Delaware corporation (the “Company”), agrees with (“you” or “Purchaser”) as follows:

1. Purchase and Sale of Shares.

The Company has authorized the issuance of Common Stock of the Company to Purchasers in the aggregate principal amount of $1,000,000.00 (the “Shares”).

2. Sale and Purchase of Shares: The Closing.

In reliance upon your representations made herein and subject to the terms and conditions set forth herein and in the Offering Documents, the Company hereby agrees to sell to you the Shares as set forth below your name on the signature pages hereof, at a purchase price per Share equal to $0.10 (the “Purchase Price”). The purchase price of the Shares is payable in cash on the Closing Date. The number of Shares to be purchased by each Purchaser is set forth on the respective signature page for such Purchaser. In reliance upon the representations and warranties of the Company contained herein, and in the Offering Documents, and subject to the terms and conditions set forth herein and therein, you hereby agree to purchase such Shares from the Company.

The sale and purchase of the Shares shall take place on the Closing Date at the offices of the Company at 10:00 a.m. on or before , 2004, or such other business day prior to , 2004, as may be selected by the Company upon notice to you at least five (5) business days prior thereto (the “Closing Date”). At the Closing, the Company will deliver to you Shares to be purchased by you (in such permitted denomination or denominations and registered in your name or the name of you (in such permitted denomination or denominations and registered in your name or the name of such nominee or nominees as you may request), dated the Closing Date, against payment of the purchase price therefor by wire transfer of immediately available funds or by federal funds check.

3. Private Offering.

The Offering is being made by the Company on a private placement basis to Accredited Investors only. The Shares to be sold hereunder, until registered with the United States Securities & Exchange Commission under the Securities Act of 1933, as amended, will carry the following restrictive legend:

THE SHARES TO BE ISSUED BY THE COMPANY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR APPLICABLE STATE BLUE SKY OR SECURITIES LAWS AND ARE OFFERED UNDER AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF SUCH LAWS.

THE SHARES CANNOT BE SOLD, TRANSFERRED, ASSIGNED OR OTHERWISE DISPOSED OF EXCEPT IN COMPLIANCE WITH THE RESTRICTIONS ON TRANSFER CONTAINED IN THIS SUBSCRIPTION AGREEMENT AND APPLICABLE FEDERAL AND STATE SECURITIES LAWS.

4. Investment Terms.

A. Stock Purchase. Purchaser hereby agrees to purchase for that certain number of Shares as set forth opposite Purchaser’s name on the signature page hereto, on the terms and conditions described herein.

B. Delivery of Purchase Price. Purchaser shall pay the Purchase Price for each Share purchased by delivering funds in U.S. Dollars, or other consideration acceptable to the Company, to the designated depository for Closing by delivery of the Shares versus payment. Delivery of Shares shall be delivered within ten (10) business days from date of the Company’s acceptance of Purchaser’s Purchase Price.

5. Termination of the Offering.

This Offering will terminate on , 2004, unless sooner terminated by the Company.

6. Anticipated Use of Proceeds.

The proceeds from the sale of the Shares will be used for the general working capital of the Company and for other appropriate corporate purposes as determined by management.

ALL FUNDS INVESTED MAY BE USED BY THE COMPANY IMMEDIATELY UPON ACCEPTANCE.

7. Offering and Disclosure Documents.

Purchaser represents and warrants that he/she/it has received copies of the following information relating to the Company.

A. Offering Documents. This questionnaire and other documents related to the Shares, including, but not limited to, the following:

(i) the Stock Purchase Agreement;

(ii) the Purchaser Questionnaire, which the Purchaser must complete and return to the Company if he/she/it desires to purchase Shares in this Offering.

B. Disclosure Documents. Purchaser further acknowledges receipt and review of the following documents provided by the Company:

(i) Financial Statements for period ending December 31, 2003, March 31, 2003, June 30, 2003 and September 30, 2003;

(ii) Website Contents;

(iii) All documents filed by the Company at www.sec.gov.

8. Representations and Warranties of the Company.

The Company warrants and represents to Purchaser that:

A. Organization and Authority. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of Delaware, with the corporate power and authority to carry on its business as now being conducted. In addition, the Company and its subsidiaries are duly qualified to do business in each jurisdiction in which the nature of its business requires it to be so qualified, except to the extent that the failure to so qualify does not have a material adverse effect on the business of the Company, taken as a whole. The execution and delivery of this Agreement and the consummation of the transactions contemplated in this Agreement have been, or will be prior to closing, duly authorized by all requisite corporate actions on the part of the Company to the extent, if any, that such authorizations are necessary. This Agreement has been duly executed and delivered by the Company and constitutes the valid, binding and enforceable obligation of the Company.

B. Ability To Carry out Agreement. To the best of the Company’s knowledge and belief, the execution and performance of this Agreement will not violate, or result in a breach of, or constitute a default in, any provisions of applicable law, any agreement, instrument, judgment, order or decree to which the Company is a party or to which the Company is subject, other than such violations, breaches, or defaults which, singly or in the aggregate, do not have a material adverse effect on the business of the Company, as a whole, or on the enforceability or validity of this Agreement. No consents of any persons under any contract or agreement required to be disclosed or disclosed pursuant to this Agreement are required for the execution, deliver, and performance by the Company of this Agreement.

C. Capitalization of the Company. The authorized capital stock of the Company consists of 24,000,000 shares of Common Stock, $01 par value per share and 1,000,000

shares of Preferred Stock, of which shares of common stock were issued and outstanding as of , 2004 and no shares of Preferred Stock were outstanding as of this date. All such issued and outstanding shares of Common Stock and Preferred Stock have been duly authorized and validly issued and are full paid and non-assessable.

D. Financial Information. The Company has provided, pursuant to Section 7.A above, copies of its financial statements. This financial information is collectively referred to herein as the “Company Financials.” This information represents fairly the assets and financial condition of the Company. Except as set forth in the Company Financials, for obligations on the part of the Company, there exists no default under the provisions of any instrument or agreement.

E. Directors and Officers. The Company’s disclosure documents at www.sec.gov accurately set forth the names and titles of the persons serving as directors and officers of the Company and each of its subsidiaries.

F. Approvals. Except as otherwise provided in this Agreement, to the Company’s best knowledge and belief, no authorization, consent, or approval of, or registration or filing with, any government authority or any other person is required to be obtained or made by the Company or any of its subsidiaries in connection with the execution, deliver, or performance of this Agreement.

G. Reporting Company Status. The Company is a reporting issuer.

9. Representations and Warranties of Purchaser.

Purchaser hereby represents and warrants to the Company as follows:

A. Financial Qualifications. He/she/it or any fiduciary account for which he/she/it is purchasing, has a net worth (inclusive of homes(s) valued at cost, but exclusive of home furnishings and automobiles) in excess of $1,000,000 or at the time of the purchase has an individual income which exceeds $200,000 in each of the two most recent years or joint income with his or her spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year.

B. Investment Intent. Each Share is being acquired for long-term investment only and for Purchaser’s own account and not with a view to, or for sale in connection with, the distribution thereof, nor with any present intention of distributing or selling any of the Shares.

C. Relationship with Company. Purchaser has either a pre-existing business or personal relationship with the Company or with an officer or director of the Company; or such knowledge and experience in financial and business matters that he is capable of evaluating the merits and risks of the investment in the Shares or, together with any Purchaser Representative being utilized, has such knowledge and experience.

D. Enterprise Risk. Purchaser acknowledges that the purchase of the Shares involves a high degrees of risk and further acknowledges that it can bear the economic risk of the purchase of the Shares, including the total loss of his/its/her investment.

E. Private Offering. Purchaser understands that the Shares are being offered and sold to it in reliance on specific exemptions from the registration requirements of U.S. federal and state securities rules and regulations and that the Company is relying upon the truth and accuracy of the representations, warranties, agreements, acknowledgements and understandings of Purchaser set forth herein or order to determine the applicability of such exemptions and the suitability of Purchaser to acquire the Shares.

F. Purchase For Own Account. Purchaser is not an underwriter of, or dealer in, the Shares and Purchaser is not acting as such or participating, pursuant to a contractual agreement, in the distribution of the Shares.

G. Purchaser’s Representatives. If Purchaser is purchasing the Shares purchased for hereby in a representative or fiduciary capacity, the representations and warranties in this Agreement shall be deemed to have been made on behalf of the person or persons for whom Purchaser is so purchasing.

H. Independent Investigation: Access. Purchaser acknowledges that in making the decision to purchase the Shares purchased for, he/she/it has relied upon independent investigations made by him/her/it and his/her/its representatives, if any, and Purchaser and such representatives, if any, prior to any sale, have given Purchaser the opportunity to ask questions of and to receive answers from the Company, or any person acting on their behalf concerning the terms and conditions of this Offering. Purchaser and its advisors, if any, have been furnished with access to all publicly available materials relating to the business, finances and operations of the Company, and materials relating to the offer and sale of the Shares which have been requested.

I. No Government Recommendations or Approval. Purchaser understands that no U.S. federal or state agency has made or will make any finding or determination relating to the fairness for public investment in the Shares, or has passes or made, or will pass on or make, any recommendation or endorsement of the Shares.

J. Entity Purchases. If Purchaser is a partnership, corporation or trust, the person executing this Agreement on its behalf represents and warrants that:

(i) he, she or it has made due inquiry to determine the truthfulness of the representations and warranties made pursuant to this Agreement; and

(ii) he, she or it is duly authorized to make this investment and to enter into and execute this Subscription Agreement on behalf of such entity.

K. For Foreign Purchasers:

(i) Purchaser is not a U.S. person (whenever such term is used herein, it shall have the meaning given in Regulation S);

(ii) Purchaser was outside the U.S. and is outside of the U.S. as of the date of the execution and delivery of the Agreement;

(iii) Purchaser is purchasing the Shares for its own account and not on behalf of any U.S. person, and the sale has not been pre-arranged with a Purchaser or subsequent purchaser in the U.S;

(iv) Purchaser acknowledges that in the view of the statutory basis for the exemption claimed for this transaction would not be present if the offering of the Shares, although in technical compliance with Regulation S, is part of a plan or scheme to evade the registration provisions of the Act. Purchaser is

acquiring the Shares for investment purposes and has no present intention to sell the Shares in the U.S. or to a U.S. person; and

(v) Purchaser is not a distributor participating in the offering of the Shares, and hereby agrees that all subsequent offers and sales of the Shares prior to the expiration of a period commencing on the date of the closing of the offering of Share sand ending 40 days thereafter (the “Restricted Period”) shall only be made in compliance with the safe harbor contained in Regulation S, pursuant to registration of Shares under the Act or pursuant to an exemption from registration.

L. Representations True and Correct. The foregoing representations and warranties are true and accurate as of the date hereof, shall be true and accurate as of the date of the acceptance by the Company of Purchaser’s subscription, and shall survive thereafter. If Purchaser has knowledge, prior to the acceptance of this Agreement by the Company, that any such representations and warranties shall not be true and accurate in any respect, Purchaser, prior to such acceptance, will give written notice of such fact to the Company specifying which representation and warranties are not true and accurate and the reasons thereof.

M. Investment Suitability. The Purchaser represents that an investment in the Shares are a suitable investment for the Purchaser, taking into consideration the restrictions on transferability affecting the Shares.

N. Lack of Liquidity. The Purchaser understands that the Shares are and will be when acquired “restricted securities” within the meaning of Rule 144 of the General Rules and Regulations under the Act and applicable state statutes. The Purchaser consents to the placement of an appropriate restrictive legend or legends on any certificates evidencing the Shares and acknowledges that the Company will cause its transfer records to note such restrictions.

11. Delayed Registration and Private Placement.

Purchaser understand and agrees that:

A. No Liquidity until Registration Occurs. Purchaser may not sell the Shares until the Shares are registered under the Act and any applicable state securities law or unless an exemption from such registration requirements is available.

B. Future Resale. Purchaser will not sell the Shares without registrations under the Act and any applicable state securities laws, unless exemptions from such registration requirements are available.

C. Representations Correct. The Purchaser recognizes that the sale of the Shares will be based upon Purchasers representations and warranties set forth hereinabove and the statements made by Purchaser herein.

D. Completion of Offering Documents. Purchaser understands that the Offering Documents included herewith are incorporated herein, and Purchaser represents that he/she/it has or will prior to the Closing Date complete the documents as necessary and deliver same to the Company.

12. Conditions Precedent to the Company’s Obligation to Sell Shares.

Purchaser understands that the Company’s obligation to sell and issue the Shares are conditioned upon:

A. Acceptance of Consideration. The receipt and acceptance by the Company of this Agreement, properly executed, and the acceptance by the Company of the Purchase Price in good funds, or other consideration acceptable to Company.

B. Acceptance of Purchaser’s Background. The receipt and acceptance by the Company of background information on Purchaser.

C. Increase in Authorized shares of Company Common Stock. The Company will amend its Certificate of Incorporation to increase its number of authorized shares of common stock from 24,000,000 to 99,000,000.

13. Definitions.

For the purpose of this Agreement, the capitalized terms contained herein shall have the following meanings:

A. “Accredited Investor” for the purpose of this Agreement shall mean any person who comes within any of the following categories, or who the Company reasonably believes comes within any of the following categories, at the time of the sale of the Shares to that person:

(i) any bank as defined in Section 3(a)(2) of the Act, or any savings and loan association or other institution as defined in Section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934; any insurance company as defined in Section 2(a)(48) of that Act; any investment company registered under the Investment Company Act of 1940 or business development company as defined in Section 2(a)(48) of that Act; any Small Business Investment Company licensed by the U.S. Small Business Administration under Section 301(c) or (d) of the Small Business Investment act of 1958; any plan established and maintained by a State, its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of Five Million Dollars (US$5,000,000); any employee benefit plan within the meaning of the employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in Section 2(21) of such Act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, of if the employee benefit plan has total assets in excess of US$5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;

(ii) any private business development company as defined in Section 202(a)(22) of the Investment Advisers Act of 1940;

(iii) any organization described in Section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of US$5,000,000;

(iv) any director, executive officer, or general partner of the Company of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that Company;

(v) any natural person whose individual net worth, or joint net worth with that person’s spouse, at the time of his purchase exceed One Millon Dollars (US$1,000,000);

(vi) any natural person who had an individual income in excess of Two Hundred Thousand Dollars (US$200,000) in each of the two most recent years or joint income with that person’s spouse in excess of Three Hundred Thousand Dollars (US$300,000) in each of those years and has a reasonable expectation of reaching the same income level in the current year;

(vii) any trust, with total assets in excess of US$5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii); and

(viii) any entity in which all of the equity owners are accredited investors.

B. “Affiliate” means a person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified. The term “control” means the possession, direct or indirect, or the power to direct or cause the direction of the management and policies of a person, whether through he ownership of voting securities, by contract, or otherwise.

C. “Directed Selling Efforts” means any activity undertaken for the purpose of, or that could reasonably be expected to have the effect of, condition the market in the U.S. for the public resale of securities. Such activity includes the placement of an advertisement in a publication with a general circulation in the U.S. that refers to the offering of securities.

Notwithstanding the foregoing, certain other activities may be deemed “directed selling efforts” as set forth in Rule 902(b) of Regulation S promulgated under the U.S. Securities Act of 1933, as amended (the “Act”).

D. “Distributor” means any underwriter, dealer, or other person who participates, pursuant to a contractual arrangement, in the distribution of the securities.

E. “Offshore Transaction” means an offer or sale of securities made under the following circumstances:

(i) The offer is not made to a person in the U.S.; and

(ii) Either:

(a) At the time the buy order was originated, the buyer was outside the United States, or the seller and any person acting on its behalf reasonably believe that the buyer is outside the United States; or

(b) The transaction was executed in, on or through the facilities of a designated offshore securities market (as defined in paragraph (a) of the Rule 902 or Rule 904 of Regulation S of the Act, and neither the seller nor any person acting on its behalf knew that the transaction was prearranged with a buyer in the United States.

Notwithstanding the foregoing, certain transactions may or may not be deemed to involve an “offshore transaction” as set forth in paragraphs (2) and (3) of Rule 902(g) or Rule 904 or Regulation S of the Act.

F. “Reporting Issuer” means a United States corporation other than an investment company registered or required to register under the U. S. Investment Company Act of 1940 that:

(i) has a class of securities registered pursuant to Section 12(b) or 12(g) of the Securities Exchange Act of 1934 (the “Exchange Act”) or is required to file reports pursuant to Section 15(d) of the Exchange Act; and

(ii) has filed all the material required to file pursuant to Section 13(a) or 15(d) of the Exchange Act for a period of at least twelve (12) months immediately preceding the offer of sale of securities made in reliance upon Regulation S of the Act (or such shorter period that the issuer was required to file such material).

G. “Share” means the common stock of the Company.

H. “U.S” means the United States of America.

I. “U.S. Person” means:

(i) any natural person resident in the U.S.;

(ii) any partnership or corporation organized or incorporated under the laws of the United States;

(iii) any estate of which any executor or administrator is a U.S. person;

(iv) ny trust of which any trustee is a U.S. person;

(v) any agency or branch of a foreign entity located in the U.S.;

(vi) any non-discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary for the benefit or account of a U.S. person;

(vii) any discretionary account or similar account (other than an estate or trust) held by a dealer or other fiduciary organized, incorporated, or (if an individual resident in the U.S.; and

(viii) any partnership or corporation if: (a) organized or incorporated under the laws of any foreign jurisdiction; and (b) formed by a U.S. person principally for the purpose of investing in securities not registered under the Act, unless it is organized or incorporated, and owned, by accredited investors (as defined in Rule 501(a) or Regulation D promulgated pursuant to the Act) who are not natural persons, estates or trusts.

14. Miscellaneous.

A. Authority. The persons executing this Agreement are duly authorized to do so and each party has taken all action required by law or otherwise to properly and legally execute this Agreement.

B. Notices. Any notice under this Agreement shall be deemed to have been sufficiently given if sent by registered or certified mail, postage prepaid, addressed as follows:

If to the Company:		MAI Systems Corporation
		Attn: CFO
		26110 Enterprise Way, Suite 200
		Lake Forest, CA 92630
		Facsimile:

With a Copy to:
		Attn:
		Facsimile:

To the Purchaser:	As their names and addresses appear on the signatures page(s) hereto.

or to any other address which may hereafter be designated by either party by notice given in such manner. All notices shall be deemed to have been given as of the date of receipt.

C. Entire Agreement. This Agreement sets forth the entire understanding between the parties hereto and no other prior written or oral statement or agreement shall be recognized or enforced.

D. Severability. If a court of competent jurisdiction determines that any clause or provision of this Agreement is invalid, illegal or unenforceable, the other clauses and provisions of the Agreement shall remain in full force and effect and the clauses and provision which are determined to be void, illegal or unenforceable shall be limited so that they shall remain in effect to the extent permissible by law.

E. Assignment. Neither party may assign this Agreement without the express written consent of the other party; provided, however, that any such Assignment shall be binding on and inure to the benefit of such successor or, in the event of death or incapacity, on the heirs, executors, administrators and successors of the assignor.

F. Proper Law. Notwithstanding that this Agreement may be performable outside of the United States, this Agreement shall be governed by the laws of the United States and the State of Delaware.

G. Attorneys’ Fees. If any legal action or other preceding (non-exclusively including arbitration) is brought for the enforcement of or to declare any right or obligation under this Agreement or as a result of a breach, default or misrepresentation in connection with any of the provisions of this Agreement, or otherwise because of a dispute among the parties hereto, the prevailing party will be entitled to recover actual attorneys’ fees (including costs for appeals and collection) and other costs incurred in such action or proceeding, in addition to any other relief to which such party may be entitled.

H. No Third Party Beneficiary. Nothing in this Agreement, expressed or implied, is intended to confer upon any person, other than the parties hereto, or their successors, any rights or remedies under or by reason of this Agreement, unless this Agreement specifically states such intent.

I. Counterparts. It is understood and agreed that this Agreement may be executed in any number of identical counterparts, each of which may be deemed an original for all purposes.

J. Further Assurances. At any time, and from time to time after the Closing Date, each party will execute such additional instruments and take such action as may be reasonably requested by the other party to confirm or perfect title to the Shares transferred hereunder or otherwise to carry out the intent and purposes of this Agreement.

K. Broker’s or Finder’s Fee. Purchaser and the Company warrant that neither has incurred any liability, contingent or otherwise, for brokers’ or finders’ fees or commissions relating to this Agreement for which the other shall have responsibility. Except as otherwise provided herein, all fees, costs and expenses incurred by either party relating to this Agreement shall be paid by the party incurring the same.

L. Amendment or Waiver. Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law, or in equity, and maybe enforced concurrently herewith, and no wavier by any party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then, therefore, or thereafter occurring or existing. At any time prior to the Effective Date, this Agreement may be amended by a writing signed by all parties hereto, with respect to any of the terms contained herein, and any term or condition of this Agreement may be waived or the time for performance hereof may be extended by a writing signed by the party or parties for whose benefit the provision is intended.

M. Headings. The section and subsection headings in this Agreement are inserted for convenience only and shall not affect in any way the meaning or interpretation of this Agreement.

N. Schedules: Knowledge. Each party is presumed to have knowledge of all information set forth in the other party’s schedules delivered pursuant to this Agreement. Whenever any negative representation is made to the “knowledge” of any party, it shall be deemed to be a representation that no officer or director of such party, after reasonable investigation, has any knowledge of such matters.

O. Public Disclosure. The Company covenants that it will take all reasonable actions necessary keep Purchaser’s identity confidential, and will no disclose Purchaser’s identity as an investor in any public announcement, governmental filing or otherwise without Purchaser’s prior written consent, unless such disclosure is required by law or compelled by order of a court of competent jurisdiction, in which case prior to making such disclosure, the Company or the Agent will give written notice to Purchaser describing all reasonable detail, the proposed content of such disclosure and will afford Purchaser in good faith an opportunity to suggest modifications in the form and substance of such proposed disclosure.

P. Facsimile Transmission. A facsimile, telecopy or other reproduction of this Agreement may be executed by one or more parties hereto and such executed copy may be delivered by facsimile of similar instantaneous electron transmission device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties agree to execute an original of this Agreement as well as any facsimile, telecopy or other reproduction hereof.

MAI SYSTEMS CORPORATION,

a Delaware corporation

By:

		Name:

		Title:

PURCHASER SIGNATURE PAGE

I have included my check in the amount of $ payable to MAI Systems Corporation, in payment of my subscription of Shares at the purchase price of $0.15 per Share.

Subject to acceptance by the Company, the undersigned, as Purchaser, has completed this Agreement to evidence his/her/its subscription to purchase the Shares as set forth above.

			Purchaser: HIS Holdings, LLC


Name (please print)			Signature

			Tax I.D. or Social Security Number



Name(s) in which the Shares are to be recorded:			Address:

Type of Ownership (check one):

o Individual

o Tenants in Common

o Joint Tenants with right of survivorship

o Corporate

o Partnership

o Trust

o Other

Sworn to before this day of , 2004.

WITNESS my hand and official seal.

[SEAL]


	Notary Public

	My Commission Expires:


Subscription accepted: , 2004.

Under the Securities Exchange Act of 1934 (Amendment No. 6)*