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EXHIBIT 10.8
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MERCURY MAIL, INC.
SERIES A PREFERRED STOCK
PURCHASE AGREEMENT
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MERCURY MAIL, INC.
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
This Series A Preferred Stock Purchase Agreement (the "Agreement") is
entered into as of February 15, 1996, by and among MERCURY MAIL, INC., a
Colorado corporation (the "Company") and each of those persons and entities,
severally and not jointly, whose names are set forth on the Schedule of
Purchasers attached hereto as Exhibit A (collectively the "Purchasers" and
individually a "Purchaser").
In consideration of the mutual promises hereinafter set forth, the
parties hereto agree as follows:
1. AGREEMENT TO SELL AND PURCHASE.
1.1 AUTHORIZATION OF SHARES. On or prior to the First Closing (as
defined in Section 2 below), the Company shall have authorized the sale and
issuance to Purchasers of Eight Hundred Eighty Thousand (880,000) shares of
Series A Preferred Stock of the Company (the "Shares") having the rights,
preferences, privileges and restrictions set forth in the Articles of Amendment
to Articles of Incorporation of the Company, in the form attached hereto as
Exhibit B (the "Articles of Amendment").
1.2 SALE AND PURCHASE. Subject to the terms and conditions hereof, at
the Closings (as hereinafter defined) the Company hereby agrees to issue and
sell to each Purchaser and each Purchaser agrees to purchase from the Company,
the number of Shares set forth opposite such Purchaser's name on Exhibit A, at a
purchase price of One Dollar and Twenty-Five Cents ($1.25) per Share.
2. CLOSING, DELIVERY AND PAYMENT. The closing of the sale and purchase of the
shares under this Agreement shall take place in two parts (the "Closings"). The
initial closing (the "First Closing") shall take place at 10:00 a.m. on February
15, 1996, at the offices of Xxxxxx Godward Xxxxxx Xxxxxxxxx & Xxxxx, 0000 Xxxxxx
Xxxx., Xxxxx 000, Xxxxxxx, Xxxxxxxx 00000, or at such other time or place as the
Company and Purchasers may mutually agree (such date is hereinafter referred to
as the "First Closing Date"); the second closing (the "Second Closing") shall
take place at 10:00 a.m. on March 15, 1996 at the offices of Xxxxxx Godward
Xxxxxx Xxxxxxxxx & Xxxxx, or at such other time or place as the Company and
Purchasers may mutually agree (such date is hereinafter referred to as the
"Second Closing Date").
At the First Closing, subject to the terms and conditions hereof, the Company
will deliver to the Purchasers certificates representing the number of Shares to
be purchased at the First Closing by each Purchaser, against payment of the
purchase price therefor by check or wire transfer made payable to the order of
the Company. The Shares to be purchased at the First Closing by each Purchaser
are as follows: 400,000 Shares by Telecom
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Partners, L.P. ("Telecom") and 200,000 Shares by Centennial Fund IV, L.P.
("Centennial"). At the Second Closing, subject to the terms and conditions
hereof, the Company will deliver to the Purchasers certificates representing the
number of Shares to be purchased at the Second Closing by each Purchaser,
against payment of the purchase price therefor by check or wire transfer made
payable to the order of the Company. The Shares to be purchased at the Second
Closing are as follows: 200,000 Shares by Centennial (subject to satisfactory
completion of due diligence) and 80,000 Shares by certain individual investors
whose names are set forth on the Schedule of Purchasers (the "Individual
Investors").
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby represents and warrants to each Purchaser as follows:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Colorado. The Company has all requisite corporate power and
authority to own and operate its properties and assets, to execute and deliver
this Agreement, to issue and sell the Shares and the Common Stock issuable upon
conversion thereof (the "Conversion Shares") and to carry out the provisions of
this Agreement and the Articles of Amendment and to carry on its business as
presently conducted and as presently proposed to be conducted.
3.2 CAPITALIZATION. The authorized capital stock of the Company,
immediately prior to the Closing, will consist of ten million (10,000,000)
shares of Common Stock, one million (1,000,000) shares of which are issued and
outstanding, and five million (5,000,000) shares of Preferred Stock, none of
which are issued and outstanding. All issued and outstanding shares of the
Company's Common Stock have been duly authorized, validly issued, fully paid and
nonassessable. The Conversion Shares have been duly and validly reserved for
issuance. There are no outstanding options, warrants or other rights to purchase
from the Company any of its securities, except for 377,700 outstanding options
which have been granted to employees of the Company and 272,300 options reserved
for issuance to employees of the Company pursuant to the Company's 1996 Stock
Option Plan. The shares of Common Stock subject to the 377,700 options granted
to date will vest according to the following schedule: 25% on February 5, 1997
and the remainder on a monthly, pro-rata basis over the following 36 months.
When issued in compliance with the provisions of this Agreement and the Articles
of Amendment, the Shares and the Conversion Shares will be validly issued, fully
paid and nonassessable.
3.3 AUTHORIZATION; BINDING OBLIGATIONS. All corporate action on the
part of the Company, its officers, directors and stockholders necessary for the
authorization of this Agreement, the performance of all obligations of the
Company hereunder
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and thereunder at the Closings and the authorization, sale, issuance and
delivery of the Shares has been taken or will be taken prior to the Closings.
3.4 PROPRIETARY RIGHTS. The Company has not received any communications
alleging that it has violated or, by conducting its business as proposed would
violate, any proprietary rights of any other person, nor is the Company aware of
any basis for the foregoing.
3.5 ACTIONS PENDING. There is no action, suit or proceeding pending or,
to the best knowledge of the Company, threatened against or affecting the
Company or any of its respective properties or rights before any court or by or
before any governmental body or arbitration board or tribunal.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each Purchaser hereby
represents and warrants to the Company as follows:
4.1 REQUISITE POWER AND AUTHORITY. Purchaser has all necessary power
and authority under all applicable provisions of law to execute and deliver this
Agreement and to carry out its provisions. All actions on Purchaser's part
required for the lawful execution and delivery of this Agreement have been or
will be effectively taken prior to the Closing.
4.2 INVESTMENT REPRESENTATIONS. Purchaser understands that neither the
Shares nor the Conversion Shares have been registered under the Securities Act.
Purchaser also understands that the Shares are being offered and sold pursuant
to an exemption from registration contained in the Securities Act based in part
upon Purchaser's representations contained in the Agreement. Purchaser hereby
represents and warrants as follows:
4.2.1 PURCHASER BEARS ECONOMIC RISK. Purchaser has substantial
experience in evaluating and investing in private placement transactions of
securities in companies similar to the Company so that it is capable of
evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests. Purchaser must bear the economic risk of
this investment indefinitely unless the Shares (or the Conversion Shares) are
registered pursuant to the Securities Act, or an exemption from registration is
available. Purchaser understands that the Company has no present intention of
registering the Shares, the Conversion Shares or any shares of its Common Stock.
Purchaser also understands that there is no assurance that any exemption from
registration under the Securities Act will be available and that, even if
available, such exemption may not allow Purchaser to transfer all or any portion
of the Shares or the Conversion Shares under the circumstances, in the amounts
or at the times Purchaser might propose.
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4.2.2 ACQUISITION FOR OWN ACCOUNT. Purchaser is acquiring the
Shares and the Conversion Shares for Purchaser's own account for investment
only, and not with a view towards their distribution.
4.2.3 PURCHASER CAN PROTECT ITS INTEREST. Purchaser represents
that by reason of its, or of its management's business or financial experience,
Purchaser has the capacity to protect its own interests in connection with the
transactions contemplated in this Agreement. Further, Purchaser is aware of no
publication of any advertisement in connection with the transactions
contemplated in the Agreement. Purchaser is able to bear the loss of its entire
investment in the Company. Purchaser is not a corporation, partnership or other
entity specifically formed for the purpose of consummating this transaction.
4.2.4 Purchaser has been given access to all Company documents,
records, and other information, has received physical delivery of all documents
which it has requested, and has had adequate opportunity to ask questions of,
and receive answers from, the Company's officers, agents, accountants, and
representatives concerning the Company's business, operations, financial
condition, assets, liabilities, and all other matters relevant to its investment
in the Shares.
4.2.5 Purchaser acknowledges that it is an accredited investor as
that term is defined in Rule 501(a) of Regulation D, promulgated pursuant to the
Securities Act.
4.3 RULE 144. Purchaser acknowledges and agrees that the Shares and the
Conversion Stock must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such registration is
available. Purchaser has been advised or is aware of the provisions of Rule 144
promulgated under the Securities Act, which permits limited resale of shares
purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things: the availability of certain current
public information about the Company, the resale occurring not less than two
years after a party has purchased and paid for the security to be sold, the sale
being through an unsolicited "broker's transaction" or in transactions directly
with a market maker (as said term is defined under the Securities Exchange Act
of 1934, as amended) and the number of shares being sold during any three month
period not exceeding specified limitations.
4.4 All consents, approvals, orders, or authorizations of, or
registration, qualification, designation, declaration or filing with any
governmental or banking authority required on the part of Purchasers in
connection with the consummation of the transactions contemplated in this
Agreement have been or shall have been obtained prior to and shall be effective
as of the First Closing and the Second Closing.
5. CONDITIONS TO THE PURCHASERS' OBLIGATIONS AT CLOSING.
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5.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Company contained in Section 3 shall be true on and as of the Closings
with the same effect as though such representations and warranties had been made
on and as of the dates of the Closings.
5.2 INVESTORS' RIGHTS AGREEMENT. The Company and each purchaser shall
have executed and delivered the Investors' Rights Agreement in substantially the
form attached as Exhibit C.
5.3 ARTICLES OF AMENDMENT. The Company shall have filed the Articles of
Amendment with the Secretary of State of Colorado on or prior to the First
Closing Date, which shall continue to be in full force and effect as of the
Second Closing Date.
6. MISCELLANEOUS.
6.1 GOVERNING LAW. This Agreement shall be governed in all respects by
the laws of the State of Colorado as such laws are applied to agreements between
Colorado residents entered into and performed entirely in Colorado.
6.2 SURVIVAL. The representations, warranties, covenants and agreements
made herein shall survive any investigation made by any Purchaser and the
closing of the transactions contemplated hereby. All statements as to factual
matters contained in any certificate or other instrument delivered by or on
behalf of the Company pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the
Company hereunder solely as of the date of such certificate or instrument.
6.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of the Shares from time to time.
6.4 ENTIRE AGREEMENT. This Agreement, the Exhibits hereto and the other
documents delivered expressly hereby constitute the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and no party shall be liable or bound to any other in any manner by any
representations, warranties, covenants and agreements except as specifically set
forth herein and therein.
6.5 SEPARABILITY. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
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6.6 AMENDMENT AND WAIVER.
6.6.1 This Agreement may be amended or modified only upon the
mutual written consent of the Company and holders of at least a majority of the
Shares (treated as if converted and including any Conversion Shares into which
the Shares have been converted that have not been sold to the public).
6.6.2 The obligations of the Company and the rights of the holders
of the Shares and the Conversion Shares under the Agreement may be waived only
with the written mutual consent of the holders of at least a majority of the
Shares (treated as if converted and including any Conversion Shares into which
the Shares have been converted that have not been sold to the public).
6.7 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified; (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day; (iii) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or (iv) one (1) day after deposit
with a nationally recognized overnight courier, specifying next day delivery,
with written verification of receipt. All communications shall be sent to the
Company at the address as set forth on the signature page hereof and to
Purchasers at the addresses set forth on Exhibit A attached hereto or at such
other address as the Company or Purchasers may designate by ten (10) days
advance written notice to the other parties hereto.
6.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
6.9 BROKER'S FEES. Each party hereto represents and warrants that no
agent, broker, investment banker, person or firm acting on behalf of or under
the authority of such party hereto is or will be entitled to any broker's or
finder's fee or any other commission directly or indirectly in connection with
the transactions contemplated herein. Each party hereto further agrees to
indemnify each other party for any claims, losses or expenses incurred by such
other party as a result of the representation in this Section 6.9 being untrue.
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IN WITNESS WHEREOF, the parties hereto have executed the Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
MERCURY MAIL, INC.
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
By:
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Xxxx Xxxx, President
and Chief Executive Officer
PURCHASERS:
CENTENNIAL FUND IV, L.P.
Name:
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By:
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Title:
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TELECOM PARTNERS, L.P.
Name:
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By:
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Title:
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IN WITNESS WHEREOF, the parties hereto have executed the Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
MERCURY MAIL, INC.
0000 00xx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
By:
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Xxxx Xxxx, President
and Chief Executive Officer
PURCHASERS:
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SERIES A STOCK PURCHASE AGREEMENT
EXHIBIT A
SCHEDULE OF PURCHASERS
FIRST CLOSING: FEBRUARY 14,1996
Name and Address
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Telecom Partners, L.P.
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Centennial Fund IV, L.P.
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
SECOND CLOSING: MARCH 15, 1996
Name and Address
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Centennial Fund IV, L.P.
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Individual Investors:
Boulder Ventures Ltd.
Xxx Xxxxx
Xxxxxxx Xxxx
Xxxxxxx Stake
Xxxxxxx Xxxxxxxxx
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SERIES A STOCK PURCHASE AGREEMENT
EXHIBIT B
FORM OF ARTICLES OF AMENDMENT TO
ARTICLES OF INCORPORATION
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SERIES A STOCK PURCHASE AGREEMENT
EXHIBIT C
FORM OF INVESTORS' RIGHTS AGREEMENT
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