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EXHIBIT 10.11
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is entered into as of the 21st day of June, 1996, by and
among the XXXXXXXX X. XXXXXX (the "Seller"), BESSEMER VENTURE PARTNERS III,
L.P. ("Bessemer") and VERTEX INVESTMENT (II) PTE. LTD. (together with Bessemer,
the "Purchasers").
In consideration of the mutual promises, covenants and conditions
hereinafter set forth, the parties hereto agree as follows:
1. PURCHASE AND SALE OF THE SHARES.
Subject to the terms and conditions hereof, at the Closing provided
for in Section 2.1 below, the Seller shall sell to each Purchaser and each
Purchaser shall purchase from the Seller the number of shares of Common Stock
of the Company, par value $0.001 per share (the "Shares") set forth opposite
such Purchaser's name on the Schedule of Purchasers attached hereto as Exhibit
A, at a purchase price of $0.75 per share.
2. CLOSING DATE; DELIVERY.
2.1 Closing. The Closing of the purchase and sale of the Shares
under this Agreement (the "Closing") will be held at the offices of Xxxxxx
Godward Xxxxxx Xxxxxxxxx & Xxxxx in Boulder, Colorado on June 21, 1996 or on
such other date as the Seller and the Purchasers may agree, orally or in
writing (the "Closing Date").
2.2 Delivery. Subject to the terms of this Agreement, at the
Closing: (a) the Seller shall deliver to the Purchasers certificates
representing the Shares ("Certificates"), accompanied by duly executed stock
powers in a form appropriate for transfer of the Shares to the Purchasers, and
(b) the Purchasers shall deliver to the Seller the purchase price therefor by
check or wire transfer made payable to the order of the Seller.
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER.
Except as otherwise described below, the Seller hereby represents
and warrants to, and agrees with, the Purchasers as set forth in this Section
3.
3.1 Title. The Seller owns and holds good and valid title to the
Shares being sold to the Purchasers, free and clear of any liens, security
interests, restrictions, options or encumbrances other than (i) restrictions on
transfer under applicable securities
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laws and (ii) restrictions contained in each of the Shareholders Agreements,
dated November 1, 1991 and March 25, 1992, by and among Seller, the Company and
certain other holders of the capital stock of the Company. The Seller has not
pledged the shares, granted any option or similar right with respect to any
such Shares or granted any right to acquire any of the Shares other than as
contemplated hereby.
3.2 Validity.
(a) The Seller has the full and unrestricted right,
power and capacity to enter into, execute and deliver this Agreement, and as of
the Closing will have the full unrestricted right, power and capacity to
transfer and deliver good and valid title to the Shares being sold by the
Seller free and clear of any liens, security interests, restrictions, options,
or encumbrances (other than restrictions on transfer under applicable
securities laws) and to transfer and deliver the Shares, as represented by the
Certificates.
(b) This Agreement is a valid and binding obligation
of the Seller enforceable in accordance with its terms, except as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other laws of
general application relating to or affecting enforcement of creditors' rights
and rules or laws concerning equitable remedies.
3.3 Share Disposition Decision.
(a) Information. The Seller has had a continuing
opportunity to discuss the Company's business, condition, assets, properties,
prospects, plans, management, financial affairs and the like, together with the
terms and conditions of this sale of the Shares, with the Company's management
and Board of Directors, and has had a continuing opportunity to inspect and
review, and to make inquiries of the Company's management concerning, the
Company's facilities, plant and equipment. In addition, the Seller has
received all information regarding the Company that the Seller believes is
material or otherwise necessary to the Seller's decision to sell the Shares to
the Purchasers, including but not limited to, copies of the Company's unaudited
financial statements dated March 31, 1996 and budget and forecasts dated April
30, 1996.
(b) Acknowledgment. The Seller hereby acknowledges
that he has been informed by the Company's management that the Company is
considering the pursuit of an initial public offering of its Common Stock
("IPO") as early as six (6) months from the date hereof, which, if it occurs,
would have a direct and positive affect on the Shares. There is no guarantee,
however, that an IPO will in fact occur within this, or any other, timeframe.
The Seller further acknowledges its unequivocal understanding, after
discussions with the Company's management, that if such IPO occurs, the
post-IPO market value of the Shares, in terms of, among other
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factors, market price and liquidity, may be materially and substantially higher
than the purchase price received by the Seller for the Shares pursuant to this
Agreement, and in fact the post-IPO price is likely to be many times greater
than such purchase price to be received by the Seller. The Seller also
acknowledges that the amount (i.e., the purchase price) to be received by him
for the Shares pursuant to this Agreement represents, in light of all the
factors and potentiality surrounding the likely value of the Company's shares
in the very near future, a fair, reasonable, full, sufficient and adequate
consideration for the sale of the Shares at this time under this Agreement.
(c) Advice. In connection with this Agreement and
the associated sale of the Shares, the Seller has had an opportunity to consult
with and to avail himself of, or has otherwise consulted with and obtained
advice from, financial advisors, attorneys and others with substantial
experience in transactions of the nature contemplated by this Agreement, and in
the valuation, price and liquidity features of stock of privately held
companies that are similar to the Company. By virtue of his own knowledge, and
through investigations of the Company and inquiries of such advisors, attorneys
and others, as well as the Company's management and Board of Directors,
together with advice obtained by the Seller specifically for the purpose of
assessing the transaction contemplated by this Agreement, the Seller has
independently arrived at his decision to sell the Shares pursuant to the terms
and conditions of this Agreement.
(d) Determination. Notwithstanding that it is
extremely likely, although not a certainty, that the Seller would realize
substantially greater value for the Shares by holding the Shares in
anticipation of appreciation of their price in the future, together with the
potential for liquidity through the IPO or other transaction in which the
Company's shares may be sold, the Seller hereby desires, without reservation,
to sell the Shares under the terms and conditions of this Agreement. The
Seller understands that by making such sale under this Agreement he is forever
giving up its right to seek, obtain or claim any different disposition of his
Shares on any terms, no matter how much greater value the Shares would have
achieved and no matter how much greater price he may otherwise have obtained
for the Shares. The Seller further understands and agrees that any claim,
assertion, allegation or the like by him to the contrary or that is otherwise
inconsistent is void.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.
Except as otherwise described below, each Purchaser hereby
represents and warrants to and agrees with the Seller as set forth in this
Section 4.
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4.1 Requisite Power and Authority. The 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 the
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. The Purchaser understands that
the Shares have not been registered under the Securities Act. The 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
the Purchaser's representations contained in the Agreement. The Purchaser
hereby represents and warrants as follows:
(a) Purchaser Bears Economic Risk. The 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. The Purchaser must bear the
economic risk of this investment indefinitely unless the Shares are registered
pursuant to the Securities Act, or an exemption from registration is available.
The Purchaser understands that the Company has no present intention of
registering the Shares. The 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 the
Purchaser to transfer all or any portion of the Shares under the circumstances,
in the amounts or at the times the Purchaser might propose.
(b) Acquisition for Own Account; Limited Resale. The
Purchaser is acquiring the Shares for the Purchaser's own account for
investment only, and not with a view towards their distribution, except as
expressly described in this paragraph. On or before the thirtieth (30th) day
following the Closing Date, each of the Purchasers intends to sell certain of
the Shares purchased pursuant to this Agreement to certain existing
stockholders of the Company (the "Subsequent Purchasers"). As a condition to
any resale of Shares by the Purchasers to the Subsequent Purchasers, the
Purchasers will require each Subsequent Purchaser to execute and deliver a
letter substantially in the form attached hereto as Exhibit B pursuant to which
each Purchaser shall provide representations and warranties identical to those
contained in this Section 4, except that each Subsequent Purchaser will
represent and warrant that will be acquiring such Shares for its own account
for investment only, and not with a view towards their distribution.
(c) Purchaser Can Protect Its Interest. The
Purchaser represents that by reason of its, or of its management's business or
financial experience, the Purchaser has the capacity to protect its own
interests in connection with the
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transactions contemplated in this Agreement. Further, the Purchaser is aware
of no publication of any advertisement in connection with the transactions
contemplated in the Agreement.
(d) Company Information. The Purchaser has had an
opportunity to discuss the Company's business, management and financial affairs
with directors, officers and management of the Company. The Purchaser has also
had the opportunity to ask questions of and receive answers from, the Company
and its management regarding the terms and conditions of this investment.
(e) Rule 144. The Purchaser acknowledges and agrees
that the Shares must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such registration is
available. The 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.
5. MISCELLANEOUS.
5.1 Waiver of Right of First Offer. The Purchasers will cause
each person or entity, if any, who holds any preemptive right with respect to
the Shares and who is not a party to this Agreement to execute and deliver to
the Seller and the Purchasers a written waiver of such right on or prior to the
Closing.
5.2 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 to be performed entirely
within Colorado.
5.3 Successors and Assigns. The rights and obligations of the
parties hereto may not be assigned or transferred, other than by operation of
law or except as otherwise expressly provided herein, without the express
written consent of the Seller and the Purchasers. Any unauthorized attempt to
assign or transfer is void. Subject to the foregoing, the provisions hereof
shall inure executors and administrators of the parties hereto.
5.4 Entire Agreement. This Agreement constitutes the full and
entire understanding and agreement between the parties with regard to the
subjects hereof.
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5.5 Separability. In case any provision of this Agreement shall
be declared invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
5.6 Title and Subtitles. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
5.7 Counterparts. This Agreement may be executed in any manner
of counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
5.8 Attorney's Fees. In the event legal action is instituted in
connection with this Agreement, the party prevailing in such action shall be
entitled to recover such party's reasonable attorneys' fees and related costs.
5.9 Represented by Counsel. Each party represents to all other
parties to this Agreement that it has been represented by legal counsel of its
choice in all aspects of considering, understanding, negotiating and making a
determination to enter into this Agreement.
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In Witness Whereof, the parties have executed this Agreement as of the
day and year first above written.
Seller:
Xxxxxxxx X. Xxxxxx
/s/ XXXXXXXX X. XXXXXX
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Purchasers:
Bessemer Venture Partners III, L.P.
/s/ XXXXXX X. XXXXXXXX
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By: Xxxxxx X. Xxxxxxxx
Vertex Investment (II) Pte. Ltd.
/s/ XXXXX XXXXXX
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By: Xxxxx Xxxxxx
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EXHIBIT A
SCHEDULE OF PURCHASERS
Aggregate
Name and Address Shares Purchase Price
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Bessemer Venture Partners III, L.P.
0000 Xxx Xxxxxxx Xxxx, Xxx. 000
Xxxxxxxx, Xxx Xxxx 00000
Vertex Investment (II) Pte. Ltd.
0 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxx Xxxx, Xxxxxxxxxx 00000
Total 420,366 $315,274.50
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