STOCK PURCHASE AGREEMENT
BY AND AMONG
CELLNET DATA SYSTEMS, INC.
AND
XXXXXXX ENTERPRISES, INC.
DATED AS OF SEPTEMBER 16, 1996
TABLE OF CONTENTS
PAGE
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SECTION 1. - PURCHASE AND SALE OF SHARES......................................1
1.1 Authorization of Shares..............................................1
1.2 Sale of the Shares1
1.3 Closing..............................................................1
SECTION 2. - OTHER AGREEMENTS.................................................2
2.1 Restrictions on Transfer of Common Stock.............................2
SECTION 3. - REPRESENTATIONS AND WARRANTIES OF THE COMPANY.....................3
3.1 Organization, Good Standing and Qualification........................3
3.2 Authorization........................................................3
3.3 No Conflict..........................................................3
3.4 Governmental Consents................................................3
3.5 Foreign Corrupt Practices Act........................................4
3.6 Final Prospectus.....................................................4
SECTION 4. - REPRESENTATIONS AND WARRANTIES OF THE PURCHASER...................4
4.1 Purchase of Securities...............................................4
4.2 Legends..............................................................4
4.3 uthorization.........................................................5
4.4 Investment Experience................................................5
4.5 Accredited Investor..................................................5
4.6 Restricted Securities; Rule 144......................................5
4.7 Access to Data.......................................................5
SECTION 5. - CONDITIONS TO THE PURCHASER'S OBLIGATIONS.........................6
5.1 Opinion of Counsel...................................................6
5.2 Representations and Warranties.......................................6
5.3 Compliance with this Agreement.......................................6
5.4 Legal Investment.....................................................6
5.5 Securities Law Compliance............................................6
5.6 Consents.............................................................6
SECTION 6. - CONDITIONS TO THE COMPANY'S OBLIGATIONS...........................7
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TABLE OF CONTENTS
(CONTINUED)
PAGE
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6.1 Opinion of Counsel...................................................7
6.2 Representations and Warranties.......................................7
6.3 Compliance with this Agreement.......................................7
6.4 Legal Investment.....................................................7
6.5 Securities Law Compliance............................................7
6.6 Consents.............................................................7
SECTION 7. - REGISTRATION RIGHTS...............................................7
7.1 Definitions..........................................................7
7.2 Registration Procedures and Expenses.................................8
7.3 Assignment of Registration Rights....................................9
7.4 Indemnification......................................................9
7.5 Information Available...............................................10
7.6 Rule 144 Reporting..................................................11
7.7 Temporary Cessation of Offers and Sales by Purchaser................11
7.8 Transfer of Shares..................................................11
7.9 Termination of Obligations..........................................11
SECTION 8. - MISCELLANEOUS....................................................12
8.1 Notices.............................................................12
8.2 Successors and Assigns..............................................13
8.3 Entire Agreement; Amendment.........................................13
8.4 Counterparts........................................................13
8.5 Governing Law.......................................................13
8.6 Survival of Representations and Warranties..........................13
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STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "AGREEMENT") is made as of September
16, 1996, by and between CellNet Data Systems, Inc., a Delaware corporation
(the "COMPANY") and Xxxxxxx Enterprises, Inc. (the "PURCHASER"), a Delaware
corporation.
WHEREAS, the Company has determined that it is in the best interests of the
Company and its stockholders for the Purchaser to make the investment in the
Company provided for, and on the terms and conditions set forth, in this
Agreement; and
WHEREAS, the Purchaser desires to make such investment on such terms and
conditions.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and conditions herein contained, the Company and the Purchaser hereby agree as
follows:
SECTION 1. PURCHASE AND SALE OF SHARES
1.1 AUTHORIZATION OF SHARES. The Company has authorized the issuance of
shares of its Common Stock, par value $.001 per share (the "SHARES") sufficient
to meet the purposes of Section 1.2.
1.2 SALE OF THE SHARES. Subject to the terms and conditions hereof, the
Company will issue and sell to the Purchaser, and the Purchaser will purchase
from the Company, at the Closing, a number of Shares equal to three million
dollars ($3,000,000) divided by the price at which the Company's Common Stock
will be sold to the public, less the underwriting discount and commission
applicable to the offering as set forth on the cover page of the final
prospectus, in the firm commitment underwriting (the "Initial Public Offering")
pursuant to a registration statement filed on August 2, 1996 with the Securities
and Exchange Commission, including any preliminary prospectus, final prospectus
or amendment relating thereto (the "SEC"). The number of Shares shall be
rounded to the nearest whole share as necessary.
1.3 CLOSING.
(a) The purchase and sale of the Shares shall take place at a closing
(the "CLOSING") to be held at the offices of Wilson, Sonsini, Xxxxxxxx & Xxxxxx,
000 Xxxx Xxxx Xxxx, Xxxx Xxxx, XX 00000-0000, concurrent with the closing date
of the Company's Initial Public Offering (the "CLOSING DATE"). This Agreement
shall terminate and be of no further force and effect if the closing of the
Initial Public Offering does not occur on or before December 31, 1996.
(b) On the Closing Date, subject to the conditions stated herein, the
Company will deliver to the Purchaser stock certificates representing the number
of Shares to be purchased by such Purchaser as provided in Section 1.2 against
payment to the Company by certified check or wire transfer of the purchase price
therefor in federal or other immediately available funds.
SECTION 2. OTHER AGREEMENTS
2.1 RESTRICTIONS ON TRANSFER OF COMMON STOCK.
(a) The Purchaser shall not, directly or indirectly, sell or transfer
any Common Stock purchased under this Agreement for a period of two years after
the Closing Date, except as permitted by and in accordance with Section 2.1(b)
or Section 2.1(c).
(b) Notwithstanding Section 2.1(a), one year after the Closing Date,
Purchaser shall be able to, directly or indirectly, sell or transfer one-half of
the Common Stock received on the Closing Date subject to applicable United
States federal and state securities laws, whether pursuant to the registration
rights set forth in Section 7.2 or otherwise.
(c) Notwithstanding Section 2.1(a), the Purchaser shall be able to
sell or transfer any Common Stock purchased under this Agreement at any time,
(i) to the Company or any person or group approved by the Company (such approval
to be granted or withheld in its sole discretion); or (ii) to an "affiliate" of
Purchaser, as defined in Regulation D of the Securities Act ("PURCHASER
AFFILIATE"), so long as such Purchaser Affiliate agrees to hold such Common
Stock subject to all provisions of this Agreement, and agrees to transfer such
Common Stock to the Purchaser or another Purchaser Affiliate if it ceases to be
an "affiliate" of Purchaser, as defined in Regulation D of the Securities Act;
(iii) to a limited partnership ("PURCHASER LIMITED PARTNERSHIP") in which a
Purchaser Affiliate is the general partner and each limited partner is an
"accredited investor," as defined in Regulation D of the Securities Act
("LIMITED PARTNERS"), it being understood that such Common Stock may be further
transferred by a Purchaser Limited Partnership to the Limited Partners, so long
as each transferee agrees to hold such Common Stock subject to all provisions of
this Agreement and is an "accredited investor" at the time of such transfer; or
(iv) in response to (1) an offer to purchase or exchange for cash or other
consideration any Common Stock (a) which is made by or on behalf of the Company,
or (b) which is made by another person or group and is not opposed by the Board
of Directors of the Company within the time such Board is required, pursuant to
regulations under the Securities Exchange Act of 1934, to advise the Company's
stockholders of such Board's position on such offer, or (2) any other offer made
by another person or group to purchase or exchange for cash or other
consideration any Common Stock which, if successful, would result in such person
or group owning or having the right to acquire Common Stock representing more
than 40% of the total Common Stock of the Company then outstanding; or
(v) pursuant to a bona fide pledge of such Common Stock to an institutional
lender to secure a loan, guarantee or other financial support, provided that
such lender agrees to hold such Common Stock subject to all provisions of this
Agreement and any sale or disposition by such lender of such pledged Common
Stock shall be subject to the limitations of this Section 2.1; or (vi) in the
event of a merger or consolidation in which the holders of Common Stock of the
Company prior to the merger or consolidation cease to hold, directly or
indirectly, at least 51% of the Common Stock of the surviving entity, or (vii)
pursuant to a plan of liquidation of the Company.
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SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser that:
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 Delaware and has all requisite power and authority to carry on
its business as now conducted and as proposed to be conducted in the future.
The Company is duly qualified to transact business and is in good standing in
each jurisdiction in which the failure to so qualify would have a material
adverse effect on its business or properties.
3.2 AUTHORIZATION. The Company has all corporate right, power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. All corporate action on the part of the Company, its
officers, directors and stockholders necessary for (i) the authorization,
execution and delivery of this Agreement and the issuance of the Shares and (ii)
the performance of all obligations of the Company hereunder has been taken.
This Agreement has been duly executed and delivered by the Company and
constitutes the valid and legally binding obligation of the Company, enforceable
in accordance with its terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally and rules of law governing specific performance, injunctive
relief and other equitable remedies and to limitations of public policy as they
may apply to the indemnification provisions set forth in Section 7.3 of this
Agreement. Upon their issuance and delivery pursuant to this Agreement, the
Shares will be validly issued, fully paid and nonassessable and will be free of
any liens or encumbrances; provided, however, that the Shares are subject to
restrictions on transfer under state and/or federal securities laws. The
issuance and sale of the Shares will not give rise to any preemptive right or
right of first refusal or right of participation on behalf of any person.
3.3 NO CONFLICT. The execution and delivery of this Agreement do not, and
the consummation of the transactions contemplated hereby will not, conflict
with, or result in any violation of, or default (with or without notice or lapse
of time, or both), or give rise to a right of termination, cancellation or
acceleration of any obligation or to a loss of a material benefit, under any
provision of the Restated Certificate of Incorporation or Bylaws of the Company
or any material mortgage, indenture, lease or other agreement or instrument,
permit, concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Company, its properties or
assets.
3.4 GOVERNMENTAL CONSENTS. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
federal, state, local or provincial governmental authority on the part of the
Company is required in connection with the consummation of the transactions
contemplated by this Agreement, except for any post-sale filings pursuant to
applicable state securities laws, which filings will be effected within the
applicable time periods. The offer and sale of the Shares pursuant to the terms
of this Agreement are exempt from the registration requirements of Section 5 of
the Securities Act of 1933, as amended (the "SECURITIES ACT").
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3.5 FOREIGN CORRUPT PRACTICES ACT. Neither the Company, nor, to the
Company's knowledge, any director, officer, agent, employee or other person
associated with or acting on behalf of the Company or any of its subsidiaries,
has (i) used any corporate funds to make any unlawful contribution, gift,
entertainment or other unlawful expense relating to political activity, (ii)
made any direct or indirect unlawful payment to any foreign or domestic
governmental official or employee from corporate funds, (iii) violated any
provision of the Foreign Corrupt Practices Act of 1977, as amended; or (iv) made
any unlawful bribe, rebate, payoff, influence payment, kickback or other
unlawful payment.
3.6 FINAL PROSPECTUS. The Company's Prospectus for the Initial Public
Offering as filed with the Securities and Exchange Commission pursuant to
Rule 424 shall not contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances in which they were made, not
misleading.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants that:
4.1 PURCHASE OF SECURITIES. The Purchaser is purchasing the Shares for
investment for its own account, not as nominee or agent, and not with a view to
the distribution or resale thereof. The Purchaser will not, in any event, make
any sale or other disposition of such securities in contravention of the
Securities Act and the rules and regulations of the Securities and Exchange
Commission thereunder.
4.2 LEGENDS. The Purchaser understands that the certificates evidencing
the Shares shall bear legends in the following form:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR
SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A
REGISTRATION STATEMENT IN EFFECT WITH RESPECT TO THE
SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED."
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
CERTAIN RESTRICTIONS ON TRANSFER AS SET FORTH IN THE STOCK
PURCHASE AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL
HOLDER OF THESE SHARES, A COPY OF WHICH MAY BE OBTAINED AT
THE PRINCIPAL OFFICE OF THE ISSUER. SUCH TRANSFER
RESTRICTIONS ARE BINDING ON TRANSFEREES OF THESE SHARES."
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4.3 AUTHORIZATION. The Purchaser has all corporate right, power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. All corporate action on the part of the Purchaser, its
officers, directors and stockholders necessary for (i) the authorization,
execution and delivery of this Agreement and (ii) the performance of all
obligations of the Purchaser hereunder has been taken. This Agreement has been
duly executed and delivered by the Purchaser and constitutes the valid and
legally binding obligation of the Purchaser, enforceable in accordance with its
terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium
and similar laws affecting creditors' rights and remedies generally and rules of
law governing specific performance, injunctive relief and other equitable
remedies and to limitations of public policy as they may apply to the
indemnification provisions set forth in Section 7.3 of this Agreement.
4.4 INVESTMENT EXPERIENCE. The Purchaser acknowledges that it can bear
the economic risk of its investment, including a complete loss of its
investment, and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the Shares. The Purchaser also represents that it has not been organized
solely for the purpose of acquiring the Shares. The Purchaser understands that
the Shares have not been registered under the Securities Act or under the
securities laws of any jurisdiction by reason of reliance upon certain
exemptions, and that the reliance of the Company on such exemptions is
predicated upon the accuracy of the Purchaser' representations and warranties in
this Section 4.
4.5 ACCREDITED INVESTOR. The Purchaser is an "accredited investor" as
defined in Rule 501 of Regulation D under the Securities Act.
4.6 RESTRICTED SECURITIES; RULE 144. The Purchaser understands that the
Shares and the Common Shares issuable upon conversion thereof are characterized
as "restricted securities" under the federal securities laws inasmuch as they
are being acquired from the Company in a transaction not involving a public
offering and that under such laws and applicable regulations the Shares may be
resold without registration under the Securities Act only in certain limited
circumstances. The Purchaser acknowledges that the Shares must be held
indefinitely unless subsequently registered under the Securities Act or an
exemption from such registration is available. The Purchaser is aware of the
provisions of Rule 144 promulgated under the Securities Act which permit limited
resale of shares purchased in a private placement subject to the satisfaction of
certain conditions, including, among other things, the existence of a public
market for the shares, the availability of certain current public information
about the Company, the resale occurring not less than two (2) years after a
party has purchased and paid for the security to be sold, the sale being
effected through a "broker's transaction" or in transactions directly with a
"market maker" (as provided by Rule 144(f)) and the number of shares being sold
during any three (3) month period not exceeding specified limitations.
4.7 ACCESS TO DATA. The Purchaser has had an opportunity to discuss the
Company's business, management and financial affairs with the Company's
management and obtain all information regarding the Company which Purchaser has
required in determining to purchase the Shares.
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SECTION 5. CONDITIONS TO THE PURCHASER'S OBLIGATIONS
The following conditions to the Purchaser' obligations must be satisfied on
the Closing Date:
5.1 OPINION OF COUNSEL. The Purchaser shall have received from Xxxxxx
Xxxxxxx Xxxxxxxx & Xxxxxx, counsel for the Company, an opinion that (i) the
Shares purchased by such Purchaser have been duly authorized and upon payment of
the consideration as provided in this Agreement, will be validly issued, fully
paid and nonassessable, (ii) the Agreement has been duly authorized, executed
and delivered by the Company, and (iii) the issuance of the Shares pursuant to
the terms of the Agreement will not be required to be registered under the
Securities Act.
5.2 REPRESENTATIONS AND WARRANTIES. The representations and warranties
contained in Section 3 shall be true in all material respects on the Closing
Date with the same effect as though made on and as of that date.
5.3 COMPLIANCE WITH THIS AGREEMENT. The Company shall have performed and
complied with all agreements and conditions contained in this Agreement which
are required to be performed or complied with by the Company on or before the
Closing Date.
5.4 LEGAL INVESTMENT. On the Closing Date, the purchase of the Shares by
the Purchaser shall be legally permitted by all laws and regulations to which
the Company and the Purchaser are subject.
5.5 SECURITIES LAW COMPLIANCE. All actions and steps necessary to assure
compliance with applicable federal and state securities laws, including all
authorizations, approvals or permits, if any, of any governmental authority or
regulatory body in any states where the Shares are being sold that are required
in connection with the lawful issuance and sale of the Shares pursuant to this
Agreement shall have been duly obtained and shall be effective on the Closing
Date except for any such filings as may under applicable law be made subsequent
to the Closing Date, which filings the Company agrees it will make in a timely
manner.
5.6 CONSENTS. All material consents, approvals and authorizations, and
all material filings with and notifications of governmental authorities and
regulatory agencies or other entities which regulate the business of the
Company, necessary on the part of the Company to the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby,
shall have been obtained or effected.
5.7 COMPLETION OF INITIAL PUBLIC OFFERING. The Initial Public Offering
shall have been completed by the Company.
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SECTION 6. CONDITIONS TO THE COMPANY'S OBLIGATIONS
The following conditions to the Company's obligations must be satisfied on
the Closing Date:
6.1 OPINION OF COUNSEL. The Company shall have received from senior
internal counsel to the Purchaser an opinion that the Agreement has been duly
authorized, executed and delivered by the Purchaser.
6.2 REPRESENTATIONS AND WARRANTIES. The representations and warranties
contained in Section 4 shall be true in all material respects on the Closing
Date with the same effect as though made on and as of that date.
6.3 COMPLIANCE WITH THIS AGREEMENT. The Purchaser shall have performed
and complied with all agreements and conditions contained in the Agreement which
are required to be performed or complied with by the Purchaser on or before the
Closing Date.
6.4 LEGAL INVESTMENT. On the Closing Date, the purchase of the Shares by
the Purchaser shall be legally permitted by all laws and regulations to which
the Company and the Purchaser are subject.
6.5 SECURITIES LAW COMPLIANCE. All actions and steps necessary to assure
compliance with applicable federal and state securities laws, including all
authorizations, approvals or permits, if any, of any governmental authority or
regulatory body in any states where the Shares are being sold that are required
in connection with the lawful issuance and sale of the Shares pursuant to this
Agreement shall have been duly obtained and shall be effective on the Closing
Date except for any such filings as may under applicable law be made subsequent
to the Closing Date, which filings the Company agrees it will make in a timely
manner.
6.6 CONSENTS. All material consents, approvals and authorizations, and
all material filings with and notifications of governmental authorities and
regulatory agencies or other entities which regulate the business of the
Company, necessary on the part of the Company to the execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby,
shall have been obtained or effected.
SECTION 7. REGISTRATION RIGHTS
7.1 DEFINITIONS. For the purpose of this Section 7:
(a) the term "Registration Statement" shall mean any registration
statement required to be filed by Section 7.2 below, and shall include any
preliminary prospectus, final prospectus, exhibit or amendment included in or
relating to such registration statement; and
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(b) the term "untrue statement" shall include any untrue statement or
alleged untrue statement, or any omission or alleged omission to state in the
Registration Statement a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
7.2 REGISTRATION PROCEDURES AND EXPENSES. The Company shall:
(a) promptly upon written notice from Purchaser delivered to the
Company at any time after ten months from the Closing Date, file with the SEC a
Registration Statement under the Securities Act on a form which is appropriate
to register the re-sale of one-half of the Shares purchased by Purchaser
hereunder;
(b) use its best efforts, subject to receipt of necessary information
from the Purchaser, to cause such Registration Statement to become effective as
promptly as practicable but not earlier than on the date one year from the
Closing Date;
(c) prepare and file with the SEC such amendments and supplements to
such Registration Statement and the prospectus used in connection therewith as
may be necessary to keep such Registration Statement effective until termination
of such obligation as provided in Section 7.8 below;
(d) furnish to the Purchaser with respect to the Shares registered on
the Registration Statement (and to each underwriter, if any, of such Shares)
such number of copies of prospectuses in conformity with the requirements of the
Securities Act as the Purchaser may reasonably request, in order to facilitate
the public sale or other disposition of the Shares by the Purchaser; provided,
however, that the obligation of the Company to deliver copies of prospectuses to
the Purchaser shall be subject to the receipt by the Company of reasonable
assurances from the Purchaser that the Purchaser will comply with the applicable
provisions of the Securities Act and of such other securities laws as may be
applicable in connection with any use of such prospectuses;
(e) file such documents as may be required of the Company for normal
securities law clearance for the resale of the Shares in such states of the
United States as may be reasonably requested by the Purchaser; provided,
however, that the Company shall not be required in connection with this
paragraph (e) to qualify as a foreign corporation or execute a general consent
to service of process in any jurisdiction; and
(f) bear all expenses in connection with the procedures in
paragraphs (a) through (e) of this Section 7.2 and the registration of the
Shares on such Registration Statement and the satisfaction of the blue sky laws
of such states, excluding all underwriting fees, discounts or commissions
applicable to Purchaser's sale of Shares registered on the Registration
Statement and the fees and expenses of any separate legal counsel or accounting
firm engaged by Purchaser.
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7.3 ASSIGNMENT OF REGISTRATION RIGHTS. The right to cause the Company to
register Shares pursuant to Section 7.2 may be assigned by Purchaser to a
Purchaser Affiliate (as described in Section 2.1(c)(ii) or to a Purchaser
Limited Partnership (as described in Section 2.1(c)(iii)), and may be further
assigned by a Purchaser Limited Partnership to any of its Limited Partners (as
described in Section 2.1(c)(iii) hereof). Upon any such assignment, the
transferor shall furnish the Company with written notice of the name and address
of such transferee(s) or assignee(s) and the Shares with respect to which such
registration rights are being assigned. Notwithstanding the foregoing, no
assignment of registration rights shall be permitted if the transferee would be
entitled to sell all of the Shares transferred in any three-month period
pursuant to Rule 144 under the Securities Act or its successors. Any exercise
of registration rights by the Limited Partners shall be made collectively by all
such Limited Partners then holding Shares registerable under Section 7.2, such
that the Company may effect any such registration on the same Registration
Statement.
7.4 INDEMNIFICATION.
(a) The Company agrees to indemnify and hold harmless Purchaser (and
each of its officers, directors, partners or persons, if any, who controls
Purchaser within the meaning of Section 15 of the Securities Act) from and
against any losses, claims, damages or liabilities to which Purchaser (and each
of its officers, directors, partners or persons, if any, who controls Purchaser
within the meaning of Section 15 of the Securities Act) may become subject
(under the Securities Act or otherwise) insofar as such losses, claims, damages
or liabilities (or actions or proceedings in respect thereof) arise out of, or
are based upon, any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement or any omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case on the effective date
thereof, or arise out of any failure by the Company to fulfill any undertaking
included in the Registration Statement, and the Company will, as incurred,
reimburse Purchaser (and each of its officers, directors, partners or persons,
if any, who controls Purchaser within the meaning of Section 15 of the
Securities Act) for any legal or other expenses reasonably incurred in
investigating, defending or preparing to defend any such action, proceeding or
claim; provided, however, that the Company shall not be liable in any such case
to the extent that such loss, claim, damage or liability arises out of, or is
based upon, an untrue statement or omission or alleged untrue statement or
omission made in such Registration Statement in reliance upon and in conformity
with written information furnished to the Company by or on behalf of Purchaser
specifically for use in preparation of the Registration Statement.
(b) Purchaser agrees to indemnify and hold harmless the Company (and
each person, if any, who controls the Company within the meaning of Section 15
of the Securities Act, each officer of the Company who signs the Registration
Statement and each director of the Company), from and against any losses,
claims, damages or liabilities to which the Company (or any such officer,
director or controlling person) may become subject (under the Securities Act or
otherwise), insofar as such losses, claims, damages or liabilities (or actions
or proceedings in respect thereof) arise out of, or are based upon, any untrue
statement of a material fact contained in the Registration Statement or any
omission or alleged omission to state therein a material fact required
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to be stated therein or necessary to make the statements therein not misleading
in each case, on the effective date thereof, if such untrue statement was made
in reliance upon and in conformity with written information furnished by or on
behalf of Purchaser specifically for use in preparation of the Registration
Statement, and Purchaser will, as incurred, reimburse the Company (or such
officer, director or controlling person) for any legal or other expenses
reasonably incurred in investigating, defending or preparing to defend any such
action, proceeding or claim; provided, however, that Purchaser shall in no event
be liable for an amount in excess of the proceeds actually received by Purchaser
upon any sale of Shares pursuant to the Registration Statement.
(c) Promptly after receipt by any indemnified person of a notice of a
claim or the beginning of any action in respect of which indemnity is to be
sought against an indemnifying person pursuant to this Section 7.4, such
indemnified person shall notify the indemnifying person in writing of such claim
or of the commencement of such action, and, subject to the provisions
hereinafter stated, in case any such action shall be brought against an
indemnified person and such indemnifying person shall have been notified
thereof, such indemnifying person shall be entitled to participate therein, and,
to the extent that it shall wish, to assume the defense thereof, with counsel
reasonably satisfactory to such indemnified person. After notice from the
indemnifying person to such indemnified person of its election to assume the
defense thereof, such indemnifying person shall not be liable to such
indemnified person for any legal expenses subsequently incurred by such
indemnified person in connection with the defense thereof; provided, however,
that if there exists or shall exist a conflict of interest that would make it
inappropriate in the reasonable judgment of the indemnified person for the same
counsel to represent both the indemnified person and such indemnifying person or
any affiliate or associate thereof, the indemnified person shall be entitled to
retain its own counsel at the expense of such indemnifying person.
(d) If the indemnification provided for in this Section 7.4 is
required by its terms but is for any reason held to be unavailable to or
otherwise insufficient to hold harmless an indemnified party in respect of any
losses, claims, damages or liabilities referred to above, then each applicable
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities in
such proportion as is appropriate to reflect the relative fault of the parties
in connection with the statements or failures which resulted in such losses,
claims, damages or liabilities; provided that Purchaser shall not be required to
contribute an amount in excess of the proceeds actually received by the
Purchaser upon any sale of Shares pursuant to the Registration Statement.
7.5 INFORMATION AVAILABLE. So long as any registration statement is
effective covering the resale of Shares, the Company will furnish to Purchaser
as soon as practicable after available and upon request of Purchaser, one copy
of (i) its Annual Report to Stockholders (which Annual Report shall contain
financial statements audited in accordance with generally accepted accounting
principles in the United States of America by a national firm of certified
public accountants), (ii) if not included in substance in the Annual Report to
Stockholders, its annual report on Form 10-K, (iii) each of its Quarterly
Reports to Stockholders, and its quarterly report on Form 10-Q, and (iv) a full
copy of the registration statement covering the Shares (the foregoing, in each
case, excluding exhibits).
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7.6 RULE 144 REPORTING. With a view to making available the benefits of
certain rules and regulations of the SEC which may at any time permit the sale
of the Shares to the public without registration, the Company agrees to use its
best efforts to:
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the effective date on which the Company becomes subject to the reporting
requirements of the Securities Act or the Exchange Act; and
(b) Use its best efforts to file with the SEC in a timely manner all
reports and other documents required of the Company under the Securities Act and
the Exchange Act.
7.7 TEMPORARY CESSATION OF OFFERS AND SALES BY PURCHASER. The Purchaser
acknowledges that there may occasionally be times when the Company may be
required to suspend the use of the prospectus forming part of the Registration
Statement until such time as an amendment to the Registration Statement has been
filed by the Company and declared effective by the Commission, until the
prospectus is supplemented or amended to comply with the Securities Act, or
until such time as the Company has filed an appropriate report with the
Commission pursuant to the Exchange Act. The Company agrees to file any
necessary amendments, supplements and reports as soon as practicable under the
circumstances. Purchaser hereby covenants that it will not sell any Shares
pursuant to said prospectus during a period of not more than 60 days commencing
at the time at which the Company gives the Purchaser notice of the suspension of
the use of said prospectus and ending at the time the Company gives the
Purchaser notice that the Purchaser may thereafter effect sales pursuant to said
prospectus, as the same may have been supplemented or amended provided the
Company may not suspend the use of such prospectus until at least 60 days has
elapsed since the previous suspension.
7.8 TRANSFER OF SHARES. Purchaser hereby covenants with the Company not
to make any sale of the Shares except (i) in accordance with the Registration
Statement, in which case Purchaser covenants to comply with the requirement of
delivering a current prospectus, or (ii) in accordance with Rule 144, in which
case Purchaser covenants to comply with Rule 144 or (iii) otherwise pursuant to
an exemption under the Securities Act. Purchaser further acknowledges and
agrees that such Shares are not transferable on the books of the Company unless
the certificate submitted to the Company's transfer agent evidencing such Shares
is accompanied by a certificate executed by an officer of, or other person duly
authorized by, Purchaser certifying to such compliance.
7.9 TERMINATION OF OBLIGATIONS. The obligations of the Company pursuant
to Section 7.2 hereof shall cease and terminate upon the earlier to occur of (i)
such time as all of the Shares which have been registered have been resold or
(ii) such time as all of the Shares that are registrable pursuant to Section
7.2(a) hereof could have been be resold in any three-month period pursuant to
Rule 144 under the Securities Act or its successors. All obligations of the
Company in Section 7 (except for the obligation in Section 7.4) shall cease and
terminate upon the earliest to occur of
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(i) such time as all of the Shares have been resold or (ii) such time as all of
the Shares may be resold under Rule 144(k) under the Securities Act or its
successor.
SECTION 8. MISCELLANEOUS
8.1 NOTICES. All notices and other communications required or permitted
hereunder shall be in writing and shall be mailed by certified or registered
mail, postage prepaid, delivered either by hand or by messenger, or transmitted
by electronic telecopy (fax) addressed:
(i) If to the Company, at:
CellNet Data Systems, Inc.
Attn: Xxxx Xxxxx
000 Xxxxxxxx Xxxx
Xxx Xxxxxx, XX 00000
Fax: 415/000-0000
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Attn: Xxxxx X. Xxxxxx, Esq.
Xxxxxx X. Xxxxxxxx, Esq.
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000
Fax: 415/000-0000
(ii) If to Bechtel Enterprises, Inc.:
Bechtel Enterprises, Inc.
Attn: Xx. Xxxx X. Xxxxxx
00 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Tel.: 415/000-0000
Fax: 415/000-0000
with a copy to:
Bechtel Enterprises, Inc.
Attn: Xxxxxxx X. Xxxxxx, Esq.
00 Xxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000-0000
Tel: 415/000-0000
Fax: 415/000-0000
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or at such other address as a party shall have furnished to the other parties in
writing. All such notices and other written communications shall be effective
(i) if mailed, seven days after mailing, (ii) if delivered, upon delivery, or
(iii) if faxed, one business day after transmission with telephone or fax
confirmation of receipt.
8.2 SUCCESSORS AND ASSIGNS. Except as otherwise expressly provided
herein, this Agreement shall inure to the benefit of and be binding upon the
successors, assigns, heirs, executors and administrators of each of the parties
hereto.
8.3 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other documents
delivered pursuant hereto constitute the full and entire understanding and
agreement between the parties with regard to the subjects hereof and thereof.
Neither this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the Company and the
Purchaser.
8.4 COUNTERPARTS. This Agreement may be executed by the several parties on
separate counterparts which, when taken together with counterparts signed by all
the other parties, shall constitute a single fully executed Agreement which
shall be as fully binding and effective as a counterpart which has been executed
by all parties.
8.5 GOVERNING LAW. This Agreement shall be deemed a contract made under
the laws of the State of California and together with the rights and obligations
of the parties hereunder, shall be construed under and governed by the laws of
the State of California.
8.6 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties set forth in Sections 3 and 4 shall survive the
execution and delivery of this Agreement and the issuance of the Shares.
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IN WITNESS WHEREOF, the Company and the Purchaser have caused this
Agreement to be executed by their duly authorized officers as the date first
above written.
CELLNET DATA SYSTEMS, INC.
/s/ Xxxxx X. Xxxxx
--------------------------------------
SIGNATURE
Vice President
--------------------------------------
NAME AND TITLE OF SIGNATORY
XXXXXXX ENTERPRISES, INC.
/s/ Xxxx X. Xxxxxx
--------------------------------------
SIGNATURE
President
--------------------------------------
NAME AND TITLE OF SIGNATORY
