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EXHIBIT 10.9
MERCURY MAIL, INC.
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
This Series B Preferred Stock Purchase Agreement (the "Agreement") is
entered into as of July 22, 1996, by and among Mercury Mail, Inc., a Delaware
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 Closing (as defined
in Section 2 below), the Company shall have authorized the sale and issuance to
the Purchasers of shares of its Series B Preferred Stock (the "Shares") having
the rights, preferences, privileges and restrictions set forth in the Amended
and Restated Certificate of Incorporation of the Company attached hereto as
Exhibit B.
1.2 SALE AND PURCHASE. Subject to the terms and conditions hereof,
at the Closing, the Company hereby agrees to issue and sell to each Purchaser
and each Purchaser severally and not jointly 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 Three Dollars ($3.00) per Share.
2. CLOSING, DELIVERY AND PAYMENT
The closing of the sale and purchase of the Shares under this
Agreement (the "Closing") shall take place at 10:00 a.m. on July 22, 1996, at
the offices of Xxxxxxxxxx Xxxxx Xxxxxx & Xxxxxxxxxx, P.C., 000 Xxxxxxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxx, 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 "Closing Date"). At the 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 Closing by each Purchaser, against
payment of the purchase price therefor by certified check or wire transfer of
immediately available funds.
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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 Delaware. 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 shares of Common Stock
issuable upon conversion thereof (the "Conversion Shares") and to carry out the
other provisions of this Agreement, 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 (i) ten million (10,000,000)
shares of Common Stock, one million (1,000,000) shares of which are issued and
outstanding, and (ii) three million three hundred thirty thousand (3,330,000)
shares of Preferred Stock, eight hundred eighty thousand (880,000) shares of
which are designated as Series A Preferred Stock, all of which are issued and
outstanding, and two million four hundred fifty thousand (2,450,000) of which
are designated as Series B Preferred Stock, none of which are issued and
outstanding. All issued and outstanding shares of the Company's Common Stock
have been duly authorized and validly issued and are fully paid and
nonassessable. Except for outstanding employee options to purchase a total of
407,700 shares of Common Stock and a warrant for 525,000 shares of Series B
Preferred Stock issued to Tribune Media Services, there are no outstanding
options, warrants or other rights to purchase from the Company any of its
securities.
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 at the Closing and the authorization, sale, issuance and
delivery of the Shares has been taken or will be taken prior to the Closing.
When issued in compliance with the provisions of this Agreement, the Shares will
be validly issued, fully paid and nonassessable. The Conversion Shares have been
duly and validly reserved for issuance and, when issued upon conversion of the
Series B Preferred Stock, will be validly issued, fully paid and nonassessable.
This Agreement has been duly executed by the Company and constitutes the valid
and binding obligation of the Company enforceable in accordance with its terms.
3.4 CONSENTS AND APPROVALS. No filings with, notices to, or
approvals of any governmental or regulatory body are required to be obtained or
made by the Company in connection with the consummation of the transactions
contemplated hereby.
3.5 NO VIOLATIONS. The execution and delivery of this Agreement and
the performance by the Company of its obligations hereunder (i) do not and will
not conflict with or violate any provision of the Certificate of Incorporation
or bylaws of the Company and (ii)
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do not and will not (a) conflict with or result in a breach of the terms,
conditions or provisions of, (b) constitute a default under, (c) result in the
creation of any encumbrance upon the capital stock or assets of the Company
pursuant to, (d) give any third party the right to modify, terminate or
accelerate any obligation under, (e) result in a violation of, or (f) require
any authorization, consent, approval, exemption or other action by or notice to
any court or administrative or governmental body or other third party pursuant
to, any law, statute, rule or regulation or any material agreement or instrument
or any order, judgment or decree to which the Company is subject or by which any
of its assets are bound.
3.6 FINANCIAL STATEMENTS; INTERIM CHANGES. The Company's unaudited
balance sheet as of June 30, 1996 (the "Latest Balance Sheet") and unaudited
statements of income and cash flows of the Company for the period from inception
to June 30, 1996 delivered to the Purchasers in connection with the investment
contemplated hereby have been prepared in accordance with generally accepted
accounting principles consistently applied (subject to normal year-end
adjustments and the absence of footnote disclosures) and fairly present in all
material respects the financial position and the results of operations of the
Company for the period covered thereby, and the Company has no material
liabilities or obligations of any nature (absolute, accrued, contingent or
otherwise) that are not either reflected or fully reserved against on the Latest
Balance Sheet or incurred in the ordinary course of the business of the Company
subsequent to the date thereof. Since the date of the Latest Balance Sheet,
there has not been any material adverse change in the business, operations,
financial condition or prospects of the Company.
3.7 COMPLIANCE WITH LAWS. The Company's business has been conducted
in compliance with all applicable laws and regulations of governmental
authorities, except for such violations that have been cured or that,
individually or in the aggregate, may not reasonably be expected to have a
material adverse effect on the business, operations, financial condition or
prospects of the Company.
3.8 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.
3.9 ACTIONS PENDING. There is no action, suit or proceeding pending
or, to the best knowledge of the Company, threatened in writing 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.
3.10 MATERIAL CONTRACTS. Except as set forth on the Disclosure
Schedule attached hereto, the Company is not a party to (and is not otherwise
bound by) any of the following: (i) any employment or consulting contract, (ii)
any agreement providing for the issuance or repurchase of any securities of the
Company, (iii) any agreement in respect of registration rights, preemptive
rights, rights of first refusal, voting rights or other rights of
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security holders, (iv) any agreement evidencing or providing for any
indebtedness for borrowed money, or (v) any other agreement that could
reasonably be deemed material to the Company.
3.11 INVESTMENTS IN UNITED STATES REAL PROPERTY INTERESTS. The
Company's capital stock does not constitute a United States real property
interest as that term is defined in Section 897(c)(l)(A)(ii) of the Internal
Revenue Code of 1986, as amended (the "Code"). The preceding representation is
based on a determination by the Company that the Company is not and has not been
a United States real property holding corporation (as that term is defined in
Section 897(c)(2) of the Code) during the five (5) year period preceding the
date of this letter. The Company shall use its best efforts to ensure that it
does not at any time in the future become a United States real property holding
corporation. If at any time in the future the Company should become a United
States real property holding corporation, the Company shall, as promptly as
possible, notify each Purchaser of such change in status.
3.12 UNRELATED BUSINESS TAXABLE INCOME. Any gross income derived by
the Purchasers from the Company shall be in the form of dividends, interest,
capital gains and losses from the disposition of property, and rents and
royalties, but only such rents and royalties as are excluded pursuant to Code
Sections 512(b)(2) and 512(b)(3), respectively, in calculating unrelated
business taxable income and only such dividends, interest, capital gains and
losses, and rents and royalties that are not included under Section 512(b)(4) of
the Code in calculating unrelated business taxable income. This Section 3.12
shall not be deemed to apply to (i) any compensation (in cash, stock or other
form) received by designees of the Purchasers in their capacities as directors
of the Company that is transferred to the Purchasers or (ii) any income included
under Section 512(b)(4) of the Code as a result of acquisition indebtedness
incurred by any Purchaser in connection with the purchase of an interest in the
Company.
3.13 QUALIFIED SMALL BUSINESS. To the best of its knowledge, the
Company qualifies as a "Qualified Small Business" as defined in Section 1202(d)
of the Code and covenants that so long as its shares are held by the Purchasers
(or a transferee in whose hands the shares are eligible to qualify as Qualified
Small Business Stock as defined in Section 1202(c) of the Code), it will use its
reasonable efforts to cause the shares to qualify as Qualified Small Business
Stock; provided that, notwithstanding the foregoing, the Company shall not be
obligated to take any action, or refrain from any action, which in its good
faith judgment is not in the best interests of the Company or its stockholders.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser severally and not jointly hereby represents and warrants
to the Company as follows:
4.1 REQUISITE POWER AND AUTHORITY. Such 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 such
Purchaser's part required for the lawful
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execution and delivery of this Agreement have been or will be effectively taken
prior to the Closing.
4.2 INVESTMENT REPRESENTATIONS. Such Purchaser understands that
neither the Shares nor the Conversion Shares have been registered under the
Securities Act of 1933, as amended (the "Securities Act"). Such 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 this Agreement.
(a) PURCHASER BEARS ECONOMIC RISK. Such 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. Such 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. Such Purchaser understands that the
Company has no present intention of registering the Shares, the Conversion
Shares or any shares of its Common Stock. Such 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
such Purchaser to transfer all or any portion of the Shares or the Conversion
Shares under the circumstances, in the amounts or at the times such Purchaser
might propose.
(b) ACQUISITION FOR OWN ACCOUNT. Such Purchaser is acquiring the
Shares and the Conversion Shares for its own account for investment only, and
not with a view towards their distribution in violation of applicable securities
laws.
(c) PURCHASER CAN PROTECT ITS INTEREST. Such Purchaser
represents that, by reason of its or of its management's business or experience,
such Purchaser has the capacity to protect its own interests in connection with
the transactions contemplated in this Agreement. Further, such Purchaser is
aware of no publication of any advertisement in connection with the transactions
contemplated by the Agreement.
(d) ACCREDITED INVESTOR. Such Purchaser represents that it is an
accredited investor within the meaning of Regulation D under the Securities Act.
(e) COMPANY INFORMATION. Such Purchaser has had an opportunity
to discuss the Company's business, management and financial affairs with
directors, officers and management of the Company. Such 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.
(f) RULE 144. Such Purchaser acknowledges and agrees that the
Shares and the Conversion Stock must be held indefinitely unless they are
subsequently registered under
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the Securities Act or an exemption from such registration is available. Such
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. CONDITIONS PRECEDENT TO PURCHASERS' OBLIGATIONS
The obligation of each Purchaser to purchase and pay for the Shares
to be delivered to it at the Closing shall be subject to the satisfaction of the
following conditions as of the Closing Date:
(i) the representations and warranties of the Company contained
in this Agreement shall be true and correct on and as of the Closing Date;
(ii) the merger of Mercury Mail, Inc., a Colorado corporation,
with and into the Company (with the Company surviving the merger) shall have
been consummated in accordance with the Delaware General Corporation Law and the
Colorado Business Corporation Act;
(iii) the Purchasers shall have received the legal opinion of
Xxxxxx Godward Xxxxxx Xxxxxxxxx & Xxxxx, counsel to the Company, in the form of
Exhibit C hereto;
(iv) concurrently with the Closing, the Company, the Purchasers
and the existing stockholders of the Company shall have entered into the
Stockholders Agreement in the form attached hereto as Exhibit D;
(v) the Company shall have provided to Centennial Fund IV, L.P.
("Centennial") a certification of the direct and indirect holdings of securities
of the Company by certain persons designated by Centennial as required by
Centennial's governing documents; and
(vi) all other Purchasers shall have concurrently purchased the
Shares to be purchased by them pursuant to this Agreement.
6. EXPENSE REIMBURSEMENT
The Company hereby agrees to reimburse each Purchaser for its
out-of-pocket expenses incurred in connection with the transactions contemplated
hereby, including all expenses incurred in connection with its due diligence
examination of the Company, the
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preparation and negotiation of this Agreement, the Stockholders Agreement and
all other documents evidencing the transactions contemplated herein (including
the fees and expenses of one counsel representing all the Purchasers in an
amount not to exceed $20,000 for services performed in connection with the
initial closing hereunder), and in connection with the enforcement of rights and
remedies of the Purchasers hereunder and under the Stockholders Agreement and
the Company's Certificate of Incorporation.
7. MISCELLANEOUS
7.1 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,
except that the General Corporation Law of the State of Delaware shall govern as
to matters of corporate law.
7.2 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.
7.3 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.
7.4 ENTIRE AGREEMENT. This Agreement, the Exhibits and the other
documents delivered pursuant hereto, including the Stockholders Agreement,
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.
7.5 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.
7.6 AMENDMENT AND WAIVER. This Agreement may be amended or modified
only upon the mutual written consent of the Company and the Purchasers;
provided, however, that following the Closing such amendment or modification may
be effected with the approval of the holders of two-thirds of the outstanding
Shares.
7.7 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)
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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, special next day delivery, with verification of
receipt. All communications shall be sent to the Company at 0000 Xxxxxxxxxxx
Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000 and to a Purchaser at the address set
forth on Exhibit A attached hereto or at such other address as the Company or
Purchaser may designate by ten (10) days advance written notice to the other
parties hereto.
7.8 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.
7.9 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 7.9 being untrue.
7.10 FUTURE FINANCINGS. The parties hereto acknowledge and agree
that one or more subsequent closings of the sale of up to 500,000 additional
shares of Series B Preferred may be held on or prior to August 31, 1996 on
substantially the same terms and conditions as are applicable to the sale of
Series B Preferred hereunder. Such additional closings may be effected by
execution of an additional signature page to this Agreement and the Stockholders
Agreement and satisfaction of the closing conditions set forth in Section 5
hereof. Nothing contained in this Agreement or any Purchaser's prior dealings
with the Company shall be deemed to constitute a commitment on the part of any
Purchaser to participate in any subsequent closing or any other future
financings by the Company.
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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.
By: /s/
------------------------------------------
Title: VP FINANCE, CFO
---------------------------------------
PURCHASERS:
CENTENNIAL FUND IV, L.P.
By: Centennial Holdings IV, L.P.
Its General Partner
By: /s/ XXXX XXXXXXX
------------------------------------------
Title: General Partner
TELECOM PARTNERS, L.P.
By: /s/ XXXXXXX X. XXXXXXX
------------------------------------------
Title: Managing Member of Telecom
---------------------------------------
Management L.L.L. its General Partner
---------------------------------------
BOULDER VENTURES LTD.
By: /s/ XXXX XXXXXXX
------------------------------------------
Title: Xxxx Xxxxxxx-General Partner
---------------------------------------
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SERIES B STOCK PURCHASE AGREEMENT
EXHIBIT A
SCHEDULE OF PURCHASERS
Aggregate
Number Purchase
Name and Address of Shares Price
-------------- --------------
Centennial Fund IV, L.P. 933,333 $ 2,799,999
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
Telecom Partners, L.P. 400,000 $ 1,200,000
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
Boulder Ventures Ltd. 83,333 249,999
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
-------------- --------------
Totals 1,416,666 $ 4,249,998
============== ==============
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SERIES B STOCK PURCHASE AGREEMENT
EXHIBIT B
CERTIFICATE OF INCORPORATION
(Intentionally Omitted)
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SERIES B STOCK PURCHASE AGREEMENT
EXHIBIT C
FORM OF LEGAL OPINION
(Intentionally Omitted)
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SERIES B STOCK PURCHASE AGREEMENT
EXHIBIT D
FORM OF STOCKHOLDERS AGREEMENT
(Intentionally Omitted)
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MERCURY MAIL, INC.
AMENDMENT NO. 1
TO
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
This Amendment No. 1 to Series B Preferred Stock Purchase Agreement
(the "Amendment") is entered into as of September 19, 1996, by and among
Mercury Mail, Inc., a Delaware corporation (the "Company"), the Prior
Purchasers set forth on the Schedule of Purchasers attached hereto as Exhibit A
(the "Prior Purchasers") and SOFTBANK Holdings Inc., a Delaware corporation
("SOFTBANK").
RECITALS
A. The Company and the Prior Purchasers are parties to (i)
the Series B Preferred Stock Purchase Agreement, dated as of July 22, 1996 (the
"Purchase Agreement"), pursuant to which the Prior Purchasers purchased from
the Company an aggregate of 1,416,666 shares (the "Shares") of the Company's
Series B Preferred Stock ("Series B Preferred"), and (ii) the Stockholders
Agreement, dated as of July 22, 1996 (the "Stockholders Agreement"), pursuant
to which the Company granted to the Prior Purchasers certain registration and
other rights with respect to the Shares.
B. Section 7.6 of the Purchase Agreement provides that the
Purchase Agreement may be amended upon mutual written consent of the Company
and the Prior Purchasers.
C. The Company and the Prior Purchasers desire to amend the
Purchase Agreement to provide for the sale of additional shares of Series B
Preferred to SOFTBANK on the terms and conditions set forth in the Purchase
Agreement.
In consideration of the mutual promises hereinafter set
forth, the parties hereto agree as follows:
1. SALE OF NEW SHARES
Subject to the terms and conditions of the Purchase
Agreement, the Company agrees to issue and sell to SOFTBANK and SOFTBANK agrees
to purchase from the Company 440,000 shares of Series B Preferred (the "New
Shares"), at a purchase price of Three Dollars ($3.00) per share or an
aggregate purchase price of $1,320,000.
2. CLOSING DATE OF SALE OF NEW SHARES
The closing of the sale of New Shares described in Section 1
hereof (the "Second Closing") shall be held at the offices of Xxxxxx Godward
Xxxxxx Xxxxxxxxx & Xxxxx in Boulder,
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Colorado, at 10:00 a.m., EST, on September 19, 1996, or at such other time and
place as the Company and Softbank shall agree (the "Second Closing Date").
3. AMENDMENTS TO PURCHASE AGREEMENT AND DISCLOSURE
SCHEDULE
3.1 PURCHASE AGREEMENT. The Purchase Agreement is hereby
amended to provide as follows: (i) SOFTBANK shall be deemed to be a "Purchaser"
for all purposes under the Purchase Agreement and shall have all the rights and
benefits and be subject to all the obligations and restrictions set forth
therein; (ii) the New Shares shall be deemed to be "Shares" for all purposes
under the Purchase Agreement; (iii) references in the Purchase Agreement to the
"Closing" and the "Closing Date" shall be deemed to refer to the Second Closing
and the Second Closing Date for purposes of the purchase hereunder by SOFTBANK
of the New Shares; (iv) Section 3.2 of the Purchase Agreement is hereby amended
to include the following: "Immediately prior to the Second Closing, one million
four hundred sixteen thousand six hundred sixty-six (1,416,666) shares of
Series B Preferred Stock are issued and outstanding and, except for outstanding
employee options to purchase a total of 542,700 shares of Common Stock and a
warrant to purchase 549,000 shares of Series B Preferred issued to Tribune
Media Services, Inc., there are no outstanding options, warrants or other
rights to purchase from the Company any of its securities."; and (v) Section
5(vi) of the Purchase Agreement is hereby amended in its entirety to state as
follows: "all other Purchasers shall have concurrently purchased the Shares to
be purchased by them pursuant to the this Agreement, except for any
Purchaser(s) who shall have purchased Shares at a subsequent closing pursuant
to this Agreement or any amendment hereto."
3.2 DISCLOSURE SCHEDULE. For purposes of the Second Closing
only, the Disclosure Schedule attached to the Purchase Agreement, including
Exhibits A through D thereto, is hereby amended and restated in its entirety as
set forth in Exhibit B hereto.
3.3 REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
following representations and warranties of the Company are hereby added to
Section 3 of the Purchase Agreement:
"3.14 DISCLOSURE. Neither this Agreement nor any schedule
hereto, nor any written disclosure document furnished by or on behalf of the
Company to the Purchasers or counsel to the Purchasers in connection with the
transactions contemplated by this Agreement, when read together, contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to any information
contained within any of the foregoing relating to future events or the
projected future financial performance of the Company, including any financial
projections or descriptions of potential strategic or business relationships
between the Company and third parties.
3.15 PERMITS. The Company has all franchises, permits,
licenses and other authority necessary for its business as now being conducted
and believes it can obtain, without
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undue burden or expense, any similar authority for its business as planned to
be conducted. The Company is not in default in any material respect under any
such franchise, permit, license or other authority.
3.16 INTELLECTUAL PROPERTY. The Company owns or has
sufficient rights to use, free and clear of all liens, charges, claims, and
restrictions, all patents, trademarks, service marks, trade names, copyrights,
trade secrets, information, proprietary rights and processes and other
intellectual property rights necessary to its business as presently conducted."
4. MISCELLANEOUS
4.1 ENTIRE AGREEMENT. Section 7.4 of the Purchase Agreement
is hereby amended in its entirety to state as follows: "This Agreement, and any
amendment hereto, the Exhibits and the other documents delivered pursuant
hereto or pursuant to any such amendment, including the Stockholders Agreement,
and any amendment thereto, constitute the full and entire understanding and
agreement among 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."
4.2 COUNTERPARTS. This Amendment may be executed in any
number of counterparts, each of which shall be an original, but all of which
together shall constitute one instrument.
4.3 BROKER'S FEES. Section 7.9 of the Purchase Agreement is
hereby amended in its entirety to read as follows:
"7.9 BROKER'S FEES. Except for the consultant fee to be paid
by SOFTBANK to Xxxxxxx Xxxx, 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 any such fee or commission payable by such
indemnifying party."
4.4 RIGHT OF ASSIGNMENT. SOFTBANK will be entitled to
transfer all or part of the shares of Series B Preferred purchased by it to one
or more affiliated partnerships managed by it, provided that such transferee
agrees in writing to be subject to the terms of the Purchase Agreement and the
Stockholders Agreement, each as amended, as if it were a purchaser and holder
thereunder.
4.5 REIMBURSEMENT OF EXPENSES.The Company shall pay the
reasonable fees and expenses of counsel for SOFTBANK, up to a maximum of
$15,000.
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IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date set forth in the first paragraph hereof.
COMPANY:
MERCURY MAIL, INC.
By: /s/
------------------------------
Title: President & CEO
------------------------------
PRIOR PURCHASERS:
CENTENNIAL FUND IV, L.P.
By: Centennial Holdings IV, L.P.
Its General Partner
By: /s/
---------------------------------
Title: General Partner
------------------------------
TELECOM PARTNERS, L.P.
By: Telecom Management L.L.C.
Its General Partner
By: /s/
---------------------------------
Title: Managing Member
------------------------------
BOULDER VENTURES LTD.
By: /s/
---------------------------------
Title: General Partner
------------------------------
SOFTBANK:
SOFTBANK HOLDINGS INC.
By: /s/
---------------------------------
Title:
------------------------------
4
18
AMENDMENT NO. 1
TO
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
EXHIBIT A
SCHEDULE OF PURCHASERS
Aggregate
Number Purchase
Name and Address of Shares Price
---------------- ---------- ----------
PRIOR PURCHASERS (FIRST CLOSING):
Centennial Fund IV, L.P. 933,333 $2,799,999
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
Telecom Partners, L.P. 400,000 $1,200,000
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
Boulder Ventures Ltd. 83,333 $ 249,999
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
---------- ----------
First Closing Totals 1,416,666 $4,249,998
---------- ----------
SOFTBANK (SECOND CLOSING):
SOFTBANK Holdings Inc. 440,000 $1,320,000
00 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxx Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxx
---------- ----------
Totals of First and Second Closings 1,856,666 $5,569,998
========== ==========
5
19
MERCURY MAIL, INC.
AMENDMENT NO. 2
TO
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
This Amendment No. 2 to Series B Preferred Stock Purchase Agreement
(the "Amendment") is entered into as of November 22, 1996, by and among Mercury
Mail, Inc., a Delaware corporation (the "Company"), the Prior Purchasers set
forth on the Schedule of Purchasers attached hereto as Exhibit A (the "Prior
Purchasers") and Tribune Company, a Delaware corporation ("Tribune").
RECITALS
A. The Company and the Prior Purchasers are parties to (i)
the Series B Preferred Stock Purchase Agreement, dated July 22, 1996, as
amended September 19, 1996 (the "Purchase Agreement"), pursuant to which the
Prior Purchasers purchased from the Company an aggregate of 1,856,666 shares
(the "Shares") of the Company's Series B Preferred Stock ("Series B
Preferred"), and (ii) the Stockholders Agreement, dated July 22, 1996, as
amended September 19, 1996 (the "Stockholders Agreement"), pursuant to which
the Company granted to the Prior Purchasers certain registration and other
rights with respect to the Shares.
B. Section 7.6 of the Purchase Agreement provides that the
Purchase Agreement may be amended upon mutual written consent of the Company
and the Prior Purchasers.
C. Tribune has determined to exercise that certain Amended
and Restated Warrant to purchase 666,667 shares of Series B Preferred, dated
August 9, 1996 (the "Amended Warrant").
D. The Company and the Prior Purchasers desire to amend the
Purchase Agreement to provide for the sale of the shares of Series B Preferred
issuable to Tribune pursuant to the Warrant on the terms and conditions set
forth in the Purchase Agreement.
In consideration of the mutual promises hereinafter set
forth, the parties hereto agree as follows:
1. SALE OF NEW SHARES
Subject to the terms and conditions of the Purchase
Agreement, the Company agrees to issue and sell to Tribune and Tribune agrees
to purchase from the Company 666,667 shares of Series B Preferred (the "New
Shares"), at a purchase price of Three Dollars ($3.00) per share or an
aggregate purchase price of $2,000,001.
1
20
2. CLOSING DATE OF SALE OF NEW SHARES
The closing of the sale of New Shares described in Section 1
hereof (the "Third Closing") shall be held at the offices of Xxxxxx Godward LLP
in Boulder, Colorado, at 10:00 a.m., EST, on November 22, 1996, or at such
other time and place as the Company and Tribune shall agree (the "Third Closing
Date").
3. AMENDMENTS TO PURCHASE AGREEMENT AND DISCLOSURE
SCHEDULE
3.1 PURCHASE AGREEMENT. The Purchase Agreement is hereby
amended to provide as follows: (i) Tribune shall be deemed to be a "Purchaser"
for all purposes under the Purchase Agreement and shall have all the rights and
benefits and be subject to all the obligations and restrictions set forth
therein; (ii) the New Shares shall be deemed to be "Shares" for all purposes
under the Purchase Agreement; (iii) references in the Purchase Agreement to the
"Closing" and the "Closing Date" shall be deemed to refer to the Third Closing
and the Third Closing Date for purposes of the purchase hereunder by Tribune of
the New Shares; (iv) Section 3.2 of the Purchase Agreement is hereby amended to
include the following: "Immediately prior to the Third Closing, one million
eight hundred fifty-six thousand six hundred sixty-six (1,856,666) shares of
Series B Preferred Stock are issued and outstanding and, except for outstanding
employee and consultant options to purchase a total of 627,643 shares of Common
Stock there are no outstanding options, warrants or other rights to purchase
from the Company any of its securities"; and (v) Section 3.6 of the Purchase
Agreement is hereby amended for purposes of the Third Closing only to replace
references to "June 30, 1996" with "October 31, 1996."
3.2 DISCLOSURE SCHEDULE. For purposes of the Third Closing
only, the Disclosure Schedule attached to the Purchase Agreement, including
Exhibits A through D thereto, is hereby amended and restated in its entirety as
set forth in Exhibit B hereto.
3.3 CONDITION TO COMPANY'S OBLIGATIONS. For purposes of the
Third Closing only, the obligation of the Company to deliver the Shares at the
Third Closing shall be subject to (i) surrender by Tribune at the Third Closing
of that certain Warrant to purchase 525,000 shares of Series B Preferred Stock
of the Company dated August 9,1996, which warrant has been amended and restated
in its entirety by the Amended Warrant, and (ii) delivery by Tribune at the
Third Closing of an executed Notice of Exercise with respect to the Amended
Warrant.
4. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
2
21
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date set forth in the first paragraph hereof.
COMPANY:
MERCURY MAIL, INC.
By: /s/
---------------------------------
Title: President & CEO
-------------------------------
PRIOR PURCHASERS:
CENTENNIAL FUND IV, L.P.
By: Centennial Holdings IV, L.P.
Its General Partner
By: /s/
---------------------------------
Title: General Partner
TELECOM PARTNERS, L.P.
By: Telecom Management L.L.C.
Its General Partner
By: /s/
---------------------------------
Title: Managing Member
BOULDER VENTURES LTD.
By: /s/
---------------------------------
Title: General Partner
SOFTBANK VENTURES INC.
By: /s/
---------------------------------
Title:
-------------------------------
TRIBUNE COMPANY
By: /s/
---------------------------------
Title: VP/General Counsel
-------------------------------
3
22
AMENDMENT NO. 2 TO
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
EXHIBIT A
SCHEDULE OF PURCHASERS
Aggregate
Number Purchase
Name and Address of Shares Price
---------------- ---------- ----------
PRIOR PURCHASERS (FIRST CLOSING):
Centennial Fund IV, L.P. 933,333 $2,799,999
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
Telecom Partners, L.P. 400,000 $1,200,000
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
Boulder Ventures Ltd. 83,333 $ 249,999
0000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
---------- ----------
First Closing Totals 1,416,666 $4,249,998
---------- ----------
SOFTBANK (SECOND CLOSING):
SOFTBANK Ventures Inc. 440,000 $1,320,000
00 Xxxxxxx Xxxx
Xxxxx 000
Xxxxxx Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxx
TRIBUNE (THIRD CLOSING):
Tribune Company 666,667 $2,000,001
000 Xxxxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Attn: Xxxxx X. Xxxxxxxx
---------- ----------
Totals of First, Second and Third Closings 2,523,333 $7,563,999
========== ==========
4
