EXHIBIT 6
NEXTNET, INC.
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
September 21, 1998
TABLE OF CONTENTS
PAGE
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1. Purchase and Sale of Preferred Stock. . . . . . . . . . . . . . . . . .1
1.1 Sale and Issuance of Series B Preferred Stock . . . . . . . . . .1
1.2 Closing; Delivery . . . . . . . . . . . . . . . . . . . . . . . .1
2. Representations and Warranties of the Company . . . . . . . . . . . . .2
2.1 Organization, Good Standing and Qualification . . . . . . . . . .2
2.2 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . .2
2.3 Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . .3
2.4 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . .3
2.5 Valid Issuance of Securities. . . . . . . . . . . . . . . . . . .3
2.6 Governmental Consents . . . . . . . . . . . . . . . . . . . . . .4
2.7 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . .4
2.8 Intellectual Property . . . . . . . . . . . . . . . . . . . . . .4
2.9 Compliance with Laws; Permits . . . . . . . . . . . . . . . . . .5
2.10 Compliance with Other Instruments. . . . . . . . . . . . . . . .5
2.11 Agreements; Action . . . . . . . . . . . . . . . . . . . . . . .5
2.12 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . .6
2.13 No Conflict of Interest. . . . . . . . . . . . . . . . . . . . .6
2.14 Rights of Registration and Voting Rights . . . . . . . . . . . .7
2.15 Title to Property and Assets . . . . . . . . . . . . . . . . . .7
2.16 Financial Statements . . . . . . . . . . . . . . . . . . . . . .7
2.17 Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . . .7
2.18 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . .8
2.19 Tax Returns and Payments . . . . . . . . . . . . . . . . . . . .8
2.20 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . .9
2.21 Labor Agreements and Actions; Employees. . . . . . . . . . . . .9
2.22 Confidential Information and Invention Assignment
Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . .9
2.23 Permits. . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
2.24 Corporate Documents. . . . . . . . . . . . . . . . . . . . . . 10
2.25 Qualified Small Business Stock . . . . . . . . . . . . . . . . 10
2.26 Obligations of Management. . . . . . . . . . . . . . . . . . . 10
2.27 Section 83(b) Elections. . . . . . . . . . . . . . . . . . . . 10
2.28 Real Property Holding Corporation. . . . . . . . . . . . . . . 11
2.29 Small Business Concern . . . . . . . . . . . . . . . . . . . . 11
3. Representations and Warranties of the Purchasers. . . . . . . . . . . 11
3.1 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.2 Purchase Entirely for Own Account . . . . . . . . . . . . . . . 11
3.3 Disclosure of Information . . . . . . . . . . . . . . . . . . . 11
3.4 Restricted Securities . . . . . . . . . . . . . . . . . . . . . 12
3.5 No Public Market. . . . . . . . . . . . . . . . . . . . . . . . 12
3.6 Restrictions on Transfer. . . . . . . . . . . . . . . . . . . . 12
3.7 Legends . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.8 Accredited Investor . . . . . . . . . . . . . . . . . . . . . . 13
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3.9 Foreign Investors . . . . . . . . . . . . . . . . . . . . . . . 13
4. Conditions of the Purchasers' Obligations at Closing. . . . . . . . . 13
4.1 Representations and Warranties. . . . . . . . . . . . . . . . . 13
4.2 Performance . . . . . . . . . . . . . . . . . . . . . . . . . . 14
4.3 Compliance Certificate. . . . . . . . . . . . . . . . . . . . . 14
4.4 Qualifications. . . . . . . . . . . . . . . . . . . . . . . . . 14
4.5 Opinion of Company Counsel. . . . . . . . . . . . . . . . . . . 14
4.6 Board of Directors. . . . . . . . . . . . . . . . . . . . . . . 14
4.7 Investors' Rights Agreement . . . . . . . . . . . . . . . . . . 14
4.8 Voting Agreement. . . . . . . . . . . . . . . . . . . . . . . . 14
4.9 Right of First Refusal Agreement. . . . . . . . . . . . . . . . 14
4.10 Restated Certificate . . . . . . . . . . . . . . . . . . . . . 14
4.11 Confidential Information and Invention Assignment Agreement. . 14
4.12 SBA Matters. . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.13 Minimum Investment . . . . . . . . . . . . . . . . . . . . . . 15
4.14 Approval of Racotek's Board of Directors . . . . . . . . . . . 15
5. Conditions of the Company's Obligations at Closing. . . . . . . . . . 15
5.1 Representations and Warranties. . . . . . . . . . . . . . . . . 15
5.2 Performance . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.3 Qualifications. . . . . . . . . . . . . . . . . . . . . . . . . 15
6. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.1 Survival of Warranties. . . . . . . . . . . . . . . . . . . . . 15
6.2 Transfer; Successors and Assigns. . . . . . . . . . . . . . . . 15
6.3 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.4 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.5 Titles and Subtitles. . . . . . . . . . . . . . . . . . . . . . 16
6.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.7 Finder's Fee. . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.8 Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . 16
6.9 Attorney's Fees . . . . . . . . . . . . . . . . . . . . . . . . 17
6.10 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . 17
6.11 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.12 Delays or Omissions. . . . . . . . . . . . . . . . . . . . . . 17
6.13 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . 17
6.14 Corporate Securities Law . . . . . . . . . . . . . . . . . . . 17
6.15 Confidentiality. . . . . . . . . . . . . . . . . . . . . . . . 18
6.16 Exculpation Among Purchasers . . . . . . . . . . . . . . . . . 18
6.17 Waiver of Conflicts. . . . . . . . . . . . . . . . . . . . . . 18
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NEXTNET, INC.
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
This Series B Preferred Stock Purchase Agreement (the "AGREEMENT") is made
as of the 21st day of September, 1998 by and between NextNet, Inc., a Delaware
corporation (the "COMPANY") and the investors listed on EXHIBIT A attached
hereto (each a "PURCHASER" and together the "PURCHASERS").
The parties hereby agree as follows:
1. PURCHASE AND SALE OF PREFERRED STOCK.
1.1 SALE AND ISSUANCE OF SERIES B PREFERRED STOCK.
(a) The Company shall adopt and file with the Secretary of State
of the State of Delaware on or before the Closing (as defined below) the Amended
and Restated Certificate of Incorporation in the form attached hereto as
EXHIBIT B (the "RESTATED CERTIFICATE").
(b) Subject to the terms and conditions of this Agreement, each
Purchaser agrees to purchase at the Closing and the Company agrees to sell and
issue to each Purchaser at the Closing that number of shares of Series B
Preferred Stock set forth opposite each such Purchaser's name on EXHIBIT A
attached hereto at a purchase price of $4.00 per share. The shares of Series B
Preferred Stock issued to the Purchaser pursuant to this Agreement shall be
hereinafter referred to as the "STOCK."
1.2 CLOSING; DELIVERY.
(a) The purchase and sale of the Stock shall take place at
the offices of Venture Law Group, 0000 Xxxx Xxxx Xxxx, Xxxxx Xxxx,
Xxxxxxxxxx, at 5:00 p.m., on September 21, 1998, or at such other time and
place as the Company and the Purchasers mutually agree upon, orally or in
writing (which time and place are designated as the "CLOSING").
(b) At the Closing, the Company shall deliver to each Purchaser
a certificate representing the Stock being purchased thereby against payment of
the purchase price therefor by check payable to the Company or by wire transfer
to the Company's bank account.
(c) If the full number of the authorized shares of Series B
Preferred Stock of the Company is not sold at the Closing, the Company shall
have the right, at any time within ninety (90) days of the Closing, to sell the
remaining authorized but unissued shares of Series B Preferred Stock to one or
more additional purchasers or to any Purchaser hereunder who wishes to acquire
additional shares of Series B Preferred Stock as determined by the Board of
Directors of the Company at the price and on the terms set forth herein. Any
additional purchaser so acquiring shares of Series B Preferred Stock
("Additional Purchasers"), by executing and delivering to the Company an
additional counterpart signature page to this Agreement, shall become a party to
this Agreement, have the rights and obligations hereunder
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and, be considered a "Purchaser" for purposes of this Agreement. Any Series B
Preferred Stock so acquired by such Additional Purchasers shall be considered
"Stock" for purposes of this Agreement and all other agreements contemplated
hereby. In addition, by executing and delivering to the Company additional
counterpart signature pages to the Investor's Rights Agreement and the Voting
Agreement (as such agreements are defined below) the Additional Purchasers shall
become parties to such agreements and have the rights and obligations
thereunder.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to each Purchaser that, except as set forth on a
Schedule of Exceptions attached hereto as EXHIBIT C, which exceptions shall be
deemed to be representations and warranties as if made hereunder:
2.1 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 corporate power and authority to
own and operate its properties and assets and to carry on its business as
presently conducted and as presently proposed to be conducted in the Business
Plan, as defined below. The Company is duly qualified to transact business and
is in good standing in each jurisdiction in which the failure so to qualify
would have a material adverse effect on its business or properties.
2.2 CAPITALIZATION. The authorized capital of the Company consists,
or will consist, immediately prior to the Closing, of:
(a) 4,900,000 shares of Preferred Stock, each with a par value
of $0.0001 per share, of which 2,400,000 shares have been designated Series A
Preferred Stock, none of which are issued and outstanding immediately prior to
the Closing, of which 2,500,000 shares have been designated Series B Preferred
Stock, none of which are issued and outstanding immediately prior to the
Closing. The rights, privileges and preferences of the Preferred Stock are as
stated in the Restated Certificate.
(b) 25,100,000 shares of Common Stock, each with a par value of
$0.0001 per share, 1,100,000 shares of which are issued and outstanding
immediately prior to the Closing. All of the outstanding shares of Common
Stock have been duly authorized, validly issued, fully paid and are
nonassessable and issued in compliance with all applicable federal and state
securities laws. The Company has reserved 4,900,000 shares of Common Stock for
issuance upon conversion of the Preferred Stock.
(c) The Company has reserved 2,017,544 shares of Common Stock
for issuance to officers, directors, employees and consultants of the Company
pursuant to its 1998 Stock Plan duly adopted by the Board of Directors and
approved by the Company stockholders (the "STOCK PLAN"). Of such reserved
shares of Common Stock, 1,000,000 shares have been issued pursuant to restricted
stock purchase agreements, and 1,017,544 shares of Common Stock remain available
for issuance to officers, directors, employees and consultants pursuant to the
Stock Plan.
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(d) There are no outstanding options, warrants, rights
(including conversion or preemptive rights and rights of first refusal or
similar rights), proxy or shareholder agreements, or agreements, orally or in
writing, for the purchase or acquisition from the Company of any shares of its
capital stock.
(e) Except as set forth on the Schedule of Exceptions, no stock
plan, stock purchase, stock option or other agreement or understanding between
the Company and any holder of any equity securities or rights to purchase equity
securities provides for acceleration or other changes in the vesting provisions
or other terms of such agreement or understanding as the result of any merger,
consolidated sale of stock or assets, change in control or other similar
transaction by the Company.
2.3 SUBSIDIARIES. The Company does not currently own or control,
directly or indirectly, any interest in any other corporation, association, or
other business entity.
2.4 AUTHORIZATION. All corporate action on the part of the Company,
its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Agreement, the Investors' Rights Agreement, in
the form attached hereto as EXHIBIT D (the "INVESTORS' RIGHTS AGREEMENT"), and
the Voting Agreement in the form attached hereto as EXHIBIT E (the "VOTING
AGREEMENT" and collectively with this Agreement and the Investors' Rights
Agreement, the "AGREEMENTS"), the performance of all obligations of the Company
hereunder and thereunder and the authorization, sale, issuance and delivery of
the Stock and the Common Stock issuable upon conversion of the Stock (together,
the "SECURITIES") has been taken or will be taken prior to the Closing, and the
Agreements, when executed and delivered by the Company, shall constitute valid
and legally binding obligations of the Company, enforceable against the Company
in accordance with their terms except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, and other laws of
general application affecting enforcement of creditors' rights generally, as
limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies, or (ii) to the extent the indemnification
provisions contained in the Investors' Rights Agreement may be limited by
applicable federal or state securities laws. The sale of the Stock and the
subsequent conversion of the Stock into shares of common stock (the "Conversion
Shares") are not and will not be subject to any preemptive rights or rights of
first refusal that have not been properly waived or complied with.
The Company has all requisite corporate power and authority to execute
and deliver the Agreements, to issue and sell the Stock and the Conversion
Shares and to carry out the provisions of the Agreements and the Restated
Certificate.
2.5 VALID ISSUANCE OF SECURITIES. The Stock that is being issued to
the Purchasers hereunder, when issued, sold and delivered in accordance with the
terms hereof for the consideration expressed herein, will be duly and validly
issued, fully paid and nonassessable and free of restrictions on transfer other
than restrictions on transfer under this Agreement, the Investors' Rights
Agreement and applicable state and federal securities laws and will have the
rights, preferences and privileges as set forth in the Restated Certificate.
Based in part upon the
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representations of the Purchasers in this Agreement and subject to the
provisions of Section 2.6 below, the Stock will be offered, sold and issued, as
contemplated by this Agreement, in compliance with all applicable federal and
state securities laws. The Common Stock issuable upon conversion of the Stock
has been duly and validly reserved for issuance, and upon issuance in accordance
with the terms of the Restated Certificate, shall be duly and validly issued,
fully paid and nonassessable and free of restrictions on transfer other than
restrictions on transfer under this Agreement, the Investors' Rights Agreement
and applicable federal and state securities laws and will be issued in
compliance with all applicable federal and state securities laws. Neither the
Company nor any agent on its behalf has solicited or will solicit any offers to
sell or has offered to sell or will offer to sell all or any part of the Shares
to any person or persons so as to bring the sale of such Shares by the Company
within the registration provisions of the Securities Act or any state securities
laws.
2.6 GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement, except for filings pursuant to Section 25102(f)
of the California Corporate Securities Law of 1968, as amended, and the rules
thereunder, other applicable state securities laws and Regulation D of the
Securities Act of 1933, as amended (the "SECURITIES ACT").
2.7 LITIGATION. There is no action, suit, proceeding or
investigation pending or, to the Company's knowledge, currently threatened
against the Company, nor, to the Company's knowledge, is there any basis for the
foregoing. The foregoing includes, without limitation, actions pending or
threatened (or any basis therefor known to the Company) involving the prior
employment of any of the Company's employees, their use in connection with the
Company's business of any information or techniques allegedly proprietary to any
of their former employers, or their obligations under any agreements with prior
employers. The Company is not a party or subject to the provisions of any
order, writ, injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or investigation by the
Company currently pending or which the Company intends to initiate.
2.8 INTELLECTUAL PROPERTY. To its knowledge, the Company owns or
possesses sufficient legal rights to use without material cost, free and
clear of all liens, charges, claims and restrictions, all patents,
trademarks, service marks, tradenames, copyrights, trade secrets, licenses,
information and proprietary rights and processes necessary for its business
as now conducted and as presently proposed to be conducted in the Business
Plan without any conflict with, or infringement of, the rights of others.
There are no outstanding options, licenses or agreements of any kind relating
to the foregoing, nor is the Company bound by or a party to any options,
licenses or agreements of any kind with respect to the patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses, information
and other proprietary rights and processes of any other person or entity.
The Company has not received any communications alleging that the Company has
violated or, by conducting its business as presently proposed in the Business
Plan, would violate any of the patents, trademarks, service marks,
tradenames, copyrights, trade secrets or other proprietary rights or
processes of any other person or entity.
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The Company is not aware that any of its employees is obligated under any
contract (including licenses, covenants or commitments of any nature) or
other agreement, or subject to any judgment, decree or order of any court or
administrative agency, that would interfere with the use of such employee's
best efforts to promote the interest of the Company or that would conflict
with the Company's business as presently proposed in the Business Plan.
Neither the execution or delivery of this Agreement, nor the carrying on of
the Company's business by the employees of the Company, nor the conduct of
the Company's business as presently proposed in the Business Plan, will, to
the Company's knowledge, conflict with or result in a breach of the terms,
conditions, or provisions of, or constitute a default under, any contract,
covenant or instrument under which any such employee is now obligated. The
Company does not believe it is or will be necessary to use any inventions,
trade secrets or proprietary information of any of its employees (or persons
it currently intends to hire) made prior to their employment by the Company.
2.9 COMPLIANCE WITH LAWS; PERMITS. To its knowledge, the Company is
not in violation of any applicable statute, rule, regulation, order or
restriction of any domestic or foreign government or any instrumentality or
agency thereof in respect of the conduct of its business or the ownership of its
properties which violation would materially and adversely affect the business,
assets, liabilities, financial condition or operations of the Company.
2.10 COMPLIANCE WITH OTHER INSTRUMENTS.
(a) The Company is not in violation or default of any provisions
of its Restated Certificate or Bylaws or of any instrument, judgment, order,
writ, decree or contract to which it is a party or by which it is bound or, to
its knowledge, of any provision of federal or state statute, rule or regulation
applicable to the Company. The execution, delivery and performance of the
Agreements and the consummation of the transactions contemplated hereby or
thereby will not result in any such violation or be in conflict with or
constitute, with or without the passage of time and giving of notice, either a
default under any such provision, instrument, judgment, order, writ, decree or
contract or an event which results in the creation of any lien, charge or
encumbrance upon any assets of the Company.
(b) To its knowledge, the Company has avoided every condition,
and has not performed any act, the occurrence of which would result in the
Company's loss of any right granted under any license, distribution agreement or
other agreement.
2.11 AGREEMENTS; ACTION.
(a) There are no agreements, understandings or proposed
transactions between the Company and any of its officers, directors, affiliates,
or any affiliate thereof.
(b) Except for agreements explicitly contemplated by the
Agreements, there are no agreements, understandings, instruments, contracts or
proposed transactions to which the Company is a party or by which it is bound
that involve (i) obligations (contingent or otherwise) of, or payments to, the
Company in excess of, $25,000, (ii) the license of any patent, copyright, trade
secret or other proprietary right to or from the Company or (iii) the grant of
rights to manufacture, produce, assemble, license, market, or sell its products
to any other person
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or affect the Company's exclusive right to develop, manufacture, assemble,
distribute, market or sell its products.
(c) The Company has not (i) declared or paid any dividends, or
authorized or made any distribution upon or with respect to any class or series
of its capital stock, (ii) incurred any indebtedness for money borrowed or
incurred any other liabilities individually in excess of $25,000 or in excess of
$100,000 in the aggregate, (iii) made any loans or advances to any person, other
than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise
disposed of any of its assets or rights, other than the sale of its inventory in
the ordinary course of business.
(d) The Company is not a party to and is not bound by any
contract, agreement or instrument, or subject to any restriction under its
Restated Certificate or Bylaws, that adversely affects its business as now
conducted or as presently proposed to be conducted in the Business Plan, its
assets or properties or its financial condition.
(e) The Company has not engaged in the past three (3) months in
any discussion (i) with any representative of any corporation or corporations
regarding the consolidation or merger of the Company with or into any such
corporation or corporations, (ii) with any corporation, partnership, association
or other business entity or any individual regarding the sale, conveyance or
disposition of all or substantially all of the assets of the Company, or a
transaction or series of related transactions in which more than fifty percent
(50%) of the voting power of the Company is disposed of, or (iii) regarding any
other form of acquisition, liquidation, dissolution or winding up of the
Company.
2.12 DISCLOSURE. The Company has fully provided the Purchasers with
all the information that the Purchasers have requested for deciding whether to
acquire the Stock including certain of the Company's projections describing its
proposed business (collectively, the "BUSINESS PLAN"). The Agreements, the
exhibits attached hereto or thereto, any certificate furnished or to be
furnished to Purchasers at the Closing, the Business Plan or any other documents
which have been prepared by the Company for the Purchasers or their attorneys or
agents in connection with the transaction as contemplated by the Agreement (when
read together) do not contain any untrue statement of a material fact nor omit
to state a material fact necessary in order to make the statements contained
herein or therein not misleading in light of the circumstances under which they
were made. To the extent the Business Plan was prepared by management of the
Company, the Business Plan and the financial and other projections contained in
the Business Plan were prepared in good faith; however, the Company does not
warrant that it will achieve such projections.
2.13 NO CONFLICT OF INTEREST. The Company is not indebted, directly
or indirectly, to any of its officers or directors, shareholders or employees or
to their respective spouses or children, in any amount whatsoever other than in
connection with expenses or advances of expenses incurred in the ordinary course
of business or relocation expenses of employees. None of the Company's
officers, directors, or shareholders or any members of their immediate families,
are, directly or indirectly, indebted to the Company (other than in connection
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with purchases of the Company's stock) or, to the Company's knowledge, have any
direct or indirect ownership interest in any firm or corporation with which the
Company is affiliated or with which the Company has a business relationship, or
any firm or corporation which competes with the Company except that officers,
directors and/or stockholders of the Company may own stock in (but not exceeding
two percent of the outstanding capital stock of) any publicly traded companies
that may compete with the Company. To the Company's knowledge, none of the
Company's officers, directors or shareholders or any members of their immediate
families are, directly or indirectly, interested in any material contract with
the Company. The Company is not a guarantor or indemnitor of any indebtedness
of any other person, firm or corporation.
2.14 RIGHTS OF REGISTRATION AND VOTING RIGHTS. Except as contemplated
in the Investors' Rights Agreement, the Company has not granted or agreed to
grant any registration rights, including piggyback rights, to any person or
entity. Except as contemplated in the Voting Agreement, neither the Company nor
any stockholder of the Company has entered into any agreements with respect to
the voting of capital shares of the Company.
2.15 TITLE TO PROPERTY AND ASSETS. The Company owns its property and
assets free and clear of all mortgages, liens, loans and encumbrances, except
such encumbrances and liens which arise in the ordinary course of business and
do not materially impair the Company's ownership or use of such property or
assets. With respect to the property and assets it leases, the Company is in
compliance with such leases and, to its knowledge, holds a valid leasehold
interest free of any liens, claims or encumbrances.
2.16 FINANCIAL STATEMENTS. Except as set forth in the Business Plan,
the Company has not prepared any balance sheet, income statement, statement of
operations, statement of changes in financial position and stockholders' equity
or other financial statement.
2.17 CHANGES. Since the date of the Business Plan, there has not
been:
(a) any change in the assets, liabilities, financial condition
or operating results of the Company from that reflected in the Business Plan,
except changes in the ordinary course of business that have not been, either
individually or in the aggregate, materially adverse;
(b) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the business, properties,
prospects, or financial condition of the Company;
(c) any waiver or compromise by the Company of a valuable right
or of a material debt owed to it;
(d) any satisfaction or discharge of any lien, claim, or
encumbrance or payment of any obligation by the Company, except in the ordinary
course of business and that is not material to the business, properties,
prospects or financial condition of the Company;
(e) any material change to a material contract or agreement by
which the Company or any of its assets is bound or subject;
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(f) any material change in any compensation arrangement or
agreement with any employee, officer, director or stockholder;
(g) any sale, assignment or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets;
(h) any resignation or termination of employment of any officer
or key employee of the Company; and the Company, is not aware of any impending
resignation or termination of employment of any such officer or key employee;
(i) any mortgage, pledge, transfer of a security interest in, or
lien, created by the Company, with respect to any of its material properties or
assets, except liens for taxes not yet due or payable;
(j) any loans or guarantees made by the Company to or for the
benefit of its employees, officers or directors, or any members of their
immediate families, other than travel advances and other advances made in the
ordinary course of its business;
(k) any declaration, setting aside or payment or other
distribution in respect to any of the Company's capital stock, or any direct or
indirect redemption, purchase, or other acquisition of any of such stock by the
Company;
(l) to the Company's knowledge, any other event or condition of
any character that might materially and adversely affect the business,
properties, prospects or financial condition of the Company;
(m) any material change, except in the ordinary course of
business, in the contingent obligations of the Company by way of guaranty,
endorsement, indemnity, warranty or otherwise;
(n) any debt, obligation or liability incurred, assumed or
guaranteed by the Company, except those for immaterial amounts and for current
liabilities incurred in the ordinary; or
(o) any arrangement or commitment by the Company to do any of
the things described in this Section 2.16.
2.18 EMPLOYEE BENEFIT PLANS. The Company does not have any Employee
Benefit Plan as defined in the Employee Retirement Income Security Act of 1974.
2.19 TAX RETURNS AND PAYMENTS. The Company has timely filed all tax
returns and reports as required by law. These returns and reports are true and
correct in all material respects. The Company has paid all taxes and other
assessments due. The Company has not been audited (and is not presently under
audit) in respect of any such tax return or report.
-8-
2.20 INSURANCE. The Company has in full force and effect fire and
casualty insurance policies, with extended coverage, sufficient in amount
(subject to reasonable deductibles) to allow it to replace any of its properties
that might be damaged or destroyed.
2.21 LABOR AGREEMENTS AND ACTIONS; EMPLOYEES. The Company is not
bound by or subject to (and none of its assets or properties is bound by or
subject to) any written or oral, express or implied, contract, commitment or
arrangement with any labor union, and no labor union has requested or, to the
knowledge of the Company, has sought to represent any of the employees,
representatives or agents of the Company. There is no strike or other labor
dispute involving the Company pending, or to the knowledge of the Company
threatened, which could have a material adverse effect on the assets,
properties, financial condition, operating results, or business of the Company,
nor is the Company aware of any labor organization activity involving its
employees. The employment of each officer and employee of the Company is
terminable at the will of the Company. To its knowledge, the Company has
complied in all material respects with all applicable state and federal equal
employment opportunity laws and with other laws related to employment. To the
Company's knowledge, no employee of the Company, nor any consultant with whom
the Company has contracted, is in violation of any term of any employment
contract, proprietary information agreement or any other agreement relating to
the right of any such individual to be employed by, or to contract with, the
Company because of the nature of the business to be conducted by the Company;
and to the Company's knowledge the continued employment by the Company of its
present employees, and the performance of the Company's contracts with its
independent contractors, will not result in any such violation. The Company has
not received any notice alleging that any such violation has occurred. No
employee of the Company has been granted the right to continued employment by
the Company or to any material compensation following termination of employment
with the Company. To the Company's knowledge, no officer or key employee
intends to terminate his or her employment with the Company, nor does the
Company have a present intention to terminate the employment of any officer or
key employee.
2.22 CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT AGREEMENTS.
Each former and current employee, consultant and officer of the Company has
executed an agreement with the Company regarding confidentiality and proprietary
information substantially in the form or forms delivered to the counsel for the
Purchasers. No current employee, officer or consultant of the Company has
excluded works or inventions made prior to his or her employment with the
Company from his or her assignment of inventions pursuant to such employee,
officer or consultant's Proprietary Information and Inventions Agreement. The
Company is not aware, after reasonable inquiry, that any of its employees or
consultants is in violation thereof, and the Company will use its best efforts
to prevent any such violation.
2.23 PERMITS. The Company has all franchises, permits, licenses and
any similar authority necessary for the conduct of its business, as now being
conducted by it, the lack of which could materially and adversely affect the
business, properties, prospects, or financial condition of the Company and
believes it can obtain, without undue burden or expenses, any similar authority
for the conduct of its business as planned to be conducted in the Business Plan.
-9-
The Company is not in default in any material respect under any of such
franchises, permits, licenses or other similar authority.
2.24 CORPORATE DOCUMENTS. The Restated Certificate and Bylaws of the
Company are in the form provided to counsel for the Purchasers. The copy of the
minute books of the Company provided to the Purchasers' counsel contains minutes
of all meetings of directors and stockholders and all actions by written consent
without a meeting by the directors and stockholders since the date of
incorporation and reflects all actions by the directors (and any committee of
directors) and stockholders with respect to all transactions referred to in such
minutes accurately in all material respects.
2.25 QUALIFIED SMALL BUSINESS STOCK.
(a) Immediately prior to the Closing, (i) the Company will be a
domestic C corporation, (ii) the Company will not have made any purchases of its
own stock described in Section 1202(c)(3)(B) of the Internal Revenue Code of
1986 (the "CODE") during the one-year period preceding the Closing, and
(iii) the Company's (and any predecessor's) aggregate gross assets, as defined
by Code Section 1202(d)(2), at no time from the date of incorporation of the
Company and through the Closing have exceeded or will exceed $50 million, taking
into account the assets of any corporations required to be aggregated with the
Company in accordance with Code Section 1202(d)(3).
(b) The Company will take no tax reporting position inconsistent
with the Stock qualifying as "qualified small business stock" under Section 1202
of the Code.
(c) The Company shall
(i) comply with applicable federal and California reporting
obligations necessary to avoid disqualification of the Stock as "qualifying
small business stock" under Section 1202 of the Code for so long as the
Purchasers are owners of the Stock; and
(ii) agree not to repurchase any stock of the Company if
such repurchase would constitute a significant redemption under Section
1202(c)(3)(b) of the Code and the Regulations thereunder with respect to
such Stock.
2.26 OBLIGATIONS OF MANAGEMENT. Each officer of the Company is
currently devoting one hundred percent (100%) of his or her business time to the
conduct of the business of the Company. The Company is not aware of any officer
or key employee of the Company planning to work less than full-time at the
Company in the future.
2.27 SECTION 83(b) ELECTIONS. To the Company's knowledge, all
elections and notices permitted by Section 83(b) of the Internal Revenue Code
and any analogous provisions of applicable state tax laws have been timely filed
by all employees who have purchased shares of the Company's common stock under
agreements that provide for the vesting of such shares.
-10-
2.28 REAL PROPERTY HOLDING CORPORATION. The Company is not a real
property holding corporation within the meaning of Internal Revenue Code Section
897(c)(2) and any regulations promulgated thereunder.
2.29 SMALL BUSINESS CONCERN. The Company together with its
"affiliates" (as that term is defined in Section 121.103 of Title 13 of the Code
of Federal Regulations (the "Federal Regulations")), is a "small business
concern" within the meaning of the Small Business Investment Act of 1958, as
amended (the "Small Business Act"), and the regulations thereunder, including
Section 121.301 of Title 13 of the Federal Regulations (a "Small Business
Concern"). The information delivered to each Purchaser that is a licensed Small
Business Investment Company (an "SBIC Purchaser") on SBA Forms 480, 652 and 1031
delivered in connection herewith is true and correct. The Company is not
ineligible for financing by any SBIC Purchaser pursuant to Section 107.720 of
Title 13 of the Federal Regulations. Based solely upon information provided to
each SBIC Purchaser, the Company acknowledges that each SBIC Purchaser is a
Federal licensee under the Small Business Investment Act of 1958, as amended.
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each Purchaser
hereby represents and warrants to the Company that:
3.1 AUTHORIZATION. Such Purchaser has full power and authority to
enter into this Agreement. The Agreements, when executed and delivered by the
Purchaser, will constitute valid and legally binding obligations of the
Purchaser, enforceable in accordance with their terms, except (a) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, and any other laws of general application affecting enforcement of
creditors' rights generally, and as limited by laws relating to the availability
of a specific performance, injunctive relief, or other equitable remedies, or
(b) to the extent the indemnification provisions contained in the Investors'
Rights Agreement may be limited by applicable federal or state securities laws.
3.2 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made with
the Purchaser in reliance upon the Purchaser's representation to the Company,
which by the Purchaser's execution of this Agreement, the Purchaser hereby
confirms, that the Securities to be acquired by the Purchaser will be acquired
for investment for the Purchaser's own account, not as a nominee or agent, and
not with a view to the resale or distribution of any part thereof, and that the
Purchaser has no present intention of selling, granting any participation in, or
otherwise distributing the same. By executing this Agreement, the Purchaser
further represents that the Purchaser does not presently have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
Securities. The Purchaser has not been formed for the specific purpose of
acquiring the Securities.
3.3 DISCLOSURE OF INFORMATION. The Purchaser has had an opportunity
to discuss the Company's business, management, financial affairs and the terms
and conditions of the offering of the Stock with the Company's management and
has had an opportunity to review the Company's facilities. The Purchaser
understands that such discussions, as well as the
-11-
Business Plan and any other written information delivered by the Company to the
Purchaser, were intended to describe the aspects of the Company's business which
it believes to be material.
3.4 RESTRICTED SECURITIES. The Purchaser understands that the
Securities have not been, and will not be, registered under the Securities Act,
by reason of a specific exemption from the registration provisions of the
Securities Act which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of the Purchaser's representations as
expressed herein. The Purchaser understands that the Securities are "restricted
securities" under applicable U.S. federal and state securities laws and that,
pursuant to these laws, the Purchaser must hold the Securities indefinitely
unless they are registered with the Securities and Exchange Commission and
qualified by state authorities, or an exemption from such registration and
qualification requirements is available. The Purchaser acknowledges that the
Company has no obligation to register or qualify the Securities for resale
except as set forth in the Investors' Rights Agreement. The Purchaser further
acknowledges that if an exemption from registration or qualification is
available, it may be conditioned on various requirements including, but not
limited to, the time and manner of sale, the holding period for the Securities,
and on requirements relating to the Company which are outside of the Purchaser's
control, and which the Company is under no obligation and may not be able to
satisfy.
3.5 NO PUBLIC MARKET. The Purchaser understands that no public
market now exists for any of the securities issued by the Company, and that the
Company has made no assurances that a public market will ever exist for the
Securities.
3.6 RESTRICTIONS ON TRANSFER
(a) Each Purchaser agrees not to make any disposition of all or
any portion of the Stock or Conversion Shares unless and until:
(i) There is then in effect a registration statement under
the Securities Act covering such proposed disposition and such disposition is
made in accordance with such registration statement; or
(ii) (A) The transferee has agreed in writing to be bound
by the terms of these restrictions, (B) such Purchaser shall have notified the
Company of the proposed disposition and shall have furnished the Company with a
detailed statement of the circumstances surrounding the proposed disposition,
and (C) if reasonably requested by the Company, such Purchaser shall have
furnished the Company with an opinion of counsel, reasonably satisfactory to the
Company, that such disposition will not require registration of such shares
under the Securities Act. It is agreed that the Company will not require
opinions of counsel for transactions made pursuant to Rule 144 except in unusual
circumstances.
(iii) Notwithstanding the provisions of paragraphs (i) and
(ii) above, no such registration statement or opinion of counsel shall be
necessary for a transfer by a Purchaser which is (A) a partnership to its
partners, former partners or an affiliated partnership managed by the same
manager or managing partner or management company, or managed by an entity
controlling, controlled by, or under common control with, such manager or
managing
-12-
partner or management company in accordance with partnership interests, (B) a
corporation to its shareholders in accordance with their interest in the
corporation, (C) a limited liability company to its members or former members in
accordance with their interest in the limited liability company, or (D) to the
Purchaser's family member or trust for the benefit of an individual Purchaser ;
PROVIDED that in each case the transferee will be subject to the terms of these
restrictions to the same extent as if he were an original Purchaser hereunder.
3.7 LEGENDS. The Purchaser understands that the Securities and any
securities issued in respect of or exchange for the Securities, may bear one or
all of the following legends:
(a) "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A
FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
THE SECURITIES ACT OF 1933."
(b) Any legend set forth in the other Agreements.
(c) Any legend required by the Blue Sky laws of any state to the
extent such laws are applicable to the shares represented by the certificate so
legended.
3.8 ACCREDITED INVESTOR. The Purchaser is an accredited investor as
defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
3.9 FOREIGN INVESTORS. If the Purchaser is not a United States
person (as defined by Section 7701(a)(30) of the Internal Revenue Code of 1986,
as amended), such Purchaser hereby represents that it has satisfied itself as to
the full observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Stock or any use of this Agreement, including
(i) the legal requirements within its jurisdiction for the purchase of the
Stock, (ii) any foreign exchange restrictions applicable to such purchase,
(iii) any governmental or other consents that may need to be obtained, and
(iv) the income tax and other tax consequences, if any, that may be relevant to
the purchase, holding, redemption, sale, or transfer of the Stock. Such
Purchaser's subscription and payment for and continued beneficial ownership of
the Stock, will not violate any applicable securities or other laws of the
Purchaser's jurisdiction.
4. CONDITIONS OF THE PURCHASERS' OBLIGATIONS AT CLOSING. The obligations
of each Purchaser to the Company under this Agreement are subject to the
fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived:
4.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in Section 2 shall be true and correct in
all material respects on and as of
-13-
the Closing with the same effect as though such representations and warranties
had been made on and as of the date of the Closing.
4.2 PERFORMANCE. The Company shall have performed and complied with
all covenants, agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by it on or before
the Closing.
4.3 COMPLIANCE CERTIFICATE. The President of the Company shall
deliver to the Purchasers at the Closing a certificate certifying that the
conditions specified in Sections 4.1 and 4.2 have been fulfilled.
4.4 QUALIFICATIONS. All authorizations, approvals or permits, if
any, of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale of
the Stock pursuant to this Agreement shall be obtained and effective as of the
Closing.
4.5 OPINION OF COMPANY COUNSEL. The Purchasers shall have received
from Venture Law Group, counsel for the Company, an opinion, dated as of the
Closing, in substantially the form of EXHIBIT F.
4.6 BOARD OF DIRECTORS. As of the Closing, the Board shall be
comprised of Xxxxx Xxxxxxxxx, Xxxxxx Xxxxxxxx, Xxxxx Xxxx, Xxxxx Xxxxxxxxx, Xxx
Xxxxx, Xxxxxxxx Xxxxxx with one seat remaining vacant.
4.7 INVESTORS' RIGHTS AGREEMENT. The Company, each Purchaser,
Racotek, Inc. ("RACOTEK"), Xxxxx Xxxxxxxxx, Xxxxxxxx Xxxxxx and Xxxxxxx Xxxxxxx
shall have executed and delivered the Investors' Rights Agreement in
substantially the form attached as EXHIBIT D.
4.8 VOTING AGREEMENT. The Company, each Purchaser, Racotek, Xxxxx
Xxxxxxxxx, Xxxxxxxx Xxxxxx, Xxxxxxx Xxxxxxx, Xxxx Xxxx, Xxxxxx Xxxxxxxx, Xxxxx
Xxxxx and Xxxx Xxxxx shall have executed and delivered the Voting Agreement in
substantially the form attached as EXHIBIT E.
4.9 RIGHT OF FIRST REFUSAL AGREEMENT. The Company, each Purchaser
and Racotek shall have executed and delivered the Right of First Refusal
Agreement in substantially the form attached as EXHIBIT F.
4.10 RESTATED CERTIFICATE. The Company shall have filed the Restated
Certificate with the Secretary of State of Delaware on or prior to the Closing
Date, which shall continue to be in full force and effect as of the Closing
Date.
4.11 CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT AGREEMENT. The
Company and each of its employees shall have entered into the Company's standard
form Confidential Information and Invention Assignment Agreement, in
substantially the form provided to the Purchasers.
-14-
4. 12 SBA MATTERS. The Company shall have executed and delivered
to each SBIC Purchaser a Size Status Declaration on SBA Form 480 and an
Assurance of Compliance on SBA Form 652, and shall have provided to each such
Purchaser information necessary for the preparation of a Portfolio Financing
Report on SBA Form 1031.
4.13 MINIMUM INVESTMENT. In the Initial Closing, the Company shall
have received an aggregate investment of not less than $8,000,000.
4.14 APPROVAL OF RACOTEK'S BOARD OF DIRECTORS. The assignment of
certain technology pursuant to the Intellectual Property and Assets Transfer
Agreement between Racotek and the Company of even date herewith shall have been
approved by the disinterested members of the Board of Directors of Racotek.
5. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING. The obligations
of the Company to each Purchaser under this Agreement are subject to the
fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived:
5.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of each Purchaser contained in Section 3 shall be true and correct in
all material respects on and as of the Closing with the same effect as though
such representations and warranties had been made on and as of the Closing.
5.2 PERFORMANCE. All covenants, agreements and conditions contained
in this Agreement to be performed by the Purchasers on or prior to the Closing
shall have been performed or complied with in all material respects.
5.3 QUALIFICATIONS. All authorizations, approvals or permits, if
any, of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale of
the Stock pursuant to this Agreement shall be obtained and effective as of the
Closing.
6. MISCELLANEOUS.
6.1 SURVIVAL OF WARRANTIES. Unless otherwise set forth in this
Agreement, the warranties, representations and covenants of the Company and the
Purchasers contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement.
6.2 TRANSFER; SUCCESSORS AND ASSIGNS. The terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations,
or liabilities under or by reason of this Agreement, except as expressly
provided in this Agreement.
6.3 GOVERNING LAW. This Agreement and all acts and transactions
pursuant hereto and the rights and obligations of the parties hereto shall be
governed, construed and
-15-
interpreted in accordance with the laws of the State of Delaware, without giving
effect to principles of conflicts of law.
6.4 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
6.5 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
6.6 NOTICES. Any notice required or permitted by this Agreement
shall be in writing and shall be deemed sufficient upon delivery, when delivered
personally or by overnight courier or sent by telegram or fax, or ten (10) days
after being deposited in the U.S. mail, as certified or registered mail, with
postage prepaid, addressed to the party to be notified at such party's address
as set forth on the signature page or EXHIBIT A hereto, or as subsequently
modified by written notice, and (a) if to the Company, with a copy to:
Xxxx X. Xxx Xxxxxx
Venture Law Group,
A Professional Corporation,
0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
or (b) if to the Purchasers, with a copy to:
Xxxxxxxxx Xxxxxxxxxx
Xxxxxx Godward LLP
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
6.7 FINDER'S FEE. Each party represents that it neither is nor will
be obligated for any finder's fee or commission in connection with this
transaction. Each Purchaser agrees to indemnify and to hold harmless the
Company from any liability for any commission or compensation in the nature of a
finder's fee (and the costs and expenses of defending against such liability or
asserted liability) for which each Purchaser or any of its officers, employees,
or representatives is responsible. The Company agrees to indemnify and hold
harmless each Purchaser from any liability for any commission or compensation
in the nature of a finder's fee (and the costs and expenses of defending against
such liability or asserted liability) for which the Company or any of its
officers, employees or representatives is responsible.
6.8 FEES AND EXPENSES. The Company shall pay the reasonable fees and
expenses of Xxxxxx Godward LLP, the counsel for JAFCO America Ventures, Inc.
(and its affiliates), incurred with respect to this Agreement, the documents
referred to herein and the
-16-
transactions contemplated hereby and thereby, provided such fees and expenses do
not exceed $15,000.
6.9 ATTORNEY'S FEES. If any action at law or in equity (including
arbitration) is necessary to enforce or interpret the terms of any of the
Agreements, the prevailing party shall be entitled to reasonable attorney's
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.
6.10 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended or waived only with the written consent of the Company and the holders
of at least 66 2/3% of the Common Stock issued or issuable upon conversion of
the Stock. Any amendment or waiver effected in accordance with this
Section 6.10 shall be binding upon the Purchasers and each transferee of the
Stock (or the Common Stock issuable upon conversion thereof), each future holder
of all such securities, and the Company.
6.11 SEVERABILITY. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, the parties agree to renegotiate
such provision in good faith. In the event that the parties cannot reach a
mutually agreeable and enforceable replacement for such provision, then (a) such
provision shall be excluded from this Agreement, (b) the balance of the
Agreement shall be interpreted as if such provision were so excluded and (c) the
balance of the Agreement shall be enforceable in accordance with its terms.
6.12 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to any party under this Agreement, upon any breach or
default of any other party under this Agreement, shall impair any such right,
power or remedy of such non-breaching or non-defaulting party nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of any party
of any provisions or conditions of this Agreement, must be in writing and shall
be effective only to the extent specifically set forth in such writing. All
remedies, either under this Agreement or by law or otherwise afforded to any
party, shall be cumulative and not alternative.
6.13 ENTIRE AGREEMENT. This Agreement, and the documents referred to
herein constitute the entire agreement between the parties hereto pertaining to
the subject matter hereof, and any and all other written or oral agreements
relating to the subject matter hereof existing between the parties hereto are
expressly canceled.
6.14 CORPORATE SECURITIES LAW. THE SALE OF THE SECURITIES WHICH ARE
THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF THE SECURITIES OR
THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR PRIOR TO THE
QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE
QUALIFICATION BY
-17-
SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS
OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON THE
QUALIFICATION BEING OBTAINED UNLESS THE SALE IS SO EXEMPT.
6.15 CONFIDENTIALITY. Each party hereto agrees that, except with the
prior written permission of the other party, it shall at all times keep
confidential and not divulge, furnish or make accessible to anyone any
confidential information, knowledge or data concerning or relating to the
business or financial affairs of the other parties to which such party has been
or shall become privy by reason of this Agreement, discussions or negotiations
relating to this Agreement, the performance of its obligations hereunder or the
ownership of Stock purchased hereunder, provided that, in connection with its
periodic reports to its partners or shareholders, each Purchaser may, without
first obtaining such written consent, make general statements, not containing
technical information, regarding the nature and progress of the Company's
business. The provisions of this Section 6.15 shall be in addition to, and not
in substitution for, the provisions of any separate nondisclosure agreement
executed by the parties hereto with respect to the transactions contemplated
hereby.
6.16 EXCULPATION AMONG PURCHASERS. Each Purchaser acknowledges that
it is not relying upon any person, firm or corporation, other than the Company
and its officers and directors, in making its investment or decision to invest
in the Company. Each Purchaser agrees that neither Racotek nor any Purchaser
nor the respective controlling persons, officers, directors, partners, agents,
or employees of Racotek or any Purchaser shall be liable to any Purchaser for
any action heretofore or hereafter taken or omitted to be taken by any of them
in connection with the purchase of the Securities.
6.17 WAIVER OF CONFLICTS. Each party to this Agreement acknowledges
that Venture Law Group, counsel for the Company, has in the past performed and
may continue to perform legal services for certain of the Purchasers in matters
unrelated to the transactions described in this Agreement, including the
representation of such Purchasers in venture capital financings and other
matters. Accordingly, each party to this Agreement hereby (a) acknowledges that
they have had an opportunity to ask for information relevant to this disclosure;
and (b) gives its informed consent to Venture Law Group's representation of
certain of the Purchasers in such unrelated matters and to Venture Law Group's
representation of the Company in connection with this Agreement and the
transactions contemplated hereby.
[Signature Pages Follow]
-18-
The parties have executed this Series B Preferred Stock Purchase Agreement
as of the date first written above.
COMPANY:
NEXTNET, INC.
By: \s\ Xxxxx Xxxxxxxxx
Xxxxx Xxxxxxxxx, President
Address:
11173 Meg Xxxxx Xxxx
Xxxx Xxxxxxx, XX 00000
SIGNATURE PAGE TO SERIES B PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS:
SVM STAR VENTURES MANAGEMENTGESELLSCHAFT mbH Nr. 3
& CO. BETEILIGUNGS KG Nr. 2
By: SVM Star Ventures Management-
gesellschaft mbH No. 3
By: \s\ Xx. Xxxx Xxxxx
Xx. Xxxx Xxxxx
Address:
Xxxxxxxxxxxxx 0
X-00000 Xxxxxx, Xxxxxxx
Facsimile: 49-89-419-43030
SIGNATURE PAGE TO SERIES B PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS:
SVE STAR VENTURES ENTERPRISES NO. VII, A GERMAN
CIVIL LAW PARTNERSHIP (with limitation of
liability)
By: SVM Star Ventures Management-
gesellschaft mbH No. 3
By: \s\ Xx. Xxxx Xxxxx
Xx. Xxxx Xxxxx
Address:
Xxxxxxxxxxxxx 0
X-00000 Xxxxxx, Xxxxxxx
Facsimile: 49-89-419-43030
SIGNATURE PAGE TO SERIES B PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS:
STAR SEED ENTERPRISES, A GERMAN CIVIL LAW
PARTNERSHIP (with limitation of liability)
By: Star-Seed Managementgesellschaft mbH
By: \s\ Xx. Xxxx Xxxxx
Xx. Xxxx Xxxxx
Address:
Xxxxxxxxxxxxx 0
X-00000 Xxxxxx, Xxxxxxx
Facsimile: 49-89-419-43030
SIGNATURE PAGE TO SERIES B PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS:
DOLL TECHNOLOGY INVESTMENT FUND, A CALIFORNIA
LIMITED PARTNERSHIP
By: Doll Technology Investment Management, LLC,
its General Partner
By: \s\ Xxxxx X. Xxxx
Name: Xxxxx R. Doll
Address:
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
SIGNATURE PAGE TO SERIES B PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS:
DOLL TECHNOLOGY AFFILIATES FUND, L.P.
By: Doll Technology Investment Management, LLC,
its General Partner
By: \s\ Xxxxx X. Xxxx
Name: Xxxxx R. Doll
Address:
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
SIGNATURE PAGE TO SERIES B PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS:
DOLL TECHNOLOGY SIDE FUND, L.P.
By: Doll Technology Investment Management, LLC,
its General Partner
By: \s\ Xxxxx X. Xxxx
Name: Xxxxx R. Doll
Address:
0000 Xxxx Xxxx Xxxx
Xxxxxxxx 0, Xxxxx 000
Xxxxx Xxxx, XX 00000
PURCHASERS:
XXX XXXXX
By: \s\ Xxx Xxxxx
Xxx Xxxxx
Address:
I Xxxxxxxxxxx Xxxxx
Xxxxxxxx, XX 00000
PURCHASERS:
JAFCO Co., Ltd.
(Investing Entity)
By: \s\ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Chairman
JAFCO America Ventures, Inc.
Attorney-in-fact
Address:
JAFCO America Ventures
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
PURCHASERS:
JAFCO G-6 (A) Investment Enterprise Partnership
(Investing Entity)
By: \s\ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Chairman
JAFCO America Ventures, Inc.
Attorney-in-fact
Address:
JAFCO America Ventures
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
PURCHASERS:
JAFCO G-6 (B) Investment Enterprise Partnership
(Investing Entity)
By: \s\ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Chairman
JAFCO America Ventures, Inc.
Attorney-in-fact
Address:
JAFCO America Ventures
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
PURCHASERS:
JAFCO G-7 (A) Investment Enterprise Partnership
(Investing Entity)
By: \s\ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Chairman
JAFCO America Ventures, Inc.
Attorney-in-fact
Address:
JAFCO America Ventures
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
PURCHASERS:
JAFCO G-7 (B) Investment Enterprise Partnership
(Investing Entity)
By: \s\ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Chairman
JAFCO America Ventures, Inc.
Attorney-in-fact
Address:
JAFCO America Ventures
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
PURCHASERS:
JAFCO USIT Fund III, L.P.
(Investing Entity)
By: \s\ Xxxxxxx Xxxxx
Name: Xxxxxxx Xxxxx
Chairman
JAFCO America Ventures, Inc.
Its Executive Partner
Address:
JAFCO America Ventures
000 Xxxxxxxx Xxxxxx
Xxxxx 000
Xxxx Xxxx, XX 00000
PURCHASERS
____________________________________
Dovrat, Xxxxx & Co., Ltd.
____________________________________
Horizon Fund Ltd.
____________________________________
Dovrat, Xxxxx-Skies Fund 92' Ltd.
____________________________________
Dovrat, Xxxxx-Rainbow Fund, Ltd.
____________________________________
Canada Israel Opportunity Fund L.P.
_____________________________________
The Canada-Israel Opportunity Fund II
____________________________________
Dovrat, Xxxxx Founders Group,
Limited Partnership
Address:
Dovrat, Xxxxx & Co.
Xxxxx Xxxxxxxx Xxxxxx #00
Xxx Xxxx 00000
XXXXXX
