Exhibit 10.2
Series A Convertible Preferred
Stock Purchase Agreement
___________________
By and among
Xxxxxxxx.xxx, Inc.
and
Xxxx X. Xxxxxxx
Dated as of January 7, 2000.
SERIES A CONVERTIBLE PREFERRED
STOCK PURCHASE AGREEMENT
This Series A Convertible Preferred Stock Purchase Agreement
(together with the schedules and exhibits hereto, the "Agreement") dated as of
January 7, 2000, is entered into by and among XxXxxxxx.xxx, Inc., a Delaware
corporation (the "Company"), and Xxxx X. XxXxxxx the "Series A Investor" or the
"Investor").
In consideration of the premises, mutual promises and covenants
contained in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
1. Authorization and Sale of Series A Preferred
1.1 Authorization. The Company has, or before the Closing (as
defined in Section 2) will have, duly authorized the sale and issuance
of up to 657,161 shares of its Series A Convertible Preferred Stock,
$0.01 par value per share (the "Series A Preferred"), having the
rights, restrictions, privileges and preferences set forth in the
Company's Amended and Restated Certificate of Incorporation attached
hereto as Exhibit A (the "Restated Certificate of Incorporation").
1.2 Sale of Shares. Subject to the terms and conditions of this
Agreement, at the Closing (as defined in Section 2), the Company will
sell and issue to the Series A Investor, and the Series A Investor will
purchase, 657,161 shares of Series A Preferred for the purchase price
of $0.76084855991811 per share.
1.3 Use of Proceeds. The Company will use the proceeds from the
sale of the Series A Preferred for working capital.
2. The Closing.
The closing (the "Closing") of the sale and purchase of 657,161
shares of the Series A Preferred under this Agreement shall take place
at the offices of Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP, 0000 Xxxxxxxxxx
Xxxxxx, X.X., Xxxxxxxxxx, X.X. 00000, at 1:00 p.m. on January 7, 2000,
or at such other time, date and place as are mutually agreeable to the
Company and counsel to the Investor. At the Closing, the Company will
deliver to the Series A Investor a certificate for 657,161 shares of
Series A Preferred, registered in the name of Xxxx X. XxXxxxx, against
payment to the Company of the purchase price therefor, by wire
transfer, check, or other method acceptable to the Company. The date of
the Closing is hereinafter referred to as the "Closing Date." If at the
Closing any of the conditions specified in Section 5 shall not have
been fulfilled, the Series A Investor shall,
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at its election, be relieved of all of its obligations under this
Agreement without thereby waiving any other rights it may have by
reason of such failure or such non-fulfillment.
3. Representations of the Company. Except as set forth on the
disclosure schedules attached hereto, as of the Closing Date, the Company hereby
represents and warrants to the Series A Investor as follows:
3.1 Organization and Standing. 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 lease its properties, to conduct its business as presently
conducted and as proposed to be conducted by it and to enter into and
perform this Agreement and the Ancillary Agreements (as defined below)
and to carry out the transactions contemplated by this Agreement and
the Ancillary Agreements. The Company is duly qualified to do business
as a foreign corporation and is in good standing in every jurisdiction
in which the failure to so qualify would have a material adverse effect
on the operations or financial condition of the Company. The Company
has furnished to the Series A Investor true and complete copies of its
Bylaws and Restated Certificate of Incorporation, each as amended to
date and presently in effect.
3.2 Primary Business of the Company. The Company is engaged
primarily in the business of the sale of wireless communications
products and services.
3.3 Capitalization. The authorized capital stock of the Company
(immediately prior to the Closing) will consist of 23,000,000 shares of
capital stock, consisting of: (i) 20,000,000 shares of common stock,
par value $0.01 per share (the "Common Stock"), and (ii) 3,000,000
shares of preferred stock, par value $0.01 per share (the "Preferred
Stock"), of which 657,161 shares have been designated as Series A
Convertible Preferred Stock, par value $0.01 per share (the "Series A
Preferred"). Of the 20,000,000 authorized shares of Common Stock,
9,191,018 shares are issued and outstanding, 1,969,402 shares are
reserved for issuance upon exercise of options, and 657,161 shares are
reserved for issuance upon the conversion of the Series A Preferred.
All of the issued and outstanding shares of Common Stock have been duly
authorized and validly issued and are fully paid and nonassessable.
Except as provided in this Agreement or as set forth on Schedule 3.3,
(i) no subscription, warrant, option, convertible security or other
right (contingent or otherwise) to purchase or acquire any shares of
capital stock of the Company is authorized or outstanding, (ii) there
is not any commitment of the Company to issue any subscription,
warrant, option, convertible security or other such right or to issue
or distribute to holders of any shares of its capital stock any
evidences of indebtedness or assets of the Company, and (iii) the
Company has no obligation (contingent or otherwise) to purchase, redeem
or otherwise acquire any shares of its capital stock or any interest
therein or to pay any dividend or make any other distribution in
respect thereof. Except as provided in this Agreement, no person or
entity is entitled to (i) any preemptive or similar right with respect
to the issuance of any capital stock of the Company or (ii) any rights
with respect to the registration of any capital stock of the Company
under the Securities Act of 1933, as amended (together with all rules
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promulgated thereunder, the "Securities Act"). All of the issued and
outstanding shares of Common Stock have been offered, issued and sold
by the Company in compliance with applicable Federal and state
securities laws. To the Company's knowledge, no stockholder of the
Company has granted options or other rights to purchase any shares of
Common Stock from such stockholder.
3.4 Subsidiaries. Except as set forth on Schedule 3.4, the
Company has no subsidiaries and does not own or control, directly or
indirectly, shares of capital stock of any other corporation, or any
interest in any partnership, joint venture or other non-corporate
business entity or enterprise.
3.5 Stockholder List and Agreements. Attached as Schedule 3.5
is a true and complete list of the stockholders of the Company, showing
the number of shares of Common Stock or other securities of the Company
held by each stockholder as of the date of this Agreement and the
consideration paid to the Company, if any, for such shares. Except as
set forth on Schedule 3.5 and as contemplated by this Agreement, there
are no agreements, written or oral, between the Company and any holder
of its capital stock, or among any holders of its capital stock,
relating to the acquisition (including, without limitation, rights of
first refusal or preemptive rights), disposition or voting of the
capital stock of the Company.
3.6 Issuance of Shares. The issuance, sale and delivery of the
Series A Preferred in accordance with this Agreement, and the issuance
and delivery of the shares of Common Stock issuable upon conversion of
the Series A Preferred (the "Conversion Shares") have been, or will be
on or prior to the Closing, duly authorized and, in the latter case,
reserved for issuance, by all necessary corporate action on the part of
the Company. The Series A Preferred, when so issued, sold and delivered
against payment therefor in accordance with the provisions of this
Agreement, and the Conversion Shares, when issued upon conversion of
the Series A Preferred, will be duly and validly issued, fully paid and
non-assessable.
3.7 Authority for Agreement. The execution, delivery and
performance by the Company of this Agreement and all other agreements
required to be executed by the Company on or prior to the Closing
pursuant to Section 5 (the "Ancillary Agreements"), and the
consummation by the Company of the transactions contemplated hereby and
thereby, have been duly authorized by all necessary corporate action.
This Agreement and the Ancillary Agreements have been duly executed and
delivered by the Company and constitute valid and binding obligations
of the Company enforceable in accordance with their respective terms.
Except as set forth on Schedule 3.7, the execution and performance of
the transactions contemplated by this Agreement and the Ancillary
Agreements and compliance with their provisions by the Company: (i)
will not violate any provision of law applicable to the Company; and
(ii) will not conflict with or result in any breach of any of the
terms, conditions or provisions of, or constitute a default under, its
Restated Certificate of Incorporation or Bylaws (each as amended to
date and presently in effect), or any indenture, lease, agreement or
other instrument to which the Company is
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a party or by which it or any of its properties is bound, or any
decree, judgment, order, statute, rule or regulation applicable to the
Company.
3.8 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation,
declaration or filing with, any governmental authority is required on
the part of the Company in connection with the execution and delivery
of this Agreement, the offer, issue, sale and delivery of the Series A
Preferred, the issue and delivery of the Conversion Shares or the other
transactions to be consummated at the Closing, as contemplated by this
Agreement and the Ancillary Agreements, except (i) such filings as
shall have been made prior to and shall be effective on and as of the
Closing and (ii) if required, qualifications or filings under the
Securities Act and other applicable state securities laws which
qualifications or filings, if required, will be obtained or made and
will be effective within the time periods required by law. Assuming the
accuracy of the representations and warranties made by the Series A
Investor in Section 4 of this Agreement, the offer and sale of the
Series A Preferred to each of the Investors will be in compliance with
applicable Federal and state securities laws.
3.9 Litigation. Except as set forth on Schedule 3.9, there is
no action, suit, proceeding or investigation pending or to the
Company's knowledge currently threatened against the Company that
questions the validity of this Agreement, or the Ancillary Agreements
or the right of the Company to enter into any of such agreements, or to
consummate the transactions contemplated hereby or thereby, or which
might result, either individually or in the aggregate, in any material
adverse change in the assets, condition, affairs or prospects of the
Company, financially or otherwise, or any change in the current equity
ownership of the Company, nor is the Company aware that there is any
basis for any of the foregoing. The foregoing includes, without
limitation, actions pending or threatened against the Company (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.
3.10 Absence of Liabilities. Except as set forth on Schedule
3.10, the Company has no liabilities, contingent or otherwise, other
than (i) liabilities incurred in the ordinary course of business that
individually or in the aggregate are not material to the financial
condition or operating results of the Company, and (ii) obligations not
required under generally accepted accounting principles to be reflected
in its financial statements.
3.11 Taxes. Except as set forth on Schedule 3.11, the Company
owes no taxes (including payroll taxes) as of the date of the most
recent balance sheet provided to the Series A Investor. The Company has
timely filed or has obtained presently effective
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extensions with respect to all Federal, state, county, local and
foreign tax returns which are required to be filed by it, such returns
are true and correct and all taxes shown thereon to be due have been
timely paid, with any exceptions permitted by any taxing authority not
having a materially adverse effect on the Company. Federal income tax
returns of the Company have not been audited by the Internal Revenue
Service, and no controversy with respect to taxes of any type is
pending or, to the knowledge of the Company, threatened.
3.12 Property and Assets. The Company has good and marketable
title to all of its material properties and assets, except those
disposed of in the ordinary course of business. The Company is in
compliance with all material terms of each lease to which it is a party
or is otherwise bound.
3.13 Intellectual Property. Set forth on Schedule 3.13 is a
true and complete list of all patents, patent applications, trademarks,
service marks, trademark and service xxxx applications, trade names,
copyrights and licenses presently owned or held by the Company or
necessary for the conduct of the Company's business as conducted and as
currently proposed to be conducted, as well as any agreement under
which the Company has access to any confidential information used by
the Company in its business (the "Intellectual Property Rights"). The
Company owns, or has the right to use, free and clear of all liens,
charges, claims and restrictions, under the agreements and upon the
terms described in Schedule 3.13, all of the Intellectual Property
Rights. 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 other than such licenses or
agreements arising from the purchase of "off the shelf" or standard
products. Except as set forth on Schedule 3.13, the Company has not
received any communications alleging that the Company has violated or,
by conducting its business as currently proposed, would violate any of
the patents, trademarks, service marks, trade names, copyrights,
licenses, trade secrets or other proprietary rights of any other person
or entity ("Third-Party Intellectual Property Rights"), and to the best
of the Company's knowledge, the business proposed by the Company will
not cause the Company to infringe or violate any Third Party
Intellectual Property Rights. The Company is not aware of any violation
by any third party of any Intellectual Property Rights of the Company
or of any defects therein or in the title thereto. The Company is not
aware that any officer, employee or director is obligated under any
contract (including any license, covenant or commitment of any nature)
or other agreement, or subject to any judgment, decree or order of any
court or administrative agency, that would conflict or interfere with:
(i) the performance of such person's duties as an officer, employee or
director of the Company; (ii) the use of such person's best efforts to
promote the interests of the Company; or (iii) the Company's business
as conducted or proposed to be conducted. No person or entity
(including, without limitation, any prior employer of any employee of
the Company) has any right to or interest in any inventions,
improvements, discoveries or other information assigned to the Company
by any employee pursuant to
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the Nondisclosure Agreement (in the form attached hereto as Exhibit B)
executed by such employee, or otherwise.
3.14 Insurance. The Company will maintain valid policies for
workers' compensation insurance and insurance related to its properties
and business of the kinds and in the amounts customary for the type of
business engaged in by the Company.
3.15 Material Contracts and Obligations. Schedule 3.15 sets
forth a list of all material agreements of any nature to which the
Company is a party or by which it is bound, including without
limitation (i) each agreement which requires future expenditures by the
Company in excess of $50,000; (ii) all material employment and
consulting agreements, employee benefit, bonus, pension,
profit-sharing, stock option, stock purchase and similar plans and
arrangements, and distributor and sales representative agreements;
(iii) any material agreement to which any stockholder, officer or
director of the Company, or any "affiliate" or "associate" of such
persons (as such terms are defined in the Securities Act), including,
without limitation, any agreement or other arrangement providing for
the furnishing of services by, rental of real or personal property
from, or otherwise requiring payments to, any such person or entity;
and (iv) any agreement relating to the Intellectual Property Rights.
The Company has delivered to the Series A Investor copies of such of
the foregoing agreements as such Investor has requested. All of such
agreements and contracts are valid, binding and in full force and
effect.
3.16 Debts Owed by Company. Except as set forth on Schedule
3.16, the Company does not owe any debt, including any outstanding
interest, to any members of management, principals, founders, or key
employees of the Company, other than that debt occurring in the
ordinary course of business.
3.17 Compliance. The Company has, in all material respects,
complied with all laws, regulations and orders applicable to its
present and proposed business and has all material franchises, permits
and licenses and any similar authority for the conduct of its business
now being conducted by it. There is no term or provision of any
material mortgage, indenture, contract, agreement or instrument to
which the Company is a party or by which it is bound, or, to the best
knowledge of the Company, of any state or Federal judgment, decree,
order, statute, rule or regulation applicable to or binding upon the
Company, that materially adversely affects or, so far as the Company
may now foresee, in the future is reasonably likely to materially
adversely affect, the business, prospects, condition, affairs or
operations of the Company or any of its properties or assets. No
employee of the Company is in violation of any contract or covenant
(either with the Company or with another entity) relating to
employment, patent, other proprietary information disclosure,
non-competition, or non-solicitation.
3.18 Employees. None of the employees of the Company is
represented by any labor union, and there is no labor strike or other
labor trouble (including, without limitation, any organizational drive)
pending or, to the knowledge of the Company,
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threatened with respect to the Company. Except as set forth on Schedule
3.18, no employee has any agreement or contract, written or verbal,
regarding his employment. Except as set forth on Schedule 3.18, the
Company is not a party to or bound by any currently effective
employment contract, deferred compensation arrangement, bonus plan,
incentive plan, profit sharing plan, retirement agreement or other
employee compensation plan or agreement.
3.19 Nondisclosure Agreements. Each current employee, officer
and consultant of the Company has executed a Nondisclosure Agreement in
the form of Exhibit B attached hereto, and all of such agreements are
in full force and effect.
3.20 Books and Records. The minute books of the Company
contain complete and accurate records of all meetings and other
corporate actions of its stockholders and its Board of Directors and
committees thereof. The stock ledger of the Company is complete and
reflects all issuances, repurchases and cancellations of shares of
capital stock of the Company, and, to the knowledge of the Company, all
transfers of shares of capital stock of the Company.
3.21 Offering Valid. Assuming the accuracy of the
representations and warranties of the Series A Investor contained in
Section 4 hereof, the offer, sale and issuance of the Series A
Preferred and the Conversion Shares will be exempt from the
registration requirements of the Securities Act of 1933, as amended
(the "Securities Act"), and will have been registered or qualified (or
are exempt from registration and qualification) under the registration,
permit or qualification requirements of all applicable state securities
laws. Neither the Company nor any agent acting 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 Series A Preferred to any
person or persons so as to bring the sale of such Series A Preferred by
the Company within the registration provisions of the Securities Act or
any state securities laws.
3.22 Tax Elections. The Company has not elected pursuant to
the Internal Revenue Code of 1986, as amended (the "Code"), to be
treated as an "S" corporation or a collapsible corporation pursuant to
Section 341(f) or Section 1362(a) of the Code.
3.23 Disclosures. The Company has provided the Series A
Investor with all information requested by the Series A Investor in
connection with its decision to purchase the Series A Preferred,
including all information the Company believes is reasonably necessary
to make such investment decision. Neither this Agreement, the Exhibits
hereto, the Ancillary Agreements nor any other document delivered by
the Company to the Series A Investor or its attorneys or agents in
connection herewith or therewith or with the transactions contemplated
hereby or thereby, 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. Notwithstanding the
foregoing, the Business Plan provided to the Series A Investor was
prepared by the management of the Company in a good faith effort to
describe the Company's presently proposed business and products and
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the markets therefore. The assumptions applied in preparing the
Business Plan appeared reasonable to management as of the date thereof
and as of the date hereof; however, there is no assurance that these
assumptions will prove to be valid or that the objectives set forth in
the Business Plan will be achieved. To the Company's knowledge, there
are no facts which (individually or in the aggregate) materially
adversely affect the business, assets, liabilities, financial
condition, prospects or operations of the Company that have not been
set forth in the Agreement, the Exhibits hereto, the Ancillary
Agreements or in other documents delivered to the Series A Investor or
its attorneys or agents in connection herewith.
4. Representations of the Series A Investor. The Series A
Investor represents and warrants to the Company as follows:
4.1 Investment. The Series A Investor is acquiring the Series
A Preferred and the Conversion Shares for its own account for
investment and not with a view to, or for sale in connection with, any
distribution thereof, nor with any present intention of distributing or
selling the same; and, except as contemplated by this Agreement and the
Exhibits hereto, the Series A Investor has no present or contemplated
agreement, undertaking, arrangement, obligation, indebtedness or
commitment providing for the disposition thereof.
4.2 Authority. The Series A Investor has full power and
authority to enter into and to perform this Agreement and the Ancillary
Agreements in accordance with their terms and to consummate the
transactions contemplated hereby and thereby. This Agreement and the
Ancillary Agreements have been duly executed and delivered by the
Series A Investor and constitute valid and binding obligations of such
Investor enforceable in accordance with their respective terms.
4.3 Experience. The Series A Investor has carefully reviewed
the representations concerning the Company contained in this Agreement
and has made detailed inquiry concerning the Company, its business and
its personnel. The officers of the Company have made available to such
Investor any and all written information that such Investor has
requested and have answered to such Investor's satisfaction all
inquiries made by such Investor. The Series A Investor has adequate net
worth and means of providing for its current needs and contingencies to
sustain a complete loss of its investment in the Company. The Series A
Investor's overall commitment to investments which are not readily
marketable is not disproportionate to its net worth and such Investor's
investment in the Series A Preferred will not cause such overall
commitment to become excessive.
4.4 Accredited Investor. The Series A Investor is an
Accredited Investor within the definition set forth in Rule 501(a) of
the Securities Act.
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5. Conditions to the Obligations of the Investor. The obligation
of the Series A Investor to purchase the Series A Preferred at the Closing is
subject to the fulfillment, or the waiver by such Investor, of the following
conditions on or before the Closing Date:
5.1 Accuracy of Representations and Warranties. Each
representation and warranty contained in Section 3 shall be true and
complete on and as of the Closing Date with the same effect as though
such representation and warranty had been made on and as of that date.
5.2 Performance. The Company shall have performed and complied
with all agreements and conditions contained in this Agreement required
to be performed or complied with by the Company prior to or at the
Closing.
5.3 Filing of Restated Certificate of Incorporation. The
Restated Certificate of Incorporation shall have been filed with the
Secretary of State of the State of Delaware and shall continue to be in
full force and effect as of the Closing Date.
5.4 Corporate Documents. The Company shall have delivered to
the Series A Investor or its counsel, copies of all corporate documents
of the Company as such Investor shall have reasonably requested.
5.5 Reservation of Conversion Shares. The Conversion Shares
issuable upon conversion of the Series A Preferred shall have been duly
authorized and reserved for issuance upon such conversion.
5.6 Blue Sky Approvals. The Company shall have taken all
actions necessary to obtain an exemption from the state securities laws
of the State of Maryland on or before the Closing Date, or at such time
thereafter as may be required by the applicable statute.
5.7 Certificates and Documents. The Company shall have
delivered to the Series A Investor:
(a) The Restated Certificate of Incorporation of the
Company, as in effect prior to the Closing, certified by the Secretary
of State of the State of Delaware;
(b) Bylaws of the Company certified by its Secretary or
Assistant Secretary as being in effect as of the Closing Date; and
(c) Resolutions of the Board of Directors of the Company,
authorizing and approving all matters in connection with this Agreement
and the transactions contemplated hereby, certified by the Secretary or
Assistant Secretary of the Company as of the Closing Date.
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5.8 Due Diligence. The Series A Investor shall have completed,
to its satisfaction, its due diligence review of the Company.
5.9 Other Matters. All corporate and other proceedings in
connection with the transactions contemplated by this Agreement and all
documents and instruments incident to such transactions shall be
reasonably satisfactory in substance and form to the Series A Investor
and to its counsel, and the Series A Investor and its counsel shall
have received all such counterpart originals or certified or other
copies of such documents as they may reasonably request.
6. Conditions to the Obligations of the Company. The obligations
of the Company under Section 1.2 of this Agreement are subject to the
fulfillment, on or before the Closing Date, of each of the following conditions:
6.1 Accuracy of Representations and Warranties. Each
representation and warranty contained in Section 4 shall be true and
complete on and as of the Closing Date with the same effect as though
such representation and warranty had been made on and as of that date.
6.2 Purchase Price. The Series A Investor shall have delivered
the aggregate purchase price of $500,000 to the Company in accordance
with Section 2 hereof.
6.3 Blue Sky Approvals. The Company shall have obtained all
necessary Blue Sky Law permits and qualifications, or secured an
exemption therefrom, required by any state for the offer and sale of
the Series A Preferred and the Conversion Shares.
7. Execution of Ancillary Agreements.
7.1 Investor Rights Agreement. The Company shall execute and
deliver an Investor Rights Agreement to the Series A Investor and
certain other parties thereto within thirty (30) days of the Closing
Date of this transaction. Such Agreement shall provide, at a minimum,
incidental or "piggyback" registration rights to the Series A Investor.
7.2 Right of First Refusal and Co-Sale Agreement. The Company
shall execute and deliver a Right of First Refusal and Co-Sale
Agreement to the Series A Investor and certain other parties thereto
within thirty (30) days of the Closing Date of this transaction. The
Series A Investor shall provide a right of first refusal with respect
to the Series A Preferred purchased hereunder to certain parties
pursuant to such Agreement.
8. Restrictions on Transfer.
8.1 The Series A Investor agrees not to make any disposition
of all or any portion of the Series A Preferred unless and until:
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(a) 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
(b) the Series A Investor 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 of 1933, as amended (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.
8.2 Notwithstanding the provisions of Section 8.1, no such
registration statement or opinion of counsel shall be necessary for a
transfer by the Series A Investor to (i) any member of the family of
the Series A Investor; (ii) a trust for the benefit of any such family
member; or (iii) a partnership whose sole partners are the Series A
Investor and/or any member of the family of the Series A Investor;
provided that in each case the transferee will be subject to the terms
of this Agreement and to the ancillary agreements described in Section
7 to the same extent as if he were the Series A Investor.
8.3 Each certificate representing the Series A Preferred shall
(unless otherwise permitted by the provisions of the Agreement) be
stamped or otherwise imprinted with a legend substantially similar to
the following (in addition to any legend required under applicable
state securities laws):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED OR
HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT OR
UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED.
8.4 The Company shall be obligated to reissue promptly
unlegended certificates at the request of any holder thereof if the
holder shall have obtained an opinion of counsel (which counsel may be
counsel to the Company) reasonably acceptable to the Company to the
effect that the securities proposed to be disposed of may lawfully be
so disposed of without registration, qualification or legend.
8.5 Any legend endorsed on an instrument pursuant to
applicable state securities laws and the stop-transfer instructions
with respect to such securities shall be removed upon receipt by the
Company of an order of the appropriate blue sky authority authorizing
such removal.
9. Successors and Assigns. The provisions of this Agreement shall
be binding upon, and inure to the benefit of, the respective successors,
assigns, heirs, executors and administrators of the parties hereto.
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10. Confidentiality. The Series A Investor agrees that it will keep
confidential and will not use, disclose or divulge, for any purpose other than
to monitor such Investor's investment in the Company, any confidential,
proprietary or secret information which such Investor may obtain from the
Company pursuant to financial statements, reports and other materials submitted
by the Company to such Investor pursuant to this Agreement, or pursuant to
visitation or inspection rights granted hereunder ("Confidential Information"),
unless such Confidential Information is known, or until such Confidential
Information becomes known, to the public other than as a result of a disclosure
by such Investor; provided, however, that the Series A Investor may disclose
Confidential Information (i) to its attorneys, accountants, consultants and
other professionals to the extent necessary to obtain their services in
connection with its investment in the Company, or (ii) to any affiliate of such
Investor or to a partner, shareholder or subsidiary of such Investor.
11. Survival of Representations and Warranties. The representations,
warranties and agreements made herein shall survive the closing of the
transactions contemplated hereby until the effective date of any registration
statement covering a public offering of securities of the Company under the
Securities Act of 1933, as amended. 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.
12. Expenses. The Company shall pay all reasonable and customary
closing costs, attorney's fees and recording fees related to this transaction.
13. Notices. All notices, requests, consents, and other communications
under this Agreement shall be in writing and shall be delivered by hand or
mailed by first class certified or registered mail, return receipt requested,
postage prepaid:
If to the Company:
XxXxxxxx.xxx, Inc.
0000 00/xx/ Xxxxxx, X.X.
Xxxxx 000
Xxxxxxxxxx, XX 00000
FAX:
Attention: Chief Executive Officer
or at such other address or addresses as may have been furnished in writing by
the Company to the Series A Investor,
with a copy to:
Xxx Xxxxxx, Esq.
Xxxxx Xxxxxxx Xxxxxxx & Xxxxx LLP
0000 00/xx/ Xxxxxx, X.X.
-00-
Xxxxxxxxxx, X.X. 00000
FAX:
If to the Series A Investor, at the address for the Series A
Investor set forth on the counterpart signature page hereto, or at such other
address or addresses as may have been furnished in writing to the Company by
such Investor.
Notices provided in accordance with this Section 13 shall be
deemed delivered upon personal delivery or three business days after deposit in
the mail.
14. Brokers. The Company is not subject to an existing agreement
with any finder and no fees will be paid by the Company to any such finder in
regard to the transaction contemplated by this Agreement. The Series A Investor
is not responsible for the payment of any finder's fees in connection with the
transaction contemplated herein. The Company will indemnify and save the other
parties harmless from and against any and all claims, liabilities or obligations
with respect to brokerage or finders' fees or commissions, or consulting fees in
connection with the transactions contemplated by this Agreement asserted by any
person on the basis of any statement or representation alleged to have been made
by such indemnifying party.
15. Entire Agreement. This Agreement embodies the entire agreement
and understanding between the parties hereto with respect to the subject matter
hereof and supersedes all prior agreements and understandings relating to such
subject matter.
16. Amendments and Waivers. Except as otherwise expressly set
forth in this Agreement, any term of this Agreement may be amended and the
observance of any term of this Agreement may be waived (either generally or in a
particular instance and either retroactively or prospectively), with the written
consent of the Company and the Series A Investor. Any amendment or waiver
effected in accordance with this Section 16 shall be binding upon each holder of
any shares of the Series A Preferred or the Conversion Shares, and each future
holder of all such securities and the Company. No waivers of or exceptions to
any term, condition or provision of this Agreement, in any one or more
instances, shall be deemed to be, or construed as, a further or continuing
waiver of any such term, condition or provision.
17. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed an original, but all of which, when
taken together, shall constitute one and the same instrument.
18. Headings. The headings of the sections, subsections, and
paragraphs of this Agreement have been added for convenience only and shall not
be deemed to be a part of this Agreement.
19. Severability. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision.
-14-
20. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the choice
of law or conflicts of law provisions thereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of
the day and year first above written.
INPHONIC. COM, INC.
By: /s/ Xxxxx Xxxxxxxxx
________________________
Name: Xxxxx Xxxxxxxxx
Title: President and CEO
[Counterpart Signature Page Follows]
-15-
XXXXXXXX.XXX, INC.
SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
By: /s/ Xxxx X. XxXxxxx
_________________________________
Name: Xxxx X. XxXxxxx, an individual
Address:
_________________________________
_________________________________
_________________________________
Telephone No. ________________________
Telecopier No. ________________________
Counterpart Signature Page to
XxXxxxxx.xxx, Inc. Series A Convertible Preferred Stock Purchase Agreement
