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EXHIBIT 4.1
SERIES E PREFERRED STOCK
AND WARRANT PURCHASE AGREEMENT
THIS SERIES E PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT is made as
of June 18, 1999, by and between GENERAL MAGIC, INC., a Delaware corporation
with its principal office at 000 X. Xxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000
(the "Company"), and EXCITE, INC., a Delaware corporation, with a principal
address at 000 Xxxxxxxx, Xxxxxxx Xxxx, Xxxxxxxxxx 00000 (the "Purchaser").
AGREEMENT
IN CONSIDERATION of the mutual covenants and agreements contained
herein, and for other good and valuable consideration, the receipt of which is
hereby acknowledged, the Company and the Purchaser agree as follows:
1. AGREEMENT TO SELL AND PURCHASE.
1.1 AUTHORIZATION OF SECURITIES. Subject to the terms and
conditions of this Agreement, the Company has, or before the Closing (as defined
below) will have, authorized the sale and issuance of (a) up to 599 shares of
its Series E Convertible Preferred Stock (the "Series E Stock") having the terms
set forth in the Certificate of Designations, Preferences and Rights in
substantially the form attached as Exhibit A (the "Certificate of Designations")
and (b) a warrant, in substantially the form attached hereto as Exhibit B (the
"Warrant"), to purchase up to 100 additional shares of the Company's Series E
Stock. The Series E Stock and the Warrant are collectively referred to herein as
the "Securities."
1.2 SALE AND PURCHASE. Subject to the terms and conditions of
this Agreement, and in reliance on the representations and warranties contained
herein, at the Closing the Company agrees to issue and sell to the Purchaser,
and the Purchaser agrees to purchase from the Company for an aggregate purchase
price of $6,000,000: (a) 599 shares of Series E Stock at purchase price of
$10,000 per share, and (b) the Warrant at a purchase price of $10,000. The
shares of Series E Stock issuable upon exercise of the Warrant will be
hereinafter referred to as the "Warrant Shares." The shares of the Company's
Common Stock issuable upon conversion of the shares of Series E Stock purchased
and sold pursuant to this Agreement and the shares of Common Stock issuable upon
conversion of Series E Stock purchasable under the Warrant will be collectively
hereinafter referred to as the "Conversion Shares."
2. CLOSING AND DELIVERY.
2.1 CLOSING. Subject to the terms of Section 5, the closing of
the sale and purchase of the Series E Stock and the Warrant shall be held at
5:00 p.m. on the date hereof (the "Closing Date") at the offices of the Company,
or at such other time and place as the Company and Purchaser may agree.
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2.2 DELIVERY. At the Closing, subject to the terms and
conditions hereof, the Company will issue and deliver to Purchaser (a) a stock
certificate, in the names designated by Purchaser, representing the shares of
Series E Stock deliverable at such Closing, dated as of the Closing, and (b) the
Warrant, in each case against payment of the purchase price therefor by wire
transfer, unless other means of payment shall have been agreed upon by Purchaser
and the Company.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. Subject to and except
as disclosed by the Company in the Schedule of Exceptions attached hereto as
Exhibit C, the Company hereby represents and warrants and covenants to Purchaser
as follows:
3.1 AUTHORIZATION. All corporate action necessary for the
authorization, execution and delivery of this Agreement has been taken. The
Company has the requisite corporate power to enter into this Agreement and carry
out and perform its obligations under the terms of this Agreement. At the
Closing, the Company will have the requisite corporate power to sell the shares
of Series E Stock and the Warrant to be sold at such Closing. This Agreement has
been duly authorized, executed and delivered by the Company and, upon due
execution and delivery by Purchaser, this Agreement will be a valid and binding
obligation of the Company, except as enforceability (i) may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' rights generally or by equitable principles and (ii) with respect to
Section 6.5 hereof, may be limited by applicable law.
3.2 NO CONFLICT WITH OTHER INSTRUMENTS. The execution,
delivery and performance by the Company of its obligations under this Agreement,
the Certificate of Designations and the Warrant and the consummation by the
Company of the transactions contemplated hereby and thereby (including, without
limitation, the reservation for issuance and issuance of the Conversion Shares
and the Warrant Shares) will not (i) result in a violation of the Certificate of
Incorporation, any Certificate of Designations, Preferences and Rights of any
outstanding series of preferred stock of the Company or the By-laws of the
Company; (ii) conflict with, or constitute a default (or an event which with
notice or lapse of time or both would become a default) under, or give to others
any rights of termination, amendment or acceleration or cancellation of, any
material agreement, indenture or instrument to which the Company is a party; or
(iii) result in a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities laws and regulations and the
rules and regulations of the principal market or exchange on which the Common
Stock is traded or listed) applicable to the Company or by which any property or
asset of the Company is bound or affected. The Company is not in violation of
any term of or in default under (x) its Certificate of Incorporation, any
Certificate of Designations, Preferences and Rights of any outstanding series of
preferred stock or By-laws, or (y) any contract, agreement, mortgage,
indebtedness, indenture, instrument, judgment, decree or order or any statute,
rule or regulation applicable to the Company, except for such violations which
have not had and, to the knowledge of the Company, will not have a material
adverse effect on the condition (financial or otherwise), business or results of
operations of the Company (a "Material Adverse Effect"). The business of the
Company is not being conducted in violation of any law, ordinance or regulation
of any governmental entity, except for any violations which individually or in
the aggregate will not have a Material Adverse Effect. Except as specifically
contemplated by this Agreement and as required under the Securities Act of 1933,
as amended (the "Securities Act") or any state securities laws, the Company is
not
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required to obtain any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency or any regulatory or
self-regulatory agency in order for it to execute, deliver or perform any of its
obligations under or contemplated by this Agreement or the Certificate of
Designations in accordance with the terms hereof or thereof. Except as disclosed
in Schedule 3.2, all consents, authorizations, orders, filings and registrations
which the Company is required to obtain pursuant to the preceding sentence have
been obtained or effected on or prior to the date hereof. The Company complies
with and is not in violation of the listing requirements of the Nasdaq National
Market as in effect on the date hereof and the Closing Date and is not aware of
any facts which would reasonably lead to delisting or suspension of the Common
Stock by the Nasdaq National Market in the foreseeable future. Immediately after
the Closing, the Company shall meet the "net tangible assets" requirement
required under "Maintenance Standard 1" as set forth in Section 4450(1)(a)(3) of
the Marketplace Rule of The Nasdaq National Market.
3.3 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 carry on its business as now conducted and as proposed to be
conducted. The Company is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure so to qualify or be in good
standing would have a Material Adverse Effect.
3.4 CAPITALIZATION.
(a) The authorized capital stock of the Company
consists of 100,000,000 shares of Common Stock, of which 41,036,769 shares were
issued and outstanding as of June 15, 1999, and 50,000 shares of Series A
Preferred Stock, of which 50,000 shares are outstanding, 12,000 shares of Series
B Preferred Stock, no shares of which are outstanding, 3,000 shares of Series C
Preferred Stock, no shares of which are outstanding, 2,000 shares of Series D
Preferred Stock, of which 2,000 shares are outstanding, and 699 shares of Series
E Preferred Stock, no shares of which are outstanding immediately prior to the
Closing. All such issued and outstanding shares have been duly authorized and
validly issued, and are fully paid and nonassessable and such shares and all
outstanding options, warrants, convertible notes and other securities of the
Company have been issued in compliance with all applicable federal and state
securities laws.
(b) Except as described on Schedule 3.4(b), after
giving effect to the sale of the securities hereunder, there are no preemptive
or other outstanding rights, options, warrants, conversion rights or agreements
for the purchase or acquisition from the Company of any shares of its capital
stock or other securities of the Company. Except as described on Schedule
3.4(b), the Company has not granted or agreed to grant to any person or entity
any rights (including piggyback registration rights) to have any securities of
the Company registered with the United States Securities and Exchange Commission
("SEC") or any other governmental authority.
3.5 SUBSIDIARIES. Except as set forth on Schedule 3.5, the
Company does not presently own or control, directly or indirectly, and has no
stock or other interest as owner or
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principal in, any other corporation or partnership, joint venture, association
or other business venture or entity.
3.6 VALID ISSUANCE OF STOCK.
(a) The shares of Series E Stock (the "Purchased
Shares") and the Warrant which will be purchased by Purchaser hereunder, when
issued, sold and delivered in accordance with the terms hereof for the
consideration expressed herein, will be duly and validly authorized and issued,
fully paid and nonassessable, will be delivered to Purchaser free and clear of
all liens, pledges, claims, encumbrances, security interests or other
restrictions, except for restrictions on transfer contemplated herein or imposed
to ensure compliance with the Securities Act, and, based in part upon the
representations of Purchaser in Section 4.3 of this Agreement, will be issued in
compliance with all applicable federal and state securities laws. The shares of
Series E Stock are not subject to preemptive rights or any other similar rights
of the stockholders of the Company.
(b) The Warrant Shares and Conversion Shares have
been duly and validly reserved for issuance, and upon issuance in accordance
with the terms of the Warrant and the Certificate of Designations, respectively,
will be duly and validly issued, fully paid and nonassessable, will be delivered
to Purchaser free and clear of all liens, pledges, claims, encumbrances,
security interests or other restrictions, except for restrictions on transfer
contemplated herein or imposed to ensure compliance with the Securities Act,
and, based in part upon the representations of Purchaser in Section 4.3 of this
Agreement, will be issued in compliance with all applicable federal and state
securities laws.
(c) The shares of Series E Stock and the Conversion
Shares are not subject to preemptive rights, rights of first refusal or any
other similar rights of the stockholders of the Company.
(d) Except as set forth on Schedule 3.6(d), the
issuance of the Securities will not require the Company to issue any additional
capital stock of the Company pursuant to any anti-dilution provision or
otherwise.
3.7 LITIGATION, ETC. There is no action, suit or proceeding
pending nor, to its knowledge, any action, suit, proceeding or investigation
currently threatened against the Company, nor, to its knowledge, is there any
basis therefor, which could have a Material Adverse Effect. The foregoing
includes, without limitation, any action, suit, proceeding or investigation,
pending or threatened, that questions the validity of this Agreement or the
right of the Company to enter into the Agreement.
3.8 GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state, local or provincial governmental authority on
the part of the Company is required in connection with the consummation of the
transactions contemplated by this Agreement, except for notices required or
permitted to be filed with certain state and federal securities commissions,
which notices will be filed on a timely basis.
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3.9 NO MATERIAL CHANGE. Since March 31, 1999, there has been
no material adverse change in the financial condition, business or results of
operations of the Company.
3.10 PROPRIETARY RIGHTS AND INFORMATION AGREEMENT. Each former
and current employee, officer, consultant and contractor of the Company has
entered into and executed a Proprietary Rights and Information Agreement in the
form attached to this Agreement as Exhibit D or an employment or consulting
agreement containing substantially similar terms.
3.11 INTELLECTUAL PROPERTY. The Company owns or possesses
adequate rights or licenses to use all trademarks, trade names, service marks,
service xxxx registrations, service names, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets and
rights necessary to conduct its business as now conducted. Except as set forth
on Schedule 3.11, none of the Company's trademarks, trade names, service marks,
service xxxx registrations, service names, patents, patent rights, copyrights,
inventions, licenses, approvals, governmental authorizations, trade secrets or
other intellectual property rights have expired or terminated, or are expected
to expire or terminate within two (2) years from the date of this Agreement,
where the result of such expiration or termination would have, individually or
in the aggregate, a Material Adverse Effect. The Company does not have any
knowledge of any infringement by the Company of trademarks, trade name rights,
patents, patent rights, copyrights, inventions, licenses, service names, service
marks, service xxxx registrations, trade secret or other similar rights of
others, or of any such development of similar or identical trade secret or
technical information by others which infringement could have a Material Adverse
Effect, and, except as set forth on Schedule 3.11, there is no claim, action or
proceeding being made or brought against, or to the Company's knowledge, being
threatened against, the Company regarding trademarks, trade name rights,
patents, patent rights, inventions, copyrights, licenses, service names, service
marks, service xxxx registrations, trade secrets or other infringement. The
Company have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of its intellectual properties.
3.12 COMPLIANCE. The Company has not been advised, and has no
reason to believe, that it is not conducting its business in compliance with all
applicable laws, rules and regulations of the jurisdictions in which it is
conducting business, including, without limitation, all applicable local, state
and federal environmental laws and regulations; except where failure to be so in
compliance would not have a Material Adverse Effect.
3.13 SEC DOCUMENTS; FINANCIAL STATEMENTS. The Company has
filed in a timely manner all documents that it was required to file with the SEC
under Sections 13, 14(a) and 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), during the twelve (12) months preceding the date
of this Agreement. As of their respective filing dates (or, if amended prior to
the date of this Agreement, when amended), all documents filed by the Company
with the SEC (the "SEC Documents") complied in all material respects with the
requirements of the Exchange Act. None of the SEC Documents as of their
respective dates contained any untrue statement of material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The financial statements of the Company included in the
SEC Documents (the "Financial Statements") comply as to form in all material
respects with applicable accounting requirements and with the published rules
and regulations of the SEC
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with respect thereto. The Financial Statements have been prepared in accordance
with generally accepted accounting principles consistently applied and fairly
present the financial position of the Company at the dates thereof and the
results of its operations and cash flows for the periods then ended (subject, in
the case of unaudited statements, to normal, recurring adjustments).
4. REPRESENTATIONS AND WARRANTIES OF PURCHASER.
Purchaser hereby represents and warrants to the Company as follows:
4.1 LEGAL POWER. Purchaser has the requisite legal power to
enter into this Agreement, to carry out and perform its obligations under the
terms of this Agreement and, at the Closing, will have the requisite legal power
to purchase the Securities.
4.2 DUE EXECUTION. This Agreement has been duly authorized,
executed and delivered by Purchaser, and, upon due execution and delivery by the
Company, this Agreement will be a valid and binding obligation of Purchaser,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
or by equitable principles.
4.3 INVESTMENT REPRESENTATIONS. In connection with the
purchase of the Securities, the Purchaser makes the following representations:
(a) the Purchaser, taking into account the personnel
and resources it can practically bring to bear on the purchase of the Securities
contemplated hereby, is knowledgeable, sophisticated and experienced in making,
and is qualified to make, decisions with respect to investments in shares
representing an investment decision like that involved in the purchase of the
Securities, including investments in securities issued by the Company, and has
requested, received, reviewed and considered all information it deems relevant
in making an informed decision to purchase the Securities;
(b) the Purchaser is acquiring the Securities in the
ordinary course of its business and for its own account for investment only (as
defined for purposes of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvement Act of 1976
and the regulations thereunder) and with no present intention of distributing
any such Securities or any arrangements or understanding with any other persons
regarding the distribution of such Securities;
(c) the Purchaser will not, directly or indirectly,
offer, sell, pledge, transfer, or otherwise dispose of (or solicit any offers to
buy, purchase or otherwise acquire or take a pledge of) any of the Securities or
capital stock of the Company issuable upon exercise or conversion thereof except
in compliance with the Securities Act of 1933, as amended, (the "Act") and the
rules and regulations of the Securities and Exchange Commission (the "SEC");
(d) the Purchaser has completed or caused to be
completed the Stock Certificate Questionnaire, attached hereto as Appendix I,
and the answers thereto are true and correct to the best knowledge of the
Purchaser as of the date hereof;
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(e) the Purchaser has not, in connection with its
decision to purchase the Securities, relied upon representations and warranties
of the Company other than those contained herein;
(f) the Purchaser is an "accredited investor" within
the meaning of Rule 501 of Regulation D promulgated under the Act;
(g) the Purchaser understands that (i) the Securities
have not been registered under the Act by reason of a specific exemption
therefrom, that such Securities must be held by Purchaser, and that Purchaser
must, therefore, bear the economic risk of such investment, until a subsequent
disposition thereof is registered under the Act or is exempt from such
registration; (ii) the Securities will be endorsed with the following legends:
(1) THE SECURITIES REPRESENTED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR
UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO
RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD
EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS,
PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. THE ISSUER OF THESE SECURITIES
MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE
ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH
THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
(2) Any legend required to be placed thereon
by the Company's Bylaws or under applicable state securities laws; and
(iii) the Company will instruct any transfer agent not to register the transfer
of the shares of Securities purchased pursuant to this Agreement (or any portion
thereof) unless the conditions specified in the foregoing legends are satisfied,
until such time as a transfer is made, pursuant to the terms of this Agreement,
and in compliance with Rule 144 or pursuant to a registration statement or, if
the opinion of counsel referred to above is to the further effect that such
legend is not required in order to establish compliance with any provisions of
the Act or this Agreement; and
(h) the Purchaser has such knowledge and experience
in financial or business matters that it is capable of evaluating the merits and
risks of the investment in the Securities purchased hereunder.
4.4 NO BROKERS. No broker, finder or investment banker is
entitled to any brokerage, finder's or other fee or commission in connection
with the transactions contemplated by this Agreement based on arrangements made
by Purchaser.
5. CONDITIONS TO CLOSING.
5.1 CONDITIONS TO OBLIGATIONS OF PURCHASER AT CLOSING.
Purchaser's obligation to purchase the Series E Stock and Warrant at the Closing
is subject to the fulfillment
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to Purchaser's satisfaction, on or prior to the Closing, of all of the following
conditions, any of which may be waived by Purchaser:
(a) REPRESENTATIONS AND WARRANTIES TRUE; PERFORMANCE
OF OBLIGATIONS. The representations and warranties made by the Company in
Section 3 hereof shall be true and correct in all material respects on the
Closing Date with the same force and effect as if they had been made on and as
of said date, and the Company shall have performed and complied with all
obligations and conditions herein required to be performed or complied with by
it on or prior to the Closing.
(b) PROCEEDINGS AND DOCUMENTS. All corporate and
other proceedings in connection with the transactions contemplated at the
Closing and all documents and instruments incident to such transactions shall be
reasonably satisfactory in substance and form to counsel to the Purchaser, and
counsel to the Purchaser shall have received all such counterpart executed
originals or certified or other copies of such documents as they may reasonably
request, including, but not limited to, the Warrant.
(c) CERTIFICATE OF DESIGNATIONS. The Certificate of
Designations shall have been filed with the
Delaware Secretary of State.
(d) QUALIFICATIONS, LEGAL INVESTMENT. 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 sale and issuance of the Securities shall have been
duly obtained and shall be effective on and as of the Closing. No stop order or
other order enjoining the sale of such Securities shall have been issued and no
proceedings for such purpose shall be pending or, to the knowledge of the
Company, threatened by the Securities and Exchange Commission, or any
commissioner of corporations or similar officer of any state having jurisdiction
over this transaction. At the time of the Closing, the sale and issuance of the
Securities shall be legally permitted by all laws and regulations to which the
Purchaser and the Company are subject.
(e) OPINION OF COMPANY COUNSEL. Purchaser shall have
received an opinion from Xxxxxx Godward LLP, counsel for the Company, dated as
of the date of the Closing, in the form attached hereto as Exhibit E.
5.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY AT CLOSING. The
Company's obligation to issue and sell the Securities to be sold at the Closing
is subject to the fulfillment to the Company's satisfaction, on or prior to the
Closing of the following conditions, any of which may be waived by the Company:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The
representations and warranties made by the Purchaser in Section 4 hereof shall
be true and correct in all material respects at the date of the Closing with the
same force and effect as if they had been made on and as of the date hereof.
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(b) PERFORMANCE OF OBLIGATIONS. Purchaser shall have
performed and complied with all agreements and conditions herein required to be
performed or complied with by it on or before the Closing.
(c) CERTIFICATE OF DESIGNATIONS. The Certificate of
Designations shall have been filed with the Delaware Secretary of State.
(d) QUALIFICATIONS, LEGAL INVESTMENT. 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 sale and issuance of the Securities shall have been
duly obtained and shall be effective on and as of the Closing. No stop order or
other order enjoining the sale of such Securities shall have been issued and no
proceedings for such purpose shall be pending or, to the knowledge of the
Company, threatened by the SEC, or any commissioner of corporations or similar
officer of any state having jurisdiction over this transaction. At the time of
the Closing the sale and issuance of the Securities shall be legally permitted
by all laws and regulations to which the Purchaser and the Company are subject.
6. REGISTRATION OF THE SHARES.
6.1 REGISTRATION STATEMENT ON FORM S-3. Within 30 days of the
Closing, the Company will prepare and file with the SEC a registration statement
on Form S-3 (or such other form that the Company may be eligible to use)
relating to the sale of the Common Stock issuable upon conversion of the Series
E Stock (the "Shares") by Purchaser from time to time (the "Registration
Statement"), and use its best efforts, subject to receipt of necessary
information from Purchaser, to cause such Registration Statement to be declared
effective by the SEC as soon as practicable after the SEC has completed its
review process. The Company agrees to use its best efforts to keep such
Registration Statement effective until the date on which the Shares may be
resold by Purchaser without registration by reason of Rule 144(k) under the Act
of 1933 or any other rule of similar effect. The Company shall file all reports
required to be filed by the Company with the Securities and Exchange Commission
(the "SEC") in a timely manner and take all other necessary action so as to
maintain such eligibility for the use of Form S-3 (or its successor or
equivalent). Notwithstanding the foregoing, following the effectiveness of the
Registration Statement, the Company may, at any time, suspend the effectiveness
of the Registration Statement (a "Suspension Period"), by giving written notice
to the Purchaser, if the Company shall have determined that the Company may be
required to disclose any material corporate development. Purchaser agrees that,
upon receipt of any notice from the Company of a Suspension Period, Purchaser
will not sell any Shares pursuant to the Registration Statement until (i)
Purchaser is advised in writing by the Company that the use of the applicable
prospectus may be resumed, (ii) Purchaser has received copies of any additional
or supplemental or amended prospectus, if applicable, and (iii) Purchaser has
received copies of any additional or supplemental filings which are incorporated
or deemed to be incorporated by reference in such prospectus. The Company will
use its best efforts to ensure that the use of the Registration Statement may be
resumed as soon as practicable and, in the case of a material corporate
development in which consummation of a transaction is concerned, as soon, in
judgment of the Company, as disclosure of the material information relating to
such corporate development would not have a material adverse effect on the
Company's ability to consummate the
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transaction, to which such transaction relates. Purchaser further covenants to
notify the Company promptly of the sale of all of its Shares.
6.2 DELIVERY OF PROSPECTUS. The Company shall furnish to
Purchaser promptly after the Registration Statement is prepared and publicly
distributed, filed with the SEC, or received by the Company, one copy of the
Registration Statement and any amendment thereto, each preliminary prospectus
and prospectus and each amendment or supplement thereto. The Company shall
furnish to Purchaser such number of copies of prospectuses and preliminary
prospectuses in conformity with the requirements of the Securities Act, in order
to facilitate the public sale or other disposition of all or any of the Shares
by Purchaser; provided, however, that the obligation of the Company to deliver
copies of prospectuses or preliminary prospectuses to the Purchaser shall be
subject to the receipt by the Company of reasonable assurances from the
Purchaser that the Purchaser will comply with the applicable provisions of the
Securities Act and of such other securities or blue sky laws as may be
applicable in connection with any use of such prospectuses or preliminary
prospectuses. The Company shall bear all expenses incurred by the Company in
connection with the registration of the Shares pursuant to the Registration
Statement (but excluding underwriters' and brokers' discounts and commissions),
and the reasonable fees and disbursements (not to exceed $10,000 in the
aggregate) of a single special counsel for the Purchaser.
6.3 INFORMATION. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to Section 6.1 that
Purchaser shall complete and deliver the Registration Statement Questionnaire
attached hereto as Appendix II and to further provide information regarding the
intended method of disposition of the Shares and such other information as the
Company may reasonably request to timely effect the registration of the Shares.
6.4 LOCK-UP. Notwithstanding anything else to the contrary,
Purchaser agrees that Purchaser shall not sell or otherwise transfer or dispose
of any Shares covered by the Registration Statement, except in the following
manner:
(a) 50% of the Shares shall be released from the
restrictions of this Section 6.4 six (6) months after the Closing Date;
(b) an additional 25% of the Shares shall be released
from the restrictions of this Section 6.4 nine (9) months after the Closing
Date; and
(c) the remaining 25% of the Shares shall be released
from the restrictions of this Section 6.4 twelve (12) months after the Closing
Date.
6.5 INDEMNIFICATION. For the purpose of this Section 6.5, the
term "Registration Statement" shall include any final prospectus, exhibit,
supplement or amendment included in or relating to the Registration Statement
referred to in Section 6.1.
(a) The Company agrees to indemnify and hold harmless
Purchaser, each of its directors and officers, any underwriters (as defined in
the Securities Act) for the Purchaser and each person, if any, who controls
Purchaser within the meaning of the Securities Act, against any losses, claims,
damages, liabilities or expenses to which Purchaser or such
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officer or director, underwriter or controlling person may become subject, under
the Securities Act, the Exchange Act, or any other federal or state statutory
law or regulation, or at common law or otherwise (including in settlement of any
litigation, if such settlement is effected with the written consent of the
Company), insofar as such losses, claims, damages, liabilities or expenses (or
actions in respect thereof as contemplated below) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, including the prospectus, financial
statements and schedules, and all other documents filed as a part thereof or
incorporated by reference therein, as amended at the time of effectiveness of
the Registration Statement, including any information deemed to be a part
thereof as of the time of effectiveness pursuant to paragraph (b) of Rule 430A,
or pursuant to Rule 434, of the Rules and Regulations, or the prospectus, in the
form first filed with the Commission pursuant to Rule 424(b) of the Regulations,
or filed as part of the Registration Statement at the time of effectiveness if
no Rule 424(b) filing is required (the "Prospectus"), or any amendment or
supplement thereto, (ii) the omission or alleged omission to state in any of
them a material fact required to be stated therein or necessary to make the
statements in any of them not misleading, or (iii) any violation or alleged
violation by the Company of the Securities Act, the Exchange Act or any federal
or state securities law in connection with the offering covered by such
registration statement (the matters in the foregoing clauses (i) through (iii)
being, collectively, "Violations"), and will reimburse Purchaser and each such
officer or director, underwriter or controlling person for any legal and other
expenses as such expenses are reasonably incurred by Purchaser or such
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action; provided, however, that the Company will not be liable in any such case
to the extent that any such loss, claim, damage, liability or expense arises out
of or is based upon an untrue statement or alleged untrue statement or omission
or alleged omission made in the Registration Statement, the Prospectus or any
amendment or supplement thereto in reliance upon and in conformity with written
information furnished to the Company (i) by or on behalf of Purchaser expressly
for use therein or (ii) the failure of Purchaser to comply with the covenants
and agreements contained in this Agreement respecting the sale of the Shares,
the inaccuracy of any representations made by Purchaser herein or any statement
or omission in any Prospectus that is corrected in any subsequent Prospectus
that was delivered to Purchaser prior to the pertinent sale or sales by
Purchaser.
(b) Purchaser will indemnify and hold harmless the
Company, each of its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of the Securities Act, against any losses, claims, damages, liabilities or
expenses to which the Company, each of its directors, each of its officers who
signed the Registration Statement or controlling person may become subject,
under the Securities Act, the Exchange Act, or any other federal or state
statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of Purchaser) insofar as such losses, claims, damages, liabilities or
expenses (or actions in respect thereof as contemplated below) arise out of or
are based upon any Violation, in each case to the extent, but only to the
extent, that such Violation occurs in reliance upon and in conformity with
written information furnished to the Company by or on behalf of any Purchaser
expressly for use therein, and will reimburse the Company, each of its
directors, each of its officers who signed the Registration Statement or
controlling person for any legal and other expense reasonably incurred by the
Company, each of its directors, each of its officers who
11.
12
signed the Registration Statement or controlling person in connection with
investigating, defending, settling, compromising or paying any such loss, claim,
damage, liability, expense or action.
(c) Promptly after receipt by an indemnified party
under this Section 6.5 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party under this Section 6.5, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party will not relieve it from any liability which it may have to
any indemnified party for contribution or otherwise than under the indemnity
agreement contained in this Section 6.5 or to the extent it is not prejudiced as
a proximate result of such failure. In case any such action is brought against
any indemnified party and such indemnified party seeks or intends to seek
indemnity from an indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it may wish, jointly with all other
indemnifying parties similarly notified, to assume the defense thereof with
counsel reasonably satisfactory to such indemnified party; provided, however, if
the defendants in any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be a conflict between the positions of the indemnifying party and
the indemnified party in conducting the defense of any such action or that there
may be legal defenses available to it and/or other indemnified parties which are
different from or additional to those available to the indemnifying party, the
indemnified party or parties shall have the right to select separate counsel to
assume such legal defenses and to otherwise participate in the defense of such
action on behalf of such indemnified party or parties. Upon receipt of notice
from the indemnifying party to such indemnified party of its election so to
assume the defense of such action and approval by the indemnified party of
counsel, the indemnifying party will not be liable to such indemnified party
under this Section 6.5 for any legal or other expenses subsequently incurred by
such indemnified party in connection with the defense thereof unless (i) the
indemnified party shall have employed such counsel in connection with the
assumption of legal defenses in accordance with the proviso to the preceding
sentence (it being understood, however, that the indemnifying party shall not be
liable for the expenses of more than one separate counsel, approved by such
indemnifying party in the case of paragraph (a), representing the indemnified
parties who are parties to such action) or (ii) the indemnified party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of action, in each of which cases the fees and expenses of counsel
shall be at the expense of the indemnifying party.
(d) The foregoing indemnity agreements of the Company
and Purchaser are subject to the condition that, insofar as they relate to the
bases for any losses, claims, damages, liabilities or expenses contemplated in
Section 6.5(a) arising out of the preparation and filing of the preliminary
prospectus but eliminated or remedied in the amended prospectus on file with the
SEC at the time the registration statement in question becomes effective or the
amended prospectus filed with the SEC pursuant to SEC Rule 424(b) (the "Final
Prospectus"), such indemnity agreement shall not inure to the benefit of any
person if a copy of the Final Prospectus was furnished to the indemnified party
and was not furnished to the person asserting the loss, liability, claim or
damage at or prior to the time such action is required by the Securities Act.
12.
13
(e) If the indemnification provided for in this
Section 6.5 is required by its terms but is for any reason held to be
unavailable to or otherwise insufficient to hold harmless an indemnified party
under paragraphs (a), (b) or (c) of this Section 6.5 in respect to any losses,
claims, damages, liabilities or expenses referred to herein, then each
applicable indemnifying party shall contribute to the amount paid or payable by
such indemnified party as a result of any losses, claims, damages, liabilities
or expenses referred to herein in such proportion as is appropriate to reflect
the relative fault of the Company and Purchaser in connection with the
statements or omissions or inaccuracies in the representations and warranties in
this Agreement which resulted in such losses, claims, damages, liabilities or
expenses, as well as any other relevant equitable considerations. The relative
fault of the Company and Purchaser shall be determined by reference to, among
other things, whether the untrue or alleged statement of a material fact or the
omission or alleged omission to state a material fact or the inaccurate or the
alleged inaccurate representation and/or warranty relates to information
supplied by the Company or by Purchaser and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by a party as a result of the
losses, claims, damages, liabilities and expenses referred to above shall be
deemed to include, subject to the limitations set forth in paragraph (c) of this
Section 6.5 any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim. The
provisions set forth in paragraph (c) of this Section 6.5 with respect to notice
of commencement of any action shall apply if a claim for contribution is to be
made under this paragraph (d); provided, however, that no additional notice
shall be required with respect to any action for which notice has been give
under paragraph (c) for purposes of indemnification. The Company and Purchaser
agree that it would not be just and equitable if contribution pursuant to this
Section 6.5 were determined solely by pro rata allocation (even if Purchaser
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in this paragraph. Notwithstanding the provisions of this Section 6.5, the
Purchaser shall not be required to contribute any amount in excess of the amount
by which the amount paid by Purchaser paid for the Shares that were sold
pursuant to the Registration Statement and the amount received by Purchaser from
such sale exceeds the amount of any damages that Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation.
7. MISCELLANEOUS.
7.1 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
Notwithstanding any investigation made by any party to this Agreement, all
covenants, agreements, representations and warranties made by the Company and
each Purchaser herein and in the certificates for the securities delivered
pursuant hereto shall survive the execution of this Agreement, the delivery to
the Purchaser of the Securities being purchased and the payment therefor and
shall expire on the first anniversary of the date hereof.
7.2 GOVERNING LAW. This Agreement shall be governed by and
interpreted in accordance with the substantive laws of the State of California
and the United States of America, without regard to choice of law rules.
13.
14
7.3 SUCCESSORS AND ASSIGNS. Except as otherwise expressly
provided herein, the provisions hereof shall inure to the benefit of, and be
binding upon, the successors, and permitted assigns of the parties hereto.
7.4 ENTIRE AGREEMENT. This Agreement and the Exhibits hereto,
and the other documents delivered pursuant hereto, constitutes the full and
entire understanding and agreement among the parties with regard to the subjects
hereof and no party shall be liable or bound to any other party in any manner by
any representations, warranties, covenants, or agreements except as specifically
set forth herein or therein. Nothing in this Agreement, express or implied, is
intended to confer upon any party, other than the parties hereto and their
respective successors and assigns, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
herein.
7.5 SEVERABILITY. Whenever possible, each provision of the
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of the Agreement is held to be prohibited
by or invalid under applicable law, such provision will be ineffective only to
the extent of such prohibition or invalidity, without invalidating the remainder
of the Agreement. In the event of such invalidity, the parties shall seek to
agree on an alternative enforceable provision that preserves the original
purpose of this Agreement.
7.6 AMENDMENT AND WAIVER. Except as otherwise provided herein,
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, either
retroactively or prospectively, and either for a specified period of time or
indefinitely), with the written consent of the Company and Purchaser.
7.7 NOTICES. All notices and other communications required or
permitted hereunder shall be in writing and shall be deemed effectively given
and received (a) upon personal delivery, (b) on the fifth day following mailing
by registered or certified mail, return receipt requested, postage prepaid,
addressed to the Company and Purchaser at their respective addresses first above
written, (c) upon transmission of telegram or facsimile (with telephonic
notice), or (d) upon confirmed delivery by overnight commercial courier service.
7.8 FEES AND EXPENSES. The Company and the Purchaser shall
bear their own expenses and legal fees incurred on their behalf with respect to
this Agreement and the transactions contemplated hereby.
7.9 TITLES AND SUBTITLES. The titles of the sections and
subsections of this Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
7.10 COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed an original, but all of
which together shall constitute one instrument.
14.
15
7.11 NASDAQ. The Company will promptly file a Notification of
Listing of Additional Shares with Nasdaq covering the Securities. The Company
agrees to take all action reasonable and necessary to maintain the listing of
its Common Stock on Nasdaq.
7.12 FURTHER ASSURANCES. From and after the date of this
Agreement, upon the request of any Purchaser or the Company, the Company and the
Purchaser shall execute and deliver such instruments, documents or other
writings as may be reasonably necessary or desirable to confirm and carry out
and to effectuate fully the intent and purposes of this Agreement.
[THIS SPACE INTENTIONALLY LEFT BLANK]
15.
16
IN WITNESS WHEREOF, the foregoing Stock Purchase Agreement is hereby
executed as of the date first above written.
COMPANY:
GENERAL MAGIC, INC.
By: /s/ Xxxxxx Xxxxxxx
-----------------------
Name: Xxxxxx Xxxxxxx
-----------------------
Title: CEO
-----------------------
PURCHASER:
EXCITE, INC.
By: /s/ Xxxx X. Xxxxxxx
-----------------------
Name: Xxxx X. Xxxxxxx
-----------------------
Title: EVP
-----------------------
17
APPENDIX II
GENERAL MAGIC, INC.
REGISTRATION STATEMENT QUESTIONNAIRE
In connection with the preparation of the Registration Statement,
please provide us with the following information:
1. Pursuant to the "Selling Shareholder" section of the Registration Statement,
please state your or your organization's name exactly as it should appear in the
Registration Statement:
2. Please provide the number of shares of capital stock of the Company that you
or your organization will own as of ___________, including those shares
purchased by you or your organization pursuant to the Series E Preferred Stock
and Warrant Purchase Agreement, shares issuable upon exercise of the Warrant and
those shares purchased by you or your organization through other transactions:
3. Have you or your organization had any position, office or other material
relationship within the past three years with the Company or its affiliates
other than as disclosed in the Prospectus included in the Registration
Statement?
__________ Yes __________ No
If yes, please indicate the nature of any such relationships below:
_______________________________________________________________________
_______________________________________________________________________
18
APPENDIX I
GENERAL MAGIC, INC.
STOCK CERTIFICATE QUESTIONNAIRE
In connection with the Agreement, please provide us with the following
information:
1. The exact name that your shares ___________________________________
of Series E Stock are to be
registered in (this is the name
that will appear on your stock
certificate(s)). You may use a
nominee name if appropriate:
2. The relationship between the
Purchaser of the Series E Stock ___________________________________
and the Registered Holder
listed in response to item 1
above:
3. The mailing address of the
Registered Holder listed in ___________________________________
response to item 1 above: ___________________________________
___________________________________
___________________________________
4. The Social Security Number or
Tax Identification Number of ___________________________________
the Registered Holder listed in
response to item 1 above:
19
SERIES E PREFERRED STOCK AND WARRANT PURCHASE AGREEMENT
BETWEEN
GENERAL MAGIC, INC.
AND
EXCITE, INC.
DATED JUNE 18, 1999
