Exhibit 10.9
VSTREAM INCORPORATED
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
TABLE OF CONTENTS
Page
1. Agreement To Sell And Purchase ................................... 1
1.1 Authorization of Shares ...................................... 1
1.2 Sale and Purchase ............................................ 1
2. Closing, Delivery And Payment .................................... 1
2.1 Initial Closing .............................................. 1
2.2 Subsequent Closings .......................................... 2
3. Representations And Warranties Of The Company .................... 2
3.1 Organization, Good Standing and Qualification ................ 2
3.2 Capitalization ............................................... 2
3.3 Subsidiaries ................................................. 3
3.4 Authorization; Binding Obligations ........................... 3
3.5 Consents and Approvals ....................................... 3
3.6 No Violations ................................................ 3
3.7 Financial Statements; Interim Changes ........................ 4
3.8 Compliance with Laws ......................................... 4
3.9 Proprietary Rights ........................................... 4
3.10 Actions Pending ............................................. 5
3.11 Material Contracts .......................................... 5
3.12 Investments in United States Real Property Interests ........ 5
3.13 Unrelated Business Taxable Income ........................... 5
3.14 Qualified Small Business .................................... 6
4. Representations And Warranties Of The Purchasers ................. 6
4.1 Requisite Power and Authority ................................ 6
4.2 Investment Representations ................................... 6
5. Conditions Precedent To Purchasers' Obligations .................. 8
6. Expense Reimbursement ............................................ 9
7. Miscellaneous .................................................... 9
7.1 Definitions .................................................. 9
7.2 Governing Law ................................................10
7.3 Survival .....................................................10
7.4 Successors and Assigns .......................................10
7.5 Entire Agreement .............................................10
7.6 Specific Enforcement .........................................10
7.7 Separability .................................................11
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7.8 Entire Agreement; Amendment and Waiver......................11
7.9 Notices.....................................................11
7.10 Counterparts................................................11
7.11 Broker's Fees...............................................11
7.12 Future Financings...........................................12
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SERIES C PREFERRED STOCK PURCHASE AGREEMENT
This Series C Preferred Stock Purchase Agreement (the "Agreement") is
entered into as of May 27, 1998, by and among VStream Incorporated, a Delaware
corporation (the "Company"), and each of those persons and entities, severally
and not jointly, whose names are set forth on the Schedule of Purchasers
attached hereto as Exhibit A (collectively the "Purchasers" and individually a
"Purchaser"). Capitalized terms not otherwise defined herein are defined in
Section 7.1.
In consideration of the mutual promises hereinafter set forth, the parties
hereto agree as follows:
1. AGREEMENT TO SELL AND PURCHASE
1.1 Authorization of Shares. On or prior to the Closing (as defined in
Section 2 below), the Company shall have authorized the sale and issuance to the
Purchasers of shares of its Series C Convertible Preferred Stock (the "Shares")
having the rights, preferences, privileges and restrictions set forth in the
Certificate of Amendment to the Certificate of Incorporation of the Company,
attached hereto as Exhibit B (the "Certificate").
1.2 Sale and Purchase. Subject to the terms and conditions hereof, at
the Closing the Company hereby agrees to issue and sell to each Purchaser and
each Purchaser severally and not jointly agrees to purchase from the Company,
the number of Shares set forth opposite such Purchaser's name on Exhibit A, at a
purchase price of One Dollar and Four Cents ($1.04) per Share.
2. CLOSING, DELIVERY AND PAYMENT
2.1 Initial Closing. Any closing of the separate purchase and sale of
the Shares shall take place at such place and on such date as may be mutually
agreeable to the Company and each Purchaser making a purchase of Shares. The
initial closing (the "Initial Closing") shall take place at the offices of
Holland & Xxxx LLP at 10:00 a.m. (Mountain Daylight Time) on May 27, 1998 or at
such other place and on such other date as may be mutually agreeable to the
Company and the Purchasers. Additional purchases may be made at a subsequent
closing (the "Subsequent Closing," whether there are one or more such closings).
(The Initial Closing and each Subsequent Closing are referred to as a
"Closing.") At each Closing, subject to the terms and conditions hereof, the
Company will deliver to the Purchasers certificates representing the number of
Shares to be purchased at the Closing by each Purchaser, against payment of the
purchase price therefor by (a) conversion of certain promissory notes, dated
March 31, 1998, payable by the Company to certain of the Purchasers as
identified on Exhibit A (the "Convertible Notes"), and (b) wire transfer of
immediately available funds.
2.2 Subsequent Closings. At any time or times within 30 days after the
Initial Closing (the "Final Closing Date"), the Company may sell up to 3,200,723
additional Shares to additional purchasers (the "Additional Purchasers") on the
same terms and conditions as such Shares are being sold to the Purchasers. If
such additional sales are made, (i) a Supplementary Schedule of Purchasers
listing the Additional Purchasers and the number of Shares being purchased by
each will be prepared and (ii) the Additional Purchasers will sign counterpart
signature pages to this Agreement, the Stockholders Agreement (as defined below)
and the Investors Agreement (as defined below). The parties to this Agreement
also agree to execute such documents and take all other actions necessary to
permit the Additional Purchasers to become parties to this Agreement and the
Stockholders Agreement. At any Subsequent Closing the Company will deliver to
the Additional Purchasers copies of all documents delivered at the Initial
Closing.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to each Purchaser that except
as set forth on the Disclosure Schedule attached hereto, which shall be deemed
representations and warranties as if made hereunder:
3.1 Organization, Good Standing and Qualification. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Company has all requisite corporate power and
authority to own and operate its properties and assets, to execute and deliver
this Agreement, the Stockholders Agreement attached hereto as Exhibit C (the
"Stockholders Agreement"), and the Investors Agreement attached hereto as
Exhibit D (the "Investors Agreement") to issue and sell the Shares and the
shares of the Company's common stock. $.00l par value (the "Common Stock")
issuable upon conversion thereof (the "Conversion Shares"), to carry out the
other provisions of this Agreement and the Stockholders Agreement, and to carry
on its business as presently conducted and as presently proposed to be
conducted.
3.2 Capitalization. The authorized capital stock of the Company,
immediately prior to the Closing, will consist of twenty million (20,000,000)
shares of Common Stock, four hundred seventy-five thousand (475,000) shares of
which are issued and outstanding, and sixteen million (l6,000,000) shares of
preferred stock, of which (i) five million twenty-five thousand (5,025,000)
shares are designated Series A Convertible Preferred Stock, all of which are
issued and outstanding, (ii) ten thousand, six hundred thirty-five (10,635)
shares are designated Series B Convertible Preferred Stock, all of which are
issued and outstanding, and (iv) ten million (10,000,000) shares are designated
Series C Convertible Preferred Stock, none of which is issued and outstanding.
(The Series A Convertible Preferred Stock, the Series B Convertible Preferred
Stock and the Series C Convertible Preferred Stock are collectively referred to
as the "Preferred Stock".) All issued and outstanding shares of the Company's
Common
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Stock, Series A Convertible Preferred Stock and Series B Convertible Preferred
Stock have been duly authorized and validly issued and are fully paid and
nonassessable. Except as set forth on the Disclosure Schedule there are no
outstanding options, warrants or other rights to purchase from the Company any
of its securities.
3.3 Subsidiaries. The Company has no Subsidiaries.
3.4 Authorization; Binding Obligations. All corporate action on the part
of the Company, its officers, directors and stockholders necessary for the
authorization of this Agreement, the performance of all obligations of the
Company hereunder and under the Stockholders Agreement and for the
authorization, sale, issuance and delivery of the Shares has been taken or will
be taken at or prior to the Closing. When issued in compliance with the
provisions of this Agreement and upon conversion of the Convertible Notes, the
Shares will be validly issued, fully paid and nonassessable. The Conversion
Shares have been duly and validly reserved for issuance and, when issued upon
conversion of the Series C Preferred Stock in accordance with the terms of the
Certificate, will be validly issued, fully paid and nonassessable. This
Agreement and the Stockholders Agreement have been duly executed by the Company
and constitute valid and binding obligations of the Company enforceable in
accordance with their terms except (i) as limited by applicable bankruptcy,
reorganization, insolvency, moratorium and similar laws affecting the rights of
creditors generally (ii) as limited by laws relating to the availability of
specific performance, injunctive relief or other equitable remedies and (iii) to
the extent the indemnification provision contained in the Stockholders Agreement
may be limited by applicable federal or state securities laws.
3.5 Consents and Approvals. No filings with, notices to, or approvals of
any governmental or regulatory body are required to be obtained or made by the
Company in connection with the consummation of the transactions contemplated
hereby except for filings pursuant to state securities laws (all of which have
been made by the Company, other than those which are required to be made after
the Closing and which will be duly made on a timely basis).
3.6 No Violations. The execution and delivery of this Agreement and the
Stockholders Agreement and the performance by the Company of its obligations
hereunder and thereunder (i) do not and will not conflict with or violate any
provision of the certificate of incorporation, as amended, (including the
Certificate), or bylaws of the Company and (ii) do not and will not (a) conflict
with or result in a breach of the terms, conditions or provisions of, (b)
constitute a default under, (c) result in the creation of any encumbrance upon
the capital stock or assets of the Company pursuant to, (d) give any third party
the right to modify, terminate or accelerate any obligation under, (e) result in
a violation of, or (f) require any authorization, consent, approval, exemption
or other action by or notice to any court or administrative or governmental body
or other third party pursuant to, any law, statute, rule or regulation or any
agreement or instrument or any order, judgment or decree to which the Company is
subject or by
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which any of its assets are bound which would have a material adverse effect on
the assets, financial condition or operations of the Company.
3.7 Financial Statements; Interim Changes. The Company's audited balance
sheet as of December 31, 1997 and audited statements of operations and cash
flows of the Company for the 12-month period ended December 31, 1997 and the
Company's unaudited balance sheet as of April 30, 1998 (the "Latest Balance
Sheet") and unaudited statements of operations and cash flows of the Company for
the 4-month period ending April 30, 1998 delivered to the Purchasers in
connection with the investment contemplated hereby have been prepared in
accordance with generally accepted accounting principles consistently applied
(subject to normal year-end adjustments and the absence of footnote disclosures)
and fairly present in all material respects the financial position and the
results of operations of the Company for the period covered thereby, and the
Company has no material liabilities or obligations of any nature (absolute,
accrued, contingent or otherwise) that are not either reflected or fully
reserved against on the Latest Balance Sheet or incurred in the ordinary course
of the business of the Company subsequent to the date thereof. Since the date of
the Latest Balance Sheet, there has not been any material adverse change in the
business, operations, financial condition or business as presently proposed to
be conducted by the Company.
3.8 Compliance with Laws. The Company's business has been conducted in
compliance with all applicable laws and regulations of governmental authorities,
except for such violations that have been cured or that, individually or in the
aggregate, may not reasonably be expected to have a material adverse effect on
the business, operations or financial condition or business as presently
proposed to be conducted by the Company.
3.9 Proprietary Rights. The Disclosure Schedule contains a complete and
accurate list of (i) all patented and registered Proprietary Rights owned by the
Company, (ii) all pending patent applications and applications for registrations
of other Proprietary Rights filed by the Company, (iii) all unregistered trade
names and corporate names owned or used by the Company and (iv) all unregistered
trademarks, service marks and copyrights and computer software, which are
material to the financial condition, operating results, assets, operations or
business prospects of the Company. The Disclosure Schedule also contains a
complete and accurate list of all licenses and other rights granted by the
Company to any third party with respect to any Proprietary Rights and all
licenses and other rights granted by any third party to the Company with respect
to any Proprietary Rights, except for "shrink-wrapped" or similar licenses
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granted to the Company by third parties for software used in the business of
the Company that is generally commercially available. The Company owns or has
the right to use pursuant to a valid license all Proprietary Rights necessary
for the operation of the businesses of the Company as presently conducted and as
presently proposed to be conducted. To the Company's knowledge, no loss or
expiration of any Proprietary Right or related group of Proprietary Rights is
threatened, pending or expected. The Company has taken all reasonably necessary
actions to maintain and protect the Proprietary Rights
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which it owns and uses. The Company has no reason (without having conducted any
special investigation) to believe that the owners of any Proprietary Rights
licensed to the Company have not taken actions necessary to maintain and protect
the Proprietary Rights which are subject to such licenses. Except as indicated
on the Disclosure Schedule, (i) the Company owns all right, title, and interest
in and to or has the right to use under a valid license all of the Proprietary
Rights listed on such schedule and all other Proprietary Rights material to the
operation of the business of the Company, (ii) there have been no claims made
against the Company asserting the invalidity, misuse or unenforceability of any
of such rights and to the Company's knowledge, none is threatened, (iii) the
Company has not received a notice of conflict with the asserted rights of
others, and (iv) to the knowledge of the Company (without having conducted a
special investigation or patent search) the conduct of the Company's business
has not infringed or misappropriated and does not infringe or misappropriate any
Proprietary Rights of other Persons, and, to the Company's knowledge, the
Proprietary Rights owned by the Company have not been infringed or
misappropriated by other Persons.
3.10 Actions Pending. There is no action, suit or proceeding pending or
to the knowledge of the Company, threatened against or affecting the Company or
any of its respective properties or rights before any court or by or before any
governmental body or arbitration board or tribunal.
3.11 Material Contracts. Except as set forth on the Disclosure Schedule
attached hereto, the Company is not a party to (and is not otherwise bound by)
any of the following: (i) any employment or consulting contract, (ii) any
agreement providing for the issuance or repurchase of any securities of the
Company, (iii) any agreement in respect of registration rights, preemptive
rights, rights of first refusal, voting rights or other rights of security
holders, (iv) any agreement evidencing or providing for any indebtedness for
borrowed money, or (v) any other agreement that could reasonably be deemed
material to the Company.
3.12 Investments in United States Real Property Interests. The Company's
capital stock does not constitute a United States real property interest as that
term is defined in Section 897(c)(1)(A)(ii) of the Internal Revenue Code of
1986, as amended (the "Code"). The preceding representation is based on a
determination by the Company that the Company is not and has not been a United
States real property holding corporation (as that term is defined in Section
897(c)(2) of the Code) ("USRPHC") during the five (5) year period preceding the
date of this Agreement. From time to time, upon request of any Purchaser, the
Company shall make a determination as to its status as a USRPHC. If at any time
in the future the Company should become a USRPHC, the Company shall, as promptly
as possible, notify each Purchaser of such change in status.
3.13 Unrelated Business Taxable Income. Any gross income derived by the
Purchasers from the Company shall be in the form of dividends, interest, capital
gains and losses from the disposition of property, and rents and royalties, but
only such rents and royalties as are excluded pursuant to Code Sections
512(b)(2) and 512(b)(3), respectively, in calculating unrelated business taxable
income and only such dividends,
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interest, capital gains and losses, and rents and royalties that are not
included under Section 512(b)(4) of the Code in calculating unrelated business
taxable income.
3.14 Qualified Small Business. The Company qualifies as a "Qualified
Small Business" as defined in Section 1202(d) of the Code and covenants that so
long as its shares are held by the Purchasers (or a transferee in whose hands
the shares are eligible to qualify as Qualified Small Business Stock as defined
in Section 1202(c) of the Code), it will use its best efforts to cause the
shares to qualify as Qualified Small Business Stock.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser severally and not jointly hereby represents and warrants
to the Company as follows:
4.1 Requisite Power and Authority. Such Purchaser has all necessary
power and authority under all applicable provisions of law to execute and
deliver this Agreement and the Stockholders Agreement and to carry out the
provisions hereunder and thereunder. All actions on such Purchaser's part
required for the lawful execution and delivery of this Agreement and the
Stockholders Agreement have been or will be effectively taken prior to the
Closing and each such agreement constitutes a valid and binding obligation of
such Purchaser, enforceable in accordance with its terms, except (i) as limited
by applicable bankruptcy, reorganization, insolvency, moratorium and similar
laws affecting the rights of creditors generally (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies and (iii) to the extent the indemnification provision
contained in the Stockholders Agreement may be limited by applicable federal or
state securities laws.
4.2 Investment Representations. Such Purchaser understands that neither
the Shares nor the Conversion Shares have been registered under the Securities
Act of 1933, as amended (the "Securities Act"). Such Purchaser also understands
and hereby confirms that the Shares are being offered and sold pursuant to an
exemption from registration contained in the Securities Act based in part upon
the Purchaser's representations contained in this Agreement.
(a) Purchaser Bears Economic Risk. Such Purchaser has substantial
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experience in evaluating and investing in private placement transactions of
securities in companies similar to the Company so that it is capable of
evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests. Such Purchaser must bear the economic
risk of this investment indefinitely unless the Shares (or the Conversion
Shares) are registered pursuant to the Securities Act, or an exemption from
registration is available. Such Purchaser understands that the Company has no
present intention of registering the Shares, the Conversion Shares or any
shares of its Common Stock or Preferred Stock. Such Purchaser also understands
that there is no assurance that any exemption from registration under the
Securities Act will be available and that, even if available, such exemption may
not allow such
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Purchaser to transfer all or any portion of the Shares or the Conversion Shares
under the circumstances, in the amounts or at the times such Purchaser might
propose.
(b) Acquisition for Own Account. Such Purchaser is acquiring the
---------------------------
Shares and the Conversion Shares for its own account for investment only, and
not with a view towards their resale or distribution of any part thereof in
violation of applicable securities laws. By executing this Agreement, each
Purchaser further represents that such Purchaser does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participation to such person or to any third person, with respect to any of the
Shares.
(c) Purchaser Can Protect Its Interest. Such Purchaser represents
----------------------------------
that, by reason of its or of its management's business or financial experience,
such Purchaser has the capacity to protect its own interests in connection with
the transactions contemplated in this Agreement. Further, such Purchaser is
aware of no publication of any advertisement in connection with the transactions
contemplated by the Agreement.
(d) Accredited Investor. Such Purchaser represents that it is an
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accredited investor within the meaning of Regulation D under the Securities Act.
(e) Company Information. Such Purchaser has had an opportunity to
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discuss the Company's business, management and financial affairs with directors,
officers and management of the Company and believes that such Purchaser has
received all of the information such Purchaser considers necessary or
appropriate for deciding whether to purchase the Shares. Such Purchaser has also
had the opportunity to ask questions of, and receive answers from, the Company
and its management regarding the terms and conditions of this investment.
(f) Rule 144. Such Purchaser acknowledges and agrees that the Shares
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and the Conversion Stock must be held indefinitely unless they are subsequently
registered under the Securities Act or an exemption from such registration is
available. Such Purchaser has been advised or is aware of the provisions of Rule
144 promulgated under the Securities Act, which permits limited resale of shares
purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things: the availability of certain current
public information about the Company, the resale occurring not less than one
year after a party has purchased and paid for the security to be sold, the sale
being through an unsolicited "broker's transaction" or in transactions directly
with a market maker (as said term is defined under the Securities Exchange Act
of 1934, as amended) and the number of shares being sold during any three-month
period not exceeding specified limitations.
(g) Further Limitations on Disposition. Without in any way limiting
----------------------------------
the representations set forth above, each Purchaser further agrees not to make
any disposition of all or any portion of the Series C Preferred Stock (or the
Common Stock issuable upon the conversion thereof) unless and until there is
then in effect a
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Registration Statement under the Securities Act covering such proposed
disposition and such disposition is made in accordance with such Registration
Statement, or such Purchaser shall have established to the reasonable
satisfaction of the Company that an exemption from registration is available.
(h) Legends. It is understood that the certificates evidencing the
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Series C Preferred Stock (and the Conversion Stock) may bear one or all of the
following legends:
(i) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT WITH
RESPECT TO THE SECURITIES UNDER SUCH ACT AND APPLICABLE STATE SECURITIES
LAWS OR AN EXEMPTION FROM REGISTRATION BEING AVAILABLE UNDER SUCH ACT AND
APPLICABLE STATE SECURITIES LAWS."
(ii) Any legend required by any applicable state securities laws.
(iii) Any legend required by the Stockholders Agreement.
5. CONDITIONS PRECEDENT To PURCHASERS' OBLIGATIONS
The obligation of each Purchaser to purchase and pay for the Shares to
be delivered to it at each Closing shall be subject to the satisfaction of the
following conditions as of the Closing Date:
(i) the representations and warranties of the Company' contained
in this Agreement shall be true and correct in all material respects on and
as of each Closing Date:
(ii) the Company shall have taken efforts reasonably satisfactory
to the Investors to obtain within 60 days after the date of the Initial
Closing from financially sound and reputable insurers term life insurance
policies reasonably satisfactory to the Purchaser on the lives of Xxxx X.
Xxxxxxxxx, Xxxxx Me LeJeal and Xxxx X. Xxxxxx in the amount of $2,000,000
each, which policies shall name the Company as loss payee:
(iii) concurrent with each Closing, the Company, the Purchasers and
the existing stockholders of the Company shall have entered into the
Stockholders Agreement in the form attached hereto as Exhibit C;
(iv) the Purchasers shall have received the legal opinion of
Xxxxxxx, Xxxxxxx & Xxxxxxxx, LLP, counsel to the Company, in the form of
Exhibit E hereto:
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(v) the Company shall have provided to Centennial Fund V. L.P.
("Centennial") at each Closing at which Centennial is purchasing Shares a
certification of the direct and indirect holdings of securities of the
Company by certain persons designated by Centennial as required by
Centennial's governing documents;
(vi) all other Purchasers who are purchasing Shares at the Closing
shall have concurrently purchased the Shares to be purchased by them
pursuant to this Agreement; and
(vii) members of the Company's management identified by Centennial
shall have completed interviews with an industrial psychologist chosen by
Centennial.
6. EXPENSE REIMBURSEMENT
The Company hereby agrees to reimburse each Purchaser for its out-of-
pocket expenses incurred in connection with the transactions contemplated
hereby, including all expenses incurred in connection with its due diligence
examination of the Company, the industrial psychologist fees for the
examinations referred to in Section 5(vii) above, the preparation and
negotiation of this Agreement, the Stockholders Agreement and all other
documents evidencing the transactions contemplated herein (including the fees
(not to exceed $25,000) and expenses of one counsel representing the Purchasers,
and in connection with the enforcement of rights and remedies of the Purchasers
hereunder and under the Stockholders Agreement and all other documents
evidencing the transactions contemplated herein; provided, however, that the
Company shall not be responsible for any such fees or expenses if the
transactions contemplated by this Agreement are not consummated.
7. MISCELLANEOUS
7.1 Definitions. For purposes of this Agreement, the following terms
have the meanings set forth below:
"Person" means an individual, a partnership, a corporation, an association,
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a joint stock company, a trust, a joint venture, an unincorporated organization
and a governmental entity or any department, agency or political subdivision
thereof.
"Proprietary Rights" means all (i) patents, patent applications, patent
------------------
disclosures and inventions, (ii) trademarks, service marks, trade dress, trade
names and corporate names and registrations and applications for registration
thereof, (iii) copyrights and registrations and applications for registration
thereof, (iv) mask works and registrations and applications for registration
thereof, (v) computer software, data and documentation, (vi) trade secrets and
other confidential information (including, without limitation, ideas, formulas,
compositions, inventions (whether patentable or unpatentable and whether or not
reduced to practice), know-how, manufacturing and information,
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drawings, specifications, designs, plans, proposals, and customer and supplier
lists and information), (vii) other intellectual property rights, and (viii)
copies and tangible embodiments thereof (in whatever form or medium).
"Subsidiary" means with respect to any Person, any corporation,
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partnership, association or other business entity of which (i) if a corporation,
a majority of the total voting power of shares of stock entitled (without regard
to the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereof is at the time owned or controlled, directly or
indirectly, by that Person or one or more of the other Subsidiaries of that
Person or a combination thereof, or (ii) if a partnership, association or other
business entity, a majority of the partnership or other similar ownership
interest thereof is at the time owned or controlled, directly or indirectly, by
any Person or one or more Subsidiaries of that Person or a combination thereof.
For purposes hereof, a Person or Persons shall be deemed to have a majority
ownership interest in a partnership, association or other business entity if
such Person or Persons shall be allocated a majority of partnership, association
or other business entity gains or losses or shall be or control the managing
director or general partner of such partnership, association or other business
entity.
7.2 Governing Law. This Agreement shall be governed in all respects by
the laws of the State of Colorado as such laws are applied to agreements between
Colorado residents entered into and performed entirely in Colorado, except that
the General Corporation Law of the State of Delaware shall govern as to matters
of corporate law.
7.3 Survival. The representations, warranties, covenants and agreements
made herein shall survive any investigation made by any Purchaser and the
closing of the transactions contemplated hereby. All statements as to factual
matters contained in any certificate or other instrument delivered by or on
behalf of the Company hereunder in connection with the transactions contemplated
hereby shall be deemed to be representations and warranties by the Company
hereunder solely as of the date of such certificate or instrument.
7.4 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of the Shares from time to time.
7.5 Entire Agreement. This Agreement, the Exhibits and the other
documents expressly delivered hereunder, including the Stockholders Agreement,
supersede any other agreement, whether written or oral, that may have been made
or entered into by the parties hereto relating to the matters contemplated
hereby and constitute the full and entire understanding and agreement between
the parties with regard to the subjects hereof, and no party shall be liable or
bound to any other in any
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manner by any representations, warranties, covenants and agreements except as
specifically set forth herein and therein.
7.6 Specific Enforcement. Any Purchaser shall be entitled to specific
enforcement of its rights under this Agreement. The Company acknowledges that
money damages would be an inadequate remedy for its breach of this Agreement and
consents to an action for specific performance or other injunctive relief in the
event of any such breach.
7.7 Separability. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
7.8 Entire Agreement; Amendment and Waiver. This Agreement (including
all exhibits hereto and the documents referred to herein) contains the entire
agreement and understanding of the parties with respect to the subject matter
hereof and supersedes all prior written or oral agreements with respect thereto.
This Agreement may be amended or modified only upon the mutual written consent
of the Company and the holders of at least 66 2/3% of the Shares (voting on an
as-converted basis).
7.9 Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified; (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day; (iii) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid: or (iv) one (1) day after deposit
with a nationally recognized overnight courier, special next day delivery, with
verification of receipt. All communications shall be sent to the Company at 0000
Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, XX 00000 and to a Purchaser at the address
set forth on Exhibit A attached hereto or at such other address as the Company
or Purchaser may designate by ten (10) days advance written notice to the other
parties hereto.
7.10 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
7.11 Broker's Fees. Each party hereto represents and warrants that no
agent, broker, investment banker, person or firm acting on behalf of or under
the authority of such party hereto is or will be entitled to any broker's or
finder's fee or any other commission directly or indirectly in connection with
the transactions contemplated herein. Each party hereto further agrees to
indemnify each other party for any claims, losses or expenses incurred by such
other party as a result of the representation in this Section 7.11 being
untrue.
11
7.12 Future Financings. Nothing contained in this Agreement or any
Purchaser's prior dealings with the Company shall be deemed to constitute a
commitment on the part of any Purchaser to participate in any future financings
by the Company.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
12
IN WITNESS WHEREOF, the parties hereto have executed the Agreement as of
the date set forth in the first paragraph hereof.
COMPANY:
VSTREAM INCORPORATED
By: /s/ Xxxxx X. XxXxxx
--------------------------------
Title: Secretary
-----------------------------
PURCHASERS:
CENTENNIAL FUND V, L.P.
By: Centennial Holdings V, L.P.,
Its General Partner
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
---------------------------------
a General Partner
CENTENNIAL ENTREPRENEURS FUND V, L.P.
By: Centennial Holdings V, L.P.
Its General Partner
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
---------------------------------
Title:
------------------------------
SOFTBANK TECHNOLOGY VENTURES IV L.P.
By: STV IV LLC
By: /s/ Xxxxxxx X. Xxxx
---------------------------------
Managing Director
SOFTBANK TECHNOLOGY ADVISORS FUND L.P.
By: STV IV LLC
By: /s/ Xxxxxxx X. Xxxx
---------------------------------
Managing Director
13
XXXXXXXXXX FAMILY PARTNERSHIP
By: /s/ X. Xxxxxxx Xxxxxxxxxx
-------------------------------------
Title: General Partner
-----------------------------------
MILLENNIAL HOLDINGS, LLC
By: /s/ X. Xxxxxxx Xxxxxxxxxx
-------------------------------------
Manager
13
SERIES C STOCK PURCHASE AGREEMENT
Exhibit A
SCHEDULE OF PURCHASERS
May 27, 1998
Number of Aggregate Closing Cash
Name and Address Shares Purchase Price Payment
Centennial Fund V, L.P. 3,730,770 $3,880,000.80 (1) $3,634,245.32
0000 00xx Xxxxxx
Xxxxxx, XX 00000
Centennial Entrepreneurs Fund V, L.P. 115,384 119,999.36 (2) 112,398.68
0000 00xx Xxxxxx
Xxxxxx, XX 00000
SOFTBANK Technology Ventures IV L.P. 2,826,924 2,940,000.96 (3) 2,691,557.67
c/o Xxxxxxx Xxxx
000 X. Xxx Xxxxxx Xxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
SOFTBANK Technology Advisors Fund L.P. 57,692 59,999.68 (4) 54,929.82
c/o Xxxxxxx Xxxx
000 X. Xxx Xxxxxx Xxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Xxxxxxxxxx Family Partnership 24,038 24,999.52 24,999.52
0000 00xx Xxxxxx
Xxxxxx, XX 00000
Millennial Holdings, LLC 24,038 24,999.52 24,999.52
0000 00xx Xxxxxx
Xxxxxx, XX 00000
Total 6,778,846 $7,049,999.84 $6,543,150.53
(1) Amount of Principal and Accrued Interest on Convertible Subordinated
Promissory Note: 245,755.48.
(2) Amount of Principal and Accrued Interest on Convertible Subordinated
Promissory Note: 7,600.68.
(3) Amount of Principal and Accrued Interest on Convertible Subordinated
Promissory Note: 248,423.29.
(4) Amount of Principal and Accrued Interest on Convertible Subordinated
Promissory Note: 5,069.86.
