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EXHIBIT 4.2
FORM OF STOCK PURCHASE AGREEMENT
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STOCK PURCHASE AGREEMENT
MessageMedia, Inc.
0000 Xxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
Ladies & Gentlemen:
The undersigned, (the "Investor"), hereby confirms its agreement
with you as follows:
1. This Stock Purchase Agreement (the "Agreement") is made as of
, 1999 between MessageMedia, Inc., a Delaware corporation (the
"Company"), and the Investor.
2. The Company has authorized the sale and issuance of up to shares
(the "Shares") of common stock of the Company, $.001 par value per share (the
"Common Stock"), subject to adjustment by the Company's Board of Directors, to
certain investors in a private placement (the "Offering").
3. The Company and the Investor agree that the Investor will purchase from
the Company and the Company will issue and sell to the Investor shares, for
a purchase price of $ per share, or an aggregate purchase price of
$ , pursuant to the Terms and Conditions for Purchase of Shares
attached hereto as Annex I and incorporated herein by reference as if fully set
forth herein. Unless otherwise requested by the Investor, certificates
representing the shares purchased by the Investor will be registered in the
Investor's name and address as set forth below.
4. The Investor represents that, except as set forth below, (a) it has had
no position, office or other material relationship within the past three years
with the Company or its affiliates, (b) neither it, nor any group of which it is
a member or to which it is related, beneficially owns (including the right to
acquire or vote) any securities of the Company and (c) it has no direct or
indirect affiliation or association with any NASD member. Exceptions:
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(If no exceptions, write "none." If left blank, response will be deemed to be
"none.")
Please confirm that the foregoing correctly sets forth the agreement
between us by signing in the space provided below for that purpose.
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"INVESTOR"
By:
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Print Name:
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Title:
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Address:
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Tax ID No.:
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Contact Name:
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Telephone:
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Name in which shares should be
registered (if different):
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AGREED AND ACCEPTED:
MESSAGEMEDIA, INC.
By:
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Title:
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ANNEX I
TERMS AND CONDITIONS FOR PURCHASE OF SHARES
1. Authorization and Sale of the Shares. Subject to the terms and conditions of
this Agreement, the Company has authorized the sale of the Shares.
2. Agreement to Sell and Purchase the Shares; Subscription Date.
2.1 At the Closing (as defined in Section 3), the Company will sell to the
Investor, and the Investor will purchase from the Company, upon the terms and
conditions hereinafter set forth, the number of Shares set forth on the
signature page hereto at the purchase price set forth on such signature page.
2.2 The Company proposes to enter into this same form of Stock Purchase
Agreement with certain other investors (the "Other Investors") and expects to
complete sales of Shares to them. (The Investor and the Other Investors are
hereinafter sometimes collectively referred to as the "Investors," and this
Agreement and the Stock Purchase Agreements executed by the Other Investors are
hereinafter sometimes collectively referred to as the "Agreements.") The Company
will accept executed Agreements from Investors for the purchase of Shares
commencing upon the date on which the Company provides the Investors with the
proposed purchase price per Share and concluding upon the date (the
"Subscription Date") on which the Company has (i) executed Agreements with
Investors each for the purchase of Shares in the amount of at least $1,000,000
and (ii) notified BancBoston Xxxxxxxxx Xxxxxxxx Inc. (in its capacity as
Placement Agent for the Shares, the "Placement Agent") in writing that it is no
longer accepting Agreements from Investors for the purchase of Shares.
2.3 Investor acknowledges that the Company intends to pay the Placement
Agent a fee in respect of the sale of Shares to the Investor.
3. Delivery of the Shares at Closing. The completion of the purchase and sale of
the Shares (the "Closing") shall occur at a place and time (the "Closing Date")
to be specified by the Company and the Placement Agent, and of which the
Investors will be notified in advance by the Placement Agent. At the Closing,
the Company shall deliver to the Investor one or more stock certificates
representing the number of Shares set forth on the signature page hereto, each
such certificate to be registered in the name of the Investor or, if so
indicated on the signature page hereto, in the name of a nominee designated by
the Investor.
The Company's obligation to issue the Shares to the Investor shall be
subject to the following conditions, any one or more of which may be waived by
the Company: (a) receipt by the Company of the purchase price for the Shares
being purchased hereunder as set forth on the signature page hereto; (b)
completion of the purchases and sales under the Agreements with the Other
Investors; and (c) the accuracy of the representations and warranties made by
the Investors and the fulfillment of those undertakings of the Investors to be
fulfilled prior to the Closing.
The Investor's obligation to purchase the Shares shall be subject to the
following conditions, any one or more of which may be waived by the Investor:
(a) Investors shall have executed Agreements each for the purchase of Shares in
the amount of at least $1,000,000; and (b) the satisfaction of all of the
conditions set forth in Section 6 of the Placement Agency Agreement between the
Company and the Placement Agent. Subject to clause (a) above, the Investor's
obligations are expressly not conditioned on the purchase by any or all of the
other Investors of the Shares that they have agreed to purchase from the
Company.
4. Representations, Warranties and Covenants of the Company. Except as otherwise
described in the confidential offering memorandum, dated September 23, 1999,
distributed in connection with the sale of the Shares (including the documents
incorporated by reference therein, the "Placement Memorandum"), which qualifies
the following representations and warranties in their entirety, the Company
hereby represents and warrants to, and covenants with, the Investor, as follows:
4.1 Organization. The Company is duly incorporated and validly existing in
good standing under the laws of the jurisdiction of its organization. Each of
the Company and its Subsidiaries (as defined in Rule 405 under the Securities
Act of 1933, as amended (the "Securities Act")) has full power and authority to
own,
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operate and occupy its properties and to conduct its business as presently
conducted and as described in the Placement Memorandum and is registered or
qualified to do business and in good standing in each jurisdiction in which it
owns or leases property or transacts business and where the failure to be so
qualified would have a material adverse effect upon the business, financial
condition, properties or operations of the Company and its Subsidiaries,
considered as one enterprise ("Material Adverse Effect"), and no proceeding has
been instituted in any such jurisdiction revoking, limiting or curtailing, or
seeking to revoke, limit or curtail, such power and authority or qualification.
4.2 Due Authorization. The Company has all requisite power and authority
to execute, deliver and perform its obligations under the Agreements, and the
Agreements have been duly authorized and validly executed and delivered by the
Company and constitute legal, valid and binding agreements of the Company
enforceable against the Company in accordance with their terms, except as rights
to indemnity and contribution may be limited by state or federal securities laws
or the public policy underlying such laws, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors' and contracting parties' rights generally and
except as enforceability may be subject to general principles of equity
(regardless of whether such enforceability is considered in a proceeding in
equity or at law).
4.3 Non-Contravention. The execution and delivery of the Agreements, the
issuance and sale of the Shares to be sold by the Company under the Agreements,
the fulfillment of the terms of the Agreements and the consummation of the
transactions contemplated thereby will not (A) conflict with or constitute a
violation of, or default (with the passage of time or otherwise) under, (i) any
material bond, debenture, note or other evidence of indebtedness, or any
material lease, contract, indenture, mortgage, deed of trust, loan agreement,
joint venture or other agreement or instrument to which the Company or any
Subsidiary is a party or by which it or any of its Subsidiaries or their
respective properties are bound, where such conflict, violation or default is
likely to result in a Material Adverse Effect, (ii) the charter, by-laws or
other organizational documents of the Company or any Subsidiary, or (iii) any
law, administrative regulation, ordinance or order of any court or governmental
agency, arbitration panel or authority binding upon the Company or any
Subsidiary or their respective properties, where such conflict, violation or
default is likely to result in a Material Adverse Effect, or (B) result in the
creation or imposition of any lien, encumbrance, claim, security interest or
restriction whatsoever upon any of the material properties or assets of the
Company or any Subsidiary or an acceleration of indebtedness pursuant to any
obligation, agreement or condition contained in any material bond, debenture,
note or any other evidence of indebtedness or any material indenture, mortgage,
deed of trust or any other agreement or instrument to which the Company or any
Subsidiary is a party or by which any of them is bound or to which any of the
property or assets of the Company or any Subsidiary is subject. No consent,
approval, authorization or other order of, or registration, qualification or
filing with, any regulatory body, administrative agency, or other governmental
body in the United States is required for the execution and delivery of the
Agreements and the valid issuance and sale of the Shares to be sold pursuant to
the Agreements, other than such as have been made or obtained, and except for
any securities filings required to be made under federal or state securities
laws.
4.4 Capitalization. The capitalization of the Company as of August 17,
1999 is as set forth in the Placement Memorandum (excluding unvested options and
treasury shares). The Company has not issued any capital stock since that date
other than pursuant to (i) employee benefit plans disclosed in the Placement
Memorandum or (ii) outstanding warrants disclosed in the Placement Memorandum.
The Shares to be sold pursuant to the Agreements have been duly authorized, and
when issued and paid for in accordance with the terms of the Agreements, will be
duly and validly issued, fully paid and nonassessable. Except for any actions
required to be taken by the Company in connection with the settlement of claims
described in the Placement Memorandum, the outstanding shares of capital stock
of the Company have been duly and validly issued and are fully paid and
nonassessable, have been issued in compliance with all federal and state
securities laws, and were not issued in violation of any preemptive rights or
similar rights to subscribe for or purchase securities. Except as set forth in
or contemplated by the Placement Memorandum, there are no outstanding rights
(including, without limitation, preemptive rights), warrants or options to
acquire, or instruments convertible into or exchangeable for, any unissued
shares of capital stock or other equity interest in the Company or any
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Subsidiary, or any contract, commitment, agreement, understanding or arrangement
of any kind to which the Company is a party and relating to the issuance or sale
of any capital stock of the Company or any Subsidiary, any such convertible or
exchangeable securities or any such rights, warrants or options. Without
limiting the foregoing, no preemptive right, co-sale right, registration right,
right of first refusal or other similar right exists with respect to the
issuance and sale of the Shares. The Company owns the entire equity interest in
each of its Subsidiaries, free and clear of any pledge, lien, security interest,
encumbrance or claim, other than as described in the Placement Memorandum.
Except as disclosed in the Placement Memorandum, there are no stockholders
agreements, voting agreements or other similar agreements with respect to the
Common Stock to which the Company is a party.
4.5 Legal Proceedings. There is no material legal or governmental
proceeding pending to which the Company or any Subsidiary is a party or of which
the business or property of the Company or any Subsidiary is subject that is not
disclosed in the Placement Memorandum.
4.6 No Violations. Neither the Company or any Subsidiary is in violation of
its charter, bylaws or other organizational document, or in violation of any
law, administrative regulation, ordinance or order of any court or governmental
agency, arbitration panel or authority applicable to the Company or any
Subsidiary, which violation, individually or in the aggregate, would be
reasonably likely to have a Material Adverse Effect, or is in default (and there
exists no condition which, with the passage of time or otherwise, would
constitute a default) in the performance of any material bond, debenture, note
or any other evidence of indebtedness in any indenture, mortgage, deed of trust
or any other material agreement or instrument to which the Company or any
Subsidiary is a party or by which the Company or any Subsidiary is bound or by
which the properties of the Company or any Subsidiary are bound, which would be
reasonably likely to have a Material Adverse Effect.
4.7 Governmental Permits, Etc. With the exception of the matters which are
dealt with separately in Sections 4.1, 4.13, and 4.14, each of the Company and
its Subsidiaries has all necessary franchises, licenses, certificates and other
authorizations from any foreign, federal, state or local government or
governmental agency, department or body that are currently necessary for the
operation of the business of the Company and its Subsidiaries as currently
conducted and as described in the Placement Memorandum except where the failure
to currently possess could not reasonably be expected to have a Material Adverse
Effect.
4.8 Intellectual Property.
(a) The Company has ownership or license or legal right to use all patent,
copyright, trade secret, trademark, customer lists, designs, manufacturing or
other processes, computer software, systems, data compilation, research results
or other proprietary rights used in the business of the Company and material to
the Company (collectively, "Intellectual Property") other than Intellectual
Property generally available on commercial terms from other sources. All of such
patents, trademarks and registered copyrights have been duly registered in,
filed in or issued by the United States Patent and Trademark Office, the United
States Register of Copyrights or the corresponding offices of other
jurisdictions and have been maintained and renewed in accordance with all
applicable provisions of law and administrative regulations in the United States
and all such jurisdictions.
(b) All material licenses or other material agreements under which (i) the
Company is granted rights in Intellectual Property, other than Intellectual
Property generally available on commercial terms from other sources, and (ii)
the Company has granted rights to others in Intellectual Property owned or
licensed by the Company, are in full force and effect and, to the knowledge of
the Company, there is no material default by the Company thereto.
(c) The Company believes it has taken all steps required in accordance
with sound business practice and business judgment to establish and preserve its
ownership of all material copyright, trade secret and other proprietary rights
with respect to its products and technology.
(d) To the knowledge of the Company, the present business, activities and
products of the Company do not infringe any intellectual property of any other
person, except where such infringement would not have a Material Adverse Effect
on the Company. No proceeding charging the Company with infringement of any
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adversely held Intellectual Property has been filed. To the Company's knowledge,
there exists no unexpired patent or patent application which includes claims
that would be infringed by or otherwise have a Material Adverse Effect on the
Company. To the knowledge of the Company, the Company is not making unauthorized
use of any confidential information or trade secrets of any person. Neither the
Company nor, to the knowledge of the Company, any of its employees have any
agreements or arrangements with any persons other than the Company related to
confidential information or trade secrets of such persons or restricting any
such employee's engagement in business activities of any nature. To the
Company's knowledge, the activities of the Company or any of its employees on
behalf of the Company do not violate any such agreements or arrangements known
to the Company which any such employees have with other persons, if any.
4.9 Financial Statements. The financial statements of the Company and the
related notes contained in the Placement Memorandum present fairly, in
accordance with generally accepted accounting principles, the financial position
of the Company and its Subsidiaries as of the dates indicated, and the results
of its operations and cash flows for the periods therein specified. Such
financial statements (including the related notes) have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis throughout the periods therein specified, except as disclosed in the
Placement Memorandum. The other financial information contained in the Placement
Memorandum has been prepared on a basis consistent with the financial statements
of the Company.
4.10 No Material Adverse Change. Except as disclosed in the Placement
Memorandum, since June 30, 1999, there has not been any Material Adverse Effect,
(ii) any obligation, direct or contingent, that is material to the Company and
its Subsidiaries considered as one enterprise, incurred by the Company, except
obligations incurred in the ordinary course of business, (iii) any dividend or
distribution of any kind declared, paid or made on the capital stock of the
Company or any of its Subsidiaries, or (iv) any loss or damage (whether or not
insured) to the physical property of the Company or any of its Subsidiaries
which has been sustained which has a Material Adverse Effect.
4.11 Disclosure. The information contained in the Placement Memorandum as
of the date of such information did not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading.
4.12 NASDAQ Compliance. The Company's Common Stock is registered pursuant
to Section 12(g) of the Exchange Act and is listed on The Nasdaq National Market
(the "Nasdaq Stock Market"), and the Company has taken no action designed to, or
likely to have the effect of, terminating the registration of the Common Stock
under the Exchange Act or de-listing the Common Stock from the Nasdaq Stock
Market.
4.13 Reporting Status. The Company has filed in a timely manner all
documents that the Company was required to file under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), during the 12 months preceding the
date of this Agreement. The following documents complied in all material
respects with the SEC's requirements as of their respective filing dates, and
the information contained therein as of the date thereof did not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein in light of the
circumstances under where they were made not misleading:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1998 (the "10-K");
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1999;
(c) The Company's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1999;
(d) The Company's Current Report on Form 8-K/A, filed with the SEC on
September 23, 1999; and
(e) All other documents, if any, filed by the Company with the SEC
since December 31,1998 pursuant to the reporting requirements of the
Exchange Act.
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4.14 Listing. The Company shall comply with all requirements of the
National Association of Securities Dealers, Inc. with respect to the issuance of
the Shares and the listing thereof on the Nasdaq Stock Market.
4.15 Year 2000 Compliance. The information set forth in the Company's
Current Report on Form 8-K/A, filed with the SEC on September 23, 1999, with
respect to the Company's efforts regarding year 2000 matters (i) conforms in all
material respects to the guidelines set forth in SEC Release No. 33-7558 and
(ii) accurately describes the status of the Company's efforts regarding year
2000 matters. To the Company's knowledge, the costs associated with ensuring
that the Company is year 2000 compliant will not result in a Material Adverse
Effect.
4.16 Foreign Corrupt Practices. Neither the Company nor any of its
Subsidiaries, nor, to the knowledge of the Company or any Subsidiary, any agent
or other person acting on behalf of the Company or any of its Subsidiaries, have
(i) directly or indirectly, used any corporate funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns from corporate funds, (iii) failed to disclose fully any contribution
made by the Company or made by any person acting on its behalf and of which the
Company is aware in violation of law or (iv) violated in any material respect
any provision of the Foreign Corrupt Practices Act of 1977, as amended.
4.17 No Manipulation of Stock. The Company has not taken and will not, in
violation of applicable law, take, any action designed to or that might
reasonably be expected to cause or result in manipulation of the price of the
Common Stock to facilitate the sale or resale of the Shares.
5. Representations, Warranties and Covenants of the Investor.
5.1 The Investor represents and warrants to, and covenants with, the
Company that: (i) the Investor is an "accredited investor" as defined in
Regulation D under the Securities Act and the Investor is also knowledgeable,
sophisticated and experienced in making, and is qualified to make decisions with
respect to, investments in shares presenting an investment decision like that
involved in the purchase of the Shares, including investments in securities
issued by the Company and investments in comparable companies, and has
requested, received, reviewed and considered all information it deemed relevant
in making an informed decision to purchase the Shares; (ii) the Investor is
acquiring the number of Shares set forth on the signature page hereto in the
ordinary course of its business and for its own account for investment only and
with no present intention of distributing any of such Shares or any arrangement
or understanding with any other persons regarding the distribution of such
Shares; (iii) the Investor 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 Shares except in compliance
with the Securities Act, applicable state securities laws and the respective
rules and regulations promulgated thereunder; (iv) the Investor has answered all
questions on the signature page hereto for use in preparation of the
Registration Statement and the answers thereto are true and correct as of the
date hereof and will be true and correct as of the Closing Date; (v) the
Investor will notify the Company immediately of any change in any of such
information until such time as the Investor has sold all of its Shares or until
the Company is no longer required to keep the Registration Statement effective;
and (vi) the Investor has, in connection with its decision to purchase the
number of Shares set forth on the signature page hereto, relied only upon the
Placement Memorandum and the representations and warranties of the Company
contained herein. Investor understands that its acquisition of the Shares has
not been registered under the Securities Act or registered or qualified under
any state securities law in reliance on specific exemptions therefrom, which
exemptions may depend upon, among other things, the bona fide nature of the
Investor's investment intent as expressed herein. Investor has completed or
caused to be completed and delivered to the Company the Investor Questionnaire
contained in Exhibit D to the Placement Memorandum, which questionnaire is true
and correct in all material respects.
5.2 The Investor acknowledges, represents and agrees that no action has
been or will be taken in any jurisdiction outside the United States by the
Company or the Placement Agent that would permit an offering of the Shares, or
possession or distribution of offering materials in connection with the issue of
the Shares, in
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any jurisdiction outside the United States where action for that purpose is
required. Each Investor outside the United States will comply with all
applicable laws and regulations in each foreign jurisdiction in which it
purchases, offers, sells or delivers Shares or has in its possession or
distributes any offering material, in all cases at its own expense. The
Placement Agent is not authorized to make any representation or use any
information in connection with the issue, placement, purchase and sale of the
Shares other than as contained in the Placement Memorandum.
5.3 The Investor hereby covenants with the Company not to make any sale of
the Shares without complying with the provisions of this Agreement, including
Section 7.2 hereof, and without effectively causing the prospectus delivery
requirement under the Securities Act to be satisfied, and the Investor
acknowledges that the certificates evidencing the Shares will be imprinted with
a legend that prohibits their transfer except in accordance therewith. The
Investor acknowledges that there may occasionally be times when the Company,
based on the advice of its counsel, determines that it must suspend the use of
the Prospectus forming a part of the Registration Statement until such time as
an amendment to the Registration Statement has been filed by the Company and
declared effective by the SEC or until the Company has amended or supplemented
such Prospectus.
5.4 The Investor further represents and warrants to, and covenants with,
the Company that (i) the Investor has full right, power, authority and capacity
to enter into this Agreement and to consummate the transactions contemplated
hereby and has taken all necessary action to authorize the execution, delivery
and performance of this Agreement, and (ii) this Agreement constitutes a valid
and binding obligation of the Investor enforceable against the Investor in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors' and contracting parties' rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law)
and except as the indemnification agreements of the Investors herein may be
legally unenforceable.
5.5 Investor will not, prior to the effectiveness of the Registration
Statement, sell, offer to sell, solicit offers to buy, dispose of, loan, pledge
or grant any right with respect to (collectively, a "Disposition"), the Common
Stock of the Company, nor will Investor engage in any hedging or other
transaction which is designed to or could reasonably be expected to lead to or
result in a Disposition of Common Stock of the Company by the Investor or any
other person or entity. Such prohibited hedging or other transactions would
include, without limitation, effecting any short sale or having in effect any
short position (whether or not such sale or position is against the box and
regardless of when such position was entered into) or any purchase, sale or
grant of any right (including, without limitation, any put or call option) with
respect to the Common Stock of the Company or with respect to any security
(other than a broad-based market basket or index) that includes, relates to or
derives any significant part of its value from the Common Stock of the Company.
5.6 The Investor agrees that if the Company engages in an underwritten
public offering for the sale by the Company of shares of Common Stock, during
the one-year period following the Closing Date and thereafter so long as the
Investor owns more than one percent (1%) of the Common Stock, the Investor will,
if so requested by the managing underwriter for such offering, execute and
deliver to such managing underwriter a "lock-up" letter with customary terms and
conditions. The obligations of and restrictions on the Investor under such
letter shall be in effect for a maximum of 180 days as specified by the managing
underwriter.
5.7 The Investor understands that nothing in the Placement Memorandum,
this Agreement or any other materials presented to the Investor in connection
with the purchase and sale of the Shares constitutes legal, tax or investment
advice. The Investor has consulted such legal, tax and investment advisors as
it, in its sole discretion, has deemed necessary or appropriate in connection
with its purchase of Shares.
6. Survival of Representations, Warranties and Agreements. Notwithstanding any
investigation made by any party to this Agreement or by the Placement Agent, all
covenants, agreements, representations and warranties made by the Company and
the Investor herein shall survive the execution of this Agreement, the delivery
to the Investor of the Shares being purchased and the payment therefor.
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7. Registration of the Shares; Compliance with the Securities Act.
7.1 Registration Procedures and Expenses. The Company shall:
(a) subject to receipt of necessary information from the Investors,
prepare and file with the SEC, within ten (10) days after the Closing Date,
a registration statement on Form S-3 (the "Registration Statement") to
enable the resale of the Shares by the Investors from time to time through
the automated quotation system of the Nasdaq Stock Market or in
privately-negotiated transactions;
(b) use its reasonable efforts, subject to receipt of necessary
information from the Investors, to cause the Registration Statement to
become effective as soon as practicable, but in no event later than ninety
(90) days after the Registration Statement is filed by the Company.
(c) use its reasonable efforts to prepare and file with the SEC such
amendments and supplements to the Registration Statement and the Prospectus
used in connection therewith as may be necessary to keep the Registration
Statement current and effective for a period not exceeding, with respect to
each Investor's Shares purchased hereunder, the earlier of (i) the second
anniversary of the Closing Date, (ii) the date on which the Investor may
sell all Shares then held by the Investor without restriction by the volume
limitations of Rule 144(e) of the Securities Act or (iii) such time as all
Shares purchased by such Investor in this Offering have been sold pursuant
to a registration statement.
(d) furnish to the Placement Agent and to the Investor with respect to
the Shares registered under the Registration Statement such number of
copies of the Registration Statement, Prospectuses and Preliminary
Prospectuses in conformity with the requirements of the Securities Act and
such other documents as the Investor may reasonably request, in order to
facilitate the public sale or other disposition of all or any of the Shares
by the Investor, provided, however, that the obligation of the Company to
deliver copies of Prospectuses or Preliminary Prospectuses to the Investor
shall be subject to the receipt by the Company of reasonable assurances
from the Investor that the Investor 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;
(e) file documents required of the Company for normal blue sky
clearance in states specified in writing by the Investor, provided,
however, that the Company shall not be required to qualify to do business
or consent to service of process in any jurisdiction in which it is not now
so qualified or has not so consented;
(f) bear all expenses in connection with the procedures in paragraph
(a) through (e) of this Section 7.1 and the registration of the Shares
pursuant to the Registration Statement; and
(g) advise the Investors, promptly after it shall receive notice or
obtain knowledge of the issuance of any stop order by the SEC delaying or
suspending the effectiveness of the Registration Statement or of the
initiation of any proceeding for that purpose; and it will promptly use its
commercially reasonable efforts to prevent the issuance of any stop order
or to obtain its withdrawal at the earliest possible moment if such stop
order should be issued.
The Company understands that the Investor disclaims being an underwriter,
but the Investor being deemed an underwriter by the SEC shall not relieve the
Company of any obligations it has hereunder, provided, however, that if the
Company receives notification from the SEC that the Investor is deemed an
underwriter, then the period by which the Company is obligated to submit an
acceleration request to the SEC shall be extended to the earlier of (i) the 90th
day after such SEC notification, or (ii) 120 days after the initial filing of
the Registration Statement with the SEC.
7.2 Transfer of Shares After Registration; Suspension.
(a) The Investor agrees that it will not effect any Disposition of the
Shares or its right to purchase the Shares that would constitute a sale
within the meaning of the Securities Act except as contemplated in the
Registration Statement referred to in Section 7.1 and as described below,
and that it will promptly
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notify the Company of any changes in the information set forth in the
Registration Statement regarding the Investor or its plan of distribution.
(b) Except in the event that paragraph (c) below applies, the Company
shall: (i) if deemed necessary by the Company, prepare and file from time
to time with the SEC a post-effective amendment to the Registration
Statement or a supplement to the related Prospectus or a supplement or
amendment to any document incorporated therein by reference or file any
other required document so that such Registration Statement will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and so that, as thereafter delivered to purchasers
of the Shares being sold thereunder, such Prospectus will not contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading;
(ii) provide the Investor copies of any documents filed pursuant to Section
7.2(b)(i); and (iii) inform each Investor that the Company has complied
with its obligations in Section 7.2(b)(i) (or that, if the Company has
filed a post-effective amendment to the Registration Statement which has
not yet been declared effective, the Company will notify the Investor to
that effect, will use its reasonable efforts to secure the effectiveness of
such post-effective amendment as promptly as possible and will promptly
notify the Investor pursuant to Section 7.2(b)(i) hereof when the amendment
has become effective).
(c) Subject to paragraph (d) below, in the event: (i) of any request
by the SEC or any other federal or state governmental authority during the
period of effectiveness of the Registration Statement for amendments or
supplements to a Registration Statement or related Prospectus or for
additional information; (ii) of the issuance by the SEC or any other
federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement or the initiation of any
proceedings for that purpose; (iii) of the receipt by the Company of any
notification with respect to the suspension of the qualification or
exemption from qualification of any of the Shares for sale in any
jurisdiction or the initiation of any proceeding for such purpose; or (iv)
of any event or circumstance which necessitates the making of any changes
in the Registration Statement or Prospectus, or any document incorporated
or deemed to be incorporated therein by reference, so that, in the case of
the Registration Statement, it will not contain any untrue statement of a
material fact or any omission to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and that in the case of the Prospectus, it will not contain any untrue
statement of a material fact or any omission to state a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; then the Company shall deliver a certificate in writing to the
Investor (the "Suspension Notice") to the effect of the foregoing and, upon
receipt of such Suspension Notice, the Investor will refrain from selling
any Shares pursuant to the Registration Statement (a "Suspension") until
the Investor's receipt of copies of a supplemented or amended Prospectus
prepared and filed by the Company, or until it is advised in writing by the
Company that the current Prospectus may be used, and has received copies of
any additional or supplemental filings that are incorporated or deemed
incorporated by reference in any such Prospectus. In the event of any
Suspension, the Company will use its reasonable efforts to cause the use of
the Prospectus so suspended to be resumed as soon as reasonably practicable
within 20 business days after delivery of a Suspension Notice to the
Investors. In addition to and without limiting any other remedies
(including, without limitation, at law or at equity) available to the
Investor, the Investor shall be entitled to specific performance in the
event that the Company fails to comply with the provisions of this Section
7.2(c).
(d) Notwithstanding the foregoing paragraphs of this Section 7.2, the
Investor shall not be prohibited from selling Shares under the Registration
Statement as a result of Suspensions on more than three occasions of not
more than 30 days each in any twelve month period, unless, in the good
faith judgment of the Company's Board of Directors, upon advice of counsel,
the sale of Shares under the Registration Statement in reliance on this
paragraph 7.2(d) would be reasonably likely to cause a violation of the
Securities Act or the Exchange Act and result in potential liability to the
Company.
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(e) Provided that a Suspension is not then in effect the Investor may
sell Shares under the Registration Statement, provided that it arranges for
delivery of a current Prospectus to the transferee of such Shares. Upon
receipt of a request therefor, the Company has agreed to provide an
adequate number of current Prospectuses to the Investor and to supply
copies to any other parties requiring such Prospectuses.
(f) In the event of a sale of Shares by the Investor, the Investor
must also deliver to the Company's transfer agent, with a copy to the
Company, a Certificate of Subsequent Sale substantially in the form
attached hereto as Exhibit A, so that the shares may be properly
transferred.
7.3 Indemnification. For the purpose of this Section 7.3:
(i) the term "Selling Stockholder" shall include the Investor and any
affiliate of such Investor;
(ii) 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 7.1; and
(iii) the term "untrue statement" shall include any untrue statement
or alleged untrue statement, or any omission or alleged omission to state
in the Registration Statement a material fact required to be stated therein
or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(a) The Company agrees to indemnify and hold harmless each Selling
Stockholder from and against any losses, claims, damages or liabilities
to which such Selling Stockholder may become subject (under the
Securities Act or otherwise) insofar as such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) arise out of,
or are based upon (i) any untrue statement of a material fact contained
in the Registration Statement, or (ii) any failure by the Company to
fulfill any undertaking included in the Registration Statement, and the
Company will reimburse such Selling Stockholder for any reasonable legal
or other expenses reasonably incurred in investigating, defending or
preparing to defend any such action, proceeding or claim, provided,
however, that the Company shall not be liable in any such case to the
extent that such loss, claim, damage or liability arises out of, or is
based upon, an untrue statement made in such Registration Statement in
reliance upon and in conformity with written information furnished to
the Company by or on behalf of such Selling Stockholder specifically for
use in preparation of the Registration Statement or the failure of such
Selling Stockholder to comply with its covenants and agreements
contained in Sections 5.1, 5.2, 5.3 or 7.2 hereof or any statement or
omission in any Prospectus that is corrected in any subsequent
Prospectus that was delivered to the Investor prior to the pertinent
sale or sales by the Investor.
(b) The Investor agrees to indemnify and hold harmless the Company
(and each person, if any, who controls the Company within the meaning of
Section 15 of the Securities Act, each officer of the Company who signs
the Registration Statement and each director of the Company) from and
against any losses, claims, damages or liabilities to which the Company
(or any such officer, director or controlling person) may become subject
(under the Securities Act or otherwise), insofar as such losses, claims,
damages or liabilities (or actions or proceedings in respect thereof)
arise out of, or are based upon, (i) any failure to comply with the
covenants and agreements contained in Section 5.1, 5.2, 5.3 or 7.2
hereof, or (ii) any untrue statement of a material fact contained in the
Registration Statement if such untrue statement was made in reliance
upon and in conformity with written information furnished by or on
behalf of the Investor specifically for use in preparation of the
Registration Statement, and the Investor will reimburse the Company (or
such officer, director or controlling person), as the case may be, for
any legal or other expenses reasonably incurred in investigating,
defending or preparing to defend any such action, proceeding or claim.
(c) Promptly after receipt by any indemnified person of a notice of
a claim or the beginning of any action in respect of which indemnity is
to be sought against an indemnifying person pursuant to this Section
7.3, such indemnified person shall notify the indemnifying person in
writing of such
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claim or of the commencement of such action, but the omission to so
notify the indemnifying party will not relieve it from any liability
which it may have to any indemnified party under this Section 7.3
(except to the extent that such omission materially and adversely
affects the indemnifying party's ability to defend such action) or from
any liability otherwise than under this Section 7.3. Subject to the
provisions hereinafter stated, in case any such action shall be brought
against an indemnified person, the indemnifying person shall be entitled
to participate therein, and, to the extent that it shall elect by
written notice delivered to the indemnified party promptly after
receiving the aforesaid notice from such indemnified party, shall be
entitled to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified person. After notice from the
indemnifying person to such indemnified person of its election to assume
the defense thereof, such indemnifying person shall not be liable to
such indemnified person for any legal expenses subsequently incurred by
such indemnified person in connection with the defense thereof,
provided, however, that if there exists or shall exist a conflict of
interest that would make it inappropriate, in the reasonable opinion of
counsel to the indemnified person, for the same counsel to represent
both the indemnified person and such indemnifying person or any
affiliate or associate thereof, the indemnified person shall be entitled
to retain its own counsel at the expense of such indemnifying person;
provided, however, that no indemnifying person shall be responsible for
the fees and expenses of more than one separate counsel (together with
appropriate local counsel) for all indemnified parties. In no event
shall any indemnifying person be liable in respect of any amounts paid
in settlement of any action unless the indemnifying person shall have
approved the terms of such settlement; provided that such consent shall
not be unreasonably withheld. No indemnifying person shall, without the
prior written consent of the indemnified person, effect any settlement
of any pending or threatened proceeding in respect of which any
indemnified person is or could have been a party and indemnification
could have been sought hereunder by such indemnified person, unless such
settlement includes an unconditional release of such indemnified person
from all liability on claims that are the subject matter of such
proceeding.
(d) If the indemnification provided for in this Section 7.3 is
unavailable to or insufficient to hold harmless an indemnified party
under subsection (a) or (b) above in respect of any losses, claims,
damages or liabilities (or actions or proceedings in respect thereof)
referred to therein, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of such
losses, claims, damages or liabilities (or actions in respect thereof)
in such proportion as is appropriate to reflect the relative fault of
the Company on the one hand and the Investors on the other in connection
with the statements or omissions or other matters which resulted in such
losses, claims, damages or liabilities (or actions in respect thereof),
as well as any other relevant equitable considerations. The relative
fault shall be determined by reference to, among other things, in the
case of an untrue statement, whether the untrue statement relates to
information supplied by the Company on the one hand or an Investor on
the other and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement.
The Company and the Investors agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were
determined by pro rata allocation (even if the Investors were treated as
one entity for such purpose) or by any other method of allocation which
does not take into account the equitable considerations referred to
above in this subsection (d). The amount paid or payable by an
indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this subsection (d), no Investor shall be required to
contribute any amount in excess of the amount by which the gross amount
received by the Investor from the sale of the Shares to which such loss
relates exceeds the amount of any damages which such Investor has
otherwise been required to pay by reason of such untrue statement. 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
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guilty of such fraudulent misrepresentation. The Investors' obligations
in this subsection to contribute are several in proportion to their
sales of Shares to which such loss relates and not joint.
(e) The parties to this Agreement hereby acknowledge that they are
sophisticated business persons who were represented by counsel during
the negotiations regarding the provisions hereof including, without
limitation, the provisions of this Section 7.3, and are fully informed
regarding said provisions. They further acknowledge that the provisions
of this Section 7.3 fairly allocate the risks in light of the ability of
the parties to investigate the Company and its business in order to
assure that adequate disclosure is made in the Registration Statement as
required by the Act and the Exchange Act. The parties are advised that
federal or state public policy as interpreted by the courts in certain
jurisdictions may be contrary to certain of the provisions of this
Section 7.3, and the parties hereto hereby expressly waive and
relinquish any right or ability to assert such public policy as a
defense to a claim under this Section 7.3 and further agree not to
attempt to assert any such defense.
7.4 Termination of Conditions and Obligations. The conditions precedent
imposed by Section 5 or this Section 7 upon the transferability of the Shares
shall cease and terminate as to any particular number of the Shares when such
Shares shall have been effectively registered under the Securities Act and sold
or otherwise disposed of in accordance with the intended method of disposition
set forth in the Registration Statement covering such Shares or at such time as
an opinion of counsel satisfactory to the Company shall have been rendered to
the effect that such conditions are not necessary in order to comply with the
Securities Act.
7.5 Information Available. So long as the Registration Statement is
effective covering the resale of Shares owned by the Investor, the Company will
furnish to the Investor:
(a) as soon as practicable after it is available, one copy of (i) its
Annual Report to Stockholders (which Annual Report shall contain financial
statements audited in accordance with generally accepted accounting
principles by a national firm of certified public accountants) and (ii) if
not included in substance in the Annual Report to Stockholders, its Annual
Report on Form 10-K (the foregoing, in each case, excluding exhibits);
(b) upon the reasonable request of the Investor, all exhibits excluded
by the parenthetical to subparagraph (a)(ii) of this Section 7.5 as filed
with the SEC and all other information that is made available to
shareholders; and
(c) upon the reasonable request of the Investor, an adequate number of
copies of the Prospectuses to supply to any other party requiring such
Prospectuses; and the Company, upon the reasonable request of the Investor,
will meet with the Investor or a representative thereof at the Company's
headquarters to discuss all information relevant for disclosure in the
Registration Statement covering the Shares and will otherwise cooperate
with any Investor conducting an investigation for the purpose of reducing
or eliminating such Investor's exposure to liability under the Securities
Act, including the reasonable production of information at the Company's
headquarters; provided, that the Company shall not be required to disclose
any confidential information to or meet at its headquarters with any
Investor until and unless the Investor shall have entered into a
confidentiality agreement in form and substance reasonably satisfactory to
the Company with the Company with respect thereto.
8. Notices. All notices, requests, consents and other communications hereunder
shall be in writing, shall be mailed (A) if within domestic United States by
first-class registered or certified airmail, or nationally recognized overnight
express courier, postage prepaid, or by facsimile, or (B) if delivered from
outside the United States, by International Federal Express or facsimile, and
shall be deemed given (i) if delivered by first-class registered or certified
mail domestic, three business days after so mailed, (ii) if delivered by
nationally recognized overnight carrier, one business day after so mailed, (iii)
if delivered by International
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Federal Express, two business days after so mailed, (iv) if delivered by
facsimile, upon electric confirmation of receipt and shall be delivered as
addressed as follows:
(a) if to the Company, to:
MessageMedia, Inc.
0000 Xxxxx Xxxx
Xxxxxxx, Xxxxxxxx 00000
Attn: Xxxx Xxxx Xxxxxx
Phone: (000) 000-0000
Telecopy: (000) 000-0000
(b) with a copy mailed to:
Xxxxxx Godward LLP
0000 Xxxxxx Xxxx., Xxxxx 000
Xxxxxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxx
Phone: (000) 000-0000
Telecopy: (000) 000-0000
(c) if to the Investor, at its address on the signature page hereto,
or at such other address or addresses as may have been furnished to the
Company in writing.
9. Changes. This Agreement may not be modified or amended except pursuant to an
instrument in writing signed by the Company and the Investor.
10. Headings. The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be part of
this Agreement.
11. Severability. In case any provision contained in this Agreement should be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
12. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of Colorado, without giving
effect to the principles of conflicts of law.
13. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute but one instrument, and shall become effective when
one or more counterparts have been signed by each party hereto and delivered to
the other parties.
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