Exhibit 10.45
ELECTRONIC DATA SUBMISSION SYSTEMS, INC.
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT (the "Agreement") dated March 4, 1998, among
ELECTRONIC DATA SUBMISSION SYSTEMS, INC., a Delaware corporation (the
"Company"), National Wireless Holdings Inc. ("National") and Xxxxxx X. Xxxxxxxxx
("Xxxxxxxxx", and with National, the "Investors").
R E C I T A L
WHEREAS, the Investors currently are stockholders and familiar with the
operations of the Company;
WHEREAS, the Company currently has outstanding a $300,000 principal
amount note, dated July, 1996, payable to Xxxxxxxxx (the "Xxxxxxxxx Note") and a
note, dated June 9, 1995, payable to National (the "National Note");
WHEREAS, the parties hereto are parties to a Stockholders Agreement,
dated September 10, 1997 (the "Stockholders Agreement");
WHEREAS, as of the Closing Date (as defined below) the Company will have
authorized two series of its serial preferred stock, $.01 par value per share,
including the Series A Convertible Preferred Stock (the "Series A Preferred
Stock") and the Series B Convertible Preferred Stock (the "Series B Preferred
Stock"), each having the respective designations, preferences and rights set
forth on Exhibit A hereto (the "Certificate of Designation") ; and
WHEREAS, the Investors have reviewed this Agreement carefully, including
all Exhibits (collectively, the "Disclosure Material");
THE PARTIES AGREE AS FOLLOWS
1. PURCHASE AND SALE OF STOCK.
1.1. SALE AND ISSUANCE OF PREFERRED STOCK
(a) The Company shall sell to National and National shall
purchase from the Company, at a price of $100.00 per share, a total of
up to 12,000 shares of Series A Preferred Stock (the "National Shares"),
initially convertible into 930 shares of Common Stock of the Company,
$.01 par value per share (the "Common Stock").
(b) The Company shall sell to Xxxxxxxxx and Xxxxxxxxx shall
purchase from the Company, at a price of $100.00 per share, a total of
up to 2,000 shares of Series B Preferred Stock (the "Xxxxxxxxx Shares"
and, with the National Shares, the "Purchased Shares") initially
convertible into 155 shares of Common Stock.
(c) The purchase and sale of the Purchased Shares shall take
place on up to four closings (each referred to hereafter as a "Closing")
on the dates (each referred to hereafter as a "Closing Date") set forth
in the table below:
AMOUNT - DELIVERY OF
-------------------------------------------------------- ------------------------------
1 2. 3. 4 5. 6.
NATIONAL
-----------------------
a. b.
PORTION PORTION
OF THE OF THE
NATIONAL XXXXXXXXX
NOTE NOTE NATIONAL XXXXXXXXX
CLOSING DATE CASH SURRENDERED SURRENDERED SHARES SHARES
------- ---- ---- ----------- ----------- ------ ------
1. March 13, 1998 $300,000 $50,000 3,000 500
2. March 30, 1998* $300,000 50,000 3,000 500
3. May 31, 1998* $200,000 $100,000 50,000 3,000 500
4. July 31, 1998* $200,000 $100,000 50,000 3,000 500
* Subject to satisfactory performance, as determined by National in its
discretion, of the business plan of the Company.
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At each Closing:
(a) National shall deliver to the Company or its designees by
wire transfer or check, or such other method of payment as the Company
shall approve, the amount set forth for such Closing in column 3a above
or a supplemental schedule to the National Notes in the form attached
hereto as EXHIBIT B reflecting the surrender by National of the portion
of principal amount of the National Note set forth for such Closing in
column 3b above, and the Company shall (i) issue and deliver to National
a certificate or certificates in form satisfactory to National for the
National Shares to be issued by the Company at such Closing and (ii), if
applicable, pay to National accrued interest on the National Note.
(b) Xxxxxxxxx shall deliver to the Company or its designees the
Xxxxxxxxx Note (or, at the second through fourth Closings, the amended
and restated note referred to below) for cancellation, and the Company
shall issue and deliver to Xxxxxxxxx (i) a certificate or certificates
in form satisfactory to National for the Xxxxxxxxx Shares to be issued
by the Company at such Closing and (ii) an executed amended and restated
note in the form attached hereto as EXHIBIT C reflecting the surrender
by Xxxxxxxxx of the portion of principal amount of the Xxxxxxxxx Note
set forth for such Closing in column 4 above, and shall pay to Xxxxxxxxx
accrued interest on the Xxxxxxxxx Note.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to the Investors that, except as disclosed in the
Disclosure Material :
2.1 CORPORATE ORGANIZATION AND AUTHORITY. The Company:
(a) is a corporation duly organized, validly existing
and in good standing under the laws of the
jurisdiction of its incorporation;
(b) has the corporate power and authority to own or
lease its properties in the places where such
business is now conducted and to carry on its
business as now conducted; and
(c) there are no other states or jurisdictions in which
the failure of the Company to qualify to transact
business could reasonably be expected to materially
adversely affect the business, financial condition,
operations or prospects of the Company.
2.2. CAPITALIZATION. On the date hereof, the authorized capital
of the Company consists of 100,000 shares of Common Stock, $.01 par value, of
which on the date hereof, 11,632 shares are validly issued, fully paid,
non-assessable and outstanding, and as of the Closing Date the authorized
capital will also consist of 100,000 shares of Serial Preferred Stock, par value
$.01 per share, of which on the first Closing Date no shares will be issued and
outstanding. All outstanding shares were issued in compliance with all
applicable Federal and state securities laws. Except as contemplated by this
Agreement or the Stockholders Agreement, there are (i) no outstanding
subscriptions, warrants, options, conversion privileges or other rights or
agreements to purchase or otherwise acquire or issue any shares of capital stock
of the Company (or shares reserved for such purpose), (ii) no preemptive rights
or rights of first refusal with respect to the issuance of additional shares of
capital stock of the Company, including the Purchased Shares and the shares of
Common Stock into which the Purchased Shares are convertible, and (iii) no
commitments or understandings
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(oral or written) of the Company to issue any shares, warrants, options or other
rights.
2.3. VALIDITY OF PURCHASED SHARES. When issued, sold and
delivered in accordance with the terms and for the consideration expressed
herein, the Purchased Shares shall be duly authorized, validly issued, fully
paid and non-assessable.
2.4. COMMON STOCK ISSUABLE ON CONVERSION OF PURCHASED SHARES. The
shares of Common Stock initially issuable upon conversion of the Purchased
Shares have been duly authorized and have been, and at all times prior to such
conversion will have been, duly reserved for issuance upon such conversion and,
when so issued, will be validly issued, fully paid and non-assessable.
2.5. PRIVATE OFFERING. Neither the Company nor anyone acting on
its behalf has offered any of the Purchased Shares for sale to, or solicited
offers to buy any thereof from, or otherwise approached or negotiated with
respect thereto with, any prospective purchaser other than the Investors.
2.6 AUTHORIZATION. When executed and delivered by the Company,
this Agreement will constitute the valid and binding obligation of the Company.
3. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS. Each Investor
represents and warrants to the Company as follows:
3.1. AUTHORIZATION. When executed and delivered by each Investor,
this Agreement will constitute the valid and binding obligation of such
Investor.
3.2. BROKERS AND FINDERS. Such Investor has not retained any
investment banker, broker or finder in connection with the transactions
contemplated by this Agreement.
4. SECURITIES LAWS.
4.1. SECURITIES LAWS REPRESENTATIONS AND COVENANTS OF INVESTORS.
(a) This Agreement is made with each Investor in reliance
upon such Investor's representation to the Company, which by such Investor's
execution of this Agreement such Investor hereby confirms, that the Purchased
Shares to be received by such Investor will be acquired for investment for such
Investor's own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that such Investor has no
present intention of selling, granting any participation in or otherwise
distributing the Purchased Shares.
(b) Each Investor understands and acknowledges that the
offering of the Purchased Shares pursuant to this Agreement will not be
registered under the Securities Act of 1933, as amended (the "Securities Act")
or qualified under any state "Blue Sky" laws ("State Securities Laws") on the
grounds that the offering and sale of the Purchased Shares are exempt from
registration and qualification, respectively, under the Securities Act and the
State Securities Laws, and that the Company's reliance upon such exemption is
predicated upon such Investor's representations set forth in this Agreement.
(c) Each Investor covenants that, unless the Purchased
Shares, the shares of Common Stock issuable upon conversion of the Purchased
Shares or any shares of capital stock of the Company received in respect of the
foregoing have been registered under the Securities Act, such
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Investor will not dispose of such shares unless and until (i) such Investor
shall have notified the Company of the proposed disposition and shall have
furnished the Company with a statement of the circumstances surrounding the
proposed disposition and (ii) such Investor shall have furnished the Company
with an opinion of counsel reasonably satisfactory in form and substance to the
Company to the effect that (x) such disposition will not require registration
under the Securities Act and (y) appropriate action necessary for compliance
with the Securities Act and any applicable state, local or foreign law has been
taken.
(d) In connection with the investment representations made
herein, each Investor represents that (i) such Investor is able to fend for
himself or itself in the transactions contemplated by this Agreement; (ii) such
Investor has such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of such Investor's prospective
investment in the Purchased Shares; (iii) such Investor has the ability to bear
the economic risks of such Investor's prospective investment and can afford the
complete loss of such investment; (iv) such Investor has been furnished with and
has had access to such information as would be made available in the form of a
registration statement under the Securities Act together with such additional
information as is necessary to verify the accuracy of the information supplied;
and (v) such Investor has had access to officers of the Company and an
opportunity to ask questions of and receive answers from such officers and has
had all questions that have been asked by such Investor satisfactorily answered
by the Company.
(e) Each Investor further represents by execution of this
Agreement that such Investor is an accredited investor, as defined in Rule 501
promulgated under the Securities Act.
(f) By acceptance hereof, each Investor agrees that the
Purchased Shares, the shares of Common Stock issued on conversion of the
Purchased Shares and any shares of capital stock of the Company received in
respect of the foregoing held by it may not be sold by such Investor without
registration under the Securities Act, or an exemption therefrom, and therefore
such Investor may be required to hold such shares for an indeterminate period.
4.2. LEGENDS. All certificates for the Purchased Shares and the
shares of Common Stock issued on conversion thereof, and each certificate
representing any shares of capital stock of the Company received in respect of
the foregoing, whether by reason of a stock split or share reclassification
thereof, a stock dividend thereon or otherwise and each certificate for any such
securities issued to subsequent transferees of any such certificate (unless
otherwise permitted herein) shall bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE
ABSENCE OF REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT,
NOR MAY SUCH SHARES BE SOLD OR TRANSFERRED WITHOUT COMPLIANCE
WITH THE SUBSCRIPTION AGREEMENT DATED AS OF MARCH __, 1998,
PURSUANT TO WHICH THEY WERE ISSUED AND THE STOCKHOLDERS
AGREEMENT, DATED SEPTEMBER 10, 1997, AMONG THE ISSUER, THE HOLDER
OF SUCH SHARES AND THE OTHER PARTIES THERETO.
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In addition, such certificates shall bear any legend that, in the opinion of
the Company's counsel, is required under the Stockholders Agreement, the
By-laws of the Company or pursuant to any state, local or foreign law
governing the Purchased Shares or any shares of Common Stock issued on
conversion of the Purchased Shares.
5. CONDITIONS TO INVESTORS' OBLIGATIONS AT EACH CLOSING. The obligations
of the Investors under Section 1.1 of this Agreement are subject to the
fulfillment at or before each Closing of each of the following conditions, any
of which may be waived in writing by the Investors or any of them.
5.1. REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained in Section 2 shall be true and correct on and as of the
Closing Date with the same effect as if made on and as of the Closing Date.
5.2. PERFORMANCE. The Company shall have performed or fulfilled
all terms, covenants and conditions contained herein required to be performed or
fulfilled by the Company before the Closing.
5.3. CERTIFICATE OF DESIGNATION. The Certificate of Designation
shall have been approved by the Board of Directors of the Company in the manner
and by the vote required by Delaware law, and shall have been duly filed with
the Secretary of State of the State of Delaware and shall have become effective.
5.4. PROCEEDINGS SATISFACTORY. All corporate and legal
proceedings taken by the Company in connection with the transactions
contemplated by this Agreement and all documents and papers relating to such
transactions shall be reasonably satisfactory in form and substance to the
Investors.
6. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT THE CLOSING. The
obligations of the Company under Section 1.1 of this Agreement are subject to
the fulfillment at or before the Closing of each of the following conditions,
any of which may be waived in writing by the Company:
6.1. WARRANTIES TRUE ON THE CLOSING DATE. The representations and
warranties of each of the Investors contained in Sections 3 and 4 shall be true
and correct on and as of the Closing Date with the same effect as if made on and
as of the Closing Date.
7. MISCELLANEOUS.
7.1. ENTIRE AGREEMENT; SUCCESSORS AND ASSIGNS. This Agreement
constitutes the entire contract between the parties relative to the subject
matter hereof and no party shall be liable or bound to the other in any manner
by any warranties, representations or covenants except as specifically set forth
herein other than the Stockholders Agreement. Any previous agreement among the
parties with respect to the sale of the Purchased Shares is superseded by this
Agreement. The terms and conditions of this Agreement shall inure to the benefit
of and be binding upon the respective executors' administrators, heirs,
successors and assigns of the parties. Except as expressly provided herein,
nothing in this Agreement, expressed or implied, is intended to confer upon any
party, other than the parties hereto, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
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7.2. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida.
7.3. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.4. HEADINGS. The headings of the sections of this Agreement are
for convenience and shall not by themselves determine the interpretation of this
Agreement.
7.5. NOTICES. Any notice required or permitted hereunder shall be
given in writing and shall be deemed effectively given if sent by hand upon
delivery, if sent by fax upon delivery (with answer back), if sent by overnight
mail delivery, on the next day, or if sent by registered or certified mail five
days after deposit, addressed to a party at its address hereinafter shown or at
such other address as such party may designate by ten days advance written
notice to the other party. Any notice shall be sent :
if to the Company or Xxxxxxxxx, to :
Electronic Data Submission Systems, Inc.
0000 Xxxxxx Xxxx, Xxxxx 000
Xxxxxxxx Xxxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxx, President
if to National, to:
National Wireless Holdings Inc.
000 Xxxxx Xxxx Xxx, Xxxxx 000
Xxxx Xxxxx, XX 00000
Fax: 000 000 0000
Attention: Xxxxxxxx X. Xxxxxxx, President
with a copy to:
NWH Inc.
000 Xxxx 00xx Xxxxxx, Xxxxx 0000
Xxx Xxxx, XX 00000
Fax: 000 000 0000
Attention: Xxxxxxxx X. Xxxxxxx, President
and:
Xxxx & Hessen LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Fax: 000 000 0000
Attention: Xxxxx Xxxxxx.
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7.6. AMENDMENT OF AGREEMENT. The terms and provisions of this
Agreement may not be modified or amended except in writing.
7.7. COUNSEL. Each of the parties (i) acknowledges that Xxxx &
Hessen LLP has acted, and from time to time continues to act, as counsel to each
of the Investors, or affiliates thereof, as well as to the Company, (ii)
consents to the representation of the Company and such other representation of
National by Xxxx & Hessen LLP and (iii) waives any conflicts of interest claim
which may arise therefrom. Without limitation on the foregoing, Xxxx & Hessen
LLP is authorized to disclose all information concerning the Company and its
plans to each of the Investors.
7.8. SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be deemed
prohibited or invalid under such applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, and such
prohibition or invalidity shall not invalidate the remainder of such provision
or any other provision of this Agreement
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the day and year first above written.
NATIONAL WIRELESS HOLDINGS INC.
By:_____________________________
---------------------------------
Xxxxxx X. Xxxxxxxxx
ELECTRONIC DATA SUBMISSION
SYSTEMS, INC.
By :_____________________________
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EXHIBIT B
SUPPLEMENTAL SCHEDULE
TO
ELECTRONIC DATA SUBMISSION SYSTEMS, INC.
NOTE DATED JUNE 9, 1995, PAYABLE TO
NATIONAL WIRELESS HOLDINGS INC.
In consideration of the issuance and delivery of 1,000 shares of Series A
Convertible Preferred Stock of Electronic Data Submission Services, Inc. on
______________, 1998, the principal amount due under the Note is hereby
reduced by $100,000.
NATIONAL WIRELESS HOLDINGS INC.
By:____________________________________
ELECTRONIC DATA SUBMISSION SYSTEMS, INC.
By:___________________________________
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EXHIBIT C
AMENDED AND RESTATED NOTE
Colorado Springs, Colorado _____________, 1998
FOR VALUE RECEIVED, the undersigned, Electronic Data Submission Systems,
Inc., a Delaware Corporation, (the "Borrower"), hereby promises to pay to the
order of Xxxxxx X. Xxxxxxxxx, ("Xxxxxxxxx") at the principal office of Xxxxxxxxx
or at such other place as Xxxxxxxxx may from time to time designate to Borrower
in writing, (a) the principal sum of ________________, ($_______________) in
lawful money of the United States of America and in immediately available funds,
on or before March 15, 1999, and (b) interest on the unpaid principal amount
thereof, in like money and funds, for the period commencing on the date hereof
until such amount shall be paid in full, at the rate per annum provided in the
Note (the "National Note"), dated June 9, 1995 made by the Borrower payable to
National Wireless Holdings Inc. ("National"), on demand made after the National
Note has been paid in full. In no event shall interest exceed the maximum
interest rate permitted by law.
The Borrower shall pay interest on this Note or any installment thereof,
and on any other amount payable by the Borrower hereunder (to the extent
permitted by law) which shall not be paid in full when due (whether by demand,
by acceleration or otherwise) for the period commencing on the due date thereof
until the same is paid in full at the applicable Post Default Rate (as defined
in the National Note) and all such interest shall be payable upon demand.
Capitalized terms used in this Note have the respective meanings
assigned to them in the National Note.
If an Event of Default occurs which has not been cured within any
applicable cure period, the principal hereof and accrued interest hereon shall
become, or may be declared to be, forthwith due and payable in the manner, upon
the conditions and with the effect provided in the National Note; provided that
notwithstanding such acceleration repayment of this Note shall be subordinated
to the National Note and any payments received on this Note prior to the payment
in full of the National Note shall be held in trust by Xxxxxxxxx and promptly
remitted to National.
The Borrower agrees to pay costs of collection and reasonable attorneys'
fees and disbursements in case default occurs in the payment of this Note.
This Note amends and restates in its entirety (and is given in
substitution for and not in satisfaction of) that certain Note between the
parties hereto, dated July, 1996, in the original principal amount of $300,000.
ELECTRONIC DATA SUBMISSION SYSTEMS, INC.
By:__________________________________________
Its President
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