1
EXHIBIT 10.25
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES B PREFERRED STOCK PURCHASE AGREEMENT (this "Agreement") is
made and entered into as of March 5, 1998 (the "Closing Date"), by and among STM
WIRELESS, INC., a Delaware corporation (the "Purchaser"), and DIREC-TO-PHONE
INTERNATIONAL, INC., a Delaware corporation and wholly-owned subsidiary of the
Company ("DTPI").
R E C I T A L S :
WHEREAS, concurrently with the execution hereof, DTPI and Pequot Private
Equity Fund, L.P. and Pequot Offshore Private Equity Fund, L.P. (collectively,
"Pequot") are entering into a Stock Purchase Agreement (the "Purchase
Agreement") pursuant to which Pequot will purchase, and DTPI will sell and issue
to Pequot, an aggregate of One Million Two Hundred Thousand (1,200,000) shares
of newly issued Series A Preferred Stock of DTPI, $.0001 par value, which shall
constitute in the aggregate twenty five percent (25%) of the outstanding capital
stock of DTPI on a Fully Diluted Basis; and
WHEREAS, the Purchaser desires to purchase, and DTPI desires to sell and
issue to the Purchaser at the Closing, an aggregate amount of one million
(1,000,000) shares of newly issued Series B Preferred Stock of DTPI, $.0001 par
value (the "Series B Stock"), which, together with the Common Stock of DTPI,
$.0001 par value (the "Common Stock") held by the Company, shall constitute in
the aggregate seventy five percent (75%) of the outstanding capital stock of
DTPI on a Fully Diluted Basis (as defined in Section 6.1 below); and
WHEREAS, in reliance on this Agreement and the representations, warranties
and agreements of the parties contained herein, each of the parties is entering
into this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and agreements
herein, and subject to the terms and conditions hereinafter set forth, the
parties hereby agree as follows:
ARTICLE 1
PURCHASE, SALE AND TERMS OF SHARES
1.1 The Purchased Shares. DTPI has authorized the issuance and sale of
an aggregate of one million (1,000,000) shares of Series B Stock (the "Purchased
Stock") to the Purchaser which represents 25% of the capital stock of DTPI
immediately following the Closing on a Fully Diluted Basis (as defined in the
Purchase Agreement).
1.2 The Closing. Upon the execution of this Agreement, DTPI agrees to
issue and sell to Purchaser, and, the Purchaser agrees to purchase the Purchased
Stock for the purchase price of $5.00 per share.
Upon execution of this Agreement, DTPI shall deliver one or more
certificates evidencing the Purchased Stock, registered in the name of
Purchaser, evidencing the shares of Series
2
B Stock to be purchased by the Purchaser, against payment of the purchase price
therefor by cancellation of indebtedness that is due and owing to the Purchaser
from DTPI.
ARTICLE 2
REPRESENTATIONS OF THE PURCHASERS
2.1 Representations by Purchasers. The Purchaser represents and warrants
to DTPI, on and as of the date of this Agreement, as follows:
(a) Investment.
(i) Purchaser has been advised that all Purchased Stock to
be purchased by Purchaser from DTPI hereunder has not been registered
under the Securities Act of 1933, as amended (the "Securities Act"), nor
qualified under any state securities laws on the ground, among others,
that no distribution or public offering of the Purchased Stock is to be
effected, and that in this connection DTPI is relying in part on the
representations of Purchaser set forth herein.
(ii) It is Purchaser's intention to acquire the Purchased
Stock solely for its own account and that the Purchased Stock is being and
will be acquired for investment purposes only, and not with a view to
distribution or resale of the Purchased Stock.
(iii) Purchaser is able to bear the economic risk of an
investment in the Purchased Stock acquired by it pursuant to this
Agreement and can afford to sustain a total loss on such investment.
(iv) Purchaser is an experienced and sophisticated investor,
is able to fend for itself in the transactions contemplated by this
Agreement, and has such knowledge and experience in financial and business
matters that it is capable of evaluating the risks and merits of acquiring
the Purchased Stock. Purchaser has not been formed or organized for the
specific purpose of acquiring the Purchased Stock. Purchaser hereby
acknowledges that it has, or its representatives have, received all such
information as it considers necessary for evaluating the risks and merits
of acquiring the Purchased Stock.
(v) Purchaser understands that it may not be readily able to
sell or dispose of the Purchased Stock and may thus have to bear the risk
of its investment for a substantial period of time, or forever. Purchaser
is aware that the Purchased Stock may not be sold pursuant to Rule 144
under the Securities Act unless certain conditions have been met and until
such Purchaser has held the Purchased Stock for at least 1 year. Among the
conditions for use of Rule 144 is the availability of current information
to the public about DTPI.
(vi) Purchaser is an "accredited investor" for purposes of
Regulation D promulgated by the Commission under the Securities Act and,
by reason of its business or financial experience or the business or
financial experience of its professional advisors (who are unaffiliated
with and who are not compensated by DTPI or any Affiliate or selling agent
of DTPI, directly or indirectly), has the capacity to protect its own
interests in connection with the purchase of the Purchased Stock.
-2-
3
(vii) Purchaser acknowledges that the certificates
representing the Purchased Stock, when issued, shall contain the following
legend:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933; THEY HAVE BEEN ACQUIRED BY THE HOLDER
FOR INVESTMENT AND MAY NOT BE PLEDGED, HYPOTHECATED, SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF EXCEPT AS MAY BE AUTHORIZED UNDER THE SECURITIES ACT
OF 1933 AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.
(b) Authorization.
(i) Purchaser is a duly organized and validly existing
corporation in good standing under and by virtue of the laws of the State
of Delaware and has all requisite power and authority to enter into and
perform its obligations under this Agreement, the Stockholders Agreement,
in the form attached hereto as Exhibit A, and the Registration Rights
Agreement, in the form attached hereto as Exhibit B;
(ii) Purchaser has duly authorized, executed and delivered
this Agreement, the Stockholders Agreement and the Registration Rights
Agreement;
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND DTPI
DTPI represents and warrants on and as of the date of this Agreement,
except as set forth in the Disclosure Schedule attached hereto as Schedule B
(the "Disclosure Schedule"):
3.1 Organization and Standing of DTPI. DTPI is a duly organized and
validly existing corporation in good standing under and by virtue of the laws of
the State of Delaware and has all requisite corporate power and authority for
the ownership and operation of its properties and for the carrying on of its
business as presently conducted.
3.2 Corporate Action. DTPI has all necessary corporate power and
authority to execute and deliver and perform its obligations under this
Agreement, the Stockholders Agreement and the Registration Rights Agreement, and
all the transactions contemplated hereby and thereby, including the sale and
issuance of the Purchased Stock.
3.3 Validity of Purchased Stock. The Purchased Stock will be, when
issued upon the terms and for the consideration specified in this Agreement,
validly issued and outstanding, fully paid and nonassesable.
ARTICLE 4
DELIVERIES AT CLOSING
4.1 Deliveries and Filings. Simultaneously with the execution of this
Agreement, the following agreements and instruments shall be executed and/or
delivered, as appropriate:
-3-
4
(a) Stockholders Agreement. A Stockholders Agreement among DTPI,
Pequot and the Purchaser in the form attached hereto as Exhibit A.
(b) Registration Rights Agreement. A Registration Rights Agreement
among DTPI, Pequot and the Purchaser in the form attached hereto as Exhibit B.
(c) Restated Certificate of Incorporation. The Restated
Certificate of Incorporation in the form attached hereto as Exhibit C which has
been filed with the Delaware Secretary of State.
(d) Supply Agreement. A Supply Agreement between DTPI and the
Purchaser in the form attached hereto as Exhibit D.
ARTICLE 5
MISCELLANEOUS
5.1 No Waiver; Cumulative Remedies. No failure or delay on the part of
DTPI or the Purchaser or any other party having rights hereunder in exercising
any right, power or remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right, power or remedy preclude
any other or further exercise thereof or the exercise of any other right, power
or remedy hereunder. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
5.2 Amendments, Waivers and Consents. Except as otherwise provided
herein, changes in or additions to this Agreement may be made, and compliance
with any covenant or provision herein or therein set forth may be omitted or
waived only if DTPI and the Purchaser shall consent in writing thereto. Any
waiver or consent may be prospective or retroactive and may be given subject to
satisfaction of conditions stated therein and any waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
5.3 Addresses for Notices, etc. All notices, requests, demands and other
communications provided for hereunder shall be in writing (including telegraphic
or facsimile communication) and mailed, by certified or registered mail, or
telegraphed, or sent by facsimile transmission, or delivered to the applicable
party at the address indicated below:
If to DTPI:
Xxxx Xxxxxxxxxxxx
Chief Executive Officer
Direct-To-Phone International, Inc.
Xxx Xxxxxxx
Xxxxxx, Xxxxxxxxxx 00000-0000
Facsimile: 000-000-0000
-4-
5
With a copy to:
X.X. Xxxxxx, Esquire
Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Facsimile: 000-000-0000
If to the Purchaser:
Xxxx Xxxxxxxxxxxx
President and Chief Executive Officer
STM Wireless, Inc.
Xxx Xxxxxxx
Xxxxxx, Xxxxxxxxxx 00000-0000
Facsimile: 000-000-0000
With a copy to:
X.X. Xxxxxx, Esquire
Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx
000 Xxxxxxx Xxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Facsimile: 000-000-0000
or, as to each of the foregoing, at such other address as shall be designated by
such Person in a written notice to the other party complying as to delivery with
the terms of this Section. All such notices, requests, demands and other
communications shall, sent by facsimile transmission with confirmation of
transmission, or personally delivered, be effective upon facsimile transmission
or personal delivery.
5.4 Costs, Expenses and Taxes. The Purchaser and DTPI shall bear their
own costs and expenses incurred in connection with the investigation,
preparation, execution and delivery of this Agreement, the Stockholders
Agreement, the Registration Rights Agreement and the other instruments and
documents to be delivered hereunder and thereunder and the transactions
contemplated hereby and thereby.
5.5 Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of DTPI and the Purchaser and their respective successors
and assigns.
5.6 Survival of Representations and Warranties. All representations and
warranties made in this Agreement, or any other instrument or document delivered
in connection herewith, shall survive the execution and delivery hereof for a
period of one year from the date of this Agreement.
5.7 Prior Agreements. This Agreement constitutes the entire agreement
between the parties and supersedes any prior understandings or agreements,
representations, discussions or understandings concerning the subject matter
thereof.
-5-
6
5.8 Severability. The invalidity or unenforceability of any provision
hereto shall in no way affect the validity or enforceability of any other
provision.
5.9 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware.
5.10 Headings. Article, Section and subsection headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose.
5.11 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
5.12 Further Assurances. From and after the date of this Agreement, upon
the request of the Purchaser, DTPI shall execute and deliver such instruments,
documents and other writings as may be necessary or desirable to confirm and
carry out and to effectuate fully the intent and purposes of this Agreement.
5.13 Waiver of Jury Trial; Consent to Jurisdiction. Each of the parties
irrevocably (a) waives any and all right to trial by jury in any legal
proceeding arising out of this Agreement, or any of the transactions
contemplated hereby, (b) submits to the nonexclusive personal jurisdiction in
the State of California, the courts thereof and the United States District
Courts sitting therein, for the enforcement of this Agreement, (c) waives any
and all personal rights under the law of any jurisdiction to object on any basis
(including, without limitation, inconvenience of forum) to jurisdiction or venue
within the State of California for the purpose of litigation to enforce this
Agreement, and (d) agrees that service of process may be made upon it in the
manner prescribed in Section 5.3 for the giving of notices to the parties.
-6-
7
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
STM WIRELESS, INC.
By:_________________________________________
Name:
Title:
DIREC-TO-PHONE INTERNATIONAL, INC.
By:_________________________________________
Name:
Title:
-7-
