Exhibit 10.11
Preferred Stock Purchase Agreement
HYBRID FAX, INC.
Dated as of June 22, 1989
This PREFERRED STOCK PURCHASE AGREEMENT dated as of June 22, 1989 by and
between Hybrid Fax, Inc., a Delaware corporation (the "Company") and Xxxxx X.
Xxxxxx (the "Purchaser") is entered into in connection with the resolution of
certain matters under an Employee Stock Purchase Agreement dated as of October
1, 1988 by and between the Company and Purchaser (the "Old Stock Agreement").
1. Repurchase of Common Stock. Pursuant to Section 3 of the Old Stock
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Agreement, Purchaser agrees to sell, and the Company agrees to buy, 55,000
shares of the Company's Common Stock issued to Purchaser pursuant to the Old
Stock Agreement. The purchase price for such repurchase shall be $.01 per share.
Purchaser and the Company agree that the remaining 25,000 shares of Common Stock
held by Purchaser pursuant to the Old Stock Agreement shall remain valid and
outstanding in the hands of Purchaser free of any further claim for repurchase
pursuant to Section 3 of the Old Stock Agreement, but subject to such other
provisions of the Old Stock Agreement as may remain applicable to such shares.
2. Authorization of the Securities. The Company has duly authorized the
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issuance and sale to Purchaser of 55,000 additional shares of the Company's
Series A Preferred Stock (the "Preferred") par value $.01 per share. The
Preferred shall have the designations, powers, preferences and relative and
other special rights and the qualifications, limitations and restrictions set
forth in the Certificate of Designation (the "Certificate of Designation") of
the Company as filed with the Secretary of State of the State of Delaware with
respect to the Series A Preferred Stock.
3. Purchase and Sale of the Shares. Purchaser hereby subscribes for, and
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agrees to purchase, and the Company agrees to issue, 55,000 shares of Preferred
for a purchase price of $.833333 per share. The Company acknowledges payment in
full of the purchase price.
4. Other Purchasers of Preferred. Purchaser acknowledges that certain
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rights and covenants set forth herein with respect to the Preferred purchased
hereunder by Purchaser are similar to other rights and covenants that holders of
other outstanding shares of Preferred are subject.
5. Representations of the Purchaser. Purchaser represents the following
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to the Company:
(a) Purchaser has full power and authority to enter into this Agreement,
and to perform its obligations hereunder and thereunder and to consummate the
transactions contemplated hereby and thereby. The Agreement is a legal, valid
and binding obligation of such Purchaser, enforceable against the purchaser in
accordance with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization or other similar laws affecting the
enforcement of creditors' rights generally, and except as enforcement thereof is
subject to general principles of equity (whether applied in a proceeding at law
or in equity), and except that enforcement of the indemnification and
contribution provisions of this Agreement may be limited or denied on the basis
of federal or applicable state securities laws and the public policies
underlying such laws.
(b) The Purchaser recognizes that an investment in the Company is a
speculative investment involving a high degree of risk.
(c) Purchaser has adequate net worth and means of providing for current
needs and possible personal contingencies, and has no need, and anticipates no
need in the foreseeable future, to sell the Preferred (or the Common Stock
issuable upon exercise) for which such Purchaser hereby subscribes. Purchaser is
able to bear the economic risk of this investment and, consequently, without
limiting the generality of the foregoing, is able to hold the Preferred (and the
Common Stock issuable upon conversion) for an indefinite period of time and has
a sufficient net worth to sustain a loss of the entire investment in the Company
in the event such loss should occur.
(d) Purchaser is acquiring the Preferred for his own account for
investment and not for the benefit of any other person or with a view toward
resale or redistribution in a manner which would require registration under the
1933 Act, and such Purchaser does not now have any reason to anticipate any
change in circumstances or other particular occasion or event which would cause
such Purchaser to sell the Preferred (or the Common Stock issuable upon
conversion).
(e) Purchaser acknowledges that there are substantial restrictions on the
transferability of the Preferred (and the Common Stock issuable upon the
conversion thereof). Since the Preferred (and the Common Stock issuable upon
conversion thereof) will not be, and the Purchaser has no right to require that
they be, registered under the 1933 Act or qualified pursuant to applicable state
securities law (except as provided in this Agreement), the Preferred (and the
Common Stock issuable upon conversion thereof) may not be, and Purchaser agrees
that they shall not be, sold unless such sale is exempt from such registration
under the 1933 Act, the Securities Act of Texas and any other applicable state
blue sky law or regulation. Each Purchaser further acknowledges that the
Company is under no obligation to aid me in obtaining any exemption from the
registration requirements. Purchaser acknowledges that Purchaser shall be
responsible for compliance with all conditions on transfer imposed by any
securities administrator of any state and for any expenses incurred by the
Company for legal or accounting services in connection with reviewing such a
proposed transfer and/or issuing opinions in connection therewith.
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6. Registration Rights.
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6.1 Requested Registration.
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(a) Request for Registration. In case the Company shall receive from
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Holders of 50% of the issued or issuable Registrable Securities (the "Initiating
Holders") a written request that the Company effect a registration under the
Securities Act of 1933, as amended (the "Securities Act") with respect to not
less than a number of shares (as adjusted for recapitalizations) of Registrable
Securities, sufficient (when aggregated with the offering of other holders who
have similar registration rights who have so requested registration) so that the
net proceeds of a proposed offering of such shares would be reasonably estimated
to exceed $3,000,000, the Company will (i) promptly give written notice of the
proposed registration, qualification or compliance to all other Holders and (ii)
as soon as practicable, use its best efforts to effect such registration
(including, without limitation, appropriate qualification under blue sky or
other state securities laws and appropriate compliance with applicable
regulations issued under the Securities Act and any other governmental
requirements or regulations) as may be so requested and as would permit or
facilitate the sale and distribution of all or such portion of such Registrable
Securities as are specified in such request, together with all or such portion
of the Registrable Securities of any Holder or Holders joining in such request
as are specified in a written request received by the Company within 20 days
after receipt of such written notice from the Company; provided, however, that
the Company shall not be obligated to take any action to effect any such
registration, qualification or compliance pursuant to this Section 6.1:
(A) In any particular jurisdiction in which the Company would be
required to execute a general consent to service of process in effecting
such registration, qualification or compliance unless the Company is
already subject to service in such jurisdiction and except as may be
required by the Securities Act;
(B) Prior to the earlier of (i) December 31, 1992, or (ii) six months
after the effective date of the Company's first registered public offering
of its stock;
(C) If the Company receives an opinion of counsel, reasonably
satisfactory to a majority of the requesting Holders, to the effect that
the Holders can make open market sales of the outstanding Common Stock held
by them without registration, subject to the volume and manner of sale
limitations contained in Rule 144 promulgated by the Securities and
Exchange Commission or such similar exemption from registration
requirements of the Act;
(D) During the period starting with the date sixty (60) days prior to
the Company's estimated date of filing of, and ending on the date six (6)
months immediately following the effective date of, any registration
statement pertaining to securities of the Company (other than a
registration of securities in a Rule 145 transaction or with respect to
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an employee benefit plan), provided that the Company is actively employing
in good faith all reasonable efforts to cause such registration statement
to become effective;
(E) After the Company has effected one such registration pursuant to
this paragraph 6.1(a), and such registrations have been declared or ordered
effective; or
(F) If the Company shall furnish to such Holders a certificate signed
by the President of the Company stating that in the good faith judgment of
the Board of Directors of the Company it would be seriously detrimental to
the Company or its shareholders for a registration statement to be filed in
the near future, in which case the Company's obligation to use its best
efforts to register, qualify or comply under this Section 6.1 shall be
deferred for a period not to exceed 120 days from the date of receipt of
the written request from the Initiating Holders. Subject to the foregoing
clauses (A) through (F), the Company shall file a registration statement
covering the Registrable Securities so requested to be registered as soon
as practicable after receipt of the request or requests of the Initiating
Holders.
(b) Underwriting. In the event that a registration pursuant to this
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Section 6.1 is for a registered public offering involving an underwriting, the
Company shall so advise the Holders as part of the notice given pursuant to
Section 6.1(a)(i). In such event, the right of any Holder to registration
pursuant to this Section 6.1 shall be conditioned upon such Holder's
participation in the underwriting arrangements required by this Section 6.1, and
the inclusion of such Holder's Registrable Securities in the underwriting to the
extent requested shall be limited as provided herein. The Company shall
(together with all Holders proposing to distribute their securities through such
underwriting) enter into an underwriting agreement in customary form with the
managing underwriter(s) selected for such underwriting by a majority in interest
of the Initiating Holders, but subject to the Company's reasonable approval.
Notwithstanding any other provision of this Section 6.1, if the managing
underwriter(s) advise(s) the Initiating Holders in writing that marketing
factors require a limitation of the number of shares to be underwritten, then
the Company shall so advise all Holders participating and the number of shares
of Registrable Securities that may be included in the registration and
underwriting shall be allocated among all Holders thereof in proportion, as
nearly as practicable, to the respective amounts of Registrable Securities held
by such Holders at the time of filing the registration statement. No Registrable
Securities excluded from the underwriting by reason of the underwriters'
marketing limitation shall be included in such registration. To facilitate the
allocation of shares in accordance with the above provisions, the Company or the
underwriters may round the number of shares allocated to any Holder to the
nearest 100 shares.
If any Holder disapproves of the terms of the underwriting, such person may
elect to withdraw therefrom by written notice to the Company, the managing
underwriter and the Initiating Holders. The Registrable Securities so withdrawn
shall also be withdrawn from registration, and such Registrable Securities shall
not be transferred in a public distribution prior to 90 days after the effective
date of such registration, or such other shorter period of time as the
underwriters may require.
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6.2 Registration on Form S-3.
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(a) If any Holder or Holders holding in the aggregate not less than 15% of
the aggregate number of shares of outstanding Preferred and Common Stock issued
upon the conversion of the Preferred request that the Company file a
registration statement on Form S-3 (or any successor form to Form S-3) for a
public offering of the Registrable Securities the reasonably anticipated
aggregate price to the public of which, net of underwriting discounts and
commissions, would exceed $500,000, and the Company is then entitled to use Form
S-3 under applicable Commission rules to register the Registrable Securities for
such an offering, the Company shall use its best efforts to cause such
Registrable Securities to be registered for the offering on such form and to
cause such Registrable Securities to be qualified in such jurisdictions as the
Holder or Holders may reasonably request; provided, however, that the Company
shall not be required to effect more than one registration pursuant to this
Section 6.3 in any six month period. The substantive provisions of Section 6.5
shall be applicable to each registration initiated under this Section 6.2.
(b) Notwithstanding the foregoing, the Company shall not be obligated to
take any action pursuant to this Section 6.2: (i) in any particular jurisdiction
in which the Company would be required to execute a general consent to service
of process in effecting such registration, qualification or compliance unless
the Company is already subject to service in such jurisdiction and except as may
be required by the Securities Act; (ii) if the Company, within ten (10) days of
the receipt of the request of the Initiating Holders, gives notice of its bona
fide intention to effect the filing of a registration statement with the
Commission within ninety (90) days of receipt of such request (other than with
respect to a registration statement relating to Rule 145 transaction, an
offering solely to employees or any other registration which is not appropriate
for the registration of Registrable Securities); (iii) during the period
starting with the date sixty (60) days prior to the Company's estimated date of
filing of, and ending on the date six (6) months immediately following, the
effective date of any registration statement pertaining to securities of the
Company (other than a registration of securities in a Rule 145 transaction or
with respect to an employee benefit plan), provided that the Company is actively
employing in good faith all reasonable efforts to cause such registration
statement to become effective; or (iv) if the Company shall furnish to such
Holder a certificate signed by the President of the Company stating that in the
good faith judgment of the Board of Directors it would be seriously detrimental
to the Company or its shareholders for registration statements to be filed in
the near future, then the Company's obligation to use its best efforts to file a
registration statement shall be deferred for a period not to exceed 120 days
from the receipt of the request to file such registration by such Holder.
6.3 Optional Registrations. If at any time or times after the Closing
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Date, the Company shall determine to register any of its securities (for itself
or for any other securities holder of the Company) under the Securities Act or
any successor legislation (other than a registration relating to stock option
plans, employee benefit plans or a Rule 145 transaction), and in connection
therewith the Company may lawfully register its Common Stock, the Company will
promptly give written
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notice thereof to the then holders (the "Holders") of all issued or issuable
Registrable Securities (as hereinafter defined) and will use its best efforts to
include in such registration and to effect the registration under the Securities
Act of all Registrable Securities which such Holders may request in writing
delivered to the Company within 15 days after receipt by such Holder of the
notice given by the Company; provided, however, if the managing underwriter for
the Company advises the Company in writing that including all or part of the
Registrable Shares in such offering will adversely affect the marketing of the
proposed offering, then, in connection with any such underwritten offering by
the Company of any of its securities, such registration of Registrable
Securities shall be limited to not less than 10% of the total number of shares
to be sold in the case of an initial public offering of the Company's
securities, and 20% of the total number of shares to be sold in the case of a
subsequent offering; further provided, however, that such limited number of
shares of Common Stock in such offering, which shares shall be taken from those
owned (or obtainable upon the exercise of rights with respect to other
securities) by a group of holders requesting registration consisting of the
Holders and other holders having similar registration rights to those of the
Holders, and such limitation shall be imposed upon the Holders and such other
holders pro rata on the basis of the total number of (i) shares of Registrable
Securities owned by the requesting Holders and (ii) shares of Common Stock
owned, or obtainable by them upon the exercise of rights with respect to other
securities, by such other requesting holders. In the event of such a limitation,
shares of persons not having similar registration rights will not be included in
such registration. The Company shall have the right to select the managing
underwriter or underwriters for any underwritten offering made pursuant to a
registration under this Section 6.3 hereof.
6.4 Registrable Securities. For the purposes of these provisions, the term
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"Registrable Securities" shall mean (i) the Common Stock issued or issuable upon
conversion of the Series A Preferred Stock of the Company (the "Conversion
Stock") and (ii) any Common Stock issued or issuable with respect to the Common
Stock described in clause (i) by way of a stock dividend or stock split.
6.5 Expenses of Registration.
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(a) All expenses of the registration and offering incurred in connection
with (i) one registration pursuant to Section 6.1, and (ii) three registrations
pursuant to Section 6.3, shall be borne by the Company, except that the Holders
shall bear underwriting commissions and discounts attributable to their
Registrable Securities being registered and the fees and expenses of separate
counsel, if any, for such Holders. Unless otherwise stated, all Selling Expenses
relating to securities registered on behalf of the Holders and all other
Registration Expenses shall be borne by the Holders of such securities pro rata.
If the Company includes in such registration any securities to be offered by it,
all expenses shall be borne by the Company.
(b) A proportionate share of the expenses of the registration and offering
incurred in connection with (i) a registration pursuant to Section 6.2 and (ii)
any registration pursuant to Section 6.3 after the third registration
thereunder, shall be borne pro rata by the Holder or Holders requesting
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the registration on the basis of the ratio of the number of their shares so
registered to the total number of shares included in such registration.
6.6 Transfer of Registration Rights. The rights to cause the Company to
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register securities granted Purchasers under Sections 6.1, 6.2 and 6.3 may be
assigned to a transferee or assignee reasonably acceptable to the Company in
connection with any transfer or assignment of Registrable Securities by
Purchaser provided that: (i) such transfer may otherwise be effected in
accordance with applicable securities laws, and (ii) such assignee or transferee
acquires at least 5,000 shares of the Registrable Securities (appropriately
adjusted for Recapitalizations).
6.7 Standoff Agreement. The Holders shall, if requested by the managing
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underwriters or underwriters of any proposed firm underwritten offering of
securities by the Company, agree not to sell any of their Registrable Securities
or any other securities of the Company owned by such Holders in any transaction
other than pursuant to such underwritten offering for a period of up to 90 days
beginning on the effective date of the registration statement, provided that the
Company's officers and directors and each holder of 10% or more of the Company's
issued and outstanding Common Stock also agree to such limitations. The Holders
shall upon request execute a written agreement confirming and agreeing as to the
foregoing.
6.8 Registration Indemnification. In the event of any Registration under
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the Act pursuant to these provisions of Registrable Securities of any Holder,
the Company will hold harmless such Holder and each underwriter of such
securities and each other person, if any, who controls such Holder or such
underwriter within the meaning of the Act, against any losses, claims, damages
or liabilities to which such Holder or such underwriter or controlling person
may become subject under the Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof arise out of or are based
upon any untrue statement or alleged untrue statement of any material fact
contained in any registration statement, or any preliminary prospectus or final
prospectus or amendment or supplement thereto on the effective date thereof, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading; and will reimburse such Holder and each such
underwriter and each such controlling person for any legal or any other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, liability or action; provided, however, that the
Company will not be liable in any such case to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in such
registration statement, or any preliminary prospectus or final prospectus or
amendment or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company through an instrument duly executed by such
Holder or such underwriter specifically for use in the preparation thereof.
It shall be a condition precedent to the obligation of the Company to
include in any registration statement any Registrable Securities then held by a
Holder that the Company shall have
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received an undertaking satisfactory to it and its counsel from each Holder, to
indemnify and hold harmless (in the same manner and to the same extent as set
forth in the preceding paragraph) the Company, each director of the Company,
each officer of the Company who shall sign such registration statement and any
person who controls the Company within the meaning of the Act, with respect to
any statement or omission from such registration statement, any preliminary
prospectus or final prospectus contained therein, or any amendment or supplement
thereto, if such statement or omission was made in reliance upon and in
conformity with information furnished to the Company through an instrument duly
executed by the Holder specifically for use in the preparation of such
registration statement, preliminary prospectus or final prospectus or such
amendment or supplement thereto.
Promptly after receipt by an indemnified party of notice of the
commencement of any action involving a claim referred to in the preceding
paragraphs of these provisions, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party, give written notice
to the latter of the commencement of such action. In case any such action is
brought against an indemnified party, the indemnifying party will be entitled to
participate in and to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the defense
thereof, the indemnifying party will not be liable to such indemnified party for
any legal or other expenses incurred by the latter in connection with the
defense thereof.
7. Right of First Purchase.
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7.1. Right of First Purchase. The Company hereby grants to Purchaser
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the right to first purchase for a number of shares of the same class of New
Securities (as defined in this Section 7.1) which the Company may, from time to
time, propose to sell and issue. Purchaser shall be entitled to purchase a
number of shares of the class of New Securities sufficient to maintain his pro
rata ownership in the Company after taking into account the proposed issuance by
the Company, which pro rata ownership is equal to the ratio that the sum of the
number of shares of Preferred (or the number of outstanding shares of Conversion
Stock) then held by Purchaser bears to the sum of the total number of shares of
Common Stock then outstanding and the number of shares of Conversion Stock or
Common Stock issuable upon conversion of the then outstanding Preferred.
(a) Except as set forth below, "New Securities" shall mean any shares of
capital stock of the Company including common stock and preferred stock, whether
now authorized or not, and rights, options or warrants to purchase said shares
of Common Stock or preferred stock, and securities of any type whatsoever that
are, or may become, convertible into said shares of Common Stock or preferred
stock. Notwithstanding the foregoing, "New Securities" does not include (i) the
shares of Preferred issued pursuant to this Agreement or the Conversion Stock,
(ii) securities offered to the public generally pursuant to a registration
statement or pursuant to Regulation A under the Securities Act, (iii) securities
issued in the acquisition of another corporation by the Company by merger,
purchase of substantially all of the assets or other reorganization whereby the
Company or
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its shareholders own not less than fifty-one percent (51%) of the voting power
of the surviving or successor corporation, (iv) shares of the Company's Common
Stock or related options exercisable for such Common Stock issued to employees,
officers and directors of, and consultants, customers, and vendors to, the
Company, pursuant to any arrangement approved by the Board of Directors of the
Company, (v) stock issued pursuant to any rights or agreements, including
without limitation convertible securities, options and warrants, provided that
the rights of first purchase established by this Section 7.1 apply with respect
to the initial sale or grant by the Company of such rights or agreements, or
(vi) stock issued in connection with any stock split, stock dividend or
recapitalization by the Company.
(b) In the event the Company proposes to undertake an issuance of New
Securities, its shall give Purchaser written notice of its intention, describing
the type of New Securities, and the price and terms upon which the Company
proposes to issue the same. The Company shall include with such notice a brief
summary of the business plan of the Company. Purchaser shall have ten (10) days
from the date of receipt of any such notice to agree to purchase up to the
Purchaser's share (calculated in accordance with Section 7.1(a)) of such New
Securities for the price and upon the terms specified in the notice by giving
written notice to the Company and stating therein the quantity of New Securities
to be purchased. The Company shall notify Purchaser of any material revision to
the price and terms of the issuance of New Securities and Purchaser shall be
entitled to 10 additional days in order to respond to the Company.
(c) In the event Purchaser fails to exercise such right of first purchase
within said 10 day period, the Company shall have 120 days thereafter to sell or
enter into an agreement (pursuant to which the sale of New Securities covered
thereby shall be closed, if at all, within 60 days from the date of said
agreement) to sell the New Securities not elected to be purchased by Purchaser
at the price and upon the terms no more favorable to the purchasers of such
securities than specified in the Company's notice. In the event the Company has
not sold the New Securities or entered into an agreement to Sell the New
Securities within said 120 day period (or sold and issued New Securities in
accordance with the foregoing within 60 days from the date of said agreement),
the Company shall not thereafter issue or sell any of such New Securities,
without offering securities in the manner provided above.
(d) The right of first purchase granted under this Agreement shall expire
upon the first to occur of the following: (i) the closing of the first public
offering of the Common Stock of the Company to the general public which is
effected pursuant to a registration statement filed with, and declared effective
by, the Commission under the Securities Act; or (ii) as to Purchaser if
Purchaser no longer holds at least 5,000 shares of Preferred and/or Conversion
Stock (appropriately adjusted for Recapitalizations).
(e) The right of first purchase hereunder is not assignable except by
Purchaser to any wholly-owned subsidiary or constituent partner who acquires at
least 5,000 shares (appropriately adjusted for Recapitalizations).
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(f) Notwithstanding anything to the contrary contained in this Section 7,
in the event the New Securities proposed to be issued by the Company are to be
convertible into shares of Common Stock, the right of first purchase granted
pursuant to this Section 7 shall, at the Company's option, apply to the purchase
of a pro rata number of shares of Common Stock into which the pro rata number of
shares of New Securities Purchaser otherwise would have been entitled would be
convertible. Substitution of Common Stock in lieu of an offer of New Securities
shall be indicated in the Company's notice to Purchasers pursuant to Section
7(b) hereof. Failure of a Purchaser to effect his right of first purchase of
such Common Stock shall entitle the Company to issue any New Securities on any
such terms as the Company shall approve, provided that such conversion right
shall be limited to a maximum number of shares as presumed in the Company's
notice to Purchaser.
8. Restrictions on Transfer; Other Agreements.
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8.1. Restrictive Legend.
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(a) The Purchaser Shares shall (unless their disposition is otherwise
permitted by the provisions of this Section 8) be subject to stop transfer
instructions and shall be stamped or otherwise imprinted with a legend in
substantially the following form:
"This security has not been registered under the Securities Act of
1933, as amended, and may not be offered, sold or otherwise transferred,
pledged or hypothecated unless and until registered under such act, or
unless such offer, sale, transfer, pledge or hypothecation is exempt from
registration or is otherwise in compliance with such act. The
transferability of this security is also subject to restrictions contained
in a Purchase Agreement which agreements the Company will furnish to the
holder of this security upon request."
(b) The Company hereby agrees that it will, upon the Purchaser's request,
eliminate the foregoing legend and stop transfer instructions if, in the written
opinion of counsel (which counsel and opinion (in form, scope and substance)
shall be satisfactory to the Company), the Purchaser is entitled, without
limitation as to manner or sales to sell the Purchaser Shares without
registration under the Securities Act by reason of Rule 144 thereunder (or any
successor provision).
8.2. Restrictions on Transfer. The Purchaser by acquiring any of the
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Purchaser Shares hereunder, hereby covenants and agrees that, except as herein
provided, it will not directly or indirectly offer for sale or sell (within the
meaning of the Securities Act) any of the Purchaser Shares.
(a) The Purchaser may offer or sell the Purchaser Shares pursuant to:
(i) an effective registration statement under the Securities Act
("Registration Statement") filed by the Company under Section 6 hereof, or
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(ii) an exemption from registration under the Securities Act,
provided that prior to any such proposed transfer of the Purchaser Shares,
the Purchaser shall give written notice to the Company of the Purchaser's
intention to effect such transfer, which notice shall be accompanied by
such evidence as may be reasonably satisfactory to the Company that the
proposed transfer of the Purchaser Shares may be effected without
registration under the Securities Acts whereupon the Purchaser shall be
entitled to transfer the Purchaser Shares in accordance with the terms of
the notice delivered by the Purchaser to the Company, or
(iii) the provisions of Rule 144 under the Securities Act, if
applicable.
(b) Any offer or sale of the Purchaser Shares shall be made in accordance
with the Federal and state securities laws (including the prospectus delivery
requirements of the Securities Act), if applicable.
(c) Each of the Purchaser Shares transferred as above provided shall bear
the appropriate restrictive legend set forth in Section 8.1 above except as
provided in Section 6 or if, in the opinion of the legal counsel referred to
above (which counsel and opinion (in form, scope and substance) shall be
satisfactory to the Company), such legend is not required in order to establish
compliance with any provisions of the Securities Act.
9. Miscellaneous.
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9.1. Notices; Payments. Except as otherwise provided in this
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Agreement, all notices, requests, claims, demands, waivers and other
communications under this Agreement shall be in writing and shall be deemed to
have been duly given when delivered by hand, if delivered personally or by
courier, or five-business days after being deposited in the mail (registered or
certified mails postage prepaid, return receipt requested) properly addressed as
set forth below. Any such notice or other communication shall be addressed (a)
if to the Purchaser, at such address as the Purchaser shall have furnished to
the Company in writing, (b) if to any subsequent holder of any of the Purchaser
Shares, at such address as shown on the Security Register of the Company
maintained pursuant to the Certificate of Designation or (d) if to the Company,
to Hybrid Fax, Inc., 000 Xxxxxxxx Xxxxx, Xxxxx Xxxx, Xxxxxxxxxx 00000,
Attention: President, with a copy to: Xxxxxxx X. Xxxx, Xxxxxxx & Xxxxx, 0000
Xxxxx Xxxxxxxx Xxxxx, Xxxxxxx, Xxxxx 00000, or to such other address and/or to
the attention of such other copied person as the Company shall have furnished to
the Purchaser and each such other holder of Preferred in writing.
9.2. Headings; Schedules and Exhibits. The headings herein are for
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convenience of reference only, do not constitute a part of this Agreement and
shall not be deemed to limit or affect any of the provisions hereof. The
schedules and exhibits attached hereto, and the Certificates and other documents
delivered as specified herein, are expressly made a part of this Agreement.
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9.3 Effect of Agreement. This Agreement shall inure to the benefit of and
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be binding upon the parties hereto and their respective successors and permitted
assigns but, except as otherwise provided herein, neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by either of
the parties hereto without the prior written consent of the other party. Nothing
in this Agreement, expressed or implied, is intended to confer on any person
other than the parties hereto or their respective successors and assigns, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement. No right, power or remedy granted under this Agreement is intended to
be exclusive, but each shall be cumulative and in addition to any other rights,
powers or remedies referred to in this Agreement or otherwise available at law
or in equity; and the exercise or beginning of exercise by any party hereto of
any one or more of such rights, powers or remedies shall not preclude the
simultaneous or later exercise by such party of any or all such other rights,
powers or remedies. No waiver by any party hereto, and no failure or delay on
the part of such party in any one or more instances to insist upon strict
performance or observance of one or more covenants or conditions hereof, shall
in any way be, or be construed to be, a waiver thereof or prevent such party's
rights to require at a later time the performance or observance of such
covenants or conditions, or otherwise prejudice such party's rights, powers or
remedies.
9.4. Company Information. For so long as the Purchaser shall own
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Preferred, the Company shall furnish to each Purchaser owning Preferred (i) for
the first three quarters of each fiscal year reports of its business and
operations (including unaudited quarterly financial statements) and (ii) for
each fiscal year, an annual report of its business and operations (including
financial statements which financial statements shall be audited commencing for
the year ended December 31, 1989 and all subsequent years). The Company shall,
from time to time prior to the Closing, provide to the Purchaser such other
information respecting the business operations, financial condition or assets of
the Company as the Purchaser may reasonably request.
9.5. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
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AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA, WITHOUT
REGARD TO THE CONFLICT OF LAWS RULES THEREOF.
9.6. Counterparts. This Agreement may be executed simultaneously in
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two or more counterparts, each of which shall be deemed to be an original, but
all of which together shall constitute one and the same instrument.
9.8. Delivery. The Purchasers hereby acknowledges delivery of a
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certificate evidencing the Purchaser Shares.
9.9. Lost, Etc., Certificates Evidencing Preferred Certificates:
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Exchange of Certificates. Upon receipt of evidence satisfactory to the Company
------------------------
of the loss, theft, destruction or mutilation of any certificate evidencing any
shares of Preferred held by the Purchaser, and in case of loss, theft or
destruction, upon receipt of indemnity reasonably satisfactory to the Company,
or, in the case of such mutilation, upon surrender and cancellation of such
Certificate, the Company will make and
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deliver in lieu of such certificate one or more new certificates of the same
series and in such denomination or denominations as the Purchaser may request
for the same aggregate number of shares of Preferred evidenced by the
certificate so lost, stolen, destroyed or mutilated, less the number of shares
of Preferred, if any, originally evidenced by such certificate that have
theretofore been redeemed, and registered in such name or names as the Purchaser
may request.
Upon surrender by the Purchaser of any certificate evidencing any shares of
Preferred for exchange at the office of the Company, the Company at its expense
(exclusive of applicable transfer taxes if any) will issue in exchange therefor
one or more new certificates of the same series and in such denomination or
denominations as such Purchaser may request for the same aggregate number of
shares of Preferred originally evidenced by the Certificate so surrendered, less
the number of shares of Preferred, if any, evidenced by such surrendered
certificate that have theretofore been redeemed, and registered in such name or
names as such Purchaser may request.
9.10. Amendments: Waiver. Any provision of Section 6 through 9 of this
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Agreement may be amended upon, and any provision of Section 6 through 9 of this
Agreement may be waived only by, the written consent of the holders of at least
66-2/3% of the aggregate Stated Value of the Preferred; provided however, that
no such amendment or waiver of this Section 9.10 shall be effective without the
written consent of the holders of 100% of the outstanding Preferred.
EXECUTED as of the date first above written by the Company and the
Purchaser.
/s/ Xxxxx X. Xxxxxx
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XXXXX X. XXXXXX ("Purchaser")
HYBRID FAX, INC.
By: /s/ Xxxxxx X. Xxxxxx III
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Title: President
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