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EXHIBIT 10.2
COMMON STOCK PURCHASE AGREEMENT
This COMMON STOCK PURCHASE AGREEMENT (this "AGREEMENT") is made as of
this 13th day of November, 2000 between USinternetworking, Inc., a Delaware
corporation (the "COMPANY") and those entities listed on Schedule 1 hereto (each
a "PURCHASER" and, collectively, the "PURCHASERS").
RECITALS
WHEREAS, concurrently with this Agreement the Company is issuing
to each Purchaser warrants to acquire its common stock, par value $0.001 per
share, (the "COMMON STOCK") in the form attached hereto as Exhibit A (the
"WARRANTS"); and
WHEREAS, in connection with the Warrants, the Company desires to sell to
each Purchaser, and each Purchaser desires to purchase from the Company, shares
of the Company's Common Stock, $.001 par value per share (the "COMMON STOCK"),
on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
promises hereinafter set forth, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1
AGREEMENT TO PURCHASE AND SELL COMMON STOCK AND WARRANTS
1.1 AGREEMENT TO PURCHASE AND SELL COMMON STOCK. Upon the terms and
subject to the conditions of this Agreement, the Company hereby agrees to sell
to the Purchasers, and each Purchaser agrees to purchase from the Company, that
number of shares of its Common Stock (the "SHARES") and Warrants to purchase
shares of its Common Stock as set forth on Schedule 1 for the aggregate
consideration set forth on such Schedule 1.
1.2 AGREEMENT TO GRANT WARRANTS. Upon the terms and conditions of this
Agreement, the Company agrees to grant to the Purchasers, and each Purchaser
agrees to accept, the Warrants.
SECTION 2
CLOSING DATES; DELIVERY; HSR ACT FILING
2.1 CLOSING DATES. The closings of the purchase and sale of the Shares
hereunder (the "CLOSINGS") shall be held at the offices of Xxxxxx & Xxxxxxx in
Washington, D.C. as follows. As soon as practicable (but no more than five (5)
business days) after the satisfaction or waiver of the last to be fulfilled of
the conditions set forth in Sections 5 and 6 OTHER THAN the conditions relating
to the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 0000 (xxx "XXX XXX") in
Sections 5.6 and 6.5 and the conditions relating to the closing of certain
investments in Section 5.7(b) (the date of each Closing
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being hereinafter referred to as a "CLOSING DATE"), the initial Closing shall
occur with respect to 25% of the amount of Common Stock and warrants, or ,if
less, the maximum amount permitted by the HSR Act as set forth on Schedule 1 as
to each Purchaser. As soon as practicable (but no more than five (5) business
days) after the satisfaction or waiver of the conditions relating to the HSR Act
in Sections 5.6 and 6.5, provided that the remaining conditions in Sections 5
and 6 remain met, the second Closing shall occur with respect to the remaining
balance of the amount of Common Stock and warrants set forth on Schedule 1 as to
each Purchaser. The exercise price for the Warrants shall be $ 4.08 per share of
Common Stock. The Warrants shall be exercisable immediately after the applicable
Closing and shall terminate five (5) years thereafter.
2.2 DELIVERY. At the first Closing, the Company will deliver to the
Purchaser a certificate or certificates representing the Shares and Warrants
against payment of the aggregate purchase price set forth on Schedule 1 by wire
transfer of immediately available funds to an account designated by the Company.
At the second Closing, the Company will deliver to the Purchaser a certificate
or certificates representing the Shares and Warrants against payment of the
aggregate purchase price set forth on Schedule 1 by wire transfer of immediately
available funds to an account designated by the Company. In each case, the
certificates representing the Shares and the Warrants shall be subject to a
legend restricting transfer under the Securities Act of 1933, as amended (the
"SECURITIES ACT") and referring to restrictions on transfer herein, such legend
to be substantially as follows:
THE [SECURITY] [SHARES] REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), OR ANY STATE SECURITIES LAW. NO TRANSFER OF THE [SECURITY]
[SHARES] REPRESENTED BY THIS CERTIFICATE SHALL BE VALID OR EFFECTIVE
UNLESS (A) SUCH TRANSFER IS MADE PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT, OR (B) THE HOLDER SHALL DELIVER TO
THE COMPANY AN OPINION OF COUNSEL IN FORM AND SUBSTANCE REASONABLY
ACCEPTABLE TO THE COMPANY THAT SUCH PROPOSED TRANSFER IS EXEMPT FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
The Company agrees (i) to remove the legend set forth in the preceding
paragraph upon receipt of an opinion of Purchaser's counsel that the Shares are
eligible for transfer without registration under the Securities Act and (ii) to
remove such legend at such time as the Shares are subject to an effective
registration statement registering the Shares under the Securities Act.
2.3 REGISTRATION OBLIGATION. As soon as practicable after the First
Closing Date, but in no event later than sixty (60) days thereafter, the Company
will prepare and file with the SEC, a registration statement on Form S-3 for an
offering to be made on a delayed or continuous basis pursuant to Rule 415 of the
Securities Act registering the resale from time to time by holders thereof of
all of the Shares and the shares of Common Stock issuable upon exercise of the
Warrants. The Company shall use its best efforts to cause the registration
statement to be declared effective under the Securities Act as promptly as is
practicable but in any event within ninety (90) days after the Fist Closing
Date, and to keep such registration
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statement continuously effective under the Securities Act until the earlier of
(i) the sale of all of the securities registered thereby and (ii) the expiration
of the holding period applicable to the securities registered thereby held by
persons that are not "affiliates" (as defined in Rule 144 of the Securities Act)
of the Company under Rule 144(k) under the Securities Act.
2.4 HSR ACT. The Company and each applicable Purchaser agree to make
all necessary filings required by the HSR Act, as amended, and the rules
promulgated thereunder (the "HSR ACT") relating to the transactions contemplated
by this Agreement as promptly as practicable after the date of this Agreement.
The parties will use commercially reasonable efforts to furnish or cause to be
furnished, as promptly as practicable, all information and documents requested
under such laws and will otherwise cooperate in all reasonable respects with the
applicable governmental authorities to obtain all required regulatory approvals
in as expeditious a manner as possible. Each party will pay its own fees and
expenses related to or assessed in connection with any and all filings by it
under the HSR Act.
SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchasers as follows:
3.1 ORGANIZATION. The Company is a corporation duly organized and
validly existing under the laws of the State of Delaware and is in good standing
under such laws. The Company has the requisite corporate power to own and
operate its properties and assets, and to carry on its business as presently
conducted and as proposed to be conducted. The Company is qualified to do
business as a foreign corporation in each jurisdiction in which the ownership of
its property or the nature of its business requires such qualification, except
where the failure to be so qualified would not reasonably be expected to have a
materially adverse effect on the Company and its subsidiaries, taken as a whole.
3.2 AUTHORIZATION. All corporate action on the part of the Company
necessary for the authorization, execution, delivery and performance of this
Agreement and the Warrants, the authorization, sale, issuance and delivery of
the Shares hereunder and upon exercise of the Warrants, and the performance of
the Company's obligations hereunder and under such agreements has been taken.
This Agreement and the Warrants constitute legal, valid and binding obligations
of the Company enforceable in accordance with their respective terms, subject to
laws of general application relating to bankruptcy, insolvency and the relief of
debtors and rules of law governing specific performance, injunctive relief or
other equitable remedies. Upon their issuance and delivery pursuant to this
Agreement, the Shares will be validly issued, fully paid and nonassessable and
the Common Stock issued upon exercise of the Warrants will be validly issued,
fully paid and nonassessable. The issuance and sale of the Shares will not give
rise to any preemptive rights or rights of first refusal on behalf of any person
in existence on the date hereof.
3.3 NO CONFLICT. The execution and delivery of this Agreement and the
Warrants do not, and the consummation of the transactions contemplated hereby
and thereby will not, conflict with, or result in any violation of, or default
under (with or without notice or lapse of time, or both), or give rise to a
right of termination, cancellation or acceleration of any obligation or to a
loss of a material benefit
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under any provision of, the Certificate of Incorporation or Bylaws of the
Company or any mortgage, indenture, lease or other agreement or instrument,
permit, concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to the Company or its properties or
assets, the effect of which could have a material effect on the Company or its
subsidiaries, taken as a whole, or materially impair or restrict the Company's
power to perform its obligations as contemplated under such agreement.
3.4 CAPITALIZATION. (a) The authorized capital stock of the Company
consists solely of (i) 450,000,000 shares of the Company's common stock, par
value $.001 per share, of which 97,893,179 shares are issued and outstanding as
of November 7, 2000 and (ii) 1,000,000 shares of the Company's preferred stock,
par value $.001 per share, none of which are issued and outstanding. All of the
issued and outstanding shares of the Company Common Stock have been duly
authorized and validly issued and are fully paid and nonassessable and are not
subject to any preemptive rights.
(b) Other than the Warrants and as set forth on Schedule 3.4(b) hereto,
the Company has not issued or granted any outstanding options, warrants, rights
or other securities convertible into or exchangeable or exercisable for shares
of the capital stock of the Company, any other commitments or agreements
providing for the issuance of additional shares of the capital stock of the
Company, the sale of treasury shares, or for the repurchase or redemption of
shares of the Company's capital stock, or any obligations arising from canceled
stock. There are no agreements of any kind which may obligate the Company to
issue, purchase, register for sale, redeem or otherwise acquire any of its
securities or interests. There are no outstanding or authorized stock
appreciation, phantom stock or similar rights with respect to the Company. There
are no outstanding securities of the Company, or contracts binding on the
Company relating to such securities, that give to their holders antidilution
protections or similar rights. The fact of the issuance of the Shares and the
issuance of common shares upon exercise of the Warrants will not give any other
holder of Company securities the right to receive as a result of such issuance
any additional securities or property or change any material rights enjoyed with
respect to such securities.
(c) There are no voting trusts, stockholder agreements, proxies or other
agreements in effect with respect to the voting or transfer of the Shares.
3.5 SEC DOCUMENTS. The Company has filed all required reports,
schedules, forms, statements and other documents with the Securities and
Exchange Commission (the "SEC") since January 15, 1999 (the "SEC DOCUMENTS"). As
of their respective dates, the SEC Documents complied in all material respects
with requirements of the Securities Act or the Securities Exchange Act of 1934,
as amended (the "EXCHANGE ACT"), as the case may be, and the rules and
regulations of the SEC promulgated thereunder, and none of the SEC Documents
contained any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Except to the extent that information contained in any SEC Document
has been revised or superseded by a later document filed with the SEC and
publicly available prior to the date of this Agreement, none of the SEC
Documents contains any untrue statement of a material fact or omits to state any
material fact required to be stated therein or necessary in order to make the
statements therein not misleading. The financial statements of the Company
included in the SEC Documents comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in accordance with U.S.
generally accepted
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accounting principles ("GAAP") applied on a consistent basis during the periods
involved (except as may be indicated in the notes thereto) and fairly present
the consolidated financial position of the Company and its consolidated
subsidiaries as of the dates thereof and the consolidated results of their
operation and cashflows for the periods then ending in accordance with GAAP
(subject, in the case of the unaudited statements, to normal year end audit
adjustments and the absence of footnotes). Neither the Company nor any of its
subsidiaries has any liabilities or obligations of any nature (whether accrued,
absolute, contingent or otherwise) required by GAAP to be set forth on a
consolidated balance sheet of the Company and its consolidated subsidiaries or
in the notes thereto and which can reasonably be expected to have a material
adverse effect on the Company and its subsidiaries taken as a whole.
3.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as disclosed in the
SEC Documents filed and publicly available prior to the date of this Agreement,
since the date of the most recent audited financial statements included in the
filed SEC Documents, Company has conducted its business only in the ordinary
course, and there has not been (i) any declaration, setting aside, or payment of
any dividend or distribution (whether in cash, stock or property) with respect
to any of the Company's capital stock, (ii) any split, combination or
reclassification of any of its capital stock or any issuance or the
authorization of any issuance of any other securities in respect of, in lieu of
or in substitution for shares of its capital stock, (iii) any damage,
destruction or loss, whether or not covered by insurance, that has or is likely
to have a material adverse effect on the Company and its subsidiaries taken as a
whole, or (iv) any change in accounting methods, principles or practices by the
Company materially affecting its assets, liabilities, or business, except
insofar as may have been required by a change in GAAP.
3.7 GOVERNMENTAL AND LIKE CONSENTS. No consent, approval or
authorization of or designation, declaration or filing with any governmental
authority on the part of the Company is required in connection with the valid
execution and delivery of this Agreement, or the offer, sale or issuance of the
Shares or the shares issuable under the Warrant, or the consummation of any
other transaction contemplated hereby, except such filings as may be required to
be made with the SEC, the National Association of Securities Dealers, Inc. or
under applicable state securities laws and the HSR Act.
3.8 LITIGATION. There is no suit, action, or proceeding pending or
affecting the Company or any of its subsidiaries that, individually or in the
aggregate, could (i) have a material adverse effect on the Company and its
subsidiaries taken as a whole, (ii) impair the ability of the Company to perform
its obligations under this Agreement, the Alliance Agreement, and the Warrants,
or (iii) prevent the consummation of any of the transactions contemplated by
said agreements, nor is there any judgment, decree, injunction, rule or order of
any governmental entity or arbitrator outstanding against the Company or any of
its subsidiaries having, or which, insofar as reasonably can be foreseen in the
future have, any such effect.
3.9 DISCLOSURE. The Company has, to the best of its knowledge, fully
responded to all requests for information, and the Company has accurately
answered all questions from the Purchaser concerning the condition of the
Company, and has not knowingly withheld any facts relating to such requests and
questions which it reasonably believes to be material with respect to its
condition. No information in this Agreement or in any Exhibit or Schedule
attached to this Agreement contains or will contain any untrue statement of a
material fact or, when considered together with all such information delivered
to the Purchaser, omits to state any material fact.
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The disclosures made in writing by the Company in connection with this
Agreement, when read in the light of the circumstances when made and taken as a
whole, did not when made contain any untrue statement of a material fact.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
Each Purchaser hereby, severally and not jointly, represents and warrants
to the Company as follows:
4.1 ORGANIZATION. The Purchaser is either an individual or a
corporation, partnership or limited liability company duly organized and validly
existing under the laws of its state of formation, with all requisite power and
authority to own, lease and operate its properties and to conduct its business
as presently conducted.
4.2 AUTHORITY. All corporate, partnership or other action on the part
of the Purchaser necessary for the authorization, execution, delivery and
performance of this Agreement by the Purchaser has been taken. This Agreement
has been duly executed and delivered by the Purchaser and constitute legal,
valid and binding obligations of the Purchaser, enforceable in accordance with
its terms, subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors and rules of law governing specific
performance, injunctive relief or other equitable remedies. The execution and
delivery of such agreement does not, and the consummation of the transactions
contemplated hereby will not, conflict with or result in any violation of any
obligation under any provision of the constituent documents of the Purchaser or
any judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to the Purchaser. Furthermore, each Purchaser and its partner,
officer or other principal, if any, which come under the auspices of Section
16(b) of the Securities and Exchange Act of 1934 have not sold equity securities
of the Company for six (6) months prior to the date of this Agreement.
4.3 INVESTMENT. The Purchaser is acquiring the Shares and the
Warrants, and, upon exercise of the Warrants, will acquire the shares of Common
Stock issuable upon such exercise for investment for its own account, not as a
nominee or agent, and not with a view to, or for resale in connection with, any
distribution thereof. The Purchaser understands that the Shares, the Warrants
and the shares of Common Stock issuable upon exercise of the Warrants, have not
been registered under the Securities Act and are issued by reason of a specific
exemption from the registration provisions of the Securities Act which depends
upon, among other things, the bona fide nature of the investment intent and the
accuracy of the Purchaser's representations and warranties contained herein.
Purchaser has no present intent to acquire securities of the Company other than
as contemplated by this Agreement.
4.4 DISCLOSURE OF INFORMATION. The Purchaser has had full access to
all information it considers necessary or appropriate to make an informed
investment decision with respect to the Shares and the Warrants to be purchased
by the Purchaser under this Agreement. The Purchaser further has had an
opportunity to ask questions and receive answers from the Company regarding the
terms and
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conditions of the offering of the Shares and to obtain additional information
necessary to verify any information furnished to the Purchaser or to which the
Purchaser had access.
4.5 INVESTMENT EXPERIENCE. The Purchaser understands that the purchase
of the Shares involves substantial risk. The Purchaser has experience as an
investor in securities of companies and acknowledges that it is able to fend for
itself, can bear the economic risk of its investment in the Shares and has such
knowledge and experience in financial or business matters that it is capable of
evaluating the merits and risks of this investment in the Shares and protecting
its own interests in connection with this investment.
4.6 ACCREDITED INVESTOR STATUS. The Purchaser is an "ACCREDITED
INVESTOR" within the meaning of Regulation D promulgated under the Securities
Act.
4.7 RESTRICTED SECURITIES. The Purchaser understands that although the
Company is undertaking to file a registration statement covering the Shares and
the Common Stock to be issued upon exercise of the Warrants, such registration
statement will not be effective as of the Closings. Accordingly, the Warrants,
the Shares, and the Common Stock are characterized as "restricted securities"
under the Securities Act inasmuch as they are being acquired from the Company in
a transaction not involving a public offering and that under the Securities Act
and applicable regulations thereunder such securities may be resold without
registration under the Securities Act only in certain limited circumstances. The
Purchaser is familiar with Rule 144 of the SEC, as presently in effect, and
understands the resale limitations imposed thereby and by the Securities Act.
SECTION 5
CONDITIONS TO OBLIGATION OF THE PURCHASERS
Except as set forth in Section 2.1, each Purchaser's obligation to
purchase the Shares at each Closing is, at the option of such Purchaser, which
may waive any such conditions, subject to the fulfillment on or prior to each
Closing Date of the following conditions:
5.1 REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties of the Company contained in Section 3 will be true and correct on and
as of the date hereof and on and as of the applicable Closing Date with the same
effect as though such representations and warranties had been made as of such
Closing Date. The Purchaser shall have received a certificate signed by a duly
authorized officer of Company to such effect on each Closing Date.
5.2 COVENANTS. All covenants, agreements and conditions contained in
this Agreement to be performed by the Company on or prior to each Closing Date
shall have been performed or complied with in all material respects. The
Purchaser shall have received a certificate signed by a duly authorized officer
of Company to such effect on each Closing Date.
5.3 NO ORDER PENDING. There shall not then be in effect any order
enjoining or restraining the transactions contemplated by this Agreement.
5.4 NO LAW PROHIBITING OR RESTRICTING SALE OF THE SHARES. There shall
not be in effect any law, rule or regulation prohibiting or restricting the sale
of the Shares or the Warrants, or requiring
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any consent or approval of any Person which shall not have been obtained to
issue the Shares with full benefits afforded the Common Stock.
5.5 WARRANTS. The Company shall have executed and delivered the
Warrants in the form attached hereto as Exhibit A, and the Company shall have
taken no action to invalidate or terminate the Warrants.
5.6 CONSENTS. All third-party consents, approvals, assignments,
waivers, authorizations or other certificates, including any approval required
under the HSR Act, required for the execution of the Agreement and the
transactions contemplated hereby or reasonably deemed necessary by Purchaser's
legal counsel in form and substance reasonably satisfactory to the Purchaser
shall have been obtained.
5.7 INVESTMENTS. (a) With respect to the initial Closing only, the
Company shall have sold to Microsoft Corporation Common Stock pursuant to the
terms and conditions of the Common Stock Purchase Agreement between the Company
amd the Microsoft Corporation dated November 13, 2000 (without amendment or
waiver by the Company) for an aggregate purchase price of at least $12.5
million.
(b) With respect to the subsequent closing only, the Company shall have
sold to Microsoft Corporation Common Stock for an aggregate purchase price of
$37.5 million.
SECTION 6
CONDITIONS TO OBLIGATION OF THE COMPANY
The Company's obligation to sell and issue the Shares and issue the
Warrants at the Closing is, at the option of the Company, which may waive any
such conditions, subject to the fulfillment on or prior to each Closing Date of
the following conditions:
6.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties
of the Purchasers contained in Section 4 will be true and correct on and as of
the date hereof and on and as of each Closing Date with the same effect as
though such representations and warranties had been made as of the applicable
Closing Date. The Company shall have received a certificate signed by a duly
authorized officer of the Purchaser to such effect on each Closing Date.
6.2 COVENANTS. All covenants, agreements and conditions contained in
this Agreement to be performed by the Purchasers on or prior to each Closing
Date shall have been performed or complied with in all material respects.
6.3 NO ORDER PENDING. There shall not then be in effect any order
enjoining or restraining the transactions contemplated by this Agreement.
6.4 NO LAW PROHIBITING OR RESTRICTING THE SALE OF THE SHARES. There
shall not be in effect any law, rule or regulation prohibiting or restricting
the sale of the Shares or the Warrants, or
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requiring any consent or approval of any Person which shall not have been
obtained to issue the Shares with full benefits afforded the Common Stock.
6.5 CONSENTS. All third-party consents, approvals, assignments,
waivers, authorizations or other certificates, including any approval required
under the HSR Act, required for the execution of the Agreement and the
transactions contemplated hereby shall have been obtained.
SECTION 7
MISCELLANEOUS
7.1 REASONABLE EFFORTS. Each of the Company and the Purchaser shall
use its reasonable good faith efforts to take all actions required under any
law, rule or regulation adopted subsequent to the date hereto to ensure that the
conditions to each Closing set forth herein are satisfied on or before each such
Closing Date.
7.2 LAW GOVERNING. This Agreement shall be construed and enforced in
accordance with, and governed by, the laws of the State of Delaware (not
including the choice of law rules thereof) regardless of the jurisdiction of
creation or domicile of the Company or its successors. The exclusive
jurisdiction for all actions and proceedings arising out of or relating to this
Agreement which are not subject to arbitration pursuant to Section 7.12 shall be
in any Delaware state or federal court thereof.
7.3 SURVIVAL. The representations and warranties in Sections 3 and 4
of this Agreement shall survive the Closing.
7.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective successors
and assigns.
7.5 ENTIRE AGREEMENT; AMENDMENT. This Agreement and the other
documents delivered or referred to in this Agreement constitute the full and
entire understanding and agreement between the parties with regard to the
subject matter hereof and thereof and supersede all prior agreements and
understandings among the parties relating to the subject matter hereof. Neither
this Agreement nor any term of such other documents delivered pursuant to this
Agreement may be amended, waived, discharged or terminated other than by a
written instrument signed by the party against whom enforcement of any such
amendment, waiver, discharge or termination is sought.
7.6 NOTICES. All notices, requests, demands or other communications
which are required or may be given pursuant to the terms of this Agreement shall
be in writing and shall be deemed to have been duly given: (i) on the date of
delivery if personally delivered by hand, (ii) upon the third day after such
notice is (a) deposited in the United States mail, if mailed by registered or
certified mail, postage prepaid, return receipt requested, or (b) sent by a
nationally recognized overnight express courier, or (iii) by facsimile upon
written confirmation (other than the automatic confirmation that is received
from the recipient's facsimile machine) of receipt by the recipient of such
notice:
(a) if to the Company, to it at:
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USinternetworking, Inc.
Xxx XXx Xxxxx
Xxxxxxxxx, XX 00000-0000
Attention: General Counsel
Telecopy No.: (000) 000-0000
with a copy to:
Xxxxxx & Xxxxxxx
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxxxxx, XX 00000
Attention: Xxxx X.Xxxxxx, Xx., Esq.
Telecopy No.: (000) 000-0000
(b) if to each of the Purchasers, to it at its address
appearing on Schedule 1 with a copy to:
Xxxxxx Xxxxxxxxx, Esquire
Xxxx, Stettinius & Hollister, LLP
1800 First Star Tower
000 Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
7.9 BROKERS.
(a) Other than Credit Suisse First Boston Corporation, the
Company has not engaged, consented to, or authorized any broker, finder or
intermediary to act on its behalf, directly or indirectly, as a broker, finder
or intermediary in connection with the transactions contemplated by this
Agreement. The Company hereby agrees to indemnify and hold harmless the
Purchaser from and against all fees, commissions or other payments owing to any
party acting on behalf of the Company hereunder.
(b) The Purchasers have not engaged, consented to or authorized
any broker, finder or intermediary to act on its behalf, directly or indirectly,
as a broker, finder or intermediary in connection with the transactions
contemplated by this Agreement. The Purchasers hereby agree to indemnify and
hold the Company harmless from and against all fees, commissions or other
payments owing to any party acting on behalf of the Purchasers hereunder.
7.10 FEES, COSTS AND EXPENSES. All fees, costs and expenses (including
attorneys' fees and expenses) incurred by either party hereto in connection with
the preparation, negotiation and execution of this Agreement and the Warrants,
and the consummation of the transactions contemplated
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hereby, shall be the sole and exclusive responsibility of such party, provided,
however, that the Company shall reimburse the Purchasers for the reasonable fees
of one attorney representing the Purchasers (excluding the executive officers of
the Company, GECC and Aether Systems, Inc. all of whom shall have separate
counsel not provided by, or paid for the Company).
7.11 SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement or the Warrants (or any such agreement in it entirety) is held by
a court of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restriction of this Agreement
(or such other agreements) shall remain in full force and effect and shall in no
way be affected, impaired or invalidated.
7.12 FURTHER ASSURANCES. The parties will from time to time subsequent
to each Closing, at the respective parties' request and without further
consideration, execute and deliver such other documents and instruments, as such
requesting party may reasonably request in order to more fully carry out the
intentions of the parties under this Agreement and under the documents
contemplated by this Agreement (including, without limitation, the Warrants).
7.14 ARBITRATION. In the event a dispute occurs with respect to any
claim, dispute or other matter arising out of or relating to this Agreement, the
parties hereto will promptly attempt to settle such dispute through consultation
and negotiation in good faith and in a spirit of mutual cooperation. If
agreement is reached concerning the resolution of such dispute, then such
agreement shall be final, conclusive and binding on the parties hereto. If, on
or before the tenth day after written notice of such dispute is given by one
party to the other parties, such dispute has not been resolved by the agreement
of all the parties, such dispute shall be settled by an expedited arbitration
proceeding conducted in accordance with the then-current CPR Non-Administered
Arbitration Rules and the Federal Rules of Evidence in Washington, D.C. by a
panel of three (3) arbitrators who shall have experience relating to the dispute
or matter to be resolved. Each of the Company and the holder shall select an
arbitrator, and those two (2) arbitrators shall select a third arbitrator. The
parties hereto shall provide such arbitrators with such information as may be
reasonably requested in connection with the arbitration of such dispute and
shall otherwise cooperate with each other and such arbitrators in good faith and
with the goal of resolving such dispute as promptly as reasonably practicable.
The arbitrators' decision and award with respect to the dispute referred to
shall be final and binding on the parties hereto and may be entered in any court
with jurisdiction, and the parties hereto shall abide by such decision and
award. The cost of the arbitration proceeding and any proceeding in court to
confirm or to vacate any arbitration award, as applicable (including, without
limitation, attorneys' fees and costs), shall be borne by the unsuccessful party
(if any) and shall be awarded as part of the arbitrators' award; provided
however, that if the arbitrators do not find one party to be unsuccessful then
the cost of the arbitral proceeding shall be paid equally by the parties hereto.
[the remainder of this page has been intentionally omitted]
-11-
12
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date set forth above.
USINTERNETWORKING, INC.
By: /s/ XXXXXX X. XXXXX
-----------------------------
Name: XXXXXX X. XXXXX
Title: CEO
[PURCHASERS] VENROCK ASSOCIATES II, L.P.
By: /s/ XXXXXXX X. XXXXXX
-----------------------------
Name: XXXXXXX X. XXXXXX
---------------------------
Title: GENERAL PARTNER
--------------------------
-12-
13
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date set forth above.
USINTERNETWORKING, INC.
By: /s/ XXXXXX X. XXXXX
-----------------------------
Name: XXXXXX X. XXXXX
Title: CEO
[PURCHASERS] VENROCK ASSOCIATES
By: /s/ XXXXXXX X. XXXXXX
-----------------------------
Name: XXXXXXX X. XXXXXX
---------------------------
Title: GENERAL PARTNER
--------------------------
-13-
14
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date set forth above.
USINTERNETWORKING, INC.
By: /s/ XXXXXX X. XXXXX
-----------------------------
Name: XXXXXX X. XXXXX
Title: CEO
[PURCHASERS]
By: /s/ W. AUGUST XXXXXXXXXXX
-----------------------------
Name: W. AUGUST XXXXXXXXXXX
---------------------------
Title:
--------------------------
-14-
15
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date set forth above.
USINTERNETWORKING, INC.
By: /s/ XXXXXX X. XXXXX
---------------------------------
Name: XXXXXX X. XXXXX
Title: CEO
GROTECH PARTNERS V, L.P.
By: Grotech Capital Group V, LLC
Its general partner
Name: /s/ XXXXX X. XXXXX
-------------------------------
XXXXX X. XXXXX, President & CEO
-15-
16
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date set forth above.
USINTERNETWORKING, INC.
By: /s/ XXXXXX X. XXXXX
---------------------------------
Name: XXXXXX X. XXXXX
Title: CEO
GROTECH V MARYLAND FUND, L.P.
By: Grotech Capital Group V, LLC
Its general partner
Name: /s/ XXXXX X. XXXXX
-------------------------------
XXXXX X. XXXXX, President & CEO
-16-
17
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date set forth above.
USINTERNETWORKING, INC.
By: /s/ XXXXXX X. XXXXX
---------------------------------
Name: XXXXXX X. XXXXX
Title: CEO
GROTECH PARTNERS VI, L.P.
By: Grotech Capital Group VI, LLC
Its general partner
Name: /s/ XXXXX X. XXXXX
-------------------------------
XXXXX X. XXXXX, President & CEO
-17-
18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date set forth above.
USINTERNETWORKING, INC.
By: /s/ XXXXXX X. XXXXX
-----------------------------
Name: XXXXXX X. XXXXX
Title: CEO
[PURCHASERS] ENSIGN PEAK ADVISORS, INC.
By: /s/ XXXXX X. XXXXXX
-----------------------------
Name: XXXXX X. XXXXXX
---------------------------
Title: 11/13/00
--------------------------
-18-
19
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date set forth above.
USINTERNETWORKING, INC.
By: /s/ XXXXXX X. XXXXX
-----------------------------
Name: XXXXXX X. XXXXX
Title: CEO
BLUE CHIP CAPITAL FUND III, L.P.
--------------------------------
By: /s/ XXXX X. XXXXX
-----------------------------
Name: XXXX X. XXXXX
Title: MANAGING DIRECTOR
BLUE CHIP VENTURE COMPANY, LTD.
-19-
20
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date set forth above.
USINTERNETWORKING, INC.
By: /s/ XXXXXXX X. XxXXXXX
-----------------------------
Name: XXXXXXX X. XxXXXXX
Title: DIRECTOR
[PURCHASERS]
By: /s/ XXXXXX X. XXXXX
-----------------------------
Name: XXXXXX X. XXXXX
---------------------------
Title:
--------------------------
-20-
21
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date set forth above.
USINTERNETWORKING, INC.
By: /s/ XXXXXX X. XXXXX
---------------------------------
Name: XXXXXX X. XXXXX
Title: CEO
[PURCHASERS] AETHER SYSTEMS, INC.
By: /s/ XXXXX X. XXXXXXX
-----------------------------
Name: XXXXX X. XXXXXXX
---------------------------
Title: CHIEF FINANCIAL OFFICER
--------------------------
-21-
22
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date set forth above.
USINTERNETWORKING, INC.
By: /s/ XXXXXX X. XXXXX
---------------------------------
Name: XXXXXX X. XXXXX
Title: CEO
[PURCHASERS] AETHER SYSTEMS, INC.
By: /s/ XXXXXXXX XXXXXXXX
-----------------------------
Name: Xxxxxxxx Xxxxxxxx
---------------------------
Title: Director
--------------------------
-22-
23
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date set forth above.
USINTERNETWORKING, INC.
By: /s/ XXXXXX X. XXXXX
---------------------------------
Name: XXXXXX X. XXXXX
Title: CEO
[PURCHASERS]
Xxxxx Partners LLP
By: /s/ XXXXXX X. XXXXX
-----------------------------
Name: Xxxxxx X. Xxxxx
---------------------------
Title: General Partner
--------------------------
-23-
24
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date set forth above.
USINTERNETWORKING, INC.
By: /s/ XXXXXX X. XXXXX
---------------------------------
Name: XXXXXX X. XXXXX
Title: CEO
[PURCHASERS]
By: /s/ XXXXXXX X. XXXXXXXX
-----------------------------
Name: Xxxxxxx X. Xxxxxxxx
---------------------------
Title: Individual
--------------------------
-24-
25
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date set forth above.
USINTERNETWORKING, INC.
By: /s/ XXXXXX X. XXXXX
---------------------------------
Name: XXXXXX X. XXXXX
Title: CEO
CFE, Inc.
By: /s/ XXXXXXX X. XXXXXXXX
-----------------------------
Name: XXXXXXX X. XXXXXXXX
---------------------------
Title: DULY AUTHORIZED SIGNATORY
--------------------------
-25-
26
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date set forth above.
USINTERNETWORKING, INC.
By: /s/ XXXXXX X. XXXXX
---------------------------------
Name: XXXXXX X. XXXXX
Title: CEO
[PURCHASERS]
PITA MANAGEMENT LLC
By: [SIG]
-----------------------------
Name: XXXXXX X. XXXXXX, III
---------------------------
Title: MANAGER
--------------------------
-26-
27
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers as of the date set forth above.
USINTERNETWORKING, INC.
By: /s/ XXXXXX X. XXXXX
---------------------------------
Name: XXXXXX X. XXXXX
Title: CEO
[PURCHASERS]
By: [SIG]
-----------------------------
Name: XXXXXXXXXXX X. XXXXXX
---------------------------
Title: Secretary for Rohem H. Canellini Holding
--------------------------
Company INC. Sole General Partner
of Canellini Management Company
-27-
28
SCHEDULE I
Initial Closing Initial Closing Initial Closing Initial Closing Subsequent Closing
Name and Address Shares Warrants Purchase Price Consideration Shares
------------------------------------------------------------------------------------------------------------------------------------
Grotech Partners V LP 1,012,941 354,529 $ 3.40 $ 3,444,000.00 3,038,824
Grotech V Maryland Fund LP 16,471 5,765 $ 3.40 $ 56,000.00 49,412
Grotech Partners VI LP * 1,029,412 360,294 $ 3.40 $ 3,500,000.00 3,088,235
Ensign Peak Advisors, Inc. 220,588 77,206 $ 3.40 $ 750,000.00 661,765
Blue Chip Capital Fund III 735,294 257,353 $ 3.40 $ 2,500,000.00 2,205,882
Aether Systems, Inc. 735,294 257,353 $ 3.40 $ 2,500,000.00 2,205,882
Xxxxxxxxxx Management 367,647 128,676 $ 3.40 $ 1,250,000.00 1,102,941
CFE, Inc. (wholly owned sub of GE Capital) 367,647 128,676 $ 3.40 $ 1,250,000.00 1,102,941
Pita Management 220,588 77,206 $ 3.40 $ 750,000.00 661,765
XxXxxxxx Capital Group LLC 147,059 51,471 $ 3.40 $ 500,000.00 441,176
Xxxxxxxx Xxxxxxxx 14,706 5,147 $ 3.40 $ 50,000.00 44,118
Xxxxx Partners, LLP 88,235 30,882 $ 3.40 $ 300,000.00 264,706
Xxxxxx X. Xxxxx 73,529 25,735 $ 3.40 $ 250,000.00 220,588
W. August Xxxxxxxxxxx 73,529 25,735 $ 3.40 $ 250,000.00 220,588
Xxxxxxx X. Xxxxxxxx 7,353 2,574 $ 3.40 $ 25,000.00 22,059
Venrock Associates 95,549 33,442 $ 3.40 $ 324,866.60 286,647
Venrock Associates II, LP 125,039 43,764 $ 3.40 $ 425,133.45 375,118
Microsoft, Inc. 3,676,471 1,286,765 $ 3.40 $12,500,000.00 11,029,412
---------------------------- --------------------------------------
Total 9,007,352 3,152,573 $30,625,000.05 27,022,059
============================ ======================================
Subsequent Closing Subsequent Closing Subsequent Closing
Name and Address Warrants Purchase Price Consideration Total
---------------------------------------------------------------------------------------------------------------------------
Grotech Partners V LP 1,063,588 $ 3.40 $ 10,332,000 $ 13,776,000
Grotech V Maryland Fund LP 17,294 $ 3.40 $ 168,000 $ 224,000
Grotech Partners VI LP * 1,080,882 $ 3.40 $ 10,500,000 $ 14,000,000
Ensign Peak Advisors, Inc. 231,618 $ 3.40 $ 2,250,000 $ 3,000,000
Blue Chip Capital Fund III 772,059 $ 3.40 $ 7,500,000 $ 10,000,000
Aether Systems, Inc. 772,059 $ 3.40 $ 7,500,000 $ 10,000,000
Xxxxxxxxxx Management 386,029 $ 3.40 $ 3,750,000 $ 5,000,000
CFE, Inc. (wholly owned sub of GE Capital) 386,029 $ 3.40 $ 3,750,000 $ 5,000,000
Pita Management 231,618 $ 3.40 $ 2,250,000 $ 3,000,000
XxXxxxxx Capital Group LLC 154,412 $ 3.40 $ 1,500,000 $ 2,000,000
Xxxxxxxx Xxxxxxxx 15,441 $ 3.40 $ 150,000 $ 200,000
Xxxxx Partners, LLP 92,647 $ 3.40 $ 900,000 $ 1,200,000
Xxxxxx X. Xxxxx 77,206 $ 3.40 $ 750,000 $ 1,000,000
W. August Xxxxxxxxxxx 77,206 $ 3.40 $ 750,000 $ 1,000,000
Xxxxxxx X. Xxxxxxxx 7,721 $ 3.40 $ 75,000 $ 100,000
Venrock Associates 100,326 $ 3.40 $ 974,599.80 $ 1,299,466
Venrock Associates II, LP 131,291 $ 3.40 $1,275,400.35 $ 1,700,534
Microsoft, Inc. 3,860,294 $ 3.40 $ 37,500,000 $ 50,000,000
-------------- ----------------------------------
Total 9,457,720 $ 91,875,000 $122,500,000
============== ==================================
Name and Address Total Shares Total Warrants
------------------------------------------------------------------------
Grotech Partners V LP 4,051,765 1,418,117
Grotech V Maryland Fund LP 65,883 23,059
Grotech Partners VI LP * 4,117,647 1,441,176
Ensign Peak Advisors, Inc. 882,353 308,824
Blue Chip Capital Fund III 2,941,176 1,029,412
Aether Systems, Inc. 2,941,176 1,029,412
Xxxxxxxxxx Management 1,470,588 514,705
CFE, Inc. (wholly owned sub of GE Capital) 1,470,588 514,705
Pita Management 882,353 308,824
XxXxxxxx Capital Group LLC 588,235 205,883
Xxxxxxxx Xxxxxxxx 58,824 20,588
Xxxxx Partners, LLP 352,941 123,529
Xxxxxx X. Xxxxx 294,117 102,941
W. August Xxxxxxxxxxx 294,117 102,941
Xxxxxxx X. Xxxxxxxx 29,412 10,295
Venrock Associates 382,196 133,768
Venrock Associates II, LP 500,157 175,055
Microsoft, Inc. 14,705,883 5,147,059
----------------------------
Total 36,029,411 12,610,293
============================
* Initial funding for Grotech VI will be made no later than November 21,2000
CONFIDENTIAL
-28-
29
SCHEDULE OF OMITTED DOCUMENTS
1. Common Stock Purchase Agreement, dated November 13, 2000 by and between
the Company and Microsoft Corporation (the "Purchase Agreement"). The Purchase
Agreement is substantially identical in all material respects to the Common
Stock Purchase Agreement between the Company and the Purchasers listed in
Schedule I thereto, filed as Exhibit 10.2 (the "Representative Purchase
Agreement"). The Purchase Agreement differs from the Representative Purchase
Agreement as follows: (i) Microsoft is purchasing 14,705,882 shares of common
stock and warrants to purchase 5,147,059 shares of common stock pursuant to the
Purchase Agreement, and (ii) the completion of the offering to Microsoft is
conditioned upon successful completion of the offerings described in the
Representative Purchase Agreement.
