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EXHIBIT 10.26
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the "Agreement") is made as of March 5,
1998, by and among STM WIRELESS, INC., a Delaware corporation (the "Company"),
PEQUOT PRIVATE EQUITY FUND, L.P., and its affiliated entities as set forth on
the signature page hereto (referred to individually as the "Purchaser" and
collectively as the "Purchasers").
R E C I T A L S
WHEREAS, the Purchasers desires to purchase, and the Company desires to
sell and issue to the Purchasers at the Closing an aggregate amount of Five
Hundred Seventy One Thousand Four Hundred and Twenty-Nine (571,429) shares of
newly issued Common Stock of the Company, $.001 par value (the "STM Common
Stock"), each purchasing the number of shares set forth opposite its name on
Schedule 1 attached hereto; and
WHEREAS, concurrently with, and as a condition to, the closing of the
transactions contemplated by this Agreement, Direc-To-Phone International, Inc.,
a Delaware corporation and a wholly-owned subsidiary of the Company ("DTPI"),
and the Purchasers are executing that certain Stock Purchase Agreement (the
"DTPI Stock Purchase Agreement") pursuant to which the Purchasers will purchase
an aggregate amount of 1,200,000 shares of newly issued Series A Preferred Stock
of DTPI, $.0001 par value (the "DTPI Preferred Stock") which shall constitute
twenty five percent (25%) (on a Fully Diluted Basis as defined in Section 6.1
herein) of the outstanding capital stock of DTPI.
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 Sale of the Stock. Subject to the terms and conditions hereof, the
Company will issue and sell to the Purchasers, and the Purchasers will purchase
an aggregate of 571,429 shares of STM Common Stock (the "Issued Stock"), at a
price per share equal to $7.00 (the "Purchase Price").
1.2 The Closing. Simultaneously with the execution of this Agreement,
the Company shall issue and sell to the Purchasers, and, subject to and in
reliance upon the representations, warranties and other terms of this Agreement,
each Purchaser shall purchase that number of shares of Issued Stock set forth
opposite its name in Schedule A hereto, for the Purchase Price.
Such purchase and sale shall take place simultaneously with the execution
of this Agreement at a closing (the "Closing") to be held concurrently with the
closing of the transactions contemplated by the DTPI Stock Purchase Agreement.
At the Closing, the Company shall deliver certificates, registered in the
appropriate Purchaser's name, evidencing the shares of the Common Stock to be
purchased by such Purchaser at such Closing, against payment of the purchase
price therefor by a
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wire transfer to the account of the Company or the delivery of a cashier's check
payable to the order of the Company.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
2.1 Representations by the Purchasers. The Purchasers, jointly and
severally, represent and warrant, on and as of the date of this Agreement, that:
(a) Investment.
(i) Each Purchaser has been advised that all the Issued
Stock to be purchased by such Purchaser from the Company
hereunder has not been registered under the Securities
Act nor qualified under any state securities laws on the
ground, among others, that no distribution or public
offering of the Issued Stock is to be effected, and that
in this connection the Company is relying in part on the
representations of the Purchasers set forth herein.
(ii) It is each Purchaser's intention to acquire the Issued
Stock solely for its own account and that the Issued
Stock is being and will be acquired for investment
purposes only, and not with a view to distribution or
resale of the Issued Stock.
(iii) Each Purchaser is able to bear the economic risk of an
investment in the Issued Stock acquired by it pursuant
to this Agreement and can afford to sustain a total loss
on such investment.
(iv) Each 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 Issued Stock. None of the Purchasers has
been formed or organized for the specific purpose of
acquiring the Issued Stock. Each 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
Issued Stock and for verifying the accuracy of any
information furnished to it or to which it had access.
Each Purchaser represents and warrants that it is basing
its investment decision on current and historical
information relating to the Company and the
representations and warranties of the Company contained
herein and not on projections of future performance
furnished to the Purchasers by the Company. Each
Purchaser further represents and warrants that the
nature and amount of the Issued Stock it is purchasing
is consistent with its investment objectives, abilities
and resources.
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(v) Each Purchaser understands that it may not be readily
able to sell or dispose of the Issued Stock and may thus
have to bear the risk of its investment for a
substantial period of time, or forever. Each Purchaser
is aware that the Issued 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 Issued Stock for at least 1 year. Among the
conditions for use of Rule 144 is the availability of
current information to the public about the Company.
(vi) Each 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 the
Company or any Affiliate or selling agent of the
Company, directly or indirectly), has the capacity to
protect its own interests in connection with the
purchase of the Issued Stock.
(vii) Each Purchaser acknowledges that the certificates
representing the Issued Stock, when issued, shall
(subject to removal as provided in the final sentence of
Section 6.4(c) 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. Each Purchaser further represents that:
(i) It is duly organized, validly existing and in good
standing under and by virtue of the laws of the
jurisdiction in which it is organized and has all
requisite power and authority to enter into and perform
its obligations under this Agreement;
(ii) It has duly authorized, executed and delivered this
Agreement;
(iii) This Agreement constitutes the valid and binding
obligations of such Purchaser, enforceable against it in
accordance with their respective terms;
(iv) No consents or approvals of any Person are required in
connection with the execution, delivery and performance
of this Agreement by such Purchaser which have not
heretofore been obtained;
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(v) Execution and performance of this Agreement shall not
result in a default under other material agreements or
instruments by such Purchaser; and
(vii) There is no pending Proceeding that has been commenced
against such Purchaser that challenges, or may have the
effect of preventing, delaying, making illegal, or
otherwise interfering with, any of the transactions
contemplated by this Agreement. There is no Order to
which such Purchaser is bound and no event has occurred
which may have the effect of enjoining, preventing or
prohibiting the transactions contemplated by this
Agreement.
(c) No Conflict. Neither the execution and delivery of this
Agreement by either Purchaser nor the consummation or performance of any of the
transactions by any of the Purchasers will give any Person the right to prevent,
delay or otherwise interfere with any of the transactions contemplated hereby
pursuant to: (i) any provision of any Purchaser's Organizational Documents; (ii)
any resolution adopted by any of the Purchasers; (iii) any Legal Requirement or
Order to which any of the Purchasers may be subject; or (iv) any contract to
which any of the Purchasers is a party or by which any of the Purchasers may be
bound, except in the case of each of clauses (iii) and (iv) above, for such
contraventions, conflicts, violations, liabilities, reassessments, revaluations,
breaches or creations of encumbrances which, individually and in the aggregate,
would not have a material adverse effect on the Company.
(d) Brokers. Each Purchaser represents that no Person has or will
have, as a result of the transactions contemplated by this Agreement, any right,
interest or valid claim upon or against the Company for any commission, fee or
other compensation as a finder or broker because of any act or omission by such
Purchaser and the Purchasers agree to indemnify and hold the Company harmless
against any such commissions, fees or other compensation.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants, on and as of the date of this
Agreement, that:
3.1 Organization and Standing of the Company. The Company is a duly
organized and validly existing corporation in good standing under and by virtue
of the laws of the jurisdiction in which it is organized 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. The Company has
furnished to Purchasers or their respective counsel copies of the Company's
Certificate of Incorporation, as amended and restated to date, and its By-laws,
as currently in effect. The documents so furnished are true, correct and
complete copies of the existing original documents, and contain all
modifications, amendments, deletions and revocations.
3.2 Corporate Action. The Company has all necessary corporate power and
authority to execute and deliver and perform its obligations under this
Agreement and all the transactions contemplated hereby, including the sale and
issuance of the Issued Stock. All corporate proceedings
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have been taken and all corporate authorizations have been secured (with no
stockholder approval required) which are necessary to authorize the execution,
delivery and performance of this Agreement by the Company. This Agreement and
any other agreements and instruments executed in connection herewith are the
valid and binding obligations of the Company, enforceable in accordance with
their respective terms.
3.3 Approvals and Material Agreements. No authorization, consent,
approval, license, exemption of or filing or registration with any court or
governmental department, commission, board, bureau, agency or instrumentality or
any Person not a party hereto is or will be necessary for, or in connection
with, the offer, issuance, sale of the Issued Stock, or the execution or
delivery by the Company, or for the performance by it of its obligations under,
this Agreement except for filings to be made, if any, to comply with regulations
of the FTC or with exemptions from registration or qualification under federal
and state securities laws. Neither the offer, issuance or sale of the Issued
Stock, the execution, delivery and performance of this Agreement nor the
consummation of any of the transactions contemplated hereby, conflicts or will
conflict with, or constitutes or will constitute a breach of, or a default
under, any material agreement, indenture, lease or other instrument to which the
Company is a party or by which the Company or any of its properties may be
bound, or violates or will violate any judgment, injunction, order or decree
applicable to the Company or any of its properties.
3.4 Securities and Exchange Commission Reports of the Company. The
Company has furnished the Purchasers with copies of its Annual Reports on Form
10-K for the fiscal years ended December 31, 1995 and December 31, 1996 and its
Quarterly Reports on Form 10-Q for the quarters ended March 31, 1997, June 30,
1997 and September 30, 1997, the Proxy Statement for its last annual meeting of
stockholders and all Current Reports on Form 8-K since January 1, 1997, as filed
with the Commission (collectively the "SEC Filings"). As of the date the SEC
Filings were made, the SEC Filings (i) were accurate and complete in all
material respects, (ii) were in compliance in all material respects with the
provisions of the Securities Act and the Exchange Act, respectively, and the
rules and regulations of the Commission promulgated under the Securities Act and
the Exchange Act, respectively, and (iii) did not contain any untrue statement
of material fact or omit to state any material information required to be set
forth therein, or necessary in order to make the statements contained therein,
in light of the circumstances under which they were made, not misleading. The
Company has filed with the Commission all reports required to be filed by its
since January 1, 1997, including, without limitation, all Current Reports on
Form 8-K.
3.5 No Brokers and Finders. The Company has taken no action and knows of
no such act or omission by any Person which would give rise to any right,
interest or valid claim against or upon the Company or the Purchasers for any
commission, fee or other compensation as a finder or broker as a result of the
transactions contemplated by this Agreement; and the Company agrees to indemnify
and hold the Purchasers harmless against any such commissions, fees or other
compensation.
3.6 Securities Act. Assuming the accuracy of the representations and the
warranties of the Purchasers contained in Section 2.1 hereof, the offer, issue,
and sale of the Issued Stock are and will be exempt from the registration and
prospectus delivery requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and have been registered or qualified (or are exempt from
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registration and qualification) under the registration, permit, or qualification
requirements of all applicable securities laws.
ARTICLE 4
DELIVERIES AT CLOSING
4.1 Deliveries by the Company. The Purchasers shall have received prior
to or at the Closing all of the following, each in form and substance reasonably
satisfactory to the Purchasers and their respective counsel:
(i) A copy of all charter documents of the Company and a
certificate of good standing with respect to the Company
certified by the Delaware Secretary of State, a
certified copy of the resolutions of the Board of
Directors evidencing approval of this Agreement, the
authorization for issuance of the Issued Stock and other
matters contemplated hereby, a certified copy of the
By-laws of the Company, and certified copies of all
documents evidencing other necessary corporate or other
action and governmental approvals, if any, with respect
to consummation of the transactions contemplated by this
Agreement.
(ii) A certificate of the Secretary or an Assistant Secretary
of the Company stating the names of the officers of the
Company authorized to sign this Agreement, the
certificates for the Issued Stock, and the other
documents or certificates to be delivered pursuant to
this Agreement by the Company or any of its officers,
together with the true signatures of such officers.
(iii) A compliance certificate from the President or Chief
Financial Officer of the Company stating that the
representations and warranties of the Company contained
in Article III hereof and otherwise made by the Company
in writing in connection with the transactions
contemplated hereby are, to the best of his knowledge,
true and correct as of the date hereof and that all
covenants and agreements required to be performed by the
Company prior to or at the Closing have been performed,
and that no condition or event has occurred or is
continuing or will result from the execution and
delivery of this Agreement or the issuance and sale of
the Issued Stock, which constitutes a breach of this
Agreement or would constitute a breach of this Agreement
but for the requirement that notice be given or time
elapse, or both.
(iv) An opinion of Xxxxxxxxx Xxxxx Xxxxxxx & Xxxxx, dated the
date hereof, with respect to matters to be agreed upon
by the parties.
(v) Such other documents (including, but not limited to, an
executed copy of the DTPI Stock Purchase Agreement)
relating to the transactions contemplated by this
Agreement as the Purchasers or the Purchasers' counsel
may reasonably request.
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4.2 Deliveries by the Purchasers. The Company shall have received prior
to or at the Closing all of the following, each in form and substance reasonably
satisfactory to the Company and its counsel:
(i) A copy of all organizational documents of the Purchasers
and a certificate of good standing with respect to each
Purchaser certified by the Delaware Secretary of State,
a certified copy of the resolutions evidencing approval
of this Agreement, a certified copy of the operating
agreement of each Purchaser, and certified copies of all
documents evidencing other necessary action and
governmental approvals, if any, with respect to
consummation of the transactions contemplated by this
Agreement.
(ii) A certificate of the Secretary or an Assistant Secretary
of each Purchaser stating the names of the officers of
such Purchaser authorized to sign this Agreement, and
the other documents or certificates to be delivered
pursuant to this Agreement by such Purchaser or any of
its officers, together with the true signatures of such
officers.
(iii) A compliance certificate from the President or Chief
Financial Officer of each Purchaser stating that the
representations and warranties of the Purchasers
contained in Article II hereof and otherwise made by the
Purchasers in writing in connection with the
transactions contemplated hereby are, to the best of his
knowledge, true and correct as of the date hereof and
that all covenants and agreements required to be
performed by the Purchasers prior to or at the Closing
have been performed, and that no condition or event has
occurred or is continuing or will result from the
execution and delivery of this Agreement, which
constitutes a breach of this Agreement or would
constitute a breach of this Agreement but for the
requirement that notice be given or time elapse, or
both.
(iv) Such other documents (including, but not limited to, an
executed copy of the DTPI Stock Purchase Agreement)
relating to the transactions contemplated by this
Agreement as the Company or the Company's counsel may
reasonably request.
ARTICLE 5
REGISTRATION RIGHTS
5.1 Shelf Registration
(a) The Company agrees to file with the Commission as soon as
practicable after the date hereof, a Shelf Registration Statement for an
offering to be made on a continuous basis pursuant to Rule 415 covering all of
the Issued Stock. The Shelf Registration Statement shall initially be on Form
S-3 under the Securities Act or another appropriate form permitting registration
of such Issued Stock for resale by the Purchasers in the manner or manners
reasonably designated by them. The Company shall use its reasonable efforts to
cause the Shelf Registration Statement to be
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declared effective pursuant to the Securities Act as promptly as is practicable
following the filing thereof, with a goal of having the Shelf Registration
Statement declared effective on or prior to the 90th day following the date
hereof, and to keep the Shelf Registration Statement continuously effective
under the Securities Act thereafter (except during periods following the filing
of a post effective amendment thereto and prior to the declaration of the
effectiveness of such post effective amendment; provided the Company shall use
its reasonable efforts to cause any such post effective amendment to be declared
effective as soon as practicable) (subject to extension pursuant to clause (b)),
until the earlier of (i) the date on which all of the Issued Stock has been
registered effectively pursuant to the Securities Act and disposed of pursuant
to the Shelf Registration Statement relating to it, or (ii) the date on which
the shares of Issued Stock are saleable pursuant to Rule 144(k) promulgated by
the Commission pursuant to the Securities Act (the "Effectiveness Period").
(b) The Company shall use its reasonable best efforts to keep the
Shelf Registration Statement continuously effective (except during periods
following the filing of a post effective amendment thereto and prior to the
declaration of the effectiveness of such post effective amendment; provided, the
Company shall use its reasonable best efforts to cause any such post effective
amendment to be declared effective as soon as practicable) by supplementing and
amending the Shelf Registration Statement as required by the rules, regulations
or instructions applicable to the registration form used for such Shelf
Registration Statement if required by the Securities Act or reasonably requested
by the Purchasers.
5.2 Registration Procedures
In connection with the Company's registration obligations hereunder,
the Company shall effect such registration on the appropriate form available for
the sale of the Issued Stock to permit the sale of the Issued Stock in
accordance with the method or methods of disposition thereof specified by the
Purchasers, and pursuant thereto the Company shall as expeditiously as
reasonably possible:
(a) No fewer than five Business Days prior to the initial filing
of the Shelf Registration Statement or Prospectus and, if practical, no fewer
than two Business Days prior to the filing of any amendment or supplement
thereto (other than any document that would be incorporated or deemed to be
incorporated therein by reference), furnish to the Purchasers, copies of all
such documents proposed to be filed, which documents, if practical (other than
those incorporated or deemed to be incorporated by reference) will be subject to
the review of such Purchasers. The Company shall not file such Shelf
Registration Statement or related Prospectus or any amendments or supplements
thereto to which the Purchasers covered thereby shall reasonably object on a
timely basis;
(b) Prepare and file with the Commission such amendments,
including post-effective amendments, to each Shelf Registration Statement as may
be necessary to keep such Shelf Registration Statement continuously effective
for the Effectiveness Period; cause the related Prospectus to be supplemented by
any required Prospectus supplement, and as so supplemented to be filed pursuant
to Rule 424 under the Securities Act; and comply with the provisions of the
Securities Act and the Exchange Act with respect to the disposition of all
securities covered by such Shelf Registration Statement during such period in
accordance with the intended methods of disposition by the Purchasers
contemplated hereby.
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(c) Notify the Purchasers promptly (as in the case of an event
specified by clause (i)(A) of this paragraph, if practical, in no event fewer
than two Business Days prior to such filing), and (if requested by any
Purchaser) confirm such notice in writing, (i)(A) when a Prospectus or any
Prospectus Supplement or post-effective amendment is proposed to be filed, and
(B) with respect to the Shelf Registration Statement or any post-effective
amendment, when the same has become effective, (ii) of any request by the
Commission or any other federal or state governmental authority for amendments
or supplements to the Shelf Registration Statement or related Prospectus or for
additional information, (iii) of the issuance by the Commission, any state
securities commission, any other governmental agency or any court of any stop
order, order or injunction suspending or enjoining the use or the effectiveness
of the Shelf Registration Statement or the Initiation of any proceedings for
that purpose, (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification or exemption from qualification
of any of the Issued Stock for sale in any jurisdiction, or the initiation or
threat of any proceeding for such purpose, and (v) of the happening of any event
that makes any statement made in such Shelf Registration Statement or related
Prospectus or any document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the making of any
changes in such Shelf Registration Statement, Prospectus or documents so that,
in the case of the Shelf Registration Statement, it will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, not
misleading, and that in the case of the Prospectus, it will not contain any
untrue statement of a material fact or omit to state any 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;
(d) If reasonably requested by the Purchasers, (i) promptly
incorporate in a Prospectus supplement or post-effective amendment such
information as Purchasers indicate relates to them or otherwise reasonably
request be included therein, and (ii) make all required filings of such
Prospectus supplement or such post-effective amendment as soon as practicable
after the Company has received notification of the matters to be incorporated in
such Prospectus supplement or post-effective amendment; provided, however, that
the Company shall not be required to take any action pursuant to this Section
5.2(e) that would, in the opinion of counsel for the Company, violate applicable
law;
(e) Furnish to each Purchaser without charge, at least one
conformed copy of the Shelf Registration Statement and each amendment thereto,
including financial statements (but excluding schedules, all documents
incorporated or deemed to be incorporated therein by reference);
(f) Deliver to each Purchaser as many copies of the Prospectus or
Prospectuses (including each form of prospectus) and each amendment or
supplement thereto as such Purchaser reasonably requests; and the Company hereby
consents to the use of such Prospectus and each amendment or supplement thereto
by each of the Purchasers in connection with the offering and sale of the Issued
Stock covered by such Prospectus and any amendment or supplement thereto;
(g) Comply with applicable rules and regulations of the Commission
and make generally available to its security holders earning statements
satisfying the provisions of Section 11(a) of the Securities Act and Rule 158
thereunder (or any similar rule promulgated under the Securities Act), no later
than 45 days after the end of any 12-month period (or 90 days after the end of
any 12-month period if such period is a fiscal year) commencing on the first day
of the first fiscal
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quarter after the effective date of the Shelf Registration Statement, which
statement shall cover said period, consistent with the requirement of Rule 158;
and
(h) List all Issued Stock covered by such Shelf Registration
Statement on the exchange or system, if any, on which the Common Stock of the
Company is then listed.
The Company may require each Purchaser of the Issued Stock as to which any
registration is being effected to: (i) furnish to the Company such information
regarding the distribution of such Issued Stock as is required by law to be
disclosed in the Shelf Registration Statement and (ii) provide to the Company a
signed writing accepting and acknowledging its rights and obligations hereunder.
The Company may exclude from such registration the Issued Stock of any Purchaser
of Issued Stock who unreasonably fails to furnish such information or signed
writing at least 5 Business Days prior to the effective date of such Shelf
Registration Statement.
Each Purchaser agrees by acquisition of the Issued Stock that, upon
receipt of any notice from the Company of the happening of any event of the kind
described in Section 5.2(c)(ii), 5.2(c)(iii), 5.2(c)(iv), or 5.2(c)(v) hereof,
such Purchaser will forthwith discontinue disposition of such Issued Stock
covered by such Shelf Registration Statement or Prospectus until it is advised
in writing (the "Advice") by the Company that the use of the applicable
Prospectus may be resumed, and, in either case, has received copies of any
additional or supplemental filings that are incorporated or deemed to be
incorporated by reference in such Prospectus.
The registration rights of the Purchaser pursuant to this Agreement and
the ability to offer and sell Issued Stock pursuant to the Shelf Registration
Statement are subject to the conditions and limitations contained in this
paragraph, and each Purchaser will be deemed to have agreed with the Company
that if the Board of Directors of the Company determines in its good faith
judgment, as evidenced by a resolution of the Board of Directors, that the use
of any Prospectus would require the disclosure of material information that the
Company has a bona fide business purpose for preserving as confidential or the
disclosure of which would impede the Company's ability to consummate a
significant transaction, and that the Company is not otherwise required by
applicable securities laws or regulations to disclose, upon written notice of
such determination by the Company, the rights of the Purchasers to offer, sell
or distribute any Issued Stock pursuant to the Shelf Registration Statement or
to require the Company to take action with respect to the registration or sale
of any Issued Stock pursuant to the Shelf Registration Statement shall be
suspended until the date upon which the Company notifies the Purchasers in
writing that suspension of such rights for the grounds set forth in this
paragraph is no longer necessary subject to the limits set forth herein, and the
Company agrees to give such notice as promptly as practicable following the date
that such suspension of rights is no longer necessary.
5.3 Registration Expenses
All fees and expenses incident to the performance of or compliance
with this Agreement by the Company shall be borne by it whether or not the Shelf
Registration Statement is filed or becomes effective and whether or not any
securities are issued or sold pursuant to the Shelf Registration Statement. The
fees and expenses referred to in the foregoing sentence shall include, without
limitation, (a) all registration and filing fees (including, without limitation,
fees and expenses in compliance with securities or "Blue Sky" laws (b) printing
expenses (including, without
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limitation, expenses or printing Prospectuses), and (c) fees and expenses of all
other Persons retained by the Company. Notwithstanding the foregoing or anything
in this Agreement to the contrary, each Purchaser shall pay all underwriting
discounts and commissions of any underwriters or broker-dealers with respect to
any Issued Stock sold by it.
5.4 Indemnification
(a) The Company agrees to indemnify and hold harmless each
Purchaser and his representatives and agents (an "Indemnified Person"), from and
against any and all losses, claims, damages, liabilities and judgments caused by
any untrue statement or alleged untrue statement of a material fact contained in
the Shelf Registration Statement, Prospectus or form of Prospectus or in any
amendment or supplement thereto or in any preliminary Prospectus, or caused by
(i) any omission or alleged omission to state therein, in the case of any
Prospectus or form of Prospectus or supplement thereto, in the light of the
circumstances under which they were made, not misleading, except insofar as such
losses, claims, damages, liabilities or judgments are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information relating to any Indemnified Person furnished to the Company by or on
behalf of such Indemnified Person or (ii) any violation or alleged violation by
the Company of the Securities Act, the Exchange Act, any state securities law or
any rule or regulation promulgated under the Securities Act, the Exchange Act or
any state securities law provided that the foregoing indemnity with respect to
any preliminary Prospectus shall not inure to the benefit of any Indemnified
Person from whom the Person asserting such losses, claims, damages, liabilities
and judgments purchased securities if such untrue statement or omission or
alleged untrue statement or omission made in such preliminary Prospectus is
eliminated or remedied in the Prospectus and a copy of the Prospectus shall not
have been furnished to such Person in a timely manner provided such failure is
not as a result of an action or inaction on the part of the Indemnifying Person.
(b) In case any action shall be brought against any Indemnified
Person, based upon the Shelf Registration Statement or any such Prospectus or
any amendment or supplement thereto and with respect to which indemnity may be
sought against the Company, such Indemnified Person shall promptly notify the
Company in writing and the Company shall assume the defense thereof, including
the employment of counsel reasonably satisfactory to such Indemnified Person and
payment of all fees and expenses. Any Indemnified Person shall have the right to
employ separate counsel in any such action and participate in the defense
thereof, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person, unless (i) the employment of such counsel shall have
been specifically authorized in writing by the Company, (ii) the Company shall
have failed to assume the defense and employ counsel for the Indemnified Parties
or (iii) the named parties to any such action (including any impleaded parties)
include both such Indemnified Person and the Company and such Indemnified Person
shall have been advised by counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
Company (in which case the Company shall not have the right to assume the
defense of such action on behalf of such Indemnified Person), provided, however,
that the Company shall not, in connection with any such action or separate but
substantially similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances, be liable for the fees and
expenses of more than one separate firm of attorneys for all such Indemnified
Persons, which firm shall be designated in writing by such Indemnified Persons;
and provided, however, that all such fees and expenses shall be reimbursed as
they are incurred. The Company shall not be liable
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for any settlement of any such action effected without its written consent. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.
(c) In connection with the Shelf Registration Statement, the
Purchasers participating in such Shelf Registration Statement agree jointly and
severally to indemnify and hold harmless the Company, its directors, its
officers and any Person controlling the Company within the meaning of Section 15
of the Securities Act or Section 20 of the Exchange Act to the same extent as
the foregoing indemnity from the Company to each Indemnified Person but only
with reference to information relating to such Indemnified Person furnished by
or on behalf of such Indemnified Person. In case any action shall be brought
against the Company, any of its directors, any such officer or any Person
controlling the Company based on such Shelf Registration Statement and in
respect of which indemnity may be sought against any Indemnified Person, the
Indemnified Person shall have the rights and duties given to the Company (except
that if the Company shall have assumed the defense thereof, such Indemnified
Person shall not be required to do so, but may employ separate counsel therein
and participate in the defense thereof but the fees and expenses of such counsel
shall be at the expense of such Indemnified Person), and the Company, its
directors, any such officers and any Person controlling the Company shall have
the rights and duties specified for Indemnified Persons in Section 5.4(b)
hereof; provided, however, that the liability of each such Purchaser hereunder
shall be limited to the net proceeds received by such Purchaser from the sale of
the Issued Stock under such Shelf Registration Statement. In no event will any
Purchaser be required to enter into any agreement or undertaking in connection
with any registration under this Article 5 providing for any indemnification or
contribution obligations on the part of such Purchaser greater than such
Purchaser's obligations under this Section 5.4(c).
(d) If the indemnification provided for in this Section 5.4 is
unavailable to an indemnified party in respect of any losses, claims, damages,
liabilities or judgments referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party, shall contribute to the amount paid
or payable by such indemnified party as a result of such losses, claim, damages,
liabilities and judgments in such proportion as is appropriate to reflect the
relative fault of the Company and each such Indemnified Person in connection
with the statements, omissions or violations which resulted in such losses,
claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative fault of the Company and each such
Indemnified Person shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the Company
or such Indemnified Person and the parties' relative intent, knowledge, access
to information and opportunity to correct or prevent such statement or omission.
The Company and the Purchasers agree that it would not be just and
equitable if contribution pursuant to this Section 5.4(d) were determined by pro
rata allocation (even if the Indemnified Persons were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to in the immediately preceding
paragraph. The amount paid or payable by an indemnified party as a result of the
losses, claims, damages, liabilities or judgments referred to in the immediately
preceding paragraph shall be deemed to
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include, subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 5.4, no Indemnified Person shall be required to contribute any amount in
excess of the amount by which the total net proceeds received by it in
connection with the sale of the Issued Stock pursuant to this Agreement exceeds
the amount of any damages which such Indemnified Person has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. No Person guilty of fraudulent misrepresentation (within
the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. The Indemnified Persons' obligations to contribute pursuant
to this Section 5.4(d) are several in proportion to the respective amount of
Issued Stock included in any such Shelf Registration Statement by each
Indemnified Person and not joint.
5.5 Rule 144
The Company shall use its reasonable best efforts to file the
reports required to be filed by it under the Securities Act and the Exchange Act
in a timely manner and, if at any time it is not required to file such reports
but in the past had been required to or did file such reports, it will, upon the
request of any Purchaser, make available other information as required by, and
so long as necessary to permit, sales of its Issued Stock pursuant to Rule 144.
ARTICLE 6
DEFINITIONS AND ACCOUNTING TERMS
6.1 Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"AFFILIATE" shall have the meaning set forth in Rule 12b-2 under the
Exchange Act.
"AGREEMENT" means this Stock Purchase Agreement as from time to time
amended and in effect between the parties.
"BUSINESS DAY" means with respect to any act to be performed
hereunder, each Monday, Tuesday, Wednesday, Thursday and Friday that
is not a day on which banking institutions in New York, New York or
other applicable place where such act is to occur are authorized or
obligated by applicable law, regulation or executive order to close.
"COMMISSION" means the U.S. Securities and Exchange Commission.
"COMMON STOCK" means the Company's common stock, $.001 par value.
"COMPANY" means STM Wireless, Inc., a Delaware corporation, and its
successors and assigns.
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"DTPI" means Direc-To-Phone International, Inc., a Delaware
corporation, and its successors and assigns.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated by the Commission
pursuant thereto.
"FULLY DILUTED BASIS" shall mean taking into account all shares of
Common Stock outstanding and all shares potentially required to be
issued by reason of any outstanding rights, options, warrants or
other instruments or securities exchangeable for or convertible into
Common Stock or evidencing any right to subscribe for, purchase or
otherwise acquire Common Stock as of the date of determination. For
purposes of computing the capital stock of DTPI on a Fully Diluted
Basis immediately following the Closing, the shares of Common Stock
subject to the DTPI's Option Plan shall be disregarded, whether or
not any options have been issued under such plan at such time.
"GAAP" means generally accepted accounting principles, consistently
applied.
"HOLDER" means, with respect to the Issued Stock, any Person who
holds such Issued Stock regardless of whether any express assignment
of rights under this Agreement was made to such Person.
"ISSUED STOCK" shall have the meaning assigned to that term in
Section 1.1.
"LEGAL REQUIREMENT" shall mean any federal, state, local, municipal,
foreign, international, multinational or other administrative order,
constitution, law, ordinance, principle of common law, regulation,
statute or treaty
"ORDER" shall mean any award, decision, injunction, judgment, order,
ruling, subpoena or verdict entered, issued, made or rendered by any
court, administrative agency or other governmental body or by any
arbitrator.
"ORGANIZATIONAL DOCUMENTS" shall mean (a) the articles or
certificate of incorporation, all certificates of determination and
designation, and the bylaws of a corporation; (b) the partnership
agreement and any statement of partnership of a general partnership;
(c) the limited partnership agreement and the certificate or
articles of limited partnership of a limited partnership; (d) the
operating agreement, limited liability company agreement and the
certificate or articles of organization or formation of a limited
liability company; (e) any charter or similar document adopted or
filed in connection with the creation, formation or organization of
a Person (including, without limitation, any trust); and (f) any
amendment to any of the foregoing.
"PROCEEDING" shall mean any action, arbitration, audit, hearing,
investigation, litigation or suit (whether civil, criminal,
administrative, investigative or informal) commenced, brought,
conducted or heard by or before, or otherwise involving, any
governmental body or arbitrator.
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"PERMITTED TRANSFEREES" means any partner of any Purchasers which is
a partnership and any trust for the benefit of a Purchaser or his or
her ancestors or descendants or spouse.
"PERSON" means an individual, corporation, partnership, joint
venture, trust, or unincorporated organization, or a government or
any agency or political subdivision thereof.
"PROSPECTUS" means the prospectus included in the Shelf Registration
Statement (including, without limitation, a prospectus that
discloses information previously omitted form a prospectus filed as
part of an effective registration statement in reliance upon Rule
430A promulgated pursuant to the Securities Act), as amended or
supplemented by any prospectus supplement, with respect to the terms
of the resale of any portion of the Issued Stock covered by such
Shelf Registration Statement, and all other amendments and
supplements to any such prospectus, including post-effective
amendments, and all material incorporated by reference or deemed to
be incorporated by reference, if any, in such prospectus.
"PURCHASERS" means Pequot Private Equity Fund, L.P. and its
affiliated entities as set forth on the signature page hereto.
"RULE 144" means Rule 144 promulgated by the Commission pursuant to
the Securities Act, as such rule may be amended from time to time,
or any similar rule or regulation hereafter adopted by the
Commission as a replacement thereto having substantially the same
effect as such rule.
"RULE 158" means Rule 158 promulgated by the Commission pursuant to
the Securities Act, as such rule may be amended form time to time,
or any similar rule or regulation hereafter adopted by the
Commission as a replacement thereto having substantially the same
effect as such rule.
"SECURITIES ACT" means the Securities Act of 1933, as amended, or
any similar federal statute, and the rules and regulations of the
Commission (or of any other federal agency then administering the
Securities Act) thereunder, all as the same shall be in effect at
the time.
"SHELF REGISTRATION STATEMENT" means the registration statement of
the Company that covers the resale of any of the Issued Stock
pursuant to the provisions of this Agreement, including the
Prospectus, amendments and supplements to such registration
statement or Prospectus, including pre-and post-effective
amendments, all exhibits thereto, and all material incorporated by
reference or deemed to be incorporated by reference, if any, in such
registration statement.
6.2 Accounting Terms. All accounting terms not specifically defined
herein shall be construed in accordance with GAAP, and all other financial data
submitted pursuant to this Agreement shall be prepared and calculated in
accordance with such principles.
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ARTICLE 7
MISCELLANEOUS
7.1 No Waiver; Cumulative Remedies. No failure or delay on the part of
the Company, the Purchasers 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.
7.2 Amendments, Waivers and Consents. 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 the Company and the holder of
a majority of the shares of Issued Stock 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.
7.3 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 the Company:
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
If to the Purchasers:
Xxxxxx Xxxxxxxxx, Esq.
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Facsimile: (000) 000-0000
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With a copy to:
Xxxxx X. Xxxxxx
Pequot Private Equity Partners, LLC
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxx 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, when mailed, be effective 48 hours following deposit in
the mails, addressed as aforesaid, or when telegraphed, sent by facsimile
transmission with confirmation of transmission, or personally delivered, be
effective upon delivery to the telegraph company, facsimile transmission or
personal delivery.
7.4 Costs, Expenses and Taxes. Each of the parties hereto shall bear
their own costs and expenses incurred in connection with the investigation,
preparation, execution and delivery of this Agreement, and other instruments and
documents to be delivered hereunder and thereunder and the transactions
contemplated hereby and thereby.
7.5 Binding Effect; Assignment. This Agreement shall be binding upon and
inure to the benefit of the Company and the Purchasers and their respective
successors and assigns. Notwithstanding the foregoing, the registration rights
granted by the Company to the Purchasers hereunder are specific to the
Purchasers and may not be assigned by the Purchasers without the prior written
consent of the Company.
7.6 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.
7.7 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.
7.8 Severability. The invalidity or unenforceability of any provision
hereto shall in no way affect the validity or enforceability of any other
provision.
7.9 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware.
7.10 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.
7.11 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute once and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
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7.12 Further Assurances. From and after the date of this Agreement, upon
the request of the Purchasers, the Company 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.
7.13 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 7.3 for the giving of notices to the parties.
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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:______________________________________
PEQUOT PRIVATE EQUITY FUND, L.P.
By: Pequot Private Equity Partners, LLC,
General Partner
By:_________________________________________
Xxxxxxxx X. Xxxxxxx,
Managing Member
PEQUOT OFFSHORE PRIVATE EQUITY FUND, INC.
By: Pequot Private Equity Partners, LLC,
Investment Manager
By:_________________________________________
Xxxxxxxx X. Xxxxxxx,
Managing Member
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SCHEDULE A
PURCHASERS
NUMBER OF SHARES PAYMENT
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Pequot Private Equity Fund, L.P. 507,211 $3,550,477
Pequot Offshore Private Equity Fund, Inc. 64,218 $ 449,526
B-1
