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EXHIBIT 10.7
TELETRAC, INC.
190,476.19 SHARES OF SERIES A REDEEMABLE
CONVERTIBLE PARTICIPATING PREFERRED STOCK
STOCK PURCHASE AGREEMENT
Dated as of December 6, 1996
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Teletrac, Inc.
Stock Purchase Agreement
Dated as of December 6, 1996
INDEX
PAGE
SECTION 1. TERMS OF PURCHASE...............................................1
1.1 Description of Securities.......................................1
1.2 Reserved Shares.................................................1
1.3 Sale and Purchase...............................................1
1.4 Closing.........................................................1
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY...................2
2.1 Organization and Corporate Power................................2
2.2 Authorization...................................................2
2.3 Non-contravention...............................................3
2.4 Capitalization of the Company...................................3
2.5 Financial Statements; Projections...............................5
2.6 FCC Licenses....................................................5
2.7 Absence of Undisclosed Liabilities..............................7
2.8 Absence of Certain Developments.................................7
2.9 Accounts Receivable.............................................7
2.10 Title to Properties.............................................7
2.11 Tax Matters.....................................................8
2.12 Contracts and Commitments.......................................8
2.13 Proprietary Rights; Employee Restrictions.......................9
2.14 Litigation.....................................................11
2.15 Offerees.......................................................11
2.16 Business; Compliance with Laws.................................11
2.17 Information Supplied to Investors..............................12
2.18 Investment Banking; Brokerage..................................12
2.19 Solvency.......................................................12
2.20 Environmental Matters..........................................12
2.21 Employee Benefit Programs......................................13
2.22 Product and Services Claims....................................16
2.23 Backlog........................................................16
2.24 Employees; Labor Matters.......................................16
2.25 Customers, Distributors and Suppliers..........................16
2.26 Corporate Records; Copies of Documents.........................17
2.27 Affiliate Transactions.........................................17
2.28 Small Business Concern, Etc....................................17
2.29 FIRPTA Withholding.............................................18
2.30 Investments Related to Certain Foreign Countries...............18
SECTION 3. CONDITIONS OF PURCHASE.........................................18
(i)
PAGE
3.1 Representations................................................18
3.2 Opinions of Counsel............................................18
3.3 Authorization..................................................18
3.4 Effectiveness of Preferred Stock Terms.........................19
3.5 Stockholders' Agreement........................................19
3.6 Convertible Notes..............................................19
3.7 Election of Directors; Indemnification Agreements..............19
3.8 Compensation Committee; Audit Committee........................19
3.9 Option Plan....................................................19
3.10 Registration Rights Agreement..................................20
3.11 Confidentiality Agreements.....................................20
3.12 All Proceedings Satisfactory...................................20
3.13 No Adverse Change..............................................20
3.14 Delivery of Documents..........................................20
3.15 SBIC Deliveries................................................21
SECTION 4. COVENANTS OF THE COMPANY.......................................21
4.1 Financial Statements; Minutes..................................21
4.2 Budget and Operating Forecast..................................22
4.3 Conduct of Business............................................22
4.4 Payment of Taxes, Compliance with Laws, etc....................22
4.5 Insurance......................................................23
4.6 Maintenance of Properties......................................23
4.7 Affiliated Transactions........................................23
4.8 Management Compensation........................................23
4.9 Use of Proceeds................................................23
4.10 Board of Directors Meetings; Meetings with Investors...........24
4.11 Stockholders' Agreement........................................24
4.12 Distributions on, and Redemptions of, Capital Stock............24
4.13 Merger, Consolidation, Sale of Assets and Other Actions........25
4.14 No Amendments to Certificate of Incorporation..................26
4.15 Capital Expenditures...........................................26
4.16 Annual Updates; Number of Stockholders; Use of Proceeds;
Regulatory Violation; Economic Impact Information Amendment....26
4.17 Non-Competition Agreements; Confidentiality and
Proprietary Rights Agreements..................................28
SECTION 5. INVESTOR REPRESENTATIONS.......................................28
SECTION 6. INDEMNIFICATION................................................29
6.1 Indemnification for Vicarious Liability........................29
6.2 Notice; Defense of Claims......................................29
6.3 Satisfaction of Indemnification Obligations....................30
(ii)
PAGE
SECTION 7. GENERAL........................................................31
7.1 Amendments, Waivers and Consents...............................31
7.2 Survival of Representations, Warranties and Covenants;
Assignability of Rights......................................31
7.3 Governing Law; Jurisdiction....................................32
7.4 Section Headings; Counterparts.................................32
7.5 Notices and Demands............................................32
7.6 Severability...................................................32
7.7 Expenses.......................................................33
7.8 Integration; Waiver of Prior Agreements........................33
7.9 Certain Provisions Applicable to SBIC and Bank Stockholders....33
APPENDIX A - List of Investors
EXHIBITS
Exhibit 3.2(a) - Opinion of Company Counsel
Exhibit 3.2(b) - Opinion of Company FCC Counsel
Exhibit 3.4 - Amended and Restated Certificate of Incorporation
Exhibit 3.5 - Stockholders' Agreement
Exhibit 3.7 - Director Indemnification Agreement
Exhibit 3.9 - Stock Option Plan
Exhibit 3.10 - Registration Rights Agreement
Exhibit 3.11 - Confidentiality and Proprietary Rights Agreement
(iii)
PAGE
SCHEDULES
Schedule 2.1 - Violations
Schedule 2.4 - Capitalization and Beneficial Ownership; Options;
Rights
Schedule 2.5 _ Projections
Schedule 2.6 _ FCC Licenses
Schedule 2.7 - Undisclosed Liabilities
Schedule 2.8 - Certain Developments
Schedule 2.9 - Accounts Receivable
Schedule 2.10 - Title to Properties
Schedule 2.11 - Tax Matters
Schedule 2.12 - Contracts and Commitments
Schedule 2.13 - Proprietary Rights
Schedule 2.14 - Litigation
Schedule 2.16 - Business
Schedule 2.17 _ Disclosure
Schedule 2.20 - Environmental Matters
Schedule 2.21 - Employee Benefits
Schedule 2.22 - Product and Service Claims
Schedule 2.23 - Backlog
Schedule 2.24 - Employee Matters
Schedule 2.27 - Affiliate Transactions
(iv)
STOCK PURCHASE AGREEMENT
AGREEMENT made as of this 6th day of December, 1996 by and among Teletrac,
Inc., a Delaware corporation (the "Company"), and the investors identified on
the signature pages hereto (the "Investors"). As used herein, the term
"Company" shall include any subsidiaries of the Company (except with respect to
Section 2.4 hereof or to the extent the context otherwise requires).
SECTION 1. TERMS OF PURCHASE
1.1 DESCRIPTION OF SECURITIES. The Company has authorized the issuance
and sale to the Investors of 190,476.19 shares (the "Preferred Shares") of its
authorized but unissued Series A Redeemable Convertible Participating Preferred
Stock, par value $.01 per share (the "Series A Preferred Stock"), for a purchase
price of $173.25 per Preferred Share. The Preferred Stock shall have the
rights, restrictions, privileges and preferences set forth in the Amended and
Restated Certificate of Incorporation attached hereto as EXHIBIT A (the
"Charter"), which has been duly adopted by the Company and filed with the
Secretary of State of the State of Delaware as of this date in connection with
this Agreement.
1.2 RESERVED SHARES. The Company has authorized and has reserved and
covenants to continue to reserve, a sufficient number of shares of its
Redeemable Convertible Participating Preferred Stock, par value $.01 per share
(the "Redeemable Convertible Participating Preferred Stock," and including the
Series A Preferred Stock, the "Preferred Stock"), for issuance upon conversion
of the Preferred Shares to one or more additional series of Preferred Stock in
accordance with the Charter (the "Diluted Preferred Stock"). The Company has
also authorized and has reserved and covenants to continue to reserve a
sufficient number of shares of its Class A Common Stock, par value $.01 per
share (the "Class A Common Stock"), to satisfy the rights of conversion of the
holders of the Preferred Stock. Any shares of Common Stock or any successor
class of capital stock of the Company hereafter issued or issuable upon
conversion of the Preferred Shares (other than conversion into Diluted Preferred
Stock in accordance with the Charter) are herein referred to as "Conversion
Shares," and the Preferred Shares, the Conversion Shares and the shares of
Diluted Preferred Stock are herein collectively referred to as the "Securities."
1.3 SALE AND PURCHASE. At the Closing (as hereinafter defined) and
subject to the terms and conditions herein set forth, the Company shall issue
and sell to each of the Investors, and each Investor severally and not jointly
shall purchase from the Company, the number of Preferred Shares set forth
opposite the name of such Investor in Column 1 of APPENDIX A hereto for the
aggregate purchase price set forth opposite the name of such Investor in Column
2 of said APPENDIX A.
1.4 CLOSING. The closing (the "Closing") of the sale and purchase of the
Preferred Shares shall take place at the offices of Xxxxxxx, Procter & Xxxx
LLP, located at Exchange Place, Boston, Massachusetts, at 10:00 A.M. on such
date as shall be mutually agreed upon by the Company and the unanimous vote or
written consent of the Investors (the "Closing Date"). At the Closing, the
Company will deliver the Preferred Shares being acquired by each Investor in
the form of a certificate, issued in such Investor's name or in the name of its
nominee (of which the Investor shall notify the Company not less than two (2)
business days prior to the Closing), against payment of the full purchase price
therefor by or on behalf of each Investor to the Company by check or wire
transfer;
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
In order to induce the Investors to enter into this Agreement, the Company
hereby represents and warrants to the Investors that as of the date hereof:
2.1 ORGANIZATION AND CORPORATE POWER. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and is duly qualified to do business as a foreign corporation and in
good standing in each jurisdiction in which such qualification is required,
except where failure to so qualify would not have a material adverse effect on
the business, assets, operations or condition (financial or otherwise) of the
Company and its subsidiaries taken as a whole ("Material Adverse Effect"). The
Company has all required corporate power and authority to own its property, to
carry on its business as presently conducted or contemplated, to enter into and
perform this Agreement and the agreements contemplated hereby, and generally to
carry out the transactions contemplated hereby and thereby. The copies of the
Charter and By-laws of the Company, each as amended to date, which have been
furnished to counsel for the Investors, are correct and complete at the date
hereof. Except as set forth on SCHEDULE 2.1, the Company is not in violation of
any term of its Charter or By-laws or any agreement, instrument, judgment,
decree, order, statute, rule or government regulation applicable to the Company.
2.2 AUTHORIZATION. This Agreement and all documents and instruments
executed pursuant hereto are valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms. The execution,
delivery and performance of this Agreement and all documents and instruments
contemplated hereby, and the delivery and issuance of the Preferred Shares and,
upon conversion of the Preferred Shares, the Conversion Shares and the shares of
Diluted Preferred Stock, have been duly authorized by all necessary corporate or
other action of the Company. Assuming the accuracy of the Investor
representations set forth in Section 5 hereof, no consent, approval or
authorization of, or registration, qualification, designation, declaration or
filing with, any governmental authority is required of the Company in connection
with the execution, delivery and performance of this Agreement or the offer,
issuance, sale and delivery by the Company of the Preferred Shares in accordance
with the terms of this Agreement and, upon conversion of the Preferred Shares,
the Conversion Shares and the shares of Diluted Preferred Stock, or the
performance or consummation of any other transaction contemplated hereby, except
for such filings as shall have been made prior to and effective on and as of the
Closing.
2.3 NON-CONTRAVENTION. The execution, delivery and performance by the
Company of this Agreement and each of the other agreements and instruments to
which it is a party and which are contemplated hereby will not: (a) violate,
conflict with or result in any material default under any contract, instrument,
obligation or commitment of the Company, or violate, conflict with or
2
result in any default under any charter provision, by-law or corporate
restriction of the Company; (b) result in the creation of any material lien,
charge, restriction or encumbrance of any nature upon any of the properties or
assets of the Company (except as contemplated hereby); or (c) violate any
instrument, agreement, judgment, decree, order, statute, rule, ordinance or
regulation of any federal, state or local government or agency applicable to the
Company or any of its assets or properties or to which the Company is a party,
except where such violations would not singly or in the aggregate have a
Material Adverse Effect.
2.4 CAPITALIZATION OF THE COMPANY. The authorized capital stock of the
Company consists of: (i) 507,934 shares of Class A Common Stock, of which
249,000 shares will be, as of the Closing, duly and validly issued, outstanding,
fully-paid and non-assessable, 190,476.19 shares will be reserved for issuance
upon conversion of the Preferred Stock, 40,000 shares will be reserved for
issuance upon conversion of the Class B Common Stock (as hereinafter defined)
43,060 shares have been reserved for issuance upon the exercise of outstanding
options under the Company's 1995 Stock Option Plan (the "1995 Option Plan") and
25,397 shares have been reserved for issuance upon the exercise of the Options
(as defined below) under the 1996 Stock Option Plan (as hereinafter defined);
(ii) 70,000 shares of Class B Common Stock, par value $.01 per share (the "Class
B Common Stock," and, collectively with the Class A Common Stock, the "Common
Stock"), none of which 40,000 shares will be outstanding as of the Closing;
(iii) 190,477 shares of Series A Preferred Stock, of which 190,476.19 shares
will be, as of the Closing, duly and validly issued, outstanding, fully-paid,
and non-assessable; and (iv) 190,476.19 shares of one or more series of Diluted
Preferred Stock, all of which shall be reserved for issuance upon automatic
conversion of the Series A Preferred Stock as provided in the Charter. Except
as disclosed in SCHEDULE 2.4 and except for 43,060 shares of Class A Common
Stock reserved for issuance under the 1995 Option Plan and 25,397 shares of
Class A Common Stock reserved for issuance under the 1996 Stock Option Plan, the
Company has not issued any other shares of its capital stock, and there are no
outstanding warrants, options or other rights to purchase or acquire any of such
shares, nor any outstanding securities convertible into such shares or
outstanding warrants, options or other rights to acquire any such convertible
securities. As of the Closing, and assuming the accuracy of the Investor
representations set forth in Section 5 hereof, all of the outstanding shares of
capital stock of the Company will have been offered, issued, sold and delivered
in compliance with applicable federal and state securities laws. The Preferred
Shares have been duly and validly authorized and, when delivered and paid for
pursuant to this Agreement, will be validly issued, fully paid and
nonassessable. The Preferred Shares are convertible into an aggregate
190,476.19 shares of Class A Common Stock representing 37.5% of the Common Stock
of the Company on a fully-diluted basis after giving effect to the issuance of
43,060 shares reserved for issuance under the 1995 Option Plan and 25,397 shares
of Class A Common Stock reserved for issuance under the 1996 Stock Option Plan
and the exercise, exchange or conversion of any other securities or options
exercisable or exchangeable for or convertible into Common Stock. The relative
rights, preferences, restrictions and other provisions relating to the capital
stock of the Company are as set forth in the Charter. The Company has
authorized and reserved for issuance upon conversion of the Preferred Stock not
less than 190,476.19 shares of its Class A Common Stock and the Conversion
Shares issuable upon such conversion will be, when issued in accordance with the
Charter, duly and validly authorized and issued, fully-paid and nonassessable.
3
Except as set forth in the Stockholders' Agreement dated November 14, 1995,
as amended (the "1995 Stockholders' Agreement), with respect to which all
stockholders party thereto have either exercised or waived their preemptive
rights, there are no preemptive rights or rights of first refusal with respect
to the issuance or sale of the Company's capital stock. Except as set forth in
SCHEDULE 2.4, no officer, director or employee of the Company or any other
person or entity has, claims to have or upon the Closing will have any right to
claim to have any interest in the Company's capital stock. There are no
restrictions on the transfer of the Company's capital stock other than those
arising from federal and state securities laws or under this Agreement, the
Stockholders' Agreement or the Registration Rights Agreement (each as
hereinafter defined). Except as set forth in the Stockholders' Agreement and
the Registration Rights Agreement, there are no rights, obligations, or
restrictions on the voting of any of the Company's capital stock or the
registration of such capital stock for offering to the public pursuant to the
Securities Act of 1933, as amended (the "Securities Act"). The outstanding
shares of the capital stock are held of record and beneficially by the persons
identified in SCHEDULE 2.4 in the amounts indicated therein. Upon the Closing,
and after giving effect to the transactions contemplated herein, the
stockholders of the Company will be as indicated on SCHEDULE 2.4.
The Company's subsidiaries and investments in any other corporation or
business organization are listed in SCHEDULE 2.4 (collectively, the
"Subsidiaries" or individually, a "Subsidiary"). Except as set forth in
SCHEDULE 2.4, each Subsidiary of the Company is a duly organized, validly
existing corporation in good standing under the laws of the state of its
incorporation with full corporate power and authority to own or lease its
properties and to conduct its business in the manner and in the places where
such properties are owned or leased or such business is currently conducted or
proposed to be conducted. Except as set forth in SCHEDULE 2.4, all of the
outstanding shares of capital stock of each Subsidiary are owned beneficially
and of record by the Company, free of any lien, restriction or encumbrance, and
said shares have been duly and validly issued and are outstanding, fully paid
and non-assessable. The copies of each of the Subsidiaries' charter and
by-laws, as amended to date, which have been furnished to counsel for the
Investors prior to the date hereof, are complete and correct, and no amendments
thereto are pending. None of the Subsidiaries is in violation of any term of
its respective charter or by-laws. Except as set forth in SCHEDULE 2.4,
(i) there are no outstanding warrants, options or other rights to purchase or
acquire any of the shares of capital stock of any Subsidiary, or any outstanding
securities convertible into such shares or outstanding warrants, options or
other rights to acquire any such convertible securities, and (ii) the Company
does not own or have any direct or indirect interest in, a loan or advance to,
or control over any corporation, partnership, joint venture or other entity of
any kind.
2.5 FINANCIAL STATEMENTS; PROJECTIONS. The Company has heretofore
furnished to the Investors the following financial statements: (i) unaudited
balance sheet of the Company as of September 30, 1996 and the related unaudited
statements of income, retained earnings and cash flows of the Company for the
nine-month period ended September 30, 1996 (collectively, the "Financial
Statements"), (ii) pro forma unaudited balance sheets for the Company as of
September 30, 1996, and (iii) audited balance sheet and related statements of
Operations and Cash Flows for fiscal year 1993-95 (the "Predecessor Financial
Statements") of the Company's predecessor, AirTouch Teletrac General Partnership
(the "Predecessor"). All of the financial statements of the Company and, to the
best knowledge of the Company, the Predecessor have
4
been prepared in accordance with generally accepted accounting principles
consistently applied, except that interim financial statements and pro forma
statements have been prepared without footnote disclosures and year-end audit
adjustments, which will not, in any event, be material. Except as set forth in
SCHEDULE 2.5, all of such financial statements contain notations for all
significant accruals or contingencies, fairly represent the financial condition
of the Company (and, to the knowledge of the Company, the Predecessor) as of the
date thereof, and are true and correct as of the date thereof in all material
respects. Nothing has come to the attention of the management of the Company
after due inquiry since such dates which would indicate that such financial
statements were not true and correct as of the date thereof or that the
Company's audited financial statements for the year ending December 31, 1996
will require any material year-end audit adjustments not reflected or reserved
for in the Financial Statements. Except as otherwise set forth in SCHEDULE 2.5,
the projections set forth in the PPM represent management's good faith estimates
of the future performance of the Company based upon assumptions which are set
forth therein and which the Company believed were reasonable when made and the
Company believes continue to be reasonable as of the date hereof.
2.6 FCC LICENSES. The Company holds the licenses issued by the FCC and
set forth on Schedule 2.6 hereto (the "FCC Licenses"). The FCC Licenses
authorize the operation of radio stations ("LMS Stations") in the Location and
Monitoring Service ("LMS") from transmitters at the authorized sites and the
authorized spectrum set forth on the FCC Licenses and described in Schedule 2.6
and permit the Company to provide LMS to the metropolitan areas identified on
Schedule 2.6 from such sites. Except as set forth in Schedule 2.6:
(i) no other authorization of the FCC is required for the operation of the
LMS Stations pursuant to the FCC Licenses;
(ii) the FCC Licenses are in full force and effect in accordance with their
terms and the rules and regulations of the FCC;
(iii)none of the FCC Licenses is subject to any condition that the
Company reasonably anticipates could have any material adverse effect upon the
operation of the LMS Stations, considered in the aggregate;
(iv) all conditions to the continuation of the FCC Licenses as
grandfathered LMS licenses under the rules and regulations of the FCC have been
met and no waivers or extensions, other than waivers or extensions previously
granted, are required from the FCC to hold and use the FCC Licenses as
contemplated by the Company; and
(v) no applications for renewal or extension of the FCC Licenses are
pending or due under the rules and regulations of the FCC.
The Company has no reason to believe that the FCC is likely to modify its
rules in a manner that would materially and adversely affect the operation of
the LMS Stations pursuant to the FCC Licenses.
5
Except as indicated on SCHEDULE 2.6, and except for actions or proceedings
affecting its industry generally, no petition, action, investigation, notice of
violation or apparent liability, notice of forfeiture, orders to show cause,
complaint or proceeding is pending or, to the best knowledge of the Company,
threatened before the FCC or any other forum or agency with respect to the
Company or any of the currently operating LMS Stations or seeking to revoke,
cancel, suspend or modify any of the FCC Licenses. Except as otherwise
expressly contemplated by this Agreement or as stated in SCHEDULE 2.6 hereto,
(i) there are no applications presently pending before the FCC with respect to
any of the currently operating LMS Stations, (ii) the Company does not know of
any fact that is likely to result in the denial of an application for renewal,
or the revocation, modification, nonrenewal or suspension of any of the FCC
Licenses, or the issuance of a cease-and-desist order, or the imposition of any
administrative or judicial sanction with respect to any of the currently
operating LMS Stations or other operations of the Company, which may have a
materially adverse effect on the currently operating LMS Stations, (iii) the
Company is in compliance in all material respects with the terms of the FCC
Licenses and all applicable filing and operating requirements related thereto
and all other applicable regulations and policies of the FCC and the
Communications Act of 1934, as amended, 47 U.S.C. Section 151, et seq. (the
"Communications Act"), and any other governmental entity and (iv) all equipment
used by the Company and its customers with respect to its LMS business has, to
the extent necessary, been approved by the FCC and the current and contemplated
use of all such equipment complies with all applicable FCC and other regulatory
requirements. No prior FCC consent is required in connection with the
execution, delivery and performance of this Agreement. The Company is the
licensee of the FCC Licenses listed in SCHEDULE 2.6, free and clear of all liens
and encumbrances except those contemplated by this Agreement. SCHEDULE 2.6
correctly sets forth all FCC Licenses required to be issued by the FCC in
connection with the Company's LMS Stations which are held by the Company and
correctly sets forth the termination date of each FCC License. To the best
knowledge of the Company, except as set forth on SCHEDULE 2.6, there have been
no changes in the sites or facilities relating to the LMS Stations which violate
the FCC's 2 kilometer site relocation restrictions (as interpreted by the FCC
staff engineer of the FCC Commercial Wireless Division of the Wireless
Telecommunications Bureau) or otherwise require FCC approval or authorization
except for such confirmation of construction as the FCC may require.
2.7 ABSENCE OF UNDISCLOSED LIABILITIES. Since the date of the PPM, except
as and to the extent set forth in SCHEDULE 2.7 or incurred in the ordinary
course of business, the Company does not have any material liability or
liabilities of any nature, whether accrued, absolute, contingent or otherwise,
asserted or unasserted, known or unknown which are or would be required to be
disclosed in accordance with generally accepted accounting principles and, to
the best knowledge of the Company, there exists no set of facts or circumstances
which should be reasonably anticipated to form the basis for any such material
liabilities.
2.8 ABSENCE OF CERTAIN DEVELOPMENTS. Except as set forth in SCHEDULE 2.8
hereto, since the date of the PPM there has been (i) no adverse change in the
condition, financial or otherwise, of the Company or in the assets, liabilities
or business of the Company, (ii) no declaration, setting aside or payment of any
dividend or other distribution with respect to, or any direct or indirect
redemption, repurchase or acquisition of, any of the capital stock of the
Company, (iii) no waiver of any valuable right of the Company or cancellation of
any debt or claim held by the Company, (iv) no loan by the Company to any
officer, director, employee or
6
stockholder of the Company, or affiliates of any of the foregoing or any
agreement or commitment therefor, (v) no material loss, destruction or damage to
any property of the Company, whether or not insured, (vi) no labor trouble
involving the Company and no material change in the personnel of the Company or
the terms and conditions of their employment, and (vii) no acquisition or
disposition of any assets (or any contract or arrangement therefor) nor any
other transaction by the Company otherwise than in the ordinary course of
business consistent with past practices.
2.9 ACCOUNTS RECEIVABLE. Except to the extent reserved against in the
Financial Statements or disclosed elsewhere in this Agreement (including the
Schedules hereto), all of the accounts receivable of the Company represent bona
fide completed sales of services or products made in the ordinary course of
business, are valid and enforceable claims, and, to the knowledge of the
Company, are not subject to asserted rights of set-off or counterclaim and
should be collectible in the ordinary course. Set forth on SCHEDULE 2.9 hereto
is an aging schedule of all accounts receivable of the Company on an aggregate
basis, based on date of invoice, and a list of all such accounts receivable,
identified by customer, which have a balance due in excess of $25,000. Except
as disclosed on SCHEDULE 2.9, the Company has no accounts receivable from any
person, firm or corporation which is affiliated with it or any of its directors,
officers, employees or shareholders or any affiliates of any of the foregoing.
2.10 TITLE TO PROPERTIES. Except as set forth in SCHEDULE 2.10 hereto, the
Company has good and marketable title to all of its material properties and
assets, free and clear of all liens, restrictions or encumbrances, and such
properties and assets constitute all of the assets necessary for the conduct of
the Company's business as presently conducted. All machinery and equipment
included in such properties which is necessary to the business of the Company is
in good condition and repair, ordinary wear and tear excepted, and all leases of
real or personal property to which the Company is a party are in full force and
effect and afford the Company peaceful and undisturbed possession of the subject
matter of the lease. The Company is not in violation of any zoning, building or
safety ordinance, regulation or requirement or other law or regulation
applicable to the operation of its owned or leased properties which individually
or in the aggregate could have a Material Adverse Effect, nor has the Company
received any notice of violation with which it has not complied.
2.11 TAX MATTERS. Except as set forth in SCHEDULE 2.11 hereto:
(a) The Company has paid or caused to be paid all material federal,
state, local, foreign, and other taxes, including without limitation, income
taxes, estimated taxes, alternative minimum taxes, excise taxes, sales taxes,
franchise taxes, employment and payroll-related taxes, withholding taxes,
transfer taxes, and all deficiencies, or other additions to tax, interest, fines
and penalties owed by it (collectively, "Taxes"), required to be paid by it
through the date hereof whether disputed or not. All taxes and other
assessments and levies which the Company is required to withhold or collect have
been withheld and collected and have been paid over to the proper governmental
authorities. The Company has, in accordance with applicable law, timely and
properly filed all federal, state, local and foreign tax returns required to be
filed by it through the date hereof, all such returns correctly and accurately
set forth the amount of any Taxes
7
relating to the applicable period and any deductions from, or credits against
any Taxes or taxable income relating to such returns are valid and proper items
of deduction or credit.
(b) Neither the Internal Revenue Service (the "IRS") nor any other
governmental authority is now asserting or, to the knowledge of the Company,
threatening to assert against the Company any deficiency or claim for additional
Taxes. No claim has ever been made by an authority in a jurisdiction where the
Company does not file reports and returns that the Company is or may be subject
to taxation by that jurisdiction. There are no security interests on any of the
assets of the Company that arose in connection with any failure (or alleged
failure) to pay any Taxes. The Company has never entered into a closing
agreement pursuant to Section 7121 of the Internal Revenue Code of 1986, as
amended (the "Code"). The Company is not and never has been a "personal holding
company" as defined under Section 541 of the Code. There has not been any audit
of any tax return filed by the Company, no such audit is in progress, and the
Company has not been notified by any tax authority that any such audit is
contemplated or pending. No extension of time with respect to any date on which
a tax return was or is to be filed by the Company is in force, and no waiver or
agreement by the Company is in force for the extension of time for the
assessment or payment of any Taxes. The Company is not now and has never been a
member of an affiliated group filing a consolidated federal income tax return.
The Company does not have any liability for the Taxes of any person or entity
other than the Company.
(c) For purposes of this Agreement, all references to Sections of the
Code shall include any predecessor provisions to such Sections.
2.12 CONTRACTS AND COMMITMENTS. Except as set forth in SCHEDULE 2.12
hereto, the Company is not a party to any contract, obligation or commitment
(whether written or oral) which involves a potential commitment in excess of
$100,000 or which is otherwise material and not entered into in the ordinary
course of business, and, except as set forth in SCHEDULE 2.12 hereto or
expressly disclosed or contemplated elsewhere in this Agreement, the Company is
not a party to any: (i) employment contracts; (ii) stock redemption or purchase
agreements; (iii) loan or other financing agreements (including capital lease
obligations in excess of $50,000 individually); (iv) licenses or licensing
agreements (other than license agreements with customers) involving an absolute
or potential commitment or liability in excess of $100,000 per year;
(v) distributor or sales representative agreements involving an absolute
commitment or liability, or which are reasonably likely (based on historical
information) to involve a potential commitment or liability, in excess of
$100,000 per year; (vi) agreements with any officers, directors, employees or
stockholders of the Company or persons or organizations related to or affiliated
with any such persons; (vii) leases involving an absolute or potential liability
in excess of $100,000 per year; (viii) agreements relating to the licensing,
distribution, development or maintenance of software and related hardware other
than such agreements relating to off the shelf "shrink-wrap" software used by
the Company and agreements with its customers; (ix) material agreements with
customers of the Company; (x) powers of attorney; or (xi) pension,
profit-sharing, retirement or stock option plans. The Company does not know of
any basis for the termination, expiration or modification of any such agreements
within one (1) year from the date hereof, which termination, expiration or
modification may have an adverse effect on the assets, liabilities, business or
financial condition of the Company. Except as set forth on SCHEDULE 2.12, the
Company is not in default under any
8
material contract, obligation or commitment, and, to the best knowledge of the
Company, there is no state of facts which upon notice or lapse of time or both
would constitute such a default. The Company is not a party to any contract or
arrangement which under circumstances now foreseeable is likely to have a
Material Adverse Effect. The Company does not have any liability for
renegotiation of any government contracts or subcontracts.
2.13 PROPRIETARY RIGHTS; EMPLOYEE RESTRICTIONS. Set forth in SCHEDULE 2.13
hereto is a list and brief description of all patents, patent rights, patent
applications, trademarks, trademark applications, service marks, service xxxx
applications, trade names and copyrights owned by or registered in the name of
the Company, or of which the Company is a licensor or licensee or in which the
Company has any right, and in each case a brief description of the nature of
such right. Except as set forth on SCHEDULE 2.13, the Company owns or possesses
exclusive licenses to use, free and clear of claims or rights of any other
person, all patents, patent applications, trademarks, trademark applications,
service marks, service xxxx applications, trade names, copyrights, manufacturing
processes, programming processes and software, algorithms, formulae, trade
secrets and know how (collectively, "Intellectual Property") necessary to the
conduct of its business as presently conducted and as proposed to be conducted.
All Intellectual Property that is used or incorporated into the Company's
products or contemplated products and which is unique or proprietary to the
Company was developed by or for the Company by the employees of the Company or
its predecessors in interests and is owned exclusively by the Company, free and
clear of claims or rights of any other person. The Company is not aware of any
infringement by any other person of any rights of the Company under any
Intellectual Property. Except as set forth on SCHEDULE 2.13, no claim is
pending or, to the Company's best knowledge, threatened against the Company nor
has the Company received any notice from any third parties to the effect that
any Intellectual Property owned or licensed by the Company, or which the Company
otherwise has the right to use, or the operation, products or services of the
Company, infringe upon or conflict with the asserted rights of any other person
under any Intellectual Property, and, to the best knowledge of the Company,
there is no basis for any such claim (whether or not pending or threatened). No
claim is pending or threatened against the Company, nor has the Company received
any notice from any third parties, to the effect that any Intellectual Property
owned or licensed by the Company, or which the Company otherwise has the right
to use, is invalid or unenforceable by the Company, as the case may be, and, to
the best knowledge of the Company, there is no basis for any such claim (whether
or not pending or threatened).
All licenses or other agreements under which the Company is granted rights
in Intellectual Property are listed in SCHEDULE 2.13 (other than such agreements
relating to off the shelf "shrink-wrap" software used by the Company in
accordance with the terms of the applicable license). All such licenses or
other agreements are in full force and effect, there is no material default by
any party thereto. True and complete copies of all such licenses or other
agreements, and any amendments thereto, have been provided to the Investors and,
to the best knowledge of the Company, the licensors under such licenses and
other agreements have and had all requisite power and authority to grant the
rights purported to be conferred thereby.
All material licenses or other material agreements under which the Company
has granted rights to others in Intellectual Property (including all end user
agreements) are listed in either SCHEDULE 2.12 or SCHEDULE 2.13. All of said
licenses or other agreements are in full force and
9
effect and there is no material default by any party thereto. True and complete
copies of all such licenses or other agreements, and any amendments thereto,
have been made available to the Investors.
All technical information developed by or belonging to the Company and
which is material to the business of the Company which has not been patented has
been kept confidential by the Company and its officers, directors, employees and
consultants. The Company is not, to the best knowledge of the Company, making
unlawful use of any Intellectual Property of any other person, including,
without limitation, any former employer of any past or present employees of the
Company. Except as set forth in SCHEDULE 2.13, neither the Company nor any of
its employees, officers or consultants has any agreements or arrangements with
former employers of such employees, officers or consultants relating to any
Intellectual Property of such employers, which interfere or conflict with the
performance of such employee's, officer's or consultant's duties for the Company
or results in any former employers of such employees, officers and consultants
having any rights in, or claims on, the Company's Intellectual Property. The
activities of the Company's employees, officers and consultants, to the best
knowledge of the Company, do not violate any agreements or arrangements which
any such employees have with former employers. The Company has taken all
commercially reasonable steps required to establish and preserve its ownership
of all of the Intellectual Property.
Without limitation of any of the foregoing and except as otherwise
expressly set forth in SCHEDULE 2.13 hereto: (a) the Company has taken
reasonable security measures to guard against unauthorized disclosure or use any
of the Intellectual Property; and (b) the Company has no reason to believe that
any person (including, without limitation, any former employee of the Company)
has unauthorized possession of any of the Intellectual Property, or any part
thereof, or that any person has obtained unauthorized access to any of the
Intellectual Property.
2.14 LITIGATION. Except as set forth in SCHEDULE 2.14 hereto, there is no
litigation or governmental proceeding or investigation pending or, to the
Company's knowledge, threatened against the Company, or any officer or key
employee of the Company, which relates to the Company or its business or affairs
or which may call into question the validity or hinder the enforceability or
performance of this Agreement or the agreements and transactions contemplated
hereby or which could have a Material Adverse Effect; nor, to the best knowledge
of the Company, has there occurred any event nor does there exist any condition
on the basis of which any such litigation, proceeding or investigation might
properly be instituted.
2.15 OFFEREES. Neither the Company nor anyone acting on its behalf has in
the past or will in the future sell, offer for sale or solicit offers to buy any
securities of the Company so as to bring the offer, issuance or sale of the
Preferred Shares, the Conversion Shares or the shares of Diluted Preferred
Stock, as contemplated by this Agreement within the provisions of Section 5 of
the Securities Act, unless such offer, issuance or sale was within the
exemptions of Section 4 thereof. The Company has and will comply with all
applicable state "blue-sky" or other applicable securities laws in connection
with the issuance and sale of its Common Stock, Preferred Shares, and other
securities heretofore issued and to be issued upon the Closing. The Company has
in the past complied with all applicable federal and state securities laws in
connection with the offer, solicitation of offers and sales of its securities.
10
2.16 BUSINESS; COMPLIANCE WITH LAWS. Except as set forth in SCHEDULE 2.16
hereto, the Company has all franchises, permits, licenses (other than the FCC
Licenses, which licenses are addressed in Section 2.6 hereof) and other rights
and privileges necessary to permit it to own its property and to conduct its
business as it is presently conducted by the Company or presently contemplated
to be conducted by the Company. The Company is not in violation of any law,
regulation, authorization or order of any public authority which individually or
in the aggregate could have a Material Adverse Effect. Except as set forth in
SCHEDULE 2.16, the Company is in compliance, in all material respects, with all
federal, state and local laws and regulations (including all applicable
environmental laws and regulations) relating to its business as presently
conducted.
2.17 INFORMATION SUPPLIED TO INVESTORS. Except as set forth in SCHEDULE
2.17, this Agreement, the Schedules attached hereto, the documents referenced
herein and the certificates, projections and written statements furnished to the
Investors by or on behalf of the Company (including the June 1996 Private
Placement Memorandum (the "PPM")) taken as a whole do not contain any untrue
statement of a material fact or omit to state a material fact necessary in order
to make the statements contained herein or therein not misleading. There is no
material fact directly relating to the assets, liabilities, business or
condition (financial or otherwise) of the Company (other than facts which relate
to general economic or industry trends or conditions) presently known to the
Company which has not been disclosed to the Investors and which has a Material
Adverse Effect, or should reasonably be anticipated to have a Material Adverse
Effect in the future.
2.18 INVESTMENT BANKING; BROKERAGE. No broker, finder, agent or similar
intermediary has acted on behalf of the Company in connection with this
Agreement or the transactions contemplated hereby and there are no brokerage
commissions, finders fees or similar fees or commissions payable in connection
therewith, other than those payable to Xxxxxx Brothers and, with respect to the
conversion of the Convertible Notes, Toronto Dominion, which commissions, fees
and expenses shall be borne entirely by the Company, and with respect to which
the Investors shall have no liability therefor. The Company agrees to indemnify
and hold the Investors harmless from any losses, damages, costs or expenses they
may suffer or incur as a result of a breach of this representation (including
any dilution or diminution in value of their investment in the Company).
2.19 SOLVENCY. The Company has not: (a) made a general assignment for the
benefit of creditors; (b) filed any voluntary petition in bankruptcy or suffered
the filing of any involuntary petition by its creditors; (c) suffered the
appointment of a receiver to take possession of all, or substantially all, of
its assets; (d) suffered the attachment or other judicial seizure of all, or
substantially all, of its assets; (e) admitted in writing its inability to pay
its debts as they come due; or (f) made an offer of settlement, extension or
composition to its creditors generally. After giving effect to the transactions
provided for or contemplated herein: (i) the Company will be able to pay its
debts as they come due in the usual course of business and will have adequate
capital to conduct its business; and (ii) the Company's total assets will be
greater than its total liabilities (total assets for this purpose being
determined on the basis of the "fair saleable value" thereof).
11
2.20 ENVIRONMENTAL MATTERS.
(a) Except as set forth on SCHEDULE 2.20, the Company has not caused
or allowed, nor has the Company contracted with any party for, the generation,
use, transportation, treatment, storage or disposal of any Hazardous Material in
connection with the operations of its business or otherwise. The Company, the
operations of its business, and any real property that the Company owns, leases,
or otherwise occupies or uses (the "Premises") are in compliance with all
applicable Environmental Laws and orders or directives of any governmental
authorities having jurisdiction under such Environmental Laws including, without
limitation, any Environmental Laws or orders or directives with respect to any
cleanup or remediation of any release or threat of release of Hazardous
Materials. The Company has not received any citation, directive, letter or
other communication, written or oral, or any notice of any proceedings, claims
or lawsuits, from any person, entity or governmental authority arising out of
the ownership or occupation of the Premises, or the conduct of its operations,
nor is it aware of any basis therefor. The Company has obtained and is
maintaining in full force and effect all necessary permits, licenses and
approvals required by any Environmental Laws applicable to the Premises and the
business operations conducted thereon (including operations conducted by tenants
on the Premises) and is in compliance with all such permits, licenses and
approvals. The Company has not caused, or allowed a release, or a threat of
release, of any Hazardous Material unto, at or near the Premises, nor to the
best of the Company's knowledge has the Premises or any property at or near the
Premises ever been subject to a release, or a threat of a release, of any
Hazardous Material.
(b) Except as set forth in SCHEDULE 2.20 hereto, to the best of the
Company's knowledge, no site owned, operated, leased or used by the Company
contains any asbestos or asbestos-containing material, any polychlorinated
biphenyls (PCBs) or equipment containing PCBs, or any urea formaldehyde foam
insulation.
(c) Counsel to the Investors has been provided with copies of all
documents, records and information available concerning any environmental or
health and safety matter relevant to the Company, whether generated in
connection with the Company's business or otherwise, including, without
limitation, environmental audits, environmental risk assessments, site
assessments, documentation regarding off-site disposal of Hazardous Materials,
spill control plans and reports, correspondence, permits, licenses, approvals,
consents and other authorizations related to environmental or health and safety
matters issued by any governmental agency.
(d) For purposes of this Section 2.20, (i) "Hazardous Material" shall
mean and include any hazardous waste, hazardous material, hazardous substance,
petroleum product, oil, toxic substance, pollutant, contaminant, or other
substance which may pose a threat to the environment or to human health or
safety, as defined or regulated under any Environmental Law; (ii) "Environmental
Law" shall mean any environmental or health and safety-related law, regulation,
rule, ordinance or by-law at the federal, state or local level, whether existing
as of the date hereof or subsequently enacted including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42
U.S.C. Section 9601 et. seq., the Emergency Planning and Community Right-to-Know
Act, 42 U.S.C. Section 11001 et. seq., and the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901 et. seq.; and (iii) "Company" shall include
the Company and any predecessor to the Company.
12
2.21 EMPLOYEE BENEFIT PROGRAMS.
(a) SCHEDULE 2.21 hereto sets forth a list of every Employee Program
(as defined below) that has been maintained (as such term is further defined
below) by the Company at any time prior to the Closing Date.
(b) Each Employee Program which has ever been maintained by the
Company and which has at any time been intended to qualify under Section 401(a)
or 501(c)(9) of the Code has received a favorable determination or approval
letter from the IRS regarding its qualification under such section and, to the
best knowledge of the Company, has, in fact, been continuously qualified under
the applicable section of the Code since the effective date of such Employee
Program. No event or omission has occurred which would cause any such Employee
Program to lose its qualification under the applicable Code section.
(c) Each Employee Program that has ever been maintained by the
Company has been maintained in compliance in all material respects with all
applicable laws. With respect to any Employee Program ever maintained by the
Company, there has occurred no "prohibited transaction," as defined in Section
406 of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), or Section 4975 of the Code (for which there exists neither a
statutory nor regulatory exception), or material breach of any duty under ERISA
or other applicable law (including, without limitation, any health care
continuation requirements or any other tax law requirements, or conditions to
favorable tax treatment, applicable to such plan or to any person in regard to
such plan), which could result, directly or indirectly (including, without
limitation, through any obligation of indemnification or contribution), in any
taxes, penalties or other liability to the Company or any of its Affiliates. No
officer, director or employee of the Company has committed a material breach of
any duty imposed upon fiduciaries by Title I of ERISA with respect to any
Employee Program maintained by the Company. No litigation, arbitration, or
governmental administrative proceeding (or investigation) or other proceeding
(other than those relating to routine claims for benefits) is pending or, to the
best knowledge of the Company threatened with respect to any such Employee
Program.
(d) Neither the Company nor any Affiliate (as defined below) (i) has
ever maintained any Employee Program which has been subject to Title IV of ERISA
or Section 412 of the Code (including, but not limited to, any Multiemployer
Plan (as defined below)) or (ii) has ever provided health care or any other
non-pension benefits to any employees after their employment is terminated
(other than as required by part 6 of subtitle B of Title I of ERISA) or has ever
promised to provide such post-termination benefits.
(e) With respect to each Employee Program maintained by or on behalf
of the Company or any Affiliate prior to the Closing, complete and correct
copies of the following documents (if applicable to such Employee Program) have
previously been delivered to counsel to the Investors: (i) all documents
embodying or governing such Employee Program, and any funding medium for the
Employee Program (including, without limitation, trust agreements), as they may
have been amended to the date hereof; (ii) the most recent IRS determination or
approval letter with respect to such Employee Program under Code Section 401 or
501(c)(9), and any applications for determination or approval subsequently filed
with the IRS; (iii) all IRS Forms
13
5500 filed, with all applicable schedules and accountants' opinions attached
thereto; (iv) the summary plan description for such Employee Program (or other
descriptions of such Employee Program provided to employees) and all
modifications thereto; (v) any insurance policy (including any fiduciary
liability insurance policy and any excess loss policy) related to such Employee
Program; (vi) any documents evidencing any loan to an Employee Program that is a
leveraged employee stock ownership plan; and (vii) all other materials
reasonably necessary for the Company to perform any of its responsibilities with
respect to any Employee Program subsequent to the Closing (including, without
limitation, all health care continuation requirements).
(f) For purposes of this Section 2.21:
(i) "Employee Program" means (A) all employee benefit plans
within the meaning of ERISA Section 3(3), including, but not limited to,
multiple employer welfare arrangements (within the meaning of ERISA Section
3(40)), plans to which more than one unaffiliated employer contributes and
employee benefit plans (such as foreign or excess benefit plans) which are
not subject to ERISA; and (B) all stock or cash option plans, restricted
stock plans, bonus or incentive award plans, severance pay policies or
agreements, deferred compensation agreements, supplemental income
arrangements, vacation plans, and all other employee benefit plans and
benefit agreements, and benefit arrangements not described in (A) above.
In the case of an Employee Program funded through an organization described
in Code Section 501(c)(9), each reference to such Employee Program shall
include a reference to such organization.
(ii) An entity "maintains" an Employee Program if such
entity sponsors, contributes to or provides (or has promised to provide)
benefits under such Employee Program, or has any obligation (by agreement
or under applicable law) to contribute to or provide benefits under such
Employee Program, or if such Employee Program provides benefits to or
otherwise covers employees of such entity (or their spouses, dependents, or
beneficiaries).
(iii) An entity is an "Affiliate" of the Company if it
would have ever been considered a single employer with the Company or any
entity under ERISA Section 4001(b) or part of the same "controlled group"
as the Company for purposes of ERISA Section 302(d)(8)(C).
(iv) "Multiemployer Plan" means a (pension or non-pension)
employee benefit plan to which more than one employer contributes and which
is maintained pursuant to one or more collective bargaining agreement.
2.22 PRODUCT AND SERVICES CLAIMS. Except as set forth in SCHEDULE 2.22
hereto, there are no pending or, to the best of the Company's knowledge,
threatened product or service claims involving amounts in excess of $25,000
individually with respect to any products manufactured or services provided by
the Company prior to the Closing date, nor, to the best knowledge of the
Company, are there any facts upon which a claim of such nature could reasonably
be anticipated to be based. No claims have been made against the Company for
renegotiation or price redetermination of any business transaction resulting
from or relating to defective products or
14
services, and, to the best of the Company's knowledge, there are no facts upon
which any such claim should reasonably be anticipated to be based.
2.23 BACKLOG. As of October 31, 1996, the Company had outstanding firm
orders for the sale of services and products as set forth in SCHEDULE 2.23
hereto. All such orders represent orders for products with specifications that
can be met in accordance with the terms of such orders and in the ordinary
course of conduct of the Company's business without undue delay or extraordinary
expense.
2.24 EMPLOYEES; LABOR MATTERS. As of the Closing Date, the Company employs
a total of approximately 232 full-time employees and no part-time employees and
generally enjoys good employer-employee relationships. The Company is not
delinquent in payments to any of its employees for any material amount of wages,
salaries, commissions, bonuses or other direct compensation for any services
performed for it to the date hereof or amounts required to be reimbursed to such
employees. The Company does not have any policy, practice, plan or program of
paying severance pay or any form of severance compensation in connection with
the termination of employment, except as set forth in SCHEDULE 2.24 hereto. All
of the Company's programs and/or arrangements in connection with the payment of
commissions are described in SCHEDULE 2.24. The Company is in compliance in all
material respects with all applicable laws and regulations respecting labor,
employment, fair employment practices, work place safety and health, terms and
conditions of employment, and wages and hours. There are no charges of
employment discrimination or unfair labor practices, nor are there any strikes,
slowdowns, stoppages of work or any other concerted interference with normal
operations which are existing, pending or threatened against or involving the
Company. The Company has not received any information indicating that any of
its employment policies or practices is currently being audited or investigated
by any federal, state or local government agency. The Company is, and at all
times has been, in compliance in all material respects with the requirements of
the Immigration Reform Control Act of 1986. SCHEDULE 2.24 sets forth a complete
list of each major metro manager, officer, employee, salesperson and consultant
who received or is scheduled to receive total remuneration from the Company in
excess of $100,000 for the calendar year ending December 31, 1996.
2.25 CUSTOMERS, DISTRIBUTORS AND SUPPLIERS. Except as disclosed in written
materials provided to the Investors, the relationships of the Company with its
customers, vendors and suppliers are good commercial working relationships. No
significant customer accounting for revenues in excess of $100,000 in any twelve
(12) month period or significant vendor has canceled, modified, or otherwise
terminated its relationship with the Company, or has during the last twelve (12)
months decreased its services, supplies or materials to the Company or its usage
or purchase of the services or products of the Company (other than with respect
to such services, supplies, materials or products which are non-recurring by
their nature), nor to the knowledge of Company does any significant customer or
vendor have any plan or intention to do any of the foregoing.
2.26 CORPORATE RECORDS; COPIES OF DOCUMENTS. The corporate record books of
the Company accurately record all corporate action taken by its respective
stockholders and board of directors and committees. The copies of the corporate
records of the Company, as made available
15
to the Investors for review prior to the date hereof, are true and complete
copies of the originals of such documents. The Company has made available for
inspection by the Investors and their counsel true and correct copies of all
documents referred to in this Section 2.26 or in the Schedules delivered
pursuant to this Agreement.
2.27 AFFILIATE TRANSACTIONS. Except as set forth in SCHEDULE 2.27 hereto,
neither the Company nor any officer, employee or director of the Company or any
of their respective spouses or family members or any of their affiliates, owns,
directly or indirectly, on an individual or joint basis, any material interest
in, or serves as an officer, director, partner, member or in another similar
capacity of, any competitor or supplier of the Company or any organization which
has a contract or arrangement with the Company.
2.28 SMALL BUSINESS CONCERN, ETC.
(a) The Company, together with its "affiliates" (as that term is
defined in 13 CFR Section 121.103), is a "smaller business" within the meaning
of SBIC Regulations, including 13 CFR Section 107.710. The information
regarding the Company and its affiliates set forth in SBA Form 480, Form 652 and
Section A of Form 1031 delivered prior to the Closing Date is accurate and
complete. Neither the Company nor any Subsidiary presently engages in, or shall
hereafter engage in, any activities, nor shall the Company or any Subsidiary use
the proceeds of the sale of the Securities hereunder directly or indirectly for
any purpose for which an SBIC is prohibited from providing funds by SBIC
Regulations (including 13 CFR Section 107.720).
(b) The proceeds from the purchase of the Preferred Shares will be
used by the Company for purposes of product development, working capital and
capital expenditures.
(c) As of the date hereof, the primary business activity of the
Company is (i) providing vehicle location and fleet management software and
services and related Messaging services and (ii) classified under Standard
Industrial Classification Code number 4812 (Radiotelephone Communications), and
the number of employees of the Company is less than 1,500.
(d) For all purposes of this Agreement, the following terms shall
have the following meanings:
(i) "SBA" means the United States Small Business Administration,
and any successor agency performing the functions thereof;
(ii) "SBIC" means a Small Business Investment Company licensed by
the SBA under the SBIC Act;
(iii)"SBIC Act" means the Small Business Investment Act of
1958, as amended; and
16
(iv) "SBIC Regulations" means the SBIC Act and the regulations
issued by the SBA thereunder, codified at Title 13 of the Code of Federal
Regulations ("13 CFR"), Parts 107 and 121.
2.29 FIRPTA WITHHOLDING. The Company is not a "foreign person" within the
meaning of Section 1445 of the Code and Treasury Regulations Sections 1.1445-2.
2.30 INVESTMENTS RELATED TO CERTAIN FOREIGN COUNTRIES. Neither the Company
nor any affiliate of the Company has participated in, or is participating in, an
anti-Israeli boycott within the scope of Chapter 7 of Part 2 of Division 4 of
Title 2 of the California Government Code, as in effect from time to time.
SECTION 3. CONDITIONS OF PURCHASE
The Investors' obligation to purchase and pay for the Preferred Shares
shall be subject to compliance by the Company with its agreements herein
contained and to the fulfillment to all of the Investors' satisfaction or
unanimous waiver by the Investors on or before the Closing Date of the following
conditions:
3.1 REPRESENTATIONS. The representations and warranties of the Company
contained in this Agreement (including but not limited to the representations
and warranties made in Section 2 hereof) shall be true and correct on and as of
the Closing Date.
3.2 OPINIONS OF COUNSEL. The Investors shall have received an opinion of
counsel in substantially the form attached hereto as EXHIBIT 3.2(A) with respect
to the organization and authority of the Company, the enforceability of this
Agreement and any related agreements, the absence of conflicts with
organizational documents and other agreements, the absence of litigation and
such other matters as requested by the Investors. The Investors shall have
received an opinion of FCC counsel in substantially the form attached hereto as
EXHIBIT 3.2(B) with respect to such matters as requested by the Investors.
3.3 AUTHORIZATION. The Board of Directors and the stockholders of the
Company shall have duly adopted resolutions in form reasonably satisfactory to
the Investors authorizing the Company to consummate the transactions
contemplated hereby in accordance with the terms hereof, and the Investors shall
have received a duly executed certificate of the Secretary of the Company
certifying to such resolutions, the Charter and By-laws of the Company, the
incumbency of all officers executing any instruments and agreements therefor,
and such other matters as may be reasonably requested by the Investors.
3.4 EFFECTIVENESS OF PREFERRED STOCK TERMS. The Board of Directors of the
Company shall have adopted a resolution establishing the terms of the Preferred
Stock as set forth in EXHIBIT 3.4 attached hereto, and such action shall have
been made effective by approval thereof by the stockholders of the Company and
the filing of an Amended and Restated Certificate of Incorporation with the
Secretary of State of the State of Delaware.
17
3.5 STOCKHOLDERS' AGREEMENT. The Company, the existing stockholders and
the Investors shall have executed and delivered a Stockholders' Agreement in the
form of EXHIBIT 3.5 attached hereto (the "Stockholders' Agreement"), which
Stockholders' Agreement shall supersede the stockholders' agreement previously
entered into among the Company and the existing stockholders.
3.6 CONVERTIBLE NOTES. The convertible notes (the "Convertible Notes") of
the Company in the aggregate amount of $4,899,999 held by some of the existing
stockholders of the Company shall have been converted into 48,999.99 shares of
Class A Common Stock, and certificates evidencing such shares of Common Stock
shall have been delivered to the holders of the Convertible Notes and such
Convertible Notes shall have been canceled.
3.7 ELECTION OF DIRECTORS; INDEMNIFICATION AGREEMENTS. In accordance with
the terms of the Stockholders' Agreement and the By-laws of the Company, the
size of the Company's Board of Directors shall have been initially fixed at
eight (8) members and the composition thereof shall be as provided in the
Stockholders' Agreement. The Company shall have entered into a Director
Indemnification Agreement in the form attached hereto as EXHIBIT 3.7 with each
member of the Board of Directors.
3.8 COMPENSATION COMMITTEE; AUDIT COMMITTEE. The Board of Directors shall
appoint and maintain a Compensation Committee, consisting of no more than three
(3) persons, one of whom shall be designated by the holders of a majority of the
shares of Preferred Stock. The Board of Directors shall appoint and maintain an
Audit Committee consisting of no less than two (2) individuals, all of whom are
not officers or employees of the Company, and one of whom shall be designated by
the holders of a majority of the shares of Preferred Stock.
3.9 OPTION PLAN. The Board of Directors of the Company shall have
adopted, and the stockholders of the Company shall have approved, a stock option
plan in substantially the form attached hereto as EXHIBIT 3.9 (the "1996 Stock
Option Plan"). As of the Closing, the options granted to the employees and
officers of the Company (the "Options") shall be as set forth on SCHEDULE 2.4
hereto.
3.10 REGISTRATION RIGHTS AGREEMENT. The Company, the Investors and the
existing Stockholders shall have entered into a an Amended and Restated
Registration Rights Agreement with respect to the Common Stock, the Preferred
Stock and the Conversion Shares in substantially the form of EXHIBIT 3.10
attached hereto (the "Registration Rights Agreement"), which Registration Rights
Agreement shall supersede the registration rights agreement previously entered
into among the Company and the existing stockholders.
3.11 CONFIDENTIALITY AGREEMENTS. Each of Xxxxxxx Xxxxxxx, Xxxx Xxxx and
Xxx Xxxxxxx shall have entered into a Confidentiality and Proprietary Rights
Agreement with the Company in the form attached hereto as EXHIBIT 3.11.
3.12 ALL PROCEEDINGS SATISFACTORY. All corporate and other proceedings
taken prior to or at the Closing in connection with the transactions
contemplated by this Agreement, and all documents and evidences incident
thereto, shall be reasonably satisfactory in form and substance
18
to all of the Investors, and the Investors shall have received such copies
thereof and other materials (certified, if requested) as they may reasonably
request in connection therewith. The issuance and sale of the Preferred Shares
to the Investors shall be made in conformity with all applicable state and
federal securities laws.
3.13 NO ADVERSE CHANGE. Since September 30, 1996, there shall have been no
material adverse change in the financial conditions, properties, assets,
liabilities, businesses or operations of the Company, whether or not in the
ordinary course of business.
3.14 DELIVERY OF DOCUMENTS. The Company shall have executed and delivered
to the Investors (or shall have caused to be executed and delivered to the
Investors by the appropriate persons) the following:
(a) Certificates for the Preferred Shares;
(b) Certified copies of resolutions of the Board of Directors (and,
if necessary, the stockholders) of the Company authorizing the execution and
delivery of this Agreement, the Stockholders' Agreement, the Registration Rights
Agreement, the Charter creating the Preferred Shares, the issuance of the
Preferred Shares and, upon conversion of the Preferred Shares, the issuance of
the Conversion Shares and shares of Diluted Preferred Stock, and the adoption of
the Stock Option Plan;
(c) Certified copy of the by-laws of the Company as in effect as of
the Closing;
(d) A copy of the Certificate of Incorporation of the Company, as
amended, certified as of a recent date by the Secretary of State of the State of
Delaware;
(e) A Certificate issued by the Secretary of State of the State of
Delaware, certifying that the Company is in good standing;
(f) A certificate issued by the Secretary of State of each of
California, Florida, Illinois, Kansas, Michigan and Texas, certifying that the
Company is duly qualified as a foreign corporation and in good standing in such
state; and
(g) A waiver from each stockholder of the Company that is not
purchasing Preferred Shares hereunder with respect to such stockholder's
preemptive rights, if any, under the 1995 Stockholders' Agreement;
(h) Such other supporting documents and certificates as the Investors
may reasonably request.
3.15 SBIC DELIVERIES. The Company shall have delivered to Toronto Dominion
Capital (U.S.A.), Inc. ("Toronto Dominion"), EOS Partners SBIC, L.P. ("EOS") and
BancBoston Ventures Inc. ("BancBoston"):
(a) duly completed and executed SBA Forms 480, 652 and Part A of
1031;
19
(b) if not delivered prior to the Closing, a business plan showing
the Company's financial projections for a five-year period from the Closing;
(c) a written statement from the Company regarding its intended use
of the proceeds of the Financing; and
(d) a list, after giving effect to such Closing, of (a) the name of
each of the Company's directors, (b) the name and title of each of the Company's
officers, and (c) the name of each of the Company's stockholders setting forth
the number and class of shares held.
SECTION 4. COVENANTS OF THE COMPANY
The Company (which term shall be deemed to include, in addition to any
subsidiaries existing as of the date hereof, for purposes of this Section 4, any
subsidiary or subsidiaries of the Company formed or acquired after the date of
this Agreement) shall comply with the following covenants except as shall
otherwise be expressly agreed pursuant to the affirmative vote of or a written
consent or consents executed by a majority in interest of the holders of the
issued and outstanding shares of Preferred Stock, until such time as all of the
shares of Preferred Stock shall have either been redeemed or converted into
Common Stock in accordance with their terms:
4.1 FINANCIAL STATEMENTS; MINUTES. The Company will maintain a
comparative system of accounts in accordance with generally accepted accounting
principles consistently applied, keep full and complete financial records and,
until such time as the Company has consummated an underwritten public offering
pursuant to an effective registration statement under the Securities Act
covering the offering and sale of Common Stock of the Corporation to the public
(an "IPO"), furnish to the Investors the following reports: (a) within ninety
(90) days after the end of each fiscal year, a copy of the consolidated balance
sheet of the Company as at the end of such year, together with a consolidated
statement of income and retained earnings of the Company for such year, audited
and certified by independent public accountants of recognized national standing
reasonably satisfactory to the Investors, prepared in accordance with generally
accepted accounting principles consistently applied; (b) within thirty (30) days
after the end of each month commencing with the month ending November 30, 1996,
a consolidated unaudited balance sheet of the Company as at the end of such
month and an unaudited statement of income and retained earnings for the Company
for such month and for the year to date, each of the foregoing balance sheets
and statements of income and retained earnings to set forth in comparative form
the corresponding figures for the prior fiscal period and to include a brief
written discussion and analysis by management of such annual financial
statements; and (c) such other financial information as the holders of at least
a majority of the issued and outstanding shares of Preferred Stock may
reasonably request, including without limitation certificates of the principal
financial officer of the Company concerning compliance with the covenants of the
Company under this Section 4.
4.2 BUDGET AND OPERATING FORECAST. Until such time as the Company has
consummated an IPO, the Company will prepare and submit to the Board of
Directors of the Company a budget for the Company for each fiscal year of the
Company at least thirty (30) days
20
prior to the beginning of such fiscal year; PROVIDED, HOWEVER that the budget
for fiscal year 1997 shall be prepared and submitted to the Board of Directors
no later than ten (10) days prior to commencement of such fiscal year. The
budget shall be accepted as the budget for such fiscal year when it has been
approved by a majority of the full Board of Directors of the Company and,
thereupon, a copy of such budget promptly shall be sent to the Investors. The
Company shall review the budget periodically and may revise such budget in such
manner as approved by a majority of the full Board of Directors and shall
promptly advise the Investors of all such revisions or other changes therein and
all material deviations therefrom.
4.3 CONDUCT OF BUSINESS. The Company will continue to engage principally
in the business now conducted by the Company or a business or businesses similar
thereto or reasonably compatible therewith. The Company will keep in full force
and effect all FCC Licenses and intellectual property rights useful in its
business (except such rights as the Board of Directors has reasonably determined
are not material to the Company's continuing operations and except to the extent
that the pending litigation regarding the proprietary rights to and use of the
Teletrac name results in a loss of such intellectual property rights and shall
use its best efforts to obtain any approvals, authorizations or waivers from the
FCC which are necessary and appropriate for the full authorization of the sites
set forth on SCHEDULE 2.6).
4.4 PAYMENT OF TAXES, COMPLIANCE WITH LAWS, ETC. The Company will pay and
discharge all lawful taxes, assessments and governmental charges or levies
imposed upon it or upon its income or property before the same shall become in
default, as well as all lawful claims for labor, materials and supplies which,
if not paid when due, might become a lien or charge upon its property or any
part thereof; PROVIDED, HOWEVER, that the Company shall not be required to pay
and discharge any such tax, assessment, charge, levy or claim so long as the
validity thereof is being contested by the Company in good faith by appropriate
proceedings and an adequate reserve therefor has been established on its books.
The Company will comply with all applicable laws and regulations in the conduct
of its business, including, without limitation, the Communications Act, all
applicable regulations and policies of the FCC, including, without limitation,
compliance with all LMS spectrum band plans implemented by the FCC, and all
applicable federal and state securities laws in connection with the issuance of
any shares of its capital stock. The Company shall file all necessary
applications for renewal of, and preserve in full force and effect, the FCC
Licenses and shall obtain all necessary waivers and permits in connection
therewith.
4.5 INSURANCE. The Company will keep its insurable properties insured,
upon reasonable business terms, by financially sound and reputable insurers
against liability, and the perils of casualty, fire and extended coverage in
amounts of coverage at least equal to those customarily maintained by companies
in the same or similar business as the Company. The Company will also maintain
with such insurers insurance against other hazards and risks and liability to
persons and property to the extent and in the manner customary for companies
engaged in the same or similar business.
4.6 MAINTENANCE OF PROPERTIES. The Company will maintain all properties
used or useful in the conduct of its business in good repair, working order and
condition, ordinary wear
21
and tear excepted, as necessary to permit such business to be properly and
advantageously conducted.
4.7 AFFILIATED TRANSACTIONS. The Company shall not enter into any
transaction or agreement with (a) any officer, director or shareholder of the
Company or any wholly-or partially-owned subsidiary of the Company, or (b) any
entity that controls, is controlled by or under common control with, the
Company, except for any transaction or agreement on terms no less favorable to
the Company than would be available in a bona fide arm's-length transaction with
a non-affiliated person or entity and which has been approved by the
disinterested members of the Audit Committee of the Board of Directors of the
Company;
4.8 MANAGEMENT COMPENSATION. No compensation or other remuneration having
an aggregate value in excess of $150,000 shall be paid to, nor shall any capital
stock of the Company be issued to, or options to purchase any of its capital
stock granted to, any officer or employee of the Company or any of its
subsidiaries, without the approval of the Compensation Committee of the Board of
Directors (the composition of which Committee shall be as set forth in the
Stockholders' Agreement); PROVIDED, HOWEVER, that the Compensation Committee may
delegate standing authority to the Chief Executive Officer of the Company to
issue stock options and other compensation to consultants to the Company who are
not affiliates of either the Company or any of its stockholders on terms set
forth in such delegation. From and after the Closing Date, any grants of
capital stock or options hereunder shall be conditioned upon the grantee
agreeing to be bound by the terms of the Stockholders' Agreement.
4.9 USE OF PROCEEDS. The Company shall use the proceeds from the sale of
the Preferred Shares for product development, capital expenditures, general
working capital needs and to fulfill its down payment obligations to Tadiran
Ltd. and/or Tadiran Telematics Ltd. as set forth in Exhibit B to the VLU
Production Agreement dated September 6, 1996, by and between Tadiran Ltd. and/or
Tadiran Telematics Ltd. and the Company.
4.10 BOARD OF DIRECTORS MEETINGS; MEETINGS WITH INVESTORS.
(a) The Company will ensure that meetings of its Board of Directors
are held at least four (4) times each year and at intervals of not more than
three (3) months, and will reimburse Directors for their reasonable and
documented travel and other out-of-pocket expenses (to the extent consistent
with the Company's policies related thereto, which provide for reimbursement of
directors' travel expenses and which have been delivered to the Investors prior
to the date hereof) incurred in connection with attending meetings of the Board
of Directors or performing such other business on behalf of the Company as may
be approved by the Company in advance. The Charter or By-laws of the Company
will at all times during which any nominee of the Investors serves as director
of the Company provide for indemnification of the directors and limitations on
the liability of the directors to the fullest extent permitted under applicable
state law. The Company will use its best efforts to obtain and maintain on
reasonable business terms (including cost) directors and officers' liability
insurance coverage of at least $1,000,000 per occurrence.
22
(b) The Investors shall be entitled to consult with and advise the
Board of Directors on significant business issues with respect to the Company,
including management's proposed annual operating plans for the Company, and
management will meet with the Investors regularly during each year at the
Company's facilities at mutually agreeable times and intervals for such
consultation and advice and to review progress in achieving said plans. The
Investors may examine the books and records of the Company and inspect its
facilities and may request information at reasonable times and intervals
concerning the general status of the financial condition and operations of the
Company, provided that access to highly confidential proprietary information and
facilities need not be provided. If an Investor holding in excess of fourteen
percent (14%) of the outstanding Preferred Shares is not represented on the
Board of Directors, the Company shall invite a representative of such Investor
to attend all meetings of its Board of Directors relating to the Company in a
non-voting observer capacity, and in this respect shall give such representative
copies of all notices, minutes, consents, and other material that it provides to
all of its directors and which relate to the Company.
4.11 STOCKHOLDERS' AGREEMENT. The Company will diligently enforce all of
its rights under the Stockholders' Agreement. The Company will not effect any
transfer of any of the outstanding capital stock of the Company on the stock
record books of the Company unless such transfer is made in accordance with the
terms of the Stockholders' Agreement. The Company will not waive or release any
rights under, or consent to the amendment of, the Stockholders' Agreement
without the requisite written approval of the parties thereto.
4.12 DISTRIBUTIONS ON, AND REDEMPTIONS OF, CAPITAL STOCK. Except as
otherwise expressly provided in this Agreement or in the Charter, the Company
will not declare or pay any dividends or make any distributions of cash,
property or securities of the Company with respect to any shares of its Common
Stock or any other class of its capital stock, or directly or indirectly redeem,
purchase, or otherwise acquire for consideration any shares of its Common Stock
or any other class of its capital stock; PROVIDED, HOWEVER, that this
restriction shall not apply to the repurchase of shares of the Common Stock
pursuant to stock repurchase agreements under which the Company has the option
to repurchase such shares upon the occurrence of certain events, including the
termination of employment and involuntary transfers, by operation of law,
provided that the repurchase price paid by the Company does not exceed the
lesser of (i) the purchase price paid to the Company for such shares and (ii)
the fair market value of such shares at the time of such repurchase (as
determined by the Board of Directors in its sole discretion). Any redemption,
repurchase or other acquisition by the Company of any shares of its capital
stock shall be made in compliance with all laws, including, but not limited to,
federal and state securities laws.
4.13 MERGER, CONSOLIDATION, SALE OF ASSETS AND OTHER ACTIONS.
(a) The Company will not without the prior written consent of holders
of a majority of the outstanding shares of Preferred Stock:
(i) Issue any shares of its capital stock which are senior to or
on a parity with the Preferred Shares with respect to dividends,
conversion, liquidation or redemptions or with any special voting rights;
23
(ii) Create, incur, assume, become liable for, or permit to exist
any indebtedness for borrowed money, capital leases, or other similar
commitments or obligations, which, for any one such borrowing or series of
related borrowings, is in excess of $250,000 other than (A) the incurrence
of up to $25 million of senior debt on competitive terms approved by the
Board of Directors (no less favorable than the terms provided in the
Toronto Dominion Bank term sheet dated June 11, 1996), and (B) the
incurrence of up to $100 million of high yield debt on competitive market
terms approved by the Board of Directors on or before the first anniversary
of the Closing;
(iii)Grant or permit to exist any material liens, security
interests or encumbrances on any of the Company's assets or properties,
except as permitted by the terms of any senior debt or high yield debt
described in Section 4.13(a)(ii) above;
(iv) Enter into any agreement with any party which by its terms
restricts the payments due the holders of the Preferred Shares as set forth
in the Charter; or
(v) Authorize any merger or consolidation of the Company with or
into any other corporation, partnership or entity (with the result that
less than a majority of the outstanding voting power of the surviving
corporation is held by person's who were stockholders of the Company
immediately prior to such event) or permit the sale of all or any material
portion of the capital stock or assets of the Company (other than sales in
the ordinary course of business and consistent with past practices).
(b) The Company will not, without the vote or affirmative written
consent of holders of sixty-six and two-thirds percent (662/3%) of the
outstanding shares of Preferred Stock, authorize or permit the bankruptcy,
reorganization, liquidation, dissolution or winding up of the Company.
4.14 NO AMENDMENTS TO CERTIFICATE OF INCORPORATION. The Company will not
make any amendment to the Charter or make any amendment to the By-laws (a) so as
to adversely affect the rights of the holders of the Convertible Preferred Stock
with respect to dividends, liquidation preferences or redemption without the
prior written consent of holders of at least eighty percent (80%) of the
outstanding shares of Convertible Preferred Stock, or (b) that adversely affects
any other preferences, powers, rights or privileges of holders of the Preferred
Stock without the prior written consent of holders of at least sixty-six and
two-thirds percent (662/3%) in interest of the Preferred Shares.
4.15 CAPITAL EXPENDITURES. The Company will not, without the prior
approval of the Board of Directors of the Company, make any expenditures for
fixed or capital assets, or any commitments for such expenditures, exceeding an
amount of $1,000,000 for any one such expenditure or series of related
expenditures in any one year.
4.16 ANNUAL UPDATES; NUMBER OF STOCKHOLDERS; USE OF PROCEEDS; REGULATORY
VIOLATION; ECONOMIC IMPACT INFORMATION AMENDMENT.
24
(a) As long as an SBIC Investor holds any shares of Preferred Stock,
or Conversion Shares, the Company shall, on an annual basis, provide to such
SBIC Investor the information required under 13 CFR Section 107.620(b) and shall
provide the information and access required by 13 CFR Section 107.620(c).
(b) As long as an SBIC Investor holds any shares of Preferred Stock
or Conversion Shares, the Company shall notify such SBIC Investor:
(i) at least fifteen (15) days prior to taking any action after
which the number of record holders of the Company's voting stock would be
increased from fewer than 50 to 50 or more;
(ii) of any other action or occurrence after which the number of
record holders of the Company's voting stock was increased (or would increase)
from fewer than 50 to 50 or more, as soon as practicable after the Company
becomes aware that such other action or occurrence has occurred or is proposed
to occur. For purposes of this Agreement, an "SBIC Investor" shall mean
(i) Toronto Dominion, provided that Toronto Dominion has been licensed as an
SBIC, or an affiliate of Toronto Dominion that has been licensed as an SBIC and
holds Preferred Stock, Conversion Shares or Common Stock of the Company,
(ii) EOS, or an affiliate of EOS that has been licensed as an SBIC and holds
Preferred Stock, Conversion Shares or Common Stock of the Company and (iii)
BancBoston, or an affiliate of BancBoston that has been licensed as an SBIC and
holds Preferred Stock, Conversion Shares or Common Stock of the Company;
(c) USE OF PROCEEDS. Within seventy-five (75) days after the
Closing, and at the end of each month thereafter until all of the proceeds from
the sale of Preferred Shares hereunder have been used by the Company and its
subsidiaries, the Company shall deliver to all Investors a written statement
certified by the Company's president or chief financial officer describing in
reasonable detail the use of the proceeds of the purchase of Preferred Shares
hereunder by the Company and its subsidiaries. In addition to any other rights
granted hereunder, the Company shall grant all Investors and the SBA access to
the Company's records for the purpose of verifying the use of such proceeds.
(d) REGULATORY VIOLATION. Upon the occurrence of a Regulatory
Violation (as defined below) or in the event that any SBIC Investor determines
in its reasonable good faith judgment that a Regulatory Violation has occurred,
in addition to any other rights and remedies to which it may be entitled
(whether under this Agreement or any other agreement), such SBIC Investor shall
have the right, to the extent required under SBIC Regulations, to demand the
immediate repurchase of all of the outstanding Preferred Stock owned by such
SBIC Investor at a price equal to the purchase price paid for such Preferred
Stock hereunder plus accrued dividends by delivering written notice of such
demand to the Company; PROVIDED, HOWEVER, that, in the event of a Regulatory
Violation, any SBIC Investor shall, prior to demanding the repurchase of all of
the outstanding shares of Preferred Stock owned by such SBIC Investor, use
reasonable efforts to retain its investment in the Preferred Stock, including,
without limitation, petitioning the SBA for its approval with respect to any
unforeseen changes in the principal business activity of the Company. The
Company shall pay the purchase price for such shares of Preferred Stock by a
25
cashier's or certified check or by wire transfer of immediately available funds
to such SBIC Investor within thirty (30) days after the Company's receipt of the
demand notice, and, upon such payment, such SBIC Investor shall deliver the
certificates, if any, evidencing the Preferred Stock being repurchased duly
endorsed for transfer or accompanied by duly executed forms of assignment.
For purposes of this Agreement, "REGULATORY VIOLATION" means a change in
the principal business activity of the Company and its subsidiaries to an
ineligible business activity (within the meaning of the SBIC Regulations), if
such change occurs within one (1) year after the date of the initial purchase of
Preferred Shares hereunder.
(e) ECONOMIC IMPACT INFORMATION. Promptly after the end of each
fiscal year (but in any event prior to February 28 of each year), the Company
shall deliver to each Investor a written assessment of the economic impact of
the total investment by all SBIC Investors in the Company, specifying the
full-time equivalent jobs created or retained in connection with the investment,
the impact of the investment on the businesses of the Company in terms of
expanded revenue and taxes, and the other economic benefits resulting from the
investment, including but not limited to, technology development or
commercialization, minority business development, urban or rural business
development and expansion of exports.
(f) AMENDMENT. Notwithstanding anything herein to the contrary, the
provisions of this Section 4.16 shall not be amended without the prior written
consent of holders of a majority of the issued and outstanding Preferred Stock
(or Conversion Shares) of any SBIC Investors (determined on an as converted
basis).
4.17 NON-COMPETITION AGREEMENTS; CONFIDENTIALITY AND PROPRIETARY RIGHTS
AGREEMENTS. The Company shall diligently enforce all of its rights under its
Non-Competition Agreements and its Confidentiality and Proprietary Rights
Agreements. From and after the Closing Date, the Company will enter into a
Confidentiality and Proprietary Rights Agreement (in the form attached hereto as
EXHIBIT 3.11) with each employee of the Company who is exposed to technical and
proprietary information of the Company.
SECTION 5. INVESTOR REPRESENTATIONS
Each Investor hereby severally represents to the Company and each other
Investor with respect to such Investor's purchase of Securities hereunder that:
(a) The Investor is acquiring the Preferred Shares (and the
Conversion Shares issuable upon conversion thereof) for its own account, for
investment, and not with a present view to any "distribution" thereof within the
meaning of the Securities Act. The Investor was not formed or organized for the
purpose of acquiring the Preferred Shares (or the Conversion Shares issuable
upon conversion thereof).
(b) The Investor understands that because the Preferred Shares have
not been registered under the Securities Act, it cannot dispose of any or all of
the Preferred Shares or the Conversion Shares issuable upon conversion thereof
unless such securities are subsequently
26
registered under the Securities Act or exemptions from such registration are
available. The Investor understands that each certificate representing the
Preferred Shares and the Conversion Shares will bear the following legend or one
substantially similar thereto:
The securities represented by this certificate have not been
registered under the Securities Act of 1933 (the "Act").
These securities have been acquired for investment and not
with a view to distribution or resale, and may not be sold,
mortgaged, pledged, hypothecated or otherwise transferred
without an effective registration statement for such
securities under the Act or the availability of an exemption
from such registration requirements.
(c) The Investor is an "accredited investor" within the meaning of
Rule 501(a) under the Securities Act and is sufficiently knowledgeable and
experienced in the making of venture capital investments so as to be able to
evaluate the risks and merits of its investment in the Company, and is able to
bear the economic risk of loss of its investment in the Company.
(d) Such Investor has had adequate opportunity to discuss the
business, management, and financial affairs of the Company with the
representatives of the Company.
SECTION 6. INDEMNIFICATION
6.1 INDEMNIFICATION FOR VICARIOUS LIABILITY. The Company shall, to the
full extent permitted by law, and in addition to any such rights which any
Indemnified Party (as defined herein) may have pursuant to statute, the
Company's Charter or By-laws, or otherwise, indemnify and hold harmless each
Investor (including its respective directors, officers, partners, beneficiaries,
stockholders, employees, investment advisors and agents, each an "Indemnified
Investor") and each person (a "Controlling Person" and collectively with
Indemnified Investors, the "Indemnified Parties") who controls any of them
within the meaning of Section 15 of the Securities Act, or Section 20 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), from and
against any and all losses, claims, damages, expenses and liabilities, joint or
several, including any investigation, legal and other expenses incurred in
connection with the investigation, defense, settlement or appeal of, and any
amount paid in settlement of, any action, suit or proceeding or any claim
asserted ("Losses" or "Loss"), to which they, or any of them, may become subject
by reason of their status as a securityholder, creditor, director, agent,
representative or controlling person of the Company, (including, without
limitation, any and all Losses under the Securities Act, the Exchange Act or
other federal or state statutory law or regulation, at common law or otherwise,
which relates directly or indirectly to the registration, purchase, sale or
ownership of any securities of the Company or to any fiduciary obligation owed
with respect thereto).
6.2 NOTICE; DEFENSE OF CLAIMS. Promptly after receipt by an Indemnified
Party of notice of any third party or other claim, liability or expense to which
the indemnification obligations hereunder would apply, including in connection
with any governmental proceeding, the Indemnified Party shall give notice
thereof in writing to the Company, but the omission to so notify the Company
promptly will not relieve the Company from any liability except, and only to
27
the extent, that the Company shall have been materially prejudiced as a result
of the failure or delay in giving such notice. Such notice shall state the
information then available regarding the amount and nature of such claim,
liability or expense.
In the case of any third party claim, if within twenty (20) days after
receiving the notice described in the preceding paragraph the Company (i) gives
written notice to the Indemnified Party or Parties stating that it intends to
defend in good faith against such claim, liability or expense at its own cost
and expense and (ii) provides assurance and security reasonably acceptable to
such Indemnified Party or Parties that such indemnification will be paid fully
and promptly if required and such Indemnified Party or Parties will not incur
cost or expense during the proceeding, then counsel for the defense shall be
selected by the Company (subject to the consent of such Indemnified Party or
Parties, which consent shall not be unreasonably withheld) and such Indemnified
Party or Parties shall not be required to make any payment with respect to such
claim, liability or expense as long as the Company is conducting a good faith
and diligent defense at its own expense; provided, however, that the assumption
of defense of any such matters by the Company shall relate solely to the claim,
liability or expense that is subject or potentially subject to indemnification.
If the Company assumes such defense in accordance with the preceding sentence,
it shall have the right, with the consent of such Indemnified Party or Parties,
which consent shall not be unreasonably withheld, to settle all indemnifiable
matters related to claims by third parties which are susceptible to being
settled provided the Company's obligation to indemnify such Indemnified Party or
Parties therefor will be fully satisfied and the settlement includes a complete
release of such Indemnified Party or Parties. The Company shall keep the such
Indemnified Party or Parties apprised of the status of the claim, liability or
expense and any resulting suit, proceeding or enforcement action, shall furnish
such Indemnified Party or Parties with all documents and information that such
Indemnified Party or Parties shall reasonably request and shall consult with
such Indemnified Party or Parties prior to acting on major matters, including
settlement discussions. Notwithstanding anything herein stated, such
Indemnified Party or Parties shall at all times have the right to fully
participate in such defense at its own expense directly or through counsel;
provided, however, if the named parties to the action or proceeding include both
the Company and the Indemnified Party or Parties and representation of both
parties by the same counsel would be inappropriate under applicable standards of
professional conduct, the expense of separate counsel for such Indemnified Party
or Parties shall be paid by the Company. The Indemnified Party or Parties shall
make available all information and assistance that the Company may reasonably
request and shall cooperate with the Company in such defense.
If the Company does not give notice of its intent to defend against any
third party or other claim, liability or expense in accordance with the
foregoing paragraph, or if such diligent good faith defense is not being or
ceases to be conducted, the Indemnified Party will have the right to retain its
own counsel in any such action and all fees, disbursements and other charges
incurred in the investigation, defense and/or settlement of such action shall be
advanced and reimbursed by the Company promptly as they are incurred and shall
have the right to compromise or settle, such claim, liability or expense;
PROVIDED, HOWEVER, that the Indemnified Party shall agree to repay any expenses
so advanced hereunder if it is ultimately determined by a court of competent
jurisdiction that the Indemnified Party to whom such expenses are advanced is
not entitled to be indemnified as a matter of law or under the terms of this
Agreement.
28
6.3 SATISFACTION OF INDEMNIFICATION OBLIGATIONS. Any indemnity payable
pursuant to this Section 6 shall be paid within the later of (a) ten (10) days
after the Indemnified Party's request therefor or (b) ten (10) days prior to the
date on which the Loss upon which the indemnity is based is required to be
satisfied by the Indemnified Party. The provisions of this Article VI shall
inure to the individual benefit of, and may be specifically enforced by, any
Indemnified Party with or without joinder of any other Indemnified Party.
SECTION 7. GENERAL
7.1 AMENDMENTS, WAIVERS AND CONSENTS. For purposes of this Agreement and
all agreements, documents and instruments executed pursuant hereto, except as
otherwise specifically set forth herein or therein, no course of dealing between
the Company and any Investor and no delay on the part of any party hereto in
exercising any rights hereunder or thereunder shall operate as a waiver of the
rights hereof and thereof. No covenant or other provision hereof or thereof may
be amended or waived otherwise than by a written instrument signed by the party
so amending or waiving such covenant or other provision; PROVIDED, HOWEVER, that
except as otherwise provided herein or therein, changes in or additions to, and
any consents required by, this Agreement may be made, and compliance with any
term, covenant, condition or provision set forth herein may be omitted or waived
(either generally or in a particular instance and either retroactively or
prospectively), by a consent or consents in writing signed by Investors holding
a majority of the outstanding shares of Preferred Stock (including for such
purposes, on a proportional basis, any Conversion Shares into which any of the
Preferred Shares have been converted that have not been sold to the public) and
(in the case of any such change or addition) the Company; PROVIDED, HOWEVER,
that the amendment or waiver of any provision which by its terms or by the terms
of the Charter requires the consent or approval of more than holders of a
majority of the outstanding shares of Preferred Stock shall only be effective if
it is signed by holders of such requisite percentage. All references in this
Agreement to holders of a majority or a specific percentage of the outstanding
shares of Preferred Stock refer to holders of a majority or such specific
percentage of the outstanding shares of Preferred Stock, as the case may be, of
the outstanding Preferred Shares and Conversion Shares on an as converted basis.
Any amendment or waiver effected in accordance with this Section 7.1 shall be
binding upon each holder of Preferred Shares purchased under this Agreement at
the time outstanding (including securities into which such Preferred Shares have
been converted), each future holder of all such securities and the Company.
7.2 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS; ASSIGNABILITY
OF RIGHTS. All covenants, agreements, representations and warranties of the
Company made herein and in the certificates, lists, exhibits, schedules or other
written information delivered or furnished by or on behalf of the Company to any
Investor in connection herewith shall be deemed material and to have been relied
upon by such Investor, and, except as otherwise provided in this Agreement,
shall survive the delivery of the Securities regardless of any instruction and
shall not merge in the performance of any obligation and shall bind the
Company's successors, assigns and heirs, whether so expressed or not, and,
except as otherwise provided in this Agreement, all such covenants, agreements,
representations and warranties shall inure to the benefit of the Investors'
successors and assigns and to transferees of the Securities, whether so
expressed or not; PROVIDED, HOWEVER, that the representations and warranties
made by the Company in Section 2 (other than
29
those set forth in Sections 2.1, 2.2 and 2.4, which shall survive indefinitely,
and those set forth in Section 2.11, which shall survive until six (6) months
after the termination of the applicable statute of limitations relating thereto)
shall survive only for a period of twenty-four (24) months after the Closing.
The representations and warranties made by the Investors in Section 5 of this
Agreement shall survive for a period of twenty-four (24) months after the
Closing and shall bind the Investors' successors and assigns and shall inure to
the benefit of the Company's successors and assigns.
7.3 GOVERNING LAW; JURISDICTION. This Agreement shall be deemed to be a
contract made under, and shall be construed in accordance with, the laws of the
Commonwealth of Massachusetts (without giving effect to choice or conflicts of
law principles the effect of which would cause the application of domestic
substantive laws of any other jurisdiction). The Company hereby irrevocably
consents to the non-exclusive personal jurisdiction, service of process and
venue in the federal and state courts of the Commonwealth of Massachusetts for
any claim, suit or proceedings arising under this Agreement or the documents and
agreements executed in connection herewith and in the event any action is
brought against the Company in the Commonwealth of Massachusetts, all of the
Investors hereby agree not to object to such action on the basis of lack of
jurisdiction, improper service of process, forum non conveniens or the like.
7.4 SECTION HEADINGS; COUNTERPARTS. The descriptive headings in this
Agreement have been inserted for convenience only and shall not be deemed to
limit or otherwise affect the construction of any provision thereof or hereof.
This Agreement may be executed simultaneously in any number of counterparts,
each of which when so executed and delivered shall be taken to be an original
but shall together constitute but one and the same document.
7.5 NOTICES AND DEMANDS. Any notice or demand which, by any provision of
this Agreement or any agreement, document or instrument executed pursuant hereto
or thereto, except as otherwise provided therein, is required or provided to be
given shall be deemed to have been sufficiently given or served and received for
all purposes when delivered or five (5) days after being sent by certified or
registered mail, postage and charges prepaid, return receipt requested, or by
express delivery providing receipt of delivery, to the following addresses: if
to the Company, at its address as shown on the signature page hereof, or at any
other address designated by the Company to each of the Investors in writing; if
to an Investor, at its mailing address as shown on the signature pages hereto,
or at any other address designated by such Investor to the Company and the other
Investors in writing; and if to an assignee of an Investor, at its address as
designated to the Company and the other Investors in writing.
7.6 SEVERABILITY. Whenever possible, each provision of this Agreement
shall be interpreted in such a manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be deemed
prohibited or invalid under such applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, and such
prohibition or invalidity shall not invalidate the remainder of such provision
or the other provisions of this Agreement.
7.7 EXPENSES. The Company shall pay all costs and expenses incurred by
Burr, Egan, Deleage & Co. and its affiliates ("BEDCO") and/or BancBoston in
connection with the negotiation and execution of the Letter of Intent dated
October 18, 1996 by and among the
30
Company, BEDCO and BancBoston. The Company shall pay all costs and expenses
that it incurs and all fees and expenses of (i) Xxxxxxx, Procter & Xxxx LLP
representing the Investors with respect to the negotiation, execution, delivery
and performance of this Agreement and the agreements, documents and instruments
contemplated hereby or executed pursuant hereto, (ii) Ropes & Xxxx as special
SBIC counsel to BancBoston and (iii) GCC Investments, Inc. with respect to the
negotiation, execution, delivery and performance of this Agreement.
7.8 INTEGRATION; WAIVER OF PRIOR AGREEMENTS. This Agreement, including
the exhibits, documents and instruments referred to herein, constitutes the
entire agreement, and supersedes all other prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof. Each Investor which is also an Institutional Investor (as defined in
the 1995 Stockholders' Agreement) hereby waives any preemptive or other rights
it may have with respect to the issuance of the Preferred Shares and consents to
and acknowledges the conversion of any Convertible Notes held by it into Common
Stock on the terms contemplated by this Agreement.
7.9 CERTAIN PROVISIONS APPLICABLE TO SBIC AND BANK STOCKHOLDERS.
Sections 2.28, 3.15 and 4.16 hereof contain certain provisions that are included
herein solely for the benefit of certain stockholders that are or may become a
small business investment company ("SBIC") subject to the SBA or a bank holding
company or bank holding company subsidiary subject to the Bank Holding Company
Act. A stockholder of the Company may not assert any rights or claims with
respect to such provisions arising at any time after it has ceased to be an SBIC
or a bank holding company or bank holding company subsidiary, as appropriate.
[Remainder of Page Intentionally Left Blank]
31
IN WITNESS WHEREOF, the undersigned have executed this Stock Purchase
Agreement as a sealed instrument as of the day and year first written above.
ADDRESS: COMPANY:
0000 Xxxxx Xxxx Xxxx TELETRAC, INC., a Delaware corporation
Xxxxx 000
Xxxxxxx, XX 00000
Attn: President By:________________________________
Name:
Title:
INVESTORS:
Toronto Dominion Capital TORONTO DOMINION CAPITAL
00 Xxxx 00xx Xxxxxx, 00xx Xxxxx (U.S.A.), INC.
Xxx Xxxx, XX 00000
Attn: Xxxxx X. Xxxx By:________________________________
Name:
Title:
Kingdon Capital Management
Corporation KINGDON ASSOCIATES, L.P.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000 By: Kingdon Capital Management Corp.,
Attn: Xxxxxxx Xxxxxxxxxxx its general partner
By:________________________________
Name: Xxxx Xxxxxxx
Title: President
32
00 Xxxx 00xx Xxxxxx XXXXXXX PARTNERS, L.P.
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxxxxx By: Kingdon Capital Management Corp.,
its general partner
By:____________________________
Name: Xxxx Xxxxxxx
Title: President
00 Xxxx 00xx Xxxxxx X. XXXXXXX OFFSHORE NV
Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxxxxx By: Kingdon Capital Management Corp.,
its investment advisor
By:____________________________
Name: Xxxx Xxxxxxx
Title: President
Burr, Egan, Deleage & Co. ALTA SUBORDINATED DEBT
One Embarcadero Center PARTNERS III, L.P.
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000 By: Alta Subordinated Debt Management
Attn: Xxxxxx X. Xxxxxx III, L.P.
By:_________________________
General Partner
Burr, Egan, Deleage & Co. ALTA V LIMITED PARTNERSHIP
One Embarcadero Center
Suite 4050 By: Alta V Management Partners, L.P.
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
By:_________________________
General Partner
33
Burr, Egan, Deleage & Co. CUSTOMS HOUSE PARTNERS
Xxx Xxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx By:_____________________________
General Partner
Burr, Egan, Deleage & Co. ALTA COMMUNICATIONS VI, L.P.
One Embarcadero Center
Suite 4050 By: Alta Communications VI Management
Xxx Xxxxxxxxx, XX 00000 Partners, L.P.
Attn: Xxxxxx X. Xxxxxx
By:_____________________________
General Partner
Burr, Egan, Deleage & Co. ALTA COMM S by S, LLC
Xxx Xxxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000 By:_____________________________
Attn: Xxxxxx X. Xxxxxx Member
000 Xxxxxxx Xxxxxx EOS PARTNERS SBIC, L.P.
00xx Xxxxx
Xxx Xxxx, XX 00000 By: EOS SBIC General, L.P.
Attn: Xxxx X. Xxxxxx
By:_________________________
Name: Xxxx Xxxxxx
Title: General Partner
3 Bala Plaza East ASSOCIATED RT, INC.
Xxxxx 000
Xxxx Xxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx By:_________________________________
Name: Xxxxx X. Xxxxxxx
Title: Executive Vice President
000 Xxxxxxx Xxxxxx XXXXXXXXXX VENTURES INC.
Xxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
By:_____________________________
Name:
Title:
34
000 Xxxxxxxxx Xxxxxxxxx XXXXXXXXX VENTURES
Xxxxx 000
Xxxxxxx, XX 00000-0000
Attn: Xxxxx X. Xxxxxx
By:______________________________
Name:
Title:
0000 Xxxxxxxx Xxxxxx XXXXXXXX XXXX WIRELESS, INC.
Xxxxxxxx Xxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
By:________________________________
Name:
Title:
000 Xxxx Xxxxxx WESTBURY CAPITAL PARTNERS, L.P.
Xxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxx By: Westbury MGP, L.P., its
general partner
By: X.X. Xxxx Co.
By:______________________________
Name:
Title:
00
Xxx Xxxx Xxxx XXXXXX XXXXXXX XXXXXXXX
Xxxxxx, XX 00000-0000
Attn: Xxxxxx Xxxxxxxxxx
By:_________________________________
Name:
Title:
000 X.X. Xxxxx Xxxxxx XXXX XXXXX XXXXXX LIMITED
Suite 1220 PARTNERSHIP
Xxxxxxxx, Xxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx XX By: High Point Management, Inc.,
its general partner
By:______________________________
Name:
Title:
000 X.X. Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxx 00000
Attn: X. X. Xxxxxx
By:_________________________________
X.X. Xxxxxx
000 X.X. Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxx 00000
Attn: Xxxxxxx X. Xxxxxx XX
By:_________________________________
Xxxxxxx X. Xxxxxx XX
36
APPENDIX A
LIST OF INVESTORS
COLUMN 1 COLUMN 2
NUMBER OF AGGREGATE
PREFERRED PURCHASE PRICE FOR
NAME SHARES PREFERRED SHARES
Alta Subordinated Debt Partners
III, L.P. 8,554.11 $1,482,000.08
Alta V Limited Partnership 14,381.53 2,491,600.95
Customs House Partners 152.38 26,399.84
Alta Communications VI, L.P. 22,574.16 3,910,974.59
Alta Comm S by S, LLC 513.85 89,024.54
Kingdon Associates, L.P. 5,898.99 $1,022,000.00
Kingdon Partners L.P. 935.06 $162,000.00
X. Xxxxxxx Offshore NV 22,025.97 $3,816,000.00
Toronto Dominion & Affiliates 5,772.01 1,000,000.00
Associated RT, Inc. 5,772.01 1,000,000.00
EOS Partners SBIC, L.P. 5,772.01 1,000,000.00
BancBoston Ventures Inc. 34,632.03 6,000,000.00
Northwood Ventures 5,772.01 1,000,000.00
Chestnut Hill Wireless, Inc. 40,404.04 7,000,000.00
Westbury Capital Partners, L.P. 5,772.01 1,000,000.00
Boston Capital Ventures III,
Limited Partnership 5,772.01 1,000,000.00
High Point Xxxxxx Limited Partnership 5,194.81 $900,000.00
37
X.X. Xxxxxx 288.60 $50,000.00
Xxxxxxx X. Xxxxxx XX 288.60 $50,000.00
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Total 190,476.19 $33,000,000.00
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38
