Exhibit___
COMMON STOCK PURCHASE AGREEMENT
BY AND AMONG
NETSAT EXPRESS, INC.,
GLOBECOMM SYSTEMS INC.
AND
REUTERS HOLDINGS SWITZERLAND SA
OCTOBER 28, 1999
TABLE OF CONTENTS
Page
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1. Purchase and Sale of Stock............................................1
1.1. Sale of Common Stock.........................................1
1.2. Closing......................................................1
2. Representations and Warranties of the Company.........................1
2.1. Organization, Good Standing and Qualification................1
2.2. Capitalization and Voting Rights.............................2
2.3. Subsidiaries.................................................2
2.4. Authorization................................................2
2.5. Valid Issuance of Common Stock...............................3
2.6. Governmental Consents........................................3
2.7. Offering.....................................................3
2.8. Litigation...................................................3
2.9. Compliance with Other Instruments............................4
2.10. Agreements; Action...........................................4
2.11. Related-Party Transactions...................................5
2.12. Financial Statements.........................................5
2.13. Changes......................................................6
2.14. Tax Returns..................................................6
2.15. Permits......................................................7
2.16. Environmental and Safety Laws................................7
2.17. Disclosure...................................................8
2.18. Business Plan................................................8
2.19. Registration Rights..........................................8
2.20. Corporate Documents; Minute Books............................8
2.21. Title to Property and Assets.................................8
2.22. Insurance....................................................9
2.23. Employee Benefit Plans.......................................9
2.24. Labor Agreements and Actions.................................9
2.25. Status of Intellectual Property..............................9
3. Representations and Warranties of GSI................................10
3.1. GSI's Title to Common Stock.................................10
3.2. Authorization...............................................10
3.3. Offering....................................................11
4. Representations and Warranties of Investor...........................11
4.1. Authorization...............................................11
4.2. Purchase Entirely for Own Account...........................11
4.3. Disclosure of Information...................................11
4.4. Investment Experience.......................................12
4.5. Accredited Investor.........................................12
4.6. Restricted Securities.......................................12
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4.7. Further Limitations on Disposition..........................12
4.8. Legends.....................................................13
4.9. Tax Advisors................................................13
4.10. Investor Counsel............................................13
5. Conditions of Investor's Obligations at Closing......................13
5.1. Representations and Warranties of the Company...............13
5.2. Representations and Warranties of GSI.......................13
5.3. Performance.................................................14
5.4. Compliance Certificate from the Company.....................14
5.5. Compliance Certificate from GSI.............................14
5.6. Qualifications..............................................14
5.7. Proceedings and Documents...................................14
5.8. Opinion of Company Counsel..................................14
5.9. Amended and Restated Investors'Rights Agreement.............14
5.10. Amended and Restated Stockholders Agreement.................15
6. Conditions of the Sellers' Obligations at Closing....................15
6.1. Representations and Warranties..............................15
6.2. Payment of Purchase Price...................................15
6.3. Qualifications..............................................15
6.4. Amended and Restated Investors' Rights Agreement............15
6.5. Amended and Restated Stockholders Agreement.................15
7. Miscellaneous........................................................15
7.1. Survival....................................................15
7.2. Successors and Assigns......................................16
7.3. Governing Law...............................................16
7.4. Titles and Subtitles........................................16
7.5. Notices.....................................................16
7.6. Finder's Fee................................................16
7.7. Expenses....................................................17
7.8. Amendments and Waivers......................................17
7.9. Severability................................................17
7.10. Entire Agreement............................................17
7.11. Counterparts................................................17
SCHEDULE A Schedule of Exceptions
EXHIBIT A List of Stockholders
EXHIBIT B Amended and Restated Investors' Rights Agreement
EXHIBIT C Opinion of Counsel for the Sellers
EXHIBIT D Amended and Restated Stockholders Agreement
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COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT (this "Agreement") is
made on the 28th day of October, 1999, by and among NetSat Express, Inc., a
Delaware corporation (the "Company"), Globecomm Systems Inc., a Delaware
corporation ("GSI") and Reuters Holdings Switzerland SA, a Swiss corporation
(the "Investor"). The Company and GSI are collectively referred to herein as the
"Sellers."
WHEREAS, the Investor desires to acquire from the Sellers, and
the Sellers desire to sell to the Investor, 1,000,000 shares of common stock,
par value $.001, of the Company (the "Common Stock"), on the terms and subject
to the conditions as set forth herein.
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock.
1.1. Sale of Common Stock.
Subject to the terms and conditions of this Agreement,
Investor agrees to purchase at the Closing and the Company agrees to sell and
issue to Investor at the Closing 300,000 shares of the Company's Common Stock
for a purchase price of $1,500,000, and GSI agrees to sell to Investor at the
Closing 700,000 shares of the Common Stock owned by GSI for a purchase price of
$3,500,000.
1.2. Closing. The purchase and sale of the Common Stock shall
take place at the offices of Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, 0000 Xxxxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 at 11:00 a.m., on October 28, 1999 or at such other time
and place as the Sellers and Investor mutually agree upon orally or in writing
(which time and place are designated as the "Closing"). At the Closing the
Sellers shall deliver to Investor certificates representing the Common Stock
that Investor is purchasing against payment of the purchase price therefor by
wire transfer.
2. Representations and Warranties of the Company. The
Company hereby represents and warrants to Investor that, except as set forth on
a Schedule of Exceptions (the "Schedule of Exceptions") furnished Investor and
counsel for Investor prior to execution hereof and attached hereto as Schedule
A, which exceptions shall be deemed to be representations and warranties as if
made hereunder:
2.1. Organization, Good Standing and Qualification
The Company is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to own its properties and assets and
to carry on it business as now conducted and as presently proposed to be
conducted. The Company is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure to so qualify would have a
material adverse effect on its business or properties.
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2.2. Capitalization and Voting Rights. The authorized capital
of the Company consists of:
(a) Preferred Stock. 4,000,000 shares of Preferred Stock,
par value $.001 (the "Preferred Stock"), of which 1,000,000 shares have been
designated Series A Participating Preferred Stock (the "Series A Preferred
Stock"). The rights, privileges and preferences of the Series A Preferred Stock
are stated in the Amended and Restated Certificate of Incorporation (the
"Restated Certificate"), filed with the Secretary of State of the State of
Delaware on August 10, 1999.
(b) Common Stock. 26,000,000 shares of Common Stock, of
which 7,000,000 shares are issued and outstanding.
(c) The outstanding shares of Common Stock and Series A
Preferred Stock are owned by the stockholders and in the numbers specified in
Exhibit A hereto.
(d) The outstanding shares of Common Stock are all duly and
validly authorized and issued, fully paid and non-assessable, and were issued in
compliance with all applicable state and federal laws concerning the issuance of
securities.
(e) Except for (i) the conversion privileges of the Series A
Preferred Stock, (ii) dividends payable on the Series A Preferred Stock pursuant
to the Restated Certificate, (iii) a warrant, issued to X.X. Xxxxxxxxx, Towbin,
to purchase 100,000 shares of Common Stock, at an exercise price of $6.00 per
share, exercisable for a period of five years from the date granted, and (iv)
currently outstanding options to purchase 1,522,406 shares of Common Stock
granted to employees or consultants pursuant to the Company's 1999 Stock
Incentive Plan (the "Option Plan"), there are not outstanding any options,
warrants, rights (including conversion or preemptive rights) or agreements for
the purchase or acquisition from the Company of any shares of its capital stock.
In addition to the aforementioned options, the Company has reserved an
additional 457,594 shares of its Common Stock for purchase upon exercise of
options to be granted in the future under the Option Plan. Except as set forth
in the Amended and Restated Investors' Rights Agreement (as defined below) and
the Amended and Restated Stockholders Agreement (as defined below), the Company
is not a party or subject to any agreement or understanding, and, to the
Company's knowledge, there is no agreement or understanding between any persons
and/or entities, which affects or relates to the voting or giving of written
consents with respect to any security or by a director of the Company.
2.3. Subsidiaries. The Company does not presently own or
control, directly or indirectly, any interest in any other corporation,
association, or other business entity. The Company is not a participant in any
joint venture, partnership, or similar arrangement.
2.4. Authorization. All corporate action on the part of the
Company, its officers, directors and stockholders necessary for the
authorization, execution and delivery of this Agreement, the Amended and
Restated Investors' Rights Agreement dated the date hereof, by and among the
Company and the signatories thereto, the form of which is attached hereto as
Exhibit B (the "Amended and Restated Investors' Rights Agreement"), and the
Amended and Restated Stockholders Agreement dated the date hereof, by and among
the Company and the
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signatories thereto, the form of which is attached hereto as Exhibit D (the
"Amended and Restated Stockholders Agreement"), the performance of all
obligations of the Company hereunder and thereunder, and the authorization (or
reservation for issuance), sale and issuance of the Common Stock being sold
hereunder by the Company, has been taken or will be taken prior to or
simultaneously with the Closing. This Agreement and the Amended and Restated
Investors' Rights Agreement constitute valid and legally binding obligations of
the Company, enforceable in accordance with their respective terms, except (i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other laws of general application affecting enforcement of creditors' rights
generally, (ii) as limited by laws relating to the availability of specific
performance, injunctive relief or other equitable remedies, and (iii) to the
extent the indemnification provisions contained in the Amended and Restated
Investors' Rights Agreement may be limited by applicable federal or state
securities laws.
2.5. Valid Issuance of Common Stock.. The Common Stock that
is being purchased by Investor from the Company hereunder, when issued, sold and
delivered in accordance with the terms of this Agreement for the consideration
expressed herein, will be duly and validly issued, fully paid and non-assessable
and will be free of restrictions on transfer, other than restrictions on
transfer under this Agreement and the Amended and Restated Investors' Rights
Agreement and under applicable state and federal securities laws.
2.6. Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement, except for filings required pursuant to
applicable federal and state securities laws and blue sky laws, which filings
will be effected within the required statutory period.
2.7. Offering. Subject in part to the truth and accuracy of
Investor's representations set forth in Section 4 of this Agreement, the offer,
sale and issuance of the Common Stock by the Company, as contemplated by this
Agreement, are exempt from the registration requirements of the Securities Act
of 1933, as amended (the "Act"), and the qualification or registration
requirements of the applicable blue sky laws. Neither the Company nor any
authorized agent acting on its behalf will take any action hereafter that would
cause the loss of such exemptions.
2.8. Litigation. There is no action, suit, proceeding or
investigation pending, or to the Company's knowledge, currently threatened
against the Company that questions the validity of this Agreement or the right
of the Company to enter into such agreement or to consummate the transactions
contemplated hereby or that might result, either individually or in the
aggregate, in any material adverse changes in the business, assets or condition
of the Company, financially or otherwise, or any change in the current equity
ownership of the Company. There is no material action, suit, proceeding, claim,
arbitration or investigation ("Action") pending (or, to the Company's knowledge,
currently threatened) against the Company, its activities, properties or assets
or, to the Company's knowledge, against any officer, director or employee of the
Company in connection with such officer's, director's or employee's relationship
with, or actions taken on behalf of, the Company. The Company is not a party or
subject to the provisions of any order, writ, injunction, judgment or decree of
any court or
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government agency or instrumentality. There is no action, suit, proceeding or
investigation by the Company currently pending or that the Company intends to
initiate.
2.9. Compliance with Other Instruments. The Company is not in
violation of any provision of its Restated Certificate or Bylaws nor, to its
knowledge, of any instrument, judgment, order, writ, decree or contract,
statute, rule or regulation ("Instruments") to which the Company is subject,
except for any violation of an Instrument that individually or in the aggregate
would not have a material adverse effect on the condition, financial or
otherwise, or operations of the Company. The execution, delivery and performance
of this Agreement and the consummation of the transactions contemplated hereby
will not result in any violation, or be in conflict with or constitute, with or
without the passage of time and giving of notice, either a default under the
Restated Certificate, Bylaws or any Instrument or an event that results in the
creation of any lien, charge or encumbrance upon any assets of the Company or
the suspension, revocation, impairment, forfeiture or non-renewal of any
material permit, license, authorization or approval applicable to the Company,
its business or operations or any of its assets or properties.
2.10. Agreements; Action. (a) Except for agreements explicitly
contemplated hereby and except as set forth on the Schedule of Exceptions, there
are no agreements, understandings or proposed transactions between the Company
and any of its officers, directors, affiliates or any affiliate thereof.
(b) Except as set forth on the Schedule of Exceptions, there
are no agreements, understandings, instruments, contracts, proposed
transactions, judgments, orders, writs or decrees to which the Company is a
party or by which it is bound that may involve (i) obligations (contingent or
otherwise) of, or payments to the Company, in excess of $50,000, other than
obligations of, or payments to, the Company arising from purchase or sale
agreements entered into in the ordinary course of business, (ii) the license of
any patent, copyright, trade secret or other proprietary right to or from the
Company, other than licenses arising from the purchase of "off the shelf" or
other standard products, (iii) provisions restricting or affecting the
development, manufacture or distribution of the Company's products or services,
or (iv) indemnification by the Company with respect to infringements of
proprietary rights, other than indemnification obligations arising from purchase
or sale agreements entered into in the ordinary course of business.
(c) Except as set forth on the Schedule of Exceptions, the
Company has not (i) declared or paid any dividends or authorized or made any
distribution upon or with respect to any class or series of its capital stock,
(ii) incurred any indebtedness for money borrowed or any other liabilities
individually in excess of $100,000 or, in the case of indebtedness and/or
liabilities individually less than $100,000, in excess of $200,000 in the
aggregate, (iii) made any loans or advances to any person, other than ordinary
advances for travel expenses, or (iv) sold, exchanged or otherwise disposed of
any of its assets or rights, other than for the purpose of the sale of its
services in the ordinary course of business.
(d) For the purposes of subsections (b) and (c) above, all
indebtedness, liabilities, agreements, understandings, instruments, contracts
and proposed transactions involving the same person or entity (including persons
or entities the Company has reason to
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believe are affiliated therewith) shall be aggregated for the purpose of meeting
the individual minimum dollar amounts of such subsections.
2.11. Related-Party Transactions. No employee, officer or
director of the Company or member of his or her immediate family is indebted to
the Company, nor is the Company indebted (or committed to make loans or extend
or guarantee credit) to any of them. Except as set forth on the Schedule of
Exceptions, to the best of the Company's knowledge, none of such persons has any
direct or indirect ownership interest in any firm or corporation with which the
Company is affiliated or with which the Company has a business relationship, or
any firm or corporation that competes with the Company, except that employees,
officers or directors of the Company and members of their immediate families may
own up to 5% of the stock in publicly traded companies that may compete with the
Company. No member of the immediate family of any officer or director of the
Company is directly or indirectly interested in any material contract with the
Company.
2.12. Financial Statements. The Company has delivered to
Investor its audited financial statements (balance sheet and statement of
operations, statement of stockholders' equity and statement of cash flows,
including notes thereto) at June 30, 1999 and 1998, and for the fiscal years
then ended (the "Financial Statements"). The Financial Statements have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis throughout the periods indicated and with each other. The
Financial Statements fairly present the financial condition and operating
results of the Company as of the dates, and for the periods, indicated therein.
Except as set forth in the Financial Statements or on the Schedule of
Exceptions, the Company has no material liabilities, contingent or otherwise,
other than (i) liabilities incurred in the ordinary course of business
subsequent to June 30, 1999 and (ii) obligations under contracts and commitments
incurred in the ordinary course of business and not required under generally
accepted accounting principles to be reflected in the Financial Statements,
which, in both cases, individually or in the aggregate, are not material to the
financial condition or operating results of the Company. Except as disclosed in
the Financial Statements, the Company is not a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation. The Company maintains and
will continue to maintain a standard system of accounting established and
administered in accordance with generally accepted accounting principles.
2.13. Changes. Since June 30, 1999 there has not been:
(a) except as set forth on the Schedule of Exceptions, any
change in the assets, liabilities, financial condition or operating results of
the Company from that reflected in the Financial Statements, except changes in
the ordinary course of business that have not been, in the aggregate, materially
adverse;
(b) any damage, destruction or loss, whether or not covered
by insurance, materially and adversely affecting the assets, properties,
financial condition, operating results or business of the Company;
(c) any waiver by the Company of a valuable right or of a
material debt owed to it;
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(d) except as set forth on the Schedule of Exceptions, any
satisfaction or discharge of any lien, claim or encumbrance or payment of any
obligation by the Company, except in the ordinary course of business and that is
not material to the assets, properties, financial condition, operating results
or business of the Company;
(e) any material change or amendment to a material contract
or arrangement by which the Company or any of its assets or properties is bound
or subject, except as set forth on the Schedule of Exceptions;
(f) any material change in any compensation arrangement or
agreement with any employee; or
(g) any agreement or commitment by the Company to do any of
the things described in this Section 2.13.
2.14. Tax Returns. (a) The Company has filed or caused to be
filed, or has properly filed extensions for, all tax returns, reports, forms and
other such documents ("Tax Returns") that are required to be filed and has paid
or caused to be paid all Taxes as shown on said returns and on all material
assessments received by it to the extent that such Taxes have become due, except
Taxes the validity or amount of which is being contested in good faith by
appropriate proceedings and with respect to which adequate reserves, in
accordance with generally accepted accounting principles in effect from time to
time ("GAAP"), have been set aside. Such Tax Returns are true and correct in all
material respects. The Company has paid or caused to be paid, or has established
reserves in accordance with GAAP for all Tax liabilities applicable to the
Company for all fiscal years that have not been examined and reported on by the
taxing authorities (or closed by applicable statutes). Except as disclosed in
the Schedule of Exceptions, no additional Tax assessment against the Company has
been heretofore proposed by any Governmental Authority and remains outstanding
for which provision has not been made on its balance sheet. Except as set forth
on the Schedule of Exceptions, no waivers of the statute of limitation or
extension of time within which to assess any Tax have been affirmatively granted
by the Company. The Schedule of Exceptions sets forth the tax year through which
United States federal income tax returns of the Company have been examined and
closed.
(b) Except as set forth on the Schedule of Exceptions,
with respect to all Tax Returns of the Company, (i) no audit is in progress and
no extension of time is in force with respect to any date on which any Tax
Return was or is to be filed and no waiver or agreement is in force for the
extension of time for the assessment or payment of any Tax; and (ii) to our
knowledge, there is no unassessed deficiency proposed or threatened against the
Company.
(c) Except as set forth on the Schedule of Exceptions,
the Company has not agreed to make any adjustments under section 481 of the Code
that would survive the Closing by reason of a change of accounting method or
otherwise prior to Closing.
(d) None of the respective assets of the Company is
required to be treated as being owned by any Person, other than the Company,
pursuant to the "safe harbor" leasing provisions of Section 168(f)(8) of the
Code.
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As used in this Agreement, "Tax" or "Taxes" means any federal,
state, county, local, foreign and other taxes (including, without limitation,
income, profits, premium, estimated, excise, sales, use, occupancy, gross
receipts, franchise, ad valorem, severance, capital levy, production, transfer,
withholding, employment, unemployment compensation, payroll and property taxes,
import duties and other governmental charges and assessments), whether or not
measured in whole or in part by net income, and including deficiencies,
interest, additions to tax or interest, and penalties with respect thereto, and
including expenses associated with contesting any proposed adjustments related
to any of the foregoing.
As used in this Agreement, "Governmental Authority" means the
government of any nation, state or other political subdivision thereof, any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, and any corporation or other entity
owned or controlled, through stock or capital ownership or otherwise, by any of
the foregoing.
2.15. Permits. The Company has all franchises, permits,
licenses and any similar authority necessary for the conduct of its business,
the lack of which could materially and adversely affect the business, properties
or financial condition of the Company. The Company is not in default in any
material respect under any of such franchises, permits, licenses or other
similar authority.
2.16. Environmental and Safety Laws. The Company is not in
violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety, and to its knowledge, no material
expenditures are or will be required in order to comply with any such existing
statute, law or regulation.
2.17. Disclosure. The Company has fully provided Investor with
all the information that Investor has requested for deciding whether to purchase
the Common Stock. Neither this Agreement (including all the exhibits and
schedules hereto) nor any other statements or certificates made or delivered in
connection herewith contains any untrue statement of a material fact or omits to
state a material fact necessary to make the statements herein or therein not
misleading in light of the circumstances under which they were made.
2.18. Business Plan. The Business Plan dated July 1999,
previously delivered to Investor has been prepared in good faith by the Company
and does not contain any untrue statement of a material fact nor does it omit to
state a material fact necessary to make the statements made therein not
misleading, except that with respect to projections contained in the Business
Plan, the Company represents only that such projections were prepared in good
faith and that the Company reasonably believes there is a reasonable basis for
such projections. There has been no material adverse change in the assets,
business, properties or financial or other condition of the Company since July
1, 1999 that would cause the Business Plan to no longer be valid.
2.19. Registration Rights. Except as provided in the Amended
and Restated Investors' Rights Agreement, the Company has not granted or agreed
to grant any registration rights, including piggyback rights, to any person or
entity.
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2.20. Corporate Documents; Minute Books. Except for amendments
necessary to satisfy representations and warranties or conditions contained
herein (the forms of which amendments have been approved by Investor), the
Restated Certificate and Bylaws of the Company are in the form previously
provided to counsel for Investor. The minute books of the Company provided to
Investor contain a complete summary of all meetings of directors and
stockholders since the time of incorporation and reflect all transactions
referred to in such minutes accurately in all material respects.
2.21. Title to Property and Assets. The property and assets
the Company owns are owned by the Company free and clear of all mortgages,
liens, loans and encumbrances, except (i) as reflected in the Financial
Statements, (ii) for statutory liens for the payment of current taxes that are
not yet delinquent, and (iii) for liens, encumbrances and security interests
that arise in the ordinary course of business and minor defects in title, none
of which, individually or in the aggregate, materially impair the Company's
ownership or use of such property or assets. With respect to the property and
assets it leases, the Company is in material compliance with such leases and, to
the its knowledge, holds a valid leasehold interest free of any liens, claims or
encumbrances, subject to clauses (i)-(iii).
2.22. Insurance. The Company has fire and casualty insurance
policies with such coverages in amounts (subject to reasonable deductibles)
customary for companies similarly situated.
2.23. Employee Benefit Plans. Except as set forth on the
Schedule of Exceptions, the Company does not have any Employee Benefit Plan as
defined in the Employee Retirement Income Security Act of 1974.
2.24. Labor Agreements and Actions. The Company is not bound
by or subject to (and none of its assets or properties is bound by or subject
to) any written or oral, express or implied, contract, commitment or arrangement
with any labor union, and no labor union has requested or, to the Company's
knowledge, has sought to represent any of the employees, representatives or
agents of the Company. There is no strike or other labor dispute involving the
Company pending, or to the Company's knowledge, threatened, that could have a
material adverse effect on the assets, properties, financial condition,
operating results or business of the Company, nor is the Company aware of any
labor organization activity involving its employees. The Company is not aware
that any officer or key employee, or that any group of key employees, intends to
terminate their employment with the Company, nor does the Company have a present
intention to terminate the employment of any of the foregoing. The employment of
each officer and employee of the Company is terminable at the will of the
Company. The Company is not a party to or bound by any currently effective
employment contract, deferred compensation agreement, bonus plan, incentive
plan, profit sharing plan, retirement agreement or other employee compensation
agreement. To its knowledge, the Company has complied in all material respects
with all applicable state and federal equal employment opportunity and other
laws related to employment.
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2.25. Status of Intellectual Property.
(a) To the Company's knowledge, the Company owns or has
sufficient licenses to use all of the material patents, patent applications,
registered trademarks, trademark applications, copyright registrations and
applications therefor which are necessary for the conduct of the business.
Except as set forth on the Schedule of Exceptions:
(i) The patents owned by the Company and patent
applications (collectively, "Patent Rights") are owned by the Company free and
clear of all mortgages, liens, charges or encumbrances whatsoever. No licenses
have been granted with respect to the Patent Rights and the Company has not
received written notice from any third party claiming that its practice of the
inventions covered by the Patent Rights or the patents or patents application
licensed to the Company would infringe the patent rights of such third party.
(ii) The copyright registrations and pending
applications owned by the Company are owned by the Company free and clear of all
mortgages, liens, charges or encumbrances whatsoever. Except for licenses
granted to end users in accordance with the Company's standard terms, no
licenses have been granted with respect to any of the Company's copyrighted
material and the Company has not received written notice from any third party
claiming that any of its activities in the conduct of its business as presently
conducted infringe the copyrights of such third party.
(iii) The trademark registrations and pending
applications owned by the Company are owned by the Company free and clear of all
mortgages, liens, charges or encumbrances whatsoever. No licenses have been
granted with respect to any of such trademarks or applications and the Company
has not received notice from any third party claiming that any of its activities
in the conduct of its business as presently conducted infringe the trademarks,
trade names or trade dress of such third party.
(b) Except as set forth on the Schedule of Exceptions, all
technical information and know-how in possession of the Company relating to the
design or manufacture of products sold, and services performed, by it, including
without limitation methods of manufacture, lab journals, manufacturing,
engineering and other drawings, design and engineering specifications and
similar items recording or evidencing such information is owned by the Company
free and clear of all mortgages, liens, charges or encumbrances whatsoever.
3. Representations and Warranties of GSI. GSI hereby
represents, warrants and covenants that:
3.1. GSI's Title to Common Stock. GSI has good and valid
title to the Common Stock to be sold pursuant to this Agreement, free and clear
of all Liens. For purposes of this Agreement, "Lien" shall mean any mortgage,
pledge, lien, security interest, claim, encumbrance or restriction, of any kind
or nature. At the Closing, GSI shall transfer to Investor the Common Stock owned
by GSI free and clear of all Liens.
3.2. Authorization. All corporate action on the part of GSI,
its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Agreement, the Amended and Restated Investors'
Rights Agreement and the Amended and
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Restated Stockholders Agreement, the performance of all obligations of GSI
hereunder and thereunder, and the authorization and sale of the Common Stock
being sold hereunder by GSI, has been taken or will be taken prior to or
simultaneously with the Closing. This Agreement, the Amended and Restated
Investors' Rights Agreement and the Amended and Restated Stockholders Agreement
constitute valid and legally binding obligations of GSI, enforceable in
accordance with their respective terms, except (i) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general
application affecting enforcement of creditors' rights generally, (ii) as
limited by laws relating to the availability of specific performance, injunctive
relief or other equitable remedies, and (iii) to the extent the indemnification
provisions contained in the Amended and Restated Investors' Rights Agreement may
be limited by applicable federal or state securities laws.
3.3. Offering. Subject in part to the truth and accuracy of
Investors' representations set forth in Section 4 of this Agreement, the offer
and sale of the Common Stock by GSI as contemplated by this Agreement are exempt
from the registration requirements of the Act, and the qualification or
registration requirements of the applicable blue sky laws. Neither GSI nor any
authorized agent acting on its behalf will take any action hereafter that would
cause the loss of such exemptions.
4. Representations and Warranties of Investor . Investor
hereby represents, warrants and covenants that:
4.1. Authorization. Investor has full power and authority to
enter into this Agreement, the Amended and Restated Investors' Rights Agreement
and the Amended and Restated Stockholders Agreement, and each such agreement
constitutes its valid and legally binding obligation, enforceable in accordance
with its terms except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies, and (iii) to the extent the indemnification provisions contained in
the Amended and Restated Investors' Rights Agreement may be limited by
applicable federal or state securities laws.
4.2. Purchase Entirely for Own Account. This Agreement is
made with Investor in reliance upon Investor's representation to the Company and
to GSI, which by Investor's execution of this Agreement Investor hereby
confirms, that the Common Stock to be received by Investor will be acquired for
investment for Investor's own account, not as a nominee or agent, and not with a
view to the resale or distribution of any part thereof, and that Investor has no
present intention of selling, granting any participation in or otherwise
distributing the same. By executing this Agreement, Investor further represents
that Investor does not have any contract, undertaking, agreement or arrangement
with any person to sell, transfer or grant participation to such person or to
any third person, with respect to any Common Stock.
4.3. Disclosure of Information. Investor has received all the
information it has requested in deciding whether to purchase the Common Stock.
Investor further represents that it has had an opportunity to ask questions and
receive answers from the Company regarding the terms and conditions of the
offering of the Common Stock and the business, properties, prospects and
financial condition of the Company. The foregoing, however, does not limit or
modify the
10
representations and warranties of the Company in Section 2 of this Agreement or
the right of Investor to rely thereon.
4.4. Investment Experience. Investor has invested in
securities of companies in the development stage and acknowledges that it is
able to fend for itself, can bear the economic risk of its investment, and has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Common
Stock. Investor also represents it has not been organized for the purpose of
acquiring the Common Stock.
4.5. Accredited Investor. Investor is an "accredited
investor" within the meaning of Securities and Exchange Commission ("SEC") Rule
501 of Regulation D, as presently in effect.
4.6. Restricted Securities. Investor understands that the
Common Stock it is purchasing is characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired from the Company
and GSI in a transaction not involving a public offering and that under such
laws and applicable regulations such Common Stock may be resold without
registration under the Act only in certain limited circumstances. In the absence
of an effective registration statement covering the Common Stock or an available
exemption from registration under the Act, the Common Stock must be held
indefinitely. In this connection, Investor represents that it is familiar with
SEC Rule 144, as presently in effect, and understands the resale limitations
imposed thereby and by the Act, including without limitation the Rule 144
condition that current information about the Company be available to the public.
Such information is not now available and the Company has no present plans to
make such information available.
4.7. Further Limitations on Disposition. Without in any way
limiting the representations set forth above, Investor further agrees not to
make any disposition of all or any portion of the Common Stock unless and until
the transferee has agreed in writing for the benefit of the Company to be bound
by this Section 3 and the Amended and Restated Investors' Rights Agreement, and:
(a) There is then in effect a registration statement under
the Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
(b) (i) Investor shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii) if
requested by the Company, Investor shall have furnished the Company with an
opinion of counsel, reasonably satisfactory to the Company that such disposition
will not require registration of such shares under the Act. It is agreed that
the Company will not require opinions of counsel for transactions made pursuant
to Rule 144 except in unusual circumstances.
(c) Notwithstanding the provisions of subsections (a) and
(b) above, no such registration statement or opinion of counsel shall be
necessary for a transfer by Investor that is a
11
corporation to a wholly owned subsidiary of such corporation if the transferee
agrees in writing to be subject to the terms hereof to the same extent as if it
were an original Investor hereunder.
4.8. Legends. It is understood that the certificates
evidencing the Common Stock may bear one or all of the following legends:
(a) "These securities have not been registered under the
Securities Act of 1933, as amended. They may not be sold, offered for sale,
pledged or hypothecated in the absence of a registration statement in effect
with respect to the securities under such Act or an opinion of counsel
satisfactory to the Company that such registration is not required or unless
sold pursuant to Rule 144 of such Act."
(b) Any legend required by the applicable blue sky laws.
4.9. Tax Advisors. Investor has reviewed with Investor's own
tax advisors the federal, state and local tax consequences of this investment,
where applicable, and the transactions contemplated by this Agreement. Investor
is relying solely on such advisors and not on any statements or representations
of the Company or any of its agents or GSI and understands that Investor (and
not the Company or GSI) shall be responsible for Investor's own tax liability
that may arise as a result of this investment or the transactions contemplated
by this Agreement.
4.10. Investor Counsel. Investor acknowledges that Investor
has had the opportunity to review this Agreement, the exhibits and the schedules
attached hereto and the transactions contemplated by this Agreement with
Investor's own legal counsel. Investor is relying solely on Investor's legal
counsel and not on any statements or representations of the Company or any of
the Company's agents, including Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP, or GSI, for
legal advice with respect to this investment or the transactions contemplated by
this Agreement.
5. Conditions of Investor's Obligations at Closing. The
obligations of Investor under subsection 1.1 of this Agreement are subject to
the fulfillment on or before the Closing of each of the following conditions,
the waiver of which shall not be effective against any Investor who does not
consent thereto:
5.1. Representations and Warranties of the Company. The
representations and warranties of the Company contained in Section 2 shall be
true on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the date of such
Closing.
5.2. Representations and Warranties of GSI.
The representations and warranties of GSI contained in Section
3 shall be true on and as of the Closing with the same effect as though such
representations and warranties had been made on and as of the date of such
Closing.
5.3. Performance. The Sellers shall have performed and
complied with all agreements, obligations and conditions contained in this
Agreement that are required to be performed or complied with by them on or
before the Closing.
12
5.4. Compliance Certificate from the Company.. The Chief
Executive Officer of the Company shall deliver to Investor at the Closing a
certificate stating that the conditions specified in Sections 5.1 and 5.3 have
been fulfilled. The Secretary of the Company shall deliver to Investor at the
Closing a certificate as to the resolutions of the Board of Directors of the
Company authorizing the execution, delivery and performance of this Agreement
and each exhibit hereto to which the Company is a signatory and the consummation
of the transactions contemplated herein.
5.5. Compliance Certificate from GSI. The Chief Executive
Officer of GSI shall deliver to Investor at the Closing a certificate stating
that the conditions specified in Sections 5.2 and 5.3 have been fulfilled. The
Secretary of GSI shall deliver to Investor at the Closing a certificate as to
the resolutions of the Board of Directors of GSI authorizing the execution,
delivery and performance of this Agreement and each exhibit hereto to which GSI
is a signatory and the consummation of the transactions contemplated herein.
5.6. Qualifications. All authorizations, approvals or
permits, if any, of any governmental authority or regulatory body of the United
States or of any state that are required in connection with the lawful issuance
and sale of the Common Stock pursuant to this Agreement shall be duly obtained
and effective as of the Closing.
5.7. Proceedings and Documents. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to Investor's counsel, and they shall have received all such
counterpart original and certified or other copies of such documents as they may
reasonably request.
5.8. Opinion of Company Counsel. Investor shall have received
from Xxxxxxx, Phleger & Xxxxxxxx LLP, counsel for the Sellers, an opinion, dated
as of the Closing, in the form attached hereto as Exhibit C.
5.9. Amended and Restated Investors' Rights Agreement. The
Company,Investor and all parties to the Investors' Rights Agreement dated August
11, 1999, shall have entered into the Amended and Restated Investors' Rights
Agreement in the form attached as Exhibit B.
5.10. Amended and Restated Stockholders Agreement. The
Company,Investor and all parties to the Stockholders Agreement dated August 11,
1999, shall have entered into a Amended and Restated Stockholders Agreement in
the form attached hereto as Exhibit D.
6. Conditions of the Sellers' Obligations at Closing. The
obligations of the Sellers to Investor under this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions by
Investor:
6.1. Representations and Warranties. The representations and
warranties of Investor contained in Section 4 shall be true on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the Closing.
13
6.2. Payment of Purchase Price. Investor shall have delivered
the purchase prices specified in Section 1.1.
6.3. Qualifications. All authorizations, approvals or
permits, if any, of any governmental authority or regulatory body of the United
States or of any state that are required in connection with the lawful issuance
and sale of the Common Stock pursuant to this Agreement shall be duly obtained
and effective as of the Closing.
6.4. Amended and Restated Investors' Rights Agreement. The
Company and Investor shall have entered into the Amended and Restated Investors'
Rights Agreement in the form attached as Exhibit B.
6.5. Amended and Restated Stockholders Agreement. The Company
and Investor shall have entered into a Amended and Restated Stockholders
Agreement in the form attached hereto as Exhibit D.
7. Miscellaneous.
7.1. Survival. The warranties, representations and covenants
of the Sellers and Investor contained in or made pursuant to this Agreement
shall survive the execution and delivery of this Agreement and the Closing for a
period of one year and shall in no way be affected by any investigation of the
subject matter thereof made by or on behalf of Investor or each of the Sellers.
7.2. Successors and Assigns. Except as otherwise provided
herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties
(including transferees of the Common Stock). Nothing in this Agreement, express
or implied, is intended to confer upon any party, other than the parties hereto
or their respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
7.3. Governing Law. This Agreement shall be governed by and
construed under the laws of the State of New York as applied to agreements among
New York residents entered into and to be performed entirely within New York.
7.4. Titles and Subtitles. The titles and subtitles used in
this Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
7.5. Notices. All notices required or permitted hereunder
shall be in writing and shall be deemed effectively given: (i) upon personal
delivery to the party to be notified, (ii) when sent by confirmed telex or
facsimile if sent during normal business hours of the recipient, if not, then on
the next business day; (iii) five days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or (iv) one day after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt. All communications shall be sent
to the address as set forth on the signature page hereof or at such other
address as such party may designate by ten days advance written notice to the
other parties hereto. A copy of any notice sent to the Sellers shall be sent to
Xxxx Xxxxxxx Xxxxxx,
14
Esq., Xxxxxxx, Phleger & Xxxxxxxx LLP, 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx
Xxxx 00000. A copy of any notice sent to the Investor shall be sent to Reuters
Limited, 00 Xxxxx Xxxxxx, Xxxxxx XX0 X0XX, Xxxxxxx, Attention: General Counsel.
7.6. Finder's Fee. Except as set forth on the Schedule of
Exceptions, each party represents that it neither is nor will be obligated for
any finders' fee or commission in connection with this transaction. Investor
agrees to indemnify and to hold harmless the Company from any liability for any
commission or compensation in the nature of a finders' fee (and the costs and
expenses of defending against such liability or asserted liability) for which
Investor or any of its officers, partners, employees or representatives is
responsible. The Sellers agree to indemnify and hold harmless Investor from any
liability for any commission or compensation in the nature of a finders' fee
(and the costs and expenses of defending against such liability or asserted
liability) for which the Company or any of its officers, employees or
representatives is responsible.
7.7. Expenses. Irrespective of whether the Closing is
effected, the Sellers and Investor shall pay all costs and expenses that such
party incurs with respect to the negotiation, execution, delivery and
performance of this Agreement; provided that if the Closing is effected, the
Sellers shall pay the reasonable fees and expenses of one special counsel to
Investor, not to exceed $25,000.00. If any action at law or in equity is
necessary to enforce or interpret the terms of this Agreement, the Amended and
Restated Investors' Rights Agreement, or the Amended and Restated Stockholders
Agreement, the prevailing party shall be entitled to reasonable attorney's fees,
costs and necessary disbursements in addition to any other relief to which such
party may be entitled.
7.8. Amendments and Waivers. Any term of this Agreement may
be amended and the observance of any term of this Agreement may be waived
(either generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Sellers and Investor. Any
amendment or waiver effected in accordance with this paragraph shall be binding
upon Investor, each future holder of all such Common Stock and the Sellers.
7.9. Severability. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, such provision
shall be excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
7.10. Entire Agreement. This Agreement and the documents
referred to herein constitute the entire agreement among the parties and no
party shall be liable or bound to any other party in any manner by any
warranties, representations or covenants except as specifically set forth herein
or therein.
7.11. Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
15
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
NETSAT EXPRESS, INC.
By:
---------------------------------------
, Chief Executive Officer
Address: 00 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
GLOBECOMM SYSTEMS INC.
By:
---------------------------------------
, Chief Executive Officer
Address: 00 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
REUTERS HOLDINGS SWITZERLAND SA.
By:
---------------------------------------
,
0 Xxx xx Xxxxxxxxxx, 0000
Xxxxxxx: Xxxxxx, Xxxxxxxxxxx
SCHEDULE A
SCHEDULE OF EXCEPTIONS
1
EXHIBIT A
LIST OF STOCKHOLDERS
Stockholder Number of shares of Common Stock owned
----------- --------------------------------------
Globecomm Systems Inc. 5,700,000
Globix Corporation 1,000,000
Xxxxxx Network Systems 300,000
=========
7,000,000
Stockholder Number of shares of Series A Preferred Stock owned
----------- --------------------------------------------------
Xxxxxx Xxxxx 1,000,000
=========
1,000,000
2
EXHIBIT B
AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
3
EXHIBIT C
OPINION OF COUNSEL FOR THE SELLERS
4
EXHIBIT D
AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
5
