EXHIBIT 10.12
CDW INTERNET, L.L.C. SUBSCRIPTION AGREEMENT
This SUBSCRIPTION AGREEMENT (this "Agreement"), dated as of September 29,
1997, is made by and between CDW Internet, L.L.C., a Delaware limited
partnership (the "Subscriber"), and NetSelect, Inc., a Delaware corporation (the
"Corporation").
WHEREAS, the capitalization of the Corporation consists of (x) 35,000,000
shares of NetSelect Class A Common Stock, par value $0.001 per share (the
"NetSelect Class A Common Stock"); (y) 10,000,000 shares of NetSelect Class B
Common Stock, par value $0.001 per share (the "NetSelect Class B Common Stock");
and (z) 5,000,000 shares of Preferred Stock, par value $0.001 per share (the
"Preferred Stock"), of which 1,647,059 shares of Preferred Stock have been
designated as Series A Convertible Preferred Stock (the "Series A Preferred
Stock"), 352,941 shares of Preferred Stock have been designated as Series B
Convertible Preferred Stock (the "Series B Preferred Stock"), and 700,000 shares
of Preferred Stock have been designated as Series C Convertible Preferred Stock
(the "Series C Preferred Stock"); and
WHEREAS, the Subscriber desires to acquire, on December 15, 1997, an equity
interest in the Corporation, representing 75,090 of the issued and outstanding
shares of Series C Preferred Stock (the "Subscription Shares") to be purchased
by the Subscriber in consideration of a capital contribution by the Subscriber
to the Corporation in the amount of $550,000.
NOW, THEREFORE, in consideration of these premises, the mutual covenants
and agreements contained in this Agreement, and in reliance upon the
representations and warranties and covenants set forth herein, the Subscriber
hereby agrees with the Corporation as follows:
SECTION 1. CAPITALIZATION OF PARTNERSHIP.
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1.1. Subscriptions. The Subscriber hereby subscribes for the Subscription
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Shares.
1.2. Contribution of Cash. On December 15, 1997, the Subscriber shall
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purchase from the Corporation the Subscription Shares for an aggregate cash
payment in an amount equal to $550,000, plus interest accruing from the date
hereof through and including the Closing Date at a rate equal to the Prime Rate
(as reported in the Wall Street Journal on the Closing Date) (the "Contribution
Amount").
1.3. The Closing. The Closing of the transactions contemplated by Section
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1.1 and Section 1.2 hereof (the "Closing") shall take place on December 15, 1997
(the "Closing Date"), at the offices of Battle Xxxxxx LLP, Park Avenue Tower, 00
Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place and time as
the parties hereto shall mutually agree.
1.4. Deliveries at the Closing.
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(a) Deliveries at Closing by the Corporation. At the Closing,
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the Corporation shall deliver to the Subscriber, stock certificates representing
the duly authorized, validly issued, fully paid and nonassessable Subscription
Shares.
(b) Deliveries at Closing by the Subscriber. At the Closing, the
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Subscriber shall:
(i) deliver by wire transfer in immediately available funds the
Contribution Amount;
(ii) deliver to the Corporation that certain Investor
Representation Letter, dated as of the date hereof (the "Investor
Representation Letter"), between the Corporation and the Subscriber,
duly executed by Subscriber;
(iii) deliver to the Corporation this Agreement, duly executed by
Subscriber; and
(iv) deliver to the Corporation any other documents, writings,
certificates or opinions as may be requested by the Corporation.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE SUBSCRIBER.
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2.1. The Subscriber hereby represents and warrants to, and covenants with
the Corporation as follows:
(i) The Subscriber is purchasing the Subscription Shares for its own
account and not on behalf of any other person, group or entity, the Subscriber
is aware and acknowledges that the Subscription Shares have not been registered
under the Securities Act of 1933, as amended (the "Securities Act"), and may not
be offered or sold unless the Subscription Shares are registered under the
Securities Act or an exemption from the registration requirements of the
Securities Act is available;
(ii) The Subscriber has had a reasonable opportunity to ask questions of
and receive answers from the Corporation concerning the Corporation and the
Subscription Shares, and all such questions, if any, have been answered to the
full satisfaction of the Subscriber;
(iii) No person or entity other than the Subscriber and a general partner
or limited partner of the Subscriber has any rights in and to the Subscription
Shares or any right to acquire the Subscription Shares;
(iv) The Subscriber has such knowledge and expertise in financial and
business matters that the Subscriber is capable of evaluating the merits and
risks involved in an investment in the Subscription Shares; and the Subscriber
is financially able to bear the economic risk of the investment in the
Subscription Shares, including a total loss of such investment;
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(v) The Subscriber is not purchasing the Subscription Shares with a view
to distribution, and has no present intention of dividing or allowing others to
participate in the investment or of reselling, or otherwise participating
directly or indirectly, in a distribution of the Subscription Shares, and shall
not make any sale, transfer or pledge thereof without registration under the
Securities Act and any applicable securities laws of any state or unless an
exemption from registration is available;
(vi) The Subscriber understands that the Subscription Shares are being
offered and sold to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the
Corporation is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of the Subscriber
set forth herein in order to determine the applicability of such exemptions and
the suitability of Subscriber to acquire the Subscription Shares;
(vii) The Subscriber expressly acknowledges and agrees that the
Corporation is relying upon the Purchaser's representations contained in this
Agreement; and
(viii) The Subscriber expressly agrees that Subscriber shall not initiate a
suit or cause of action against Corporation for the Corporation's failure to
obtain additional financing in the form of Series C Convertible Preferred Stock,
provided, however, the foregoing shall not bar Subscriber from bringing such
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suit as a result of fraudulent acts on the part of the Corporation.
(ix) The Subscriber agrees to be bound to the terms and provisions of
this Agreement regardless of whether a material adverse change in the business,
operations, results of operations or condition (financial or otherwise) of the
Corporation has occurred prior to the Closing Date, including any damage,
destruction or loss of any material assets or properties of the Corporation that
could have or has had a material adverse effect on the business, operations,
results of operations or condition (financial or otherwise) of the Corporation,
whether or not covered by insurance.
SECTION 3. MISCELLANEOUS.
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3.1. Fees and Expenses. Except as expressly provided herein each of the
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parties hereto shall each pay all of their own costs and expenses, including any
and all legal and accounting fees, incident to the negotiation, execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby whether or not such transactions shall be consummated.
3.2. Counterparts. This Agreement may be executed in two or more
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counterparts, all of which taken together shall constitute one instrument.
3.3. Binding Effect. All of the terms of this Agreement shall be binding
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upon the respective personal representatives, heirs and successors of the
parties hereto and shall inure to the benefit of and be enforceable by the
parties hereto and their respective personal representatives, heirs and
successors.
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3.4. Assignment. Neither this Agreement nor any right or interest hereunder
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may be assigned in whole or in part by any party without the prior written
consent of the other parties.
3.5. Entire Agreement and Amendment. This Agreement and the Investor
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Representation Letter contain the entire agreement between the parties hereto
with respect to the subject matter hereof. No change, modification, extension,
termination, notice of termination, discharge, abandonment or waiver of this
Agreement or any of the provisions hereof, nor any representations, promise or
condition relating to this Agreement, shall be binding upon the parties hereto
unless made in writing and signed by the parties hereto.
3.6. Captions. The captions of Sections hereof are for convenience only and
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shall not control or affect the meaning or construction of any of the provisions
of this Agreement.
3.7. Notices. All notices or other communications to be given or made
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hereunder shall be in writing and shall be deemed given when delivered
personally or mailed, by registered or certified mail, return receipt requested,
postage prepaid, or overnight delivery, to the parties hereto, as the case may
be, (a) in the case of the Subscriber, to NetSelect, Inc.. 0000 Xxxxxxx Xxxxxx
Xxxx, Xxxxx 000, Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxx Xxxxx,
Ph.D. ; and (b) in the case of the Corporation, to NetSelect, Inc., 0000 Xxxxxxx
Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxx Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxxx
Xxxxx, Ph.D., facsimile no.: (000) 000-0000.
3.8. Applicable Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of Delaware as applied to residents of
that State executing contracts wholly to be performed in that State. The
Subscriber hereby expressly submits to the jurisdiction of all federal and state
courts located in the State of Delaware and consents that any process or notice
of motion or other application to any of said courts or a judge thereof may be
served within or without such court's jurisdiction by registered mail or by
personal service, provided a reasonable time for appearance is allowed. The
Subscriber also waives any claim that Delaware is an inconvenient forum.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
date and year first above written.
CDW INTERNET, L.L.C.
By:
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Name:
Title:
NETSELECT, INC.
By: /s/ Xxxxxx Xxxxx
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Name: Xxxxxx Xxxxx, Ph.D.
Title: Chief Executive Officer
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