EXHIBIT 10.1
FAXSAV INCORPORATED
COMMON STOCK PURCHASE AGREEMENT
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July 22, 1998
TABLE OF CONTENTS
Page
1. Purchase and Sale of Stock.................................................................... 1
1.1 Sale and Issuance 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 Authorization........................................................................ 2
2.3 Valid Issuance of Common Stock....................................................... 2
2.4 Governmental Consents................................................................ 2
2.5 Litigation........................................................................... 2
2.6 Compliance with Other Instruments.................................................... 2
2.7 Financial Statements................................................................. 3
2.8 SEC Filings.......................................................................... 3
2.9 Other Information.................................................................... 3
3. Representations and Warranties of the Investor................................................ 3
3.1 Authorization........................................................................ 4
3.2 Purchase Entirely for Own Account.................................................... 4
3.3 Disclosure of Information............................................................ 4
3.4 Investment Experience................................................................ 4
3.5 Accredited Investor.................................................................. 4
3.6 Restricted Securities................................................................ 5
4. Conditions of the Investors' Obligations at Closing........................................... 5
4.1 Closing.............................................................................. 5
4.2 Representations and Warranties....................................................... 5
4.3 Performance.......................................................................... 5
4.4 Qualifications....................................................................... 5
5. Conditions of the Company's Obligations at Closing............................................ 5
5.1 Closing.............................................................................. 5
5.2 Representations and Warranties....................................................... 5
5.3 Payment of Purchase Price............................................................ 5
5.4 Qualifications....................................................................... 6
6. Registration of Common Stock.................................................................. 6
6.1 Definitions.......................................................................... 6
6.2 Required Registration................................................................ 6
6.3 Obligations of the Company........................................................... 7
6.4 Furnish Information.................................................................. 8
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Page
6.5 Expenses of Registration............................................................. 9
6.6 Delay of Registration................................................................ 9
6.7 Indemnification...................................................................... 9
6.8 Assignment of Registration Rights.................................................... 11
6.9 "Lock-Up" Agreement.................................................................. 11
6.10 "Market Stand-Off" Agreement......................................................... 12
7. Miscellaneous................................................................................. 12
7.1 Survival of Warranties............................................................... 12
7.2 Successors and Assigns............................................................... 13
7.3 Governing Law........................................................................ 13
7.4 Counterparts......................................................................... 13
7.5 Titles and Subtitles................................................................. 13
7.6 Notices.............................................................................. 13
7.7 Finder's Fee......................................................................... 13
7.8 Expenses............................................................................. 13
7.9 Attorney's Fees...................................................................... 14
7.10 Amendments and Waivers............................................................... 14
7.11 Severability......................................................................... 14
7.12 Entire Agreement..................................................................... 14
SCHEDULE 1 - List of Investors, addresses, number of shares of Common Stock
being purchased and purchase price due from each Investor
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COMMON STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT is made as of the 22nd day of July, 1998,
by and between FaxSav Incorporated, a Delaware corporation (the "Company"), and
the investors listed on Schedule 1 attached hereto, each of which is herein
referred to as an "Investor".
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock.
1.1 Sale and Issuance of Common Stock. Subject to the terms and
conditions of this Agreement, each Investor agrees to purchase at the Closing
and the Company agrees to sell and issue to the Investor at the Closing, that
number of shares of the Company's common stock, $.01 par value per share
("Common Stock") as is set forth opposite each Investor's named on Schedule 1
attached hereto, at a purchase price of Three Dollars and Fifty Cents ($3.50)
per share. The maximum aggregate number of shares of Common Stock sold pursuant
to this Agreement shall be Two Million (2,000,000) shares.
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, at
such time and place as the Company and Investors acquiring in the aggregate a
minimum of One Million Five Hundred Thousand (1,500,000) shares of Common Stock
sold pursuant hereto mutually agree upon orally or in writing (which time and
place are designated as the "Initial Closing"), but any event no later than July
24, 1998. The Company may sell up to the balance of the authorized number of
shares of Common Stock not sold at the Initial Closing to such Investors (who
need not have purchased shares in the Initial Closing) as it shall select at a
purchase price not less than $3.50 per share, at such other time and place as
the Company and such Investors shall mutually agree upon orally or in writing
(an "Additional Closing", and together with the Initial Closing the "Closing"),
provided each Additional Closing shall take place not later than August 3, 1998.
At each Closing, the Company shall deliver to each Investor a certificate
representing the Common Stock which such Investor is purchasing against either
(i) delivery to the Company by such Investor of a check or (ii) a completed wire
transfer, in the amount of the purchase price payable by such Investor, in favor
of the Company.
2. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Investor that:
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.
2.2 Authorization. All corporate action on the part of the Company, its
officers, directors and shareholders necessary for the authorization, execution
and delivery of this Agreement and the performance of all obligations of the
Company hereunder and the authorization, issuance and delivery of the Common
Stock being sold hereunder has been taken or will be taken prior to the Closing,
and this Agreement constitutes a valid and legally binding obligation of the
Company, 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 herein may be limited by applicable federal
or state securities laws.
2.3 Valid Issuance of Common Stock. The Common Stock which is being
purchased by each Investor hereunder, when issued, sold and delivered in
accordance with the terms hereof for the consideration expressed herein, will be
duly and validly issued, fully paid and nonassessable, and, based in part upon
the representations of the Investors in this Agreement, will be issued in
compliance with all applicable federal and state securities laws.
2.4 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 post-Closing filings as may be required under
applicable state securities laws.
2.5 Litigation. Except as previously disclosed by the Company in its
periodic reports filed with the U.S. Securities and Exchange Commission (the
"SEC") pursuant to the requirements of the Securities Exchange Act of 1934 (the
"1934 Act"), as amended, and listed in Section 2.8 hereof, there is no action,
suit, proceeding or investigation pending or currently threatened against 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 government agency or
instrumentality. Except as previously disclosed by the Company in its periodic
reports filed with the SEC pursuant to the requirements of the 1934 Act, there
is no action, suit, proceeding or investigation by the Company currently pending
or which the Company intends to initiate.
2.6 Compliance with Other Instruments. The Company is not in violation
or default of any provisions of its Sixth Amended and Restated Certificate of
Incorporation or Bylaws, true and correct and complete copies of which have been
furnished to each Investor, or of any instrument, judgment, order, writ, decree
or contract to which it is a party or by which it is bound or, to its knowledge,
of any provision of federal or state statute, rule or regulation applicable to
the Company. The execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby will not result in any such
violation or be in conflict with or constitute, with or without the passage of
time and giving of notice, either a default under any such provision,
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instrument, judgment, order, writ, decree or contract or an event which results
in the creation of any lien, charge or encumbrance upon any assets of the
Company or the suspension, revocation, impairment, forfeiture, or nonrenewal of
any material permit, license, authorization, or approval applicable to the
Company, its business or operations or any of its assets or properties.
2.7 Financial Statements. The Company has delivered to each Investor
its audited financial statements (balance sheet and statement of operations,
statement of stockholders' equity and statement of cash flows) at December 31,
1997 and for the fiscal year then ended and similar unaudited financial
statements at March 31, 1998 and for the three-month period then ended (the
"Financial Statements"). The Financial Statements are complete and correct in
all material respects and 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 accurately set
out and describe the financial condition and operating results of the Company as
of the dates, and for the periods, indicated therein, subject to normal year-end
audit adjustments. Since March 31, 1998, there has occurred no event materially
adverse to the Company, its business or prospects.
2.8 SEC Filings. The Company has delivered to the Investor:
(a) its Prospectus, dated October 11, 1996;
(b) its annual report on Form 10-K for the fiscal year ended
December 31, 1997;
(c) its quarterly report on Form 10-Q for the fiscal quarter ended
March 31, 1998; and
(d) its proxy statement to stockholders as filed with the SEC on
April 30, 1998.
As of its filing date, no such report or statement filed by the Company
with the SEC contained any untrue statement of a material fact or omitted to
state any material fact necessary in order to make the statements made therein,
in the light of the circumstances under which they were made, not misleading.
2.9 Other Information. The Company has delivered to the Investor copies
of all press releases, reports to stockholders and other documents released to
the public since January 1, 1998.
3. Representations and Warranties of the Investor. Each Investor,
severally and not jointly, hereby represents and warrants that:
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3.1 Authorization. This 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 and (ii) as limited by laws relating to the availability of specific
performance, injunctive relief, or other equitable remedies.
3.2 Purchase Entirely for Own Account. This Agreement is made with each
Investor in reliance upon each Investor's representation to the Company, which
by such Investor's execution of this Agreement such Investor hereby confirms,
that the Common Stock to be received by such Investor will be acquired for
investment for such 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 such
Investor has no present intention of selling, granting any participation in, or
otherwise distributing the same. By executing this Agreement, each Investor
further represents that it does not have any contract, undertaking, agreement or
arrangement with any person to sell, transfer or grant participations to such
person or to any third person, with respect to the Common Stock. Each Investor
represents that it has full power and authority to enter into this Agreement.
Notwithstanding the foregoing, Investors may effect: (i) resales or
distributions of up to twenty percent (20%) of the Common Stock received by each
Investor to accredited investors within the meaning of SEC Rule 501 of
Regulation D or (ii) distributions in kind to any beneficial owners of such
Investor provided, that all such permitted transfers shall be (x) subject to the
restrictions of applicable federal or state securities laws and (y) such
transferee or assignee agrees in writing to be bound by and subject to the terms
and conditions of this Agreement.
3.3 Disclosure of Information. Each Investor believes it has received
all the information it considers necessary or appropriate for deciding whether
to purchase the Common Stock. Each 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. The foregoing,
however, does not limit or modify the representations and warranties of the
Company in Section 2 of this Agreement or the right of each Investor to rely
thereon.
3.4 Investment Experience. Each Investor is an investor in securities
of companies at an early 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 such that it is capable of
evaluating the merits and risks of its investment in the Common Stock. In
connection therewith, each Investor understands that the purchase of the shares
offered hereby is highly speculative and involves a significant degree of risk,
as more fully described in the "Risk Factors" sections included in the Company's
periodic reports filed with the SEC pursuant to the requirements of the 1934
Act.
3.5 Accredited Investor. Each Investor is an "accredited investor"
within the meaning of SEC Rule 501 of Regulation D, as presently in effect.
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3.6 Restricted Securities. Each Investor understands that the shares of
Common Stock it is purchasing are characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired from the Company
in a transaction not involving a public offering and that under such laws and
applicable regulations such securities may not be resold without registration
under the Securities Act of 1933, as amended (the "Act"), except in certain
limited circumstances. In this connection, each Investor represents that it is
familiar with Rule 144 under the Act ("Rule 144"), as presently in effect, and
understands the resale limitations imposed thereby and by the Act.
4. Conditions of the Investors' Obligations at Closing. The obligations
of each 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
in writing thereto:
4.1 Closing. The Closing shall have occurred on or before July 24,
1998.
4.2 Representations and Warranties. 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.
4.3 Performance. The Company 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 it on or before the Closing.
4.4 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. Conditions of the Company's Obligations at Closing. The obligations
of the Company to each Investor under this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions by that
Investor:
5.1 Closing. The Closing shall have occurred on or before July 24,
1998.
5.2 Representations and Warranties. The representations and warranties
of the Investor 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 Closing.
5.3 Payment of Purchase Price. The Investor shall have delivered the
purchase price specified in Section 1.
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5.4 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. Registration of Common Stock. The Company covenants and agrees as
follows:
6.1 Definitions. For purposes of this Section 6:
(a) The term "register", "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Act, and the declaration or ordering of
effectiveness of such registration statement or document;
(b) The term "Registrable Securities" means (i) the Common Stock
issued pursuant to this Agreement; or (ii) any Common Stock of the Company
issued as (or issuable upon the conversion or exercise of any warrant, right or
other security which is issued as) a dividend or other distribution with respect
to, or in exchange for or in replacement of, such Common Stock, excluding in all
cases, however, any Registrable Securities which are sold, assigned, pledged,
hypothecated or otherwise disposed of by an Investor in a transaction in which
such Investor's rights under this Agreement are not assigned or assignable;
(c) The number of shares of "Registrable Securities then
outstanding" shall be determined by the number of shares of Common Stock
outstanding which are, and the number of shares of Common Stock issuable
pursuant to then exercisable or convertible securities which are, Registrable
Securities; and
(d) The term "Holder" means one of the Investors.
6.2 Required Registration.
(a) The Company shall, subject to the limitations specified in this
Agreement, use its best efforts to file a registration statement on Form S-3
within sixty (60) days from the date hereof covering the registration under the
Act of all Registrable Securities then outstanding.
(b) Notwithstanding the foregoing, if the Company shall furnish to
the Holders a certificate signed by the Chief Executive Officer and President of
the Company stating that, in the good faith judgment of the Board of Directors
of the Company, it would be seriously detrimental to the Company and its
stockholders for a registration statement to be filed and it is therefore
essential to defer the filing of such registration statement, the Company shall
have the right to defer taking action with respect to such filing for a period
of
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not more than thirty (30) days from the delivery of such certificate to the
Holders. The following events or circumstances may result in the filing of a
registration statement being detrimental to the Company and its shareholders: a
pending material acquisition, merger or sale or purchase of assets, pending or
threatened material litigation, pending or threatened material regulatory or
governmental action, pending material change in the business, prospects,
condition (financial or other) or properties of the Company. The foregoing list
is for illustrative purposes only and is not meant to be exclusive.
(c) The registration statement filed pursuant to this Section 6.2
may include other securities of the Company (i) which are held by persons who,
by virtue of agreements with the Company, are entitled to include their
securities in any such registration, (ii) which are held by officers and
directors of the Company, or (iii) which are being offered for the account of
the Company provided, however that the number of shares of the Holders'
Registrable Securities to be included in such registration statement which is
firmly underwritten shall not be reduced unless all other securities are first
entirely excluded from the registration statement.
6.3 Obligations of the Company. When required under this Section 6 to
effect the registration of the Registrable Securities, the Company shall, as
expeditiously as reasonably possible:
(a) Prepare and file with the SEC a registration statement with
respect to the Registrable Securities and use its best efforts to cause such
registration statement to become effective, and keep such registration statement
effective until the earlier of (i) the second anniversary of the date hereof or
(ii) until all such Registrable Securities have been sold are eligible to be
sold pursuant to Rule 144; provided that if, during the period the registration
statement is required to be kept effective, the Company delivers a certificate,
as per Section 6.2(b), stating that, in the good faith judgment of the Board of
Directors of the Company, it would be seriously detrimental to the Company and
its shareholders for such registration statement to be kept effective during a
specified period of time (the "Blackout Period"), then the Company shall not be
obligated to keep such registration statement effective for a period of not more
than thirty (30) days, and the Holders of the Registrable Securities covered by
the Registration Statement shall not sell any of their Registrable Securities
covered by the Registration Statement, during such Blackout Period. The Company
shall not utilize this right more than once in any twelve (12) month period.
After the termination of such Blackout Period, the Company shall file an
amendment to such registration statement or a new registration statement with
respect to the unsold portion of the Registrable Securities included in the
original registration statement and shall keep such amendment or new
registration statement effective until the earlier of; (i) the second
anniversary of the date hereof, or (ii) until all such Registrable Securities
have been sold or are eligible to be sold pursuant to Rule 144.
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(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection with such
registration statement as may be necessary to comply with the provisions of the
Act with respect to the disposition of all securities covered by such
registration statement.
(c) Furnish to the Holders whose Registrable Securities are covered
by the Registration Statement such numbers of copies of a prospectus, including
a preliminary prospectus, in conformity with the requirements of the Act, and
such other documents as they may reasonably request in order to facilitate the
disposition of Registrable Securities owned by them.
(d) Use its best efforts to register and qualify the securities
covered by such registration statement under such other securities or Blue Sky
laws of such jurisdictions as shall be reasonably requested by the Holders whose
Registrable Securities are covered by the Registration Statement; provided that
the Company shall not be required in connection therewith or as a condition
thereto to qualify to do business or to file a general consent to service of
process in any such states or jurisdictions.
(e) Notify the Holders whose Registrable Securities are covered by
the Registration Statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
(f) Use its best efforts to furnish, at the request of the Holders
whose Registrable Securities are covered by the Registration Statement, on the
date that such Registrable Securities are delivered to the underwriters for sale
in connection with a registration pursuant to this Section 6, if such securities
are being sold through underwriters, or, if such securities are not being sold
through underwriters, on the date that the registration statement with respect
to such securities becomes effective, (i) an opinion, dated such date, of the
counsel representing the Company for the purposes of such registration, in form
and substance as is customarily given to underwriters in an underwritten public
offering, addressed to the underwriters, if any, and to the Holders whose
Registrable Securities are covered by the Registration Statement and (ii) a
letter dated such date, from the independent certified public accountants of the
Company, in form and substance as is customarily given by independent certified
public accountants to underwriters in an underwritten public offering, addressed
to the underwriters, if any, and to the Holders whose Registrable Securities are
covered by the Registration Statement.
6.4 Furnish Information. It shall be a condition precedent to the
obligations of the Company to take any action pursuant to this Section 6 with
respect to the Registrable Securities of the Holders whose Registrable
Securities are covered by the Registration Statement that each of such Holders
shall furnish to the Company such
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information regarding itself, the Registrable Securities held by it, and the
intended method of disposition of such securities as shall be reasonably
required to effect the registration of such Holder's Registrable Securities.
6.5 Expenses of Registration. All expenses incurred in connection with
registrations, filings or qualifications pursuant to Section 6.2, including
(without limitation) all registration, filing and qualification fees, printers'
and accounting fees, fees and disbursements of counsel for the Company, and the
reasonable fees and disbursements of one counsel for the Holders whose
Registrable Securities are covered by the Registration Statement shall be borne
by the Company.
6.6 Delay of Registration. The Holders shall not have any right to
obtain or seek an injunction restraining or otherwise delaying any such
registration as the result of any controversy that might arise with respect to
the interpretation or implementation of this Section 6.
6.7 Indemnification. In the event any Registrable Securities are
included in a registration statement under this Section 6:
(a) To the extent permitted by law, the Company will indemnify and
hold harmless the Holder whose Registrable Securities are covered by the
Registration Statement, any underwriter (as defined in the Act) for such Holders
and each person, if any, who controls such Holders or underwriter within the
meaning of the Act or the 1934 Act, against any losses, claims, damages, or
liabilities (joint or several) to which they may become subject under the Act or
the 1934 Act, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"): (i) any untrue
statement or alleged untrue statement of a material fact contained in such
registration statement, including any preliminary prospectus or final prospectus
contained therein or any amendments or supplements thereto, (ii) the omission or
alleged omission to state therein a material fact required to be stated therein,
or necessary to make the statements therein not misleading, or (iii) any
violation or alleged violation by the Company of the Act, the 1934 Act, or any
rule or regulation promulgated under the Act or the 1934 Act; and the Company
will pay to such Holders, and each such underwriter or controlling person any
legal or other expenses reasonably incurred by them in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this Section 6.7
shall not apply to amounts paid in settlement of any such loss, claim, damage,
liability, or action if such settlement is effected without the consent of the
Company (which consent shall not be unreasonably withheld or delayed), nor shall
the Company be liable in any such case for any such loss, claim, damage,
liability, or action to the extent that it arises out of or is based upon a
Violation which occurs in reliance upon and in conformity with written
information furnished expressly for use in connection with such registration by
such Holders, or any such underwriter or controlling person.
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(b) To the extent permitted by law, each Holder whose Registrable
Securities are covered by the Registration Statement will indemnify and hold
harmless the Company, each of its directors, each of its officers who has signed
the registration statement, each person, if any, who controls the Company within
the meaning of the Act, any underwriter, and any controlling person of any such
underwriter, against any losses, claims, damages, or liabilities (joint or
several) to which any of the foregoing persons may become subject, under the
Act, or the 1934 Act, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereto) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by such
Holder expressly for use in connection with such registration; and such Holder
will pay any legal or other expenses reasonably incurred by any person intended
to be indemnified pursuant to this Section 6.7, in connection with investigating
or defending any such loss, claim, damage, liability, or action; provided,
however, that the indemnity agreement contained in this Section 6.7 shall not
apply to amounts paid in settlement of any such loss, claim, damage, liability
or action if such settlement is effected without the consent of such Holder,
which consent shall not be unreasonably withheld; provided that, in no event
shall any indemnity under this Section 6.7 exceed the gross proceeds from the
offering received by such Holder.
(c) Promptly after receipt by an indemnified party under this
Section 6.7 of notice of the commencement of any action (including any
governmental action), such indemnified party will, if a claim in respect thereof
is to be made against any indemnifying party under this Section 6.7, deliver to
the indemnifying party a written notice of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party
(together with all other indemnified parties which may be represented without
conflict by one counsel) shall have the right to retain one separate counsel,
with the fees and expenses to be paid by the indemnifying party, if
representation of such indemnified party by the counsel retained by the
indemnifying party would be inappropriate due to actual or potential differing
interests between such indemnified party and any other party represented by such
counsel in such proceeding. The failure to deliver written notice to the
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
6.7, but the omission so to deliver written notice to the indemnifying party
will not relieve it of any liability that it may have to any indemnified party
otherwise than under this Section 6.7.
(d) If the indemnification provided for in this Section 6.7 is held
by a court of competent jurisdiction to be unavailable to an indemnified party
with respect to any loss, liability, claim, damage, or expense referred to
therein, then the indemnifying party, in lieu of indemnifying such indemnified
party hereunder, shall contribute to the amount paid or payable by such
indemnified party as a result of such loss, liability, claim,
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damage, or expense in such proportion as is appropriate to reflect the relative
fault of the indemnifying party on the one hand and of the indemnified party on
the other in connection with the statements or omissions that resulted in such
loss, liability, claim, damage, or expense as well as any other relevant
equitable considerations. The relative fault of the indemnifying party and of
the indemnified party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission to state a material fact relates to information supplied by the
indemnifying party or by the indemnified party and the parties' relative intent,
knowledge, access to information, and opportunity to correct or prevent such
statement or omission.
(e) The obligations of the Company and Holders under this Section
6.7 shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 6, and otherwise.
6.8 Assignment of Registration Rights. The right to have the Company
register Registrable Securities pursuant to this Section 6 may not be assigned;
provided, however, that (i) any heir or the estate of an Investor which acquires
the Registrable Securities from such Investor by will or intestate succession
shall be entitled to have the Company register the Registrable Securities
pursuant to this Section 6 (provided that such heirs or such estate shall have a
single attorney in fact for the purpose of exercising any rights, receiving any
notices or taking any action under this Section 6); (ii) any individual Investor
may sell, assign or transfer Registrable Securities to his or her spouse or
children or to a trust established for the benefit of his or her spouse,
children or himself or herself, and such transferee shall be entitled to have
the Company register the Registrable Securities pursuant to this Section 6; and
(iii) such right may be assigned by a Holder to a permitted transferee or
assignee of such securities who, after such assignment or transfer, holds at
least 20,000 shares of Registrable Securities (subject to appropriate adjustment
for stock splits, stock dividends, combinations and other recapitalizations)
provided, (A) the Company is, within a reasonable time after such transfer,
furnished with written notice of the name and address of such transferee or
assignee and the securities with respect to which such registration rights are
being assigned; (B) such transferee or assignee agrees in writing to be bound by
and subject to the terms and conditions of this Agreement, including without
limitation the provision of Sections 6.9 and 6.10 hereof; and (C) such
assignment shall be effective only if immediately following such transfer the
further disposition of such securities by the transferee or assignee is
restricted under the Act.
6.9 "Lock-Up" Agreement. Each Investor hereby agrees that, for a period
of sixty (60) days from the Initial Closing, it shall not, unless expressly
agreed to in writing by the Company, directly or indirectly, sell, offer to
sell, contract to sell (including, without limitation, any short sale), grant
any option to purchase or otherwise transfer or dispose of (other than to donees
who agree to be similarly bound) the Registrable Securities included in such
registration. Notwithstanding the foregoing, Investors may engage in private
resales of the registrable securities pursuant to Section 4(2) of the Act and
Regulation D promulgated thereunder. The "Lock-Up" Agreement contained in this
Section 6.9 shall automatically
11
terminate upon the public announcement of any of the following: (i) the
acquisition of the Company by another entity by means of any transaction or
series of related transactions (including, without limitation, any
reorganization, merger or consolidation but, excluding any merger effected
exclusively for the purpose of changing the domicile of the Company); or (ii) a
sale of all or substantially all of the assets of the Company; unless the
shareholders of record as constituted immediately prior to such acquisition or
sale will, immediately after such acquisition or sale (by virtue of securities
issued as consideration for the Company's acquisition or sale or otherwise) hold
at least 51% of the voting power of the surviving or acquiring entity.
In order to enforce the foregoing covenant, the Company may impose
stop-transfer instructions with respect to the Registrable Securities of the
Investors (and the shares or securities of every other person subject to the
foregoing restriction) until the end of such period.
6.10 "Market Stand-Off" Agreement. Each Holder hereby agrees that,
during a reasonable period of duration specified by the Company and an
underwriter of common stock or other securities of the Company, following the
effective date of a registration statement of the Company filed under the Act,
it shall not, to the extent reasonably requested by the Company and such
underwriter, directly or indirectly sell, offer to sell, contract to sell
(including, without limitation, any short sale), grant any option to purchase or
otherwise transfer or dispose of (other than to donees who agree to be similarly
bound) any securities of the Company held by it at any time during such period
except common stock included in such registration. The Company shall, at the
time of such offering promptly give each Holder written notice of such
registration and upon the written request of each Holder, the Company shall
cause to be registered under the Act all of the Registrable Securities that each
such Holder has requested to be registered provided, however, that if the total
amount of securities, including Registrable Securities, requested by Holders to
be included in such offering exceeds the amount of securities sold other than by
the Company that the underwriters determine in their sole discretion is
compatible with the success of the offering, then the Company shall be required
to include in the offering only that number of such securities, including
Registrable Securities, which the underwriters determine in their sole
discretion will not jeopardize the success of the offering (the securities so
included to be apportioned pro rata among the Holders according to the total
amount of securities entitled to be included therein owned by each Holder or in
such other proportions as shall mutually be agreed to by such selling Holders).
7. Miscellaneous.
7.1 Survival of Warranties. The warranties, representations and
covenants of the Company and each Investor contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of the Investors or the Company.
12
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 any shares of Common Stock sold hereunder). 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 without regard to the principles of
conflicts or choice of law.
7.4 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.
7.5 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.
7.6 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
deposit with the United States Post Office, by registered or certified mail,
postage prepaid and addressed to the party to be notified at the address
indicated for such party on the signature page hereof in the case of the Company
and on Schedule 1 in the case of each Investor, or at such other address as such
party may designate by ten (10) days' advance written notice to the other
parties.
7.7 Finder's Fee. Each party represents that it neither is nor will be
obligated for any finders' fee or commission in connection with this
transaction. Each 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 such Investor or any of its officers, partners,
employees, or representatives is responsible.
The Company agrees to indemnify and hold harmless the Investors 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.
7.8 Expenses. The Company agrees to reimburse the Investors for their
reasonable out-of-pocket legal fees and expenses, in an amount not to exceed
$15,000 in the aggregate.
13
7.9 Attorney's Fees. If any action at law or in equity is necessary to
enforce or interpret the terms of this 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. The Company
shall pay all attorney's fees, costs and necessary disbursements incurred by the
Investors, commencing the date hereof, in connection with the consummation of
the transactions as contemplated by Section 1 hereof.
7.10 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 Company and the holders of a majority of the
Common Stock sold hereunder. Any amendment or waiver effected in accordance with
this paragraph shall be binding upon each holder of any securities purchased
under this Agreement at the time outstanding, each future holder of all such
securities, and the Company.
7.11 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.
7.12 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.
[Remainder of this page intentionally left blank]
14
IN WITNESS WHEREOF, the parties have executed this Common Stock
Purchase Agreement as of the date first above written.
FAXSAV INCORPORATED
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxxxx
--------------------------------------
(please print)
Title: Vice President and CFO
-------------------------------------
Address: 000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
INVESTORS:
East River Ventures, L.P.
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxx Xxxxxxx
--------------------------------------
(please print)
Title: General Partner
--------------------------------------
Haussmann Holdings, N.V.
By: /s/ Xxxx Xxxxx
--------------------------------------
Name: Xxxx Xxxxx
--------------------------------------
(please print)
Title: Controller
--------------------------------------
[SIGNATURE PAGE TO COMMON STOCK PURCHASE AGREEMENT]
Watershed Cayman, Ltd.
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxxx
--------------------------------------
(please print)
Title: President, Brookhaven Capital
Management LLC, Investment Advisor
to Watershed (Cayman) Ltd.
--------------------------------------
Stanford B. School Trust
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxx
--------------------------------------
(please print)
Title: Managing Director, Stanford
Management Company
--------------------------------------
CMS Concentrated Equity Fund, L.P.
By MSPS Feeders, Inc., General Partner
By: /s/ Xxxxxx Xxxxx
--------------------------------------
Name: Xxxxxx Xxxxx
--------------------------------------
(please print)
Title: Vice President
--------------------------------------
Piton Partners LP
By: /s/ Xxxxxxx Xxxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxxx
--------------------------------------
(please print)
Title: General Partner
--------------------------------------
[SIGNATURE PAGE TO COMMON STOCK PURCHASE AGREEMENT]
Whittier Ventures LLC
By: /s/ Xxxxx X. Xxxx
--------------------------------------
Name: Xxxxx X. Xxxx
--------------------------------------
(please print)
Title: President
--------------------------------------
Deem Trust
By: /s/ Xxxxxx X. Xxxx
--------------------------------------
Name: Xxxxxx X. Xxxx
--------------------------------------
(please print)
Title: Trustee
--------------------------------------
Xxxxxx Xxxxxx
By: /s/ Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
--------------------------------------
(please print)
Title:
--------------------------------------
Equities Holdings LLC
By: /s/ Montague X. Xxxxxxx, Xx.
--------------------------------------
Name: Montague X. Xxxxxxx, Xx.
--------------------------------------
(please print)
Title:
--------------------------------------
[SIGNATURE PAGE TO COMMON STOCK PURCHASE AGREEMENT]
Victory Ventures LLC
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxx
--------------------------------------
(please print)
Title: Co-President
--------------------------------------
M3 Partners LLC
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxx
--------------------------------------
(please print)
Title: Manager/Member
--------------------------------------
Xxxxxxx Xxxx
By: /s/ Xxxxxxx X. Xxxx, Xx.
--------------------------------------
Name: Xxxxxxx X. Xxxx, Xx.
--------------------------------------
(please print)
Title:
--------------------------------------
Montague Xxxxxxx
By: /s/ Montague X. Xxxxxxx, Xx.
--------------------------------------
Name: Montague X. Xxxxxxx, Xx.
--------------------------------------
(please print)
Title: Co-Chairman, Victory Ventures LLC
--------------------------------------
[SIGNATURE PAGE TO COMMON STOCK PURCHASE AGREEMENT]
Xxxxxxx Xxxxxxxx
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
--------------------------------------
(please print)
Title:
--------------------------------------
Xxxxxx Xxxxxxxx
By: /s/ Xxxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxxx
--------------------------------------
(please print)
Title:
--------------------------------------
[SIGNATURE PAGE TO COMMON STOCK PURCHASE AGREEMENT]
Schedule 1
----------
List of Investors, addresses, number of shares being purchased and
purchase price due from each Investor.
Number of
Investor Shares Purchase Price
-------- ------ --------------
First Closing:
Haussmann Holdings, N.V. 107,142 $374,997
0000 Xxxx Xxxx Xxxx, Xxxxxxxx 0
Xxxxx 000
Xxxxx Xxxx, XX 00000
Watershed Cayman, Ltd. 350,000 $1,225,000
0000 Xxxx Xxxx Xxxx, Xxxxxxxx 0
Xxxxx 000
Xxxxx Xxxx, XX 00000
Stanford B School Trust 150,000 $525,000
0000 Xxxx Xxxx Xxxx, Xxxxxxxx 0
Xxxxx 000
Xxxxx Xxxx, XX 00000
CMS Concentrated Equity Fund, L.P. 150,000 $525,000
0000 Xxxx Xxxx Xxxx, Xxxxxxxx 0
Xxxxx 000
Xxxxx Xxxx, XX 00000
Piton Partners LP 100,000 $350,000
0000 Xxxx Xxxx Xxxx, Xxxxxxxx 0
Xxxxx 000
Xxxxx Xxxx, XX 00000
Whittier Ventures LLC 150,000 $525,000
0000 Xxxxxxxxxx Xxxxx
Xxxxx Xxxxxxxx, XX 00000
--------- ----------
Subtotal 1,007,142 $3,524,997
Second Closing:
Deem Trust 10,000 $35,000
0000 Xxxxxxxx Xxxx.
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Xxxxxx Xxxxxx 40,000 $140,000
Xxxxxxxxx and Xxxxxx
000 Xxxxx Xxx., 00xx Xxxxx
Xxx Xxxx, XX 00000
Piton Partners LP 50,000 $175,000
0000 Xxxx Xxxx Xxxx, Xxxxxxxx 0
Xxxxx 000
Xxxxx Xxxx, XX 00000
Watershed Cayman, Ltd. 200,000 $700,000
0000 Xxxx Xxxx Xxxx, Xxxxxxxx 0
Xxxxx 000
Xxxxx Xxxx, XX 00000
East River Ventures, L.P. 285,714 $999,999
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Haussmann Holdings, Ltd. 142,858 $500,003
0000 Xxxx Xxxx Xxxx, Xxxxxxxx 0
Xxxxx 000
Xxxxx Xxxx, XX 00000
--------- ----------
Subtotal 728,572 $2,550,002
Third Closing:
Victory Ventures LLC 171,428 $599,998
000 Xxxxxxx Xxx.
Xxx Xxxx, XX 00000
Equities Holdings LLC 21,429 $75,001.50
000 Xxxxxxx Xxx.
Xxx Xxxx, XX 00000
M3 Partners LLC 8,572 $30,002
000 Xxxxxxx Xxx.
Xxx Xxxx, XX 00000
Xxxxxxx Xxxx 4,286 $15,001
000 Xxxxxxx Xxx.
Xxx Xxxx, XX 00000
Montague Hackett 4,286 $15,001
000 Xxxxxxx Xxx.
Xxx Xxxx, XX 00000
Xxxxxxx Xxxxxxxx 2,143 $7,500.50
000 Xxxxxxx Xxx.
Xxx Xxxx, XX 00000
Xxxxxx Xxxxxxxx 2,142 $7,497
000 Xxxxxxx Xxx.
Xxx Xxxx, XX 00000
--------- ----------
Subtotal 214,286 $750,001
Fourth Closing:
Equities Holdings LLC 50,000 $175,000
000 Xxxxxxx Xxx.
Xxx Xxxx, XX 00000
--------- ----------
Subtotal 50,000 $175,000
Total 2,000,000 $7,000,000
