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EXHIBIT 10.9
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
DATED AS OF AUGUST 9, 1999
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TABLE OF CONTENTS
PAGE
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SECTION 1 Authorization and Sale of the Series A Preferred..............1
1.1 Authorization of the Series A Preferred......................1
1.2 Sale of the Series A Preferred...............................1
SECTION 2 Closing Date; Delivery........................................2
2.1 Closing Date.................................................2
2.2 Delivery.....................................................2
2.3 Subsequent Sale of Series A Preferred........................2
SECTION 3 Representations and Warranties of the Company.................2
3.1 Organization and Standing....................................3
3.2 Capitalization...............................................3
3.3 Subsidiaries, Etc............................................3
3.4 Stockholder List and Agreements..............................3
3.5 Issuance of Shares...........................................4
3.6 Authorization................................................4
3.7 Governmental Consents........................................4
3.8 Litigation...................................................5
3.9 Financial Statements.........................................5
3.10 Absence of Operations and Liabilities........................5
3.11 Title to Property and Assets and Liabilities.................5
3.12 Intellectual Property........................................5
3.13 Material Contracts and Obligations...........................6
3.14 Permits; Compliance..........................................6
3.15 Employees....................................................6
3.16 Proprietary Information and Inventions Agreements............7
3.17 Environmental Matters........................................7
3.18 ERISA........................................................8
3.19 Transactions with Related Parties............................8
3.20 Books and Records............................................8
3.21 Year 2000....................................................8
3.22 Real Property Holding Company................................8
3.23 Disclosures..................................................8
3.24 Additional Share Issuances...................................9
SECTION 4 Representations and Warranties of the Purchasers..............9
4.1 Investment Representations of the Purchasers.................9
4.2 Authorization................................................10
4.3 Legends......................................................10
4.4 Investor Counsel.............................................11
4.5 No Intent to Dispose.........................................11
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SECTION 5 Conditions to Closing of the Purchasers.......................11
5.1 Representations and Warranties Correct.......................11
5.2 Performance..................................................11
5.3 Opinion of Company's Counsel.................................11
5.4 Rights Agreement.............................................11
5.5 ROFR Agreement...............................................11
5.6 Voting Agreement.............................................11
5.7 Proprietary Information Agreements...........................12
5.8 Board of Directors...........................................12
5.9 Indemnification Agreements...................................12
5.10 Stock Option Plan............................................12
5.11 Restated Certificate.........................................12
5.12 Compliance Certificate.......................................12
5.13 Other Matters................................................12
SECTION 6 Conditions to Closing of the Company..........................12
6.1 Representations..............................................12
6.2 Payment of Purchase Price....................................12
6.3 Other Matters................................................13
SECTION 7 Covenants of the Company......................................13
7.1 Proprietary Information Agreement............................13
7.2 Independent Accountants......................................13
7.3 Insurance....................................................13
7.4 Year 2000....................................................13
7.5 Termination of Covenants.....................................13
7.6 Tax Reporting................................................13
SECTION 8 Miscellaneous.................................................14
8.1 Governing Law................................................14
8.2 Survival.....................................................14
8.3 Rights of Purchasers.........................................14
8.4 Successors and Assigns.......................................14
8.5 Entire Agreement; Amendment..................................14
8.6 Notices, etc.................................................14
8.7 Delays or Omissions..........................................15
8.8 Headings.....................................................15
8.9 Severability.................................................15
8.10 Finders Fee..................................................15
8.11 Further Assurances...........................................15
8.12 Titles and Subtitles.........................................16
8.13 Counterparts.................................................16
8.14 Additional Parties...........................................16
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SCHEDULES AND EXHIBITS
Schedule A Schedule of Purchasers
Schedule B Schedule of Exceptions
Exhibit A Amended and Restated Certificate of Incorporation
Exhibit B Investors' Rights Agreement
Exhibit C Right of First Refusal and Co-Sale Agreement
Exhibit D Voting Agreement
Exhibit E Proprietary Information Agreement
Exhibit F Opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Exhibit G Indemnification Agreements
Exhibit H Bylaws
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AIRWEB CORPORATION
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
This Agreement is made as of August 9, 1999, by and among AirWeb
Corporation, a Delaware corporation doing business as "OpenSky Corporation" (the
"COMPANY"), and each of the purchasers listed on the Schedule of Purchasers
attached hereto as Schedule A (the "SCHEDULE OF PURCHASERS"). The persons or
entities listed thereon are hereinafter referred to collectively as the
"PURCHASERS" and individually as a "PURCHASER."
W I T N E S S E T H:
WHEREAS, the Company desires to issue and sell, and the Purchasers desire
to purchase, in exchange for cash and/or the contribution of assets, up to
25,000,000 shares of the Company's Series A Preferred Stock, par value $.001 per
share (the "SERIES A PREFERRED"), upon the terms and conditions hereinafter set
forth;
WHEREAS, the Company and the Purchasers intend that the transfers of cash
and assets for Series A Preferred described herein constitute transfers
described in Section 351(a) of the Internal Revenue Code of 1986 (the "CODE");
NOW THEREFORE, in consideration of the foregoing and the mutual
covenants, agreements and warranties herein contained, the parties hereto agree
as follows:
SECTION 1
Authorization and Sale of the Series A Preferred
1.1 Authorization of the Series A Preferred. The Company has, or before
the Closing (as hereinafter defined) will have, authorized the sale and issuance
of up to 25,000,000 shares of its Series A Preferred, having the rights,
restrictions, privileges and preferences as set forth in the Company's Amended
and Restated Certificate of Incorporation attached hereto as Exhibit A (the
"RESTATED CERTIFICATE").
1.2 Sale of the Series A Preferred. Subject to the terms and conditions
hereof and in reliance upon the representations, warranties and agreements
contained herein, the Company will issue and sell to each Purchaser, severally
and not jointly, and each Purchaser, severally and not jointly, will purchase
from the Company, at the Closing, the number of shares of Series A Preferred set
forth opposite the Purchaser's name on the Schedule of Purchasers in return for
the assets and/or cash contributed by such Purchaser set forth opposite the
Purchaser's name on the Schedule of Purchasers. The Series A Preferred are
valued at a purchase price of $0.75 per share. The Company's agreement with each
Purchaser is a separate agreement, and the sale of the Series A Preferred to
each Purchaser is a separate sale.
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SECTION 2
Closing Date; Delivery
2.1 Closing Date. The closing of the purchase and sale of the Series A
Preferred hereunder (the "CLOSING") shall be held at the offices of Xxxxxx
Xxxxxxx Xxxxxxxx & Xxxxxx, Professional Corporation, 000 Xxxx Xxxx Xxxx, Xxxx
Xxxx, Xxxxxxxxxx 00000 at 10:00 a.m. on August 9, 1999 (the "CLOSING DATE") or
at such other time and place as shall be mutually agreed upon by the Company and
the Purchasers who have subscribed for at least a majority of the Series A
Preferred to be sold at the Closing.
2.2 Delivery. At the Closing, the Company shall deliver to each
Purchaser a certificate, in such denomination and registered in the Purchaser's
name as set forth on the Schedule of Purchasers, representing the number of
shares of Series A Preferred which such Purchaser is purchasing from the Company
against (i) delivery to the Company of a check or wire transfer payable to the
order of the Company, (ii) contribution of assets to the Company, or (iii) a
combination of (i) and (ii), in each case in the aggregate amount of the
purchase price of the Series A Preferred to be purchased by such Purchaser.
2.3 Subsequent Sale of Series A Preferred. If less than all of the
authorized number of shares of Series A Preferred are sold on the Closing Date,
then, subject to the terms and conditions of this Agreement and the Related
Agreements (as defined below), the Company may sell, on or before November 30,
1999, up to the balance of the authorized but unissued shares of the Series A
Preferred to such persons as the Board of Directors of the Company (the "BOARD")
may determine at the same price per share as the Series A Preferred purchased
and sold at the Closing (the date of any such sale also being referred to herein
as a "CLOSING DATE"). Any such sale shall be made upon the same terms and
conditions as those contained herein, and such persons or entities shall become
parties to this Agreement, the Investors' Rights Agreement attached hereto as
Exhibit B (the "RIGHTS AGREEMENT"), the Right of First Refusal and Co-Sale
Agreement attached hereto as Exhibit C (the "ROFR AGREEMENT"), the Voting
Agreement attached hereto as Exhibit D (the "VOTING AGREEMENT"), and the Warrant
attached as Exhibit A to the Rights Agreement, and any other agreement to which
the other Purchasers are party and the execution and delivery of which is
contemplated hereby (collectively, the "RELATED AGREEMENTS"), and shall have the
rights and obligations of a Purchaser hereunder and thereunder. Such persons or
entities shall also execute and deliver such documents and certificates as are
reasonably required to comply with applicable state, federal and foreign
securities laws.
SECTION 3
Representations and Warranties of the Company
The Company represents and warrants to each of the Purchasers that the
statements made in this Section 3 are true and correct, except as set forth in
the Schedule of Exceptions attached hereto as Schedule B (the "SCHEDULE OF
EXCEPTIONS"), which shall be arranged to correspond to the
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numbered paragraphs contained in this Section 3. Without limiting the generality
of the foregoing, the mere listing (or inclusion of a copy) of a document or
other item shall not be deemed adequate to disclose an exception to a
representation or warranty made herein (unless the representation or warranty
relates to the existence of the document or other item itself).
3.1 Organization and Standing. The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and has full corporate power and authority to conduct its business as
presently conducted and as proposed to be conducted by it and to enter into and
perform this Agreement and the Related Agreements to which the Company is a
party and to carry out the transactions contemplated by this Agreement and such
Related Agreements. The Company is duly qualified and in good standing to do
business in each jurisdiction (whether domestic or foreign) where the failure to
be so qualified would have a material adverse effect on the Company. The Company
has furnished to counsel for the Purchasers true and complete copies of its
Certificate of Incorporation and Bylaws, each as amended to date and currently
in effect.
3.2 Capitalization. The authorized capital stock of the Company consists
of 40,000,000 shares of Common Stock, $0.001 par value, of which 4,200,000
shares are issued and outstanding and of which 5,800,000 shares have been
reserved for issuance pursuant to the AirWeb Corporation 1999 Stock Plan (the
"1999 STOCK PLAN"), and 25,000,000 shares of Preferred Stock, $0.001 par value,
all of which shares are designated as Series A Preferred, none of which shares
of Series A Preferred are issued or outstanding. The Company has reserved
25,000,000 shares of Common Stock for issuance upon conversion of the Series A
Preferred. All of the issued and outstanding shares of Common Stock have been
duly authorized and validly issued and are fully paid and nonassessable. The
rights, privileges and preferences of the Series A Preferred are as stated in
the Restated Certificate. Except as provided in this Agreement, the Restated
Certificate, any Related Agreement and pursuant to the 1999 Stock Plan: (a) no
subscription, warrant, option, convertible security or other right (contingent
or otherwise) to purchase or acquire any shares of capital stock of the Company
is authorized or outstanding; (b) the Company has no obligation (contingent or
otherwise) to issue any subscription, warranty option, convertible security or
other such right or to issue or distribute to holders of any shares of its
capital stock any evidences of indebtedness or assets of the Company; and (c)
the Company has no obligation (contingent or otherwise) to purchase, redeem or
otherwise acquire any shares of its capital stock or any interest therein or to
pay any dividend or make any other distribution in respect thereof. All of the
issued and outstanding shares of capital stock of the Company have been offered,
issued and sold by the Company in compliance with applicable federal and state
securities laws or pursuant to valid exemptions therefrom, and, if issued to a
non-US person, in full observance and compliance with the securities laws of
such holder's jurisdiction.
3.3 Subsidiaries, Etc. The Company has no Subsidiaries and does not own
or control, directly or indirectly, any shares of capital stock of any other
corporation or any interest in any partnership, joint venture, limited liability
company, professional association or other business enterprise.
3.4 Stockholder List and Agreements. The Schedule of Exceptions contains
a true and complete list of the stockholders of the Company, showing the number
of shares of Common Stock
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or other securities of the Company held by each stockholder as of the date of
this Agreement and the date of the Closing and the consideration paid to the
Company, if any, therefor. Except as provided in this Agreement, the Restated
Certificate, any Related Agreement and pursuant to the 1999 Stock Plan, there
are no agreements, written or oral, between the Company and any holder of its
capital stock or, to the best of the Company's knowledge, among any holders of
its capital stock relating to the acquisition (including without limitation
rights of first refusal or preemptive rights), transfer, sale or other
disposition, registration under the Securities Act of 1933, as amended (the
"SECURITIES ACT") or voting of the capital stock of the Company.
3.5 Issuance of Shares. Prior to the initial Closing, the issuance, sale
and delivery of the shares of Series A Preferred in accordance with this
Agreement, and the issuance and delivery of the shares of Common Stock issuable
upon conversion of the shares of Series A Preferred, will be duly authorized by
all necessary corporate action on the part of the Company and its officers,
directors and stockholders, and all such shares have been duly reserved for
issuance. The shares of Series A Preferred, when so issued, sold and delivered
against payment therefor in accordance with the provisions of this Agreement,
and the shares of Common Stock issuable upon conversion of the shares of Series
A Preferred, when issued upon such conversion in accordance with the Restated
Certificate, will be duly and validly issued, fully paid and non-assessable. The
offer and sale of the shares of Series A Preferred (and Common Stock issued upon
conversion thereof) to each of the Purchasers will be in full compliance with
applicable federal and state securities laws.
3.6 Authorization. The execution, delivery and performance by the
Company of this Agreement and all Related Agreements to which it is a party and
the consummation by the Company of the transactions contemplated hereby and
thereby, have been duly authorized by all necessary corporate action. All
corporate action on the part of the Company and its officers, directors and
stockholders necessary for the authorization, execution and delivery of this
Agreement and all Related Agreements, and the performance of all obligations of
the Company hereunder and thereunder has been taken or will be taken prior to
the initial Closing. This Agreement and each of the Related Agreements have been
duly executed and delivered by the Company and 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 or 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 indemnification provisions contained herein or
in any Related Agreement may be limited by applicable federal or state
securities laws. The execution, delivery and performance of the transactions
contemplated by this Agreement and the Related Agreements and compliance with
their provisions by the Company will not violate any provision of law and will
not conflict with or result in any breach of any of the terms, conditions or
provisions of, or constitute a default under, or require a consent or waiver
under, the Restated Certificate or Bylaws (each as amended to date) or any
indenture, lease, agreement or other instrument to which the Company is a party
or by which it or any of its properties is bound, or any decree, judgment,
order, statute, rule or regulation applicable to the Company.
3.7 Governmental Consents. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
governmental authority is required on the part of the Company in connection with
the execution and delivery of this
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Agreement or the Related Agreements, the offer, issuance, sale and delivery of
the shares of Series A Preferred or the other transactions to be consummated at
the Closing, as contemplated by this Agreement, except such filings as shall
have been made prior to and shall be effective on and as of such Closing.
3.8 Litigation. There is no action, suit or proceeding or governmental
inquiry or investigation pending against the Company that questions the validity
of this Agreement or any Related Agreement or the right of the Company to enter
into or perform this Agreement or any Related Agreement, or that could be
expected to have, either individually or in the aggregate, any material adverse
effect on the business, prospects, assets or condition, financial or otherwise,
of the Company, nor is there any litigation pending against the Company by
reason of the proposed activities of the Company or negotiations by the Company
with possible investors in the Company.
3.9 Financial Statements. The Company has prepared no financial
statements.
3.10 Absence of Operations and Liabilities. The Company has conducted no
operations prior to the Closing Date other than taking such actions as are
reasonably necessary to incorporate in the State of Delaware, to complete the
corporate organization of the Company and to negotiate this Agreement and the
Related Agreements. The Company has incurred no material liabilities, whether
absolute or contingent, other than the incurrence of fees and expenses
(including attorney's fees) related to the formation and the negotiation of this
Agreement and the Related Agreements.
3.11 Title to Property and Assets and Liabilities. The Company's assets
and liabilities are set forth on a Pro Forma Balance Sheet previously delivered
to the Purchasers. Except as set forth on the Pro Forma Balance Sheet, the
Company has no assets or liabilities.
3.12 Intellectual Property. Upon execution of license agreements with
each of 3Com Corporation and Aether Technologies (collectively, the "LICENSE
AGREEMENTS") the Company shall possess legal rights to all patents, trademarks,
service marks, patent and trademark applications, trade names, copyrights,
mask-works, trade secrets, licenses, information and proprietary rights,
processes, data and know-how necessary for the conduct of the Company's business
as conducted and as proposed to be conducted (the "INTELLECTUAL PROPERTY
RIGHTS"), free and clear of all Liens (as defined below), licenses or other
restrictions, except as contemplated in the License Agreements. The Schedule of
Exceptions contains a complete list of the Intellectual Property Rights. To the
Company's knowledge, the business conducted or proposed to be conducted by the
Company does not cause the Company to infringe or violate any of the patents,
trademarks, service marks, trade names, copyrights, mask-works, trade secrets,
processes, data or know-how or other intellectual property rights of any other
individual, partnership, corporation, association, joint stock company, trust,
joint venture, limited liability company, unincorporated organization or
governmental entity or any department, agency or political subdivision thereof
(each being a "PERSON") and, to the Company's knowledge, does not require the
Company to obtain any license or other agreement to use any patents, trademarks,
service marks, trade names, copyrights, trade secrets, processes, data or
know-how of others, except as set forth in the License Agreements. The Company
has not received any communications alleging that the Company has violated or,
by conducting its business as proposed to be conducted, would violate any of the
patents, trademarks, service marks, trade names, copyrights, mask-works, trade
secrets, processes, data and know-how of any other Person. There are
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no outstanding options, licenses or agreements of any kind relating to the
Intellectual Property Rights, nor is the Company a party to any options,
licenses or agreements of any kind with respect to the patents, trademarks,
service marks, trade names, copyrights, mask-works, trade secrets, processes,
data or know-how of any other Person. None of the holders of Common Stock,
whether vested or unvested, owns any rights in patents, trademarks, service
marks, trade names, copyrights, mask-works, trade secrets, processes, data or
know-how directly or indirectly competitive with those owned or to be used by
the Company or derived from or in connection with the conduct of the Company's
business. The Company does not believe that it is or will be necessary to use
any inventions or works of authorship of its employees (or Persons it currently
intends to hire) made outside of their employment by the Company. For purposes
of this Agreement, "Liens" shall mean any lien, security interest, pledge,
mortgage, deed of trust, charge or encumbrance in real, personal or mixed
property (tangible or intangible, and wherever located), whether contractual or
statutory (each being a "LIEN"), of any nature other than those the material
terms of which are described in the Schedule of Exceptions or those which do not
materially impair the operations of the Company.
3.13 Material Contracts and Obligations. The Schedule of Exceptions sets
forth a list of all material agreements or commitments of any nature to which
the Company is a party or by which it is or will be bound as of the Closing
Date, including without limitation: (i) each agreement that requires future
expenditures by the Company in excess of $25,000 or that might result in
payments to the Company in excess of $25,000; (ii) all management, consulting
and similar agreements; (iii) all employment and consulting agreements, employee
benefit, bonus, pension, profit-sharing, stock option, stock purchase and
similar plans and arrangements and distributor and sales representative
agreements; (iv) each agreement with any stockholder, officer or director of the
Company, or any affiliate of such Persons, including without limitation any
agreement or other arrangement providing for the furnishing of services by,
rental of real or personal property from, or otherwise requiring payments to,
any such Person or entity; and (v) any agreement relating to the Intellectual
Property Rights. The Company has delivered to the Purchasers copies of such of
the foregoing agreements as the Purchasers have requested. All of such
agreements and contracts are valid, binding and in full force and effect.
3.14 Permits; Compliance. The Company holds all permits, orders and
approvals from governmental authorities required for the conduct of its business
as conducted or as proposed to be conducted, or can obtain within a commercially
reasonable period of time such permits, orders and approvals without having a
material adverse effect on such business. There is no term or provision of any
mortgage, indenture, material contract, material agreement or material
instrument to which the Company is a party or by which it is bound or of any
provision of any existing judgment, decree, order, statute, rule or regulation
applicable to or binding upon the Company, that materially adversely affects or,
so far as the Company may now reasonably foresee, in the future is reasonably
likely to materially adversely affect, the business, prospects, assets or
condition, financial or otherwise, of the Company.
3.15 Employees. None of the employees of the Company is represented by
any labor union, and, to the Company's knowledge, there is no labor strike or
other labor trouble pending with respect to the Company (including, without
limitation, any organizational drive) or threatened. No employee of the Company
is in violation of any judgment, decree, order, or any term of any employment
contract, patent disclosure agreement, or other contract or agreement relating
to the
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relationship of any such employee with the Company or any other party because of
the nature of the business conducted or presently proposed to be conducted by
the Company or to the use by the employee of his or her best efforts with
respect to such business. The employment of each officer and employee is
terminable at the will of the Company.
3.16 Proprietary Information and Inventions Agreements. Each employee and
officer of the Company has executed a Proprietary Information and Inventions
Agreement in the form of Exhibit E (the "PROPRIETARY INFORMATION AGREEMENT").
3.17 Environmental Matters. With respect to environmental matters:
The Company is and has been in compliance with all Environmental
Laws (as defined below), and no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, demand or notice has been made, given,
filed or commenced by any Person, nor to the Company's knowledge has any such
making, giving, filing or commencement been threatened, against any of them
alleging any failure to comply with the Environmental Laws, or seeking
contribution towards, or participation in, any remediation of any contamination
of any property or thing with Hazardous Materials (as defined below). Without
limiting the generality of the preceding sentence, the Company has obtained and
been, and currently is, in compliance with all of the terms and conditions of
all permits, licenses and other authorizations that are required under, and has
complied with all other limitations, restrictions, conditions, standards,
prohibitions, requirements, obligations, schedules and timetables that are
contained in, all Environmental Laws;
The Company has no obligation to remediate or any other liabilities
of any kind arising in connection with or under any of the Environmental Laws,
nor is there any basis for such obligation or liabilities;
Except as set forth in the Schedule of Exceptions. all properties
and equipment used in the business of the Company are and have been free of
Hazardous Materials;
"Environmental Laws" means all federal, state and local laws,
regulations, ordinances, codes, rules, permits, decisions, orders or decrees
relating or pertaining to the public health and safety or the environment, or
otherwise governing the generation, use, handling, collection, treatment,
storage, transportation, recovery, recycling, removal, discharge or disposal of
Hazardous Materials, including, without limitation, the Solid Waste Disposal
Act, 42 U.S.C. 6901 et seq., as amended (also known as "RCRA" for a subsequent
amending act), (b) the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601 et seq., as amended ("CERCLA"), (c) the
Clean Water Act, 33 U.S.C. Section 1251 et seq., as amended ("CWA"), (d) the
Clean Air Act, 42 U.S.C. Section 7401 et seq., as amended ("CAA"), (e) the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et seq., as amended ("TSCA"), (f)
the Emergency Planning and Community Right To Know Act, 15 U.S.C. Section 2601
et seq., as amended ("EPCRKA"), and (g) the Occupational Safety and Health Act,
29 U.S.C. Section 651 et seq., as amended; and
Hazardous Materials means, without limitation, (i) any "hazardous
wastes" as defined under RCRA, (ii) any "hazardous substances" as defined under
CERCLA, (iii) any toxic pollutants as defined under the CWA, (iv) any hazardous
air pollutants as defined under the CAA, (v) any
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hazardous chemicals as defined under TSCA, (vi) any hazardous substances as
defined under EPCRKA, (vii) asbestos, (viii) polychlorinated biphenyls, (ix)
petroleum or petroleum products, (x) underground storage tanks, whether empty,
filled or partially filled with any substance, (xi) any substance the presence
of which on the property in question is prohibited under any Environmental Law,
and (xii) any other substance which under any Environmental Law requires special
handling or notification of or reporting to any federal, state or local
governmental entity in its generation, use, handling, collection, treatment,
storage, recycling, treatment, transportation, recovery, removal, discharge or
disposal.
3.18 ERISA. The Company does not have or otherwise contribute to or
participate in any employee benefit plan subject to the Employee Retirement
Income Security Act of 1974 (other than the Company's 401(k) savings plan and
any medical benefit plan with respect to which the Company has made all required
contributions and has complied with all applicable laws).
3.19 Transactions with Related Parties. No employee, officer, director or
stockholder 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, other than (i) for payment of salary
for services rendered, (ii) reimbursement for reasonable expenses incurred on
behalf of the Company and (iii) for other employee benefits made generally
available to all employees. None of such persons has any direct or indirect
ownership interest in any Person with which the Company is affiliated or with
which the Company has a business relationship, or any Person that competes with
the Company, except that employees, stockholders, officers or directors of the
Company and members of their immediate families may own stock in publicly traded
companies that may compete with the Company. No officer, director or stockholder
or any member of their immediate families is, directly or indirectly, interested
in any material contract with the Company (other than such contracts as relate
to any such person's ownership of capital stock or other securities of the
Company).
3.20 Books and Records. The minute books of the Company contain complete
and accurate records of all meetings and other corporate actions of its
stockholders and its Board and committees thereof. The stock ledger of the
Company is complete and reflects all issuances, transfers, repurchases and
cancellations of shares of capital stock of the Company.
3.21 Year 2000. The Company intends to conduct a review and assessment of
its computer applications and to make inquiry of its key suppliers, vendors and
customers with respect to the risk that computer applications may not be able to
properly perform date-sensitive functions after December 31, 1999 (the "YEAR
2000 PROBLEM"). As of the date hereof, to the knowledge of the Company, the Year
2000 Problem will not have a material adverse effect on the condition (financial
or otherwise), business, operations, properties or prospects of the Company.
3.22 Real Property Holding Company. The Company is not a real property
holding company within the meaning of Section 897 of the Code.
3.23 Disclosures. Neither this Agreement, any Related Agreement nor any
exhibit hereto or thereto, nor any written report, certificate or instrument
furnished to any of the Purchasers in connection with the transactions
contemplated in this Agreement or the Related Agreements contains
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any untrue statement of a material fact or, when taken together, omits to state
a material fact necessary in order to make the statements contained herein or
therein, in light of the circumstances under which they were made, not
misleading. However, as to any projections furnished to the Purchasers, the
Company only represents that such projections were prepared in good faith by the
Company and there is a reasonable basis for such projections. The Company knows
of no information or fact that has or would have a material adverse effect on
the business, prospects, assets or condition, financial or otherwise, of the
Company that has not been disclosed to the Purchasers in this Agreement, the
Related Agreements, the exhibits hereto or thereto or other written materials
furnished to the Purchasers.
3.24 Additional Share Issuances. The Company is not under any obligation
or binding commitment to issue additional shares of its stock to any person or
entity.
SECTION 4
Representations and Warranties of the Purchasers
Each Purchaser, severally and not jointly, hereby represents and warrants
to the Company with respect to the purchase of the Series A Preferred as
follows:
4.1 Investment Representations of the Purchasers. Purchaser understands
that the Series A Preferred (and the Common Stock issuable upon conversion of
the Series A Preferred) have not been registered under the Securities Act and
are being offered and sold pursuant to an exemption from registration contained
in the Act based upon the representations of each Purchaser contained herein.
Purchaser knows of no public solicitation or advertisement of an offer in
connection with the proposed issuance and sale of the Series A Preferred.
Purchaser is acquiring the Series A Preferred to be issued and sold
hereunder (and the Common Stock issuable upon conversion of the Series A
Preferred) for Purchaser's own account for investment and not as a nominee and
not with a view to the distribution thereof. Purchaser understands that
Purchaser must bear the economic risk of this investment indefinitely unless the
Series A Preferred or such Common Stock are registered pursuant to the Act, or
an exemption from such registration is available, and that the Company has no
present intention of registering the Series A Preferred or such Common Stock.
Purchaser further understands that there is no assurance that any exemption from
the Act will be available or, if available, that such exemption will allow
Purchaser to dispose of or otherwise transfer any or all of the Series A
Preferred or such Common Stock under the circumstances, in the amounts or at the
times Purchaser might propose.
By reason of Purchaser's business or financial experience, or that of
Purchaser's professional advisor, Purchaser has the capacity to protect his own
interests in connection with the purchase of the Series A Preferred hereunder
and has the ability to bear the economic risk (including the risk of total loss)
of Purchaser's investment; provided, however, such capacity and/or ability in
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no way serves to mitigate or release the Company from its obligations or
representations or warranties in this Agreement, the Related Agreements or the
Restated Certificate.
Purchaser acknowledges that Purchaser is aware of Rule 144 promulgated
under the Act, which permits limited public resales of securities acquired in a
non-public offering, subject to the satisfaction of certain conditions.
Purchaser understands that under Rule 144, except as otherwise provided by
section (k) of that Rule, the conditions include, among other things: the
availability of certain current public information about the issuer, the resale
occurring not less than one year after the party has purchased and paid for the
securities to be sold and limitations on the amount of securities to be sold and
the manner of sale. Purchaser understands that the current information referred
to above is not now available and the Company has no present plans to make such
information available. Purchaser acknowledges and understands that
notwithstanding the Company's obligations under the Rights Agreement the Company
may not be satisfying the current public information requirement of Rule 144 at
the time Purchaser wishes to sell the Series A Preferred or any Common Stock
received on conversion thereof, and that, in such event, Purchaser may be
precluded from selling such stock under such Rule, even if the one year minimum
holding period of such Rule has been satisfied.
Purchaser acknowledges that in the event all of the requirements of Rule
144 are not met, registration under the Act, compliance with the Securities and
Exchange Commission's (the "COMMISSION") Regulation A or an exemption from
registration will be required for any disposition of the Series A Preferred and
the Common Stock issued on conversion thereof. Purchaser understands that
although Rule 144 is not exclusive, the Commission has expressed its opinion
that persons proposing to sell restricted securities received in a private
offering other than in a registered offering or pursuant to Rule 144 will have a
substantial burden of proof in establishing that an exemption from registration
is available for such offers or sales and that such persons and the brokers who
participate in the transactions do so at their own risk.
The residency of Purchaser (or, in the case of a partnership or
corporation, such entity's principal place of business as office) is correctly
set forth on the Schedule of Purchasers.
4.2 Authorization. Purchaser has the full power and authority to
execute, deliver and perform this Agreement. This Agreement when executed and
delivered by Purchaser will constitute a valid and legally binding obligation of
Purchaser, enforceable in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium or 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
indemnification provisions contained herein or in any Related Agreement may be
limited by applicable federal or state securities laws.
4.3 Legends. Purchaser understands and acknowledges that the certificate
evidencing such Purchaser's Series A Preferred and any Common Stock acquired
upon the conversion thereof will be imprinted with a legend in the form set
forth in Sections 3 and 20(d) of the Rights Agreement, Section 3 of the Voting
Agreement, and in Section 4 of the ROFR Agreement.
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4.4 Investor Counsel. Purchaser acknowledges that such Purchaser has had
the opportunity to review this Agreement, the exhibits and the schedules
attached hereto and the transactions contemplated by this Agreement with such
Purchaser's own legal counsel and has not relied upon the Company or any of its
agents for legal advice, other than the legal opinion provided pursuant to
Section 5.3 hereto, with respect to this investment or the transactions
contemplated by this Agreement.
4.5 No Intent to Dispose. Purchaser has no current plan or intention,
and is not under any binding commitment or contract, to sell, exchange or
otherwise dispose of any stock in the Company, including without limitation any
Series A Preferred received or to be received pursuant to this Agreement.
SECTION 5
Conditions to Closing of the Purchasers
The obligation of each of the Purchasers to purchase the Series A
Preferred at the Closing is subject to the fulfillment to the Purchaser's
satisfaction on or prior to the Closing Date of each of the following
conditions:
5.1 Representations and Warranties Correct. Each representation and
warranty made by the Company in Section 3 hereof shall be true and correct when
made and on the Closing Date.
5.2 Performance. All covenants, agreements and conditions contained in
this Agreement to be performed or complied with by the Company on or prior to
the Closing Date shall have been performed or complied with by the Company in
all respects.
5.3 Opinion of Company's Counsel. The Purchasers shall have received
from Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, counsel to the Company, an opinion
addressed to the Purchasers, dated the Closing Date and in substantially the
form attached hereto as Exhibit F.
5.4 Rights Agreement. The Company, each of the Purchasers and Xxxxxxx
XxXxxxx, Xxxxx Xxxxxxxxx, Xxxxxxx Xxxxxx and Xxxx Xxxxx (the "FOUNDING COMMON
STOCKHOLDERS") shall have entered into and delivered the Rights Agreement at or
prior to the Closing, and the Rights Agreement shall be in full force and
effect, without amendment or modification.
5.5 ROFR Agreement. The Company, each of the Purchasers and the Founding
Common Stockholders shall have entered into and delivered the ROFR Agreement, at
or prior to the Closing, and the ROFR Agreement shall be in full force and
effect, without amendment or modification.
5.6 Voting Agreement. Each of the Purchasers and the Founding Common
Stockholders shall have entered into and delivered the Voting Agreement, at or
prior to the Closing, and the Voting Agreement shall be in full force and
effect, without amendment or modification.
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5.7 Proprietary Information Agreements. The Company shall have entered
into a Proprietary Information Agreement at or prior to the Closing, with each
employee. Such Proprietary Information Agreements shall be in full force and
effect, without amendment or modification.
5.8 Board of Directors. The Company's Bylaws shall provide for a Board
of Directors, with the number of directors fixed at three (3). As of the
Closing, the Board of Directors of the Company shall consist of (i) Xxxxxx
Xxxxxxx, (ii) Xxxxx Xxxx and (iii) Xxxxxxx XxXxxxx.
5.9 Indemnification Agreements. The Company shall have entered into
Indemnification Agreements, in the form attached hereto as Exhibit G (the
"INDEMNIFICATION AGREEMENTS"), at or prior to the Closing, with each of the
directors of the Company.
5.10 Stock Option Plan. The Board of Directors shall have adopted, and
the stockholders of the Company shall have approved the 1999 Stock Plan
providing for the issuance of up to an aggregate of 5,800,000 shares of Common
Stock.
5.11 Restated Certificate. The Restated Certificate shall have been filed
with the Secretary of State of the State of Delaware, shall have become
effective in accordance with Section 103 of the Delaware General Corporation
Law, as amended, and shall not have been further modified or amended. The Bylaws
of the Company in the form of Exhibit H shall have been adopted and be in
effect.
5.12 Compliance Certificate. The Company shall have delivered to the
Purchasers or their special counsel a certificate signed by the President of the
Company, dated the Closing Date, certifying to the fulfillment of the conditions
specified in Sections 5.1, 5.2, 5.8 and 5.11 above.
5.13 Other Matters. All material matters of a legal nature which pertain
to the transactions contemplated in this Agreement, the Related Agreements and
all documents and instruments incident to such transactions shall be reasonably
satisfactory in substance and form to the Purchaser and its counsel, and the
Purchaser and its counsel shall have received all such counterpart originals or
certified or other copies of such documents as they may reasonably request.
SECTION 6
Conditions to Closing of the Company
The Company's obligation to sell the Series A Preferred at the Closing is
subject to the fulfillment to its satisfaction on or prior to the Closing Date
of each of the following conditions:
6.1 Representations. The representations made by the Purchasers pursuant
to Section 4 hereof shall be true in all material respects at and as of the
Closing.
6.2 Payment of Purchase Price. Each Purchaser shall have delivered to
the Company the purchase price for such Purchaser's Series A Preferred, as set
forth opposite such Purchaser's name on the Schedule of Purchasers.
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6.3 Other Matters. All material matters of a legal nature which pertain
to the transactions contemplated in this Agreement, the Related Agreements and
all documents and instruments incident to such transactions shall be reasonably
satisfactory in substance and form to the Company and its counsel, and the
Company and its counsel shall have received all such counterpart originals or
certified or other copies of such documents as they may reasonably request.
SECTION 7
Covenants of the Company
The Company hereby covenants and agrees with the Purchasers that, so long
as a Purchaser owns any shares of Series A Preferred or of Common Stock issued
upon conversion of the Series A Preferred, as follows:
7.1 Proprietary Information Agreement. Each person now or hereafter
employed by the Company or any subsidiary with access to confidential
information will enter into a Proprietary Information Agreement.
7.2 Independent Accountants. As promptly as practicable after the
Closing Date, the Company will retain independent public accountants of
recognized national standing who shall audit the Company's financial statements
at the end of each fiscal year. In the event the services of the independent
public accountants so selected, or any firm of independent public accountants
hereafter employed by the Company, are terminated, the Company will promptly
thereafter engage another firm of independent public accountants of recognized
national standing.
7.3 Insurance. The Company shall obtain and maintain valid policies of
insurance with respect to its properties and business of the kinds and in the
amounts not less than is customarily obtained by corporations engaged in the
same business and similarly situated, including, without limitation, workers
compensation insurance and insurance against casualty loss, public liability,
libel, slander, defamation, advertising injury and other risks.
7.4 Year 2000. The Company intends to conduct a review and assessment of
its computer applications and to make inquiry of its key suppliers, vendors and
customers with respect to the risk that computer applications may not be able to
properly perform date-sensitive functions after December 31, 1999.
7.5 Termination of Covenants. The covenants of the Company set forth in
this Section 7 shall terminate in all respects on the date of the closing of an
initial firm commitment underwritten public offering pursuant to an effective
registration statement under the Securities Act, covering the offer and sale of
the Company's Common Stock.
7.6 Tax Reporting. The Purchasers and the Company will treat the
transfers of cash and assets for Series A Preferred described herein and the
transactions described in the Founders Stock Purchase Agreements between the
Company and each of Xxxxxxx XxXxxxx, Xxxxx Xxxxxxxxx, Xxxxxxx Xxxxxx and Xxxx
Xxxxx, each dated as of July 29, 1999 as transfers described in Section
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351(a) of the Code and shall comply with the reporting and recordkeeping
requirements of Treasury Regulation Section 1.351-3.
SECTION 8
Miscellaneous
8.1 Governing Law. This Agreement shall be construed in accordance with,
and governed in all respects by, the laws of the State of Delaware, as applied
to agreements entered into, and to be performed entirely in such state, between
residents of such state.
8.2 Survival. The representations, warranties, covenants and agreements
made herein shall survive (i) the execution and delivery of this Agreement and
(ii) the Closing.
8.3 Rights of Purchasers. Each Purchaser shall have the absolute right
to exercise or refrain from exercising any right or rights that such Purchaser
may have by reason of this Agreement, the Related Agreements, the Restated
Certificate, the Bylaws or at law or in equity including, without limitation,
the right to consent to the waiver of any obligation of the Company and to enter
into any agreement with the Company for the purpose of modifying this Agreement
or the Related Agreements and such Purchaser shall not incur any liability to
any other Purchaser or holder of Series A Preferred (or Common Stock issued upon
conversion thereof) with respect to exercising or refraining from exercising any
such right or rights.
8.4 License Agreement. 3Com Ventures, Inc. shall cause Palm Computing,
Inc. to make good faith efforts to enter into a license agreement with the
Company on terms and conditions mutually acceptable to Palm Computing, Inc. and
the Company within 30 days of the date of this Agreement.
8.5 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto. Notwithstanding any other provision of this Agreement to the
contrary, the rights and obligations of this Agreement may be expressly
transferred to any affiliate of the Purchasers.
8.6 Entire Agreement; Amendment. This Agreement (including all exhibits
hereto) and the other documents delivered pursuant hereto constitute the full
and entire understanding and agreement among the parties with regard to the
subjects hereof and thereof. This Agreement and any term hereof may be amended,
waived, discharged or terminated only by means of a written instrument signed by
the Company and Purchasers (or their respective successor or assigns) holding at
least a majority of the shares of Series A Preferred (or Common Stock issued
upon conversion thereof) then outstanding. Any amendment, waiver, discharge or
termination not in compliance with this Section 8.5 shall be void.
8.7 Notices, etc. All notices and other communications required or
permitted hereunder shall be in writing and shall be mailed by first-class mail,
postage prepaid, or delivered either by
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hand, by messenger, by overnight courier service or by confirmed facsimile,
addressed (a) if to Purchaser, as indicated on the Schedule of Purchasers, or at
such other address as Purchaser shall have furnished to the Company in writing,
or (b) if to any other holder of any Series A Preferred or any Common Stock
issued upon conversion of Series A Preferred, at such address as such holder
shall have furnished the Company in writing or, until any such holder so
furnishes an address to the Company, then to and at the address of the last
holder thereof who has so furnished an address to the Company, or (c) if to the
Company, at its address set forth at the end of this Agreement or at such other
address as the Company shall have furnished to the Purchasers and each such
other holder in writing.
8.8 Delays or Omissions. No delay or omission to exercise any right,
power or remedy accruing to any holder of any Series A Preferred (or Common
Stock issued upon conversion thereof) upon any breach or default of the Company
under this Agreement shall impair any such right, power or remedy of such
holder, nor shall it be construed to be a waiver of any such breach or default
or an acquiescence therein, or of or in any similar breach or default thereafter
occurring; nor shall any waiver of any single breach or default be deemed a
waiver of any other breach or default theretofore or thereafter occurring. Any
waiver, permit, consent or approval of any kind or character on the part of any
holder of any breach or default under this Agreement, or any waiver on the part
of any holder of any provisions or conditions of this Agreement, must be made in
writing and shall be effective only to the extent specifically set forth in such
writing. All remedies, either under this Agreement or by law or otherwise
afforded to any holder, shall be cumulative and not alternative.
8.9 Headings. The headings of this Agreement are for convenience only
and should not be used to construe or interpret the terms of this Agreement.
8.10 Severability. In case any provision of the Agreement shall be held
to be invalid, illegal or unenforceable, such provision shall be excluded from
this Agreement the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
8.11 Finders Fee. Each party represents that it neither is nor will be
obligated for any finders' fee or commission in connection with this
transaction. Each Purchaser agrees, severally and not jointly, 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 Purchaser
or any of its officers, partners, employees, or representatives is responsible.
The Company agrees to indemnify and hold harmless each Purchaser 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,
representatives or predecessors-in-interests is responsible.
8.12 Further Assurances. Each party to this Agreement hereby covenants
and agrees, without the necessity of any further consideration, to execute and
deliver any and all such further documents and take any and all such other
actions as may be necessary or appropriate to carry out the intent and purposes
of this Agreement and to consummate the transactions contemplated herein.
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8.13 Titles and Subtitles. The titles of the paragraphs and subparagraphs
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
8.14 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
8.15 Additional Parties. The parties hereto agree that additional
purchasers of Series A Preferred may, with the consent only of the Company and
as otherwise set forth in Section 2.3 of the Agreement, be added as parties to
this Agreement, and shall thereupon be deemed for all purposes "Purchasers"
hereunder. Any such additional party shall execute a counterpart of this
Agreement, and upon execution by such additional party and by the Company, shall
be considered a Purchaser for purposes of this Agreement.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the undersigned has executed this Agreement as of the
date set forth above.
COMPANY:
AIRWEB CORPORATION
By: /s/ XXXXXXX XxXXXXX
-------------------------------------
Name: XXXXXXX XxXXXXX
-----------------------------------
Title: CEO
----------------------------------
Address:
--------------------------------
--------------------------------
SIGNATURE PAGE TO SERIES A PREFERRED STOCK PURCHASE AGREEMENT
22
PURCHASERS:
3COM VENTURES, INC.
By: /s/ XXXXXX XXXXXXX
-------------------------------------
(Signature)
Name: XXXXXX XXXXXXX
-----------------------------------
(Print Name)
Title: PRESIDENT
----------------------------------
AETHER OPENSKY INVESTMENTS LLC
By: Aether Technologies International,
L.L.C.,
Its Sole Member
By: /s/ XXXXX X. XXXX
-------------------------------------
(Signature)
Name: XXXXX X. XXXX
-----------------------------------
(Print Name)
Title: MANAGER
----------------------------------
SIGNATURE PAGE TO SERIES A PREFERRED STOCK PURCHASE AGREEMENT
23
WS INVESTMENT COMPANY 99B
By:
-------------------------------------
(Signature)
Name:
-----------------------------------
(Print Name)
Title:
----------------------------------
SIGNATURE PAGE TO SERIES A PREFERRED STOCK PURCHASE AGREEMENT
