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EXHIBIT 10.20
PARK `N VIEW, INC.
SECURITIES PURCHASE AGREEMENT
SUBORDINATED NOTES
SERIES A PREFERRED STOCK
AND COMMON STOCK
DATED AS OF NOVEMBER 2, 1995
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TABLE OF CONTENTS
PAGE
I. AUTHORIZATION AND FORM OF STOCK; CLOSING.............................................................5
1.1 Authorization of Stock and Subordinated Notes..................................................5
1.2 Initial Closing; Payment.......................................................................5
1.3 Interim Closing; Payment.......................................................................6
1.4 Final Closing: Payment.........................................................................7
II. OTHER AGREEMENTS....................................................................................7
2.1 Other Agreements...............................................................................7
III. REPRESENTATIONS AND WARRANTIES OF THE COMPANY......................................................7
3.1 Organization and Qualification of the Company..................................................7
3.2 Capital Stock..................................................................................8
3.3 Title to Assets................................................................................9
3.4 Outstanding Debt...............................................................................9
3.5 Litigation, etc................................................................................9
3.6 Other Agreements, etc..........................................................................9
3.7 Company Authorizations.........................................................................9
3.8 Governmental Authorizations...................................................................10
3.9 Full Disclosure...............................................................................10
3.10 Required Approvals...........................................................................11
3.11 ERISA........................................................................................11
3.12 No Broker or Finder..........................................................................11
3.13 Extent of Offering...........................................................................11
3.14 Dividends....................................................................................12
3.15 Registration Rights..........................................................................12
3.16 No Registration..............................................................................12
3.17 No Obligation to Purchase....................................................................12
3.18 Other Offerings: Registration Exemptions.....................................................12
3.19 Illegal Payments.............................................................................13
3.20 Related Party Transactions...................................................................13
3.21 Financial Statements.........................................................................13
IV. REPRESENTATIONS, WARRANTIES AND COVENANTS OF INVESTOR..............................................14
4.1 Investment Intent, etc........................................................................14
4.2 Sophistication, Financial Strength, Access, etc...............................................14
4.3 No Broker or Finder...........................................................................14
4.4 Authorization.................................................................................14
4.5 Binding Effect................................................................................15
4.6 Information and Nature of the Investment......................................................15
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V. CONDITIONS TO OBLIGATIONS OF PURCHASER..............................................................15
5.1 Initial Closing Conditions....................................................................15
5.2 Interim Closing Conditions....................................................................18
5.3 Final Closing Conditions......................................................................19
VI. COVENANTS OF THE COMPANY...........................................................................20
6.1 Selection of Independent Public Accountants...................................................20
6.2 Payment of Taxes: Corporate Existence and Licenses; Maintenance of Properties/Assets..........20
6.3 To Insure.....................................................................................21
6.4 Payment of Indebtedness, etc..................................................................21
6.5 Financial Statements and Information..........................................................22
6.6 Discussion and Inspection Rights..............................................................24
6.7 Tax Treatment of Dividends....................................................................25
6.8 Notice of Claimed Default or Deficiency.......................................................26
6.9 Composition of Board..........................................................................26
6.10 Blue Sky.....................................................................................27
6.11 Compliance with Laws.........................................................................27
6.12 Filing of Commission Reports.................................................................27
6.13 Transactions with Affiliates.................................................................27
6.14 Subsidiaries.................................................................................27
6.15 Expenditures.................................................................................27
6.16 No Registration Rights to Others.............................................................28
6.17 Use of Proceeds..............................................................................28
6.18 Restrictions on Employee Stock...............................................................28
6.19 Confidentiality..............................................................................28
6.20 Take or Pay Contracts........................................................................28
6.21 The Financing................................................................................29
6.22 Small Business Information...................................................................29
VII. TRANSFER OF SECURITIES............................................................................29
7.1 Restrictive Legends...........................................................................29
7.2 Notice of Proposed Transfer...................................................................30
7.3 Termination of Restrictions...................................................................30
7.4 Compliance with Rule 144 and Rule 144A........................................................31
7.5 Non-Applicability of Restrictions on Transfer.................................................31
VIII. MISCELLANEOUS....................................................................................32
8.1 Brokers; Indemnification......................................................................32
8.2 Stamp Tax and Delivery Costs..................................................................32
8.3 Place of Payment..............................................................................32
8.4 Amendment and Waiver..........................................................................33
8.5 Lost, Etc., Securities........................................................................33
8.6 Representations, Warranties and Covenants to Survive..........................................34
8.7 Severability..................................................................................34
8.8 Investigation of the Company..................................................................34
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8.9 Listings......................................................................................34
8.10 Successors and Assigns.......................................................................35
8.11 Notices......................................................................................35
8.12 Governing Law................................................................................35
8.13 Counterparts.................................................................................35
8.14 Reproduction of Documents....................................................................35
8.15 Payment of Fees and Expenses of Purchasers...................................................36
8.16 Affiliates; Transfers........................................................................36
8.17 Table of Contents; Headings..................................................................36
8.18 Indemnification..............................................................................36
8.19 Effect of Failure to Make Agreed Purchases...................................................37
8.20 Entire Agreement; Exhibits and Schedules.....................................................37
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Exhibit Document
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A Names and addresses of Investors
A.1 List of Investors from Investor Group in Initial Investment
A.2 List of Investors from Investor Group in Interim Investment
A.3 List of Investors from Investor Group in Final Investment
B List of Existing Investors
1.1(a) Charter
1.1(b) Certificate of Designation
1.1(c) Form of Subordinated Note
1.2(d) By-laws
3. Exceptions to Representations and Warranties
3.2 Common Stock held by Existing Investors
3.3 List of Assets
3.6 Other Agreements
3.8(b) List of F.C.C. and other licenses.
3.12 Broker/Finder
3.21 Unaudited Financial Statements
5.1(f) Securities Restriction Agreement
5.1(g) Registration Rights Agreement
5.1(h) Stockholders' Agreement
5.1(k) Form of Legal Opinion of Xxxxxx Xxxxxxxx, L.L.P.
5.2(c) Interim Funding Milestones
5.3(d) Final Funding Milestones
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PARK `N VIEW, INC.
SECURITIES PURCHASE AGREEMENT
SUBORDINATED NOTES
SERIES A PREFERRED STOCK
AND COMMON STOCK
As of November 2, 1995
To The Purchasers
Named in Exhibit A Hereto
and appearing on the
signature pages hereto
(collectively referred to herein
as "Investors"; individually, "Investor")
Executing Its Acceptance Hereof
Gentlemen:
Park `N View, Inc. hereby confirms its agreement with you as follows:
DEFINITIONS
"Affiliate" shall mean any entity controlling, controlled by or under
common control with a designated Person. For the purposes of this definition,
"control" shall have the meaning presently specified for that word in Rule 405
promulgated by the Securities and Exchange Commission under the Securities Act.
With respect to any Person who is a limited partnership, Affiliate shall also
after any general or limited partner of such limited partnership, or any Person
which is a general partner in a general or limited partnership which is a
general partner of such limited partnership.
"Agreement" shall mean, and the words "herein," "hereof," "hereunder"
and words of similar import shall refer to this Agreement and any amendment or
supplement hereto.
"Annual Budget" shall have the meaning set forth in Section 6.5 hereof.
"Assets" shall mean any interest in any kind of property or assets,
whether real, personal or mixed, or tangible or intangible as set forth on
Exhibit 3.3 attached hereto.
"Board" shall mean the Board of Directors of the Company.
"By-laws" shall have the meaning set forth in Section 1.2 hereof.
"Certificate of Designation" shall have the meaning set forth in
Section 1.1 hereof.
"Charter" shall have the meaning set forth in Section 1.1 hereof.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
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"Common Stock" shall mean the Company's Common Stock, $.001 par value,
and any Stock into which such Common Stock may hereafter be converted.
"Company" shall mean Park N' View, Inc., a Delaware corporation, and
all successor corporations thereof.
"Consolidated" shall mean, with respect to Park N' View, Inc.,
financial statements of the Company including the results of its operations at
each truckstop, consolidated in accordance with generally accepted accounting
principles consistently applied, whether or not ordinarily consolidated by the
Company.
"Dividends Received Deduction" shall have the meaning set forth in
Section 6.7 hereof.
"Existing Investors" shall have the meaning of investors in Park `N
View, Ltd. immediately preceding the Initial Closing.
"Final Closing" shall have the meaning set forth in Section 1.4 hereof.
"Final Closing Date" shall have the meaning set forth in Section 1.4
hereof.
"Final Investment" shall have the meaning set forth in Section 1.4
hereof.
"Holders" shall mean the Persons who shall from time to time, own, of
record or beneficially, any Security. The term "Holder" shall mean any one of
the Holders.
"Indebtedness" shall have the meaning set forth in the Certificates of
Designation.
"Initial Closing" shall have the meaning set forth in Section 1.2
hereof.
"Initial Investment" shall have the meaning set forth in Section 1.2
hereof.
"Interim Closing" shall have the meaning set forth in Section 1.3
hereof.
"Interim Closing Date" shall have the meaning set forth in Section 1.3
hereof.
"Interim Investment" shall have the meaning set forth in Section 1.3
hereof.
"Investor Designee" shall have the meaning set forth in the
Stockholders' Agreement.
"Investors" shall have the meaning set forth in Section 2.1 hereof,
subject to the provisions of Section 9.16 hereof. "Investor" shall mean any one
of the Investors.
"Key-Man Policy" shall have the meaning set forth in Section 5.1
hereof.
"Losses" shall have the meaning set forth in Section 8.18 hereof.
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"NASDAQ" shall mean the National Association of Securities Dealers
Automated Quotation System.
"Other Agreements" shall have the meaning set forth in Section 2.1
hereof.
"Other Investors" shall have the meaning set forth in Section 2.1
hereof.
"Person" shall mean an individual, a corporation, a partnership, a
trust, an unincorporated organization or a governmental organization or any
agency or political subdivision thereof.
"Preferred Stock" shall mean the Series A Preferred Stock, $.01 par
value.
"Registrable Stock" shall mean any securities which constitute
Registrable Stock pursuant to the Registration Rights Agreement.
"Registration Rights Agreement" shall have the meaning set forth in
Section 5.1 hereof.
"Registration Statement" shall mean any registration statement filed
with the Securities and Exchange Commission in accordance with the Securities
Act, together with all amendments or supplements thereto.
"Regulatory Problem" shall mean (a) any set of facts or circumstances
wherein it has been asserted by any governmental regulatory agency (or any
Holder believes that such assertion will be made) that such Holder (or any
Person that controls such Holder) is not entitled to hold, or exercise any
material right with respect to, all or any portion of the Securities or (b) when
any Holder and such Holder's Affiliates would own, control or have power
(including voting rights) over a greater quantity of Securities of any kind than
are permitted under any applicable law or regulation or any requirement of any
governmental authority.
"Related Entities" shall mean with respect to any Person:
a) if such Person is a limited or general partnership
any general partner of such partnership;
b) if such Person is a corporation, any Person holding,
directly or indirectly and alone or in the aggregate, not less than a
majority in voting power of the voting securities in such corporation;
c) any corporation in which such Person and/or any of
the Persons included as Related Entities pursuant to clause (a) of this
definition hold, directly or indirectly and alone or in the aggregate,
not less than a majority in voting power of the then outstanding voting
securities; and
d) any limited or general partnership in which such
Person and/or any of the Persons included as Related Entities pursuant
to clauses (a) to (c) of this definition is a
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general partner, and any other partnership in which any partnership
included as a Related Entity pursuant to this clause (d) is a general
partner.
"Rule 144" shall have the meaning set forth in Section 7.3 hereof.
"Rule 144A" shall have the meaning set forth in Section 7.2 hereof.
"Securities" shall mean any debt or equity securities of the Company
whether now or hereafter authorized including the Subordinated Notes, and any
instrument convertible into or exchangeable for Securities or a Security. The
term "Security" shall mean any one of the Securities.
"Securities Act" shall mean the Securities Act of 1933, as amended,
prior to or after the date of this Agreement, or any federal statute or statutes
which shall be enacted to take the place of such Act, together with all rules
and regulations promulgated thereunder.
"Securities and Exchange Commission" shall mean the United States
Securities and Exchange Commission or any successor to the functions of such
agency.
"Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, prior to or after the date of this Agreement, or any federal
statute or statutes which shall be enacted to take the place of such Act,
together with all rules and regulations promulgated thereunder.
"Series A Stock" shall have the meaning set forth in Section 1.1
hereof.
"Service Revenue" shall mean the aggregate gross amount collected from
the sale of cable television, telecommunication services, excluding advertising,
data transmission or pay-per-view services, less the amount of taxes, if any,
and less any refunds for faulty service or equipment.
"Stock" shall include any and all shares, interests or other
equivalents (however designated) of, or participation in, corporate stock.
"Stockholders' Agreement" shall have the meaning set forth in Section
5.1 hereof.
"Stock Restriction Agreement" shall have the meaning set forth in
Section 5.1 hereof.
"Subordinated Notes" shall mean the $1,000 subordinated promissory
notes with a 8% coupon payable semi-annually.
"Subsidiary" shall mean any corporation more than 50% of whose
outstanding Voting Stock shall at the time be owned directly or indirectly by
the Company or by one or more Subsidiaries or by the Company and one or more
Subsidiaries.
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"Voting Stock" as applied to the Stock of any corporation, shall mean
Stock of any class or classes (however designated) having ordinary voting power
for the election of a majority of the members of the Board of Directors (or
other governing body) of such corporation, other than Stock having such power
only by reason of the happening of a contingency.
I.
AUTHORIZATION AND FORM OF STOCK; CLOSING
1.1 Authorization of Stock and Subordinated Notes.
The Company has adopted the Amended Certificate of Incorporation (the
"Charter") in the form of Exhibit 1.1(a) attached hereto and made a part hereof.
The Company proposes to designate, authorize and create a series of its
preferred stock, designated the Series A Preferred Stock, having a par value of
$.01 per share ( the "Series A Stock"), consisting of 140,010 shares and having
the designation, powers, preferences and rights and the qualifications,
limitations or restrictions thereof set forth in the certificate of designation
with respect to such Series (the "Certificate of Designation") in the form of
Exhibit 1.1(b) attached hereto and made a part hereof. Pursuant to this
Agreement, the Company proposes to issue up to $6,000,000 principal amount of
its 8% Subordinated Promissory Notes due October 31, 2000 in the form of Exhibit
1.1(c) (the "Subordinated Notes").
1.2 Initial Closing; Payment.
(a) Subject to the terms and conditions of this Agreement,
including, without limitation, the valid adoption by the Company of the Charter
and the Certificate of Designation and the filing thereof with the Secretary of
State of Delaware, the valid adoption by the Company of its By-laws (the
"By-laws"), in the form of Exhibit 1.2(a) attached hereto and made a part
hereof, and upon the basis of the representations and warranties herein
contained or at such earlier or later date as the parties shall agree, the
Company hereby agrees to sell to you and issue to you or your nominee, and you
agree to purchase from the Company, (i) for the amount set forth to the right of
your name under the heading "Initial Subordinated Note Investment" on Exhibit
A.1 which is attached hereto and made a part hereof, that principal amount of
Subordinated Notes, (ii) for the amount set forth to the right of your name
under the heading "Initial Series A Preferred Stock Investment" on Exhibit A.1
which is attached hereto and made a part hereof, the number of shares of Series
A Stock set forth under the heading "Initial Series A Preferred Stock Purchased"
at a purchase price of $10.00 per share and (iii) for the amount set forth to
the right of your name under the heading "Common Stock Investment" on Exhibit
A.1 which is attached hereto and made a part hereof, the number of shares of
Common Stock, $.001 par value (the "Common Stock") set forth under the heading
"Common Stock Purchased" at a purchase price of $.05 per share (collectively,
the "Initial Investment"). The proceeds of $1.8 million from this Initial
Investment shall be disbursed to the Company in three installments of $600,000
as follows: (i)$600,000 which shall be comprised of proceeds from the sale of
32,210 shares of the Series A Stock, 2,000,000 shares of Common Stock and $0.178
million of
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Subordinated Notes, including $100,000 of Subordinated Notes in exchange for a
$100,000 secured promissory note issued by the Company on October 20, 1995, as
soon as possible following execution of this Agreement and satisfaction of the
terms and conditions set forth herein (the "Initial Closing"), (ii) $600,000 one
month following the Initial Closing which shall be comprised of proceeds from
the sale of $600,000 of Subordinated Notes and (iii) $600,000 three months
following the Initial Closing which shall be comprised of proceeds from the sale
of $600,000 of Subordinated Notes. Each Investor's Initial Investment shall be
paid to the Company by wire transfer of funds against delivery of shares of
Common Stock, Series A Stock and Subordinated Notes to be purchased by such
Investor at the Closing registered in such Investor's name or that of a nominee,
as such Investor may direct. Notwithstanding the foregoing, in the event that
the condition set forth in Section 5.1(p) hereof is not met by the Company
within five (5) months of the Initial Closing, the Investors shall have the
right to purchase up to an additional 349,651 shares of Common Stock from the
Company at a price of $.001 per share. Such shares of Common Stock shall be
purchasable by each Investor on a pro rata basis based on the number of shares
held by each Investor as set forth on Exhibit A.1 hereof.
(b) At the Initial Closing, Park `N View, Ltd. ("PNV") shall
transfer all of its Assets to the Company in exchange for 2,318,182 shares of
Common Stock of the Company which shall be distributed to Existing Investors as
set forth under the heading "Issuance of Common Stock" on Exhibit B which is
attached hereto and made a part hereof. The Initial Closing shall take place at
the offices of Shereff, Friedman, Xxxxxxx & Xxxxxxx, LLP, or at such other time
and place as shall be agreed upon by the parties.
1.3 Interim Closing; Payment.
Subject to the terms and conditions of this Agreement, the Company
hereby agrees to sell to you and issue to you or your nominee, and you agree to
purchase from the Company (i) for the amount set forth to the right of your name
under the heading "Interim Subordinated Notes Investment" on Exhibit A.2 which
is attached hereto and made a part hereof, that principal amount of Subordinated
Notes and (ii) for the amount set forth to the right of your name under the
heading "Interim Series A Preferred Stock Investment" on Exhibit A.2 which is
attached hereto and made a part hereof, the number of shares of Series A Stock
set forth under the heading "Interim Series A Preferred Stock Purchased"
(collectively, the "Interim Investment"). Each Investor's Interim Investment
shall be paid by wire transfer of funds against delivery of certificates
evidencing the shares of Series A Stock and the issuance of Subordinated Notes
to be purchased by such Investor at the Interim Closing registered in such
Investor's name or that of a nominee as such Investor may direct. The Interim
Closing shall be effected at the offices of Shereff, Friedman, Xxxxxxx &
Xxxxxxx, LLP, or at such other place as shall be agreed upon by the parties,
five months after the Initial Closing (the "Interim Closing") subject to the
satisfaction of the terms and conditions set forth in Section 5.2 of this
Agreement.
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1.4 Final Closing: Payment.
Subject to the terms and conditions of this Agreement, the Company
hereby agrees to sell to you and issue to you or your nominee, and you agree to
purchase from the Company (i) for the amount set forth to the right of your name
under the heading "Final Subordinated Notes Investment" on Exhibit A.3 which is
attached hereto and made a part hereof, that principal amount of Subordinated
Notes and (ii) for the amount set forth to the right of your name under the
heading "Final Series A Preferred Stock Investment", the number of shares of
Series A Stock set forth under the heading "Final Series A Preferred Stock
Purchased" (collectively, the "Final Investment"). Each Investor's Final
Investment shall be paid by wire transfer of funds against delivery of
certificates evidencing the shares of Series A Stock and the issuance of
Subordinated Notes to be purchased by such Investor at the Final Closing
registered in such Investor's name or that of a nominee as such Investor may
direct. The Final Closing shall be effected at the offices of Shereff, Friedman,
Xxxxxxx & Xxxxxxx, LLP, or at such other place as shall be agreed upon by the
parties, nine months after the Initial Closing (the "Final Closing") subject to
the satisfaction of the terms and conditions set forth in Section 5.3 of this
Agreement.
II.
OTHER AGREEMENTS
2.1 Other Agreements.
The Company is entering into other agreements of even date herewith
(the "Other Agreements") with the Persons other than you listed on Exhibit A
hereto (the "Other Investors"). (You and the Other Investors are sometimes
hereinafter collectively referred to as the "Investors," and individually as an
"Investor.") Except for differences in the amounts to be invested, the Other
Agreements are identical to this Agreement.
III.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company and PNV, jointly and severally, represents and warrants to
you that, except as otherwise provided in this Article III or as set forth in
Exhibit 3 hereto, as of the date hereof and as of the Initial Closing:
3.1 Organization and Qualification of the Company.
The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all requisite
corporate power and authority to own its Assets and to carry on its business as
contemplated pursuant to its business plan, and to carry out the transactions
contemplated by this Agreement and the Other Agreements. The Company is
qualified to do business in each of the jurisdictions in which the character of
its
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Assets or the nature of its activities makes such qualification in such
jurisdictions necessary, except where the failure to so qualify would not have a
material adverse effect on the business of the Company. The Company has no
Subsidiaries and does not own of record or beneficially any securities of any
corporation or any instrument or investment in any partnership, association,
corporation, fund or business entity.
3.2 Capital Stock.
Subject to the valid filing of the Charter and the Certificate of
Designation with the Secretary of State of Delaware, the authorized capital
stock of the Company immediately following the completion of the Initial
Investment will consist of 5,000,000 shares of Common Stock and 140,000 shares
of Series A Preferred Stock. Immediately following the completion of the Initial
Investment, there will be:
(a) 2,318,182 fully paid and non-assessable shares of
Common Stock duly issued and outstanding, registered to the Existing
Investors as set forth in Exhibit B hereto;
(b) 2,000,000 fully paid and non assessable shares of
Common Stock duly issued and outstanding, registered to Investors as
set forth on Exhibit A.1 hereto.
(c) 32,200 fully paid and non-assessable shares of Series
A Stock duly issued and outstanding, registered to Investors as set
forth on Exhibit A.1 hereto, and 107,800 shares of Series A Stock duly
authorized and reserved for issuance in accordance with the provisions
of this Agreement and the Other Agreements.
Upon completion of the Initial Investment no other Stock will be
outstanding or authorized for issuance. Except as disclosed in this Section 3.2
and as otherwise provided for in or contemplated by this Agreement, upon
completion of the Initial Investment: (i) no Holder of any Security of the
Company (a) will be entitled to any preemptive rights or (b) will have any right
of first refusal to purchase any shares of Series A Stock to be issued and sold
or otherwise transferred to you and the Other Investors pursuant to this
Agreement and the Other Agreements, (ii) the Company will not have granted any
options, warrants or rights to purchase any of its Common Stock or authorized
any of its Common Stock for issuance, and (iii) no instrument or security is
outstanding which will be convertible into or exchangeable for, or which
entitles the Holder thereof to purchase, any Security. In addition to the shares
described above, the Company shall institute a stock option plan for the benefit
of its management. The Company shall reserve shares representing up to 5% of the
outstanding shares of Common Stock for issuance under the plan. The terms for
the grant and exercise of the options under the plan shall be approved by the
Board of Directors.
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3.3 Title to Assets.
PNV and The Existing Investors have duly and validly transferred all of
their respective rights, title and interest in the assets set forth on Exhibit
3.3 (the "Assets") attached hereto and made a part hereof, to the Company and
the Company has good and marketable title to such Assets, and none of such
Assets is subject to any mortgage, pledge, security interest, lien, or other
encumbrance. The Assets constitute all of the Assets of PNV and all of the
Assets relating to the business to be carried on by the Company in which any of
the Existing Investors or their affiliates own any direct or indirect interest.
3.4 Outstanding Debt.
Immediately after the Initial Closing, the Company will not have any
Indebtedness other than Indebtedness incurred in connection with the formation
of the Company and the negotiation of this Agreement and the Other Agreements
including without limitation the Subordinated Notes.
3.5 Litigation, etc.
There are no actions, suits, proceedings or investigations pending or,
to the knowledge of the Company, PNV or the Existing Investors, threatened
against PNV, the Company, or any of the Existing Investors which relates to PNV
or the Company before any court or before any administrative agency or
administrative officer, nor is there any litigation pending or, to the knowledge
of the Company, PNV or the Existing Investors, threatened against the Company,
PNV or against the principal executive management of the Company by reason of
employment agreements, confidentiality agreements, noncompetition agreements or
other agreements or arrangements. Neither the Company nor any of its Assets is
subject to any judicial or administrative order, judgment or decree. The Company
has no knowledge of any existing violations by PNV, the Company or the principal
executive management of the Company of federal, state or local laws, regulations
or orders.
3.6 Other Agreements, etc.
The Company is not a party to any indenture, agreement or other
instrument, and has not issued any outstanding Indebtedness. Exhibit 3.6 is a
complete list of all contracts to which PNV or the Company is a party or which
are currently in negotiation.
3.7 Company Authorizations.
This Agreement, the Other Agreements, the Charter, the Certificate of
Designation, the By-laws, the Stock Restriction Agreement, the Registration
Rights Agreement, the Stockholders' Agreement and the Truck Stop Agreements (as
identified on Exhibit 3.6) have been duly authorized by PNV or the Company, as
the case may be, and each such agreement constitutes or, when executed by or
assigned to the Company, will constitute the legal, valid and binding
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obligation of the Company, enforceable in accordance with its terms, except as
limited by bankruptcy, insolvency or other laws affecting the enforcement of
creditors' rights generally or by equitable principles in any action (legal or
equitable) or by public policy.
3.8 Governmental Authorizations.
(a) Except for the filing with the Secretary of State of Delaware
of the Charter and the Certificate of Designation and filings pursuant to
federal and state securities and blue sky laws, none of which securities or blue
sky law filings are required to be made prior to the Initial Closing, no
approval or authorization of, or registration, qualification or filing with, any
state regulatory body or any federal, state or municipal governmental authority
in the United States or in any foreign country is required in connection with
the execution, delivery or performance by the Company of this Agreement or the
Other Agreements or the issuance of the shares of Common Stock, Series A Stock
and Subordinated Notes sold in each of the Initial, Interim and Final
Investments or the performance by the Company of its obligations under the
Certificate of Designation.
(b) The Company holds the licenses or other permits issued by the
Federal Communications Commission ("FCC") and other state and federal agencies
listed on Exhibit 3.8(b) . Except for local construction permits, no other
licenses or permits are required to be obtained by the Company to operate its
business as contemplated.
3.9 Full Disclosure.
Neither the representations and warranties of the Company contained in
this Article III, nor any other written statement, including, without
limitation, the Business Plan of the Company, furnished by or on behalf of the
Company to you in connection with the negotiation of the issuance of the Common
Stock, Series A Stock and Subordinated Notes and the other transactions
contemplated by this Agreement and the Other Agreements, contains any untrue
statement of a material fact or omits a material fact necessary to make the
statements contained therein or herein, taken as a whole, not misleading;
provided, however, that plans, projections, estimates and other information with
respect to future results, activities and events, contained in any written
document furnished by or on behalf of the Company are not facts and as to such
matters the Company represents and warrants only that such information
represents the Company's best efforts to plan, project and estimate, based upon
current circumstances, such future results, activities and events and the good
faith belief that such activities and events can be accomplished. There is no
fact known to the Company which the Company has not disclosed to you which
materially adversely affects or, to the knowledge of the Company, could
reasonably be expected to materially adversely affect the business, Assets,
prospects, profits or condition, financial or otherwise, of the Company, or the
ability of the Company to perform its obligations under this Agreement, the
Other Agreements and the Charter.
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3.10 Required Approvals.
Other than (i) the valid adoption by the Board and the Holders of
Common Stock of the resolution embodied in the Charter, (ii) the valid adoption
by the Board of the resolutions embodied in the Certificate of Designation,
(iii) the valid adoption by the Board of the resolution embodied in the By-laws,
(iv) the valid adoption by the Board of resolutions authorizing the execution
and delivery by the Company of this Agreement, the Other Agreements including
the Subordinated Notes, the consummation of the transactions contemplated hereby
and thereby and the performance by the Company of its obligations hereunder and
thereunder, and (v) the valid adoption by the Board of resolutions authorizing
the execution and delivery by the Company of the Stock Restriction Agreement,
the Registration Rights Agreement, the Stockholders' Agreement, the Subscription
Agreements and the performance by the Company of its obligations thereunder, no
approval or consent is required by law or by the Company's Charter or By-laws or
by any indenture, agreement or other instrument to which the Company is a party
or otherwise bound or to which its Assets is subject, or by any Indebtedness of
the Company, in connection with the issuance and sale or transfer of the Common
Stock, Series A Stock and Subordinated Notes to you and the Other Investors
pursuant to this Agreement and the Other Agreements, and the performance by the
Company of its obligations under this Agreement, the Other Agreements, the
Certificate of Designation and the Subordinated Notes. The execution and
delivery of this Agreement and the Other Agreements by the Company and
consummation of the transactions contemplated hereby and thereby, do not and
will not violate any provision of law, any order of any court or other agency of
government in a proceeding to which the Company is a party or by which it is
bound, or conflict with the Charter, the Certificate of Designation or the
By-laws of the Company or result in any breach of, or constitute a default
under, any contract, agreement or instrument to which the Company is a party or
by which it or any of its Assets is bound.
3.11 ERISA.
The Company does not now maintain or make contributions to any employee
pension plan or employee benefit plan, as such terms are defined in Section 3 of
the Employee Retirement Income Security Act of 1974, as amended.
3.12 No Broker or Finder.
Except as set forth on Exhibit 3.12, the Company has engaged no broker
or finder in connection with this Agreement and the Other Agreements or the
transactions contemplated hereby and thereby.
3.13 Extent of Offering.
Neither the Company nor any agent acting on its behalf has sold or
offered to sell any or all of the Common Stock, Series A Stock or Subordinated
Notes or any similar securities so as to bring the issuance or sale of the
Common Stock, Series A Stock or Subordinated Notes pursuant to this Agreement
and the Other Agreements within the provisions of Section 5 of the Securities
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Act, and neither the Company nor any agent acting on its behalf will offer or
sell the Common Stock, Series A Stock or Subordinated Notes or any similar
securities so as to bring the issuance or sale of the Common Stock, Series A
Stock or Subordinated Notes pursuant to this Agreement and the Other Agreements
within such provisions.
3.14 Dividends.
The Company has taken no action which would require or permit it to
treat the Common Stock or Series A Stock as other than equity or dividends on
the Common Stock or Series A Stock as other than dividends on its books or
federal, state or local income tax returns.
3.15 Registration Rights.
Except for rights existing pursuant to the Registration Rights
Agreement contemplated hereby, as of the completion of the Initial Closing, no
holder of any Security will have any right to require the registration thereof
(or of Securities receivable upon the exercise or conversion thereof) under the
Securities Act or the right to include such Security (or any Security receivable
upon the exercise or conversion thereof) in a registration statement filed by
the Company under the Securities Act.
3.16 No Registration.
The Company has not registered any Securities under the Securities
Exchange Act. Except for the Investors and Existing Investors, the Company and
its predecessors have not offered any securities to any person within the past
two years.
3.17 No Obligation to Purchase.
As of the Initial Closing, except for rights provided pursuant to the
Other Agreements, the Company will not be a party to any agreement with any
Holder of any Securities which requires the Company to purchase any of such
Securities from such Holder under any circumstances.
3.18 Other Offerings: Registration Exemptions.
All the Securities issued and outstanding immediately after the Initial
Closing will have been offered and sold or will be offered and sold pursuant to
valid exemptions from the registration requirements of the Securities Act and
any applicable state securities and blue sky laws. As of the Initial Closing, no
agreements or instruments providing for the issuance or sale of shares of Common
Stock, Series A Stock or Subordinated Notes by the Company, other than this
Agreement and the Other Agreements will be in existence.
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3.19 Illegal Payments.
The Company has never made any illegal payment of any kind, directly or
indirectly, including, without limitation, payments, gifts or gratuities, to
United States or foreign national, state or local government officials,
employees or agents.
3.20 Related Party Transactions.
(a) No Existing Investors, employee, officer or director of the
Company, no Affiliate of any Existing Investors, employee, officer or director
of the Company, and no member of the immediate family of any Existing Investor,
employee, officer or director of the Company is indebted to the Company or PNV.
(b) The Company and PNV are not indebted and are not committed to
make loans or extend or guarantee credit, to any Existing Investor, employee,
officer or director of the Company, or any Affiliate of any Existing Investor,
employee, officer or director of the Company, or any member of the immediate
family of any Existing Investor, employee, officer or director of the Company.
(c) No Existing Investors, employee of the Company and no member
of the immediate family of any employee of the Company is interested, directly
or indirectly, in any contract with the Company or PNV except by reason of their
ownership interest in the Company or PNV.
(d) No Existing Investor or party to this Agreement or the Other
Agreements is presently, directly or indirectly through such party's affiliation
with any other Person, a party to any transaction with the Company providing for
the furnishing of services by, or rental of real or personal property from, or
otherwise requiring cash payments to, any such Person pursuant to an agreement
that is material.
3.21 Financial Statements. Annexed hereto as Exhibit 3.21 is the
unaudited pro forma balance sheet of the Company ("Balance Sheet") as of the
date indicated thereon. The Balance Sheet was prepared in accordance with
general accepted accounting principles and accurately reflects and fairly
presents the financial condition of the Company as at such date. Since the date
of the Balance Sheet, the Company has not declared any dividends or made any
distributions; and except as set forth on Exhibit 3, made any commitments
involving more than $1,000; incurred any Indebtedness; or made any capital
expenditures.
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IV.
REPRESENTATIONS, WARRANTIES AND COVENANTS OF INVESTOR
4.1 Investment Intent, etc.
You represent and warrant that you are acquiring the Subordinated
Notes, the Series A Stock and the Common Stock, if any, purchased or otherwise
acquired hereunder for your own account for investment and not with a view to,
or for sale or other disposition in connection with, any distribution thereof,
nor with any present intention of selling or otherwise disposing of the same,
subject, nevertheless, to any requirement of law that the disposition of your
Assets shall at all times be within your control.
4.2 Sophistication, Financial Strength, Access, etc.
You represent, warrant and acknowledge that you are an Accredited
Investor (as that term is defined in Rule 501 promulgated by the Securities and
Exchange Commission under the Securities Act), that you have such knowledge and
experience in business and financial matters as to be capable of evaluating the
merits and risks of the investment contemplated to be made hereunder, and that
you were not formed or organized for the specific purpose of investing in the
Company; that you understand that such investment bears a high degree of risk
and could result in a total loss of your investment; that your principal place
of business is the address set forth on Exhibit A; and that you have sufficient
financial strength to hold your investment for an indefinite period and to bear
the economic risks of such investment (including possible loss of such
investment) for an indefinite period of time. You acknowledge that you are fully
informed that the Securities being sold to you hereunder are being sold pursuant
to a private offering exemption under the Securities Act and are not being
registered under the Securities Act or under the securities or blue sky laws of
any state or foreign jurisdiction; that such Securities must be held
indefinitely unless they are subsequently registered under the Securities Act
and any applicable state securities or blue sky laws, or unless an exemption
from registration is available thereunder; and that the Company has no
obligation to register such Securities except as expressly set forth in the
Registration Rights Agreement.
4.3 No Broker or Finder.
You represent and warrant that you have engaged no broker or finder in
connection with this Agreement or the transactions contemplated hereby.
4.4 Authorization.
You represent and warrant that as of the Initial Closing the execution,
delivery and performance of this Agreement, the Registration Rights Agreement,
the Stockholders' Agreement, the Stock Restriction Agreement and the
consummation of the transactions contemplated herein, have been duly authorized
by you. Subject to and in reliance upon the
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accuracy of the Company's representations and warranties contained herein, the
fulfillment of and compliance with the terms of this Agreement, the Registration
Rights Agreement, the Stock Restriction Agreement and the Stockholders'
Agreement by you will not (i) conflict with or result in a breach of the terms,
conditions or provisions of, (ii) constitute a default under, or (iii) result in
a violation of, breach of or default under (a) your partnership agreement or
your articles or certificate of incorporation (as applicable) or any other
organizational document, (b) any law, statute, rule or regulation to which you
are subject, or (c) any agreement, instrument, order, judgment or decree to
which you are a party, bound or subject.
4.5 Binding Effect.
You represent and warrant that this Agreement constitutes a valid and
binding obligation of yours, enforceable in accordance with its terms, except
insofar as (i) such obligation may be limited by bankruptcy, insolvency or other
laws affecting the enforcement of creditors rights generally or by equitable
principles in any action (legal or equitable), (ii) the availability of
equitable relief may be subject to the discretion of the court before which any
proceeding thereof may be brought and (iii) the enforceability of the
indemnification provisions may be limited by applicable securities law or public
policy.
4.6 Information and Nature of the Investment.
You represent and warrant that you understand that the Company is a
recently organized corporation, which has been organized to acquire the business
of PNV, and that your investment in Subordinated Notes, Series A Stock and
Common Stock, if any, entails a high degree of risk. You represent that you have
been provided, and have reviewed, a copy of the Company's Business Plan and
understand that the accuracy of certain of the assumptions stated in the
Company's business plan is subject to industry performance, general business and
economic conditions, taxes and other matters, many of which are beyond the
Company's control.
V.
CONDITIONS TO OBLIGATIONS OF PURCHASER
5.1 Initial Closing Conditions.
Your obligation to purchase the Subordinated Notes, Series A Stock and
Common Stock, to be purchased by you at the Initial Closing and to consummate
the other transactions contemplated herein, as provided in Section 1.2 hereof,
shall be subject to the satisfaction of the following conditions, any of which
may be waived by you in writing:
(a) Representations and Warranties True at Closing:
Non-Occurrence of Default. The representations and warranties contained in
Article III hereof shall be true upon completion of the Initial Closing, there
shall exist no condition, event or fact constituting, or which, with notice or
passage of time or both would constitute, a default in the observance of any
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of the Company's undertakings or covenants hereunder, under the Other Agreements
or pursuant to the Certificate of Designation, and all conditions precedent to
the Initial Closing to be performed by the Company shall have been complied
with; and the President and the Treasurer of the Company shall deliver to you at
the Initial Closing a certificate to such effect, executed by them.
(b) Corporate Proceedings. All corporate and other
proceedings required to be taken in connection with the transactions
contemplated hereby, by the Other Agreements, and by the Certificate of
Designation including, without limitation, the valid adoption and filing of the
Charter and the Certificate of Designation, and all documents incident hereto
and thereto, shall be satisfactory in form and substance to you, and you shall
have received all such counterpart originals or certified or other copies of
such documents as you shall reasonably request.
(c) Assets. PNV shall have transferred all of the Assets
to the Company as set forth on Exhibit 3.3 attached hereto and made a part
hereof.
(d) Other Agreements. Contemporaneously with the
execution of this Agreement, the Company shall have entered into the Other
Agreements with the Other Investors listed on Exhibit A hereto which, together
with this Agreement, provide for the purchase of an aggregate of $6 million
principal amount of Subordinated Notes, 140,000 shares of Series A Stock and
2,000,000 shares of Common Stock and the Initial Closing shall have taken place
under the Other Agreements contemporaneously with the Initial Closing under this
Agreement.
(e) Charter; Certificate of Designation. The Board and
the Holders of Common shall have adopted the resolution embodied in the Charter;
the Board shall have adopted the resolutions embodied in the Certificate of
Designation; and you shall have received a copy of the Charter and the
Certificate of Designation, certified as of the Initial Closing by the Secretary
of the Company; and the Charter and the Certificate of Designation shall have
been filed with the Secretary of State of Delaware, and their terms shall have
become effective, and you shall have received a copy of each of the Charter and
the Certificate of Designation, certified by the Secretary of State of Delaware.
(f) Securities Restriction Agreement. The Company, each
of the Existing Investors and each of the Investors shall have entered into a
Securities Restriction Agreement with the Company in the form attached hereto
and made a part hereof as Exhibit 5.1(f) (the "Securities Restriction
Agreement"), and a copy of the signed Securities Restriction Agreement shall
have been delivered to you.
(g) Registration Rights Agreement. The Company and each
of the Investors shall have entered into the Registration Rights Agreement in
the form attached hereto and made a part hereof as Exhibit 5.1(g) (the
"Registration Rights Agreement"), and a copy of the signed Registration Rights
Agreement shall have been delivered to you.
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(h) Securityholders' Agreement. The Company and each
Investor shall have entered into the Securityholders' Agreement in the form
attached hereto and made a part hereof as Exhibit 5.1(h) and a copy of the
signed Securityholders' Agreement shall have been delivered to you.
(i) By-laws Amendment. The Board shall have adopted the
resolutions embodied in the By-laws and you shall have received a copy of the
By-laws, certified as of the Initial Closing by the Secretary of the Company.
(j) Key-Man Life Insurance. The Company shall have
obtained a life insurance policy (the "Key-Man Policy") on the life of Xxx
Xxxxxxxx with a death benefit of $1 million naming the Company as the sole
beneficiary from an insurer of recognized responsibility, and upon completion of
the Initial Closing, the Key-Man Policy shall be effective, in full force and
unencumbered, and all premiums, fees or charges which are due thereon shall have
been paid.
(k) Opinion of Counsel. You shall have received from
Xxxxxx Stockton, L.L.P., counsel to the Company, an opinion of counsel
substantially in the form attached hereto and made a part hereof as Exhibit
5.1(k).
(l) Small Business Information. The Company shall deliver
an undertaking to provide information, make reports and take such actions as may
be required under Section 1202(D)(1)(c) of the Internal Revenue Code of 1986, as
amended ("IRC"), in order to qualify the Common Stock and Series A Stock as
"small business stock" within the meaning of IRC Section 1202(c).
(m) Board Composition. The duly elected and acting
members of the Board shall be Xxxxxx Xxxxxxx, Xxxxxx Xxxxxxxxxx, Xxx Xxxxxxxx
and Xxxxxx X'Xxxxxxx. The fifth seat shall be a designee mutually agreed upon by
a majority of the Investors and the Existing Investors as set forth in Section
6.9 hereof.
(n) Prior to the payment of the second installment of
$600,000, the Company shall have delivered an audited balance sheet of the
Company as at November 1, 1995 which is in all material respects consistent with
the Balance Sheet except for the investment made pursuant to this Agreement.
(o) At the Initial Closing, the principal officers of the
Company shall deliver a certificate confirming that the above-listed conditions
has been met.
(p) Within five months of the Initial Closing, the
Company shall have entered into Truck Stop Agreements with Pilot Corporation or
Truck Stops of America on terms (length of contract, fees, fee splitting, costs
and number of truck stops or stalls) substantially the same as or better than
the existing contract with Highway Service Ventures, Inc. or that is otherwise
acceptable to the Investors. In the event that the Company fails to enter into
such Truck Stop
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Agreement within such five (5) month period, the Investors shall have the right
to purchase from the Company an additional 347,658 shares of Common Stock (the
"Additional Shares") at a price of $0.001 per share.
5.2 Interim Closing Conditions.
Your obligation to purchase the Subordinated Notes and Series A Stock
at the Interim Closing shall be subject to the satisfaction of the following
conditions, any of which may be waived by you in writing, without effect upon
any Other Investor's or the Company's rights and/or obligations pursuant to the
Other Agreements except as specified pursuant to Section 2.1 hereof:
(a) Non-Occurrence of Default. There shall exist no
condition, event or fact constituting, or which, with notice or passage of time
or both, would constitute a default in the observance of any of the Company's
undertakings or covenants hereunder, under the Other Agreements or pursuant to
the Certificate of Designation, no material adverse change shall have occurred
in the business, Assets or condition (financial or otherwise) of the Company
since the Initial Closing, and all conditions precedent to the Interim Closing
to be performed by the Company shall have been complied with, and the President
and the Treasurer of the Company shall deliver to you at the Interim Closing a
certificate to such effect, executed by them.
(b) Other Agreements. The Interim Closing on the Interim
Closing Date shall have taken place under a sufficient number of the Other
Agreements contemporaneously with the Interim Closing under this Agreement such
that Investors, collectively, actually purchase the Subordinated Notes and
Series A Stock which all of the Investors, collectively, agreed to purchase at
the Interim Closing pursuant to this Agreement and the Other Agreements.
(c) Sufficient Progress. The President and Treasurer of
the Company shall have certified to the Board that the Company has met the
milestones specified in Exhibit 5.2(c) hereof, with respect to the Interim
Closing, and the Board, by a resolution adopted by action of a majority of the
directors, including all of the Investors' Designee(s) shall have concurred with
such determination and shall have deemed it advisable for the Interim Closing to
occur.
(d) Representations, Warranties and Covenants. The
Company shall deliver to the Investors a Certificate signed by an officer of the
Company certifying that the representations contained in Article III remain true
upon completion of this Interim Closing, and the Company is in compliance with
its Charter, Certificate of Designation and Other Agreements.
5.3 Final Closing Conditions.
Your obligation to purchase the Subordinated Notes, Series A Stock and
Common Stock at the Final Closing shall be subject to the satisfaction of the
following conditions, any of which may be waived by you in writing, without
effect upon any Other Investor's or the Company's
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rights and/or obligations pursuant to the Other Agreements except as specified
pursuant to Section 2.1 hereof:
(a) Non-Occurrence of Default. There shall exist no
condition, event or fact constituting, or which, with notice or passage of time
or both, would constitute a default in the observance of any of the Company's
undertakings or covenants hereunder, under the Other Agreements or pursuant to
the Certificate of Designation, no material adverse change shall have occurred
in the business, Assets or condition (financial or otherwise) of the Company
since the Interim Closing Date, and all conditions precedent to the Final
Closing to be performed by the Company shall have been complied with, and the
President and the Vice President of Finance of the Company shall deliver to you
at the Final Closing a certificate to such effect, executed by them, dated the
Final Closing Date.
(b) Other Agreements. The Final Closing on the Final
Closing Date shall have taken place under a sufficient number of the Other
Agreements contemporaneously with the Final Closing under this Agreement such
that Investors agreed to purchase the requisite amount of Subordinated Notes,
Series A Stock and Common Stock at the Final Closing pursuant to this Agreement
and the Other Agreements.
(c) Interim Closing. The Interim Closing shall have taken
place.
(d) Sufficient Progress. The President and Treasurer of
the Company shall have certified to the Board that the Company has met the
milestones specified in Exhibit 5.3(d) hereof with respect to the Final Closing,
and the Board, by a resolution adopted by action of a majority of the directors,
which majority includes all Investor Designee(s), shall have concurred with such
determination and shall have deemed it advisable for the Final Closing to occur.
(e) Representations, Warranties and Covenants. The
Company shall deliver to the Investors a Certificate signed by an officer of the
Company certifying that the representations contained in Article III remain true
upon completion of this Final Closing, and the Company is in compliance with its
Charter, Certificate of Designation and Other Agreements.
VI.
COVENANTS OF THE COMPANY
The Company covenants and agrees that, except as otherwise provided in
this Article VI, from the Initial Closing and thereafter so long as any shares
of Series A Stock or Common Stock shall exist:
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6.1 Selection of Independent Public Accountants.
The Company shall retain as its independent public accountants an
independent public accounting firm of nationally recognized standing acceptable
to a majority in interest of the Investors to perform the annual audit required
pursuant to Section 6.5.
6.2 Payment of Taxes: Corporate Existence and Licenses;
Maintenance of Properties/Assets.
The Company shall and shall cause each Subsidiary to:
(a) (i) Pay and discharge promptly, or cause to be
paid and discharged promptly, when due and payable, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or upon any of
its Assets or upon any part thereof, as well as all claims of any kind
(including claims for labor, materials and supplies) which, if unpaid, might by
law become a lien, charge or encumbrance upon its Assets; (ii) withhold all
monies required to be withheld by the Company from employees for income taxes,
Social Security and unemployment insurance taxes; and (iii) complete and file,
on a timely basis, all tax returns and reports required to be filed by it;
provided, however, that the Company shall not be required to pay, or to cause
any subsidiary to pay, any tax, assessment, charge, levy or claim if the amount,
applicability or validity thereof shall currently be contested in good faith by
appropriate proceedings and if the Company shall have set aside on its books
reserves (segregated to the extent required by generally accepted accounting
principles) deemed by the Company adequate with respect thereto;
(b) Do or cause to be done all things necessary to
preserve and keep in full force and effect its corporate existence, and all of
its corporate rights, franchises, licenses and permits; provided, however, that
nothing in this Subsection (b) shall (i) prevent the abandonment or termination
of the Company's authorization to do business in any foreign state or
jurisdiction, if, in the opinion of the Board, such abandonment or termination
is in the best interest of the Company, (ii) require compliance with any law so
long as the validity or applicability thereof shall be disputed or contested in
good faith or (iii) prevent the Company from effecting a merger, consolidation
or voluntary dissolution upon obtaining the required approval of the Board
and/or the Holders of Common Stock of the Company; and
(c) Maintain and keep, or cause to be maintained and
kept, its Assets in good repair, working order and condition, and from time to
time make, or cause to be made, all repairs, renewals and replacements which, in
the opinion of the Board, are necessary and proper so that the business carried
on in connection therewith may be properly and advantageously conducted at all
times; provided, however, that nothing in this Subsection (c) shall prevent the
Company from selling or otherwise disposing of any Assets whenever in the good
faith judgment of the Company's management such Assets are obsolete, worn out,
without economic value, or unnecessary for the conduct of the business of the
Company.
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6.3 To Insure.
The Company shall:
(a) keep all of its insurable Assets insured against loss
or damage by fire and other risks;
(b) maintain public liability insurance against claims
for personal injury, death or property damage suffered by others upon or in or
about any premises occupied by it or arising from equipment owned by the Company
and leased to and located upon or in or about any premises occupied by any other
person;
(c) maintain all such workers' compensation or similar
insurance as may be required under the laws of any state or jurisdiction in
which it may be engaged in business;
(d) maintain a Key-Man Policy as described pursuant to
Section 5.1 hereof and not create or suffer the creation or maintenance of any
assignment, security interest or other encumbrance with respect to the Key-Man
Policy or the proceeds thereof.
All insurance for which provision has been made in this Section 6.3
shall (unless otherwise stated herein) be maintained against such risks and in
at least such amounts as shall be approved by the Board from time to time, and
all insurance herein provided for shall be effected and maintained in force
under a policy or policies issued by insurers of recognized responsibility,
except that the Company may effect workers' compensation or similar insurance in
respect of operations in any state or other jurisdiction either through an
insurance fund operated by such state or other jurisdiction or by causing to be
maintained a system or systems of self-insurance which is in accord with
applicable laws.
6.4 Payment of Indebtedness, etc.
The Company shall:
(a) Pay or cause to be paid the principal of, and the
interest and premium, if any, on, all material Indebtedness heretofore or
hereafter incurred or assumed by the Company, when and as the same shall become
due and payable, unless such Indebtedness shall be renewed or extended, in which
case such payments shall be made in accordance with the terms of such renewal or
extension;
(b) Faithfully observe, perform and discharge in all
material respects all the material covenants, conditions and obligations which
are imposed on it by any and all material indentures, agreements, or other
instruments securing or evidencing Indebtedness, if any, or pursuant to which
Indebtedness is issued, and not permit the occurrence or continuance of any act
or omission which is or under the provisions thereof may be declared to be a
material default thereunder, unless such default (other than a default in
payment of principal or interest) or the
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right to declare a default on account of such act or omission is waived pursuant
to the provisions thereof; provided, however, that the Company shall not be
required to make any payment or to take any other action by reason of this
Subsection (b) at any time while it shall be currently contesting in good faith
by appropriate proceedings its obligations to make such payment or to take such
action, if the Company shall have set aside on its books reserves (segregated or
classified to the extent required by generally accepted accounting principles)
deemed by it adequate with respect thereto;
(c) Not violate any provision of its Charter (including
the Certificate of Designation and any other certificates of designation filed
by the Company with the Secretary of State of Delaware with respect to any
series of the Company's preferred stock) or By-laws or any material provision of
any judgment, writ, decree, order, statute, rule or governmental regulation or
approval applicable to the Company, or any material provision of any contract,
agreement, indenture, mortgage, lien, lease, sublease or arbitration award to
which the Company is a party, by which it is bound or to which any of its Assets
is subject;
(d) Not prepay any Indebtedness heretofore or hereafter
incurred or assumed by it without the specific authorization of the Board other
than trade debt and professional fees and expenses incurred in the ordinary
course of business; provided, however, that, no prepayment shall be made at any
time that a breach of any of the covenants contained in this Article VI or of
any obligation of the Company under its Charter or the Certificate of
Designation has occurred and is continuing; and
(e) Not redeem, retire, purchase or acquire, directly or
indirectly, any shares of any class or series of stock of the Company except
pursuant to Section 5 of the Certificate of Designation.
6.5 Financial Statements and Information.
The Company shall furnish to each Holder of Subordinated Notes or
Series A Stock:
(a) Interim Financial Statements and Reports. Within 20
days after the end of each month, a consolidated balance sheet of the Company as
of the end of such month, together with related consolidated statements of
operations, changes in stockholders' equity and cash flows for such month and
year-to-date, prepared in accordance with generally accepted accounting
principles consistently applied (with the exception of full footnote
disclosures, schedules and precise period cutoffs) and certified by the
Treasurer of the Company, subject to usual year-end audit adjustments, together
with a written comparison of the results as reported on such financial
statements with the projections thereof contained in the applicable Annual
Budget (as defined herein).
(b) Annual Financial Statements and Reports. Within 90
days after the last day of each fiscal year of the Company, a copy of its audit
report containing a consolidated balance sheet of the Company at the end of the
fiscal year, together with related consolidated
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statements of operations, changes in stockholders' equity and cash flows for
such fiscal year, prepared in accordance with generally accepted accounting
principles consistently applied, all examined by and accompanied by a
certificate of opinion of the Company's independent public accountants, selected
in accordance with Section 6.1 hereof, together with consolidating statements,
which need not be certified, which set forth the eliminations of intercorporate
items. Together with each delivery of annual financial statements of the Company
pursuant to this Subsection (b), the Company will deliver a copy of a letter
addressed to the Company's independent public accountants informing such
accountants that a primary intent of the Company regarding the professional
services such accountants provided to the Company in preparing their audit
report was to benefit or influence the Holders of Subordinated Notes and Series
A Stock, and identifying such Holders as parties that the Company has indicated,
intend to rely on such professional services provided to the Company by such
accountants.
(c) Reports of Auditors. Promptly upon receipt thereof, a
copy of each report or management letter, if any, submitted to the Company by
independent public accountants in connection with each annual audit (and any
other audit which may be performed) of the books of the Company made by such
accountants.
(d) Annual Budgets and Strategic Plan. Not less than 40
days prior to the commencement of each fiscal year of the Company, an annual
operating strategic plan summary and corresponding annual budget (an "Annual
Budget") consisting of (i) projected consolidated statements of operations,
changes in stockholders' equity and cash flows, each on a monthly basis, for
each of the calendar months of such fiscal year; (ii) a projected consolidated
balance sheet as of the close of each calendar month; (iii) projected capital
expenditures for each month; and (iv) promptly upon making thereof, any revision
or updating which may be made of any such Annual Budget. Each such Annual Budget
and any revisions thereof shall be submitted for the approval of the Board,
which approval shall include the approval of any Investor designees, and be
subject to revision or updating by the Board.
(e) Additional Information. The Company shall provide
Investors with prompt notice of:
(i) any investigation by any federal or state
governmental or regulatory agency in connection with
which the Company is identified as an object of such
investigation;
(ii) any complaint or proceeding instituted against the
Company by any federal or state governmental or
regulatory agency;
(iii) any other action at law or suit in equity involving a
claim or claims against the Company which, if
concluded adversely to the Company or such truckstop,
could give rise to damages in excess of $20,000 in
the aggregate or could otherwise materially adversely
affect the business or Assets of the Company, and
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(iv) any other event which could reasonably be expected to
have a material adverse effect on the business or
Assets of the Company.
(f) Certificate of Independent Public Accountants. At
such times as the statements referred to in Subsection (b) of this Section 6.5
are furnished, the Company shall also furnish a certificate of the independent
public accountant whose certificate or opinion accompanies such statements
stating that nothing has come to his attention which would cause him to believe
that any condition, event or fact exists which would constitute, or which with
notice or passage of time or both would constitute, a violation which has not
previously been disclosed by a prior certificate of the principal financial
officer or controller, or their equivalent, of any of the then applicable
covenants of the Company contained herein or in the Certificate of Designation;
provided, however, that if any such violation exists, such certificate shall
specify the nature and period of existence of such violation; and provided,
further, that such certificate may state that tests of the accounting records
and other auditing procedures conducted with respect to the Company might, but
would not necessarily, reveal that such violations exist or that no violations
exist. The Company covenants that, upon obtaining knowledge of any such
violation, it will promptly deliver a certificate of its principal financial
officer or controller, or their equivalent, specifying the nature thereof, the
period of existence thereof, and what action the Company proposes to take with
respect thereto.
6.6 Discussion and Inspection Rights.
The Company shall permit any Holder who or which, alone or when
aggregated with the holdings of its Affiliates, owns not less than 5% of the
then existing Registrable Stock or not less than 5% of the then outstanding
Series A Stock and any Person designated from time to time by any such Holder,
at such Holder's expense, to discuss the affairs, finances and accounts of the
Company with the Company's directors, officers, other principal executives and
independent accountants, all at such reasonable times and as often as such
Holder may reasonably request; all books, documents, financial records and
vouchers relating to the business and affairs of the Company shall at all
reasonable times be open to inspection either by such Holder or such accountant
or other Person as shall from time to time be designated by such Holder, who may
make such copies thereof or extracts therefrom as such Holder reasonably deems
appropriate; and all facilities of the Company shall at all reasonable times be
open to inspection by such Holder or such Person as shall from time to time be
designated by such Holder.
6.7 Tax Treatment of Dividends.
So long as any Preferred Stock or Common Stock purchased pursuant to
this Agreement or the other Agreements is outstanding, the Company shall:
(a) Treat the shares of Preferred Stock and Common Stock
as Stock and not as Indebtedness, and treat the dividends paid (or accrued) with
respect to the shares of Preferred Stock as dividends within the meaning of
Section 316 of the Code, and not as interest.
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(b) Not take any action which could reasonably be
expected by it (i) to require the Company to treat the dividends paid with
respect to the Preferred Stock or Common Stock as interest for any purpose, (ii)
to cause the Preferred Stock or Common Stock to be treated as indebtedness for
purposes of Section 385 of the Code or any successor provision of the Code and
the regulations promulgated thereunder, or (iii) to cause the dividends received
deduction under Section 243 of the Code (the "Dividends Received Deduction") to
cease to be available, in whole or in part, with respect to dividends on the
Preferred Stock or Common Stock received by any corporate Holder.
(c) Without limiting the generality of the foregoing
Subsection (b), (i) not claim a deduction for dividends paid on the Preferred
Stock or Common Stock whether as interest or otherwise, in any federal income
tax return, claim for refund of federal income tax or other submission to the
Internal Revenue Service, and (ii) unless required to do so by generally
accepted accounting principles, not treat the Preferred Stock or Common Stock
other than as equity capital or the dividends paid thereon other than as
dividends paid on capital in any report to stockholders or any governmental body
having jurisdiction over the Company or otherwise.
(d) Not exercise any option or election that may at any
time be available under the Code or otherwise to deduct all or part of any
dividend paid with respect to the shares of Preferred Stock if so doing would
increase the amount of such dividend includable for federal, state or local
income tax purposes in the income of any corporate Holder of shares of Preferred
Stock or Common Stock.
(e) At the request of any corporate Holder of Preferred
Stock or Common Stock, join with such Holder in the submission to the Internal
Revenue Service of a request for a ruling that dividends paid on the Preferred
Stock will be eligible for the Dividends Received Deduction for federal income
tax purposes; in addition, the company shall cooperate with and support any
corporate Holder in any litigation, appeal or other proceeding challenging or
contesting any ruling, technical advice, finding or determination of the
Internal Revenue Service that dividends paid on the Preferred Stock are to be
treated as indebtedness for purposes of the Code or are not eligible for the
Dividends Received Deduction. The cooperation and support required of the
Company by the preceding sentence shall be at the expense of such corporate
Holder, except that the Company will pay all fees and expenses (whether incurred
by it or a corporate Holder) in connection with any such submission, litigation,
appeal or other proceeding necessitated or caused by a breach by the Company of
its covenants contained in this Section 6.7.
6.8 Notice of Claimed Default or Deficiency.
The Company, within ten days after receiving written notice of a
default or deficiency in excess of $10,000 from, or being served with a
complaint in law or in equity by, the Holder of any Indebtedness or other
Security of the Company, or a party to any agreement to which the Company is a
party or otherwise bound which calls for payments by or to the Company or such
Subsidiary in an aggregate amount in excess of $10,000, with respect to a
claimed default or event of default or claimed deficiency thereunder, shall
furnish to each Holder of Subordinated
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Notes, Series A Stock or Common Stock purchased pursuant to this Agreement or
the Other Agreements a written notice specifying the notice given or action
taken by such Person, as the case may be, and the nature of the claimed default
or event of default or claimed deficiency and what action the Company is taking
or proposes to take with respect thereto.
6.9 Composition of Board.
The Company's Board of Directors shall consist of not more than five
(5) members, of which one member shall be unaffiliated with any Investor or
Existing Investor and be mutually agreed upon by a majority of the Existing
Investors and a majority of the Investors. The Existing Investors shall have the
right to nominate and elect two members to the Board. Furthermore, so long as
the Series A Stock and the Subordinated Debt have not been redeemed and paid in
full or the Investors taken collectively as a group own 20% or more of the
outstanding Common Stock of the Company, a majority of such Investors shall have
the right to elect two directors to the Board and shall be entitled to approval
rights on each of the following: (a) incurrence by the Company of debt in excess
of $25,000 in the aggregate which does not relate to the expenditures for the
buildout of a truckstop approval by the Board; (b) capital expenditures of the
Company in excess of $25,000 in the aggregate, which does not relate to the
expenditures for the buildout of a truckstop approval by the Board; (c) issuance
by the Company of equity securities and (d) sale by the Company of substantially
all of the Company's Assets. In the event that the Investors taken collectively
as a group hold at least 10% but less than 20% of the outstanding Common Stock,
a majority of such Investors shall have the right to elect one member to the
Board. In all cases, all holders of Common Stock shall vote in favor of election
of all nominees of the Investors and Existing Investors.
6.10 Blue Sky.
The Company shall make any and all filings necessary (whether before or
after the Initial Closing) in connection with the offer, issuance and sale
and/or transfer of the Series A Stock and Common Stock to be purchased pursuant
to this Agreement or the Other Agreements under the securities or blue sky laws
of any jurisdiction in which such filing is required by law.
6.11 Compliance with Laws.
The Company shall comply in all material respects with all laws of any
jurisdiction which are applicable to the Assets, business or operations of the
Company.
6.12 Filing of Commission Reports.
If the Company becomes obligated to file reports with the Securities
and Exchange Commission under Section 13 or Section 15(d) of the Securities
Exchange Act by reason of its having a class of Securities registered under
Section 12 of the Securities Exchange Act, it shall regularly file reports
thereunder in a timely manner so long as it is required to do pursuant to the
provisions of the Securities Exchange Act. Unless and until required to do so by
law or to obtain
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or retain quotation of the Common Stock by NASDAQ or on any national securities
exchange registered under Section 6 of the Securities Exchange Act, and then not
without giving 30 days' prior written notice to the Holders of the Registrable
Stock, the Company shall not register the Series A Stock or Common Stock under
Section 12 of the Securities Exchange Act.
6.13 Transactions with Affiliates.
The Company shall not directly or indirectly engage in any transaction
or series of transactions providing for the furnishing of services by or to, or
rental of real or personal property from or to, or otherwise requiring cash
payments from or to any director, officer or stockholder of the Company, or any
of its Affiliates, unless any such transaction is (a) in the ordinary course of
the Company's business, (b) upon fair and reasonable terms comparable to that
which would obtain in an arm's length transaction with a Person that is not an
Affiliate and (c) approved by a majority of disinterested members of the Board.
6.14 Subsidiaries.
Obligations set forth in this Article VI shall be applicable to
Subsidiaries only at such times, if any, that one or more Subsidiaries shall be
in existence.
6.15 Expenditures.
The Company shall not make or commit to make aggregate expenditures of
any type greater than the aggregate expenditures of such type budgeted of such
fiscal year in the then applicable Annual Budget without the prior approval of
the majority of the Board, which majority includes all Investor Designees,
evidenced by a duly adopted resolution.
6.16 No Registration Rights to Others.
So long as any shares of Registrable Stock (as such term is defined
pursuant to the Registration Rights Agreement) exist, the Company shall not
grant to any Holder of its Securities the right to include such Securities in
any Registration Statement filed by the Company, except as provided in the
Registration Rights Agreement.
6.17 Use of Proceeds.
The proceeds of the sale of the Subordinated Notes, Series A Stock and
the Common Stock to be purchased pursuant to this Agreement and the Other
Agreements shall be used solely for the buildout of truckstops and the
development of stalls supplying advertising, cable television and telephone and
data transmission services.
6.18 Restrictions on Employee Stock.
So long as the Stock Restriction Agreement is in effect, the Company
shall not issue any Securities to officers, employees, agents or consultants of
the Company unless such Securities
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are subject to restrictions substantially similar to those contained in Section
2 of the Stock Restriction Agreement.
6.19 Confidentiality.
The Company shall use its best efforts to (a) protect the secrecy,
confidentiality and value of all trade secrets useful in the conduct of the
Company's business and (b) cause each Person who is or becomes an officer or key
employee of the Company, as the case may be, who shall have access to
confidential and proprietary information of the Company, to execute a
confidentiality agreement, as a condition to such employment, in such form as
shall be approved by the Board of Directors of the Company, which approval shall
include the approval of all Investor Designees. Such confidentiality agreements
shall not be amended in any material respect without the approval of the Board,
which approval shall include the approval of all Investor Designees.
6.20 Take or Pay Contracts.
The Company shall not enter into any agreement requiring it to pay for
goods or services whether or not it acquires such goods or services.
6.21 The Financing.
The Company shall not enter into any agreement requiring the Company to
make payments of principal or interest unless such agreement contains a
provision permitting any Holder of Series A Stock or Subordinated Notes to cure
any monetary default thereunder.
6.22 Small Business Information.
The Company shall provide information, make reports and take such
actions as may be required under Section 1202(D)(1)(c) of the Internal Revenue
Code of 1986, as amended ("IRC"), in order to qualify the Common Stock and
Series A Stock as "small business stock" within the meaning of IRC Section
1202(c).
VII.
TRANSFER OF SECURITIES
The Subordinated Notes, Series A Stock and the Common Stock purchased
pursuant to this Agreement and the Other Agreements shall not be transferable
except upon the conditions specified in this Article VII, which conditions are
intended to insure compliance with the provisions of the Securities Act and
state securities laws in respect of the transfer of any such Securities.
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7.1 Restrictive Legends.
(a) Unless and until otherwise permitted by this Article,
each certificate for Series A Stock or Common Stock and purchased pursuant to
this Agreement and the Other Agreements issued to you or your nominee, or to any
subsequent transferee of such certificate shall be stamped or otherwise
imprinted with a legend in substantially the following form:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and
thus may not be offered for sale, sold, transferred or
otherwise disposed of unless registered under the Securities
Act of 1933, as amended, or unless an exemption from such
registration is available. Further, such transfer is subject
to the conditions specified in an Agreement dated as of
November 2, 1995, pursuant to which such shares were issued
and sold or otherwise transferred by Park 'N View, Inc. (the
"Company"), a copy of which Agreement is on file and may be
inspected at the principal office of the Company. A copy of
such Agreement will be furnished by the Company to the holder
hereof upon request and without charge. Under certain
circumstances specified in such Agreement, the Company has
agreed to deliver to the holder hereof a new certificate, not
bearing this legend, for all or part of the number of shares
evidenced hereby, as the case may be, registered in the name
of such holder or designated nominee."
(b) Each certificate for Series A Stock shall be stamped
or otherwise imprinted with a legend in substantially the following form:
"A statement of the relative rights and preferences of the
Company's Common Stock and its series of Preferred Stock will
be furnished by the Company to the holder hereof upon request
and without charge."
(c) The Company may order its transfer agents for
Subordinated Notes Series A Stock and Common Stock purchased pursuant to this
Agreement or the Other Agreements to stop the transfer of any shares of Series A
Stock or Common Stock purchased pursuant to this Agreement or the Other
Agreements bearing the legend set forth in Subsection (a) of this Section 7
until the conditions of this Article VII with respect to the transfer of such
shares have been satisfied.
7.2 Notice of Proposed Transfer.
If, prior to any transfer or sale of any Series A Stock or Common Stock
purchased pursuant to this Agreement or the Other Agreements, the Holder
desiring to effect such transfer or sale shall deliver a written notice to the
Company describing briefly the manner of such transfer or sale and a written
opinion of counsel for such Holder (provided that such counsel, and the form and
substance of such opinion, are reasonably satisfactory to the Company) to the
effect
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that such transfer or sale may be effected without the registration of such
Securities under the Securities Act, the Company shall thereupon permit or cause
its transfer agent (if any) to permit such transfer or sale to be effected;
provided, however, that if in such written notice the transferring Holder
represents and warrants to the Company that the transfer or sale is to a
purchaser or transferee whom the transferring Holder knows or reasonably
believes to be a "qualified institutional buyer," as that term is defined in
Rule 144A promulgated by the Securities and Exchange Commission under the
Securities Act ("Rule 144A"), no opinion shall be required.
7.3 Termination of Restrictions.
(a) Notwithstanding the foregoing provisions of this
Article VII, the restrictions imposed by this Article VII upon the
transferability of Series A Stock and Common Stock purchased pursuant to this
Agreement or the Other Agreements shall terminate as to any particular share of
Series A Stock or share of Common Stock purchased pursuant to this Agreement or
the Other Agreements when (1) such Security shall have been effectively
registered under the Securities Act and sold by the Holder thereof in accordance
with such registration, or (2) a written opinion to the effect that such
restrictions are no longer required or necessary under any federal or state
securities law or regulation have been received from counsel for the Holder
thereof (provided that such counsel, and the form and substance of such opinion,
are reasonably satisfactory to the Company) or counsel for the Company, or (3)
such Security shall have been sold without registration under the Securities Act
in compliance with Rule 144 promulgated by the Securities and Exchange
Commission under the Securities Act ("Rule 144"), or (4) the Company is
reasonably satisfied that the Holder of such Security shall, in accordance with
the terms of Subsection (k) of Rule 144, be entitled to sell such Security
pursuant to such Subsection, or (5) a letter or an order shall have been issued
to the Holder thereof by the staff of the Securities and Exchange Commission or
such Commission stating that no enforcement action shall be recommended by such
staff or taken by such Commission, as the case may be, if such Security is
transferred without registration under the Securities Act in accordance with the
conditions set forth in such letter or order and such letter or order specifies
that no subsequent restrictions on transfer are required.
(b) Whenever the restrictions imposed by this Article VII
shall terminate, as hereinabove provided, the Holder of any particular share of
Series A Stock or share of Common Stock purchased pursuant to this Agreement or
the Other Agreements then outstanding as to which such restrictions shall have
terminated shall be entitled to receive from the Company, without expense to
such Holder, one or more new certificates for Series A Stock or Common Stock
purchased pursuant to this Agreement or the Other Agreements not bearing the
restrictive legend set forth in Section 7.1(a) hereof.
7.4 Compliance with Rule 144 and Rule 144A.
At the written request of any Holder of Series A Stock or Common Stock
purchased pursuant to this Agreement or the Other Agreements who proposes to
sell any of such Series A
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Stock or Common Stock in compliance with Rule 144, the Company shall furnish to
such Holder, within ten days after receipt of such request, a written statement
as to whether or not the Company is in compliance with the filing requirements
of the Securities and Exchange Commission as set forth in such Rule. For
purposes of effecting compliance with Rule 144A, in connection with any resales
of any shares of Series A Stock or Common Stock purchased pursuant to this
Agreement or the Other Agreements that hereafter may be effected pursuant to the
provisions of Rule 144A, any Holder of shares of such Series A Stock or Common
Stock desiring to effect such resale and each prospective institutional
purchaser of such shares designated by such Holder shall have the right, at any
time the Company is not subject to Section 13 or 15(d) of the Securities and
Exchange Act, to obtain from the Company, upon the written request of such
Holder and at the Company's expense the documents specified in Section (d)(4)(i)
of Rule 144A, as such rule may be amended from time to time.
7.5 Non-Applicability of Restrictions on Transfer.
Notwithstanding the provisions of Section 7.2 hereof, any record owner
of Subordinated Notes, Series A Stock or Common Stock purchased pursuant to this
Agreement or the Other Agreements may from time to time transfer all or part of
such record owner's Subordinated Notes, Series A Stock or Common Stock purchased
pursuant to this Agreement or the Other Agreements (i) to a nominee identified
in writing to the Company as being the nominee of or for such record owner, and
any nominee of or for a beneficial owner of Subordinated Notes, Series A Stock
or Common Stock purchased pursuant to this Agreement or the Other Agreements
identified in writing to the Company as being the nominee of or for such
beneficial owner may from time to time transfer all or part of the Subordinated
Notes, Series A Stock or Common Stock purchased pursuant to this Agreement or
the Other Agreements registered in the name of such nominee but held as nominee
on behalf of such beneficial owner, to such beneficial owner, (ii) to an
Affiliate or related entity of such record owner, or (iii)if such record owner
is a partnership or the nominee of a partnership, to a partner, retired partner,
or estate of a partner or retired partner, of such partnership, so long as such
transfer is in accordance with the transferee's interest in such partnership and
is without consideration; provided, however, that each such transferee shall
remain subject to all restrictions on the transfer of Stock herein contained.
VIII.
MISCELLANEOUS
8.1 Brokers; Indemnification.
The Company will hold you free and harmless from any claim, demand,
liability for, or expense in connection with, any broker's or finder's fees or
commissions from any Person acting on behalf of the Company in connection with
this Agreement or the transactions contemplated hereby. Any Person acting on
behalf of an officer, director, employee or agent of the Company shall be acting
on behalf of the Company for purposes of this Section 8.1.
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8.2 Stamp Tax and Delivery Costs.
The Company will pay all stamp and other taxes, if any, which may be
payable in respect of the sale or other transfer of Series A Stock and Common
Stock purchased pursuant to this Agreement or the Other Agreements to you and
the issuance thereof to you or your nominee, and will save you harmless against
any loss or liability resulting from nonpayment or delay in payment of any such
tax. The Company will also pay all reasonable costs of delivery to you, or your
nominee, of the Series A Stock to be purchased by you or otherwise transferred
to you hereunder and Common Stock, if any, acquired by you hereunder.
8.3 Place of Payment.
So long as you or your nominee shall be the Holder of any Subordinated
Note share of Series A Stock or Common Stock purchased hereunder, if any, the
Company will make, by wire transfer (or equally expeditious delivery) of
immediately available funds, all payments with respect to Subordinated Notes,
Series A Stock or Common Stock purchased hereunder, if any, owned by you or your
nominee at the address set forth below your name in Exhibit A hereto or such
other place as you may designate to the Company in writing.
8.4 Amendment and Waiver.
(a) Any term, covenant, agreement or condition contained in this
Agreement may be amended, or compliance therewith may be waived (either
generally or in particular instances and either retroactively or prospectively),
(i) if prior to the Initial Closing, by written instruments signed by you, the
Other Investors, and the Company, and (ii) if subsequent to the Initial Closing,
by written instruments signed by the Company and an aggregate of not less than
66.6% of the Investors; provided, however, that any provision of this Agreement
that would materially adversely affect any particular Investor without similarly
affecting all Investors shall not be valid unless consented to in writing by
such particular Investor.
(b) This Agreement shall not be altered, amended or supplemented
except by written instruments. Any waiver of any term, covenant, agreement or
condition contained in this Agreement shall not be deemed a waiver of any other
term, covenant, agreement or condition, and any waiver of any default in any
such term, covenant, agreement or condition shall not be deemed a waiver of any
later default thereof or of any other term, covenant, agreement or condition. No
delay on the part of any party in exercising any right, power or privilege
hereunder shall operate as a waiver thereof.
(c) Withstanding the foregoing provisions of this Section 8.4, no
amendment to or waiver of any provision of this Section 8.4 shall be effective
with respect to this Section 8.4 without the consent of 100% of the Investors.
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8.5 Lost, Etc., Securities.
Upon receipt by the Company of evidence satisfactory to it of the loss,
theft, destruction or mutilation of any certificate of Series A Stock or Common
Stock or Subordinated Notes purchased pursuant to this Agreement or the Other
Agreements and (in case of loss, theft or destruction) receipt of indemnity
satisfactory to it, and upon reimbursement to the Company of all reasonable
expenses incidental thereto, and upon surrender and cancellation of such Series
A Stock or other Common Stock certificate or Subordinated Notes, if mutilated,
the Company will make, and deliver, in lieu of such Series A Stock or other
Common Stock certificate or Subordinated Notes, a new Series A Stock or other
Common Stock certificate or Subordinated Note of like tenor. Any Series A Stock
or other Common Stock certificate or Subordinated Note made and delivered in
accordance with the provisions of this Section 8.5 shall be dated as of the date
of the Series A Stock or other Common Stock certificate or Subordinated Note in
lieu of which such new Series A Stock or other Common Stock certificate or
Subordinated Note is made and delivered. If you or your Affiliate are the
beneficial owner of such lost, stolen or destroyed Series A Stock or other
Common Stock certificate or Subordinated Note, then the affidavit of you or your
Affiliate (if you or your Affiliate are a natural person) your or your
Affiliate's president (or other chief executive officer) and any vice president
or treasurer (if you or your Affiliate are a corporation) or your or your
Affiliates general partner (if you or your Affiliate are a partnership), setting
forth the fact of loss, theft or destruction and your or your Affiliate's
beneficial ownership of such Series A Stock or other Common Stock certificate or
Subordinated Note at the time of such loss, theft or destruction shall be
accepted as satisfactory evidence thereof, and no indemnity shall be required as
a condition to execution and delivery of a new Series A Stock or other Common
Stock certificate or Subordinated Note other than your or your Affiliate's
written agreement to indemnify the Company and its directors, officers and
agents. The term "outstanding" when used in this Agreement with reference to
Securities as of any particular time, shall not include other Series A Stock or
other Common Stock or Subordinated Note in lieu of which a new Series A Stock or
other Common Stock certificate or Subordinated Note has been made and delivered
by the Company in accordance with the provisions of this Section 8.5.
8.6 Representations, Warranties and Covenants to Survive.
All representations, warranties and covenants contained herein or made
in writing by the Company or by you in connection herewith shall survive the
execution and delivery of this Agreement, the issuance and sale or other
transfer of Subordinated Notes, Series A Stock or Common Stock, if any,
purchased hereunder.
8.7 Severability.
In the event that any court or any governmental authority or agency
declares all or any part of any Section of this Agreement to be unlawful or
invalid, such unlawfulness or invalidity shall not serve to invalidate any other
Section of this Agreement, and in the event that only a
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portion of any Section is so declared to be unlawful or invalid, such
unlawfulness or invalidity shall not serve to invalidate the balance of such
Section.
8.8 Investigation of the Company.
You shall have had the right prior to the Initial Closing to make such
reasonable investigation of the Company and the assets and business of the
Company as you shall deem necessary or advisable, but any such investigation
shall not affect the representations, warranties and covenants of the Company
contained herein or made pursuant hereto.
8.9 Listings.
In the event that the Common Stock shall be listed for trading on any
national securities exchange, such listing (to the extent permitted by the rules
of such exchange) shall include other Common Stock purchased pursuant to this
Agreement and the Other Agreements.
8.10 Successors and Assigns.
All representations, warranties, covenants and agreements of the
parties contained in this Agreement or made in writing in connection herewith,
shall, except as otherwise provided herein, be binding upon and inure to the
benefit of their respective nominees, successors and assigns and, in the case of
a natural Person, of his heirs and personal representatives.
8.11 Notices.
All communications provided for hereunder shall be in writing and
delivered by hand or by first-class or certified mail, postage prepaid, or by
telecopier, and, if to you or your nominee, addressed to you at the address set
forth below your name in Exhibit A hereto or at such other address as you may
designate to the Company in writing, if to the Other Investors or their
nominees, addressed to such Persons at the addresses set forth below their names
on Exhibit A hereto or at such other address as the Other Investors may
respectively designate to the Company in writing, and if to any Holders of
Subordinated Notes, Series A Stock or Common Stock purchased pursuant to this
Agreement or the Other Agreements other than you or your nominee or the Other
Investors or their nominees, addressed to such Holders at their addresses as
shown on the books of the Company or its transfer agent, and if to the Company,
at its offices at 0000 XX 00xx Xxxxxx, Xxxx. 00, Xx. Xxxxxxxxxx, Xxxxxxx 00000,
Attention: President, or such other place as shall be designated by the company
in writing.
8.12 Governing Law.
The validity, meaning and effect of this Agreement shall be determined
in accordance with the domestic laws of the State of New York applicable to
contracts made and to be performed in that state without giving effect to any
choice or conflict of law provision or rule
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(whether in the State of New York or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of New
York.
8.13 Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall together constitute one
and the same document.
8.14 Reproduction of Documents.
This Agreement and all documents relating hereto, including, without
limitation, (a) consents, waivers and modifications which may hereafter be
executed, (b) documents received by you at the Closing or thereafter (except
stock certificates evidencing any Securities) and (c) financial statements,
certificates and other information previously or hereafter furnished to you, may
be reproduced by you by any photographic, photostatic, microfilm, micro-card,
miniature photographic or other similar process and you may destroy any original
document so reproduced. The Company agrees and stipulates that any such
reproduction shall be admissible in evidence as the original itself in any
judicial or administrative proceeding (whether or not the original is in
existence and whether or not such reproduction was made by you in the regular
course of business) and that any enlargement, facsimile or further reproduction
of such reproduction shall likewise be admissible in evidence.
8.15 Payment of Fees and Expenses of Purchasers.
Whether or not the purchase herein provided for shall be consummated,
the Company will pay the legal and accounting fees, and reasonable due diligence
expenses as with respect to the purchase of securities under this Agreement of
you and the Other Investors, and the out-of-pocket expenses and disbursements
incurred, including without limitation expenses incurred with respect to the
production and reproduction of this Agreement and other documents used in
connection with the transactions herein contemplated, provided that if the
Initial Closing does not occur, the Company's obligation under this Section 8.15
shall be limited to $50,000.
8.16 Affiliates; Transfers.
Notwithstanding any other provision of this Agreement, if, after your
purchase of Subordinated Notes, Series A Stock or Common Stock, if any,
hereunder, you or your nominee transferred Subordinated Notes, Series A Stock
and Common Stock to any Affiliate or nominee of yours or the nominee of such
Affiliate, such transferee shall be entitled to all rights and benefits to which
the transferor would be entitled as an original Holder of the Securities so
transferred and such transferee shall be deemed an "Investor" hereunder.
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8.17 Table of Contents; Headings.
The Table of Contents and the headings used herein are solely for the
convenience of the parties and shall not constitute a part hereof or serve to
modify or interpret the text.
8.18 Indemnification.
The Company shall indemnify and hold harmless each Holder of
Subordinated Notes, Series A Stock and/or Common Stock purchased pursuant to
this Agreement or the Other Agreements against and from any losses, claims,
damages, liabilities or expenses ("Losses") insofar as such Losses (or actions
in respect thereof) arise out of or are based upon (i) the falsity or
incorrectness as of the Initial Closing of any representation or warranty of the
Company contained in or made pursuant to Article III hereof or of the Other
Agreements, or (ii) the existence of any condition, event or fact constituting,
or which with notice or passage of time, or both, would constitute a default in
the observance of any of the Company's undertakings or covenants hereunder,
under the Other Agreements, the Registration Rights Agreement, the Stockholders'
Agreement or pursuant to the Certificate of Designation. The Company shall also
pay all attorney's and accountant's fees and costs and court costs incurred by
any Holder of Subordinated Notes, Series A Stock and/or Common Stock purchased
pursuant to this Agreement or the Other Agreements in enforcing the
indemnification provided for in this Section 8.18. Notwithstanding the
foregoing, the Company expressly agree and acknowledge that the right of
indemnification granted herein to each Holder of Subordinated Notes, Series A
Stock and/or Common Stock purchased pursuant to this Agreement or the Other
Agreements shall not be deemed to be the exclusive remedy available to such
Holder for any of the matters described in this Section 8.18.
8.19 Effect of Failure to Make Agreed Purchases.
The Company acknowledges and agrees that, as its sole remedy, if the
conditions specified in Section 5.2(c) or Section 5.3 (d), as the case may be,
hereof have been fulfilled and your obligation to purchase the Subordinated
Notes, Series A Stock and Common Stock, if any, at the Interim Closing or the
Final Closing, respectively, is not subject to any conditions and you fail to
purchase the Subordinated Notes, Series A Stock and Common Stock, if any, at
such Closing, then the Company shall have the option to repurchase from the
Investor Group, pro rata among Investors, the following amounts of Common Stock
at the same purchase price as paid by the Investor Group: (i) 1,520,000 shares
of Common Stock if the Interim Closing is not completed or (ii) 986,667 shares
of Common Stock if the Final Closing is not completed. Any shares so acquired
shall be retired by the Company.
8.20 Entire Agreement; Exhibits and Schedules.
This Agreement, the Other Agreements and the Exhibits and Schedules
hereto and thereto constitute and encompass the entire agreement and
understanding of the parties hereto and thereto with regard to the transactions
contemplated or provided for herein or therein. This
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Agreement supersedes, replaces and terminates any prior agreements between the
Investor and the Company with respect to the purchase of Series A Preferred
Stock and Common Stock, if any, and Subordinated Notes by such Investor from the
Company and neither the Company nor the Investor shall have any liability under
any such prior agreement to the other for any reason whatsoever.
Very truly yours,
ATTEST: PARK N' VIEW, INC.
By /s/ Xxx Xxxxxxxx
------------------------------ -----------------------------
Secretary President
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EXHIBIT A
I. APA EXCELSIOR IV, L.P.
By: APA EXCELSIOR IV PARTNERS, L.P.
(Its General Partner)
By: PATRICOF & CO. MANAGERS, INC.
(Its General Partner)
By: /s/ Xxxxxx Xxxxxxx
------------------------------------------
Name: Xxxxxx Xxxxxxx
Title: X.X.
XX. APA EXCELSIOR IV OFFSHORE, L.P.
By: PATRICOF & CO. VENTURES, INC., INVESTMENT ADVISOR
By: /s/ Xxxxxx Xxxxxxx
------------------------------------------
Name: Xxxxxx Xxxxxxx
Title: X.X.
XX. THE P/A FUND, L.P.
By: APA PENNSYLVANIA PARTNERS, L.P.
(Its General Partner)
By: /s/ Xxxxxx Xxxxxxx
------------------------------------------
Name: Xxxxxx Xxxxxxx
Title: G.P.
/s/ Xxxxxxx Xxxxxxx
-----------------------------------------------
Xxxxxxx Xxxxxxx
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EXHIBIT A.1
-----------------------------------------------------------------------------------------------------------------------------
INVESTOR COMMON COMMON INITIAL INITIAL SERIES A INITIAL SERIES A TOTAL
STOCK STOCK SUBORDINATED PREFERRED STOCK PREFERRED
INVESTMENT PURCHASED NOTES INVESTMENT STOCK
($) (SHARES) INVESTMENT($) PURCHASE
($)
-----------------------------------------------------------------------------------------------------------------------------
APA Excelsior IV, L.P. 73,468 1,469,367 131,000 236,560 23,656 441,028
-----------------------------------------------------------------------------------------------------------------------------
APA Excelsior IV Offshore, 12,965 259,300 23,000 41,750 4,175 77,715
L.P.
-----------------------------------------------------------------------------------------------------------------------------
The P/A Fund 12,900 258,000 23,000 41,540 4,154 77,440
-----------------------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxxx 667 13,333 1,000 2,150 215 3,817
-----------------------------------------------------------------------------------------------------------------------------
TOTALS 100,000 2,000,000 178,000 322,000 32,200 600,000
-----------------------------------------------------------------------------------------------------------------------------
*Including $100,000 of Subordinated Notes exchanged for a $100,000 secured
promissory note issued by the Company on October 20, 1995.
**Does not include the Additional Shares (See Section 5.1(p)).
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EXHIBIT A.2
-----------------------------------------------------------------------------------------------------
INVESTOR INTERIM INTERIM SERIES INTERIM SERIES A TOTAL
SUBORDINATED A PREFERRED PREFERRED STOCK
NOTES INVESTMENT STOCK PURCHASE
INVESTMENT
($)
-----------------------------------------------------------------------------------------------------
APA Excelsior IV, L.P. 1,192,000 277,710 27,771 1,469,710
-----------------------------------------------------------------------------------------------------
APA Excelsior IV Offshore, 210,000 49,010 4,901 259,010
L.P.
-----------------------------------------------------------------------------------------------------
The P/A Fund 209,000 48,760 4,876 257,760
-----------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxxx 11,000 2,520 252 13,520
-----------------------------------------------------------------------------------------------------
TOTALS 1,622,000 378,000 37,800 2,000,000
-----------------------------------------------------------------------------------------------------
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EXHIBIT A.3
----------------------------------------------------------------------------------------------------
INVESTOR FINAL FINAL SERIES FINAL SERIES A TOTAL
SUBORDINATED A PREFERRED PREFERRED STOCK
NOTES INVESTMENT STOCK PURCHASE
($) INVESTMENT
----------------------------------------------------------------------------------------------------
APA Excelsior IV, L.P. 2,204,000 513,390 51,339 2,717,390
----------------------------------------------------------------------------------------------------
APA Excelsior IV Offshore, 389,000 90,650 9,065 479,650
L.P.
----------------------------------------------------------------------------------------------------
The P/A Fund 387,000 91,300 9,130 478,300
----------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxxx 20,000 4,660 466 24,660
----------------------------------------------------------------------------------------------------
TOTALS 3,000,000 700,000 70,000 3,700,000
----------------------------------------------------------------------------------------------------
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EXHIBIT B
Name of Existing Investor Number of Shares Held
------------------------- ---------------------
Park 'N View General Partner, Inc. 22,950
Xxx Xxxxxxxx 517,906
Xxx Xxxxxxx 988,610
Xxxxx Xxxxxxxxx 517,906
Nelgo Investments 270,810
Total 2,318,182
=========
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EXHIBIT 1.1(a)
FORM OF CHARTER
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
PARK `N VIEW, INC.
The undersigned, for the purposes of forming a corporation pursuant to
the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY as
follows:
FIRST: The name of the Corporation is: PARK `N VIEW, INC.
SECOND: The registered office of the Corporation is to be
located at 0000 Xxxxxx Xxxx, xx xxx Xxxx xx Xxxxxxxxxx, Xxxxxx of Xxx Xxxxxx,
Xxxxx xx Xxxxxxxx, 00000. The name of its registered agent at that address is
Corporation Service Company.
THIRD: The purpose of the Corporation is to engage in any
lawful act or activity for which a corporation may be organized under the
General Corporation Law of Delaware.
FOURTH: The aggregate number of shares of stock which the
Corporation shall have authority to issue is 5,000,000 shares of common stock,
par value $.001 per share, all of which shall be designated "Common Stock" and
140,010 shares of preferred stock, par value $0.01 per share, all of which are
designated "Series A Preferred Stock."
FIFTH: The name and mailing address of the Incorporator is
Xxxxx X. X'Xxxxxxx, 0000 Xxxx Xxxxx Xxxxx, Xxxxx 000, Xxxxxxx, Xxxxx Xxxxxxxx
00000.
SIXTH: The number of Directors of the Corporation may be
specified by the By-laws. The number of Directors constituting the instant Board
of Directors shall be two (2), and the names and mailing addresses of the
persons who are to serve as Directors until the first annual meeting of the
shareholders or until the successors are elected and qualify are:
Name Address
Xxx Xxxxxxxx 0000 XX 00xx Xxxxxx
Xxxxxxxx 00
Xxxx Xxxxxxxxxx, XX 00000
Xxxxxx X'Xxxxxxx 0000 XX 00 Xxxxx Xxx
Xxxxx, XX 00000
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SEVENTH: In furtherance and not in limitation of the powers
conferred by statute but subject to any limitations contained in any Certificate
of Designation, the board of directors is expressly authorized:
(a) to adopt, amend or repeal the By-Laws of the Corporation in
such manner and subject to such limitations, if any, as shall be set forth in
the By-Laws;
(b) to allot and authorize the issuance of the authorized but
unissued shares of the Corporation, including the declaration of dividends
payable in shares of any class to stockholders of any class;
(c) (i) with respect to the authorized shares of Preferred Stock,
the board of directors is expressly authorized, from time to time, (1) to fix
the number of shares of one or more series thereof; (2) to determine the
designation of any such series; (3) to determine or alter, without limitation or
restriction, the right, preferences, privileges and restrictions granted to or
imposed upon any wholly unissued series including, without limitation, dividend
rights, conversion rights, redemption privileges and liquidation preferences, as
shall be stated in such resolution or resolutions, all to the fullest extent
permitted by the Delaware Statute; and (4) within the limits or restrictions
stated in any resolution or resolutions of the board of directors originally
fixing the number of shares constituting any series, to increase or decrease
(but not below the number of shares then outstanding) the number of shares of
any such series of such class subsequent to the issue of shares of that series,
(5) to determine and fix such voting powers, full or limited, or no voting
powers, and such other powers, designations, preferences and relative,
participating, optional and other rights, and the qualifications, limitations
and restrictions thereof. Without limiting the generality of the foregoing, the
resolution or resolutions providing for the establishment of any series or
Preferred Stock may, to the extent permitted by law, provide that such series
shall be superior to, rank equally with or be junior to any other series of
Preferred Stock.
The amendment of the terms of any certificate of designation of any
series of the Corporation's Preferred Stock of which shares are outstanding
shall require only (i) that the Corporation's board of directors adopt a
resolution setting forth the amendment proposed, declaring its advisability, and
either calling a special meeting of the holders of such series of Preferred
Stock for consideration of such amendment or directing that the amendment
proposed be considered at the next annual meeting of stockholders by the holders
of such series of Preferred Stock (in either event, subject to the ability of
such holders to act by written consent in lieu of voting at a meeting), and (ii)
that the holders of sixty-six and two thirds percent (66 2/3%) (or such greater
number as may be required by the certificate of designations of such series) of
the outstanding shares of such series of Preferred Stock have voted in favor of
the amendment. Except for holders of a series of Preferred Stock the terms of
which are being amended, no holder of Common Stock and no holder of any series
of Preferred Stock shall be entitled to vote upon such amendment unless the
rights of such holders would be adversely affected by such
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amendment or such vote shall otherwise be required by law or by any certificate
of designation of any series of Preferred Stock.
(d) With respect to Common Stock, (1) Voting. Each holder of
shares of Common Stock shall be entitled to one vote for each share of Common
Stock held on all matters as to which holders of Common Stock shall be entitled
to vote. In any election of directors, no holder of shares of Common Stock shall
be entitled to cumulate his or her votes by giving one candidate more than one
vote per share.
(2) Other Rights. Each share of Common Stock issued and
outstanding shall be identical in all respects one with the other. In the event
any dividend is paid on all shares of Common Stock, the same dividend shall be
paid on all shares of Common Stock outstanding at the time of such payment.
Except for and subject to those rights expressly granted to the holders of the
Preferred Stock, or except as may be provided by the laws of the State of
Delaware, the holders of Common Stock shall have exclusively all other rights of
stockholders.
(d) to exercise all of the powers of the Corporation, insofar as
the same may lawfully be vested by this certificate in the board of directors.
EIGHTH: That thereafter by a written consent of the requisite
stockholders of the Corporation any amendment was approved and adopted by the
stockholders of the Corporation.
NINTH: That any said amendment was duly adopted in
accordance with the provision of Section 242 of the General corporation Law of
the State of Delaware.
TENTH: If the Corporation has outstanding Preferred Stock
which is then in default on its obligations to pay dividends thereon or to
redeem such Preferred Stock, the primary duty of the directors of the
Corporation shall be to cause the Corporation to take such actions as may be
necessary in order to pay such dividends and make such redemption.
ELEVENTH: No director shall be personally liable to the
Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director; provided, however, that to the extent required by the
provisions of Section 102(b)(7) of the General Corporation Law of the State of
Delaware or any successor statute, or any other laws of the State of Delaware,
this provision shall not eliminate or limit the liability of a director (i) for
any breach of the director's duty of loyalty to the Corporation or its
stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the General Corporation Law of the State of Delaware or (iv) for any transaction
from which the director derived an improper personal benefit. If the General
Corporation Law of the State of Delaware hereafter is amended to authorize the
further elimination or limitation of the liability of directors, then the
liability of a director of the Corporation, in addition to the limitation on
personal liability provided herein, shall be limited to the fullest extent
permitted by the amended General Corporation Law of the State of Delaware. Any
repeal or modification of this paragraph ELEVENTH by the stockholders of the
Corporation shall be prospective only, and shall not
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adversely affect any limitation on the personal liability of a director of the
Corporation existing at the time of such repeal or modification.
The Board of Directors of the Corporation has, by unanimous written
consent, authorized the filing of this Amended and Restated Certificate of
Incorporation in compliance with Section 241(b) of the General Corporation Law
of the State of Delaware.
IN WITNESS WHEREOF, I have hereunto set my hand this ____ day of
October, 1995.
------------------------------
Xxx Xxxxxxxx, President
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EXHIBIT 1.1(b)
FORM OF CERTIFICATE OF DESIGNATION
PARK `N VIEW, INC.
CERTIFICATE OF DESIGNATION RELATING
TO THE SERIES A PREFERRED STOCK WITH
A PAR VALUE OF $.01 PER SHARE
OF PARK `N VIEW, INC.
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
Park `N View, Inc., a Delaware corporation (the "Corporation"), hereby
certifies that pursuant to the authority contained in Article Fourth of the
Corporation's Certificate of Incorporation, and in accordance with the
provisions of Section 151 of the General Corporation Law of the State of
Delaware (the "DGCL"), the following resolution was duly adopted by the Board of
Directors of the Corporation, by the unanimous written consent of directors
pursuant to Section 141(f) of the DGCL, creating a series of its Preferred Stock
designated as Series A Preferred Stock:
RESOLVED, that there is hereby created and the Corporation be, and it
hereby is, authorized to issue 140,010 shares of a series of its Preferred Stock
designated Series A Preferred Stock (the "Series A Stock") to have the powers,
preferences and rights and the qualifications, limitations or restrictions
thereof hereinafter set forth in this resolution:
1. Preference. The preferences of each share of Series A Stock
with respect to distributions of the Corporation's assets upon voluntary or
involuntary liquidation, dissolution or winding up of the Corporation shall be
equal to the preferences of every other share of Series A Stock from time to
time outstanding in every respect and prior in right to such preferences of all
other equity Securities of the Corporation, whether now or hereafter authorized.
2. Voting Rights. Except as otherwise expressly provided herein,
in the Certificate of Incorporation or the By-laws of the corporation or by law,
the Holders of Series A Stock, by virtue of their ownership thereof, shall be
entitled to one vote for each share of Series A Stock and shall vote as a
separate class for any merger, consolidation, sale of assets or creation of any
class or series equal to or superior to the Series A Stock, upon the failure of
the Corporation to redeem the Series A Stock in accordance with Section 5(a)
hereof. The Holders of at least 66.6% of the shares of the then outstanding
Series A Stock voting as a separate class shall be entitled to elect a majority
of the total number of directors then constituting the Board and the balance of
the directors then constituting the Board may be elected by the Holders of
Common voting as a separate class. So long as Holders of Series A Stock are
entitled to elect a majority of the Board,
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the Corporation's directors shall have the primary duty to take such actions as
are necessary to pay to Holders of Series A Stock their accrued dividends (and
interest thereon) and Series A Stock value.
U3. Liquidation Rights. If the Corporation shall be voluntarily or
involuntarily liquidated, dissolved or wound up, at any time when any Series A
Stock shall be outstanding, each then outstanding share of Series A Stock shall
entitle the Holder thereof to a preference against the Assets of the corporation
available for distribution to the Holders of the Corporation's equity securities
equal to the Series A Stock Value plus an amount equal to all unpaid dividends
(including, without limitation, all accrued and unpaid interest thereon and the
Deferred Dividends, calculated in accordance with Section 4(B) hereof) accrued
on such share to the date of payment. If, upon any such liquidation, dissolution
or winding-up of the Corporation, the assets of the Corporation, or proceeds
thereof, distributed among the Holders of Series A Stock shall be insufficient
to pay in full the aggregate preferential amounts on all of the then outstanding
shares of the Series A Stock, then such assets, or the proceeds thereof, shall
be distributed among such Holders equally and ratably in proportion to the full
liquidation preferences to which each such Holder is entitled. After such
payment shall have been made in full to the Holders of the outstanding Series A
Stock, or funds necessary for such payment shall have been set aside in trust
for the account of the Holders of Series A Stock so as to be, and continue to
be, available therefor, the Holders of Series A Stock shall be entitled to no
further participation in such distribution of assets of the Corporation. The
consolidation or merger of the Corporation into or with any corporation or
corporations (other than a merger with another corporation in which the
Corporation is the surviving corporation and which does not result in any
reclassification or change -- other than a change in par value, or from par
value to no par value, or from no par value to par value, or as a result of a
subdivision or combination -- of outstanding shares of the Corporation's Stock
of any class or series, whether now or hereafter authorized), or the sale or
transfer by the Corporation of all or substantially all of its assets otherwise
than to an Affiliate of the Corporation, or a Change-in-Control Transaction
shall be deemed to be a liquidation.
All of the preferential amounts to be paid to the Holders of Series A
Stock as provided in this Section 3 shall be paid or set apart for payment
before the payment or setting apart for payment of any amount for, or the
distribution of any Assets of the Corporation to, the Holders of any other
equity securities of the Corporation, whether now or hereafter authorized, in
connection with such liquidation, dissolution or winding up.
4. Dividends.
(a) Accrual of Dividends. Commencing with the first
anniversary of the Initial Closing pursuant to and as defined in the Purchase
Agreements, the Holders of Series A Stock shall be entitled to receive, when and
as declared by the Board of Directors out of funds legally available therefor,
cumulative dividends payable quarterly on March 15, June 15, September 15 and
December 15 of each year (each of such dates being a "Dividend Payment
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54
Date") in cash or in kind at a rate of 7% per annum, computed on the basis of
the Series A Stock Value. Such dividends shall be Series A Stock with respect to
each share of Series A Stock, from the later of the first anniversary of the
Initial Closing pursuant to and as defined in the Purchase Agreements and the
date of issuance of such share, and shall accrue until paid, whether or not
earned, whether or not declared by the Board and whether or not there are funds
legally available therefor on the date such dividends are payable. Dividends not
declared and paid on any Dividend Payment Date shall accrue dividends thereon at
the rate of 7% per annum until such dividends are declared and paid in full.
(b) Payment of Dividends. Dividends shall be payable at
the Corporation's option in cash or in kind to each Holder of Series A Stock in
quarterly installments on March 31, June 30, September 30, and December 31, in
each year commencing on March 31, 1996 (each a "Regular Dividend Payment Date"),
as declared by the Board out of funds legally available therefor. Dividends paid
in cash on the shares of Series A Stock in an amount less than the total amount
of such dividends shall be allocated pro rata on a share-by-share basis among
all such shares at the time outstanding. The Board may fix a record date for the
determination of a dividend or distribution declared thereon, which record date
shall not be more than 30 days prior to the date fixed for the payment thereof.
(c) Limitation on Certain Distributions. Without the
written consent of the Holders of at least 66.6% of the then outstanding Series
A Stock, the Corporation shall not declare or pay any cash dividend on, or
redeem or repurchase or make any other cash distribution in respect of any other
equity Securities of the Corporation, unless at the time of such declaration,
payment or distribution the Corporation shall have paid all dividends on the
Series A Stock accrued through the most recent Regular Dividend Payment Date
preceding the date of such payment or distribution.
5. Redemption.
(a) Mandatory Redemption. The Corporation shall redeem
all of the issued and outstanding shares of Series A Stock at the earlier to
occur of (a) the fifth anniversary of the Initial Closing Date, as defined in
the Purchase Agreements, or (b) upon any involuntary or voluntary liquidation,
dissolution or winding up of the Corporation (including the sale of all or
substantially all of the Corporation's Assets or the acquisition of the
Corporation by a third party by means of a merger or consolidation resulting in
the exchange of the outstanding securities of the Corporation for securities or
other consideration issued by the acquirer) for cash at a redemption price per
share equal to the Series A Stock Value plus an amount equal to all unpaid
dividends accrued thereon to the date of redemption.
(b) Redemption Upon an Initial Public Offering. Upon the
closing of an underwritten public offering of Common Stock by means of a
registration statement filed by the Corporation under the Securities Act of
1933, as amended, which offering does not exclusively relate to securities under
an employee stock option, bonus or other compensation plan, and yielding
proceeds to the Corporation of not less than $15,000,000 million (net of
underwriting
-49-
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discounts and other expenses and including proceeds received by the Corporation
upon exercise of any over-allotment option by underwriters), the Corporation
shall redeem, for cash, all of the then outstanding shares of Series A Stock at
a redemption price per share equal to the Series A Stock Value plus an amount
equal to all unpaid dividends accrued thereon to the date of redemption.
(c) Optional Redemption.
(i) Upon (i) the occurrence of an Event of
Non-Compliance specified in any of clauses (i), (ii) or (iii) of the Definition
thereof set forth in Section 7 hereof, which remains uncured for 30 days, or
(ii) the occurrence of an Event of NonCompliance specified in any of clauses
(vi) or (vii) of the Definition thereof set forth in Section 7 hereof, the
Holders of at least 66.6% of the then outstanding shares of Series A Stock by
written notice, delivered by hand or by first-class, certified or overnight
mail, postage prepaid, or by telecopier to the Corporation may compel the
Corporation to redeem, for cash, all of the then outstanding shares of Series A
Stock. Upon receipt of such notice, the Corporation shall redeem all of the then
outstanding shares of Series A Stock at a redemption price per share equal to
the Series A Stock Value plus an amount equal to all unpaid dividends (and
interest thereon) accrued thereon to the date of redemption.
(ii) The Corporation shall have the option of
redeeming shares of Series A Stock at any time after the date of issuance of
such Series A Stock at a redemption price per share equal to the Series A Stock
Value plus an amount equal to all unpaid dividends (and interest thereon)
accrued thereon to the date of redemption.
(d) Availability of Funds for Redemption.
Notwithstanding anything in this Section 5 to the contrary, if
the Corporation has insufficient funds legally available on the redemption date
to redeem shares of Series A Stock pursuant to this Section 5, then funds to the
extent legally available shall be used to redeem such shares, in which case the
shares shall be redeemed pro rata from each holder thereof. At any time
thereafter when additional funds of the Corporation are legally available for
the redemption of the unredeemed shares of Series A Stock, such funds shall be
immediately used to redeem such shares.
6. Protective Provisions. So long as any shares of Series A Stock
shall be outstanding, the Corporation shall not, without the approval by the
vote or written consent of the Holders of at least 66.6% (or more if required by
law) of the then outstanding shares of Series A Stock:
(a) Amend, waive or repeal any provisions of, or add any
provision to, (i) this Certificate of Designation or (ii) any provision of the
Corporation's Certificate of Incorporation or any other certificate of
designation filed with the Secretary of State of Delaware by the Corporation
with respect to its preferred stock;
-50-
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(b) Amend, waive or repeal any provisions of, or add any
provision to, the Corporations By-Laws;
(c) Authorize, create, issue or sell any shares of
Equivalent Stock or Superior Stock; except as authorized in the Certificate of
Designation
(d) Issue any shares of Series A Stock other than
pursuant to the Purchase Agreements or upon transfers of outstanding shares of
Series A Stock;
(e) Enter into any agreement, indenture or other
instrument which contains any provisions restricting the Corporation's
obligation to pay dividends on or make redemptions of the Series A Stock in
accordance with Sections 4 and 5 hereof;
(f) Consolidate with or merge into any other Person or
permit any other Person to consolidate with or merge into it;
(g) Sell, lease, encumber, transfer, liquidate or
otherwise dispose of, in one transaction or a series of related transactions,
all or substantially all of the Assets of the Corporation; or
(h) Dissolve the Corporation.
7. Definitions. As used in this Certificate of Designation, the
following terms have the following meanings:
"Affiliate" shall mean any entity controlling, controlled by or under
common control with another entity. For the purposes of this definition,
"control" shall have the meaning presently specified for that word in Rule 405
promulgated by the Securities and Exchange Commission under the Securities Act.
"Assets" shall mean an interest in any kind of property or assets,
whether real, personal or mixed, or tangible or intangible.
"Board" shall mean the Board of Directors of the Corporation.
"Change-in-Control Transaction" means any transaction or series of
related transactions, whether involving the Corporation, the Holders of any
class or series of its Stock other than Series A Stock (whether now or hereafter
authorized), or both, resulting in any Person or group of Persons acting in
concert who were not theretofore the Holder or Holders of Voting Securities
enabling the Holder or Holders thereof to cast more than a majority of the votes
which may be cast for the election of directors becoming the Holder or Holders
of at least such amount of Voting Securities (for such purpose, treating
instruments or Securities issued in such transaction which are convertible into
or exchangeable or exercisable for Voting Securities as being so converted,
exchanged or exercised upon issuance, regardless of the terms thereof).
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"Common Stock" shall mean the Corporation's Common Stock, par value
$.001 per share, and any stock into which such stock may hereafter be changed.
"Definition" shall mean the definition of "Event of Non-Compliance"
hereunder.
"Equivalent Stock" shall mean any shares of any class or series of
Stock of the Corporation having any preference or priority as to dividends or
Assets on a parity with any such preference or priority of the Series A Stock
and no preference or priority as to dividends or Assets superior to any such
preference or priority of the Series A Stock and any instrument or Security
convertible into or exchangeable for Equivalent Stock. Without limiting the
generality of the foregoing, a dividend rate, mandatory or optional sinking fund
payment amounts or schedules or optional redemption provisions, the existence of
a conversion right or the existence of a liquidation preference of up to 100% of
the original issue price plus unpaid accrued dividends plus a premium of up to
the dividend rate or up to the percentage of the equity of the Corporation
represented by such Stock, with respect to any class or series of Stock,
differing from that of the Series A Stock, shall not prevent such class of Stock
from being Equivalent Stock.
"Event of Non-Compliance" shall mean any of the following:
(i) Any failure by the Corporation to declare and pay in
cash or in kind any dividend on the payment due dates and in the amounts
provided pursuant to Section 4 hereof, if such failure shall continue for a
period of five days from the payment due date;
(ii) Any failure by the Corporation to satisfy its
redemption obligations pursuant to Section 5 hereof if any such failure shall
continue for a period of five days from the appropriate redemption date;
(iii) Any failure by the Corporation to comply with the
provisions of Sections 4(c) or 6 hereof;
(iv) If any representation or warranty made by the
Corporation in the Purchase Agreements is or shall be untrue in any material
respect at the time it was made, if such representation or warranty remains
untrue after 10 days' written notice, with such notice delivered by hand or by
first-class, certified or overnight mail, postage prepaid, or by telecopier,
from any Holder of Series A Stock;
(v) Any material failure by the Corporation to comply
with, or any material breach by the Corporation of, any of the covenants,
agreements or obligations of the Corporation contained in the Purchase
Agreements which continues for a period of 10 days after written notice, with
such notice delivered by hand or by first-class, certified or overnight mail,
postage prepaid, or by telecopier, from any Holder of Series A Stock;
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(vi) Default by the Corporation in the performance or
observance of any obligation or condition with respect to any Indebtedness of
the Company; if the effect of such default is to accelerate the maturity of such
Indebtedness or cause such Indebtedness to be prepaid, purchased or redeemed or
to permit the holder or holders thereof, or any trustee or agent for such
holders, to cause such Indebtedness to become due and payable prior to its
expressed maturity or to cause such Indebtedness to be prepaid, purchased or
redeemed or to realize upon any collateral or security for such Indebtedness,
unless such default shall have been waived by the appropriate Person; and
(vii) If the Corporation shall:
(a) become insolvent or generally fail to pay,
or admits in writing its inability to pay, its debts as they become due;
(b) apply for, consent to, or acquiesce in, the
appointment of a trustee, receiver, sequestrator or other custodian for the
Corporation or any property thereof, or make a general assignment for the
benefit of creditors (any of which shall be referred to herein as a "Receiver");
(c) in the absence of such application, consent
or acquiescence, permit or suffer to exist the appointment of a Receiver, and
such Receiver shall not be discharged within 60 calendar days;
(d) commit any act of bankruptcy, permit or
suffer to exist the commencement of any bankruptcy reorganization, debt
arrangement or other case or proceeding under any bankruptcy or insolvency law,
or any dissolution, winding up or liquidation proceeding in respect of the
Corporation, and, if any such case or proceeding is not commenced by the
Corporation, such case or proceeding shall be consented to or acquiesced in by
the Corporation, or shall result in the entry of an order for relief and shall
remain for 30 calendar days undismissed; or
(e) take any corporate or other action
authorizing, or in furtherance of, any of the foregoing.
"Funded Debt" of any corporation shall mean all Indebtedness of such
Person which by its terms or by the terms of any instrument or agreement
relating thereto matures, or which is otherwise payable or unpaid, more than one
year from, or is directly or indirectly renewable or extendible at the option of
the debtor to a date more than one year (including an option of the debtor under
a revolving credit or similar agreement obligating the lender or lenders to
extend credit over a period of more than one year) from, the date of the
creation thereof.
"Holders" shall mean the Persons who shall, from time to time, own of
record, or beneficially, any Security. The term "Holder" shall mean one of the
Holders.
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"Indebtedness" of any corporation shall mean the principal of (and
premium, if any) and unpaid interest on:
(i) indebtedness which is for money borrowed from others;
(ii) indebtedness guaranteed, directly or indirectly, in
any manner by such corporation, or in effect guaranteed, directly or indirectly,
by such corporation through an agreement, contingent or otherwise, to supply
funds to or in any manner invest in the debtor or to purchase indebtedness, or
to purchase Assets or services primarily for the purpose of enabling the debtor
to make payment of the indebtedness or of assuring the owner of the indebtedness
against loss;
(iii) all indebtedness secured by any mortgage, lien,
pledge, charge or other encumbrance upon Assets owned by such corporation, even
if such corporation has not in any manner become liable for the payment of such
indebtedness;
(iv) all indebtedness of such corporation created or
arising under any conditional sale, lease or other title retention agreement
with respect to Assets acquired by such corporation even though the rights and
remedies of the seller, lessor or lender under such agreement or lease in the
event of default are limited to repossession or sale of such Assets and provided
that obligations for the payment of rent under a lease of premises from which
the business of such corporation will be conducted shall not constitute
indebtedness; and
(v) renewals, extensions and refunding of any such
indebtedness.
"Person" shall mean an individual, a corporation, a partnership, a
trust, an unincorporated organization or a government organization or an agency
or political subdivision thereof.
"Purchase Agreements" shall mean those certain purchase agreements,
dated as of October ___, 1995, between the Corporation and each of the
Investors, as defined therein, providing for the purchase and sale of
Subordinated Notes, Series A Stock and Common Stock.
"Securities" shall mean any debt or equity securities of the
Corporation, whether now or hereafter authorized, and any instrument convertible
into or exchangeable for Securities or a Security. The term "Security" shall
mean one of the Securities.
"Securities Act" shall mean the Securities Act of 1933, as amended
prior to or after the date hereof, or any federal statute or statutes which
shall be enacted to take the place of such Act together with all rules and
regulations promulgated thereunder.
"Securities and Exchange Commission" shall mean the United States
Securities and Exchange Commission or any successor to the functions of such
agency.
"Series A Stock Value" shall mean $10.00 per share of Series A Stock.
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"Stock" shall include any and all shares, interests or other
equivalents (however designated) of, or participations in, corporate stock.
"Subordinated Notes" shall mean the $1,000 subordinated promissory with
an 8% coupon purchasable pursuant to the Purchase Agreements.
"Superior Stock" shall mean any shares of any class or series of Stock
of the Corporation having any preference or priority as to dividends or Asset
superior to any such preference or priority of the Series A Stock and any
instrument or security convertible into or exchangeable for Superior Stock.
"Voting Securities," as applied to the securities of any corporation,
shall mean securities of any class or classes (however designated) having
ordinary voting power for the election of a member of the Board of Directors (or
other governing body) of such corporation, other than securities having such
power only by reason of the happening of a contingency.
IN WITNESS WHEREOF, Park `N View, Inc. has caused this Certificate to
be duly executed this ______ day of October, 1995.
PARK `N VIEW, INC.
By:
-----------------------------
President
Attest:
---------------------------
Secretary
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EXHIBIT 1.1(c)
PARK `N VIEW, INC.
8% Subordinated Note
Due November 1, 2000
$_______
New York, New York
__________, 199_
THIS NOTE (THE "NOTE") HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). NO SALE, TRANSFER, ASSIGNMENT OR
HYPOTHECATION OF THIS NOTE OR ANY INTEREST HEREIN MAY BE MADE OTHER THAN
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION
THEREFROM. PARK `N VIEW, INC. MAY REQUEST AS A CONDITION TO ANY SUCH TRANSACTION
A SATISFACTORY OPINION OF COUNSEL THAT SUCH SALE, TRANSFER, ASSIGNMENT OR
HYPOTHECATION DOES NOT REQUIRE REGISTRATION UNDER THE ACT.
PARK `N VIEW, INC., a Delaware corporation (the "Issuer"), for
value received, hereby promises to pay to _______________ (the "Holder") the
principal amount of ____________ Dollars ($_____).
This Note is one of a duly authorized issue of notes issued
pursuant to or in connection with a Securities Purchase Agreement ("Agreement")
by and among the Issuer, the Holder and certain other parties (collectively, the
"Notes;" such term also to include any Notes which may be issued in exchange
therefor or in replacement thereof).
Capitalized terms used herein but not otherwise defined shall
have the meanings ascribed to them in the Securities Purchase Agreement.
1. Principal. The Issuer will pay to Holder the principal sum of
____________ Dollars ($_____), plus all unpaid and accrued interest thereon on
the earlier to occur of (i) November 1, 2000; (ii) an Event of Default which is
not cured or waived as provided herein.
2. Interest. Interest on the outstanding principal amount of this Note
shall accrue from the date hereof at the rate of eight percent (8%) per annum,
computed on the basis of a 360-day year, and compounded semi-annually. Interest
shall become due and payable semi-annually, on June 30 and December 31 each year
(each, an "Interest Payment Date"), commencing on
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_________, 199_. The Issuer may elect to defer the payment of interest until the
principal of this Note shall become due and payable. Interest so deferred shall
bear interest at the rate of 8% per annum until fully paid.
3. Replacement or Exchange of this Note.
3.1 Replacement. Upon receipt by the Issuer of evidence
satisfactory to it of the loss, theft, destruction or mutilation of this Note,
and of indemnity or security reasonably satisfactory to it, and upon
reimbursement to the Issuer of all reasonable expenses incidental thereto, and
upon surrender for cancellation of this Note, if mutilated, the Issuer will make
and deliver a new Note of like terms, in lieu of this Note. Any Note made and
delivered in accordance with the provisions of this Section 3.1 shall be dated
the date hereof.
3.2 Exchange. Except as otherwise provided herein, in the
event that the Issuer has merged with, liquidated into, sold substantially all
of its assets to or combined with, another company, the surviving entity will,
at the request of the Holder, exchange this Note for a new instrument with the
same terms and covenants, having substituted said surviving entity for the
Issuer, executed by such surviving entity and in which the surviving entity
assumes all the Issuer's rights and obligations hereunder.
4. Prepayment.
4.1 Mandatory Prepayment. The Issuer may prepay the
outstanding principal amount of this Note plus accrued and unpaid Interest
thereon upon the registration of Stock of the Issuer under the Securities Act of
1933, as amended (the "Act") being declared effective by the Securities and
Exchange Commission.
4.2 Optional Prepayment. The Issuer may, at its option,
prepay this Note in full at any time upon five (5) days prior written notice.
Any payment received shall first be applied to the payment of any accrued but
unpaid interest and then to prepayment.
5. Subordination.
5.1 Subordination to Senior Indebtedness. The payment of
the principal of and interest on this Note is expressly subordinated to the
payment in full of all amounts payable on, under or in connection with Senior
Indebtedness, as hereinafter defined, to the extent set forth in this Article 5.
The term "Senior Indebtedness" shall mean all present and future Indebtedness
(as hereinafter defined) of the Issuer and its subsidiaries that is not by its
terms expressly subordinated to the Notes. The term "Indebtedness" means, (i)
the principal of or premium (if any) in respect of all indebtedness for money
borrowed and indebtedness evidenced by securities, debentures, bond or other
similar instruments (including purchase money obligations) for payment, and (ii)
all capital lease obligations, provided, however, that "Indebtedness" shall not
include any obligations to any subsidiary or affiliate of the Issuer or any
affiliate of any officer, director or 10% shareholder of the Issuer.
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5.2 Priority of Senior Indebtedness of Default. No
payment with respect to this Note shall be made by the Issuer or received by the
Holder if there is outstanding at the time such payment is to be made any Senior
Indebtedness and there exists at such time, or immediately after giving effect
to such payment there would exist, any default in the payment of principal of,
or any premium or interest on, any Senior Indebtedness or any other event of
default under the terms of any Senior Indebtedness then outstanding, which
default has not been waived or cured prior thereto; provided, however, that the
Issuer shall resume payments with respect to this Note on the six-month
anniversary of the date that notice of such default with respect to Senior
Indebtedness is first received by the Issuer if (i) the default is not the
subject of judicial proceedings and (ii) the maturity of the Senior Indebtedness
for which the default relates has not been accelerated.
5.3 Priority of Senior Indebtedness on Liquidation. Upon
any payment or distribution of assets of the Issuer of any kind or character,
whether in cash, property or securities, to creditors upon any dissolution or
winding up or total or partial liquidation or reorganization of the Issuer,
whether voluntary or involuntary, or in bankruptcy, insolvency, receivership or
other proceedings, all amounts due or to become due in respect of any and all
Senior Indebtedness shall first be paid in full and payment or distribution of
assets of the Issuer of any kind or character, whether in cash, property or
securities, to which the Holder would be entitled shall be paid to the holders
of Senior Indebtedness (pro rata to each such holder on the basis of the
respective amounts of Senior Indebtedness held by such holders of Senior
Indebtedness or on such other basis as the holders of Senior Indebtedness or a
court of competent jurisdiction shall direct) to the extent necessary to pay all
Senior Indebtedness in full after giving effect to any concurrent payment or
distribution to or from the holders of Senior Indebtedness, before any payment
or distribution is made to the Holder.
5.4 Duties of Holder to Holders of Senior Indebtedness.
In the event that any payment or distribution of assets of the Issuer of any
kind or character, whether in cash, property or securities, shall be received by
the Holder, in violation of Section 5.2 or Section 5.3, such payment or
distribution shall be (and shall be deemed to be) held in trust for the benefit
of, and shall be paid over or delivered to, the holders of such Senior
Indebtedness for application to the payment of all Senior Indebtedness remaining
unpaid (pro rata to each holder on the basis of the amount of Senior
Indebtedness held by such holder or on such other basis as the holders of Senior
Indebtedness or a court of competent jurisdiction shall direct) to the extent
necessary to pay all such Senior Indebtedness in full in accordance with its
terms, after giving effect to any concurrent payment or distribution to or for
the holders of such Senior Indebtedness.
5.5 Enforcement by Holders of Senior Indebtedness. The
provisions of Sections 5.2, 5.3 and 5.4 shall be for the benefit of the holders
of Senior Indebtedness and may be enforced directly by such holders against the
Holder without the necessity of joining the Issuer as a party.
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5.6 Subrogation. After all Senior Indebtedness is paid in
full, or a sum of money sufficient for the payment thereof shall have been set
aside for payment, and until this Note is paid in full, the Holder shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of assets of the Issuer applicable to the Senior
Indebtedness to the extent that payments or distributions otherwise payable to
the Holder have been applied to the payment of Senior Indebtedness.
5.7 Subordination Unimpaired. It is understood that the
provisions of this Article 5 are intended solely for the purpose of defining the
relative rights of the Holder on the one hand and the rights of holders of
Senior Indebtedness on the other, and nothing contained herein, including,
without limitation, any act or failure to act by the Issuer or the failure of
the Issuer to comply with the terms of the Notes, is intended to or shall impair
the right of any holder of Senior Indebtedness to enforce the subordination of
the Indebtedness evidenced by the Notes.
5.8 Subordination Agreements. In the event the Company
determines it reasonably necessary to incur Indebtedness and upon obtaining the
approval of a majority of the Holders, each Holder agrees to execute a
subordination agreement in favor of the holders of Senior Indebtedness.
6. Event of Default. (a) For purposes of this Note, an "Event of Default"
shall mean the occurrence of one or more of the following events:
(i) if the Issuer shall default in the payment
of the principal or interest of this Note when due at maturity, upon
acceleration, redemption or otherwise.
(ii) (A) the Issuer, pursuant to or within the
meaning of title 11, U.S. Code or any similar applicable federal or state law
for the relief of debtors ("Bankruptcy Law"): (1) commences a voluntary case,
(2) consents to the entry of an order for relief against it in an involuntary
case, (3) consents to the appointment of a Custodian of it or for all or
substantially all of its property, (4) makes a general assignment for the
benefit of its creditors or (5) generally is unable to pay its debts as the same
become due; or (B) a court of competent jurisdiction enters an order or decree
under Bankruptcy Law that: (1) is for relief against the Issuer in an
involuntary case, (2) appoints a receiver, trustee, assignee, liquidator or
similar official ("Custodian") of the Issuer or (3) orders the liquidation of
the Issuer and the order or decree remains unstayed and in effect for sixty (60)
days; or
(iii) the Issuer shall voluntarily or
involuntarily liquidate, dissolve or wind up, which shall include the sale of
all or substantially all of the Issuer's assets or the acquisition of the Issuer
by a third party by means of a merger or consolidation resulting in the exchange
of the outstanding shares of Stock of the Issuer for securities or consideration
by the third party acquirer;
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then and in each and every case, the Holder may declare the entire principal
amount of this Note outstanding and the interest accrued thereon to be due and
payable and, upon such declaration, such amount shall be immediately due and
payable.
7. Investment Representations and Restrictions on Transfer. The Holder, by
acceptance hereof, confirms such Holder's representations to and agreements with
the Issuer as follows:
(a) The Holder is acquiring this Note solely for the
purpose of investment and not with a view to the distribution thereof. The
Holder acknowledges that this Note will not be registered under Act and the
acquisition of this Note by the Holder will not be registered under the Act.
Therefore, the Holder acknowledges that this Note may not be transferred, sold,
hypothecated or otherwise disposed of except pursuant to the registration
provisions of the Act or pursuant to an applicable exemption therefrom and
subject to state securities laws, as applicable.
(b) The Holder acknowledges that this Note involves a
great deal of risk and that there is no existing or other market for the Notes.
The Holder is able to (i) bear the economic risk of the investment in the debt
of the Issuer, (ii) afford a complete loss of such investment and (iii) hold
this Note indefinitely. In reaching an informed decision to invest in the
Issuer, the Holder has obtained sufficient information to evaluate the merits
and risks of an investment in the capital stock of the Issuer.
(c) The Holder is an "accredited investor" within the
meaning of Rule 501 of Regulation D promulgated under the Act.
(d) Each Note shall bear a legend in substantially the
following form:
"THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"). NO SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION OF
THE NOTE OR ANY INTEREST HEREIN MAY BE MADE OTHER THAN PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT OR AN EXEMPTION THEREFROM. PARK `N VIEW,
INC. MAY REQUEST AS A CONDITION TO ANY SUCH TRANSACTION A SATISFACTORY OPINION
OF COUNSEL THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION DOES NOT
REQUIRE REGISTRATION UNDER THE ACT."
(e) The Holder acknowledges that the Issuer and any
transfer agent acting on its behalf may maintain appropriate "stop transfer"
notations with respect to such Notes.
8. Miscellaneous.
8.1 Notices. Any notice, demand, request, waiver, or
other communication under this Note shall be in writing (including facsimile or
similar writing) and shall be deemed to have been duly given (i) on the date of
service if personally served, (ii) on the third day after mailing if mailed to
the party to whom notice is to be given, by first class mail, registered, return
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receipt requested, postage prepaid or (iii) on the date sent if sent by
facsimile, to the parties at the following addresses or facsimile numbers (or at
such other address or facsimile number for a party as shall be specified by like
notice):
If to the Holder, to:
Patricof & Co., Ventures, Inc.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx
with a copy to:
Shereff, Friedman, Xxxxxxx & Xxxxxxx, LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx, Esq.
If to the Issuer, to:
Park `N View, Inc.
0000 X.X. 00xx Xxxxxx, Xxxxxxxx 00
Xxxx Xxxxxxxxxx, Xxxxxxx 00000
with a copy to:
Xxxxxx Xxxxxxxx, L.L.P.
000 Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx X'Xxxxxxx, Esq.
8.2 Binding Effect; Assignment. This Note shall be binding upon
and inure to the benefit of the Issuer and the Holder and their respective
successors and assigns. This Note shall not confer any rights or remedies upon
any person other than the parties hereto and their respective successors and
permitted assigns.
8.3 Amendment or Modification; Waiver. This Note may be amended or
modified only by written agreement by the holders of at least a 66.6% of the
then outstanding principal amount of the Notes, except that no amendment or
modification of the maturity date or Articles 1, 2 and 6 hereof shall be binding
on any Holder without the prior written consent of such Holder. Any of the
parties hereto may extend the time for the performance of any of the obligations
or other acts of any other party hereto, waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto, or waive compliance with any of the covenants, agreements or
conditions contained herein. Any
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agreement on the part of a party hereto to any such extension or waiver shall be
valid only if set forth in a written instrument signed by the party granting
such waiver. Such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or future failure. Any Holder of
Notes may waive any of his or her rights hereunder without obtaining the consent
of any other Holder of Notes.
8.4 Severability. In the event that any one or more of the
provisions contained in this Note shall for any reason be held to be invalid,
illegal or unenforceable in any respect, in whole or in part, the validity of
the remaining provisions shall not be affected and the remaining portion of any
provision held to be invalid, illegal or unenforceable shall in no way be
affected, prejudiced or disturbed thereby.
8.5 Waiver of Presentment. The Issuer hereby waives presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
Issuer with respect to this Note.
8.6 Paying Agent. Initially, the Issuer will act as Paying Agent.
The Issuer may appoint a substitute Paying Agent.
8.7 Entire Agreement. This Note, the Notes, the Securities
Purchase Agreement and the agreements referenced therein set forth the entire
understanding and agreement of the parties with respect to their subject matter
and supersede any and all prior understandings, negotiations or agreements among
the parties hereto, both written and oral, with respect to such subject matter.
8.8 Governing Law: Consent to Jurisdiction. This Note shall be
construed in accordance with, and governed by, the internal laws of the State of
Delaware as applied to contracts made and to be performed entirely within the
State of Delaware. Any legal action, suit or proceeding arising out of or
relating to this Note may be instituted in any state or federal court located
within the County of New Castle, State of Delaware, and each party hereto agrees
not to assert, by way of motion, as a defense, or otherwise, in any such action,
suit or proceeding, any claim that it is not subject personally to the
jurisdiction of such court in an inconvenient forum, that the venue of the
action, suit or proceeding is improper or that this Note or the subject matter
hereof may not be enforced in or by such court. Each party hereto further
irrevocably submits to the jurisdiction of any such court in any such action,
suit or proceeding.
8.9 Gender and Number. Whenever used in this Note, the singular
number shall include the plural, the plural the singular, and the use of any
gender shall be applicable to all genders.
8.10 Headings of Subdivisions. Section headings contained in this
Note are included for convenience only and shall not affect the interpretation
of any provisions of this Note.
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IN WITNESS WHEREOF, the Issuer has duly caused this Note to be duly
executed as of this ___ day of ______, 199_.
PARK `N VIEW, INC.
By:
------------------------------------
Name:
Title:
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EXHIBIT 1.2(D)
FORM OF BY-LAWS
BY-LAWS OF
PARK `N VIEW, INC.
ARTICLE I
OFFICES
Section 1.1. Registered Office. The registered office of the
Corporation within the State of Delaware shall be located at the principal place
of business in said State of such corporation or individual acting as the
Corporation's registered agent in Delaware.
Section 1.2. Other Offices. The Corporation may also have offices and
places of business at such other places both within and without the State of
Delaware as the Board of Directors may from time to time determine or the
business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 2.1. Place of Meetings. All meetings of stockholders shall be
held at the principal office of the Corporation, or at such other place within
or without the State of Delaware as shall be stated in the notice of the meeting
or in a duly executed waiver of notice thereof.
Section 2.2. Annual Meetings. The annual meeting of stockholders for
the election of directors shall be held at such time on such day, other than a
legal holiday, as the Board of Directors in each such year determines. At the
annual meeting, the stockholders entitled to
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vote for the election of directors shall elect a Board of Directors and transact
such other business as may properly come before the meeting.
Section 2.3. Special Meetings. Special meetings of stockholders, for
any purpose or purposes, may be called by a member of the Board of Directors.
Any such request shall state the purpose or purposes of the proposed meeting. At
any special meeting of stockholders, only such business may be transacted as is
related to the purpose or purposes set forth in the notice of such meeting.
Section 2.4. Notice of Meetings. Written notice of every meeting of
stockholders, stating the place, date and hour thereof and, in the case of a
special meeting of stockholders, the purpose or purposes thereof and the person
or persons by whom or at whose direction such meeting has been called and such
notice is being issued, shall be given not less than ten (10) nor more than
sixty (60) days before the date of the meeting, either personally or by mail, by
or at the direction of the Chairman of the Board, Secretary, or the persons
calling the meeting, to each stockholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be given when deposited in
the United States mail, postage prepaid, directed to the stockholder at his
address as it appears on the stock transfer books of the Corporation. Nothing
herein contained shall preclude the stockholders from waiving notice as provided
in Section 4.1 hereof.
Section 2.5. Quorum. The holders of a majority of the issued and
outstanding shares of stock of the Corporation entitled to vote, represented in
person or by proxy, shall be necessary to and shall constitute a quorum for the
transaction of business at any meeting of
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stockholders. If, however, such quorum shall not be present or represented at
any meeting of stockholders, the stockholders entitled to vote thereat, present
in person or represented by proxy, shall have power to adjourn the meeting from
time to time, without notice other than announcement at the meeting, until a
quorum shall be present or represented. At any such adjourned meeting at which a
quorum shall be present or represented, any business may be transacted which
might have been transacted at the meeting as originally noticed. Notwithstanding
the foregoing, if after any such adjournment the Board of Directors shall fix a
new record date for the adjourned meeting, or if the adjournment is for more
than thirty (30) days, a notice of such adjourned meeting shall be given as
provided in Section 2.4 of these By-Laws, but such notice may be waived as
provided in Section 4.1 hereof.
Section 2.6. Voting. At each meeting of stockholders, each holder of
record of shares of stock entitled to vote shall be entitled to vote in person
or by proxy, and each such holder shall be entitled to one vote for every share
standing in his name on the books of the Corporation as of the record date fixed
by the Board of Directors or prescribed by law and, if a quorum is present, a
majority of the shares of such stock present or represented at any meeting of
stockholders shall be the vote of the stockholders with respect to any item of
business, unless otherwise provided by any applicable provision of law, by these
By-Laws or by the Certificate of Incorporation.
Section 2.7. Proxies. Every stockholder entitled to vote at a meeting
or by consent without a meeting may authorize another person or persons to act
for him by proxy. Each proxy shall be in writing executed by the stockholder
giving the proxy or by his duly
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authorized attorney. No proxy shall be valid after the expiration of three (3)
years from its date, unless a longer period is provided for in the proxy. Unless
and until voted, every proxy shall be revocable at the pleasure of the person
who executed it, or his legal representatives or assigns except in those cases
where an irrevocable proxy permitted by statute has been given.
Section 2.8. Consents. Whenever a vote of stockholders at a meeting
thereof is required or permitted to be taken in connection with any corporate
action by any provision of statute, the Certificate of Incorporation or these
By-Laws, the meeting, prior notice thereof and vote of stockholders may be
dispensed with if the holders of all outstanding shares shall consent in writing
to the taking of such action.
Section 2.9. Stock Records. The Secretary or agent having charge of the
stock transfer books shall make, at least ten (10) days before each meeting of
stockholders, a complete list of the stockholders entitled to vote at such
meeting or any adjournment thereof, arranged in alphabetical order and showing
the address of and the number and class and series, if any, of shares held by
each. Such list, for a period of ten (10) days prior to such meeting, shall be
kept at the principal place of business of the Corporation or at the office of
the transfer agent or registrar of the Corporation and such other places as
required by statute and shall be subject to inspection by any stockholder at any
time during usual business hours. Such list shall also be produced and kept open
at the time and place of the meeting and shall be subject to the inspection of
any stockholder at any time during the meeting.
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ARTICLE III
DIRECTORS
Section 3.1. Number. The number of directors of the Corporation which
shall constitute the entire Board of Directors shall initially be fixed by the
Incorporator and thereafter from time to time by a vote of a majority of the
entire Board and shall be not less than one nor more than five. The first Board
of Directors shall consist of five members. If a certificate of designation of a
series of preferred stock provides that the number of directors shall be
increased upon the occurrence of certain events, then the provisions of such
certificate of designation shall supersede the provisions of these By-Laws.
Section 3.2. Resignation and Removal. Any director may resign at any
time upon notice of resignation to the Corporation. Any director may be removed
at any time by vote of the stockholders then entitled to vote for the election
of directors at a special meeting called for that purpose, either with or
without cause, except that directors elected by a class vote of holders of
preferred stock may only be removed by vote of the holders a majority of such
preferred stock.
Section 3.3. Newly Created Directorship and Vacancies. Newly created
directorships resulting from an increase in the number of directors and
vacancies occurring in the Board of Directors for any reason whatsoever shall be
filled by vote of the Board. If the number of directors then in office is less
than a quorum, such newly created directorships and vacancies may be filled by a
vote of a majority of the directors then in office. Any director elected to fill
a vacancy shall be elected until the next meeting of stockholders at which the
election of
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directors is in the regular course of business, and until his successor has been
elected and qualified.
Section 3.4. Powers and Duties. Subject to the applicable provisions of
law, these By-Laws or the Certificate of Incorporation, but in furtherance and
not in limitation of any rights therein conferred, the Board of Directors shall
have the control and management of the business and affairs of the Corporation
and shall exercise all such powers of the Corporation and do all such lawful
acts and things as may be exercised by the Corporation.
Section 3.5. Place of Meetings. All meetings of the Board of Directors
may be held either within or without the State of Delaware.
Section 3.6. Annual Meetings. An annual meeting of each newly elected
Board of Directors shall be held immediately following the annual meeting of
stockholders, and no notice of such meeting to the newly elected directors shall
be necessary in order to legally constitute the meeting, provided a quorum shall
be present, or the newly elected directors may meet at such time and place as
shall be fixed by the written consent of all of such directors.
Section 3.7. Regular Meetings. Regular meetings of the Board of
Directors may be held upon such notice or without notice, and at such time and
at such place as shall from time to time be determined by the Board.
Section 3.8. Special Meetings. Special meetings of the Board of
Directors may be called by a majority of the Board of Directors. Neither the
business to be transacted at, nor the purpose of, any regular or special meeting
of the Board of Directors need be specified in the notice or waiver of notice of
such meeting.
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Section 3.9. Notice of Meetings. Notice of each special meeting of the
Board (and of each regular meeting for which notice shall be required) shall be
given by the Secretary or an Assistant Secretary and shall state the place, date
and time of the meeting. Notice of each such meeting shall be given orally or
shall be mailed to each director at his residence or usual place of business. If
notice of less than three (3) days is given, it shall be oral, whether by
telephone or in person, or sent by special delivery mail or telegraph. If
mailed, the notice shall be given when deposited in the United States mail,
postage prepaid. Notice of any adjourned meeting, including the place, date and
time of the new meeting, shall be given to all directors not present at the time
of the adjournment, as well as to the other directors unless the place, date and
time of the new meeting is announced at the adjourned meeting. Nothing herein
contained shall preclude the directors from waiving notice as provided in
Section 4.1 hereof.
Section 3.10. Quorum and Voting. At all meetings of the Board of
Directors a majority of the entire Board shall be necessary to and shall
constitute a quorum for the transaction of business at any meeting of directors,
unless otherwise provided by any applicable provision of law, by these By-Laws,
or by the Certificate of Incorporation. The act of a majority of the directors
present at the time of the vote, if a quorum is present at such time, shall be
the act of the Board of Directors, unless otherwise provided by an applicable
provision of law, by these By-Laws or by the Certificate of Incorporation. If a
quorum shall not be present at any meeting of the Board of Directors, the
directors present thereat may adjourn the meeting from time to time, until a
quorum shall be present.
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Section 3.11. Compensation. The Board of Directors, by the affirmative
vote of a majority of the directors then in office, and irrespective of any
personal interest of any of its members, shall have authority to establish
reasonable compensation of all directors for services to the Corporation as
directors, officers or otherwise.
Section 3.12. Books and Records. The directors may keep the books of
the Corporation, except such as are required by law to be kept within the state,
outside of the State of Delaware, at such place or places as they may from time
to time determine.
Section 3.13. Action without a Meeting. Any action required or
permitted to be taken by the Board, or by a committee of the Board, may be taken
without a meeting if all members of the Board or the committee, as the case may
be, consent in writing to the adoption of a resolution authorizing the action.
Any such resolution and the written consents thereto by the members of the Board
or committee shall be filed with the minutes of the proceedings of the Board or
committee.
Section 3.14. Telephone Participation. Any one or more members of the
Board, or any committee of the Board, may participate in a meeting of the Board
or committee by means of a conference telephone call or similar communications
equipment allowing all persons participating in the meeting to hear each other
at the same time. Participation by such means shall constitute presence in
person at a meeting.
Section 3.15. Committees of the Board. The Board, by resolution adopted
by a majority of the entire Board, may designate one or more committees, each
consisting of one or more directors. The Board may designate one or more
directors as alternate members of any
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such committee. Such alternate members may replace any absent member or members
at any meeting of such committee. Each committee (including the members thereof)
shall serve at the pleasure of the Board and shall keep minutes of its meetings
and report the same to the Board.
Except as otherwise provided by law, each such committee, to the extent provided
in the resolution establishing it, shall have and may exercise all the authority
of the Board with respect to all matters. However, no such committee shall have
power or authority to:
(a) amend the Certificate of Incorporation;
(b) adopt an agreement of merger or consolidation;
(c) recommend to the stockholders the sale, lease or
exchange of all or substantially all of the Corporation's property and assets;
(d) recommend to the stockholders a dissolution of the
Corporation or a revocation of a dissolution;
(e) amend these By-Laws; and unless expressly so provided
by resolution of the Board, no such committee shall have power or authority to:
(1) declare a dividend; or
(2) authorize the issuance of shares of the
Corporation of any class.
ARTICLE IV
WAIVER
Section 4.1. Waiver. Whenever a notice is required to be given by any
provision of law, by these By-Laws, or by the Certificate of Incorporation, a
waiver thereof in writing, whether before or after the time stated therein,
shall be deemed equivalent to such notice. In
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addition, any stockholder attending a meeting of stockholders in person or by
proxy without protesting prior to the conclusion of the meeting the lack of
notice thereof to him, and any director attending a meeting of the Board of
Directors without protesting prior to the meeting or at its commencement such
lack of notice, shall be conclusively deemed to have waived notice of such
meeting.
ARTICLE V
OFFICERS
Section 5.1. Executive Officers. The officers of the Corporation shall
be a President or Chief Executive Officer, a Treasurer and a Secretary. Any
person may hold two or more of such offices. The officers of the Corporation
shall be elected annually (and from time to time by the Board of Directors, as
vacancies occur), at the annual meeting of the Board of Directors following the
meeting of stockholders at which the Board of Directors was elected.
Section 5.2. Other Officers. The Board of Directors may appoint such
other officers and agents, including a Chief Financial Officer, Vice President,
Assistant Vice Presidents, Secretaries, Assistant Secretaries and Assistant
Treasurers, as it shall at any time or from time to time deem necessary or
advisable.
Section 5.3. Authorities and Duties. All officers, as between
themselves and the Corporation, shall have such authority and perform such
duties in the management of business and affairs of the Corporation as may be
provided in these By-Laws, or, to the extent not so provided, as may be
prescribed by the Board of Directors.
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Section 5.4. Tenure and Removal. The officers of the Corporation shall
be elected or appointed to hold office until their respective successors are
elected or appointed. All officers shall hold office at the pleasure of the
Board of Directors, and any officer elected or appointed by the Board of
Directors may be removed at any time by the Board of Directors for cause or
without cause at any regular or special meeting.
Section 5.5. Vacancies. Any vacancy occurring in any office of the
Corporation, whether because of death, resignation or removal, with or without
cause, or any other reason, shall be filled by the Board of Directors.
Section 5.6. Compensation. The salaries and other compensation of all
officers and agents of the Corporation shall be fixed by or in the manner
prescribed by the Board of Directors.
Section 5.7. President. The President shall have general charge of the
business and affairs of the Corporation and in the absence of the Chairman of
the Board, the President shall preside at all meetings of the stockholders and
the directors. The President shall perform such other duties as are properly
required of him by the Board of Directors.
Section 5.8. Vice President. Each Vice President, if any, shall perform
such duties as may from time to time be assigned to him by the Board of
Directors.
Section 5.9. Secretary. The Secretary shall attend all meetings of the
stockholders and all meetings of the Board of Directors and shall record all
proceedings taken at such meetings in a book to be kept for that purpose; he
shall see that all notices of meetings of stockholders and meetings of the Board
of Directors are duly given in accordance with the provisions of
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these By-Laws or as required by law; he shall be the custodian of the records
and of the corporate seal or seals of the Corporation; he shall have authority
to affix the corporate seal or seals to all documents, the execution of which,
on behalf of the Corporation, under its seal, is duly authorized, and when so
affixed it may be attested by his signature; and in general, he shall perform
all duties incident to the office of the Secretary of a corporation, and such
other duties as the Board of Directors may from time to time prescribe.
Section 5.10. Treasurer. The Treasurer shall have charge of and be
responsible for all funds, securities, receipts and disbursements of the
Corporation and shall deposit, or cause to be deposited, in the name and to the
credit of the Corporation, all moneys and valuable effects in such banks, trust
companies, or other depositories as shall from time to time be selected by the
Board of Directors. He shall keep full and accurate accounts of receipts and
disbursements in books belonging to the Corporation; he shall render to the
President and to each member of the Board of Directors, whenever requested, an
account of all of his transactions as Treasurer and of the financial condition
of the Corporation; and in general, he shall perform all of the duties incident
to the office of the Treasurer of a corporation, and such other duties as the
Board of Directors may from time to time prescribe.
Section 5.11. Other Officers. The Board of Directors may also elect or
may delegate to the President the power to appoint such other officers as it may
at any time or from time to time deem advisable, and any officers so elected or
appointed shall have such authority and perform such duties as the Board of
Directors or the President, if he shall have appointed them, may from time to
time prescribe.
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ARTICLE VI
PROVISIONS RELATING TO STOCK CERTIFICATES AND STOCKHOLDERS
Section 6.1. Form and Signature. The shares of the Corporation shall be
represented by a certificate signed by the President or any Vice President and
by the Secretary or any Assistant Secretary or the Treasurer or any Assistant
Treasurer, and shall bear the seal of the Corporation or a facsimile thereof.
Each certificate representing shares shall state upon its face (a) that the
Corporation is formed under the laws of the State of Delaware, (b) the name of
the person or persons to whom it is issued, (c) the number of shares which such
certificate represents and (d) the par value, if any, of each share represented
by such certificate.
Section 6.2. Registered Stockholders. The Corporation shall be entitled
to recognize the exclusive right of a person registered on its books as the
owner of shares of stock to receive dividends or other distributions, and to
vote as such owner, and to hold liable for calls and assessments a person
registered on its books as the owner of stock, and shall not be bound to
recognize any equitable or legal claim to or interest in such shares on the part
of any other person.
Section 6.3. Transfer of Stock. Upon surrender to the Corporation or
the appropriate transfer agent, if any, of the Corporation, of a certificate
representing shares of stock duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, and, in the event that the
certificate refers to any agreement restricting transfer of the shares which it
represents, proper evidence of compliance with such agreement, a new
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certificate shall be issued to the person entitled thereto, and the old
certificate canceled and the transaction recorded upon the books of the
Corporation.
Section 6.4. Lost Certificates, etc. The Corporation may issue a new
certificate for shares in place of any certificate theretofore issued by it,
alleged to have been lost, mutilated, stolen or destroyed, and the Board may
require the owner of such lost, mutilated, stolen or destroyed certificate, or
his legal representatives, to make an affidavit of the fact and/or to give the
Corporation a bond in such sum as it may direct as indemnity against any claim
that may be made against the Corporation on account of the alleged loss,
mutilation, theft or destruction of any such certificate or the issuance of any
such new certificate.
Section 6.5. Record Date. For the purpose of determining the
stockholders entitled to notice of, or to vote at, any meeting of stockholders
or any adjournment thereof, or to express written consent to any corporate
action without a meeting, or for the purpose of determining stockholders
entitled to receive payment of any dividend or other distribution or allotment
of any rights, or entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose of any other lawful action,
the Board may fix, in advance, a record date. Such date shall not be more than
sixty (60) nor less than ten (10) days before the date of any such meeting, nor
more than sixty (60) days prior to any other action.
Section 6.6. Regulations. Except as otherwise provided by law, the
Board may make such additional rules and regulations, not inconsistent with
these By-Laws, as it may deem expedient, concerning the issue, transfer and
registration of certificates for the securities of the Corporation. The Board
may appoint, or authorize any officer or officers to appoint, one or
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more transfer agents and one or more registrars and may require all certificates
for shares of capital stock to bear the signature or signatures of any of them.
ARTICLE VII
GENERAL PROVISIONS
Section 7.1. Dividends and Distributions. Dividends and other
distributions upon or with respect to outstanding shares of stock of the
Corporation may be declared by the Board of Directors at any regular or special
meeting, and may be paid in cash, bonds, property, or in stock of the
Corporation. The Board shall have full power and discretion, subject to the
provisions of the Certificate of Incorporation or the terms of any other
corporate document or instrument to determine what, if any, dividends or
distributions shall be declared and paid or made.
Section 7.2. Checks, etc. All checks or demands for money and notes or
other instruments evidencing indebtedness or obligations of the Corporation
shall be signed by such officer or officers or other person or persons as may
from time to time be designated by the Board of Directors.
Section 7.3. Seal. The corporate seal shall have inscribed thereon the
name of the Corporation, the year of its incorporation and the words "Corporate
Seal Delaware". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or otherwise reproduced.
Section 7.4. Fiscal Year. The fiscal year of the Corporation shall be
determined by the Board of Directors.
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Section 7.5. General and Special Bank Accounts. The Board may authorize
from time to time the opening and keeping of general and special bank accounts
with such banks, trust companies or other depositories as the Board may
designate or as may be designated by any officer or officers of the Corporation
to whom such power of designation may be delegated by the Board from time to
time. The Board may make such special rules and regulations with respect to such
bank accounts, not inconsistent with the provisions of these By-Laws, as it may
deem expedient.
ARTICLE VIII
INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHER PERSONS
Section 8.1. Indemnification by Corporation. To the extent permitted by
law, as the same exists or may hereafter be amended (but, in the case of any
such amendment, only to the extent that such amendment permits the Corporation
to provide broader indemnification rights than said law permitted the
Corporation to provide prior to such amendment) the Corporation shall indemnify
any person against any and all judgments, fines, and amounts paid in settling or
otherwise disposing of actions or threatened actions, and expenses in connection
therewith, incurred by reason of the fact that he, his testator or intestate is
or was a director or officer of the Corporation or of any other corporation of
any type or kind, domestic or foreign, which he served in any capacity at the
request of the Corporation. To the extent permitted by law, expenses so incurred
by any such person in defending a civil or criminal action or proceeding shall
at his request be paid by the Corporation in advance of the final disposition of
such action or proceeding.
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ARTICLE IX
ADOPTION AND AMENDMENTS
Section 9.1. Power to Amend. Subject to any limitation contained in any
certificate of designation, these By-Laws may be amended or repealed and any new
By-Laws may be adopted by the Board of Directors; provided that these By-Laws
and any other By-Laws amended or adopted by the Board of Directors may be
amended, may be reinstated, and new By-Laws may be adopted, by the stockholders
of the Corporation entitled to vote at the time for the election of directors.
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EXHIBIT 3
Exceptions to Article III Representations and Warranties of the
Company.
Section 3.1
The Company is in the process of qualifying to do business in Arkansas
and Florida, the only two jurisdictions in which the character of its Assets or
the nature of its activities currently make such qualification necessary.
Section 3.3
The Company and PNV have pledged their rights under certain contracts
to APA Excelsior IV, L.P., and APA Excelsior IV Offshore, L.P.
Section 3.4
The Company's outstanding liabilities are set forth on Schedule 1.2 of
the Conveyance Agreement attached hereto as exhibit 3.3.
Section 3.5
Noteholders of Arden Technologies, Inc. have asserted claims against
PNV, Xxx Xxxxxxxx and Xxxxx Xxxxxxxxx. PNV has provided the Investors with
copies of all correspondence regarding these claims.
Section 3.20(b)
The Company is indebted to Xxx Xxxxxxx for the repayment of a $150,000
loan made to PNV on.
Xx. Xxxxxxx has agreed to modify his loan and make a contribution to
capital as provided in the attached agreement.
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EXHIBIT 3.2
Common Stock Held by Existing Investors
See Exhibit B
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Exhibit 3.3
List of Assets Transferred to the Company by PNV
The Partnership shall transfer all of its Assets to the Corporation
as of the Effective Date including, without limitation, all of the Assets listed
below.
A. Equipment, Furniture, Fixtures and Software
All computer equipment
All furniture and fixtures
All software
All office equipment
All cable and telephone equipment relating to the installation and operation of
the cable television and telephone system at the West Memphis, Arkansas test
site.
All plans, sketches, maps, designs and other materials relating to the
installation of telephone and cable television systems at truckstops.
All cable and telephone equipment currently in inventory or under purchase
order.
All electrical, engineering, and testing equipment.
B. Leases, Contracts and Agreements
1. That certain lease relating to real property located at 0000 XX 00xx
Xxxxxx, Xxxxxxxx #00, Xx. Xxxxxxxxxx, Xxxxxxx 00000.
2. That certain license relating to office space located at 000 Xxxxx
Xxxxxxxxx Xxxx Xxxxx, Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx 00000.
3. That certain Park 'N View Agreement dated May 27, 1994, by and among
the Partnership and Memphis Gateway Travel Center, Inc.
4. That certain Amended Cable Television and Telephone Service
Agreement dated March 27, 1995 by and among the Partnership and National
Auto/Truckstops, Inc.
5. That certain Amended Cable Television and Telephone Service
Agreement dated August 27, 1995 by and among the Partnership and Ambest.
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EXHIBIT 3.6
List of all Contracts to which either PNV or the Company
is a party or which are currently in negotiation
1. That certain lease relating to real property located at 0000 XX 00xx Xxxxxx,
Xxxxxxxx #00, Xx. Xxxxxxxxxx, Xxxxxxx 00000.
2. That certain license relating to office space located at 000 Xxxxx Xxxxxxxxx
Xxxx Xxxxx. Xxxxx 000, Xxxxxxxxx, Xxxxxxxxx 00000.
3. That certain Park N' View Agreement dated May 27, 1994, by and between PNV
and Memphis Gateway Travel Center, Inc.
4. That certain Amended Cable Television and Television and Telephone Service
Agreement dated March 27, 1995 by and between PNV and National Auto/Truckstops,
Inc.
5. That certain Amended Cable Television and Telephone Service Agreement dated
August 27, 1995 by and between PNV and Ambest.
6. That certain Amended Cable Television and Telephone Service Agreement dated
September 29, 1995 by and between the Company and Highway Service Ventures.,
Inc.
7. That certain Amended Cable Television and Telephone Service Agreement dated
October 28, 1995 by and between Company and Travel Ports of America, Inc.
8. That certain Amended Cable Television and Telephone Service Agreement by and
between the Company and Pilot Corporation under negotiation.
9. That certain Agreement between the Company and Aquity Marketing dated October
2, 1995.
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EXHIBIT 3.8(B)
None
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EXHIBIT 3.12
Broker or Finder Fee
The Company entered into an Agreement with Cancap Investments Limited
pursuant to which the Company agreed to pay Cancap a finders fee as set forth in
the attached letter agreement.
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EXHIBIT 3.21
Unaudited Financial Statements
Park `N View, Inc.
(A Development Stage Enterprise)
Pro Forma Financial Statement - Income Tax Basis
September 30, 1995
MUKAMAL, APPEL, FROMBERG & XXXXXXXXX, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
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Park `N View, Inc.
(A Development Stage Enterprise)
Table of Contents
September 30, 1995
================================================================================
Accountants' Compilation Report............................................1
Financial Statement:
Pro Forma Statement of Assets, Liabilities and Stockholders' Equity-
Income Tax Basis...........................................................2-3
Selected Note to Pro Forma Financial Statement.............................4
MUKAMAL, APPEL, FROMBERG & XXXXXXXXX, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
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MUKAMAL, APPEL, FROMBERG & XXXXXXXXX, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
One Biscayne Tower, Suite 0000
Xxx Xxxxx Xxxxxxxx Xxxxxxxxx
Xxxxx, Xxxxxxx 00000
Dade 305/530-0900 o Broward 305/765-0796
Telefax 305/530-1313
To the Board of Directors
Park `N View, Inc.
Ft. Lauderdale, Florida
We have compiled the accompanying pro forma statement of assets, liabilities and
stockholders' equity of Park `N View, Inc. (a development stage enterprise) as
of September 30, 1995 in accordance with Statements on Standards for Accounting
and Review Services issued by the American Institute of Certified Public
Accountants. The financial statements have been prepared on the accounting basis
used by the company for income tax purposes, which is a comprehensive basis of
accounting other than generally accepted accounting principles.
A compilation is limited to the presenting in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying pro forma statement of assets, liabilities and
stockholders' equity and, accordingly, do not express an opinion or any other
form of assurance on it.
Management has elected to omit substantially all of the disclosures and
assumptions required by generally accepted accounting principles. If the omitted
disclosures and assumptions were included in the pro forma financial statement,
they might influence the user's conclusions about the company's financial
position. Accordingly, this pro forma financial statement is not designed for
those who are not informed about such matters.
-----------------------------------
Mukamal, Apel, Fromberg & Xxxxxxxxx, P.A.
Certified Public Accountants
Miami, Florida
October 26, 1994
Page 1
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Park `N View, Inc.
(A Development Stage Enterprise)
Pro Forma Statement of Assets, Liabilities and Stockholders' Equity -
Income Tax Basis
September 30, 1995
ASSETS
Current Assets:
Cash and cash equivalents $ 33,938
Cash received from investors 100,000
Accounts receivable 5,000
Other receivables 100
Inventory 200
Prepaid expenses 7,000
-----------
Total current assets 148,238
Equipment and Leasehold improvements:
Office Equipment $ 3,829
Communication equipment 149,855
Leasehold improvements 28,244
Other receivables 100
Inventory 200
Prepaid expenses 7,000
-----------
Total current assets 179,728
Less: accumulated depreciation and amortization (50,782)
-----------
Net equipment and leasehold improvements 128,948
Other Assets:
Organization costs, net of accumulated amortization of $287 733
Start-up expenditures, net of accumulated amortization of $88,272 187,748
Goodwill, net of accumulated amortization of $31,540 530,171
Capitalized costs of raising capital 36,157
-----------
Total current assets 754,807
-----------
$ 1,029,991
see accountants' compilation report
Page 2
MUKAMAL, APPEL, FROMBERG & XXXXXXXXX, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
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Park `N View, Inc.
(A Development Stage Enterprise)
Pro Forma Statement of Assets, Liabilities and Stockholders' Equity -
Income Tax Basis
September 30, 1995
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 73,534
Accrued expenses 18,874
Line of credit - related party 150,000
Loan payable - investors 100,000
----------
Total current assets 340,408
Stockholders' Equity:
Capital stock, per value $0.001, 5,000,000 shares authorized,
1,650,000 shares issued and outstanding 1,650
Additional paid in capital 1,340,607
Deficit accumulated during the development stage (652,674)
----------
Total stockholders' equity 689,583
----------
$1,029,991
==========
see accountants' compilation report
Page 3
MUKAMAL, APPEL, FROMBERG & XXXXXXXXX, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
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Park `N View, Inc.
(A Development Stage Enterprise)
Selected Note to Pro Forma Financial Statement
September 30, 1995
1. PRO FORMA PRESENTATION/PARTNERSHIP TERMINATION
For purposes of this pro forma financial statement, all of the assets,
liabilities and partners' capital of Park `N View, Ltd. (a development stage
enterprise which is an operating partnership) have been recorded on the pro
forma statement of assets, liabilities and stockholders' equity of Park `N View,
Inc. as of September 30, 1995. The Partnership will terminate and transfer all
of its assets, rights, contracts, intangibles and liabilities to the newly
formed corporation in October 1995 in an anticipated "tax-free exchange". The
assets and liabilities when transferred to the successor corporation may be
valued on a fair market basis according to generally accepted accounting
principles.
Certain related party loans have been recorded as specified in contracts which
are expected to be consummated by investor entities. The entities loaned the
newly formed corporation $100,000. This loan has been recorded on the pro forma
September 30, 1995 statement of assets, liabilities and stockholders' equity -
income tax basis of the company.
Page 4
MUKAMAL, APPEL, FROMBERG & XXXXXXXXX, P.A.
CERTIFIED PUBLIC ACCOUNTANTS
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EXHIBIT 5.1(F)
FORM OF SECURITIES RESTRICTION AGREEMENT
SECURITIES RESTRICTION AGREEMENT
SECURITIES RESTRICTION AGREEMENT ("Agreement") dated as of November 2,
1995, by and among PARK 'N VIEW, INC., a Delaware corporation (the "Company"),
the Existing Investors as set forth on Exhibit A attached hereto and made a part
hereof and the Investors as set forth on Exhibit B attached hereto and made a
part hereof. The parties hereto other than the Company are referred to herein
collectively as the "Securityholders" and each individually as a
"Securityholder."
Definitions. Terms initially capitalized but not otherwise defined
herein shall have the meanings given such terms in the Stock Purchase
Agreements, except for the following:
"Event of Option" shall mean the occurrence of any of the
following:
(a) if any Securityholder shall: (i) apply for, consent
to, or acquiesce in, the appointment of a trustee, receiver, sequestrator or
other custodian or make a general assignment for the benefit of creditors for
itself or any of its property, (any of which shall be referred to herein as a
"Receiver"), or in the absence of such application, consent or acquiesce, permit
or suffer to exist the appointment of a Receiver and such Receiver shall not be
discharged within 60 calendar days; (ii) commit any act of bankruptcy or permit
or suffer to exist the commencement of any bankruptcy reorganization, debt
arrangement or other case or proceeding under any bankruptcy or insolvency law,
or any dissolution, winding up or liquidation proceeding in respect of itself,
and, if any such case or proceeding is not commenced by such Securityholder, if
such case or proceeding shall be consented to or acquiesced in by such
Securityholder, or shall result in the entry of an order for relief and shall
remain undismissed for 30 days; or (iii) take any corporate or other action
authorizing, or in furtherance of, any of the foregoing; or
(b) a writ of attachment, levy or other court order which
prevents a Securityholder from exercising his, her or its voting and/or other
rights in connection with all or a portion of his, her or its Stock in the
Company shall be entered and shall remain undismissed for 30 days.
"Non-Participating Investor" shall mean a Holder of Securities
that does not exercise its rights of first refusal under Section 3(a) of the
Securityholders' Agreement in connection with a transaction in which other
Holders of Securities purchase securities of the Company pursuant to such
section and any nominee for or Affiliate of such Holder unless such failure to
exercise its rights of first refusal under Section 3(a) of the Securityholders'
Agreement is due to a Regulatory Problem, as defined therein.
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"Prospective Purchaser" shall mean any person to whom a holder
shall desire to sell shares of Common Stock and who shall be identified by such
Securityholder to the Company and the Holders of Securities under the terms of
Subsection (A) of Section I hereof.
"Securities" shall mean at any time, the shares of then
outstanding Common Stock, Series A Preferred Stock and Subordinated Notes;
provided, however, that Securities shall not be deemed to include any shares of
Common Stock after such shares have been registered under the Securities Act and
sold pursuant to such registration or any shares sold without registration under
the Securities Act in compliance with Rule 144, or pursuant to any other
exemption from registration under the Securities Act to a person who is free to
resell such shares without registration under the Securities Act; and provided,
further, that at any time subsequent to the closing of the Initial Public
offering, Securities shall not include any shares which are eligible to be sold
without registration under the Securities Act in compliance with subsection (k)
of Rule 144.
"Sale" means the consolidation or merger of the Company into
or with any corporation or corporations (other than a merger with another
corporation in which the Company is the surviving corporation and which does not
result in any reclassification or change -- other than a change in par value, or
from par value to no par value, or from no par value to par value, or as a
result of a subdivision or combination -- of outstanding shares of the Company's
Stock of any class or series, whether now or hereafter authorized), or the sale
or transfer by the Company of all or substantially all of its assets.
"Securities Purchase Agreements" shall mean those certain
Securities Purchase Agreements dated as of hereof by and between the Company and
each of the Investors, as defined therein.
"Subordinated Notes" shall mean the subordinated promissory
notes, 8% coupon, sold pursuant to the Securities Purchase Agreements.
"Series A Preferred Stock" shall mean the $.01 par value
Preferred Stock designated as Series A Preferred Stock pursuant to the
Certificate of Designation referred to in the Securities Purchase Agreement.
1. Right of First Refusal; Right of Co-Sale.
(A) Right of First Refusal. (1) Except in the event of a
public offering, merger, consolidation, exchange of securities of the Company
approved by the stockholders of the Company, in the event that a Securityholder
desires to sell any or all of the shares of Common Stock owned by such
Securityholder and receives a bona fide offer therefor (the "Selling
Securityholder"), such Selling Securityholder shall so notify the Holders of
Securities in writing. The notice to the Holders of Securities shall be
delivered to them by hand, or by first-class, certified or overnight mail,
postage prepaid, or by telecopier, to their respective addresses as shown on the
books of the Company, which addresses shall be provided to the Selling
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Securityholder by the Company. Each notice shall set forth the identity and
mailing address of the prospective purchaser ("Prospective Purchaser"), the
quantity and description of the Common Stock proposed to be sold, the price per
share to be received therefor, the number of shares purchasable by each Holder
of Securities as determined in accordance herewith and the address of the
Selling Securityholder to which the Holders of Securities and/or the Company may
send notices to such Selling Securityholder required hereunder. If the Selling
Securityholder is also selling Series A Preferred Stock and/or Subordinated
Notes, then in order to exercise its right of first refusal, Holders or the
Company must purchase all Securities being sold.
The Selling Securityholder shall advise the Holders of
Securities by providing them with written notice, whereupon each Holder of
Securities shall be entitled, for a period of 20 days from the date of such
notice, to purchase upon the terms set forth in such notice, that proportion of
the Common Stock as such Securityholder's aggregate holding of Securities then
bears to the aggregate holding of Common Stock held by all Holders of Securities
exercising their right under this Subsection l(A)(1) (excluding all Securities
held by Non-Participating Investors) by the tender of an official bank check or
certified check for the appropriate amount to the Selling Securityholder, by
first class, certified or overnight mail, postage prepaid, addressed to the
Selling Securityholder at the address specified in the notice, within 30 days
after being notified of the availability of such rights pursuant hereto. Within
five days after the receipt of such official bank or certified check from the
Company, the Selling Securityholder shall surrender to the Company, by hand
delivery or by first class, certified or overnight mail, postage prepaid,
addressed to the Company as aforesaid, the certificate or certificates
representing the Common Stock sold in accordance herewith. If the certificate or
certificates surrendered by the Selling Securityholder represent a greater
number of shares of Common Stock than have been so sold, the Company shall
promptly issue to the Selling Securityholder a new certificate representing the
shares of Common Stock not so sold. Upon receipt by the Company of certificates
representing the Common Stock sold in accordance herewith, the Company shall
issue to each purchaser (or to the nominee of such purchaser) of such Common
Stock a new certificate representing such shares.
(2) If any Holders of Securities eligible to exercise the
right granted pursuant to Section (A)(1) of this Section 1 do not exercise such
right, in whole, the Selling Securityholder shall advise the Holders of
Securities who exercised their rights under Subsection (A)(1) of this Section 1
by providing them written notice, delivered by hand or by first-class, certified
or overnight mail, postage prepaid or by telecopier, within 5 days after the
earlier of (i) the expiration of the 20 day period specified in Subsection
(A)(1) above or (ii) the date the Selling Securityholder has determined the
total number of shares of Common Stock being purchased pursuant to Subsection
(A)(1) of this Section 1. Each such Holder of Securities shall thereupon be
entitled, for a period of 7 days from the date of such notice, to purchase some
or all of the shares of Common Stock not otherwise purchased under Subsection
(A) (1) of this Section 1; provided, however, that to the extent that more than
one such Holder desires to purchase shares of Common Stock exceeding that
proportion as such purchaser's aggregate holding of Securities then bears to the
aggregate holding of Securities then held by all Holders of
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Securities which exercised their rights granted under Subsection (A)(1) of this
Section 1 ("Excess Securities"), the amount of such Excess Securities which each
such Holder shall be entitled to purchase shall be reduced pro rata in
accordance with that proportion as the number of shares of Securities of which
such Holder is then the Holder bears to the total number of shares of Securities
then held by all such Holders desiring to purchase Excess Securities pursuant to
this Subsection (A)(2). The rights granted by this Subsection (A)(2) shall be
exercisable, in whole or in part, in the manner described in Subsection (A)(1)
of this Section 1.
(B) Right of Co-Sale. In the event that there are any shares
of Common Stock not purchased by one or more of the Holders of Securities
through the exercise of the rights granted in Subsection (A) of this Section 1,
no transfer of any of such shares shall be made other than in compliance with
this Subsection (B). The Selling Securityholder shall notify the Holders of
Securities, in the manner described in Subsection (A) of this Section 1, of the
number of shares of Common Stock remaining to be sold to the Prospective
Purchaser, restating the price to be paid in exchange therefor and the terms of
the proposed transaction. Such notice shall state the maximum number of shares
of Common Stock which may be sold to the Prospective Purchaser by each Holder of
Securities as determined in accordance herewith. With respect to any shares of
Common Stock which were unsold, each Holder of Securities shall thereupon be
entitled for a period of 20 days after the date of such notice to offer to sell
to the Prospective Purchaser, for such price and upon such terms, that
proportion (rounded to the nearest whole share) of the number of shares of
Common Stock proposed to be sold as such Holder's aggregate holding of
Securities then bears to the aggregate amount of Securities then held by all
Holders of Securities exercising their rights of co-sale under this Subsection
(B). The rights granted to the Holders of Securities in this Subsection (B) may
be exercised in whole or in part and shall be exercised by the tender,
conditioned upon receipt of the consideration for the Common Stock sold
hereunder, of the maximum number of shares of Common Stock the Holder thereof
desires to sell, endorsed and in transferable form, free and clear of liens,
claims, security interests and other encumbrances, to the Company, which shall
act as agent for purposes of such sale. On the first business day following the
date 20 days following the date of the first notice given to the Holders of
Securities, the Company shall notify the Selling Securityholder, the Holders of
Securities, and the Prospective Purchaser of the amount of Securities to be sold
under this Subsection (B) of Section 1, the price to be paid for any shares of
Common Stock and the price therefor. In such notice to the Prospective
Purchaser, the Company shall direct the Prospective Purchaser to furnish to the
Company, as agent, within 10 days of the date of such notice, the price of such
tendered shares of Common Stock in the form of an official bank or certified
check or checks in specified amounts. Promptly upon receipt of such check or
checks, the Company shall (i) transmit each check (duly endorsed, if necessary)
to the respective tendering Holder or Holders of Securities (ii) transfer the
shares so purchased on the books of the Company into the name of the purchaser
thereof, (iii) transmit certificates for such shares to the Prospective
Purchaser thereof by first class or certified mail, (iv) transmit tendered
shares not so purchased to the Holder thereof by first class or certified mail,
(v) notify the Holders of Securities in writing, delivered by hand or by
first-class, certified or overnight mail, postage prepaid, or by telecopier, of
such sale within 5 days following the completion thereof. In the event that, as
to any tender of
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shares of Common Stock or by the Holders of Securities pursuant hereto, the
entire purchase price for all shares of Common Stock duly tendered and eligible
for sale under this Subsection (B) is not received from the Prospective
Purchaser within the aforesaid 10-day period, the Company shall promptly (i)
return to the Holders of Securities all the shares of Common Stock tendered by
such Holders, delivered by hand or by first class, certified or overnight mail,
postage prepaid, and (ii) notify the Selling Securityholder of the return of
such shares of Common Stock . Any shares of Common Stock tendered by a Holder of
Securities as aforesaid received by the Company more than 20 days following the
date of the first notice given to the Holders of Securities pursuant to this
Subsection (B) shall be ineligible for sale in accordance with such notice and
the Company shall promptly return such shares of Common Stock to the tendering
Holder, delivered by hand or by first class, certified or overnight mail. The
balance of the number of shares of Common Stock to be sold to the Prospective
Purchaser, after deduction of the number of shares of Common Stock properly
tendered, if any, by one or more Holders of Securities in accordance herewith,
except in the event of a public offering, merger, consolidation, exchange of
securities of the Company approved by the stockholders of the Company, may be
sold by the Selling Securityholder to the Prospective Purchaser, at the price
and upon the terms set forth in the first notice given to the Holders of
Securities pursuant to this Subsection (B), not less than 20 days nor more than
60 days following the expiration of the 20-day period during which Holders of
Securities were entitled to exercise their rights of co-sale hereunder but only
if the Prospective Purchaser has timely paid the purchase price for all shares
properly tendered by such Holders and eligible for sale under this Subsection
(B).
(C) Non-Participating Investors. Notwithstanding the foregoing
provisions of this Section 1, a Non-Participating Investor shall not be entitled
to exercise any rights pursuant to Subsection (A) of this Section 1. However, a
Non-Participating Investor may participate in a sale pursuant to Subsection (B)
of this Section 1.
(D) Transfers to Affiliates. Notwithstanding anything in this
Section 1 to the contrary, any record owner of Common Stock purchased by a
Securityholder pursuant to the Securities Purchase Agreements may from time to
time transfer all or part of such record owner's Common Stock purchased pursuant
to the Securities Purchase Agreements: (i) to a nominee identified in writing to
the Company as being the nominee of or for such record owner, and any nominee of
or for a beneficial owner of Common Stock purchased pursuant to the Securities
Purchase Agreements identified in writing to the Company as being the nominee of
or for such beneficial owner may from time to time transfer all or part of
Common Stock purchased pursuant to the Securities Purchase Agreements registered
in the name of such nominee but held as nominee on behalf of such
Securityholder, to such Securityholder; (ii) an Affiliate of such
Securityholder; or (iii) if such Securityholder is a partnership or the nominee
of a partnership, to a partner, retired partner, or estate of a partner or
retired partner, of such partnership, so long as such transfer is in accordance
with the transferee's interest in such partnership and is without consideration;
provided, however, that each such transferee shall remain subject to all
restrictions on the transfer of Securities herein contained.
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(E) Termination of Provisions of this Section 1. The rights
granted and obligations imposed in this Section 1, shall terminate on the first
date on which shares of Common Stock are sold in an Initial Public Offering,
provided, however, that notwithstanding the foregoing provisions of this
Subsection l(E), all rights granted and obligations imposed in this Section 1
shall terminate on the date of consummation of Sale.
2. Sale of the Company.
(A) Obligation to Sell. Upon a Sale, each Securityholder shall
sell, exchange or otherwise transfer his shares of Common Stock in accordance
with the terms and conditions of the Sale if such Sale was approved by the
Holders of at least a majority of each class of the outstanding Securities. Each
Securityholder shall execute such documents and perform such acts, including,
without limitation, voting his, her or its shares of Common Stock, as may be
reasonably necessary to consummate such transfer of his shares of Common Stock;
provided, however, that no Securityholder who is not an officer of the Company
shall be required to make any representations or warranties in any such
document, other than with respect to the status of such Securityholder's title
to its or his share of Common Stock and whether or not it or he is an Accredited
Investor (as that term is defined in Rule 501 promulgated by the Securities and
Exchange Commission under the Securities Act).
3. Event of Option.
(A) Company's Right of Option. Upon the occurrence of an Event
of Option, the Securityholder who is the subject of the Event of Option (the
"Optioner") shall notify the Company in writing (such notice to be referred to
as the "Optioner's Notice"), delivered by hand or by first-class, certified or
overnight mail, postage prepaid, or by telecopier, within 5 days after the
occurrence of such Event of option, of its occurrence and nature. The Company
shall, within 7 days after its receipt of such notice, notify all Holders of
Securities other than the Optioner, such notice to be in writing, delivered by
hand, or by first-class, certified or overnight mail, postage prepaid, or by
telecopier, to their respective addresses as shown on the books of the Company.
Each such notice shall set forth the identity of the Optioner, the nature of the
Event of Option and the quantity and description of the Common Stock owned by
the Optioner.
The Company shall thereupon be entitled, for a period of 20
days after the delivery to it of the calculations of Fair Market Value to be
made pursuant to the last sentence of this Subsection (A), to purchase at a
price per share equal to the Fair Market Value of Common Stock, any or all of
the Optioner's shares of Common Stock by the tender of an official bank or
certified check for the appropriate amount to the Optioner. Within 3 days after
the receipt of such check from the Company, the Optioner shall surrender to the
Company by hand delivery or by first-class, certified or overnight mail, postage
prepaid, addressed to the Company, the certificates representing the shares of
Common Stock sold in accordance herewith. If the certificate or certificates
surrendered by the Optioner represent a greater number of shares of Common Stock
than have been sold, the Company shall promptly issue to the Optioner a new
certificate representing the shares of Common Stock not so sold. As used in this
Section 3, the
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term "Fair Market Value" shall mean the fair market value per share of Common
Stock on the date of the relevant Event of Option as applicable, as determined
by the firm of certified public accountants regularly engaged by the Company to
audit its financial statements, which determination the Company shall cause its
accountants to make and deliver to the Company no later than 20 days after its
receipt of the Optioner's Notice.
(B) Investors' Rights to Option.
(1) If the Company does not exercise, in whole, the option
granted under Subsection (A) of this Section 4 by the end of the 20 day option
period referred to therein, the Company shall so advise the Holders of
Securities other than the Optioner, by providing them with written notice as
aforesaid within 7 days after the expiration of the aforesaid 20 day period.
Each Holder of Securities, other than the Optioner and Non-Participating
Investors, shall thereupon be entitled, for a period of 20 days from the date of
such notice, to purchase that proportion of the Common Stock for which the
Company did not exercise its rights under Subsection (A) of this Section 3 as
such purchaser's aggregate holding of Securities then bears to the aggregate
holding of Securities then held by all Holders of Securities (excluding all
Securities held by Non-Participating Investors). The rights granted by this
Subsection (B)(1) shall be exercisable, in whole or in part, in the manner
described in Subsection (A) of this Section 3. In addition, upon receipt by the
Company of Common Stock sold in accordance herewith, the Company shall issue to
each purchaser of such Common Stock (or to the nominee of such purchaser) a new
certificate representing such shares.
(2) If any Holders of Securities eligible to exercise the
option granted pursuant to Section (B)(1) of this section 3 do not exercise such
right, in whole, the Company shall advise the Holders of Securities who
exercised their rights under Subsection (B)(1) of this Section 3 by providing
them written notice within 5 days after the expiration of the 20 day period
specified in Subsection (B)(1) above. Each such Holder of Securities shall
thereupon be entitled, for a period of 7 days from the date of such notice, to
purchase some or all of the shares of Common Stock not otherwise purchased under
Subsections (A) or (B) of this Section 3; provided, however, that to the extent
that more than one such Holder exercising its rights granted under this
Subsection (B)(2) desires to purchase Common Stock exceeding that proportion as
such purchaser's aggregate holding of Securities then bears to the aggregate
holding of Securities then held by all Holders of Securities which exercised
their rights granted under Subsection (B)(1) of this Section 3 ("Excess Option
Securities"), the amount of such Excess Securities which each such Holder shall
be entitled to purchase shall be reduced pro rata in accordance with that
proportion as the number of shares of Common Stock of which such Holder is then
the Holder bears to the total number of shares of Common Stock then held by all
such Holders desiring certificates representing the Common Stock, to purchase
Excess Option Securities pursuant to this Subsection (B)(2). The rights granted
by this Subsection (B)(2) shall be exercisable, in whole or in part, in the
manner described in Subsection (B)(1) of this Section 3.
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(C) Shares Not Purchased. Any shares not purchased pursuant to
Subsection (A) or (B) of this Section 3 shall continue to be subject to an open
option to purchase by the Company or by the Holders of any Securities other than
the Optioner. Any transfer, sale or disposition of such shares subject to this
option shall not be valid unless the intended transferee has executed and
delivered to the Company, a valid and binding agreement to such effect as a
condition to such transfer, sale, or disposition.
(D) Information. Upon the occurrence of an Event of Option,
the Optioner shall cease to be entitled to receive information pursuant to
Section 6.5 and 6.8 of the Securities Purchase Agreements and shall cease to
have any rights under Sections 6.6 of the Securities Purchase Agreements.
4. Limitations on Transfer: Legend.
(A) Transfer Limitations and Exceptions. For so long as this
Agreement shall remain in effect, the Securityholders shall not, directly or
indirectly, offer for sale, sell, assign, transfer, pledge, hypothecate,
encumber, convey in trust, gift, transfer by request, devise or descent or
otherwise dispose of, or subject to a security interest, any shares of Common
Stock or any interest therein whether now owned or hereafter acquired, owned
beneficially or of record (each of the above-described actions by any
Securityholder being referred to herein as a "Transfer"), except in strict
compliance with the provisions of this Agreement; provided, however, that this
Section 4 shall not restrict any transfer of shares of Common Stock by gift to
such Securityholder's spouse, lineal descendant or antecedent, brother or
sister, the adopted child or adopted grandchild, or spouse of any child, adopted
child, grandchild or adopted grandchild of such Securityholder or to a trust or
trusts for the exclusive benefit of such Securityholder or such Securityholder's
family members, or transfer by devise or descent or if such Securityholder is a
partnership, to any partners of such partnership, provided that in all cases,
the transferee or other recipient executes a counterpart copy of this Agreement
and becomes bound thereby.
(B) Prohibited Transfers. Any Transfer of shares of Common
Stock in violation of this Agreement (a "Prohibited Transfer") shall be null and
void. The Company shall not record any Prohibited Transfer on its books and
shall not recognize any equitable or other claim to, or any interest in,
Securities that are the subject of a Prohibited Transfer on the part of any
third party.
(C) Legend. All certificates representing shares of Common
Stock of the Company held or later acquired by the parties hereto shall bear a
legend in substantially the following form:
"This certificate and the shares represented hereby may not be
sold, assigned, bequeathed, transferred (including by will or pursuant to the
laws of descent and distribution or otherwise), pledged, encumbered or otherwise
disposed of or be made the subject of a security interest except as provided in
that certain Securities Restriction Agreement dated as of November 2, 1995, by
and among Park `N View, Inc. (the "Company") and the Securityholders of the
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Company, a copy of which agreement is on file at the office of the Company and
will be furnished to the holder of this certificate upon written request and
without charge. Any purported transfer in violation of that agreement shall be
void."
Upon termination of this Agreement, if a Securityholder shall
so request in writing, the Company shall promptly issue to such Securityholder a
new certificate not bearing the foregoing legend representing any shares of
Common Stock then held by such Securityholder.
(D) In the event the Company or Securityholders pursuant to
the Registration Rights Agreement propose to make an underwritten public
offering of Securities, all Securityholders shall agree not to sell any
Securities (including short sales) for a period to be determined by a majority
vote of each class of Securities except pursuant to such registration statement
without the prior written consent of the Company and the underwriter.
5. Failure to Deliver Securities If a Securityholder
becomes obligated to sell any shares of Common Stock to a Holder of Securities
or to the Company under this Agreement and fails to deliver such shares in
accordance with the terms of Agreement, such Holder or the Company, as the case
maybe, may at its option, in addition to all other remedies it may have, send to
such Securityholder the purchase price for such shares of Common Stock as is
herein specified. Thereupon, the Company upon written notice delivered by hand
or by first-class, certified or overnight mail, postage prepaid, or by
telecopier, to such Securityholder, (a) shall cancel on its books the
certificate or certificates represent the shares of Common Stock to be sold and
(b) shall issue, in lieu thereof, in the name of such Holder or the Company, as
the case may be, a certificate or certificates representing such shares of
Common Stock and thereupon all of such Securityholder's rights in and to such
shares of Common Stock shall terminate.
6. Miscellaneous.
(A) (i) Amendments. This Agreement may not be altered, amended
or supplemented except in a written instrument executed by the Company, Holders
of not less than a majority of each class of the then existing Securities.
(ii) Pledge. The parties to the Agreement hereby consent
to the pledge of Securities by Messrs. Xxxxxxxx and Xxxxxxxxx to secure their
obligation to indemnify the Investors and the Company under that certain
Indemnification and Stock Pledge Agreement dated November 2, 1995.
(B) Successors and Assigns. The rights and benefits of this
Agreement shall inure to the benefit of, and be enforceable by, the successors
and assigns of the Company and the Holders of Securities. The rights and
obligations of the Securityholders under this Agreement may only be assigned
with the prior written consent of the Company and the Holders of at least a
majority of each class of the then outstanding Securities. This Agreement shall
be binding upon
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the Company and its successors and assigns and each Securityholder and his
heirs, personal representatives, successors and assigns.
(C) Further Execution. The parties hereto agree to execute any
additional documents or instruments necessary to carry out the purposes of this
Agreement.
(D) Governing Law. The validity, meaning and effect of this
Agreement shall be determined in accordance with the domestic laws of the State
of Delaware applicable to contracts made and to be performed in that state
without giving any effect to any choice or conflict of law provision or rule
(whether in the State of Delaware or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Delaware.
(E) Headings. The headings herein are solely for the
convenience of the parties and shall not serve to modify or interpret the text
of the Sections at the beginning of which they appear.
(F) Severability. In the event that any court or any
governmental authority or agency declares all or any part of any Section of this
Agreement to be unlawful or invalid, such unlawfulness or invalidity shall not
serve to invalidate any other Section of this Agreement, and in the event that
only a portion of any Section is so declared to be unlawful or invalid, such
unlawfulness or invalidity shall not serve to invalidate the balance of such
Section.
(G) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be an original but all of which shall
together constitute one and the same document.
(H) Entire Agreement. This Agreement constitutes the entire
agreement by and among the parties hereto with respect to the subject matter
hereof.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first set forth above.
ATTEST: PARK 'N VIEW, INC.
By:
------------------------------- ----------------------------------------
Secretary
Existing Investors whose signatures appear
on Exhibit A hereto and Investors whose
signatures appear on Exhibit B hereto.
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EXHIBIT A
Park 'N View General Partner, Inc.
By:
------------------------------------
Name:
Title:
------------------------------------
Xxx Xxxxxxxx
------------------------------------
Xxx Xxxxxxx
------------------------------------
Xxxxx Xxxxxxxxx
Nelgo Investments
By:
------------------------------------
Name:
Title:
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EXHIBIT B
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1. APA EXCELSIOR IV, L.P.
By: APA EXCELSIOR IV PARTNERS, L.P.
(Its General Partner)
By: PATRICOF & CO. MANAGERS, INC.
(Its General Partner)
By:
-------------------------------------
Name:
Title:
2. APA EXCELSIOR IV OFFSHORE, L.P.
By: PATRICOF & CO. VENTURES, INC., INVESTOR ADVISOR
By:
-------------------------------------
Name:
Title:
3. THE P/A FUND
By: APA PENNSYLVANIA PARTNERS, L.P.
(Its General Partner)
By:
-------------------------------------
Name:
Title:
4.
---------------------------------
Xxxxxxx Xxxxxxx
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EXHIBIT 5.1(G)
FORM OF REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement"), dated as of
November 2, 1995 by and among each of the Investors that signs a signature page
annexed hereto (collectively the "Investors") and Park N' View, Inc., a Delaware
corporation (the "Company").
WHEREAS, the Investors and the Company have entered into
Securities Purchase Agreements dated October __, 1995 whereby the Investors have
purchased $6 million of Subordinated Notes, 140,000 shares of Series A Preferred
Stock and 2,000,000 shares of Common Stock.
ARTICLE 1.
DEFINITIONS
Section 1.1 Definitions. All terms not defined below shall have the
meaning set forth in the Securities Purchase Agreements dated November 2, 1995.
"Commission" means the United States Securities and Exchange
Commission, or any other federal agency at the time administering the Securities
Act.
"Common Stock" means the Common Stock, par value $.001 per share, of
Park `N View, Inc., as it may exist from time to time.
"Demand Registration" means a Demand Registration as defined in Section
2.1.
"Holder" means any person who now holds or shall hereafter acquire and
hold Registrable Securities.
"Piggy-Back Registration" means a Piggy-Back Registration as defined in
Section 2.2.
"Registrable Securities" means the shares of Common Stock purchased
pursuant to the Securities Purchase Agreement until (i) a registration statement
covering such shares of Common Stock has been declared effective by the
Commission and such Common Stock have been disposed of pursuant to such
effective registration statement, or (ii) such shares of Common Stock are sold
or are sellable under circumstances in which all of the applicable conditions of
Rule 144 (or any similar provisions then in force) under the Securities Act are
met, including in a sale pursuant to the provisions of Rule 144(k), or (iii)
such shares of Common Stock have been otherwise transferred and the Company has
delivered a new certificate or other evidence of ownership for such Common Stock
not bearing the legend required pursuant to the Securities
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Purchase Agreement and such Common Stock may be resold by the person receiving
such certificate without registration under the Securities Act.
"Restricted Stock" means the Stock which may at the time be sold
pursuant to Rule 144(k) under the Securities Act or which may be otherwise sold
without registration under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar Federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.
"Selling Holder" means an Investor who is selling Registrable
Securities pursuant to a registration statement under the Securities Act.
"Underwriter" means a securities dealer who purchases any Registrable
Securities as principal in an underwritten offering and not as part of such
dealer's market-making activities.
ARTICLE 2.
REGISTRATION RIGHTS
Section 2.1 Demand Registration. (a) Request for Registration. At any
time and from time to time Holders of a majority of Registrable Securities may
make written requests on the Company for the registration of the Common Stock
under the Securities Act, such requests hereinafter referred to as a Demand
Registration ("Demand Registration"). Subject to the penultimate sentence of
Section 2.1(b), the Company shall have no obligation to file more than two
registration statements under the Securities Act with respect to Demand
Registrations; provided, however, if the Registrable Securities may be
registered on Form S-3 (or any successor form with similar "short form"
disclosure requirements), the Investors shall have the right to request
registration of their shares on Form S-3, or such successor form, once per year.
Any such request will specify the number of shares or aggregate principal
amount, as the case may be, of Registrable Securities proposed to be sold and
will also specify the intended method of disposition thereof. The Company shall
give written notice of such registration request within 10 days after the
receipt thereof to all other Holders of Registrable Securities. Within 20 days
after receipt of such notice by any such Holder, such Holder may request in
writing that Registrable Securities be included in such registration and the
Company shall include in the registration statement for such Demand Registration
the Registrable Securities of all Holders requested to be so included. Each such
request by such other Holders shall specify the number of shares or aggregate
principal amount, as the case may be, of Registrable Securities proposed to be
sold and the intended method of disposition thereof.
(b) Effective Registration. A registration will not be deemed
to have been effected as a Demand Registration unless it has been declared
effective by the Commission and the Company has complied in all material
respects with its obligations under this Agreement with respect thereto;
provided that if, after it has become effective, the offering of shares of
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Common Stock pursuant to such registration is or becomes the subject of any stop
order, injunction or other order or requirement of the Commission or any other
governmental or administrative agency, or if any court prevents or otherwise
limits the sale of the shares of Common Stock pursuant to the registration at
any time within 180 days after the effective date of the registration statement,
such registration will be deemed not to have been effected. If (i) a
registration requested pursuant to this Section 2.1 is deemed not to have been
effected or (ii) the registration requested pursuant to this Section 2.1 does
not remain effective for a period of at least 180 days beyond the effective date
thereof or, with respect to an underwritten offering of Registrable Securities,
until 45 days after the commencement of the distribution by the Holders of the
Registrable Securities included in such registration statement, then the Company
shall continue to be obligated to effect such registration pursuant to this
Section 2.1. The Holders of Registrable Securities shall be permitted to
withdraw all or any part of the Registrable Securities from a Demand
Registration at any time prior to the effective date of such Demand
Registration; provided that in the event of such withdrawal, such Holders shall
be responsible for all fees and expenses (including counsel fees and expenses)
incurred by them prior to such withdrawal.
(c) Selection of Underwriter. If a majority of the Selling
Holders so elect, the offering of such Registrable Securities pursuant to such
Demand Registration shall be in the form of an underwritten offering. The
Selling Holders owning a majority of Common Stock to be sold shall select one or
more nationally recognized firms of investment bankers to act as the lead
managing Underwriter or Underwriters in connection with such offering and shall
select any additional investment bankers and managers to be used in connection
with the offering.
Section 2.2 Piggy-Back Registration. If at any time the Company
proposes to file a registration statement under the Securities Act with respect
to an offering by the Company for its own account or for the account of any of
its respective security holders (other than a registration statement on Form S-4
or S-8 (or any substitute form that may be adopted by the Commission), or a
Demand Registration pursuant to Section 2.1), then the Company shall give
written notice of such proposed filing to the Holders of Registrable Securities
as soon as practicable (but in no event less than 20 days before the anticipated
filing date), and such notice shall offer such Holders the opportunity to
register such number of Registrable Securities as each such Holder may request
(which request shall specify the Registrable Securities intended to be disposed
of by such Holder and the intended method of distribution thereof) (a
"Piggy-Back Registration"). The Company shall use its [reasonable] best efforts
to cause the managing Underwriter or Underwriters of a proposed underwritten
offering to permit the Registrable Securities requested to be included in a
Piggy-Back Registration to be included on the same terms and conditions as any
similar securities of the Company or any other security holder included therein
and to permit the sale or other disposition of such Registrable Securities in
accordance with the intended method of distribution thereof. Any Holder shall
have the right to withdraw its request for inclusion of its Registrable
Securities in any registration statement pursuant to this Section 2.2 by giving
written notice to the Company of its request to withdraw, provided that in the
event of such withdrawal, such Holder shall be responsible for all fees and
expenses (including fees and
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expenses of counsel) incurred by such Holder prior to such withdrawal. The
Company may withdraw a Piggy-Back Registration at any time prior to the time it
becomes effective.
No registration effected under this Section 2.2, and no failure to
effect a registration under this Section 2.2, shall relieve the Company of its
obligation to effect a registration upon the request of Holders pursuant to
Section 2.1, and no failure to effect a registration under this Section 2.2 and
to complete the sale of Registrable Securities in connection therewith shall
relieve the Company of any other obligation under this Agreement (including,
without limitation, the Company's obligations under Sections 3.2 and 4.1).
Section 2.3 Reduction of Offering. (a) Demand Registration. The Company
may include in a Demand Registration pursuant to Section 2.1 Registrable
Securities for the account of the Company and any other Persons who hold
Registrable Securities on the same terms and conditions as the Registrable
Securities to be included therein; provided, however, that (i) if the managing
Underwriter or Underwriters of any underwritten offering described in Section
2.1 have informed the Company in writing that it is their opinion that the
amount of Registrable Securities which Holders of Registrable Securities, the
Company and any other Persons desiring to participate in such registration
intend to include in such offering is such as to materially and adversely affect
the success of such offering, then the number of shares or aggregate principal
amount, as the case may be, to be offered for the account of the Company and for
the account of all such other Persons (other than the Holders) participating in
such registration shall be reduced or limited pro rata in proportion to the
respective number of shares or aggregate principal amount, as the case may be,
requested to be registered to the extent necessary to reduce the total number of
shares or aggregate principal amount, as the case may be, requested to be
included in such offering to the number of shares or aggregate principal amount,
as the case may be, if any, recommended by such managing Underwriters, and (ii)
if the offering is not underwritten, no other Person, including the Company,
shall be permitted to offer securities under any such Demand Registration unless
the Holders of a majority of the Registrable Securities participating in the
offering consent to the inclusion of such shares therein.
(b) Piggy-Back Registration. (1) Notwithstanding anything to
the contrary contained herein, if the managing Underwriter or Underwriters of
any underwritten offering described in Section 2.2 have informed, in writing,
the Holders of the Registrable Securities requesting inclusion in such offering
that it is their opinion that the total number of shares which the Company,
Holders of Registrable Securities and any other Persons desiring to participate
in such registration intend to include in such offering is such as to materially
and adversely affect the success of such offering, then the number of shares or
aggregate principal amount, as the case may be, to be offered shall be reduced
or limited in the following order of priority: first, the number of shares or
aggregate principal amount, as the case may be, to be offered by all other
holders of Stock of the Company other than the Holders of Registrable Securities
or other holders who have registration rights ("Demand Holders") to the extent
necessary to reduce the total number of shares or aggregate principal amount, as
the case may be, as recommended by such managing Underwriters; and second, if
further reduction or limitation is required, the
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number of shares or aggregate principal amount, as the case may be, to be
offered for the account of the Holders shall be reduced or limited on a pro rata
basis in proportion to the relative number of Registrable Securities of the
Holders participating in such registration, provided, however, that if the
registration is pursuant to a demand made by Demand Holders, then the number of
Registrable Securities to be included shall be determined under Section 2.3 (a).
(2) If the managing Underwriter or Underwriters of any
underwritten offering described in Section 2.2 notify the Holders of the
Registrable Securities requesting inclusion in such offering that the kind of
securities that the Holders, the Company and any other Persons desiring to
participate in such registration intend to include in such offering is such as
to materially and adversely affect the success of such offering, (x) the
Registrable Securities to be included in such offering shall be reduced as
described in clause (i) above or (y) if such reduction would, in the judgment of
the managing Underwriter or Underwriters, be insufficient to substantially
eliminate the adverse effect that inclusion of the Registrable Securities
requested to be included would have on such offering, such Registrable
Securities will be excluded from such offering.
(c) If, as a result of the proration provisions of this
Section 2.3, any Holder shall not be entitled to include at least 50% of the
Registrable Securities in a Demand Registration or Piggy-Back Registration that
such Holder has requested to be included, such Holder may elect to withdraw his
request to include Registrable Securities in such registration (a "Withdrawal
Election"); provided, however, that a Withdrawal Election shall be irrevocable
and, after making a Withdrawal Election, a Holder shall no longer have any right
to include Registrable Securities in the registration as to which such
Withdrawal Election was made.
ARTICLE 3.
REGISTRATION PROCEDURES
Section 3.1 Filings; Information. Whenever the Company is required to
effect or cause the registration of Registrable Securities pursuant to Section
2.1, the Company will use its reasonable efforts to effect the registration and
the sale of such Registrable Securities in accordance with the intended method
of disposition thereof as quickly as practicable, and in connection with any
such request:
(a) prepare and file with the Commission a registration
statement (which, in the case of an underwritten public offering pursuant to
Section 3, shall be on Form S-3 (unless the Company does not qualify for use of
Form S-3 in a registration involving only a secondary offering as provided in
the General Instructions to Form S-3 in such registration, in which case such
registration statement shall be a Form S-1) or other form of general
applicability satisfactory to the managing underwriter selected as therein
provided) with respect to such securities and use reasonable efforts to cause
such registration statement to become and remain effective until the completion
of the distribution; provided, however, the Company shall be required to keep
any registration statement effective for not less than 180 days;
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(b) prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement effective for
the period specified in Section 3.1(a) and as to comply with the provisions of
the Securities Act with respect to the disposition of all Registrable Securities
covered by such registration statement in accordance with the intended method of
disposition set forth in such registration statement for such period.
(c) The Company will, prior to filing a registration statement
or prospectus or any amendment or supplement thereto, furnish to (i) each
Selling Holder, (ii) not more than [one counsel] representing all Selling
Holders, to be selected by a majority-in-interest of such Selling Holders, and
(iii) each Underwriter, if any, of the Registrable Securities covered by such
registration statement copies of such registration statement as proposed to be
filed, together with exhibits thereto, which documents will be subject to review
and approval by the foregoing within five days after delivery, and thereafter
furnish to such Selling Holders, counsel and Underwriters, if any, for their
review and comment such number of copies of such registration statement, each
amendment and supplement thereto (in each case including all exhibits thereto
and documents incorporated by reference therein), the Prospectus included in
such registration statement (inducing each preliminary prospectus) and such
other documents or information as such Selling Holders, counsel or Underwriters
may reasonably request in order to facilitate the disposition of the Registrable
Securities owned by such Selling Holders.
(d) After the filing of the registration statement, the
Company will promptly notify each Selling Holder of Registrable Securities
covered by such registration statement of any stop order issued or threatened by
the Commission and take all reasonable actions required to prevent the entry of
such stop order or to remove it if entered.
(e) The Company will use its reasonable efforts to (i)
register or qualify the Registrable Securities under such other securities or
blue sky laws of such jurisdictions in the United States as any Selling Holder
reasonably (in light of such Selling Holder's intended plan of distribution)
requests, and (ii) cause such Registrable Securities to be registered with or
approved by such other governmental agencies or authorities in the United States
as may be necessary by virtue of the business and operations of the Company and
do any and all other acts and things that may be reasonably necessary or
advisable to enable such Selling Holder to consummate the disposition of the
Registrable Securities owned by such Selling Holder; provided that the Company
will not be required to (A) qualify generally to do business in any jurisdiction
where it would not otherwise be required to qualify but for this paragraph (e),
(B) subject itself to taxation in any such jurisdiction or (C) consent to
general service of process in any such jurisdiction.
(f) The Company will immediately notify each Selling Holder of
such Registrable Securities, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the occurrence of an event
requiring the preparation of a supplement or amendment to such prospectus so
that, as thereafter delivered to the Investors of such Registrable Securities,
such prospectus will not contain an untrue statement of a material fact or
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omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading and promptly make available to each
Selling Holder any such supplement or amendment.
(g) The Company and the Holders will enter into customary
agreements (including, if applicable, an underwriting agreement in customary
form and which is reasonably satisfactory to the Company) and take such other
actions as are reasonably required in order to expedite or facilitate the
disposition of such Registrable Securities (the Selling Holders may, at their
option, require that any or all of the representations, warranties and covenants
of the Company or to or for the benefit of such Underwriters also be made to and
for the benefit of such Selling Holders).
(h) The Company will make available to each selling Holder of
such Registrable Securities (and will deliver to their counsel) and each
Underwriter, if any, subject to restrictions imposed by the United States
federal government or any agency or instrumentality thereof, copies of all
correspondence between the Commission and the Company, its counsel or auditors
and will also make available for inspection by any Selling Holder of such
Registrable Securities, any Underwriter participating in any disposition
pursuant to such registration statement and any attorney, accountant or other
professional retained by any such Selling Holder or Underwriter (collectively,
the "Inspectors"), all financial and other records, pertinent corporate
documents and properties of the Company (collectively, the "Records") as shall
be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers and employees to supply all
information reasonably requested by any Inspectors in connection with such
registration statement. Records which the Company determines, in good faith, to
be confidential and which it notifies the Inspectors are confidential shall not
be disclosed by the Inspectors unless (i) the disclosure of such Records is
necessary to avoid or correct a misstatement or omission in such registration
statement or (ii) the disclosure or release of such Records is requested or
required pursuant to oral questions, interrogatories, requests for information
or documents or a subpoena or other order from a court of competent jurisdiction
or other process; provided that prior to any disclosure or release pursuant to
clause (ii), the Inspectors shall provide the Company with prompt notice of any
such request or requirement so that the Company may seek an appropriate
protective order or waive such Inspectors' obligation not to disclose such
Records; and, provided further, that if failing the entry of a protective order
or the waiver by the Company permitting the disclosure or release of such
Records, the Inspectors, upon advice of counsel, are compelled to disclose such
Records, the Inspectors may disclose that portion of the Records which counsel
has advised the Inspectors that the Inspectors are compelled to disclose. Each
Selling Holder of such Registrable Securities agrees that information obtained
by it solely as a result of such inspections (not including any information
obtained from a third party who, insofar as is known to the Selling Holder after
reasonable inquiry, is not prohibited from providing such information by a
contractual, legal or fiduciary obligation to the Company) shall be deemed
confidential and shall not be used by it as the basis for any market
transactions in the securities of the Company or its Affiliates unless and until
such information is made generally available to the public. Each Selling Holder
of such
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Registrable Securities further agrees that it will, upon learning that
disclosure of such Records is sought in a court of competent jurisdiction, give
notice to the Company and allow the Company, at its expense, to undertake
appropriate action to prevent disclosure of the Records deemed confidential.
(i) In connection with an underwritten offering, the Company
will participate, to the extent reasonably requested by the managing Underwriter
for the offering or the Selling Holders, in customary efforts to sell the
securities under the offering, including, without limitation, participating in
"road shows"; provided that the Company shall not be obligated to participate in
more than one such offering in any 12-month period.
The Company may require each Selling Holder of Registrable
Securities to promptly furnish in writing to the Company such information
regarding the distribution of the Registrable Securities as the Company may from
time to time reasonably request and such other information as may be legally
required in connection with such registration including, without limitation, all
such information as may be requested by the Commission or the NASD. The Company
may exclude from such registration any Holder who fails to provide such
information.
Each Selling Holder agrees that, upon receipt of any notice
from the Company of the happening of any event of the kind described in Section
3.1(f) hereof, such Selling Holder will forthwith discontinue disposition of
Registrable Securities pursuant to the registration statement covering such
Registrable Securities until such Selling Holder's receipt of the copies of the
supplemented or amended prospectus contemplated by Section 3.1(f) hereof, and,
if so directed by the Company, such Selling Holder will deliver to the Company
all copies, other than permanent file copies then in such Selling Holder's
possession, of the most recent prospectus covering such Registrable Securities
at the time of receipt of such notice. In the event the Company shall give such
notice, the Company shall extend the period during which such registration
statement shall be maintained effective (including the period referred to in
Section 3.1(a) hereof) by the number of days during the period from and
including the date of the giving of notice pursuant to Section 3.1(f) hereof to
the date when the Company shall make available to the Selling Holders of
Registrable Securities covered by such registration statement a prospectus
supplemented or amended to conform with the requirements of Section 3.1(f)
hereof.
Section 3.2 Registration Expenses. In connection with the
Demand Registrations pursuant to Section 2.1 hereof and the Piggy-Back
Registrations under Section 2.2 hereof, the Company shall pay the following
registration expenses incurred in connection with the registration thereunder
(the "Registration Expenses"): (i) all registration and filing fees, (ii) fees
and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue sky
qualifications of the Registrable Securities), (iii) printing expenses, (iv) the
Company's internal expenses (including, without limitation, all salaries and
expenses of its officers and employees performing legal or accounting duties),
(v) the fees and expenses incurred in connection with the listing of the
Registrable Securities, (vi) reasonable fees and disbursements of counsel for
the Company and customary
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fees and expenses for independent certified public accountants retained by the
Company (including the expenses of any comfort letters or costs associated with
the delivery by independent certified public accountants of a comfort letter or
comfort letters requested but not the cost of any audit other than a year end
audit), (vii) the reasonable fees and expenses of any special experts retained
by the Company in connection with such registration, and (viii) reasonable fees
and expenses of one firm of counsel for the Holders. The Company shall have no
obligation to pay any underwriting fees, discounts or commissions attributable
to the sale of Registrable Securities, or the cost of any special audit
required, such costs to be borne by the Holder or Holders making the request.
ARTICLE 4.
INDEMNIFICATION AND CONTRIBUTION
Section 4.1 Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Selling Holder of Registrable Securities, its
partners, officers, directors, employees and agents, and each Person, if any,
who controls such Selling Holder within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, together with the partners,
officers, directors, employees and agents of such controlling Person
(collectively, the "Controlling Persons"), from and against any loss, claim,
damage, liability, reasonable attorneys' fees, cost or expense and costs and
expenses of investigating and defending any such claim (collectively, the
"Damages"), joint or several, and any action in respect thereof to which such
Selling Holder, its partners, officers, directors, employees and agents, and any
such Controlling Person may become subject under the Securities Act or
otherwise, insofar as such Damages (or proceedings in respect thereof) arise out
of, or are based upon, any untrue statement or alleged untrue statement of a
material fact contained in any registration statement or prospectus relating to
the Registrable Securities or any preliminary prospectus, or arises out of, or
are based upon, any omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, except insofar as the same are based upon information furnished
in writing to the Company by a Selling Holder or Underwriter expressly for use
therein, and shall reimburse each Selling Holder, its partners, officers,
directors, employees and agents, and each such Controlling Person for any legal
and other expenses reasonably incurred by that Selling Holder, its partners,
officers, directors, employees and agents, or any such Controlling Person in
investigating or defending or preparing to defend against any such Damages or
proceedings; provided, however, that the Company shall not be liable to any
Holder of Registrable Securities to the extent that any such Damages arise out
of or are based upon an untrue statement or omission made in any preliminary
prospectus if (i) such Holder failed to send or deliver a copy of the final
prospectus with or prior to the delivery of written confirmation of the sale by
such Holder of a Registrable Security to the Person asserting the claim from
which such Damages arise, and (ii) the final prospectus would have corrected
such untrue statement or such omission; and provided further, however, that the
Company shall not be liable in any such case to the extent that any such Damages
arise out of or are based upon an untrue statement or omission in any prospectus
if (x) such untrue statement or omission is corrected in an amendment or
supplement to such prospectus, and (y) having previously been
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furnished by or on behalf of the Company with copies of such prospectus as so
amended or supplemented, such Holder thereafter fails to deliver such prospectus
as so amended or supplemented prior to or concurrently with the sale of a
Registrable Security to the Person asserting the claim from which such Damages
arise. The Company also agrees to indemnify any Underwriters of the Registrable
Securities, their officers and directors and each Person who controls such
Underwriters on substantially the same basis as that of the indemnification of
the Selling Holders provided in this Section 4.1.
Section 4.2 Indemnification by Holders of Registrable Securities. Each
Selling Holder agrees, severally but not jointly, to indemnify and hold harmless
the Company, its officers, directors, employees and agents and each Person, if
any, who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, together with the partners, officers,
directors, employees and agents of such controlling Person, to the same extent
as the foregoing indemnity from the Company to such Selling Holder, but only
with reference to information related to such Selling Holder, or its plan of
distribution, furnished in writing by such Selling Holder or on such Selling
Holder's behalf expressly for use in any registration statement or prospectus
relating to the Registrable Securities, or any amendment or supplement thereto,
or any preliminary prospectus. In case any action or proceeding shall be brought
against the Company or its officers, directors, employees or agents or any such
controlling Person or its officers, directors, employees or agents, in respect
of which indemnity may be sought against such Selling Holder, such Selling
Holder shall have the rights and duties given to the Company, and the Company or
its officers, directors, employees or agents, or such controlling Person, or its
officers, directors, employees or agents, shall have the rights and duties given
to such Selling Holder, by the preceding paragraph. Each Selling Holder also
agrees to indemnify and hold harmless any Underwriters of the Registrable
Securities, their officers and directors and each Person who controls such
Underwriters on substantially the same basis as that of the indemnification of
the Company provided in this Section 4.2. The Company shall be entitled to
receive indemnities from Underwriters, selling brokers, dealer managers and
similar securities industry professionals participating in the distribution, to
the same extent as provided above, with respect to information so furnished in
writing by such Persons specifically for inclusion in any prospectus or
registration statement.
Section 4.3 Conduct of Indemnification Proceedings. Promptly after
receipt by any person in respect of which indemnity may be sought pursuant to
Section 4.1 or 4.2 (an "Indemnified Party") of notice of any claim or the
commencement of any action, the Indemnified Party shall, if a claim in respect
thereof is to be made against the Person against whom such indemnity may be
sought (an "Indemnifying Party"), notify the Indemnifying Party in writing of
the claim or the commencement of such action; provided that the failure to
notify the Indemnifying Party shall not relieve it from any liability which it
may have to an Indemnified Party otherwise than under Section 4.1 or 4.2 and
except to the extent of any actual prejudice resulting therefrom. If any such
claim or action shall be brought against an Indemnified Party, and it shall
notify the Indemnifying Party thereof, the Indemnifying Party shall be entitled
to participate therein, and, to the extent that it wishes, jointly with any
other similarly notified
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Indemnifying Party, to assume the defense thereof with counsel reasonably
satisfactory to the Indemnified Party. After notice from the Indemnifying Party
to the Indemnified Party of its election to assume the defense of such claim or
action, the Indemnifying Party shall not be liable to the Indemnified Party for
any legal or other expenses subsequently incurred by the Indemnified Party in
connection with the defense thereof other than reasonable costs of
investigation; provided that the Indemnified Party shall have the right to
employ separate counsel to represent the Indemnified Party and its controlling
Persons who may be subject to liability arising out of any claim in respect of
which indemnity may be sought by the Indemnified Party against the Indemnifying
Party, but the fees and expenses of such counsel shall be for the account of
such Indemnified Party unless (i) the Indemnifying Party and the Indemnified
Party shall have mutually agreed to the retention of such counsel or (ii) in the
reasonable judgment of the Company and such Indemnified Party, representation of
both parties by the same counsel would be inappropriate due to actual or
potential conflicts of interest between them, it being understood, however, that
the Indemnifying Party shall not, in connection with any one such claim or
action or separate but substantially similar or related claims or actions in the
same jurisdiction arising out of the same general allegations or circumstances,
be liable for the fees and expenses of more than one separate firm of attorneys
(together with appropriate local counsel) at any time for all Indemnified
Parties, or for fees and expenses that are not reasonable. No Indemnifying Party
shall, without the prior written consent of the Indemnified Party, effect any
settlement of any claim or pending or threatened proceeding in respect of which
the Indemnified Party is or could have been a party and indemnity could have
been sought hereunder by such Indemnified Party, unless such settlement includes
an unconditional release of such Indemnified Party from all liability arising
out of such claim or proceeding. Whether or not the defense of any claim or
action is assumed by the Indemnifying Party, such Indemnifying Party will not be
subject to any liability for any settlement made without its consent, which
consent will not be unreasonably withheld.
Section 4.4 Contribution. If the indemnification provided for in this
Article 4 is unavailable to the Indemnified Parties in respect of any Damages
referred to herein, then each Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such Damages (i) as between the Company and the
Selling Holders on the one hand and the Underwriters on the other, in such
proportion as is appropriate to reflect the relative benefits received by the
Company and the Selling Holders on the one hand and the Underwriters on the
other from the offering of the Registrable Securities, or if such allocation is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits but also the relative fault of the Company and
the Selling Holders on the one hand and of the Underwriters on the other in
connection with the statements or omissions which resulted in such Damages, as
well as any other relevant equitable considerations, and (ii) as between the
Company on the one hand and each Selling Holder on the other, in such proportion
as is appropriate to reflect the relative fault of the Company and of each
Selling Holder in connection with such statements or omissions, as well as any
other relevant equitable considerations. The relative benefits received by the
Company and the Selling Holders on the one hand and the Underwriters on the
other shall be deemed to be in
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the same proportion as the total proceeds from the offering (net of underwriting
discounts and commissions but before deducting expenses) received by the Company
and the Selling Holders bear to the total underwriting discounts and commissions
received by the Underwriters, in each case as set forth in the table on the
cover page of the prospectus. The relative fault of the Company and the Selling
Holders on the one hand and of the Underwriters on the other shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company and the Selling
Holders or by the Underwriters. The relative fault of the Company on the one
hand and of each Selling Holder on the other shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by such party, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Selling Holders agree that it would not be just and
equitable if contribution pursuant to this Section 4.4 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an Indemnified Party as a result of the Damages
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such Indemnified Party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
Section 4.4, no Underwriter shall be required to contribute any amount in excess
of the amount by which the total price at which the Registrable Securities
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such Underwriter has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission, and no Selling Holder shall be required to contribute any
amount in excess of the amount by which the total price at which the Registrable
Securities of such Selling Holder were offered to the public (less underwriting
discounts and commissions) exceeds the amount of any damages which such Selling
Holder has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation. Each Selling Holder's obligations to contribute
pursuant to this Section 4.4 is several in the proportion that the proceeds of
the offering received by such Selling Holder bears to the total proceeds of the
offering received by all the Selling Holders and not joint.
ARTICLE 5.
LIMITATIONS OF THE COMPANY'S OBLIGATIONS
Section 5.1 (a) The rights granted under this Agreement shall terminate
on the earlier to occur of the following; (i) after sale or other transfer
(other than a distribution to
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partners of a Holder or the transfer to a Holder which transfer includes the
registration rights granted hereunder), whether by registration, under Rule 144
under the Securities Act or otherwise, by the Holders of the Registrable
Securities held by the Holders, or (ii) at such time as all of the Registrable
Securities become sellable pursuant to Rule 144 under the Securities Act (or a
similar successor or additional exemption) without volume restrictions.
(b) The Company shall not be obligated under this Agreement to
register or include in any registration Registrable Securities that any Holder
has requested to be registered if the Company shall furnish such Holder with a
written opinion of counsel reasonably satisfactory to such Holder, that either
(i) all Registrable Securities that such Holder holds may be publicly offered,
sold and distributed without registration under the Securities Act pursuant to
Rule 144 under the Securities Act without restrictions as to the amount of
securities that can be sold, or (ii) such Registrable Securities are covered by
a registration statement that remains effective under the Securities Act.
(c) The Company shall have no obligation to register the
Registrable Securities of any Holder to an offering to which the Company is also
offering securities for sale for its own account, unless the Holder enters into
an underwriting agreement in customary form with the underwriter or underwriters
selected for the offering by the Company (which shall not require the Holder to
indemnify the underwriter with respect to misstatements or omissions in the
registration statement other than such misstatements or omissions in written
material supplied by such Holder expressly for inclusion in the registration
statement) and, if requested by the underwriter(s), an agreement appointing one
or more (but not more than three) persons approved by a majority in interest of
the Holders whose Registrable Securities are to be included in the registration,
to act as attorney-in-fact for the Holder and as escrow agent for the
Registrable Securities to be included in the offering in customary form.
(d) In any registered offering, each Holder shall provide the
Company in a writing signed by the Holder such information about the Holder as
in the opinion of securities counsel to the Company shall be either necessary or
reasonably appropriate to enable the Company to comply with the Securities Act
and applicable state securities laws. Such information shall be provided by the
Company within a reasonable time after written request is made by the Company
and shall be supplied by Holder whether or not any Registrable Securities of
Holder are to be included in the registration.
(e) The Company may in its discretion grant to any owner of
securities of the Company registration rights of any kind or nature.
ARTICLE 6.
MISCELLANEOUS
Section 6.1 Participation in Underwritten Registrations. No Person may
participate in any underwritten registration hereunder unless such Person (a)
agrees to sell such Person's securities on the basis provided in any
underwriting arrangements approved by the Persons
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entitled hereunder to approve such arrangements, and (b) completes and executes
all questionnaires, powers of attorney, indemnities, underwriting agreements and
other documents reasonably required under the terms of such underwriting
arrangements and these registration rights.
Section 6.2 Lockup Agreement. For so long as the Holder has the right
to have Registrable Securities included in any registration pursuant to this
Agreement, the Holder agrees in connection with any registration of the
Company's securities, upon the request of the underwriters managing any
underwritten offering of the Company's securities, not sell, make any short sale
of, pledge, grant any option for the purchase of or otherwise dispose of any
Registrable Securities without the prior written consent of the Company or such
underwriters, as the case may be, during the seven days prior to and during the
180-day period beginning on the effective date of such registration, as the
Company or the underwriters may specify. This provision shall apply whether or
not any Registrable Securities of the Holder are included in the offering.
Section 6.3 Rule 144 and 144A. The Company covenants that it will file
any reports required to be filed by it under the Securities Act and the Exchange
Act and that it will take such further action as any Holder may reasonably
request, all to the extent required from time to time to enable Holders to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by (a) Rule 144 or Rule 144A under the
Securities Act, as such Rules may be amended from time to time, or (b) any
similar rule or regulation hereafter adopted by the Commission. Upon the request
of any Holder, the Company will deliver to such Holder a written statement as to
whether it has complied with such requirements.
Section 6.4 Notwithstanding the provisions of Section 3.1(a), the
Company's obligations to file a registration statement, or cause such
registration statement to become and remain effective, shall be suspended for a
period not exceed 90 days if there exists at the time material non-public
information relating to the Company that, in the reasonable opinion of the
Company, should not be disclosed.
Section 6.5 Amendment and Modification. Any provision of this Agreement
may be waived, provided that such waiver is set forth in a writing executed by
the party against whom the enforcement of such waiver is sought. This Agreement
may not be amended, modified or supplemented other than by a written instrument
signed by holders of a majority of the Registrable Securities; provided,
however, that without the consent of the Holders, no amendment or modification
which materially and adversely affects the ability of such Holders to have
securities registered hereunder may be effected. No course of dealing between or
among any Persons having any interest in this Agreement will be deemed effective
to modify, amend or discharge any part of this Agreement or any rights or
obligations of any Person under or by reason of this Agreement.
Section 6.6 Successors and Assigns; Entire Agreement. This Agreement
and all of the provisions hereof shall be binding upon and inure to the benefit
of the parties hereto and their
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respective successors and assigns and executors, administrators and heirs. This
Agreement sets forth the entire agreement and understanding between the parties
as to the subject matter hereof and merges and supersedes all prior discussions,
agreements and understandings of any and every nature among them.
Section 6.7 Separability. In the event that any provision of this
Agreement or the application of any provision hereof is declared to be illegal,
invalid or otherwise unenforceable by a court of competent jurisdiction, the
remainder of this Agreement shall not be affected except to the extent necessary
to delete such illegal, invalid or unenforceable provision unless that provision
held invalid shall substantially impair the benefits of the remaining portions
of this Agreement.
Section 6.8 Notices. All notices, demands, requests, consents or
approvals (collectively, "Notices") required or permitted to be given hereunder
or which are given with respect to this Agreement shall be in writing and shall
be personally served or mailed, registered or certified, return receipt
requested, postage prepaid (or by a substantially similar method), or delivered
by a reputable overnight courier service with charges prepaid, or transmitted by
hand delivery, telegram, telex or facsimile, addressed as set forth below, or
such other address as such party shall have specified most recently by written
notice:
(1) If to the Company:
Park `N View, Inc.
NW 55th Street, Building 10
Xxxx Xxxxxxxxxx, XX 00000
with copies (which shall not constitute notice) to:
Xxxxx X'Xxxxxxx, Esq.
Xxxxxx Stockton, LLP
Xxxx Xxxxx Xxxxx, Xxxxx 000
Xxxxxxx, Xxxxx Xxxxxxxx 00000
(2) If to the Holder, at the most current address, and with a copy to
be sent to each additional address, given by such Holder to the Company in
writing, and copies sent to:
Shereff, Friedman, Xxxxxxx & Xxxxxxx
Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx Xxxxx, Esq.
Notice shall be deemed given or delivered on the date of service or transmission
if personally served or transmitted by telegram, telex or facsimile. Notice
otherwise sent as provided herein
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shall be deemed given or delivered on the third business day following the date
mailed or on the next business day following delivery of such notice to a
reputable overnight courier service.
Section 6.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAW OF THE STATE OF DELAWARE, WITHOUT
GIVING EFFECT TO PRINCIPLES OF CONFLICTS S OF LAW.
Section 6.10 Headings. The headings in this Agreement are for
convenience of reference only and shall not constitute a part of this Agreement,
nor shall they affect their meaning, construction or effect.
Section 6.11 Counterparts. This Agreement may be executed in any number
of counterparts, each of which shall be deemed to be an original instrument and
all of which together shall constitute one and the same instrument.
Section 6.12 Further Assurances. Each party shall cooperate and take
such action as may be reasonably requested by another party in order to carry
out the provisions and purposes of this Agreement and the transactions
contemplated hereby.
Section 6.13 Remedies. In the event of a breach or a threatened breach
by any party to this Agreement of its obligations under this Agreement, any
party injured or to be injured by such breach will be entitled to specific
performance of its rights under this Agreement or to injunctive relief, in
addition to being entitled to exercise all rights provided in this Agreement and
granted by law. The parties agree that the provisions of this Agreement shall be
specifically enforceable, it being agreed by the parties that the remedy at law,
inducing monetary damages, for breach of any such provision will be inadequate
compensation for any loss and that any defense or objection in any action for
specific performance or injunctive relief that a remedy at law would be adequate
is waived.
Section 6.14 Pronouns. Whenever the context may require, any pronouns
used herein shall be deemed also to include the corresponding neuter, masculine
or feminine forms.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
PARK `N VIEW, INC.
By:
----------------------------
Name:
Title:
INVESTORS
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EXHIBIT A
Park 'N View General Partner, Inc.
By:
-------------------------------------
Name:
Title:
-------------------------------------
Xxx Xxxxxxxx
-------------------------------------
Xxx Xxxxxxx
-------------------------------------
Xxxxx Xxxxxxxxx
Nelgo Investments
By:
-------------------------------------
Name:
Title:
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EXHIBIT B
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1. APA EXCELSIOR IV, L.P.
By: APA EXCELSIOR IV PARTNERS, L.P.
(Its General Partner)
By: PATRICOF & CO. MANAGERS, INC.
(Its General Partner)
By:
-------------------------------------
Name:
Title:
2. APA EXCELSIOR IV OFFSHORE, L.P.
By: PATRICOF & CO. VENTURES, INC., INVESTOR ADVISOR
By:
-------------------------------------
Name:
Title:
3. THE P/A FUND
By: APA PENNSYLVANIA PARTNERS, L.P.
(Its General Partner)
By:
-------------------------------------
Name:
Title:
4.
-------------------------------------
Xxxxxxx Xxxxxxx
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EXHIBIT 5.1(H)
FORM OF STOCKHOLDERS' AGREEMENT
SECURITYHOLDERS' AGREEMENT
SECURITYHOLDERS' AGREEMENT, dated as of November 2, 1995 (the
"Securityholders' Agreement"), by and among Park `N View, Inc. a Delaware
corporation (the "Company"), the Existing Investors as set forth on Exhibit A
attached hereto and the Investors as set forth on Exhibit B attached hereto.
R E C I T A L S
1. Pursuant to those certain Securities Purchase Agreements by and
between the Company and the Investors dated as of November 2, Agreements"), the
Company agreed to sell to the Investors an aggregate of $6 million of
Subordinated Notes, an aggregate of 140,000 shares of the Company's Series A
Preferred Stock and an aggregate of 2,000,000 shares of the Company's Common
Stock.
2. As a condition to the consummation of the transactions contemplated
by the Securities Purchase Agreements, the Company, the Existing Investors and
the Investors (collectively referred to herein as the "Investors") have entered
into this Securityholders' Agreement to, among other things, grant certain
rights of first refusal regarding securities of the Company to the Investors,
grant certain additional rights and impose certain obligations and restrictions.
A G R E E M E N T S
In consideration of the mutual covenants herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto do hereby agree as follows:
1. Defined Terms. Terms initially capitalized but not otherwise defined
herein shall have the meanings given such terms in the Securities Purchase
Agreements, except for the following:
"Existing Investors" shall mean those persons listed on Exhibit A
attached hereto and made a part hereof.
"Existing Stock" shall mean 2,318,182 of the shares of Common Stock
owned by the Existing Investors.
"Non-Participating Investor" shall mean an Investor that does not
exercise its rights of first refusal under Section 3(a) of this Securityholders'
Agreement in connection with a
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transaction in which other Investors purchase Securities of the Company pursuant
to such section and any nominee for or Affiliate of such Investor unless such
failure to exercise its rights of first refusal under Section 3(a) herein is due
to the existence of a Regulatory Problem.
"Securities" shall mean at any time, the shares of then outstanding
Common Stock and Series A Preferred Stock and Subordinated Notes owned by any
Investor or any such Investors direct or subsequent assignee pursuant to
Sections 1(B) and 4(A) of the Securities Restriction Agreement, provided,
however, that Securities shall not be deemed to include any shares of Common
Stock after such shares have been registered under the Securities Act and sold
pursuant to such registration or any shares sold without registration under the
Securities Act in compliance with Rule 144, or pursuant to any other exemption
from registration under the Securities Act to a person who is free to resell
such shares without registration under the Securities Act; and provided,
further, that at any time subsequent to the closing of the Initial Public
Offering, Securities shall not include any shares which are eligible to be sold
without registration under the Securities Act in compliance with subsection (k)
of Rule 144.
"Regulatory Problem" shall mean (a) any set of facts of circumstances
wherein it has been asserted by any governmental regulatory agency believes that
such assertion will be made that such Investor (or any Person that controls such
Investor) is not entitled to hold, or exercise any material right with respect
to, all or any portion of the securities or (b) when any Investors of Common
Stock, Series A Preferred Stock or Subordinated Notes and such Investor's
Affiliates would own, control or have power (including voting rights) over a
greater quantity of Securities of any kind than are permitted under any
applicable law or regulation or any requirement of any governmental authority.
"Subordinated Notes" shall mean the subordinated promissory notes, 8%
coupon sold pursuant to the Securities Purchase Agreement.
"Sale" shall have the meaning given such term in the Securities
Restriction Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Series A Preferred Stock" shall mean the Preferred Stock of the
Company designated as Series A Preferred Stock pursuant to the Certificate of
Designation described in the Securities Purchase Agreement.
2. Entire Agreement. This Securityholders' Agreement constitutes the
entire agreement by and among the parties hereto with respect to the subject
matter hereof.
3. Right of First Refusal.
(a) If, after the Initial Investment, any Securities shall exist and
the Company proposes to issue any Stock (including, without limitation,
convertible debt) or any security convertible into or exchangeable for Stock, or
any unit of securities which includes Stock or any
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security convertible into or exchangeable or exercisable for Stock (in the case
of securities convertible into or exchangeable or exercisable for Stock, whether
or not so convertible or exchangeable or exercisable only upon payment of
additional consideration) but excluding Securities issuable pursuant to the
Securities Purchase Agreements, then the Company shall first offer such Stock or
securities to the Investors (excluding Non-Participating Investors). Such offer
shall be made by written notice, which notice shall (i) be delivered by hand or
by first-class, certified or overnight mail, postage prepaid, or by telecopier,
by the Company to such Investors and (ii) set forth the quantity and description
of the security proposed to be issued and the price to be received in exchange
therefor.
Each such Investor shall thereupon be entitled, for a period
of 30 days after the date of such notice to purchase at the price and upon the
terms set forth in such notice, that proportion of securities proposed to be
issued as the number of Securities held by such Investor bears to the total
number of Securities then held by all such Investors. The rights granted to such
Investors hereby may be exercised in whole or in part and shall be exercised by
the tender of an official bank or certified check for the appropriate amount to
the Company by hand delivery or by first-class, certified or overnight mail,
postage prepaid addressed to the Company's principal office (or at such other
place as the Company may designate) within 30 days after being notified of the
availability of such rights pursuant hereto. Within five days after the receipt
of such official bank or certified check, the Company shall issue and deliver to
such Investors who are exercising the rights granted by this Section 3 the
securities being purchased. The Company covenants and agrees that all securities
which may be issued upon the exercise of the rights granted hereby will, upon
issuance and payment therefor, be duly and validly issued and outstanding, fully
paid and non-assessable and free from all taxes, liens, and charges with respect
to the issue thereof. The Company further covenants and agrees that during the
period within which any such rights (and any conversion right inuring in any
security acquired pursuant to any such rights) may be exercised, the Company
will in the case where the Company issues Stock, at all times have authorized
and reserved for the purpose of issuance upon exercise of such rights (including
conversion rights) a sufficient number of shares of Stock of an appropriate
class and, if applicable, series, to provide for the exercise in full of such
rights (including conversion rights).
(b) If any Investor entitled to exercise rights under
Subsection (a) of this Section 3 does not exercise the rights granted hereunder,
in whole, after being notified of the availability of such rights, the Company
shall so advise the other Investors entitled to rights hereunder who have
purchased securities pursuant to this Section 3 by providing them with written
notice, transmitted as aforesaid within five days after the first to occur of
(i) being advised of the failure of a Investors to exercise such right or (ii)
the expiration of the 30-day period in which such right could have been
exercised. Each such other Investor shall thereupon for a period of 7 days from
the date of such notice be entitled to purchase some or all of the securities
which could have been purchased by the Investors who did not exercise the rights
granted under Subsection (a) of this Section 3; provided, however, that to the
extent that more than one such other Investors exercising its rights granted
under this Subsection (b) desires to
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purchase securities exceeding that proportion as the number of securities of
which such other Investors is then the Investors bears to the total number of
then held by all such other Investor who are exercising their rights under
Subsection (a) of this Section 3 ("Excess Securities"), the amount of such
Excess Securities which each such other Investors shall be entitled to purchase
shall be reduced pro rata in accordance with that proportion as the number of
securities of which such other Investor is then the Investor bears to the total
number of securities then held by all such other Investor desiring to purchase
Excess Securities pursuant to this Subsection (b). The rights granted by this
Subsection (b) shall be exercisable in the manner described in Subsection (a) of
this Section 3. Any securities not so purchased may be sold during the 90-day
period following the aforementioned 7-day period to Persons other than Investors
who are entitled to exercise rights under Subsection (a) of this Section 3 for
the price and upon the terms set forth in the notice first sent pursuant to said
Subsection (a).
(c) Notwithstanding the foregoing provisions of this Section
3, any purchase pursuant hereto of Securities may be made by an Investor only of
full units and not of fractions of units, any fraction to be rounded up to the
nearest whole unit and a Non-Participating Investor shall not be entitled to
exercise any rights pursuant to Section 3 from and after the date on which it
becomes a Non-Participating Investor.
(d) The provisions of this Section 3 shall not apply to (A)
Stock issued in connection with a pro rata stock dividend, stock split or in
substitution for the capital stock of the Company by reason of any combination,
recapitalization, reclassification or consolidation; (B) securities issued in
connection with a Sale of the Company in which the Investors will be selling all
of their Stock; or (C) capital stock sold in the Initial Public offering.
(e) In the event any subsidiary ever proposes to issue and/or
sell any Stock of the Company or a Subsidiary (including its own shares) or any
securities containing options or rights to acquire any shares of Stock
(including, without limitation, convertible debt) to any Person other than the
Company or another Subsidiary, then the Company shall first cause such
Subsidiary to enter into an agreement with the Investors substantially similar
to this Agreement.
4. Board Designees.
(a) Investors' Designee. The Board shall consist of not more
than five (5) members of which two members shall be designated by the Investors
as provided herein, two members shall be designated by the Existing Investors
and one member, who shall be unaffiliated with any Investor or any Existing
Investor, shall be designated by a majority of Investors and a majority of the
Existing Investors. So long as the Series A Preferred Stock and the Subordinated
Debt have not been redeemed and paid in full or the Investors taken collectively
as a group own 20% or more of the outstanding shares of Common Stock of the
Company, at each of the Company's annual or special meetings of stockholders at
which directors are to be elected, the Investors shall have the right to
designate in writing two nominees for election to the Board (each referred to
herein as an "Investor Designee" and collectively as the "Investor Designees")
unless the term of office of either Investor Designee does not expire at
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such meeting, in which case the Investors may not designate any nominees. The
Investor Designees shall initially be Xxxxxx Xxxxxxx and Xxxxxx Xxxxxxxxxx. At
such time as Xxxxxx Xxxxxxx and/or Xxxxxx Xxxxxxxxxx is unwilling or unable to
serve, any new Investor Designee(s) may be any Person(s) designated by the
Investors. The Investor Designees shall have approval rights on each of the
following: (a) incurrence by the Company of debt in excess of $25,000 which does
not relate to the expenditures for the buildout of a truckstop approved by the
Board; (b) capital expenditures of the Company in excess of $25,000, which does
not relate to the expenditures for the buildout of a truckstop approved by the
Board; (c) issuance by the Company of equity securities and (d) sale by the
Company of substantially all of the Company's Assets. In the event that the
Investors taken collectively as a group hold at least 10% but less than 20% of
the outstanding Common Stock, a majority of such Investors shall have the right
to elect one member to the Board. In all cases, all holders of Common Stock
shall vote in favor of election of all nominees of the Investors and the
Existing Investors.
(b) Best Efforts to Elect Designees. In the event that any
nominee or nominees are designated pursuant to Subsections 4(a) hereof, the
Company shall use its best efforts to cause such nominees to be elected to the
Board, and the Holders of Stock of shall vote, together as one class, such Stock
owned by them to elect those directors nominated in accordance with this
Section. The foregoing right shall also apply to election of the Board effected
by written consents of Holders of Stock rather than by meetings.
(c) Removal of Designees. At any special or annual meeting of
the Company's stockholders at which it is proposed to remove directors from
office or in connection with a solicitation of consents through which directors
are to be removed from office, for gross negligence, willful misconduct,
conviction of a felony or acts of fraud, each holder of Common Stock shall vote
(or give a written consent with respect to) all of its shares of Common Stock.
In all other situations, directors may only be removed with the majority vote of
the group that elected them in accordance with Section 4(a) hereof.
(d) Vacancies. Should a vacancy on the Board arise for any
reason with respect to one or both of the Investor Designees such vacancy may be
filled only by another Investor Designee. If the Investors desire that such
vacancy be filled, the Holders of Stock shall vote each class of Stock [together
as a single class] to elect such Investor Designee.
(e) Expenses. The Company shall reimburse all members of the
Board for all reasonable out-of-pocket travel and relate expenses incurred by
such Board members in attending Board meetings and meetings of committees of the
Board on which they serve.
5. Confidentiality. The Company shall use its best efforts to
(a) protect the secrecy, confidentiality and value of all trade secrets useful
the conduct of the company's businesses and (b) cause each Person who is or
becomes an officer or key employee of the Company who shall have access to
confidential and proprietary information of the Company to execute a
confidentiality agreement, as a condition to such employment, in such form as
shall be approved by the Board of Directors of the Company, which approval shall
include the approval of all of the
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Investor designees. Such confidentiality agreements shall not be amended in any
material respect without the approval of the Board of Directors of the Company
which approval shall include the approval of all of the Investor designees.
6. Miscellaneous.
7. Counterparts. This Securityholders' Agreement may be executed
in two or more counterparts, each of which shall be deemed an original but all
of which shall together constitute on and the same document.
8. Amendments and Governing Law. This Securityholders' Agreement
may be amended, modified and supplemented, and compliance with any term,
covenant, agreement, or condition contained herein may be waived either
generally or in particular instances, and either retroactively or prospectively,
only by a written instrument executed by the Company and Investors who hold
66.6% of each class of the Securities; provided, however, that any provision of
this Agreement that would materially adversely affect any particular Investors
without similarly affecting all Investors shall not be valid unless consented to
in writing by such particular Investors. This Securityholders' Agreement shall
be governed by and construed in accordance with the domestic laws of the State
of Delaware applicable to contracts made and to be performed in that state
without giving any effect to any choice or conflict of law provision or rule
(whether in the State of Delaware or any other jurisdiction) that would cause
the application of the laws of any jurisdiction other than the State of
Delaware.
9. Application to Subsequent Investors. This Securityholders'
Agreement shall inure to the benefit of and be binding upon (i) the parties
hereto and their heirs, legal representatives successors and assigns and (ii)
any Person who, after the date hereof, shall become the Investors of any shares
of any Common Stock, Series A Preferred Stock and/or Subordinated Notes (such
Person's acceptance of such shares to be deemed to constitute his agreement to
be bound hereby) and such Person's heirs, legal representatives, successors and
assigns.
10. Termination. This Agreement shall terminate upon the first to
occur of: (i) the first date on which shares of Common Stock are sold in an
Initial Public Offering or (ii) the date of consummation of a Sale.
11. Headings. The headings herein are solely for the convenience
of the parties and shall not serve to modify or interpret the text of the
Sections at the beginning of which they appear.
12. Severability. In the event that any court or any governmental
authority or agency declares all or any part of any Section of this Agreement to
be unlawful or invalid, such unlawfulness or invalidity shall not serve to
invalidate any other Section of this Agreement, and in the event that only a
portion of any Section is so declared to be unlawful or invalid, such
unlawfulness or invalidity shall not serve to invalidate the balance of such
Section.
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13. Entire Agreement. This Agreement constitutes the entire
agreement by and among the parties hereto with respect to the subject matter
hereof.
14. Further Execution. The parties hereto agree to execute any
additional documents or instruments necessary to carry out the purposes of this
Agreement.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Agreement as of the day and year first written above.
PARK `N VIEW, INC.
By:
-------------------------------------
Name:
Title:
ATTEST:
By:
-------------------------------
Secretary
Existing Investors whose signatures appear
on Exhibit A hereto and Investors whose
signatures appear on Exhibit B hereto.
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EXHIBIT A
Park 'N View General Partner, Inc.
By:
-------------------------------------
Name:
Title:
-------------------------------------
Xxx Xxxxxxxx
-------------------------------------
Xxx Xxxxxxx
-------------------------------------
Xxxxx Xxxxxxxxx
Nelgo Investments
By:
-------------------------------------
Name:
Title:
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EXHIBIT B
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1. APA EXCELSIOR IV, L.P.
By: APA EXCELSIOR IV PARTNERS, L.P.
(Its General Partner)
By: PATRICOF & CO. MANAGERS, INC.
(Its General Partner)
By:
-------------------------------------
Name:
Title:
2. APA EXCELSIOR IV OFFSHORE, L.P.
By: PATRICOF & CO. VENTURES, INC., INVESTOR ADVISOR
By:
-------------------------------------
Name:
Title:
3. THE P/A FUND
By: APA PENNSYLVANIA PARTNERS, L.P.
(Its General Partner)
By:
-------------------------------------
Name:
Title:
4.
-------------------------------------
Xxxxxxx Xxxxxxx
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EXHIBIT 5.1(K)
FORM OF LEGAL OPINION OF XXXXXX XXXXXXXX, L.L.P.
[LETTERHEAD OF XXXXXX STOCKTON, L.L.P.]
November 2, 1995
To each of the Purchasers who are parties
to the Securities Purchase Agreement referred
to below
Gentlemen:
We have acted as counsel to Park 'N View, Inc., a corporation organized
and existing under the laws of Delaware (the "Company"), in connection with the
sale of common stock, preferred stock and subordinated notes (collectively, the
"Securities") pursuant to the Securities Purchase Agreement, dated as of
November 2, 1995 (the "Securities Purchase Agreement"), by and among the Company
and each of the purchasers who are parties thereto (the "Purchasers").
Capitalized terms used herein without definition have the meanings ascribed to
them in the Securities Purchase Agreement. This opinion is being rendered
pursuant to Section 5.1(k) of the Securities Purchase Agreement.
In connection with this opinion, we have examined originals or copies
of the following documents:
Securities Purchase Agreement and all exhibits thereto;
Securities Restriction Agreement, the Securityholders'
Agreement and the Subordinated Notes (collectively, the
"Ancillary Agreements");
Certificate of Designation of the Company filed with the
Delaware Secretary of State's office on October 30, 1995;
Amended and Restated Certificate of Incorporation filed with
the Delaware Secretary of State's office on October 30, 1995;
Unanimous Written Consent of the Board of Directors of the
Company authorizing the execution, delivery and performance of
the Securities Purchase Agreement, the Ancillary Agreements,
the offer, issuance, sale and delivery of the Securities and
all transactions relating thereto and the adoption and filing
of the
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Amended and Restated Certificate of Incorporation and the
Certification of Designation;
copy of the charter documents of the Company, certified by the
Secretary of State of Delaware as of October 30, 1995;
Good Standing Certificate of the Company, issued by the
Secretary of State of Delaware as of November 1, 1995;
Bylaws of the Company, as amended to date; and
the Conveyance Agreement by and between the Company and Park
'N View, Ltd. (the "Conveyance Agreement").
In addition, we have examined originals (or copies certified or
otherwise identified to our satisfaction) of such other instruments,
certificates and documents as we have deemed necessary or appropriate for the
purposes of the opinions rendered below, including a certificate of an officer
of the Company (the "Officer's Certificate") upon which we have relied as to
certain factual matters in giving our opinion herein.
During the course of our examinations, with your permission and without
independent verification or investigation, we have assumed (i) the genuineness
of all signatures, (ii) the authenticity of all documents submitted to us as
originals, (iii) the conformity to original documents of all documents submitted
to us as certified, conformed or photostatic copies, (iv) that the corporate
minute book of the Company is complete and accurately reflects all of the
minutes of meetings and consents to actions of the directors and shareholders of
the Company, (v) the truth and accuracy of all matters stated in the Officer's
Certificate and (vi) the due authorization, valid execution and delivery of all
documents except where our opinion expressly addresses authorization, execution
and delivery.
As to the factual matters forming the basis of our opinion, whenever an
opinion with respect to the existence or absence of facts is qualified by the
phrases "to our knowledge" or "known to us" or "to the best of our knowledge,"
such phrases indicate only that, based on the actual knowledge (i.e., conscious
awareness of facts) of Xxxxx X. X'Xxxxxxx, the attorney in this firm who is
actively involved in and responsible for the handling of the Company's legal
affairs handled by this firm and a review of our files, we have no reason to
believe such opinions are not factually correct, and that no inference as to our
knowledge of such facts should be drawn from the fact of our representation of
the Company. We have, when relevant facts were not known to us or independently
established, relied upon the Officer's Certificate, and we have made no
independent investigation of such matters on the public records or otherwise
except to discuss them with the President of the Company. We have not reviewed
the files and records of the Company generally and have relied on the Company to
provide us with documents for review.
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Based on the foregoing and subject to the assumptions, limitations and
qualifications set forth herein, we are of the opinion that:
1. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware. The Company has all
requisite corporate power and authority to own its properties and assets and
carry on its business as now conducted, and is duly qualified and in good
standing as a foreign corporation in each jurisdiction in which the location or
nature of its property or the character of its business makes such qualification
necessary, except where the failure to be so qualified would not materially
adversely affect the business, condition, prospects, properties or results of
operations of the Company (a "Material Adverse Effect").
2. The Company has the full corporate power and authority to execute
and deliver each of the Securities Purchase Agreement and the Ancillary
Agreements and to perform fully its obligations thereunder. The execution,
delivery and performance of the Securities Purchase Agreement and the Ancillary
Agreements, the adoption and filing of the Amended and Restated Certificate of
Incorporation and the Certificate of Designation with the Delaware Secretary of
State and the issuance of the Common Stock and Preferred Stock thereunder have
been duly authorized by all necessary action of the Company.
3. The Conveyance Agreement has been duly executed and delivered by and
constitutes a valid and binding obligation of the Company and Park 'N View, Ltd.
enforceable against the Company and Park 'N View, Ltd in accordance with its
terms. The Securities Purchase Agreement and Ancillary Agreements have been duly
executed and delivered by and constitute valid and binding obligations of the
Company enforceable against the Company in accordance with their terms, except
as enforceability may be limited by bankruptcy, insolvency, moratorium and other
rights affecting creditors rights generally or by general equitable principles
(regardless of whether such enforceability is considered in a proceeding at law
or equity).
4. The authorized capital stock of the Company consists of 5,000,000
shares of Common Stock, $0.001 par value per share, of which 4,318,182 shares
shall be issued as of the date hereof, and 140,010 shares of Preferred Stock,
$0.01 par value per share, all of which have been designated as Series A
Preferred Stock, and of which 32,200 shares shall be issued and outstanding on
the date hereof. The Common Stock and the Preferred Stock to be issued pursuant
to the Securities Purchase Agreement has been duly and validly authorized and,
when delivered and paid for, will be validly issued, fully paid and
non-assessable with no personal liability attaching to the ownership thereof,
and, assuming the accuracy of the Purchasers' representations contained in the
Securities Purchase Agreement, will have been issued by the Company in
compliance with all applicable federal and state securities laws and all
applicable rules and regulations thereunder provided, however, we express no
opinion or compliance with the antifraud provisions of the federal and state
securities laws. The relative rights, preferences, restrictions and other
matters relating to the Common Stock and the Preferred Stock are as
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reflected in the Amended and Restated Certificate of Incorporation and the
Certificate of Designation.
5. To the best of our knowledge, the Company is not in violation or
default of any provision of (i) its Certificate of Incorporation or Bylaws, or
(ii) any contract, agreement, obligation, commitment, license, indenture,
mortgage, deed of trust, loan or credit agreement or any other agreement or
instrument to which the Company is a party or by which any of its assets are
bound, except for violations with respect to clause (ii) that would not have a
Material Adverse Effect. The execution, delivery and performance of the
Securities Purchase Agreement, the Ancillary Agreements and the Conveyance
Agreement will not conflict with or, with or without the serving and/or receipt
of notice or the passage of time or both, result in any default or in any
material modification of (i) any provision of the Certificate of Incorporation
or Bylaws of the Company or (ii) to the best of our knowledge, the terms of any
material contract, agreement, obligation, commitment, license, indenture,
mortgage, deed of trust, loan or credit agreement or any other agreement or
instrument to which the Company is a party or by which any of its assets are
bound, or the creation of any lien, charge or encumbrance of any nature upon any
of the properties or assets of the Company. To best of our knowledge, the
execution, delivery and performance of the Securities Purchase Agreement, the
Ancillary Agreements and the Conveyance Agreement by the Company will not
violate any judgment, decree, order, statute, rule or regulation of any federal,
state or local government or agency having jurisdiction over the Company or its
assets.
6. To the best of our knowledge, no action, suit, claim, investigation,
inquiry or other proceeding by any governmental body or other person or legal or
administrative proceeding has been instituted or, to our knowledge, threatened
which questions the validity or legality of the transactions contemplated by the
Securities Purchase Agreement. Except as set forth on Exhibit 3 to the
Securities Purchase Agreement, there are no actions, suits, claims, proceedings,
investigations pending or, to our knowledge, threatened against the Company,
except for actions, suits, claims, investigations, inquiries or proceedings
that, singly or in the aggregate, could not result in a Material Adverse Effect.
7. To the best of our knowledge, no consent, approval, waiver or
authorization of or designation, declaration or filing with any governmental or
regulatory authority or any other person is required in connection with the
valid execution and delivery of the Securities Purchase Agreement, the Ancillary
Agreements and the other agreements contemplated thereunder (except for such
filings as may be necessary to qualify for exemption under the federal
Securities Act of 1933, as amended, and to comply with applicable state "Blue
Sky" securities laws).
The opinions expressed above are subject to the following
qualifications:
A. We are members of the North Carolina bar and we express no opinion
as to matters under or involving laws of any other jurisdiction
other than the corporate laws of the State of Delaware;
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B. Our opinions are limited to matters expressly stated herein and no
opinion is implied or may be inferred beyond the matters expressly
stated;
C. This opinion letter is furnished to the Purchases solely for their
benefit and may not be relied upon by nor copies delivered to any
other person or entity or in connection with any other transaction
without our prior written consent; and
D. Our opinions are rendered as of the date hereof and we do not assume
any responsibility to update or modify our opinions based upon new
or additional information or facts which arise or come to our
attention subsequent to delivery of this opinion.
Very truly yours,
XXXXXX XXXXXXXX, L.L.P.
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EXHIBIT 5.2(C)
INTERIM MILESTONES
1. Buildout of 6 truckstops totaling at least 1,200 wired stalls.
2. Hiring a Principal Financial Officer approved by a majority-in-interest of
the Investors.
3. Achieving an average Service Revenue per stall in the fifth month following
the Initial Closing of $27 per month for truckstops operating for the full
month.
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EXHIBIT 5.3(D)
FINAL MILESTONES
1. Buildout in the first nine months of 14 truckstops totaling at least 2,700
stalls.
2. Achieving an average Service Revenue per stall in the ninth month from the
Initial Closing of $45 per month for those truckstops which commence operations
within 180 days of the Initial Closing and $27 per month for those truckstops
which commence operations 180 to 240 days after the Initial Closing.
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