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EXHIBIT 10.8
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT (this "Agreement") is made and entered
into as of this 29th day of September, 1995, by and among NEW META LICENSING
CORPORATION, a Delaware corporation ("New Meta"), and the individuals
identified in the attached EXHIBIT A hereto (individually a "Purchaser" and
collectively the "Purchasers").
WHEREAS, on September 22, 1995, the Certificate of Incorporation of
New Meta Licensing Corporation was filed by the Secretary of State for the
State of Delaware (the "Certificate");
WHEREAS, pursuant to the Certificate the authorized capital stock of
New Meta consists solely of Ten Million (10,000,000) shares of Voting Common
Stock $.01 par value (the "Voting Common"), Three Million (3,000,000) shares of
Non-Voting Common Stock $.01 par value and Three Million (3,000,000) shares of
Preferred Stock $.01 par value;
WHEREAS, the Purchasers are officers or advisors of New Meta;
WHEREAS, the Board of Directors of New Meta has determined that it
will be in the best interests of New Meta and its stockholders if New Meta
sells shares of Voting Common to the Purchasers in the amounts set forth in
EXHIBIT A in order to more closely align the interests of New Meta and the
Purchasers, and each Purchaser desires to purchase such shares of Voting Common
from New Meta;
WHEREAS, immediately prior to consummating the transactions
contemplated hereby, New Meta's parent corporation, Metanetics Corporation
("Metanetics"), shall substantially discontinue the business in which it was
heretofore engaged and New Meta shall begin conducting such business.
NOW, THEREFORE, in consideration of the foregoing premises and the
respective representations, warranties, covenants and agreements hereinafter
set forth, the parties, intending to be legally and equitably bound, hereby
agree as follows:
1. SALE AND PURCHASE OF SHARES. Subject to the terms and
conditions hereof, New Meta shall sell, transfer and assign to each Purchaser,
and each Purchaser shall purchase and acquire from New Meta, the number of
shares of Voting Common indicated in EXHIBIT A (the "Purchased Shares"), for a
purchase price of 50/100 Dollars ($0.50) per share (each Purchaser's aggregate
purchase price is set forth in EXHIBIT A and is referred to as the "Purchase
Price"). The Purchase Price shall be payable by each Purchaser to New Meta at
the Closing (as hereinafter defined) through its delivery to New Meta of good
funds. Delivery of the share
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certificates evidencing the shares so purchased shall be delivered by New Meta
to the Purchasers within ten (10) days following the Closing.
2. REPRESENTATIONS AND WARRANTIES.
(a) New Meta hereby represents and warrants to each Purchaser
(with respect to and only with respect to the shares of Voting Common hereby
being sold by New Meta to him), respectively, that:
(i) Except as indicated in SCHEDULES 2(a)(ix) AND (x),
the execution, delivery and performance of this Agreement does not and
will not violate, conflict with or result in the breach of any
provision of (a) any material contract, agreement or instrument to
which it is a party or by or to which it or its assets or properties
may be bound or subject; or (b) any order, judgment, injunction,
award, decree, statute, law, rule or regulation of any jurisdiction
applicable to it. Such execution, delivery and performance will not
result in the creation of any lien or encumbrance on the Purchased
Shares.
(ii) There are no outstanding orders, judgments,
injunctions, awards or decrees of any court, arbitrator or
governmental or regulatory body against it. There are no actions,
suits or claims or legal, administrative or arbitral proceedings or
investigations (whether or not the defense thereof or liabilities in
respect thereof are covered by insurance) pending or, to its
knowledge, threatened, against or involving it which could adversely
effect its ability to consummate the transactions contemplated hereby.
(iii) Upon its execution and delivery, this Agreement will be
the valid and binding obligation of New Meta, enforceable in
accordance with its terms, except (A) as limited by applicable
bankruptcy, insolvency, organization, moratorium or other laws of
general application affecting enforcement of creditor' rights; and (B)
general principles of equity that restrict the availability of
equitable remedies.
(iv) It is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware, with all
requisite corporate power and lawful authority to own, lease and
operate its assets and properties and to carry on its business in the
manner presently conducted or contemplated by it.
(v) The execution, delivery and performance of this
Agreement does not and will not violate, conflict with or result in
the breach of any provision of its Certificate of Incorporation or
By-laws, as either may be amended.
(vi) No consent, action, approval, order or authorization, or
declaration of or registration or filing with, any federal, state,
local or governmental agency or authority is required to be obtained
or made by New Meta in connection with (a) the execution, delivery or
performance by New Meta of this Agreement and of the other
instruments, agreements and documents required or contemplated
hereunder; and (b) the consummation of the transactions contemplated
hereby and thereby.
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(vii) New Meta is authorized to issue Ten Million
(10,000,000) shares of Voting Common Stock $.01 par value, Three
Million (3,000,000) shares of Non-Voting Common Stock $.01 par value
and Three Million (3,000,000) shares of Preferred Stock $.01 par
value, of which Four Million (4,000,000) shares of Voting Common Stock
are issued and outstanding as of the date hereof. There are no other
class of capital stock authorized, issued or outstanding. The
Purchase Shares shall when issued be validly issued, fully paid, and
nonassessable, and all such shares have been issued in compliance with
all applicable federal and state securities laws. There are no
subscriptions, rights, options, warrants, convertible or exchangeable
securities, agreements, restrictions, or other rights of any kind
relating to the shares being sold hereunder.
(viii) Metanetics' un-audited balance sheet and income
statement as of March 31, 1995 and August 31, 1995, copies of which
have been furnished to each Purchaser, were prepared by or for
Metanetics on the same basis as required for incorporation into
Metanetics' parent corporation's, Telxon Corporation, audited
financial statements, and are materially correct in presenting the
financial position of Metanetics as at that date and the results of
Metanetics' operations for the period then ended.
(ix) There is no tangible property or intangible personal
property, including, without limitation, trademarks, service marks,
styles, trade names, copyrights, licenses, patents, logos, designs,
inventions, discoveries, processes, formulae, trade secrets,
proprietary technical information and know-how (whether confidential
or otherwise), software and other industrial property (including
applications, certificates and registrations for or of any of the
foregoing), used by New Meta in its business as presently conducted by
it which is not owned, leased or licensed by New Meta. New Meta's
property is free and clear of any lien or other encumbrance, except
for (a) liens or encumbrances specifically described in SCHEDULE
2(A)(IX); (b) liens or other encumbrances securing taxes, assessments,
governmental charges or levies, or the claims of materialmen,
carriers, landlords and like persons, all of which are not yet due and
payable or are being contested in good faith and such contest does not
involve any substantial danger of the sale, forfeiture or loss of any
assets material to the condition of New Meta; (c) minor liens or other
encumbrances of a character that do not substantially impair the
assets to which they apply; and (d) the terms of the written
agreements pursuant to which any such property, tangible or
intangible, is leased or licensed by it.
(x) EXCEPT AS DESCRIBED IN SCHEDULE 2(a)(x), as of the date
hereof, New Meta does not have, nor has it agreed to incur or does it
contemplate incurring, any indebtedness, liability, claim or loss,
liquidated or unliquidated, secured or unsecured, accrued, absolute,
contingent or otherwise, including but not limited to liabilities for
taxes, and which is not fully and adequately reflected or reserved
against on its balance sheet.
(xi) New Meta is not in violation of any applicable United
States, state, local or foreign law, ordinance, regulation, order,
judgment, injunction, award, decree or other
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requirement of any governmental or regulatory body, court or
arbitrator, which violation could have a material adverse effect on
the condition, financial or otherwise, of New Meta.
(xii) To the extent that the business plan and other
disclosures of Metanetics which have been provided to the Purchasers
contain any projections, such projections, if any, have been prepared
by on the basis of underlying assumptions which, in good faith
judgment, based on the circumstances known at the time of preparation
thereof and as to the conditions which, in such judgment, it was then
believed most likely to prevail over the projected period, provide a
reasonable basis for such projections; provided that there is no
assurance that the projected results will actually be achieved.
(b) Each Purchaser hereby severally represents and warrants as to
himself or herself to New Meta as follows:
(i) Purchaser has all necessary power and authority under
all applicable provisions of law to execute and deliver this Agreement
and to carry out Purchaser's obligations hereunder. All actions by
Purchaser required for the lawful execution and deliver of this
Agreement have been effectively taken prior to the Closing. Upon its
execution and delivery, this Agreement will be the valid and binding
obligation of Purchaser, enforceable in accordance with its terms,
except (A) as limited by applicable bankruptcy, insolvency,
organization, moratorium or other laws of general application
affecting enforcement of creditor' rights; and (B) general principles
of equity that restrict the availability of equitable remedies.
(ii) All consents, approvals, orders, authorizations,
registrations, qualifications, designations, declarations or filings
with any governmental or banking authority on the part of Purchaser or
his spouse required in connection with the consummation of the
transactions contemplated in this Agreement have been obtained prior
to and shall be effective as of the Closing.
(iii) Purchaser understands that the Purchased Shares
purchased by him hereunder have not been registered under the
Securities Act of 1993, as amended (the "Securities Act"). Purchaser
also understands that the shares are being offered and sold pursuant
to exemptions from registration contained in the Securities Act and
applicable state securities laws based in part upon Purchaser's
representations contained in this Agreement.
(iv) Purchaser understands and agrees that he bears the
economic risk of this investment indefinitely unless and until the
shares acquired hereunder are registered pursuant to the Securities
Act, or an exemption from registration is available. Purchaser
understands that New Meta has no present intention of registering the
shares being sold hereunder or any shares of its capital stock.
Purchaser also understands that there is no assurance that any
exemption from registration under the Securities Act will be available
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and that, even if available, such exemption may not allow Purchaser to
transfer all or any portion of such shares.
(v) Purchaser is acquiring the Purchased Shares for
Purchaser's own account for investment only, and not with a view
toward their distribution.
(vi) Purchaser represents that by reason of his business
or financial experience, Purchaser has the capacity to protect his own
interests in connection with the transactions contemplated in this
Agreement and can bear the risk of such investment without materially
impairing his financial condition. Further, Purchaser is aware of no
publication of any advertisement in connection with the transactions
contemplated in this Agreement.
(vii) Purchaser has had an opportunity to discuss New
Meta's and Metanetics' business, management and financial affairs with
directors, officers and management of New Meta and Metanetics,
respectively, and has had the opportunity to review New Meta and
Metanetics' respective operations and facilities. Purchaser also has
had the opportunity to ask questions of and receive answers from New
Meta and its management regarding the transactions contemplated
hereby.
(viii) If identified in SCHEDULE 2(b)(viii), Purchaser is an
"accredited investor" as that term is defined in Regulation D under
the Securities Act. Specifically, if so identified, Purchaser meets
one or more of the following definitions of an "accredited investor":
(A) A natural person whose net worth, either
individually or jointly with such person's spouse, at the same
time of the Closing, exceeds $1,000,000;
(B) A natural person who had an individual income
in excess of $200,000 or joint income with that person's
spouse in excess of $300,000 in 1993 and 1994, and reasonably
expects to have individual income reaching the same level in
1995;
(C) A director or executive officer of New Meta;
(D) A trust, with total assets in excess of
$5,000,000, not formed for the specific purpose of acquiring
the shares, whose purchase is directed by a sophisticated
person who has such knowledge and experience in financial and
business matters that such person is capable of evaluating the
merits and risks involved in purchasing the shares hereunder;
(E) A corporations, not formed for the specific
purpose of acquiring shares the Purchased Shares, with assets
in excess of $5,000,000.
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For purposes of the above definitions of "accredited investor," the
term "net worth" means the excess of total assets over total
liabilities. In calculating net worth, Purchaser may include the
estimated fair market value of the Purchaser's principal residence as
an asset. In determining individual "income," Purchaser should add to
Purchaser's individual adjusted gross income (exclusive of any spousal
income) any amounts attributable to tax exempt income received, losses
claimed as a limited partner in any limited partnership, deductions
claimed for depletion, contributions to an XXX or Xxxxx retirement
plan, alimony payments, and any amount by which income from long-term
capital gains has been reduced in arriving at adjusted gross income,
and should subtract any unrealized capital gain.
(ix) Purchaser's address as set forth on EXHIBIT A is the
address of Purchaser's primary residence. Purchaser's address as set
forth on EXHIBIT A is the same state in which Purchaser received an
offer of sale of the Purchased Shares and in which Purchaser is
entering into this Agreement.
3. CLOSING. The closing of the transactions contemplated
hereunder (the "Closing") shall be held at such times and places as the parties
may agree, and shall continue until all of the Purchasers have consummated such
transactions; provided that the Closing shall be consummated no later than
September 29, 1995.
4. INDEMNIFICATION. Notwithstanding anything to the contrary in
this Agreement, each of the Purchasers severally and New Meta shall indemnify
and hold harmless the other against and from any and all losses, fees, costs,
expenses, damages, obligations, liabilities and claims (including, without
limitation, any and all fees, costs and expenses whatsoever reasonably incurred
by it or its counsel in investigating, preparing for, defending against, or
providing evidence, producing documents or taking any other action in respect
of, any threatened or asserted claim) arising directly or indirectly out of:
(a) any failure of any representation or warranty of such party to be correct
and complete when made, or (b) any failure by such party to perform and observe
fully all obligations and conditions to be performed or observed by that party
under this Agreement. Notwithstanding the foregoing or anything herein to the
contrary, no claim for indemnification may be asserted after September 29,
1996.
5. CONDITIONS TO EACH PURCHASER'S OBLIGATIONS. The obligation of
each Purchaser to purchase the Purchased Shares are subject to the
satisfaction, at or prior to the Closing, of the following conditions, any one
or more of which may be waived by such Purchaser:
(a) The representations and warranties made by New Meta
in Section 2(a) hereof shall be true and correct in all material
respects at the Closing with the same force and effect as if they had
been made as of the date of the Closing, and New Meta shall have
performed all obligations and conditions herein required to be
performed or observed by it on or prior to Closing.
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(b) At the time of Closing, the sale of the Purchased
Shares shall be legally permitted by all laws and regulations to which
the Purchasers and New Meta are subject.
(c) New Meta shall have obtained any and all consents,
permits, and waivers necessary or appropriate for consummation of the
transactions contemplated by this Agreement (except for such as
properly may be obtained subsequent to the Closing).
(d) Each Purchaser or his counsel has had the opportunity
to review copies of all corporate documents of New Meta as the
Purchaser reasonably may have requested.
(e) New Meta shall have delivered to Purchaser a
certificate, executed by an officer of New Meta, dated the date of
Closing, to the effect that the conditions specified in subparagraphs
(a) through (c) of this Section 5 have been satisfied.
(e) All corporate and other proceedings in connection
with the transactions contemplated at the Closing hereby and all
documents and instruments incident to such transactions shall be
reasonably satisfactory in substance and form to the Purchasers, and
the Purchasers shall have received all such counterpart originals or
certified or other copies of such documents as they reasonably may
request.
6. CONDITIONS TO NEW META'S OBLIGATIONS. New Meta's obligation to
sell the Purchased Shares at Closing is subject to the satisfaction, on or
prior to Closing, of the following conditions, any one or more of which may be
waived by it:
(a) The representations and warranties made by each
Purchaser in Section 2(b) hereof shall be true and correct in all
material respects at the date of the Closing, with the same force and
effect as if they had been made on and as of said date, and each
Purchaser shall have performed all obligations and conditions herein
required to be performed or observed by him on or prior to Closing.
(b) At the time of Closing, the sale of the Purchased
Shares shall be legally permitted by all laws and regulations to which
the Purchasers and New Meta are subject.
(c) Each Purchaser shall have obtained any and all
consents, permits, and waivers necessary or appropriate for
consummation of the transactions contemplated by this Agreement
(except for such as properly may be obtained subsequent to the
Closing).
(d) Each Purchaser shall have performed and complied with
all agreements and conditions herein required to be performed or
complied with by each Purchaser on or before the Closing.
(e) Each Purchaser shall have delivered to New Meta (i) a
certificate, executed by him or her, dated the date of Closing, to the
effect that the conditions specified in subparagraphs (a) through (d)
of this Section 6, and in subparagraph (d) of Section 5,
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have been satisfied and (ii) an Investment Letter in the form attached
hereto as EXHIBIT B, executed by him or her.
7. CONDITION SUBSEQUENT. This Agreement and the transactions
contemplated hereby are subject to ratification by the Board of Directors of
Telxon Corporation, parent corporation of Metanetics, parent corporation of New
Meta. In the event that such ratification is not granted, then New Meta may
return the Purchase Price to Purchaser and require Purchaser to return the
Purchased Shares purchased by him hereunder, and thereafter all of Purchaser's
rights and obligations hereunder and as a shareholder of New Meta shall be null
and void ab initio.
8. ENTIRE AGREEMENT. This Agreement and any other writing
specifically identified herein or specifically contemplated hereby, taken
together, contain the entire agreement among the parties hereto with respect to
New Meta's sale and each Purchaser's acquisition of shares hereunder and
supersedes all previous written or oral negotiations, commitments and writings
with respect thereto.
9. HEADINGS. The paragraph headings used herein are for
convenience of reference only and do not form a part hereof and do not in any
way modify, interpret or set forth the intentions of the parties.
10. SURVIVAL. All agreements, obligations, warranties, and
representations under this Agreement shall survive the Closing and any
investigations made by the parties until September 29, 1996.
11. GENDER AND NUMBER. When permitted by the context, each
pronoun used in this Agreement includes the same pronoun in other genders or
numbers, and each noun used in this Agreement, including each capitalized term
defined herein, includes the same noun in other numbers.
12. SUCCESSORS. This Agreement shall be binding upon, inure to
the benefit of, and be enforceable by and against the respective heirs,
personal representatives, successors, and assigns of each party to this
Agreement.
13. NO THIRD-PARTY BENEFIT. This Agreement is intended for the
exclusive benefit of the parties to this Agreement and their respective
successors and assigns, and nothing contained in this Agreement shall be
construed as creating any rights or benefits in or to any third party.
14. GOVERNING LAW. All questions concerning the validity or
meaning of this Agreement or relating to the rights and obligations of the
parties with respect to performance under this Agreement shall be construed and
resolved under the laws of the State of Ohio, without regard to conflict of
laws principals.
15. SEVERABILITY. The intention of the parties to this Agreement
is to comply fully with all laws and public policies, and this Agreement shall
be construed consistently with all
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laws and public policies to the extent possible. If any court of competent
jurisdiction determines it is impossible to construe any provision of this
Agreement consistently with any law or public policy and consequently holds
that provision to be invalid, such holding shall in no way effect the validity
of the other provisions of this Agreement, which shall remain in full force and
effect.
16. COUNTERPARTS. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies
hereof each signed by less than all, but together signed by all, of the parties
hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
NEW META LICENSING CORPORATION
By: /s/ Xxxxx X. Xxxxx
Its President
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