Execution Copy
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SERIES A CONVERTIBLE
PREFERRED STOCK PURCHASE AGREEMENT
Among
UNVEIL TECHNOLOGIES, INC.
and
VOICENET, INC.
As of March 7, 2001
EXHIBITS AND SCHEDULES
----------------------
Exhibits
--------
A Amended and Restated Certificate of Incorporation
B Form of Stockholders Agreement
C Form of Registration Rights Agreement
Schedules
---------
4.4 Capitalization
4.6 Material Contracts
4.9 Employee Benefit Plans
4.13 Patents and Trademarks
UNVEIL TECHNOLOGIES, INC.
SERIES A CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
THIS Agreement, dated as of March 7, 2001, is among (a) Unveil
Technologies, Inc., a Delaware corporation (the "COMPANY") and (b) Voicenet,
Inc., a Delaware corporation ("VOICENET"),and such other Persons who become a
party hereto pursuant to Section 2.5 hereof. The parties agree as follows:
1. DEFINITIONS. Accounting terms used in this Agreement and not otherwise
defined herein shall have the meanings provided in U.S. GAAP. Certain
capitalized terms are used in this Agreement as specifically defined in this
Section 1 as follows:
"ADDITIONAL CLOSING" is defined in Section 2.5.
"ADDITIONAL INVESTOR" is defined in Section 2.5.
"AFFILIATE" means any Person directly or indirectly controlling,
controlled by or under direct or indirect common control with the Company (or
other specified Person) and shall include (a) any Person who is an officer,
director or beneficial holder of at least 10% of the outstanding capital stock
of the Company (or other specified Person), (b) any Person of which the Company
(or other specified Person) or any officer or director of the Company (or other
specified Person) shall, directly or indirectly, either beneficially own at
least 10% of the outstanding equity securities or constitute at least a 10%
participant, and (c) in the case of a specified Person who is an individual,
Members of the Immediate Family of such Person; provided, however, that (a) the
Investors and (b) Xxxx Xxxxxx, shall not be Affiliates of the Company for
purposes of this Agreement.
"AMENDED AND RESTATED CHARTER" is defined in Section 2.1.
"BY-LAWS" means all written rules, regulations, procedures and by-laws
and all other similar documents, relating to the management, governance or
internal regulation of a Person other than an individual, each as from time to
time amended or modified.
"CHARTER" means the articles or certificate of incorporation, statute,
constitution, joint venture or partnership agreement or articles or other
charter of any Person other than an individual, each as from time to time
amended or modified.
"CLOSING" is defined in Section 2.4.
"CLOSING DATE" is defined in Section 2.4.
"CODE" means the U.S. federal Internal Revenue Code of 1986 or any
successor statute, and the rules and regulations thereunder, as from time to
time amended and in effect.
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"COMMON STOCK" means the common stock, $0.001 par value per share, of
the Company.
"COMMISSION" means the Securities and Exchange Commission or any other
federal agency at the time administering the Securities Act, the Exchange Act or
both.
"COMPANY" is defined in the Preamble.
"CONTRACTUAL OBLIGATION" means, with respect to any Person, any
contracts, agreements, deeds, mortgages, leases, licenses, other instruments,
commitments, undertakings, arrangements or understandings, written or oral, or
other documents, including any document or instrument evidencing indebtedness,
to which any such Person is a party or otherwise subject to or bound by or to
which any asset of any such Person is subject.
"EMPLOYEE BENEFIT PLAN" means each and all "employee benefit plans" as
defined in section 3(3) of ERISA, maintained or contributed to by the Company,
any of its Affiliates or any of their respective predecessors, or in which the
Company, any of its Affiliates or any of their respective predecessors
participates or participated and which provides benefits to employees of the
Company or their spouses or covered dependents or with respect to which the
Company has or may have a material liability, including, (i) any such plans that
are "employee welfare plans" as defined in section 3(1) of ERISA and (ii) any
such plans that are "employee pension benefit plans" as defined in section 3(2)
of ERISA.
"ERISA" means the Employee Retirement Income Security Act of 1974 or
any successor statute and the rules and regulations thereunder, and in the case
of any referenced section of any such statute, rule or regulation, any successor
section thereof, collectively and as from time to time amended and in effect.
"ERISA Group", with respect to any entity, means any Person which is a
member of the same "controlled group" or under "common control", within the
meaning of section 414(b) or (c) of the Code or section 4001(b)(1) of ERISA,
with such entity.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as from time to time amended and in effect.
"GAAP" means U.S. generally accepted accounting principles, as in
effect from time to time, applied on a consistent basis.
"INVESTOR SECURITIES" is defined in Section 2.1.
"INVESTORS" means the holders of Investor Securities.
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"LEGAL REQUIREMENT" means any federal, state, local or foreign law,
statute, standard, ordinance, code, order, rule, regulation, resolution,
promulgation or any final order, judgment or decree of any court, arbitrator,
tribunal or governmental authority, or any license, franchise, permit or similar
right granted under any of the foregoing.
"MATERIAL ADVERSE EFFECT" means a material adverse effect upon the
business, assets, financial condition, income or prospects of the Company and
its Subsidiaries, if any, on a consolidated basis.
"MEMBERS OF THE IMMEDIATE FAMILY," as applied to any individual, means
each parent; spouse; child; brother; sister; or the spouse of a child, brother
or sister of the individual, and each trust created for the benefit of one or
more of such persons and each custodian of a property of one or more such
persons.
"PENSION PLAN" means each pension plan (as defined in section 3(2) of
ERISA) established or maintained, or to which contributions are or were made, by
the Company or any of its Subsidiaries or former Subsidiaries, or any Person
which is a member of the same ERISA Group with any of the foregoing.
"PERSON" means an individual, partnership, corporation, company,
association, trust, joint venture, unincorporated organization and any
governmental department or agency or political subdivision.
"PREFERRED STOCK" means the Series A Convertible Preferred Stock, par
value $0.001 per share, of the Company.
"PRINCIPAL HOLDER" means Voicenet (and its Affiliates) so long as it
holds Investor Securities representing at least 25% of its original investment.
"QUALIFIED PUBLIC OFFERING" is defined in Paragraph 5 of Article FOURTH
of the Amended and Restated Charter.
"REGISTRATION RIGHTS AGREEMENT" is defined in Section 3.6(b).
"RELATED AGREEMENTS" means the Stockholders Agreement and the
Registration Rights Agreement.
"REQUIRED HOLDERS" means the holders at the relevant time (excluding
the Company or any of its Subsidiaries) of a majority or more of the voting
power of all Preferred Stock, voting together as a single class.
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"SECURITIES ACT" means the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be from time to time amended and in effect.
"STOCKHOLDERS AGREEMENT" is defined in Section 3.6(a).
"SUBSIDIARY" means any Person of which the Company or other specified
Person now or hereafter shall at the time (a) own directly or indirectly through
a Subsidiary at least 50% of the outstanding capital stock (or other shares of
beneficial interest) entitled to vote generally or (b) constitute a general
partner.
"WELFARE PLAN" means each welfare plan (as defined in section 3(1) of
ERISA) established or maintained, or to which any contributions are or were
made, by the Company or any of its Subsidiaries or any Person which is a member
of the same ERISA Group with any of the foregoing.
"VOICENET" is defined in the Preamble.
2. SALE AND PURCHASE OF SECURITIES.
2.1. INVESTOR SECURITIES. The Preferred Stock being purchased by the
Investors hereunder are referred to as "INVESTOR SECURITIES." The powers,
preferences and rights of the Preferred Stock are set forth in the Company's
Charter as amended through the date hereof in the form set forth in EXHIBIT A
(the "AMENDED AND RESTATED CHARTER").
2.2. AGREEMENT TO SELL AND PURCHASE. Based on the Investors'
representations and warranties contained in Section 5, the Company agrees to
issue and sell to the Investors and, subject to the terms and conditions hereof
and in reliance on the representations, warranties and agreements of the Company
contained or referred to herein, the Investors severally agree to purchase (a)
in the case of Voicenet, 2,500,000 shares of Preferred Stock at a price of
$0.625 per share at the Closing, and (b) in the case of Additional Investors,
such number of shares of Preferred Stock as are indicated on subscription
agreements executed and delivered by such Additional Investors at a price of
$0.625 per share at any Additional Closings.
2.3. RESERVATION OF SHARES. The Company will have authorized and
reserved as of the Closing and each Additional Closing, and covenants to
continue thereafter to reserve, free of preemptive rights and other preferential
rights, a sufficient number of its previously authorized but unissued shares of
Common Stock to satisfy the rights of conversion of the holders of the Preferred
Stock.
2.4. CLOSING. The closing of the purchase and sale of Preferred Stock
described in Section 2.2(a) (the "CLOSING") shall take place in Boston,
Massachusetts at the offices of Ropes & Xxxx on March 7, 2001 (the "CLOSING
DATE") or at such other place and time as the Company
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and Voicenet may otherwise agree. Against payment of the purchase price therefor
by check, wire transfer, cancellation of indebtedness or such other form of
payment as shall be acceptable to the Company, (a) at the Closing, the Company
will deliver to Voicenet a certificate evidencing 2,500,000 shares of Preferred
Stock and (b) at each Additional Closing, the Company will deliver to each
Investor a certificate evidencing such number of Preferred Shares as such
Investor has purchased at such Additional Closing.
2.5. ADDITIONAL CLOSINGS. At any time within 90 days of the Closing,
the Company may, but is not obligated to, sell up to 500,000 shares of Preferred
Stock (the "ADDITIONAL INVESTOR SECURITIES") to certain individuals and entities
who did not purchase Investor Securities at the Closing (any such Person, an
"ADDITIONAL INVESTOR"). The purchase price for the Additional Investor
Securities to be sold to the Additional Investors pursuant to this Section 2.5
shall be $0.625 per share. As a condition to each such sale of Additional
Investor Securities to an Additional Investor, such Additional Investor shall
execute and deliver to the Company a counterpart signature page to each of this
Agreement, the Shareholders Agreement and the Registration Rights Agreement. All
such Additional Investors shall be deemed, upon such execution and delivery, an
Investor for all purposes under this Agreement, with all of the rights and
obligations thereof. Each additional closing contemplated by this Section 2.5
shall be referred to herein as an "ADDITIONAL CLOSING".
3. CONDITIONS TO PURCHASE. The Investors' several obligations to purchase the
Preferred Stock pursuant to this Agreement are subject to the satisfaction, on
or prior to the Closing Date or the date of any Additional Closings, of the
following conditions:
3.1. REPRESENTATIONS AND WARRANTIES CORRECT. The representations and
warranties made by the Company herein shall be true and correct in all respects
on and as of the Closing Date.
3.2. FILING OF CHARTER. The Company shall have filed the Amended and
Restated Charter with the Secretary of State of the State of Delaware.
3.3. SECRETARY'S CERTIFICATE. The Secretary of the Company shall
deliver a Certificate certifying: (a) the signatures of the officers of the
Company authorized to sign the Agreement, the certificates for the Investor
Securities and the Related Agreements; (b) the By-laws of the Company in effect
on the Closing Date; (c) the Amended and Restated Charter as filed with the
State of Delaware and effective on the Closing Date; and (d) the resolutions of
the board of directors of the Company authorizing the execution and delivery of
the Agreement, the Related Agreements and the transactions contemplated hereby.
3.4. BOARD OF DIRECTORS. The Board of Directors of the Company shall
consist of the members identified in the Stockholders Agreement.
3.5.
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3.5 GOOD STANDING. The Company shall deliver a Certificate of Good
Standing for the Company from the Secretary of State of the State of Delaware
and a certificate of foreign qualification from the state secretary of the
Commonwealth of Massachusetts.
3.6. RELATED AGREEMENTS. The Company shall have duly authorized,
executed and delivered to the Investors the following agreements:
(a) Stockholders Agreement, in the form of EXHIBIT B, among
the Company, the Investors and certain other stockholders of the
Company (as from time to time in effect, the "STOCKHOLDERS AGREEMENT").
(b) Registration Rights Agreement, in the form of EXHIBIT C,
among the Company, the Investors and certain other stockholders of the
Company (as from time to time in effect, the "REGISTRATION RIGHTS
AGREEMENT").
3.7. EMPLOYEE CONFIDENTIALITY AND INVENTION AGREEMENTS. Each person
employed by the Company who has access to proprietary information concerning the
Company shall have executed and delivered to the Company a confidentiality and
invention agreement.
3.8. LEGALITY. All authorizations, approvals or permits of any
governmental authority or regulatory body that are required in connection with
the lawful issuance and sale of the Preferred Stock pursuant to this Agreement
shall have been duly obtained and shall be in full force and effect.
3.9. GENERAL. All instruments and legal and corporate proceedings in
connection with the transactions contemplated by this Agreement shall be
reasonably satisfactory in form and substance to the Investors, and the
Investors shall have received copies of all documents, including records of
corporate proceedings and officers certificates, which they may have reasonably
requested in connection therewith.
3.10. CONDITIONS PRECEDENT TO THE ADDITIONAL CLOSINGS. Except as set
forth in this Section 3.10, there shall be no conditions precedent to the
respective obligations of each of the Additional Investors to purchase the
shares of Preferred Stock to be purchased by it at the applicable Additional
Closing; PROVIDED HOWEVER, that in no event shall any Additional Investor be
obligated to purchase any shares of Preferred Stock, if, prior to the date of
the applicable Additional Closing, (a) the Company has filed a petition in
bankruptcy (or takes any equivalent action under applicable state law), (b) a
receiver and/or administrator (or equivalent) has been appointed in respect of
substantially all of the Company's assets, (c) the Company has sought to make a
compromise, assignment or other arrangement for the benefit of its creditors,
(d) there has been filed any complaint, application or petition against the
Company seeking an order of relief or adjudication of bankruptcy under the
Bankruptcy Act with respect to the Company, which complaint, application or
petition is not timely contested, or, if timely contested, is not dismissed
within 60 days of the date when such petition was filed, or (e) there has been
filed any
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complaint against the Company alleging that the Company has violated the
intellectual property or other proprietary rights of a third party, which
complaint (if resolved in favor of the plaintiff) would reasonably be expected
to have a Material Adverse Effect.
4. REPRESENTATIONS AND WARRANTIES. In order to induce the Investors to enter
into this Agreement and to purchase the Preferred Stock hereunder, the Company
represents and warrants the following, except as set forth in a Company
Disclosure Letter attached hereto (the "COMPANY DISCLOSURE LETTER") furnished to
Voicenet.
4.1. ORGANIZATION. The Company is a duly organized and validly existing
corporation in good standing under the laws of Delaware. The Company is duly
qualified to do business as a foreign corporation and is in good standing in
each jurisdiction in which it does business, except where the failure to be so
qualified would not have a Material Adverse Effect.
4.2. CORPORATE POWER AND AUTHORITY; NO CONFLICTS. The Company has all
necessary corporate power and authority to enter into and perform this Agreement
and the Related Agreements, to issue and sell the Investor Securities hereunder,
and to carry on the businesses now conducted or presently proposed to be
conducted by it. The Company has taken all corporate action necessary to
authorize this Agreement, the Related Agreements and the issuance of the
Investor Securities to be issued and sold hereunder. This Agreement and the
Related Agreements are legal, valid and binding agreements of the Company,
enforceable in accordance with their terms. The execution, delivery and
performance by the Company of this Agreement and the Related Agreements and the
issuance and sale of the Investor Securities will not result in any violation of
or be in conflict with, or result in a breach of or constitute a default under,
any term or provision of any Legal Requirement to which the Company is subject,
or the Company's Charter or By-Laws, or any Contractual Obligation to which the
Company is a party or by which it is bound.
4.3. SUBSIDIARIES. The Company does not own or control, directly or
indirectly, or have an interest in, any other corporation, partnership or
business entity.
4.4. CAPITALIZATION. The authorized capital stock of the Company is set
forth in the Charter. On the Closing Date, after giving effect to the issuance
of the Preferred Stock: (a) the Company will have no outstanding capital stock
except for the shares of Common Stock and Preferred Stock owned beneficially and
of record by the persons listed on SCHEDULE 4.4, (b) all of the shares of
capital stock of the Company will be validly issued, fully paid, nonassessable
and subject to no lien or restriction on transfer, except restrictions on
transfer imposed by the Related Agreements and applicable securities laws, and
(c) all of the outstanding shares of capital stock have been offered and sold in
compliance with applicable United States federal and state securities laws. The
Company has no outstanding: (a) rights (either preemptive or otherwise) or
options to subscribe for or purchase, or any warrants or other agreements
providing for or requiring the issuance of, any capital stock or any securities
convertible into or exchangeable for its capital stock, (b) obligations to
repurchase or otherwise acquire or retire any of its capital
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stock, any securities convertible into or exchangeable for its capital stock or
any rights, options or warrants with respect thereto except any contained in the
Related Agreements, (c) rights that require it to register the offering of any
of its securities under the Securities Act or (d) restrictions on voting any of
securities.
4.5. OUTSTANDING DEBT; ABSENCE OF LIABILITIES. The Company has no
outstanding indebtedness for borrowed money, except for trade payables and money
borrowed from Voicenet and/or any Affiliate of Voicenet and (ii) is not a
guarantor or otherwise contingently liable on such indebtedness of any other
Person. The Company has no material liabilities, contingent or otherwise.
4.6. CONTRACTUAL OBLIGATIONS. SCHEDULE 4.6 contains, together with a
reference to the paragraph pursuant to which each item is being disclosed, a
correct and complete list of all Contractual Obligations of a material nature of
the Company and its Subsidiaries of the types described below:
(a) All collective bargaining agreements, all employment, bonus or
consulting agreements, all pension, profit sharing, deferred compensation, stock
option, stock purchase, retirement, welfare or incentive plans or agreements,
and all plans, agreements or practices that constitute "fringe benefits" to any
of the employees of the Company or its Subsidiaries.
(b) All Contractual Obligations under which the Company is
restricted from carrying on any business, venture or other activities anywhere
in the world.
(c) All Contractual Obligations to sell or lease (as lessor) any
of the properties or assets of the Company or its Subsidiaries, except in the
ordinary course of business, or to purchase or lease (as lessee) any real
property.
(d) All Contractual Obligations pursuant to which the Company
guarantees any liability of any Person, or pursuant to which any Person
guarantees any liability of the Company.
(e) All Contractual Obligations pursuant to which the Company
provides goods or services involving payments to the Company of more than
$25,000 annually, which Contractual Obligation is not terminable by the Company
without penalty upon notice of 30 days or less.
(f) All Contractual Obligations with any Affiliate of the Company
(other than this Agreement and the Related Agreements).
(g) All Contractual Obligations providing for the disposition of
the business, assets or shares of the Company or the merger or consolidation or
sale of purchase of all or substantially all of the assets or business of any
Person, and any letters of intent relating to the foregoing.
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(h) All Contractual Obligations of the Company relating to the
borrowing of money or to the mortgaging or pledging of, or otherwise placing a
lien on, any asset of the Company (except liens imposed by operation of law in
favor of landlords, suppliers, mechanics or others who provide services to the
Company).
All of the Contractual Obligations of the Company are enforceable
against the Company and, to its knowledge, the other parties thereto in
accordance with their terms, except for Contractual Obligations the failure of
which to be so enforceable does not and will not result in a Material Adverse
Effect. The Company is not in default under nor, to the best of the Company's
knowledge, are there any material liabilities arising from any breach or default
by any Person prior to the date of this Agreement of, any provision of any such
Contractual Obligation. The Company has furnished to the Investors true and
correct copies of all Contractual Obligations listed on SCHEDULE 4.6 which the
Investors have reasonably requested.
4.7. TRANSACTIONS WITH AFFILIATES. No Affiliate of the Company is a
customer or supplier of, or is party to any Contractual Obligation with, the
Company.
4.8. CONFORMITY WITH LEGAL REQUIREMENTS. The operations of the Company
as now conducted are not in violation of, nor is the Company in default under,
any Legal Requirements presently in effect, except for such violations and
defaults as do not and will not, in the aggregate, have a Material Adverse
Effect. The Company has all franchises, licenses, permits or other authority
presently necessary for the conduct of its business as now conducted.
4.9. EMPLOYEE BENEFIT PLANS. SCHEDULE 4.9 sets forth a complete list of
all Employee Benefit Plans and all Welfare Plans applicable to the employees of
the Company. Each Employee Benefit Plan and Welfare Plan has been administered
in substantial compliance with its terms and all applicable laws, including the
Code and ERISA, except where the failure to comply would not have a Material
Adverse Effect. The Company has no obligation under any Welfare Plan to provide
for the continuation of benefits (other than disability payments and medical
benefits incurred for illness arising in the course of employment) for more than
one year after retirement or other termination of employment. No "reportable
events" within the meaning of section 4043 of ERISA have occurred with respect
to any Employee Benefit Plan. No Pension Plan is a "multiemployer plan" as
defined in ERISA. The present value of benefits liabilities as described in
Title IV of ERISA of Employee Benefit Plans does not exceed the current value of
such Employee Benefit Plans assets allocable to such benefits liabilities by
more than $100,000.
4.10. EMPLOYEES. None of the employees of the Company is presently
represented by a labor union, and to Company's knowledge no petition has been
filed or proceedings instituted by any employee or group of employees with any
labor relations board seeing recognition of a bargaining representative. No
controversies or disputes are pending between the Company and any of its
employees, except for such controversies and disputes as do not and will not, in
the
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aggregate, have a Material Adverse Effect. To the best of the Company's
knowledge, no employee of the Company is in violation of any term of any
Contractual Obligation with a former employer relating to the right of any such
employee to by employed by the Company because of the nature of the Company's
business or the use of any trade secrets or proprietary information. Each
employee of the Company is an "employee at will" and may be terminated by the
Company without payment of any amounts other than accrued wages.
4.11. TAXES. The Company has filed all material tax and information
returns which are required to be filed by it and has paid, or made adequate
provision for the payment of, all taxes which have or may become due. The
Company has no knowledge of any material additional assessments or any basis
therefor. The Company has withheld or collected from each payment made to its
employees the amount of all taxes required to be withheld or collected therefrom
and has paid over such amounts to the appropriate taxing authorities.
4.12. LITIGATION. No litigation or proceeding before, or investigation
by, any foreign, federal, state or municipal board or other governmental or
administrative agency or any arbitrator is pending or, to the knowledge of the
Company, threatened (nor to the knowledge of the Company, does any basis exist
therefor) against the Company or, to the Company's knowledge, any officer of the
Company, which in the aggregate could result in any material liability or which
may otherwise result in a Material Adverse Effect, or which seeks rescission of,
seeks to enjoin the consummation of, or which questions the validity of, this
Agreement or any other Related Agreement or any of the transactions contemplated
hereby or thereby.
4.13. PATENTS AND TRADEMARKS. The Company owns or has sufficient rights
to use all patents, patent applications, trademarks, service marks, copyrights,
trade secrets and other intellectual property rights necessary for its business
as now conducted or proposed to be conducted by it. A complete list of all
patents, patent applications, trademarks, and registered copyrights is included
on SCHEDULE 4.13. To Company's knowledge, the conduct of the business of the
Company does not conflict with or infringe upon the patents, trademarks,
copyrights or other intellectual property rights of any other Person. The
Company is not aware that any of its patents, trademarks, copyrights or other
intellectual property rights are not valid and enforceable.
4.14. CONSENTS. No consent, approval, qualification, order or
authorization of, or filing with any governmental authority is required in
connection with the Company's valid execution, delivery or performance of the
Related Agreements, or the offer, issue or sale of the Investor Securities by
the Company, the conversion of the Preferred Stock, or the issuance of Common
Stock upon conversion of the Preferred Stock, or the consummation of any other
transaction contemplated on the part of the Company hereby, except the filing of
the Amended and Restated Charter.
4.15. FILINGS, BROKER'S FEES, ETC. The Company is not obligated to pay
any broker's fee, finder's fee, investment banker's fee or other similar
transaction fee in connection with the transactions contemplated hereby.
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4.16. REAL PROPERTY HOLDING CORPORATION. Neither the Company nor its
Subsidiaries is a "United States real property holding corporation," as defined
in section 897(c)(2) of the Code and Treasury Regulation section 1.897-2(b).
4.17. FEDERAL RESERVE REGULATIONS. The Company is not engaged in the
business of extending credit for the purpose of purchasing or carrying margin
securities (within the meaning of Regulation G of the Board of Governors of the
Federal Reserve System), and no part of the proceeds from the sale of the
Investor Securities will be used to purchase or carry any margin security or to
extend credit to others for the purpose of purchasing or carrying any margin
security or in any other manner which would involve a violation of any of the
regulations of the Board of Governors of the Federal Reserve System.
5. INVESTMENT REPRESENTATIONS; RESTRICTIONS ON TRANSFER.
5.1. REPRESENTATIONS AND WARRANTIES OF THE INVESTORS. Each of the
Investors severally represents and warrants to the Company that:
(a) It is an "accredited investor" for purposes of Regulation D
under the Securities Act and that it has sufficient knowledge and experience in
investing in companies similar to the Company in terms of the Company's stage of
development so as to be able to evaluate the risks and merits of its investment
in the Company and it is able financially to bear the risks thereof.
(b) It is acquiring the Preferred Stock at the Closing for
investment for its own account and not with a view to, or for resale in
connection with, any distribution thereof.
(c) It has had an opportunity to discuss the Company, business,
management and financial affairs with the Company's management and has received
(or had made available to it) any financial and business documents requested by
it.
(d) It understands that the shares of Preferred Stock to be
purchased by it have not been registered under the Securities Act and must be
held indefinitely unless a subsequent disposition thereof is registered under
the Securities Act or is exempt from such registration.
(f) It has no contract, arrangement or understanding with any
broker, finder or similar agent with respect to the transactions contemplated by
this Agreement.
(g) It has all necessary power and authority to enter into and
perform its obligations under this Agreement and the Related Agreements and to
purchase the Investor Securities hereunder. This Agreement and the Related
Agreements are legal, valid and binding agreements of the Investor, enforceable
against the Investor in accordance with their terms.
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5.2. LEGEND. Each certificate representing shares of Investor
Securities shall bear legends in substantially the following forms:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, or under
the securities laws of any state, and may not be sold, or
otherwise transferred, in the absence of such registration or an
exemption therefrom under such Act and under any such applicable
state laws."
"The Corporation has more than one class of capital stock
authorized to be issued. The Corporation will furnish without
charge to each stockholder upon written request a copy of the full
text of the preferences, voting powers, qualifications and special
and relative rights of the shares of each class of stock (and any
series thereof) authorized to be issued by the Corporation as set
forth in its charter and any amendments thereto."
6. MISCELLANEOUS.
6.1. EXPENSES. The Company and the Investors will each bear its own
expenses and legal fees incurred on its behalf with respect to this Agreement
and the Related Agreements.
6.2. NOTICES. Any notice or other communication in connection with this
Agreement or the Investor Securities shall be deemed to be delivered if in
writing addressed as provided below and if either (a) actually delivered at said
address, (b) in the case of a letter, three business days shall have elapsed
after the same shall have been deposited in the mail, postage prepaid and
registered or certified, return receipt requested or (c) transmitted and
confirmed by telecopy or by overnight or two-day courier:
If to the Company, to it at 000 0xx Xxxxxx, Xxxxxxx, XX 00000,
attention: President, telecopy: (000) 000-0000, telephone: (000) 000-0000, with
a copy to Ropes & Xxxx, Xxx Xxxxxxxxxxxxx Xxxxx, Xxxxxx, XX 00000, attention:
Xxxxxxx X. Xxxxx, Esq., telecopy: (000) 000-0000, telephone: (000) 000-0000, or
at such other address as the Company shall have specified by notice to the
Principal Holders.
If to Voicenet, to 0000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Chief Executive Officer, telecopy: , telephone: (212)
000-0000, with a copy to Xxxxxxxx & Xxxxxxxx, 0 Xxxxxxxx Xxxxx, Xxxxxxxx, XX
00000, attention: Xxxxx Xxxxxxx, Esq., telecopy: (000) 000-0000, telephone:
(000) 000-0000, or at such other address as Voicenet shall have specified by
notice to the Company.
If to any other holder of record of any Investor Security, to it at its
address set forth in the stock register of the Company.
Unveil Technologies, Inc.
Series A Convertible Preferred Stock Purchase Agreement Page 13
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6.3. CONFIDENTIALITY. Each Investor will maintain the confidential
nature of information obtained from the Company concerning the Company and its
Subsidiaries, if any; PROVIDED, HOWEVER, that such Investor shall not be
precluded from making disclosure regarding such information: (a) to counsel for
any such Investor, accountants or other professional advisors on a need-to-know
basis, (b) to any other Investor, (c) as required by law or applicable
regulation, (d) to any participant in or assignee of any Investor Securities
after notice to the Company so long as such participant or assignee has agreed
to be bound by this Section 6.3 or (e) to the extent such information has become
publicly available other than as a result of the violation of this Section 6.3.
6.4. AMENDMENTS AND WAIVERS. Any term of this Agreement may be amended
and the observance of any term of this Agreement may be waived (either generally
or in a particular instance and either retroactively or prospectively) with the
written consent of the Required Holders. Any amendment or waiver effected in
accordance with this Section 6.4 shall be binding upon each holder of any
Investor Securities and the Company and each of its Subsidiaries.
6.5. SURVIVAL AND TERMINATION OF COVENANTS. All covenants, agreements,
representations and warranties made herein or in any closing certificate or
other certificate or written report delivered to the Investors pursuant to an
express requirement hereof shall be deemed to have been material and relied on
by the Investors, shall survive the execution and delivery of the Agreement to
the Investors hereof and of the Investor Securities and shall terminate upon the
closing of a Qualified Public Offering.
6.6. GENERAL. The invalidity or unenforceability of any term or
provision hereof shall not affect the validity or enforceability of any other
term or provision hereof. The headings in this Agreement are for convenience of
reference only and shall not alter or otherwise affect the meaning hereof. This
Agreement, the Related Agreements and the other items referred to herein or
therein constitute the entire understanding of the parties hereto with respect
to the subject matter hereof and thereof and supersede all present and prior
agreements, whether written or oral. This Agreement is intended to take effect
as a sealed instrument and may be executed in any number of counterparts which
together shall constitute one instrument. The Agreement shall be governed by and
construed in accordance with the General Corporation Law of the State of
Delaware as to matters within the scope thereof and as to all other matters
shall be construed and enforced in accordance with the internal laws of the
Commonwealth of Massachusetts (other than the conflict of laws rules), and shall
bind and inure to the benefit of the parties hereto and their respective
successors and assigns. Whether or not any express assignment has been made in
this Agreement, provisions of this Agreement that are for the Investors' benefit
as the holder of any Investor Securities are also for the benefit of, and
enforceable by, all subsequent holders of Investor Securities.
[Remainder of Page Intentionally Left Blank]
Unveil Technologies, Inc.
Series A Convertible Preferred Stock Purchase Agreement Signature Page
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IN WITNESS WHEREOF, the undersigned have executed this Agreement under
seal as of the date first above written.
UNVEIL TECHNOLOGIES, INC.
By /s/ Xxxxx Xxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxx
Title: President
VOICENET, INC.
By /s/ Xxxx Xxxxxx
--------------------------------
Name: Xxxx Xxxxxx
Title: Chief Executive Officer
