EXHIBIT 2.1
FINAL
STOCK PURCHASE AGREEMENT
BETWEEN
PRINCETON eCOM CORPORATION,
and
BILLING CONCEPTS CORP.
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Dated: February 21, 2000
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Table of Contents
Page
ARTICLE I DEFINITIONS...........................................................................................1
1.1 Definitions...........................................................................................1
ARTICLE II PURCHASE AND SALE OF PREFERRE.........................................................................7
2.1 Purchase and Sale of Preferred Stock..................................................................7
2.2 Certificates of Designations..........................................................................8
2.3 Closing...............................................................................................8
ARTICLE III REPRESENTATIONS AND WARRANTIES OF THE COMPANY.........................................................8
3.1 Corporate Existence and Power.........................................................................8
3.2 Authorization; No Contravention.......................................................................8
3.3 Governmental Authorization; Third Party Consents......................................................9
3.4 Binding Effect........................................................................................9
3.5 Litigation............................................................................................9
3.6 Compliance with Laws..................................................................................9
3.7 Capitalization.......................................................................................10
3.8 No Default or Breach; Contractual Obligations........................................................11
3.9 Title to Properties..................................................................................11
3.10 FIRPTA...............................................................................................12
3.11 Financial Statements.................................................................................12
3.12 Taxes................................................................................................12
3.13 No Material Adverse Change; Ordinary Course of Business..............................................13
3.14 Investment Company...................................................................................13
3.15 Private Offering.....................................................................................13
3.16 Labor Relations......................................................................................13
3.17 Employee Benefit Plans...............................................................................13
3.18 Title to Assets......................................................................................14
3.19 Liabilities..........................................................................................14
3.20 Intellectual Property................................................................................14
3.21 Network Redundancy and Computer Back-up..............................................................16
3.22 Security of Customer Information.....................................................................16
3.23 Potential Conflicts of Interest......................................................................17
3.24 Trade Relations......................................................................................17
3.25 Outstanding Borrowing................................................................................17
3.26 Insurance............................................................................................17
3.27 Environmental Matters................................................................................17
3.28 Broker's, Finder's or Similar Fees...................................................................18
3.29 Disclosure...........................................................................................18
3.30 SEC Documents........................................................................................18
3.31 Stock Option Plans...................................................................................18
3.32 Year 2000 Compliance.................................................................................18
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE PURCHASER......................................................19
4.1 Existence and Power..................................................................................19
4.2 Authorization; No Contravention......................................................................19
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4.3 Governmental Authorization; Third Party Consents.....................................................19
4.4 Binding Effect.......................................................................................19
4.5 Purchase for Own Account.............................................................................20
4.6 Restricted Securities................................................................................20
4.7 Broker's, Finder's or Similar Fees...................................................................21
4.8 Accredited Investor..................................................................................21
ARTICLE V CONDITIONS TO THE OBLIGATION OF THE PURCHASER TO CLOSE...............................................21
5.1 Secretary's Certificate..............................................................................21
5.2 Representations and Warranties True; Performance of Obligations Filing of Series A and Series B
Certificate of Designations..........................................................................22
5.3 Regulatory Approvals.................................................................................22
5.4 Filing of Series A and Series B Certificate of Designations..........................................22
5.5 Purchased Shares.....................................................................................22
5.6 Termination of Rights of Purchaser...................................................................23
5.7 Stockholders Agreement...............................................................................23
5.8 Registration Rights Agreement........................................................................23
5.9 Selling Stockholders Stock Purchase Agreement........................................................23
5.10 Management Assurances................................................................................23
5.11 Xxxxxxx Employment...................................................................................23
5.12 Opintion of Counsel..................................................................................23
5.13 Xxxxxxxxxxxx Employment Agreement....................................................................23
5.14 Resignation and Appointment of Corporate Secretary...................................................23
ARTICLE VI CONDITIONS TO THE OBLIGATION OF THE COMPANY TO CLOSE.................................................23
6.1 Payment of Purchase Price............................................................................23
6.2 Stockholders Agreement...............................................................................24
6.3 Registration Rights Agreement........................................................................24
ARTICLE VII INDEMNIFICATION......................................................................................24
7.1 Indemnification......................................................................................24
7.2 Notification.........................................................................................25
ARTICLE VIII AFFIRMATIVE COVENANTS...............................................................................26
8.1 Preservation of Existence............................................................................27
8.2 Financial Statements and Other Information...........................................................27
8.3 Reservation of Common Stock..........................................................................28
8.4 Insurance............................................................................................28
8.5 Books and Records....................................................................................28
8.6 Back-ups of Computer Software........................................................................28
8.7 Inspection...........................................................................................28
8.8 Employment Agreements................................................................................29
ARTICLE IX MISCELLANEOUS........................................................................................29
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9.1 Survival of Representations and Warranties...........................................................29
9.2 Notices..............................................................................................30
9.3 Successors and Assigns; Third Party Beneficiaries....................................................30
9.4 Amendment and Waiver.................................................................................30
9.5 Counterparts.........................................................................................30
9.6 Headings.............................................................................................31
9.7 GOVERNING LAW........................................................................................31
9.8 Severability.........................................................................................31
9.9 Rules of Construction................................................................................31
9.10 Entire Agreement.....................................................................................31
9.11 Fees.................................................................................................31
9.12 Publicity; Confidentiality...........................................................................31
9.13 Further Assurances...................................................................................32
9.14 Specific Performance.................................................................................32
EXHIBITS
A Form of By-laws
B Form of Series A Certificate of Designations
C Form of Series B Certificate of Designations
D Form of Certificate of Incorporation
E Form of Registration Rights Agreement
F Form of Stockholders Agreement
F-1 Form of Xxxxxxxxxxxx Employment Agreement
G Form of Xxxx & Xxxxxxxxx Opinion
H Form of Selling Stockholders Stock Purchase Agreement
(Xxxxxxxxxxxx)
I. Form of Selling Stockholder Stock Purchase Agreement (Xxxx)
SCHEDULES
2.1 Purchased Shares and Purchase Price
3.3 Authorizations and Consents
3.5 Litigation
3.7(a) List of Equity Holders
3.7(b) List of Subsidiaries and their Equity Holders
3.8 Contractual Obligations
3.17 Employee Benefit Plans
3.18 Liens on Assets
3.20(a)(ii) Intellectual Property Owned by the Company and Filings and
Applications Therefor
3.20(a)(iii) Intellectual Property Licenses, Sublicenses, Distributor
Agreements and Other Agreements
3.20(a)(iv) Infringements by the Company of Intellectual Property of
Others
3.20(a)(v) Intellectual Property Litigation
3.20(b) Infringements of Intellectual Property of the Company
3.20(d) Licenses or Other Agreements Requiring Material Royalty
Payments
3.21 Network Redundancy and Computer Back-up
3.24 Potential Conflict of Interest
3.26 Outstanding Borrowing
3.27 Insurance
9.2 Notices
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STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated February 21, 2000 (this "Agreement"),
between Princeton eCom Corporation, a Delaware corporation (the "Company"), and
Billing Concepts Corp., a Delaware corporation ("Billing Concepts" or the
"Purchaser").
WHEREAS, upon the terms and conditions set forth in this Agreement, the
Company proposes to issue and sell to the Purchaser the number of shares, par
value $.01 per share, of Series A Convertible Preferred Stock of the Company
(the "Series A Preferred Stock") and the number of shares, par value $.01 per
share, of Series B Convertible Preferred Stock of the Company (the "Series B
Preferred Stock" and together with the Series A Preferred Stock, the "Preferred
Stock") set forth on Schedule 2.1, for the aggregate purchase price set forth on
Schedule 2.1;
WHEREAS, each share of Preferred Stock is convertible (subject to
adjustment) into one share, par value $.01 per share, of common stock of the
Company (the "Common Stock").
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth herein and for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Agreement, and unless the context
requires a different meaning, the following terms have the meanings indicated:
"Affiliate" shall mean any Person who is an "affiliate," as
defined in Rule 12b-2 of the General Rules and Regulations under the
Exchange Act, of another Person.
"Agreement" means this Agreement as the same may be amended,
supplemented or modified in accordance with the terms hereof.
"Assets" has the meaning set forth in Section 3.18 of this
Agreement.
"Audited Financial Statements" has the meaning set forth in
Section 3.11 of this Agreement.
"Board of Directors" means the Board of Directors of the
Company.
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"Business Day" means any day other than a Saturday, Sunday or
other day on which commercial banks in the State of New York are
authorized or required by law or executive order to close.
"By-laws" means the by-laws of the Company in effect on the
Closing Date substantially in the form attached hereto as Exhibit A, as
the same may be amended from time to time in accordance with the terms
of the Stockholders Agreement.
"Certificate of Incorporation" means the Certificate of
Incorporation of the Company substantially in the form attached hereto
as Exhibit D, as the same may be amended from time to time in
accordance with the terms of the Stockholders Agreement.
"Claims" has the meaning set forth in Section 3.5 of this
Agreement.
"Closing" has the meaning set forth in Section 2.3 of this
Agreement.
"Closing Date" has the meaning set forth in Section 2.3 of
this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, or
any successor statute thereto.
"Commission" means the United States Securities and Exchange
Commission or any similar agency then having jurisdiction to enforce
the Securities Act.
"Common Stock" has the meaning set forth in the recitals to
this Agreement.
"Company" has the meaning set forth in the preamble to this
Agreement.
"Company Indemnified Party" has the meaning set forth in
Section 7.1(b) of this Agreement.
"Company Loss" has the meaning set forty in Section 7.1(b) of
this Agreement.
"Condition of the Company" means the assets, business,
operations or financial condition of the Company and its Subsidiaries,
taken as a whole.
"Contingent Obligation" means, as applied to any Person, any
direct or indirect liability of that Person with respect to any
Indebtedness, lease, dividend, guaranty, letter of credit or other
obligation, contractual or otherwise (the "primary obligation") of
another Person (the "primary obligor"), whether or not
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contingent, (a) to purchase, repurchase or otherwise acquire such
primary obligations or any property constituting direct or indirect
security therefor, (b) to advance or provide funds (i) for the payment
or discharge of any such primary obligation, or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency or any balance sheet item, level
of income or financial condition of the primary obligor, (c) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation, or (d)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss or failure or inability to perform in respect
thereof. The amount of any Contingent Obligation shall be deemed to be
an amount equal to the stated or determinable amount of the primary
obligation in respect of which such Contingent Obligation is made or,
if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof.
"Contractual Obligations" means, as to any Person, any
provision of (i) any security issued by such Person or (ii) any
agreement, undertaking, contract, indenture, mortgage, deed of trust or
other instrument to which such Person is a party or by which it or any
of its property is bound.
"Copyrights" means any foreign or United States copyright
registrations and applications for registration thereof, and any
non-registered copyrights.
"Environmental Laws" means federal, state, local and foreign
laws, principles of common laws, civil laws, regulations, and codes, as
well as orders, decrees, judgments or injunctions, issued, promulgated,
approved or entered thereunder relating to pollution, protection of the
environment or public health and safety.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission thereunder.
"Financial Statements" has the meaning set forth in Section
3.11 of this Agreement.
"GAAP" means United States generally accepted accounting
principles in effect from time to time.
"Governmental Authority" means the government of any nation,
state, city, locality or other political subdivision thereof, and any
governmental or
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quasi-governmental entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government.
"Indebtedness" means, as to any Person, (a) all obligations of
such Person for borrowed money (including, without limitation,
reimbursement and all other obligations with respect to surety bonds,
letters of credit and bankers' acceptances, whether or not matured),
(b) all obligations of such Person evidenced by notes, bonds,
debentures or similar instruments, (c) all obligations of such Person
to pay the deferred purchase price of property or services, except
trade accounts payable and accrued commercial or trade liabilities
arising in the ordinary course of business, (d) all interest rate and
currency swaps, caps, collars and similar agreements or hedging devices
under which payments are obligated to be made by such Person, whether
periodically or upon the happening of a contingency, (e) all
indebtedness created or arising under any conditional sale or other
title retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender
under such agreement in the event of default are limited to
repossession or sale of such property), (f) all obligations of such
Person under leases which have been or should be, in accordance with
GAAP, recorded as capital leases, (g) all indebtedness secured by any
Lien (other than Liens in favor of lessors under leases other than
leases included in clause (f)) on any property or asset owned or held
by that Person regardless of whether the indebtedness secured thereby
shall have been assumed by that Person or is non-recourse to the credit
of that Person, and (h) any Contingent Obligation of such Person.
"Indemnified Party" has the meaning set forth in Section 7.2
of this Agreement.
"Indemnifying Party" has the meaning set forth in Section 7.2
of this Agreement.
"Intellectual Property" has the meaning set forth in Section
3.20 of this Agreement.
"Internet Assets" means any Internet domain names and other
computer user identifiers and any rights in and to sites on the
worldwide web, including rights in and to any text, graphics, audio and
video files and html or other code incorporated in such sites.
"Liabilities" has the meaning set forth in Section 3.19 of
this Agreement.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, encumbrance, lien (statutory or other) or
other security interest.
"Losses" has the meaning set forth in Section 7.1 of this
Agreement.
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"Orders" has the meaning set forth in Section 3.2 of this
Agreement.
"Patents" means any foreign or United States patents and
patent applications, including any divisions, continuations,
continuations-in-part, substitutions or reissues thereof, whether or
not patents are issued on such applications and whether or not such
applications are modified, withdrawn or resubmitted.
"Permits" has the meaning set forth in Section 3.6 of this
Agreement.
"Person" means any individual, firm, corporation, partnership,
trust, incorporated or unincorporated association, joint venture, joint
stock company, limited liability company, Governmental Authority or
other entity of any kind, and shall include any successor (by merger or
otherwise) of such entity.
"Plans" has the meaning set forth in Section 3.17 of this
Agreement.
"Preferred Stock" has the meaning set forth in the recitals to
this Agreement.
"Purchased Shares" has the meaning set forth in Section 2.1 of
this Agreement.
"Purchaser" has the meaning set forth in the preamble to this
Agreement.
"Purchaser Indemnified Party" has be meaning set forth in
Section 7.1(a) of this Agreement.
"Purchaser Losses" has the meaning set forth in Section 7.1(a)
of this Agreement.
"Registration Rights Agreement" means the Registration Rights
Agreement substantially in the form attached hereto as Exhibit E.
"Requirements of Law" means, as to any Person, any law,
statute, treaty, rule, regulation, ruling, position, interpretation or
interpretive position, right, privilege, qualification, license or
franchise or determination of an arbitrator or a court or other
Governmental Authority or stock exchange, in each case applicable or
binding upon such Person or any of its property or to which such Person
or any of its property is subject or pertaining to any or all of the
transactions contemplated or referred to herein.
"SEC Documents" means all registration statements and other
documents filed by the Company under the Securities Act or the Exchange
Act and all
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amendments and supplements thereto filed by the Company with the
Commission since December 31, 1998.
"Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission thereunder.
"Selling Stockholder Stock Purchase Agreements" means the
Selling Stockholder Stock Purchase Agreement dated as of the Closing
Date between the Purchaser and Xx. Xxxxxx X. Xxxxxxxxxxxx pursuant to
which the Purchaser will purchase from Xx. Xxxxxxxxxxxx 1 million
shares of Common Stock of the Company for an aggregate purchase price
of $6.5 million in the form attached hereto as Exhibit H and the
Selling Stockholder Stock Purchase Agreement dated as of the Closing
Date between Xxxxxx X. Xxxxxx, Xx. and Mr. C. Xxxxxxx Xxxx pursuant to
which Xxxxxx X. Xxxxxx, Xx. will purchase from Xx. Xxxx 100,000 shares
of Common Stock of the Company for an aggregate purchase price of
$650,000 in the form attached hereto as Exhibit I.
"Series A Certificate of Designations" means the Series A
Certificate of Designations with respect to the Series A Preferred
Stock adopted by the Board of Directors and duly filed with the
Secretary of State of the State of Delaware on or before the Closing
Date substantially in the form attached hereto as Exhibit B.
"Series A Preferred Stock" has the meaning set forth in the
recitals to this Agreement.
"Series B Certificate of Designations" means the Series B
Certificate of Designations with respect to the Series B Preferred
Stock adopted by the Board of Directors and duly filed with the
Secretary of State of the State of Delaware on or before the Closing
Date substantially in the form attached hereto as Exhibit C.
"Series B Preferred Stock" has the meaning set forth in the
recitals to this Agreement.
"Software" means any computer software programs, source code,
object code, data and documentation, including, without limitation, any
computer software programs that incorporate and run the Company's
pricing models, formulae and algorithms.
"Stock Equivalents" means any security or obligation which is
by its terms convertible into or exchangeable for shares of common
stock or other capital stock or securities of the Company, and any
option, warrant or other subscription or purchase right with respect to
common stock or such other capital stock or securities.
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"Stock Option Plans" means the Company's 1996 Stock Option
Plan and the Company's 1998 Non-Employee Director Plan.
"Stockholders Agreement" means the Stockholders Agreement
substantially in the form attached hereto as Exhibit F.
"Subsidiaries" means, as of the relevant date of
determination, with respect to any Person, a corporation or other
Person of which 50% or more of the voting power of the outstanding
voting equity securities or 50% or more of the outstanding economic
equity interest is held, directly or indirectly, by such Person. Unless
otherwise qualified, or the context otherwise requires, all references
to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer to
a Subsidiary or Subsidiaries of the Company.
"Taxes" has the meaning set forth in Section 3.12 of this
Agreement.
"Trade Secrets" means any trade secrets, research records,
processes, procedures, manufacturing formulae, technical know-how,
technology, blue prints, designs, plans, inventions (whether patentable
and whether reduced to practice), invention disclosures and
improvements thereto.
"Trademarks" means any foreign or United States trademarks,
service marks, trade dress, trade names, brand names, designs and
logos, corporate names, product or service identifiers, whether
registered or unregistered, and all registrations and applications for
registration thereof.
"Transaction Documents" means, collectively, this Agreement,
the Stockholders Agreement, the Registration Rights Agreement, the
Selling Stockholder Stock Purchase Agreements and the employment
agreement between the Company and Xxxxxxxxxxxx referred to in Section
5.9 of this Agreement.
"Unaudited Financial Statements" has the meaning set forth in
Section 3.11 of this Agreement.
ARTICLE II
PURCHASE AND SALE OF PREFERRED STOCK
2.1 Purchase and Sale of Preferred Stock. Subject to the terms and
conditions herein set forth, the Company agrees to issue and sell to the
Purchaser, and the Purchaser agrees to purchase from the Company, on the Closing
Date (as hereinafter defined) the number of shares of Preferred Stock set forth
opposite the Purchaser's name
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on Schedule 2.1 hereto, for the purchase price set forth opposite the
Purchaser's name on Schedule 2.1 hereto (all of the shares of Preferred Stock
being purchased pursuant hereto being referred to herein as the "Purchased
Shares").
2.2 Certificates of Designations. The Series A Preferred Stock shall
have the preferences and rights set forth in the Series A Certificate of
Designations. The Series B Preferred Stock shall have the preferences and rights
set forth in the Series B Certificate of Designations.
2.3 Closing. The closing of the sale and purchase of the Purchased
Shares (the "Closing") shall take place at the offices of Xxxxxx, Xxxx &
Xxxxxxxx LLP Washington, D.C., at 10:00 a.m., local time, on the date hereof, or
at such other time, place and date that the Company and the Purchaser may agree
in writing (the "Closing Date"). On the Closing Date, the Company shall deliver
to the Purchaser a certificate or certificates in definitive form and registered
in the name of the Purchaser, representing its Purchased Shares against delivery
by the Purchaser to the Company of the aggregate purchase price therefor by wire
transfer of immediately available funds.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the Purchaser as follows:
3.1 Corporate Existence and Power. The Company (a) is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation; (b) has all requisite power and authority to
own and operate its property, to lease the property it operates as lessee and to
conduct the business in which it is currently, or is proposed to be, engaged;
(c) is duly qualified as a foreign corporation, licensed and in good standing
under the laws of each jurisdiction in which its ownership, lease or operation
of property or the conduct of its business requires such qualification, except
where the failure to so qualify would not have a material adverse effect on the
Condition of the Company; and (d) has the corporate power and authority to
execute, deliver and perform its obligations under this Agreement and each of
the other Transaction Documents. No jurisdiction, other than those referred to
in clause (c) above, has claimed, in writing or otherwise, that the Company is
required to qualify as a foreign corporation or other entity therein, and the
Company does not file any franchise, income or other tax returns in any other
jurisdiction based upon the ownership or use of property therein or the
derivation of income therefrom. The Company does not own or lease property in
any jurisdiction other than its jurisdiction of incorporation and the
jurisdictions referred to in clause (c) above.
3.2 Authorization; No Contravention. The execution, delivery and
performance by the Company of this Agreement and each of the other Transaction
Documents and the transactions contemplated hereby and thereby (a) have been
duly
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authorized by all necessary corporate action of the Company; (b) do not
contravene the terms of the Certificate of Incorporation or the By-laws; (c) do
not violate, conflict with or result in any breach, default or contravention of
(with due notice or lapse of time or both), or the creation of any Lien under,
any material Contractual Obligation of the Company or, taking into account
reliance upon Article IV hereof, any Requirement of Law, to the knowledge of the
Company, applicable to the Company; and (d) do not violate, to the knowledge of
the Company, any judgment, injunction, writ, award, decree or order of any
nature (collectively, "Orders") of any Governmental Authority against, or
binding upon, the Company. Neither the issuance, sale or delivery of the
Purchased Shares nor the issuance and delivery of the shares of Common Stock
issuable upon conversion of the Purchased Shares is subject to any preemptive
right to any stockholder of the Company or any right of first refusal or other
right in favor of any Person, which has not been waived.
3.3 Governmental Authorization; Third Party Consents. Except as set
forth in Schedule 3.3 and excluding application of any state securities or blue
sky laws, no approval, consent, compliance, exemption, authorization or other
action by, or notice to, or filing with, any Governmental Authority or any other
Person, and no lapse of a waiting period under a Requirement of Law, is
necessary or required in connection with the execution, delivery or performance
(including, without limitation, the sale, issuance and delivery of the Purchased
Shares) by, or enforcement against, the Company of this Agreement and the other
Transaction Documents or the transactions contemplated hereby and thereby.
3.4 Binding Effect. This Agreement and each of the other Transaction
Documents have been duly executed and delivered by the Company, and constitute
the legal, valid and binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity relating to enforceability
(regardless of whether considered in a proceeding at law or in equity).
3.5 Litigation. Except as set forth on Schedule 3.5, there are no
actions, suits, proceedings, claims, complaints, disputes, arbitrations or
investigations (collectively, "Claims") pending or, to the knowledge of the
Company, threatened, at law, in equity, in arbitration or before any
Governmental Authority against the Company. To the knowledge of the Company, no
Order has been issued by any court or other Governmental Authority against the
Company purporting to enjoin or restrain the execution, delivery or performance
of this Agreement or any of the other Transaction Documents.
3.6 Compliance with Laws. Except as set forth in Schedule 3.6,
(a) The Company is in compliance with (i) all Requirements of
Law, to the knowledge of the Company, and (ii) all Orders issued by any
court or
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Governmental Authority against the Company, except in each case where
such non-compliance would have an insubstantial effect on the Condition
of the Company. To the Company's knowledge, there is no existing or
proposed Requirement of Law which could reasonably be expected to
prohibit or restrict the Company from, or otherwise materially
adversely affect the Company in conducting its business in any
jurisdiction in which it now conducts or proposes to conduct its
business.
(b) (i) The Company has all licenses, permits and approvals of
any Governmental Authority (collectively, "Permits") that are necessary
for the conduct of the business of the Company; (ii) such Permits are
in full force and effect; and (iii) no violations are or have been
recorded in respect of any Permit.
(c) No material expenditure is currently required by the
Company to comply with any existing Requirement of Law or Order.
3.7 Capitalization.
(a) On the Closing Date, after giving effect to the
transactions contemplated by this Agreement, the authorized capital
stock of the Company shall consist of (i) 100,000,000 shares of Common
Stock, of which 11,424,002 shares are issued and outstanding, and (ii)
4,241,651 shares of Preferred Stock, all of which shares are issued and
outstanding. Schedule 3.7(a) sets forth, as of the Closing Date, a true
and complete list of (x) the stockholders of the Company (including any
trust or escrow agent arrangement created in connection with any
employee stock option plan) and, opposite the name of each stockholder,
the amount of all outstanding capital stock owned by such stockholder
and (y) the holders of Stock Equivalents and, opposite the name of each
such holder, the amount of all Stock Equivalents owned by such holder.
As of the date of this Agreement, the aggregate number of options to
purchase shares of Common Stock which may be issued under the Stock
Option Plan is 6,800,000, of which 3,449,550 have been granted. The
Company has reserved an aggregate of 4,241,651 shares of Common Stock
for issuance upon conversion of the Purchased Shares. Except as set
forth on Schedule 3.7(a), there are no options, warrants, conversion
privileges, subscription or purchase rights or other rights currently
outstanding to purchase or otherwise acquire (i) any authorized but
unissued, unauthorized or treasury shares of the Company's capital
stock, (ii) any Stock Equivalents or (iii) other securities of the
Company and there are no commitments, contracts, agreements,
arrangements or understandings by the Company to issue any shares of
the Company's capital stock or any Stock Equivalents or other
securities of the Company. The Purchased Shares are duly authorized,
and when issued and sold to the Purchaser after payment therefor, will
be validly issued, fully paid and non-assessable, will be issued in
compliance with the registration and qualification requirements of all
applicable federal, state and foreign securities laws and will be free
and clear of all Liens
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(other than those imposed by the Stockholders Agreement). The shares of
Common Stock issuable upon conversion of the Purchased Shares have been
duly reserved for issuance upon conversion of the Preferred Stock and,
when issued in compliance with the provisions of the Certificate of
Designations and the General Corporation Law of the State of Delaware,
will be validly issued, fully paid and non-assessable and not subject
to any preemptive rights or similar rights that have not been satisfied
and will be free and clear of all Liens (other than those imposed by
the Stockholders Agreement). All of the issued and outstanding shares
of Common Stock have been duly authorized and validly issued, are fully
paid for and non-assessable, and were issued in compliance with the
registration and qualification requirements of all applicable federal
and state securities laws.
(b) Except as set forth in Schedule 3.7(b), the Company does
not directly or indirectly own any Subsidiary or own or have any
investment in any of the capital stock of, or any other proprietary
interest in, any Person.
(c) The Purchased Shares to be purchased by the Purchaser
hereunder represent, in the aggregate, on the Closing Date, not less
than 22.19% of the outstanding shares of Common Stock on a fully
diluted basis assuming the grant of all options that have been granted
under the Stock Option Plans and the exercise thereof and the
conversion, exercise or exchange of any outstanding securities into
shares of Common Stock, including, without limitation, all of the
Purchased Shares.
3.8 No Default or Breach; Contractual Obligations. The Company has not
received notice of a default and is not in default under, or with respect to,
any Contractual Obligation listed on Schedule 3.8, nor does any condition exist
that with notice or lapse of time or both would constitute a default thereunder
except as disclosed on Schedule 3.6. Schedule 3.8 lists all of the Contractual
Obligations to which the Company is a party, whether written or oral, (i) under
which the Company received in excess of $100,000 in fiscal year 1999 or (ii)
which are otherwise material to the Condition of the Company. Except as set
forth in Schedule 3.8, all of such Contractual Obligations are valid,
subsisting, in full force and effect and binding upon the Company and, to the
knowledge of the Company, the other parties thereto, and the Company has paid in
full or accrued all amounts due thereunder and has satisfied in full or provided
for all of its liabilities and obligations heretofore due thereunder. To the
knowledge of the Company, no other party to any such Contractual Obligation is
in default thereunder, nor does any condition exist that with notice or lapse of
time or both would constitute a default by such other party thereunder.
3.9 Title to Properties. The Company holds interests as lessee under
leases in full force and effect in, all real property used in connection with
its business or otherwise leased by it. The Company does not own, or have any
marketable title in fee simple to, any real property.
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3.10 FIRPTA. The Company is not a "foreign person" within the meaning
of Section 1445 of the Code.
3.11 Financial Statements. The Company has delivered to the Purchaser
the audited financial statements of the Company (balance sheet and statements of
operations, cash flow and stockholders' equity, together with the notes thereto)
for the fiscal year ended December 31, 1998 which contains the unqualified
report of Xxxxxx Xxxxxxxx LLP (the "Audited Financial Statements") and the
unaudited financial statements of the Company (balance sheet and statements of
operations) for the fiscal periods ended March 31, 1999, June 30, 1999,
September 30, 1999 and December 31, 1999 (the "Unaudited Financial Statements"
and, together with the Audited Financial Statements, the "Financial
Statements"). The Financial Statements are complete and correct in all material
respects and have been prepared in accordance with GAAP applied on a consistent
basis throughout the periods indicated and with each other, except that the
Unaudited Financial Statements do not contain footnotes or normal year-end
adjustments. The Financial Statements fairly present the financial condition,
operating results and cash flows of the Company as of the respective dates and
for the respective periods indicated in accordance with GAAP, except that the
Unaudited Financial Statements do not contain footnotes or normal year-end
adjustments.
3.12 Taxes. (a) Except as set forth in Schedule 3.12, the Company has
paid or made adequate reserves for all federal, state, county, local, foreign
and other taxes, including, without limitation, income taxes, estimated taxes,
excise taxes, sales taxes, use taxes, gross receipts taxes, franchise taxes,
employment and payroll related taxes, property taxes and import duties, whether
or not measured in whole or in part by net income (hereinafter, "Taxes" or,
individually, a "Tax") which have come due and are required to be paid by or
reserved against through the date hereof, and all deficiencies or other
additions to Tax, interest and penalties owed by it in connection with any such
Taxes, other than Taxes being disputed by the Company in good faith for which
adequate reserves have been made in accordance with GAAP; (b) the Company has
timely filed or caused to be filed all returns for Taxes that it is required to
file on and through the date hereof (including all applicable extensions), and
all such Tax returns are accurate and complete in all material respects; (c)
with respect to all Tax returns of the Company, (i) there is no unassessed Tax
deficiency proposed or, to the knowledge of the Company, threatened against the
Company and (ii) no audit is in progress with respect to any return for Taxes,
no extension of time is in force with respect to any date on which any return
for Taxes was or is to be filed and no waiver or agreement is in force for the
extension of time for the assessment or payment of any Tax; (d) all provisions
for Tax liabilities of the Company with respect to the Financial Statements have
been made in accordance with GAAP consistently applied, and all liabilities for
Taxes of the Company attributable to periods prior to or ending on the Closing
Date have been adequately provided for on the Financial Statements; and (e)
there are no Liens for Taxes on the assets of the Company.
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3.13 No Material Adverse Change; Ordinary Course of Business. Since
December 31, 1999, (a) except as set forth on Schedule 3.13(a), there has not
been any material adverse change, nor is any such change reasonably expected, in
the Condition of the Company, (b) except as set forth on Schedule 3.13(b), the
Company has not engaged in any transaction material to the Condition of the
Company outside the ordinary course of business, including, without limitation,
declaring or paying any dividend or declaring or making any distribution to its
stockholders except out of the earnings or surplus of the Company, (c) the
Company has not increased the compensation of any of its officers or the rate of
pay of any of its employees, except as part of regular compensation increases in
the ordinary course of business, (d) the Company has not incurred any
Indebtedness, other than in the ordinary course of business, (e) the Company has
not created or assumed any Lien on a material asset of the Company, (f) the
Company has not entered into any Contractual Obligation other than in the
ordinary course of business and (g) there has not occurred a material change in
the Company's accounting principles or practices except as required by reason of
change in GAAP.
3.14 Investment Company. The Company is not and is not controlled by or
affiliated with an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
3.15 Private Offering. No form of general solicitation or general
advertising was used by the Company or its representatives in connection with
the offer or sale of the Purchased Shares. Assuming reliance upon Article IV
hereof, no registration of the Purchased Shares, pursuant to the provisions of
the Securities Act or any state securities or "blue sky" laws, will be required
by the offer, sale or issuance of the Purchased Shares.
3.16 Labor Relations. (a) The Company is not engaged in any unfair
labor practice; (b) there is (i) no grievance or arbitration proceeding arising
out of or under collective bargaining agreements pending or, to the knowledge of
the Company, threatened against the Company, and (ii) no strike, labor dispute,
slowdown or stoppage pending or, to the knowledge of the Company, threatened
against the Company; (c) the Company is not a party to any collective bargaining
agreement or contract; (d) to the knowledge of the Company, there is no union
representation question existing with respect to the employees of the Company;
and (e) to the knowledge of the Company, no union organizing activities are
taking place.
3.17 Employee Benefit Plans. The Company does not have any actual or
contingent, direct or indirect, liability in respect of any employee plan or
arrangement, including any plan subject to ERISA, other than to make
contributions under or pay benefits pursuant to the plans listed on Schedule
3.17 (collectively, the "Plans"). All of the Plans are in compliance with all
applicable Requirements of Law. No Plan is subject to Title IV of ERISA, or is
otherwise a Defined Benefit Plan, or is a multiple employer plan (within the
meaning of Section 413(c) of the Code), or provides for
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post-retirement welfare benefits or a "parachute payment" (within the meaning of
Section 280G(b) of the Code).
3.18 Title to Assets. The Company owns and has good, valid, and
marketable title to all of its properties and assets used in its business and
reflected as owned on the Financial Statements or so described in any
Schedule hereto (collectively, the "Assets"), in each case free and clear of
all Liens, except for Liens specifically described on the notes to the
Financial Statements[, or as set forth on Schedule 3.18.]
3.19 Liabilities. The Company does not have any direct or indirect
obligation or liability (the "Liabilities") other than (a) Liabilities fully and
adequately reflected or reserved against on the Financial Statements, (b)
Liabilities incurred since December 31, 1999 in the ordinary course of business
and (c) Liabilities not required to be set forth in the Financial Statements.
The Company has no knowledge of any existing or reasonably foreseeable
circumstance, condition, event or arrangement that could reasonably be expected
to give rise hereafter to any Liabilities of the Company except in the ordinary
course of business.
3.20 Intellectual Property.
(a) (i) The Company is the owner of all, or has the license or
right to use, sell and license all of, the Copyrights, Patents, Trade
Secrets, Trademarks, Internet Assets, Software and other proprietary
rights (collectively, "Intellectual Property") that are used in
connection with its business as presently conducted or contemplated in
its business plan, free and clear of all Liens.
(ii) Schedule 3.20(a)(ii) sets forth all of the
Intellectual Property owned by, and filings and applications
for any Intellectual Property filed by, the Company. Except as
set forth in Schedule 3.20(a)(ii), none of the Intellectual
Property listed on Schedule 3.20(a)(ii) is subject to any
outstanding Order, and no action, suit, proceeding, hearing,
investigation, charge, complaint, claim or demand is pending
or, to the knowledge of the Company, threatened, which
challenges the validity, enforceability, use or ownership by
the Company of the item.
(iii) Schedule 3.20(a)(iii) sets forth all
Intellectual Property licenses, sublicenses, distributor
agreements and other agreements under which the Company is
either a licensor, licensee or distributor, except such
licenses, sublicenses and other agreements relating to
off-the-shelf software, which is commercially available on a
retail basis and used solely on the computers of the Company.
The Company has substantially performed all obligations
imposed upon it thereunder, and is not, nor to the knowledge
of the Company is any other party thereto, in breach of or
default thereunder in any respect, nor is there any event
which with
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notice or lapse of time or both would constitute a default
thereunder. Except as set forth in Schedule 3.20(a)(iii), all
of the Intellectual Property licenses listed on Schedule
3.20(a)(iii) are valid, enforceable and in full force and
effect, and will continue to be so on identical terms
immediately following the Closing except as enforceability may
be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent conveyance or transfer, moratorium
or similar laws affecting the enforcement of creditors' rights
generally and by general principles of equity relating to
enforceability (regardless of whether considered in a
proceeding at law or in equity).
(iv) Other than as set forth on Schedule 3.20(a)(iv),
none of the Intellectual Property currently sold or licensed
by the Company to any Person or, to the knowledge of the
Company, used by or licensed to the Company from any Person
infringes upon or otherwise violates any Intellectual Property
rights of others.
(v) Except as set forth on Schedule 3.20(a)(v), no
litigation is pending and no Claim has been made against the
Company or, to the knowledge of the Company, is threatened,
contesting the right of the Company to sell or license to any
Person or use the Intellectual Property presently sold or
licensed to such Person or used by the Company.
(b) Except as set forth on Schedule 3.20(b), to the knowledge
of the Company, no Person is infringing upon or otherwise violating the
Intellectual Property rights of the Company.
(c) No former employer of any employee of the Company, and no
current or former client of any consultant of the Company, has made a
claim against the Company or, to the knowledge of the Company, against
any other Person, that such employee or such consultant is utilizing
Intellectual Property of such former employer or client.
(d) Except as set forth on Schedule 3.20(d), the Company is
not a party to or bound by any license or other agreement requiring the
payment by the Company of any royalty payment, excluding such
agreements relating to software licensed for use solely on the
computers of the Company.
(e) To the knowledge of the Company, no employee of the
Company is in violation of any Requirement of Law applicable to such
employee, or any term of any employment agreement, patent or invention
disclosure agreement or other contract or agreement relating to the
relationship of such employee with the Company or any prior employer.
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(f) To the knowledge of the Company, none of the Trade
Secrets, wherever located, the value of which is contingent upon
maintenance of confidentiality thereof, has been disclosed to any
Person other than employees, representatives and agents of the Company,
except as required pursuant to the filing of a patent application by
the Company, or pursuant to binding confidentiality and nondisclosure
agreements.
(g) It is not necessary for the Company's business (as
currently conducted or as proposed to be conducted, as set forth in the
business plan previously delivered to the Purchaser) to use any
Intellectual Property owned by any director, officer, employee or
consultant of the Company (or persons the Company presently intends to
hire). To the Company's knowledge, at no time during the conception or
reduction to practice of any of the Company's Intellectual Property was
any developer, inventor or other contributor to such Intellectual
Property operating under any grants from any Governmental Authority or
subject to any employment agreement, invention assignment,
nondisclosure agreement or other Contractual Obligation with any Person
that could adversely affect the Company's rights to its Intellectual
Property.
(h) All present employees of the Company who have received
stock option agreements for stock option grants have executed and
delivered proprietary invention agreements with the Company, and are
obligated under the terms thereof to assign all inventions made by them
during the course of employment to the Company.
3.21 Network Redundancy and Computer Back-up. Except as set forth
on Schedule 3.21,
(a) the server hardware and supporting equipment (including
communications equipment, terminals and hook-ups that interface with
third party computer systems) used in the Company's services network
provide redundancy and meet industry standards relating to high
availability; and
(b) the Company has made back-ups of all material computer
Software and databases utilized by it and maintains such Software and
databases at a secure off-site location.
3.22 Security of Customer Information. The Company has adequate
security measures in place to protect, and, to the Company's knowledge, such
security measures protect the customer information it receives through its
website from illegal use by third parties or use by third parties in a manner
violative of the rights of privacy of its customers. Such security measures
conform to prevalent industry standards. The Company represents to its customers
that it assures security as to the customer information it receives through its
website.
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3.23 Potential Conflicts of Interest. Except as set forth on Schedule
3.23, no officer, director or greater than 5% stockholder of the Company, no
spouse of any such officer, director or greater than 5% stockholder, and, to the
knowledge of the Company, no relative of such spouse or of any such officer,
director or stockholder and no Affiliate of any of the foregoing (a) owns,
directly or indirectly, any interest in (excepting less than five percent (5%)
stock holdings for investment purposes in securities of publicly held and traded
companies), or is an officer, director, employee or consultant of, any Person
which is, or is engaged in business as, a competitor, lessor, lessee, supplier,
distributor, sales agent or customer of, or lender to or borrower from, the
Company; (b) owns, directly or indirectly, in whole or in part, any tangible or
intangible property that the Company has used, or that the Company will use, in
the conduct of business; or (c) has any cause of action or other claim
whatsoever against, or owes or has advanced any amount to, the Company, except
for claims in the ordinary course of business such as for accrued vacation pay,
accrued benefits under employee benefit plans, and similar matters and
agreements existing on the date hereof, except as set forth in the Financial
Statements.
3.24 Trade Relations. There exists no actual or, to the knowledge of
the Company, threatened termination, cancellation or limitation of, or any
adverse modification or change in, the business relationship of the Company, or
the business of the Company, with any customer or supplier or any group of
customers or suppliers whose purchases are individually or in the aggregate
material to the Condition of the Company, and there exists no present condition
or state of fact or circumstances relating to the Company, as opposed to the
industry, that would adversely affect the Condition of the Company or prevent
the Company from conducting such business relationships or such business with
any such customer, supplier or group of customers or suppliers in the ordinary
course of business or practice within its industry.
3.25 Outstanding Borrowing. Schedule 3.25 sets forth the amount of all
Indebtedness of the Company as of the date hereof, the Liens that relate to such
Indebtedness and that encumber the Assets and the name of each lender thereof.
No Indebtedness is entitled to any voting rights in any matters voted upon by
the holders of the Company's Common Stock.
3.26 Insurance. Schedule 3.26 lists all of the insurance policies held
by or on behalf of the Company, with the effective date and coverage amounts
indicated thereon. Such policies and binders are valid and enforceable in
accordance with their terms and are in full force and effect and cover all risks
associated with the Company's business that are customarily insured against in
the electronic xxxx presentment and payment industry in such amounts as are
customary in such industry. None of such policies will be affected by, or
terminate or lapse by reason of, any transaction contemplated by this Agreement
or any of the other Transaction Documents.
3.27 Environmental Matters. The Company is in material compliance with
all applicable Environmental Laws. There is no civil, criminal or administrative
judgment,
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action, suit, demand, claim, hearing, notice of violation, investigation,
proceeding, notice or demand letter pending or, to the knowledge of the Company,
threatened against the Company pursuant to Environmental Laws; and, to the
knowledge of the Company, there are no past or present events, conditions,
circumstances, activities, practices, incidents, agreements, actions or plans
which could reasonably be expected to prevent compliance with, or which have
given rise to or will give rise to liability under, Environmental Laws.
3.28 Broker's, Finder's or Similar Fees. There are no brokerage
commissions, finder's fees or similar fees or commissions payable by the Company
in connection with the transactions contemplated hereby based on any agreement,
arrangement or understanding with the Company or any action taken by any such
Person.
3.29 Disclosure. Agreement and Other Documents. This Agreement,
including the schedule and exhibits hereto, and certificates furnished to the
Purchaser by the Company hereunder do not contain any untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements contained herein or therein, in the light of the circumstances under
which they were made, when taken as a whole, not misleading.
3.30 SEC Documents. As of its filing date, each SEC Document (including
all exhibits and schedules thereto and documents incorporated by reference
therein), in each case as amended, (i) complied in all material respects with
the applicable requirements of the Securities Act and the Exchange Act and (ii)
did not contain any untrue statement of material fact or omit to state any
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading.
3.31 Stock Option Plans. The transactions contemplated by the
Transaction Documents do not constitute a "Change of Control" under any of the
Company's Stock Option Plans.
3.32 Year 2000 Compliance. The Company has conducted and continues to
conduct "year 2000" audits with respect to the Software which constitutes part
of the products and services manufactured, marketed or sold by the Company or
licensed by the Company to third parties, and the Company is not aware of any
failure of such Software to be Year 2000 Compliant, which failure is reasonably
likely to have a material adverse effect on the Company. The Company has used
commercially reasonable efforts to obtain "year 2000" certifications with
respect to all third-party Software used in connection with the business or
operations of the Company, including without limitation systems belonging to the
Company's suppliers, service providers and customers. As used herein, "Year 2000
Compliant" means Software which can (a) accurately process date information
before, during and after January 1, 2000, including, but not limited to,
accepting date input, providing date output and performing calculations on date
or portions of dates; (b) function accurately and
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without interruption before, during and after January 1, 2000 without any change
in operations associated with the advent of the new century; (c) respond to two
(2) digit year input in a way that resolves the ambiguity as to century in a
disclosed and predetermined manner; and (d) store and provide output of date
information in ways that are unambiguous as to century, in each case assuming
that such Software receives properly formatted data from all other software or
hardware with which it interacts.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Company as follows:
4.1 Existence and Power. The Purchaser (a) is a corporation duly
organized and validly existing under the laws of the State of Delaware and (b)
has the requisite corporate power and authority to execute, deliver and perform
its obligations under this Agreement and each of the other Transaction
Agreements.
4.2 Authorization; No Contravention. The execution, delivery and
performance by the Purchaser of this Agreement and each of the other Transaction
Agreements and the transactions contemplated hereby and thereby, (a) have been
duly authorized by all necessary corporate action , (b) do not contravene the
terms of the Purchaser's organizational documents, or any amendment thereof, and
(c) do not violate, conflict with or result in any breach or contravention of,
or the creation of any Lien under, any material Contractual Obligation of the
Purchaser or any Requirement of Law applicable to the Purchaser, and (d) do not
violate any Orders of any Governmental Authority against, or binding upon, the
Purchaser.
4.3 Governmental Authorization; Third Party Consents. No approval,
consent, compliance, exemption, authorization or other action by, or notice to,
or filing with, any Governmental Authority or any other Person, and no lapse of
a waiting period under any Requirement of Law, is necessary or required in
connection with the execution, delivery or performance (including, without
limitation, the purchase of the Purchased Shares) by, or enforcement against,
the Purchaser of this Agreement and each of the other Transaction Agreements to
which it is a party or the transactions contemplated hereby and thereby.
4.4 Binding Effect. This Agreement and the other Transaction Agreements
have been duly executed and delivered by the Purchaser and constitute the legal,
valid and binding obligations of the Purchaser, enforceable against it in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer,
moratorium or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability (regardless of
whether considered in a proceeding at law or in equity).
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4.5 Purchase for Own Account. The Purchased Shares hereby acquired by
the Purchaser pursuant to this Agreement (and any Common Stock obtained upon
conversion of the Purchased Shares) are being acquired for its own account and
with no intention of distributing or reselling such Purchased Shares or such
Common Stock or any part thereof in any transaction that would be in violation
of the securities laws of the United States of America, or any state, without
prejudice, however, to the rights of the Purchaser at all times to sell or
otherwise dispose of all or any part of the Purchased Shares or such Common
Stock under an effective registration statement under the Securities Act, or
under an exemption from such registration available under the Securities Act,
and subject, nevertheless, to the disposition of the Purchaser's property being
at all times within its control. If the Purchaser should in the future decide to
dispose of any of such Purchased Shares or such Common Stock, the Purchaser
understands and agrees that it may do so only in compliance with the Securities
Act and applicable state securities laws, as then in effect. The Purchaser
agrees to the imprinting, so long as required by law, of a legend on
certificates representing all of its Purchased Shares and shares of Common Stock
issuable upon conversion of its Purchased Shares to the following effect:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE
SECURITIES LAWS OF ANY STATE. THE SECURITIES MAY NOT BE TRANSFERRED
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS.
THE SALE, ASSIGNMENT, HYPOTHECATION, PLEDGE, ENCUMBRANCE OR OTHER
DISPOSITION (EACH A "TRANSFER") AND VOTING OF ANY OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED BY THE TERMS OF THE
STOCKHOLDERS AGREEMENT, DATED FEBRUARY __, 2000, AMONG THE COMPANY AND
THE STOCKHOLDERS NAMED THEREIN, A COPY OF WHICH MAY BE INSPECTED AT THE
COMPANY'S PRINCIPAL OFFICE. THE COMPANY WILL NOT REGISTER THE TRANSFER
OF SUCH SECURITIES ON THE BOOKS OF THE COMPANY UNLESS AND UNTIL THE
TRANSFER HAS BEEN MADE IN COMPLIANCE WITH THE TERMS OF THE STOCKHOLDERS
AGREEMENT.
4.6 Restricted Securities. The Purchaser understands that the Purchased
Shares will not be registered at the time of their issuance under the Securities
Act for the reason that the sale provided for in this Agreement is exempt
pursuant to Section 4(2) of the Securities Act and that the reliance of the
Company on such exemption is predicated in part on the Purchaser's
representations set forth herein.
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4.7 Broker's, Finder's or Similar Fees. There are no brokerage
commissions, finder's fees or similar fees or commissions payable by the
Purchaser in connection with the transactions contemplated hereby based on any
agreement, arrangement or understanding with the Purchaser or any action taken
by the Purchaser.
4.8 Accredited Investor. The Purchaser is an "accredited investor"
within the meaning of Rule 501 of Regulation D under the Securities Act, as
presently in effect. Such Purchaser has been afforded the opportunity to ask the
Company such questions, and obtain answers thereto, without limitation so as to
enable such Purchaser to make an investment decision in the Company. Such
Purchaser is able to withstand the risks associated with a complete loss of an
investment in the Purchased Shares and the risks associated with an inability to
resell the Purchased Shares (or Common Stock upon conversion thereof) for an
indefinite period of time, in each case in recognition of the risks associated
with an investment thereby.
ARTICLE V
CONDITIONS TO THE OBLIGATION
OF THE PURCHASER TO CLOSE
The obligation of the Purchaser to purchase the Purchased Shares, to
pay the purchase price therefor at the Closing and to perform any obligations
hereunder shall be subject to the satisfaction as determined by, or waiver by,
the Purchaser of the following conditions on or before the Closing Date.
5.1 Secretary's Certificate. The Purchaser shall have received a
certificate from the Company, in form and substance satisfactory to the
Purchaser, dated the Closing Date and signed by the Secretary or an Assistant
Secretary of the Company, certifying (a) that the Company is in good standing
with the Secretary of State of the State of Delaware, (b) that the attached
copies of the Certificate of Incorporation, the By-laws, and resolutions of the
Board of Directors of the Company approving this Agreement and each of the other
Transaction Documents and the transactions contemplated hereby and thereby, are
all true, complete and correct and remain unamended and in full force and effect
and (c) as to the incumbency and specimen signature of each officer of the
Company executing this Agreement, each other Transaction Document and any other
document delivered in connection herewith on behalf of the Company.
5.2 Representations and Warranties True; Performance of Obligations.
The representations and warranties of the Company contained in the Transaction
Documents shall be true and correct on and as of the Closing with the same
effect as though such representations and warranties had been made on and as of
the Closing; and the Company shall have performed all obligations and conditions
required to be performed or observed by it under the Transaction Documents on or
prior to the Closing.
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5.3 Regulatory Approvals. The Purchaser shall be satisfied in its sole
discretion that the Company prior to Closing is in compliance, or immediately
following Closing will be in compliance, with all legal and regulatory
requirements applicable to it and has all licenses, permits and approvals of any
Governmental Authority that are necessary for the conduct of its business as
currently conducted.
5.4 Filing of Series A and Series B Certificate of Designations. The
Series A Certificate of Designations and the Series B Certificate of
Designations shall have been duly filed by the Company with the Secretary of
State of the State of Delaware in accordance with the General Corporation Law of
the State of Delaware, and the Purchaser shall have received evidence of such
filing in form and substance reasonably satisfactory to it.
5.5 Purchased Shares. The Company shall have delivered to the Purchaser
certificates in definitive form representing the number of Purchased Shares set
forth opposite the Purchaser's name on Schedule 2.1 hereto, registered in the
name of the Purchaser.
5.6 Termination of Rights of Purchaser.
(a) Waiver and Termination of Rights of First Refusal. The
Purchaser shall have duly executed and delivered an irrevocable waiver
of its right of first refusal as set forth in Section 3.4 of the Stock
Purchase Agreement between the Purchaser and Princeton Telecom
Corporation, dated as of September 4, 1998, and all future rights
granted to the Purchaser pursuant to Section 3.4 of such Stock Purchase
Agreement shall have been terminated irrevocably.
(b) Termination of Registration Rights Agreement. The
Registration Rights Agreement between the Company and the Purchaser,
dated as of June 16, 1999, shall have been terminated irrevocably by
all parties thereto. No rights or obligations granted by such
Registration Rights Agreement shall survive such termination.
(c) Termination of Amended and Restated Voting Agreement. The
Amended and Restated Voting Agreement among the Company, the Purchaser,
Xxxxxx X. Xxxxxxxxxxxx and the Xxxxxx Xxxxxxxxxxxx Family Limited
Partnership, dated as of May 10, 1999, shall have been terminated
irrevocably by the parties thereto. No rights or obligations granted by
such Voting Rights Agreement shall survive such termination.
5.7 Stockholders Agreement. The Company and the Purchaser shall have
duly executed and delivered the Stockholders Agreement.
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5.8 Registration Rights Agreementt. The Company and the Purchaser shall
have duly executed and delivered the Registration Rights Agreement.
5.9 Selling Stockholders Stock Purchase Agreement. Xxxxxx X.
Xxxxxxxxxxxx and Billing Concepts and C. Xxxxxxx Xxxx and Xxxxxx X. Xxxxxx, Xx.
shall have duly executed and delivered respectively the respective Selling
Stockholders Stock Purchase Agreements.
5.10 Management Assurances The members of management listed in Section
8.8 and such other members of the Company's management as the Purchaser may
require shall have entered into letters of intent acceptable in form and
substance to the Purchaser in its sole discretion, providing assurances that
they will continue in the Company's employ for such periods of time as are
acceptable to the Purchaser in its sole discretion.
5.11 Xxxxxxx Employment. The Company shall have hired and currently be
employing Xxxxxx X. Xxxxxxx as the Chief Operating Officer of the Company
reporting directly to the Chief Executive Officer of the Company.
5.12 Opinion of Counsel. The Purchaser shall have received an opinion
of Xxxxxxx Xxxxxxxxx of Xxxx & Xxxxxxxxx, dated the Closing Date, relating to
the transactions contemplated by or referred to herein, substantially in the
form attached hereto as Exhibit G.
5.13 Xxxxxxxxxxxx Employment Agreement. The Company and Xxxxxx X.
Xxxxxxxxxxxx shall have executed the Employment Agreement attached hereto as
Exhibit F-1.
5.14 Resignation and Appointment of Corporate Secretary. C. Xxxxxxx
Xxxx shall have resigned as Secretary of the Company and Xxxxx Xxxxxx shall have
been appointed Secretary of the Company as C. Xxxxxxx Xxxx'x replacement.
ARTICLE VI
CONDITIONS TO THE OBLIGATION
OF THE COMPANY TO CLOSE
The obligation of the Company to issue and sell the Purchased Shares
and the obligation of the Company to perform its other obligations hereunder
shall be subject to the satisfaction as determined by, or waiver by, the Company
of the following conditions on or before the Closing Date:
6.1 Payment of Purchase Price. The Purchaser shall be prepared to pay
the aggregate purchase price for the Purchased Shares to be purchased by the
Purchaser.
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6.2 Stockholders Agreement. The Purchaser shall have duly executed and
delivered the Stockholders Agreement.
6.3 Registration Rights Agreement. The Purchaser shall have duly
executed and delivered the Registration Rights Agreement.
ARTICLE VII
INDEMNIFICATION
7.1 Indemnification.
(a) Except as otherwise provided in this Article VII, the Company
agrees to indemnify, defend and hold harmless the Purchaser and its Affiliates
and their respective officers, directors, agents, employees, Subsidiaries,
partners, members and controlling persons (each, a "Purchaser Indemnified
Party"), to the fullest extent permitted by law from and against any and all
losses, Claims, or written threats thereof (including, without limitation, any
Claim by a third party), damages or expenses (including reasonable fees,
disbursements and other charges of one counsel retained for the benefit of the
Purchaser Indemnified Parties in any action between the Company and one or more
Purchaser Indemnified Parties hereto or between one or more Purchaser
Indemnified Parties and any third party or otherwise) (collectively, "Purchaser
Losses") directly resulting from or directly arising out of any breach of any
representation or warranty, covenant or agreement by the Company in this
Agreement or the other Transaction Documents; PROVIDED, HOWEVER, that the
Company shall not be liable under this Article VII to a Purchaser Indemnified
Party to the extent that it is finally judicially determined that such Purchaser
Losses resulted or arose solely from the breach by such Purchaser Indemnified
Party of any representation, warranty, covenant or other agreement of such
Purchaser Indemnified Party contained in this Agreement or the other Transaction
Documents or the willful misconduct or gross negligence of such Purchaser
Indemnified Party; and PROVIDED FURTHER, that if and to the extent that such
indemnification is unenforceable for any reason, the Company shall make the
maximum contribution to the payment and satisfaction of such Purchaser Losses
which shall be permissible under applicable laws. The amount of any payment to
any Purchaser Indemnified Party herewith in respect of any Purchaser Loss shall
be of sufficient amount to make such Purchaser Indemnified Party whole. Subject
to the terms of this Article VII, in connection with the obligation of the
Company to indemnify for expenses as set forth above, the Company shall, upon
presentation of appropriate invoices containing reasonable detail, reimburse
each Purchaser Indemnified Party for all such expenses as they are incurred by
such Purchaser Indemnified Party; provided, however, that if an Purchaser
Indemnified Party is reimbursed under this Article VII for any expenses, such
reimbursement of expenses shall be refunded to the extent it is finally
judicially determined that the Purchaser Losses in question resulted primarily
from the breach by such Purchaser Indemnified Party of any representation,
warranty,
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covenant or other agreement of such Purchaser Indemnified Party contained in
this Agreement or the other Transaction Documents or from the willful misconduct
or gross negligence of such Purchaser Indemnified Party.
(b) Except as otherwise provided in this Article VII, the Purchaser
agrees to indemnify, defend and hold harmless the Company and its Affiliates and
their respective officers, directors, agents, employees, Subsidiaries, partners,
members and controlling persons (each, a "Company Indemnified Party"), to the
fullest extent permitted by law from and against any and all losses, Claims, or
written threats thereof (including, without limitation, any Claim by a third
party), damages or expenses (including reasonable fees, disbursements and other
charges of one counsel retained for the benefit of the Company Indemnified
Parties in any action between the Purchaser and one or more Company Indemnified
Parties hereto or between one or more Company Indemnified Parties and any third
party or otherwise) (collectively, "Company Losses") directly resulting from or
directly arising out of any breach of any representation or warranty, covenant
or agreement by the Purchaser in this Agreement or the other Transaction
Documents; PROVIDED, HOWEVER, that the Purchaser shall not be liable under this
Article VII to a Company Indemnified Party to the extent that it is finally
judicially determined that such Company Losses resulted or arose solely from the
breach by such Company Indemnified Party of any representation, warranty,
covenant or other agreement of such Company Indemnified Party contained in this
Agreement or the other Transaction Documents or the willful misconduct or gross
negligence of such Company Indemnified Party; and PROVIDED FURTHER, that if and
to the extent that such indemnification is unenforceable for any reason, the
Purchaser shall make the maximum contribution to the payment and satisfaction of
such Company Losses which shall be permissible under applicable laws. The amount
of any payment to any Company Indemnified Party herewith in respect of any
Company Loss shall be of sufficient amount to make such Company Indemnified
Party whole. Subject to the terms of this Article VII, in connection with the
obligation of the Purchaser to indemnify for expenses as set forth above, the
Purchaser shall, upon presentation of appropriate invoices containing reasonable
detail, reimburse each Company Indemnified Party for all such expenses as they
are incurred by such Company Indemnified Party; provided, however, that if an
Company Indemnified Party is reimbursed under this Article VII for any expenses,
such reimbursement of expenses shall be refunded to the extent it is finally
judicially determined that the Company Losses in question resulted primarily
from the breach by such Company Indemnified Party of any representation,
warranty, covenant or other agreement of such Company Indemnified Party
contained in this Agreement or the other Transaction Documents or from the
willful misconduct or gross negligence of such Company Indemnified Party.
7.2 Notification. Each party entitled to indemnification (an
"Indemnified Party") under this Article VII shall, promptly after the receipt of
notice of the commencement of any Claim against such Indemnified Party in
respect of which indemnity may be sought from the party obligated to indemnify
such Indemnified Party under this Article VII (the "Indemnifying Party"), notify
the Indemnifying Party in
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writing of the commencement thereof. The omission of any Indemnified Party to so
notify the Indemnifying Party of any such action shall not relieve the
Indemnifying Party from any liability which it may have to such Indemnified
Party (a) other than pursuant to this Article VII or (b) under this Article VII
unless, and only to the extent that, such omission results in the Indemnifying
Party's forfeiture of substantive rights or defenses or the Indemnifying Party
is prejudiced by such delay. In case any such Claim shall be brought against any
Indemnified Party, and it shall notify the Indemnifying Party of the
commencement thereof, the Indemnifying Party shall be entitled to assume the
defense thereof at its own expense, with counsel satisfactory to such
Indemnified Party in its reasonable judgment; provided, however, that any
Indemnified Party may, at its own expense, retain separate counsel to
participate in such defense at its own expense. Notwithstanding the foregoing,
in any Claim in which both the Indemnifying Party, on the one hand, and an
Indemnified Party, on the other hand, are, or are reasonably likely to become, a
party, such Indemnified Party shall have the right to employ separate counsel
and to control its own defense of such Claim if, in the reasonable opinion of
counsel to such Indemnified Party, either (x) one or more defenses are available
to the Indemnified Party that are not available to the Indemnifying Party or (y)
a conflict or potential conflict exists between the Indemnifying Party, on the
one hand, and such Indemnified Party, on the other hand, that would make such
separate representation advisable; provided, however, that the Indemnifying
Party (i) shall not be liable for the fees and expenses of more than one counsel
to all Indemnified Parties and (ii) shall reimburse the Indemnified Parties for
such reasonable fees and expenses of such counsel incurred in any such action
between the Indemnifying Party and the Indemnified Parties or between such the
Indemnified Parties and any third party, as such expenses are incurred. The
Indemnifying Party agrees that it will not, without the prior written consent of
the Purchaser, settle, compromise or consent to the entry of any judgment in any
pending or threatened Claim relating to the matters contemplated hereby (if any
Indemnified Party is a party thereto or has been actually threatened to be made
a party thereto) unless such settlement, compromise or consent includes an
unconditional release of each Indemnified Party from all liability arising or
that may arise out of such Claim. The Indemnifying Party shall not be liable for
any settlement of any Claim effected against an Indemnified Party without the
Indemnifying Party's written consent, which consent shall not be unreasonably
withheld. The rights accorded to an Indemnified Party hereunder shall be in
addition to any rights that any Indemnified Party may have at common law, by
separate agreement or otherwise; provided, however, that notwithstanding the
foregoing or anything to the contrary contained in this Agreement, nothing in
this Article VII shall restrict or limit any rights that any Indemnified Party
may have to seek equitable relief.
ARTICLE VIII
AFFIRMATIVE COVENANTS
The Company hereby covenants and agrees with the Purchaser, for as long
as any of the Purchased Shares are outstanding, as follows:
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8.1 Preservation of Existence. The Company shall:
(a) preserve and maintain in full force and effect its
existence and good standing under the laws of its jurisdiction of
formation or organization;
(b) preserve and maintain in full force and effect all
material rights, privileges, qualifications, applications, licenses and
franchises necessary in the normal conduct of its business;
(c) use its reasonable best efforts to preserve its business
organization;
(d) conduct its business in the ordinary course (unless
altered by Board approval, in accordance with the Stockholders
Agreement when applicable), keep its properties in good working order
and condition (normal wear and tear excepted), and from time to time
make all needed repairs to, renewals of or replacements of its
properties so that the efficiency of its business operation shall be
reasonably maintained and preserved;
(e) comply with all material Requirements of Law and with the
directions of any Governmental Authority having jurisdiction over the
Company or its business or property; and
(f) file or cause to be filed in a timely manner all reports,
applications, estimates and licenses that shall be required by a
Governmental Authority.
8.2 Financial Statements and Other Information. Subject to Section
9.2 hereof, the Company shall deliver to the Purchaser, in form and substance
satisfactory to the Purchaser:
(a) as soon as available, but not later than ninety (90) days
after the end of each fiscal year of the Company, a copy of the audited
balance sheet of the Company as of the end of such fiscal year and the
related statements of operations and cash flows for such fiscal year,
setting forth in each case in comparative form the figures for the
previous year, all in reasonable detail and accompanied by a management
summary and analysis of the operations of the Company for such fiscal
year and by the opinion of a nationally recognized independent
certified public accounting firm which report shall state that such
financial statements present fairly the financial condition as of such
date and results of operations and cash flows for the periods indicated
in conformity with GAAP applied on a consistent basis;
(b) commencing with the fiscal period ending on March 31,
2000, as soon as available, but in any event not later than forty-five
(45) days after the end of each of the first three fiscal quarters of
each fiscal year, the unaudited balance
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sheet of the Company, and the related statements of operations and cash
flows for such quarter and for the period commencing on the first day
of the fiscal year and ending on the last day of such quarter, all
certified by an appropriate officer of the Company as presenting fairly
the financial condition as of such date and results of operations and
cash flows for the periods indicated in conformity with GAAP applied on
a consistent basis, subject to normal year-end adjustments and the
absence of footnotes required by GAAP;
(c) if requested by the Purchaser, as promptly as practicable,
but not later than five (5) days after the end of each fiscal year of
the Company, a certificate signed by the Chief Executive Officer of the
Company in customary form certifying that the Company is not a "foreign
person" within the meaning of Section 1445 of the Code; and
(d) such other financial and operating data of the Company as
the Purchaser reasonably may request.
8.3 Reservation of Common Stock. The Company shall at all times reserve
and keep available out of its authorized shares of Common Stock, solely for the
purpose of issue or delivery upon conversion of the Purchased Shares, as
provided in the Certificate of Designations, the maximum number of shares of
Common Stock that may be issuable or deliverable upon such conversion. Such
shares of Common Stock are duly authorized and, when issued or delivered in
accordance with the Certificate of Designations, shall be validly issued, fully
paid and non-assessable. The Company shall issue such shares of Common Stock, in
accordance with the terms of the Certificate of Designations, and otherwise
comply with the terms hereof and thereof.
8.4 Insurance. The Company shall maintain insurance with insurance
companies or associations with a rating of "A" or better as established by
Best's Rating Guide (or an equivalent rating with such other publication of a
similar nature as shall be in current use) in such amounts and covering such
risks as are usually and customarily carried with respect to similar businesses
according to its locations.
8.5 Books and Records. The Company shall keep proper books of record
and account, in which full and correct entries shall be made of all financial
transactions and the assets and business of the Company in accordance with GAAP
consistently applied.
8.6 Back-ups of Computer Software. The Company shall make back-ups of
all material computer software programs and databases and shall maintain such
software programs and databases at a secure off-site location.
8.7 Inspection. Subject to Section 9.12 hereof, the Company shall
permit representatives of the Purchaser to visit and inspect any of its
properties, to examine its corporate, financial and operating records and make
copies thereof or abstracts therefrom, and to discuss its affairs, finances and
accounts with their respective
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directors, officers and independent public accountants, all at such reasonable
times during normal business hours and as often as may be reasonably requested
upon reasonable advance notice to the Company.
8.8 Employment Agreements. The Company will use its best efforts to
execute employment agreements on terms and conditions that are reasonably
acceptable to the Company and the Purchaser with the following seven employees
of the Company: (1) Xxxxxx X. Xxxxxxx; (2) Xxxxxxxxxxx X. Xxxxxx, (3) Xxxxxx
Xxxxxxx; (4) Xxxxxx Xxxxxxxx; (5) Xxxxxx X. Xxxxxxxxx; and (6) Xxxxx Xxxx.
ARTICLE IX
MISCELLANEOUS
9.1 Survival of Representations and Warranties. All of the
representations and warranties made herein shall survive the execution and
delivery of this Agreement until the date that is the earlier of (i) the closing
of the initial public offering of the Company's Common Stock that is registered
under the Securities Act of 1933, as amended, or (ii) ninety (90) days after the
receipt by the Purchaser of audited financial statements of the Company for the
fiscal year ending December 31, 2000 (or, if such fiscal year changes and no
such audited consolidated financial statements are available, then the successor
fiscal year), except for (a) Sections 3.1, 3.2, 3.4, 3.7, 3.28, 3.29, 3.31, 4.1,
4.2, 4.4, and 4.7 , which representations and warranties shall survive until the
third anniversary of the Closing Date, and (b) Section 3.12, which shall survive
until the later to occur of (i) the lapse of the statute of limitations with
respect to the assessment of any Tax to which such representation and warranty
relates (including any extensions or waivers thereof) and (ii) sixty (60) days
after the final administrative or judicial determination of the Taxes to which
such representation and warranty relates, and no claim with respect to Section
3.12 may be asserted thereafter with the exception of claims arising out of any
fact, circumstance, action or proceeding to which the party asserting such claim
shall have given notice to the other parties to this Agreement prior to the
termination of such period of reasonable belief that a tax liability will
subsequently arise therefrom. The Purchaser is entitled to rely, and the parties
hereby acknowledge that the Purchaser has so relied, upon the truth, accuracy
and completeness of each of the representations and warranties of the Company
contained herein (and is entitled to indemnification pursuant to Article VII
hereof with respect to breaches of such representations and warranties),
irrespective of any independent investigation made by Purchaser or any facts or
information known, either actually or constructively, by Purchaser. The Company
is entitled to rely, and the parties hereby acknowledge that the Company has so
relied, upon the truth, accuracy and completeness of each of the representations
and warranties of the Purchaser contained herein (and is entitled to
indemnification pursuant to Article VII hereof with respect to breaches of such
representations and warranties), irrespective of any independent investigation
made by the Company or any facts or information known, either actually or
constructively, by the Company.
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9.2 Notices. All notices, demands and other communications provided for
or permitted hereunder shall be made in writing and shall be by registered or
certified first-class mail, return receipt requested, telecopier, courier
service or personal delivery to the address as set forth on Schedule 9.2. All
such notices, demands and other communications shall be deemed to have been duly
given when delivered by hand, if personally delivered; when delivered by
courier, if delivered by commercial courier service; five (5) Business Days
after being deposited in the mail, postage prepaid, if mailed; and when receipt
is mechanically acknowledged, if telecopied.
9.3 Successors and Assigns; Third Party Beneficiaries. This Agreement
shall inure to the benefit of and be binding upon the successors and permitted
assigns of the parties hereto. Subject to applicable securities laws and the
terms and conditions thereof, the Purchaser may assign any of its rights under
this Agreement or the other Transaction Documents to any person acquiring
Purchased Shares from the Purchaser. The Company may not assign any of its
rights under this Agreement without the written consent of the Purchaser. Except
as provided in Article VII, no Person other than the parties hereto and their
successors and permitted assigns is intended to be a beneficiary of this
Agreement.
9.4 Amendment and Waiver.
(a) No failure or delay on the part of the Company or the
Purchaser in exercising any right, power or remedy hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise
of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy.
The remedies provided for herein are cumulative and are not exclusive
of any remedies that may be available to the Company or the Purchaser
at law, in equity or otherwise.
(b) Any amendment, supplement or modification of or to any
provision of this Agreement, any waiver of any provision of this
Agreement, and any consent to any departure by the Company or the
Purchaser from the terms of any provision of this Agreement, shall be
effective (i) only if it is made or given in writing and signed by the
Company and the Purchaser, and (ii) only in the specific instance and
for the specific purpose for which made or given. Except where notice
is specifically required by this Agreement, no notice to or demand on
the Company in any case shall entitle the Company to any other or
further notice or demand in similar or other circumstances.
9.5 Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
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9.6 Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
9.7 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO THE
PRINCIPLES OF CONFLICTS OF LAW THEREOF.
9.8 Severability. If any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions hereof shall not be in any way impaired, unless the provisions held
invalid, illegal or unenforceable shall substantially impair the benefits of the
remaining provisions hereof.
9.9 Rules of Construction. Unless the context otherwise requires,
references to sections or subsections refer to sections or subsections of this
Agreement.
9.10 Entire Agreement. This Agreement, together with the exhibits and
schedules hereto, and the other Transaction Documents are intended by the
parties as a final expression of their agreement and intended to be a complete
and exclusive statement of the agreement and understanding of the parties hereto
in respect of the subject matter contained herein and therein. There are no
restrictions, promises, representations, warranties or undertakings, other than
those set forth or referred to herein or therein. This Agreement, together with
the exhibits and schedules hereto, and the other Transaction Documents supersede
all prior agreements and understandings between the parties with respect to such
subject matter.
9.11 Fees. Upon the Closing, the Company shall reimburse the Purchaser
for its respective fees, disbursements and other charges of counsel incurred in
connection with the transactions contemplated by this Agreement, provided that
the amount of such reimbursement shall not exceed $75,000.
9.12 Publicity; Confidentiality. Except as may be required by
applicable Requirements of Law, neither of the parties hereto shall issue a
publicity release or public announcement or otherwise make any disclosure
concerning this Agreement, the transactions contemplated hereby, the Purchaser
or the business, technology and financial affairs of the Company, without prior
approval by the other party hereto; provided, however, that nothing in this
Agreement shall restrict the Purchaser from disclosing information (a) that is
already publicly available, (b) that was known to the Purchaser on a
non-confidential basis prior to its disclosure by the Company, (c) that may be
required or appropriate in response to any summons or subpoena or in connection
with any litigation, provided that the Purchaser will use reasonable efforts to
notify the Company in advance of such disclosure so as to permit the Company to
seek a protective order or otherwise contest such disclosure, and the Purchaser
will use reasonable efforts to cooperate, at the expense of the Company, with
the Company in
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pursuing any such protective order, (d) to the extent that the Purchaser
reasonably believes it appropriate in order to protect its investment in the
Purchased Shares in order to comply with any Requirement of Law, (e) to the
Purchaser's or the Company's officers, directors, shareholders, advisors,
employees, members, partners, controlling persons, auditors or counsel who have
agreed or are otherwise bound by the confidentiality obligations set forth in
this Section 9.12 or (f) to Persons from whom releases, consents or approvals
are required, or to whom notice is required to be provided, pursuant to the
transactions contemplated by the Transaction Documents. If any announcement is
required by law, Governmental Authority or the rules of any securities exchange
or market on which shares of Common Stock are traded to be made by any party
hereto, prior to making such announcement such party will deliver a draft of
such announcement to the other parties and shall give the other parties
reasonable opportunity to comment thereon.
9.13 Further Assurances. Each of the parties shall execute such
documents and perform such further acts (including, without limitation,
obtaining any consents, exemptions, authorizations or other actions by, or
giving any notices to, or making any filings with, any Governmental Authority or
any other Person) as may be reasonably required or desirable to carry out or to
perform the provisions of this Agreement.
9.14 Specific Performance. The Company acknowledges that the Preferred
Stock is of a special, unique and extraordinary character and that damages are
inadequate to compensate the Purchaser for Company's breach of this Agreement.
Accordingly, in the event of a material breach by the Company of its
representations, warranties, covenants and agreements under this Agreement, the
Purchaser, not being in material default hereunder, shall be entitled to
specific performance of this Agreement by the Company. In the event the
Purchaser elects to institute any action specifically to enforce the Company's
performance, the Company agrees to waive any claim or defense that Purchaser has
an adequate remedy at law, and the Company will interpose no opposition legally
or otherwise to the propriety of specific performance. The Purchaser's right to
specific performance, if exercised, shall be an alternative to, and not in
addition to, the right to pursue through legal proceedings an award of damages
or expenses arising from a material default by the Company.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the undersigned have executed, or have caused to be
executed, this Stock Purchase Agreement on the date first written above.
PRINCETON eCOM CORPORATION
By: /s/ X.X. Xxxxxxxxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxxxxxxxx
Title: Chairman and Chief Executive Officer
BILLING CONCEPTS CORP.
By: /s/ Xxxxxx X. Xxxxxx, Xx.
------------------------------------
Name: Xxxxxx X. Xxxxxx, Xx.
Title: Chairman & CEO
Schedule 2.1
Purchased Shares and Purchase Price
============================== ==================== ================== ==================== ===================
Series A Purchased Series B Purchased Series A Purchase Series B Purchase
Purchaser Shares Shares Price Price
============================== =================== =================== =================== ===================
Billing Concepts 3,753,846 487,805 $24,400,000.00 $2,600,000.00
============================== =================== =================== =================== ===================
Schedule 9.2
Notices
(i) if to the Company:
Princeton eCom Corporation
000 Xxxxxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxxxxxx, Chief Executive Officer
with a copy to:
Xxxx & Xxxxxxxxx
00 Xxxxxx
Xxxxx X-000
Xxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
and:
Xxxxxx, Xxxxx & Bockius LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attn: Xxxxx X. Xxxxx, Esq. and Xxxxxxx X. Xxxxxxx, Esq.
(ii) if to Billing Concepts Corp.:
Billing Concepts Corp.
0000 Xxxx Xxxxx Xx.
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx, Xx.
with a copy to:
Billing Concepts Corp.
0000 Xxxx Xxxxx Xx.
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Telecopy: (000) 000-0000
Attention: Xxxxx Xxxx, Senior VP and General Counsel
and,
Xxxxxx, Xxxx & Xxxxxxxx LLP
0000 Xxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxx X. Xxxxx, Esq.
