Exhibit 10.14
PRINTCAFE, INC.
SERIES F PREFERRED STOCK
PURCHASE AGREEMENT
DECEMBER 31, 2001
TABLE OF CONTENTS
PAGE
1. PURCHASE AND SALE OF STOCK AND NOTES.....................................1
1.1 Sale and Issuance of Stock and Notes...............................1
1.2 Closing; Delivery..................................................1
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY............................1
2.1 Organization, Good Standing and Qualification......................2
2.2 Capitalization.....................................................2
2.3 Rights of Registration and Voting Rights...........................3
2.4 Subsidiaries; Joint Ventures.......................................3
2.5 Authorization......................................................4
2.6 Valid Issuance of Securities.......................................4
2.7 Governmental Consents..............................................4
2.8 Litigation.........................................................5
2.9 Intellectual Property..............................................5
2.10 Confidential Information and Invention Assignment Agreements.......5
2.11 Compliance with Other Instruments..................................6
2.12 Agreements; Action.................................................6
2.13 No Conflict of Interest............................................7
2.14 Title to Property and Assets.......................................7
2.15 Financial Statements...............................................7
2.16 Changes............................................................8
2.17 Distributions......................................................9
2.18 Tax Returns and Payments...........................................9
2.19 Insurance..........................................................9
2.20 Employee Benefit Plans.............................................9
2.21 Labor Agreements and Actions.......................................9
2.22 Compliance with Environmental Requirements........................10
2.23 Permits...........................................................10
2.24 Private Offering..................................................10
2.25 Brokers and Finders...............................................11
2.26 Certificate of Incorporation......................................11
2.27 Bylaws............................................................11
2.28 Disclosure........................................................11
2.29 Compliance with Other Laws........................................11
2.30 Investment Company................................................11
3. INTERPRETATION..........................................................11
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS........................11
4.1 Authorization.....................................................11
4.2 Purchase Entirely for Own Account.................................12
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TABLE OF CONTENTS
(continued)
4.3 Disclosure of Information.........................................12
4.4 Restricted Securities.............................................12
4.5 No Public Market..................................................12
4.6 Legends...........................................................12
4.7 Qualified Institutional Buyer or Accredited Investor..............13
4.8 Foreign Investors.................................................13
4.9 Manner of Offering................................................13
4.10 Nature of Purchaser...............................................14
5. COVENANTS OF THE COMPANY................................................14
5.1 Compliance........................................................14
5.2 Performance.......................................................14
5.3 Books and Records.................................................14
5.4 Renewals and Good Standing........................................14
5.5 Principal Business................................................14
5.6 Proprietary Information and Assignment Agreement..................14
5.7 Stock Options.....................................................14
5.8 Securities Filings................................................15
5.9 Investment of Funds...............................................15
5.10 Survival of Company's Covenants...................................15
6. CONDITIONS OF THE PURCHASERS' OBLIGATIONS AT THE CLOSING................15
6.1 Representations and Warranties....................................15
6.2 Performance.......................................................15
6.3 Compliance Certificate............................................15
6.4 Qualifications....................................................15
6.5 Written Consents..................................................15
6.6 Stock Certificates................................................16
6.7 Restated Certificate..............................................16
6.8 Restated Investors' Rights Agreement..............................16
6.9 Restated Co-Sale Agreement........................................16
6.10 Restated Voting Agreement.........................................16
6.11 Confidential Information and Invention Assignment Agreement.......16
6.12 No Material Adverse Change........................................16
6.13 Company Legal Opinions............................................17
6.14 No Litigation.....................................................17
6.15 Proceedings and Documents.........................................17
6.16 Closing Documents.................................................17
6.17 Other Transactions................................................17
6.18 General...........................................................18
7. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT THE CLOSING..................18
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TABLE OF CONTENTS
(continued)
7.1 Representations and Warranties....................................18
7.2 Performance.......................................................18
7.3 Qualifications....................................................18
8. Miscellaneous...........................................................18
8.1 Survival of Warranties............................................18
8.2 Entire Agreement..................................................19
8.3 Transfer; Successors and Assigns..................................19
8.4 Governing Law.....................................................19
8.5 Counterparts......................................................19
8.6 Titles and Subtitles..............................................19
8.7 Notices...........................................................19
8.8 Finder's Fee......................................................19
8.9 Attorneys' Fees...................................................20
8.10 Amendments and Waivers of Agreement...............................20
8.11 Severability......................................................20
8.12 Delays or Omissions...............................................20
8.13 Confidentiality...................................................20
8.14 Exculpation Among Purchasers......................................21
8.15 Indemnification...................................................21
8.16 Press Release.....................................................21
8.17 Use of Proceeds...................................................21
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PRINTCAFE, INC.
SERIES F PREFERRED STOCK PURCHASE AGREEMENT
-------------------------------------------
This Series F Preferred Stock Purchase Agreement (this "AGREEMENT") is
made as of December 31, 2001 by and among printCafe, Inc., a Delaware
corporation (the "COMPANY"), and the investors listed on EXHIBIT A attached
hereto (each a "PURCHASER" and together the "PURCHASERS").
In consideration of the mutual promises, covenants and conditions
hereinafter set forth, the parties hereto hereby agree as follows:
1. PURCHASE AND SALE OF STOCK AND NOTES.
1.1 SALE AND ISSUANCE OF STOCK.
(a) The Company shall adopt and file with the Secretary of State of
the State of Delaware on or before the Closing (as defined in Section 1.2(a)
below) the Sixth Amended and Restated Certificate of Incorporation in the form
attached hereto as EXHIBIT B (the "RESTATED CERTIFICATE").
(b) Subject to the terms and conditions of this Agreement, each
Purchaser identified on EXHIBIT A hereto agrees to purchase at the Closing (as
defined below), and the Company agrees to sell and issue to each Purchaser at
the Closing that number of shares of the Company's Series F Preferred Stock (the
"SERIES F PREFERRED STOCK"), $0.0001 par value per share set forth opposite each
such Purchaser's name on EXHIBIT A attached hereto at a purchase price equal to
$4.00 per share of Series F Preferred Stock. The shares of Series F Preferred
Stock issued to the Purchasers pursuant to this Agreement shall be hereinafter
referred to as the "STOCK."
1.2 CLOSING; DELIVERY.
(a) The purchase and sale of the Stock shall take place at the
executive offices of the Company, at 10:00 a.m., on December 31, 2001, or at
such other time and place as the Company and the Purchasers mutually agree upon,
orally or in writing (which time and place are designated as the "CLOSING" and
the date of which is designated the "CLOSING DATE").
(b) At the Closing, the Company shall deliver to each Purchaser a
certificate representing the Stock being purchased by such Purchaser against
payment of the purchase price therefor by check payable to the Company or by
wire transfer to the Company's bank account, or by cancellation of the
promissory notes set forth opposite such Purchaser's name on EXHIBIT A.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby represents
and warrants to each Purchaser that (acknowledging that each Purchaser is
relying on the representations and warranties set forth in this Section 2 in
connection with the purchase of
the Stock by such Purchaser), except as set forth on the Schedule of Exceptions
attached hereto as EXHIBIT C:
2.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business. The Company is duly qualified as a foreign corporation or
is otherwise duly qualified to transact business and is in good standing in each
jurisdiction in which the failure so to qualify would, either individually or in
the aggregate, have a material adverse effect on its business or properties.
2.2 CAPITALIZATION. Immediately prior to the Closing, and prior to giving
effect to the Reverse Stock Split (as defined in the Restated Certificate), the
authorized capital of the Company shall consist of:
(a) 70,789,957 shares of Preferred Stock, of which (i) 2,455,798
shares have been designated Series A Preferred Stock, all of which will be
issued and outstanding immediately prior to the Closing, (ii) 10,090,707 shares
have been designated Series A-1 Preferred Stock, 9,564,885 of which will be
issued and outstanding immediately prior to the Closing, (iii) 31,186,312 shares
have been designated Series B Preferred Stock, all of which will be issued and
outstanding immediately prior to the Closing, (iv) 1,915,080 have been
designated Series C Preferred Stock, all of which will be issued and outstanding
immediately prior to the Closing, (v) 283,125 shares have been designated Series
D Preferred Stock, all of which will be issued and outstanding immediately prior
to the Closing, (vi) 20,333,333 shares have been designated Series E-1 Preferred
Stock, 17,375,000 of which will be issued and outstanding immediately prior to
the Closing, and (vii) 4,525,602 shares have been designated Series F Preferred
Stock, none of which will be issued and outstanding immediately prior to the
Closing. The rights, privileges and preferences of the Preferred Stock are as
stated in the Restated Certificate. All of the outstanding shares of Preferred
Stock have been duly authorized, fully paid and nonassessable and issued in
compliance with all applicable federal and state securities laws.
(b) 100,000,000 shares of Class A Common Stock, 9,751,683 of which
are issued and outstanding immediately prior to the Closing. All of the
outstanding shares of Common Stock have been duly authorized, fully paid and are
nonassessable and issued in compliance with all applicable federal and state
securities laws.
(c) The Company has reserved (i) 380,915 shares of Class A Common
Stock and 525,822 shares of Series A-1 Preferred Stock (collectively, "OPTION
STOCK") for issuance to officers, directors, employees and consultants of the
Company pursuant to its 1999 Revised Stock Plan duly adopted by the Board of
Directors and approved by the Company's stockholders (the "1999 REVISED STOCK
PLAN"), and (ii) 10,000,000 shares of Class A Common Stock for issuance to
officers, directors, employees and consultants of the Company pursuant to its
2000 Incentive Stock Plan duly adopted by the Board of Directors and approved by
the Company's stockholders (the "2000 INCENTIVE STOCK PLAN" and, together with
the 1999 Revised Stock Plan, the "STOCK PLANS"). Of such reserved shares of
Option Stock under the 1999 Revised Stock Plan, no shares have been issued
pursuant to restricted stock purchase agreements, options
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to purchase 380,915 shares of Class A Common Stock and 525,822 shares of Series
A-1 Preferred Stock have been granted, of which options to purchase 297,633
shares of Class A Common Stock and 362,370 shares of Series A-1 Preferred Stock
are currently outstanding, and no shares of Class A Common Stock remain
available for issuance to officers, directors, employees and consultants
pursuant to the 1999 Revised Stock Plan. Of such reserved shares of Class A
Common Stock under the 2000 Incentive Stock Plan, no shares have been issued
pursuant to restricted stock purchase agreements, options to purchase 8,283,936
shares of Class A Common Stock are currently outstanding, and 1,716,064 shares
of Class A Common Stock remain available for issuance to officers, directors,
employees and consultants pursuant to the 2000 Incentive Stock Plan.
(d) Except for outstanding options issued pursuant to the Stock Plans
and the warrants listed in Section 2.2 of the Schedule of Exceptions, there are
no outstanding options, warrants, rights (including conversion or preemptive
rights and rights of first refusal or similar rights) or agreements, orally or
in writing, for the purchase or acquisition from the Company of any shares of
its capital stock. The shares of Common Stock described in Section 4(n)(ii)(B)
of Division B of the Restated Certificate include shares of Common Stock
issuable upon conversion of shares of Series E-1 Preferred Stock issuable upon
exercise of options therefor that may be issued to employees of the Company.
(e) Attached to Section 2.2 of the Schedule of Exceptions is a true,
correct and complete capitalization table of the Company prepared by the Company
on a pro forma basis after giving effect to the transactions contemplated
hereby, including the Reverse Stock Split.
2.3 RIGHTS OF REGISTRATION AND VOTING RIGHTS. Except as contemplated in
the Fifth Amended and Restated Investors' Rights Agreement, in the form attached
hereto as EXHIBIT D (the "RESTATED INVESTORS' RIGHTS Agreement"), the Company
has not granted or agreed to grant any registration rights, including piggyback
registration rights, to any person or entity. To the Company's knowledge, except
as contemplated in the Fourth Amended and Restated Voting Agreement, in the form
attached hereto as EXHIBIT E (the "RESTATED VOTING Agreement"), no stockholder
of the Company has entered into any agreements with respect to the voting of
capital stock of the Company. Except as contemplated by the Restated
Certificate, the Restated Voting Agreement and the Fourth Amended and Restated
Right of First Refusal and Co-Sale Agreement, in the form attached hereto as
EXHIBIT F (the "RESTATED CO-SALE AGREEMENT"), there are no stockholders
agreements, pledge agreements, buy-sell arrangements, rights of first refusal or
proxies related to any securities of the Company to which the Company is subject
or a party or to which, to the Company's knowledge, any stockholder, officer,
director or affiliate of the Company is a party or subject.
2.4 SUBSIDIARIES; JOINT VENTURES. The Company does not currently own or
control, directly or indirectly, any interest in any other corporation,
association, or other business entity other than the subsidiaries set forth on
Schedule 2.4 of the Schedule of Exceptions (the "SUBSIDIARIES"). The Company,
either directly or through one of its Subsidiaries, holds all of the issued and
outstanding capital stock of each of the Subsidiaries. The Company is not a
participant in any joint venture, partnership or similar arrangement.
3
2.5 AUTHORIZATION. All corporate action on the part of the Company, its
officers, directors and stockholders necessary for the authorization, execution
and delivery of this Agreement, the Restated Investors' Rights Agreement, the
Restated Voting Agreement and the Restated Co-Sale Agreement (collectively, the
"TRANSACTION DOCUMENTS"), the performance of all obligations of the Company
hereunder and thereunder and the authorization, issuance and delivery of the
Stock and the Common Stock issuable upon conversion of the Stock (together, the
"SECURITIES") has been taken or will be taken prior to the Closing, and the
Transaction Documents, when executed and delivered by the Company, shall
constitute valid and legally binding obligations of the Company, enforceable
against the Company in accordance with their respective terms, except (i) as
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent conveyance, and other laws of general application affecting
enforcement of creditors' rights generally, as limited by laws relating to the
availability of specific performance, injunctive relief, or other equitable
remedies, or (ii) to the extent the indemnification provisions contained in the
Restated Investors' Rights Agreement may be limited by applicable federal or
state securities laws. All corporate action on the part of the Company and its
predecessors, officers, directors, stockholders and subsidiaries necessary for
the authorization, execution and/or delivery, as applicable, for all past
corporate actions was obtained.
2.6 VALID ISSUANCE OF SECURITIES. The Stock that is being issued to the
Purchasers hereunder, when issued, sold and delivered in accordance with the
terms hereof for the consideration expressed herein, will be duly and validly
issued, fully paid and nonassessable and free and clear of all preemptive
rights, rights of first refusal, liens, charges, restrictions, claims and any
other encumbrances imposed by or through the Company other than restrictions on
transfer under this Agreement, the Restated Investors' Rights Agreement, the
Restated Co-Sale Agreement and applicable state and federal securities laws of
the United States. Based in part upon the representations of the Purchasers in
this Agreement and subject to the provisions of Section 2.7 below, the Stock
will be issued in compliance with all applicable federal and state securities
laws. The Common Stock issuable upon conversion of the Stock has been duly and
validly reserved for issuance and, upon issuance in accordance with the terms of
the Restated Certificate, shall be duly and validly issued, fully paid and
nonassessable and free and clear of all preemptive rights, rights of first
refusal, liens, charges, restrictions, claims and any other encumbrances imposed
by or through the Company other than restrictions on transfer under this
Agreement, the Restated Investors' Rights Agreement, the Restated Co-Sale
Agreement and applicable federal and state securities laws and, based in part on
the representations of the Purchasers set forth in Section 4 hereof, will be
issued in compliance with all applicable federal and state securities laws of
the United States and, where applicable, provincial securities laws of Canada.
2.7 GOVERNMENTAL CONSENTS. No consent, approval, order or authorization
of, or registration, qualification, designation, declaration or filing with, any
federal, state or local governmental authority of the United States is required
in connection with the consummation of the transactions contemplated by this
Agreement, except for filings pursuant to applicable state securities laws and
Regulation D of the Securities Act of 1933, as amended (the "SECURITIES ACT").
Based in part on the representations of the Purchasers set forth in Section 4
hereof, the offer, sale and issuance of the Stock, in accordance with the terms
hereof for the consideration
4
expressed herein, are exempt from the registration requirements of Section 5 of
the Securities Act and from the qualification requirements of applicable state
securities laws.
2.8 LITIGATION. There is no action, suit, proceeding or investigation
pending or, to the Company's knowledge, currently threatened against the Company
or any of the Subsidiaries, or any basis therefor known to the Company, that
questions the validity of the Transaction Documents or the right of the Company
to enter into them, or to consummate the transactions contemplated hereby or
thereby, or that might result, either individually or in the aggregate, in any
material adverse change in the financial condition, assets, liabilities,
operations or financial performance of the Company, or any change in the current
equity ownership of the Company. Neither the Company nor any of the Subsidiaries
is a party or subject to the provisions of any order, writ, injunction, judgment
or decree of any court or government agency or instrumentality. There is no
action, suit, proceeding or investigation by the Company or any of the
Subsidiaries currently pending or which the Company or any of the Subsidiaries
intends to initiate. The foregoing includes, without limitation, actions pending
or threatened (or any basis therefor known to the Company) involving the prior
employment of any of the Company's employees, their use in connection with the
Company's business of any information or technologies allegedly proprietary to
any of their former employers, or their obligations under any agreements with
prior employers.
2.9 INTELLECTUAL PROPERTY. The Company owns or possesses sufficient legal
rights to all patents, trademarks, service marks, tradenames, copyrights, trade
secrets, licenses, information and proprietary rights and processes
(collectively, "INTELLECTUAL PROPERTY RIGHTS") necessary for its business
without any conflict with, or infringement of, the rights of others. To the
Company's knowledge, no third party is infringing or violating any of the
Company's Intellectual Property Rights. The Company has not received any written
communications alleging that the Company has violated or, by conducting its
business, would violate any of the Intellectual Property Rights of any other
person or entity. Except with respect to license agreements entered into in the
ordinary course of the Company's business, there are no outstanding options,
licenses or agreements of any kind related to the foregoing, nor is the Company
bound by, or a party to, any options, licenses or agreements of any kind with
respect to Intellectual Property of any other forms.
2.10 CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT AGREEMENTS. Each
officer, independent contractor, consultant and employee of the Company
(collectively, "SERVICE PROVIDERS") has entered into an agreement with the
Company regarding confidentiality, non-solicitation of employees and customers
and assignment of all Intellectual Property Rights, technical information and
other information developed and/or worked on by such Service Provider while
employed or engaged with the Company (each, a "CONFIDENTIALITY AND INVENTION
ASSIGNMENT AGREEMENT"). To the Company's knowledge, (i) no past or present
Service Provider is in violation of any term of any Confidentiality and
Invention Assignment Agreement between the Company and such Service Provider;
and (ii) it is not nor will it be necessary to use any inventions of any of its
Service Providers (or persons it currently intends to hire) made prior to their
employment or engagement by the Company. Each Service Provider hired or engaged
by the Company after the date hereof shall, prior to their employment or
engagement with the Company, enter into a Confidentiality and Invention
Assignment Agreement with the Company.
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2.11 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in violation
in any respect or default of any provisions of its Restated Certificate or
Bylaws or of any provision, instrument, agreement, commitment, arrangement,
license, judgment, order, writ, decree or contract to which it is a party or by
which it is bound or of any provision of federal or state statute, rule or
regulation applicable to the Company, which violation or default is reasonably
likely to result in a material adverse effect on the financial condition,
assets, liabilities, operations or financial performance of the Company. No
event has occurred which with the passage of time or the giving of notice, or
both, would constitute a material breach of or default under any of the
foregoing, which material violation or breach or default is reasonably likely to
result in a material adverse effect on the financial condition, assets,
liabilities, operations or financial performance of the Company. The execution,
delivery and performance of the Transaction Documents and the consummation of
the transactions contemplated thereby will not result in any such violation or
breach or be in conflict with or constitute, with or without the passage of time
and giving of notice, either a default under any such provision, agreement,
commitment, arrangement, license, instrument, judgment, order, writ, decree or
contract or an event which results in the creation of any lien, charge or
encumbrance upon any assets of the Company. Neither the execution or delivery of
this Agreement, nor the carrying on of the Company's business by the employees
of the Company, nor the conduct of the Company's business as proposed, will
conflict in any material respect with or result in a material breach of the
terms, conditions, or provisions of, or constitute a default under, any
contract, covenant or instrument under which any of the Company's employees is
now obligated.
2.12 AGREEMENTS; ACTION.
(a) There are no agreements, understandings or proposed transactions
between the Company and any of its officers, directors, affiliates or any
affiliate thereof.
(b) Except as explicitly contemplated by the Transaction Documents,
and agreements entered into in the ordinary course of business, there are no
agreements, understandings, instruments, contracts or proposed transactions to
which the Company or any of the Subsidiaries is a party or by which it is bound
that involve (i) obligations (contingent or otherwise) of, or payments to, the
Company or any of the Subsidiaries in excess of $50,000, (ii) the license of any
patent, copyright, trade secret or other proprietary right to or from the
Company or any of the Subsidiaries, or (iii) the grant of rights to manufacture,
produce, assemble, license, market, or sell its products to any other person or
affect the Company's exclusive right to develop, manufacture, assemble,
distribute, market or sell its products.
(c) Neither the Company nor any of the Subsidiaries has (i) declared
or paid any dividends, or authorized or made any distribution upon or with
respect to any class or series of its capital stock, (ii) incurred any
indebtedness for money borrowed or incurred any other liabilities individually
in excess of $50,000 or in excess of $100,000 in the aggregate, (iii) made any
loans or advances to any person, other than ordinary advances to the Company's
employees for business expenses, or (iv) sold, exchanged or otherwise disposed
of any of its assets or rights, other than the sale of its inventory in the
ordinary course of business.
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(d) Except as disclosed in Section 2.12 of the Schedule of Exceptions
or as set out in the Transaction Documents, the Company has not entered into any
binding letters of intent with any corporation, partnership, association, other
business entity or any individual regarding (i) the consolidation or merger of
the Company with or into any such corporation or other business entity, (ii) the
sale, conveyance or disposition of all or substantially all of the assets of the
Company or a transaction or series of transactions in which more than 50% of the
voting power of the company is disposed of, or (iii) any other form of
acquisition, liquidation, dissolution or winding-up of the Company.
2.13 NO CONFLICT OF INTEREST. The Company is not indebted, directly or
indirectly, to any of its officers or directors, in any amount whatsoever, other
than in connection with expenses or advances of expenses incurred in the
ordinary course of business or relocation expenses of employees. None of the
Company's officers or directors are, directly or indirectly, indebted to the
Company (other than in connection with purchases of the Company's stock) or, to
the Company's knowledge, have any direct or indirect ownership interest in any
firm or corporation with which the Company is affiliated or with which the
Company has a business relationship, or any firm or corporation which competes
with the Company (other than ownership of stock in, but not exceeding two
percent (2%) of the outstanding capital stock of, any publicly traded company
that competes with the Company). To the Company's knowledge, none of the
Company's officers or directors are, directly or indirectly, interested in any
material contract with the Company. The Company is not a guarantor of any
indebtedness of any other person, firm or corporation.
2.14 TITLE TO PROPERTY AND ASSETS. The Company has good and valid title
to all of its properties and assets, both real and personal, and has good title
to all its leasehold interests, in each case free and clear of all mortgages,
liens, pledges, loans, security interests, conditional sales agreements,
encumbrances or charges, except for Permitted Liens (as defined below). The
Company owns or leases all properties and assets reasonably necessary to the
operation of its business as now conducted. With respect to the property and
assets it leases, the Company is in compliance with such leases and, to the
Company's knowledge, holds a valid leasehold interest free of any liens, claims
or encumbrances, except for Permitted Liens. For purposes of this Agreement,
"Permitted Liens" shall mean any (a) mechanics', carriers', workers' and other
similar liens arising in the ordinary course of business which are not
delinquent and which in the aggregate are not material in amount, and do not
interfere with the present use of the assets of the Company to which they apply;
(b) liens for current taxes and assessments not yet due and payable; (c) liens
and encumbrances that have arisen in the ordinary course of business and that do
not (in any case or in the aggregate) materially detract from the value of the
assets subject thereto or materially impair the operations of the Company; and
(d) with respect to any asset of the Company which consists of a leasehold or
other possessory interest in real property, all encumbrances, covenants,
imperfections in title, easements, restrictions and other title matters (whether
or not the same are recorded) not known to the Company to which the underlying
fee estate in such real property is subject which were not created by or
incurred by the Company.
2.15 FINANCIAL STATEMENTS. Attached hereto as EXHIBIT G are the unaudited
consolidated balance sheet, statement of operations and statement of cash flows
of the Company for the fiscal year ended December 31, 2000 and the unaudited
consolidated balance sheet,
7
statement of operations and statement of cash flows of the Company for the nine
months ended September 30, 2001 (collectively, the "FINANCIAL STATEMENTS"). The
Financial Statements have been prepared in accordance with generally accepted
accounting principles consistently applied (except that the unaudited financial
statements do not contain footnotes and are subject to normal year-end audit
adjustments). The Financial Statements are complete in all material respects and
in accordance with the books and records of the Company and fairly present the
financial condition and operating results of the Company as of the dates, and
for the periods, indicated therein (except that the unaudited financial
statements do no contain footnotes and are subject to normal year-end audit
adjustments). Except as set forth in the Financial Statements, the Company has
no material liabilities, contingent or otherwise, other than (i) liabilities
incurred in the ordinary course of business subsequent to September 30, 2001,
(ii) obligations under contracts and commitments incurred in the ordinary course
of business and not required under generally accepted accounting principles to
be reflected in the Financial Statements, and (iii) performance obligations of
the Company under the Transaction Documents.
2.16 CHANGES. Since September 30, 2001 there has not been:
(a) any change in the assets, liabilities, financial condition or
operating results of the Company from that reflected in the Financial
Statements, except changes in the ordinary course of business that have not
been, in the aggregate, materially adverse;
(b) any damage, destruction, loss or other occurrence or development
materially and adversely affecting the business, properties or financial
condition of the Company;
(c) any waiver or compromise by the Company of a valuable right or
any material debt owed to it;
(d) any satisfaction or discharge of any lien, claim, or encumbrance
or payment of any obligation by the Company, except in the ordinary course of
business and that is not material to the assets, business, properties or
financial condition or operating results of the Company;
(e) any material change or amendment to a material contract or
agreement by which the Company or any of its assets or properties is bound or
subject;
(f) any material change or amendment in any compensation arrangement
or agreement with any employee, officer, director or stockholder;
(g) any sale, assignment or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets;
(h) any resignation or termination of employment of any officer or
key employee of the Company; and the Company, is not aware of any impending
resignation or termination of employment of any such officer or key employee;
8
(i) any mortgage, pledge, transfer of a security interest in, or
lien, created by the Company, with respect to any of its material properties or
assets, except for Permitted Liens;
(j) any loans or guarantees made by the Company to or for the benefit
of its employees, officers or directors, or any members of their immediate
families, other than travel advances and other advances made in the ordinary
course of its business;
(k) any declaration, setting aside or payment or other distribution
in respect to any of the Company's capital stock, or any direct or indirect
redemption, purchase, or other acquisition of any of such stock by the Company;
(l) to the Company's knowledge, any other event or condition of any
character that might materially and adversely affect the business, properties or
financial condition of the Company; or
(m) any arrangement or commitment by the Company to do any of the
things described in this Section 2.16.
2.17 DISTRIBUTIONS. There has been no declaration or payment by the
Company of any dividend, nor any distribution by the Company of any assets of
any kind, to any of its stockholders.
2.18 TAX RETURNS AND PAYMENTS. The Company has filed all tax returns and
reports as required by applicable law and such tax returns and reports are true
and correct in all material respects. The Company has paid all taxes, fees,
assessments and other governmental charges upon the Company, or upon any of its
properties, income, or franchises, shown in such returns and on assessments
received by the Company to be due as of the date hereof and no such taxes or
assessments are being contested.
2.19 INSURANCE. The Company has in full force and effect fire and
casualty insurance policies, with extended coverage, sufficient in amount
(subject to reasonable deductibles) to allow it to replace any of its properties
that might be damaged or destroyed, and the Company has such other insurance
policies and coverages as are customary in the Company's industry.
2.20 EMPLOYEE BENEFIT PLANS. Section 2.20 of the Schedule of Exceptions
sets forth all currently effective employment contracts, deferred compensation
arrangements, bonus plans, incentive plans, profit sharing plans, retirement
agreements or other employee compensation agreements. The Company does not have
any Employee Benefit Plan as defined in the Employee Retirement Income Security
Act of 1974, as amended.
2.21 LABOR AGREEMENTS AND ACTIONS. The Company is not bound by or subject
to (and none of its assets or properties is bound by or subject to) any written
or oral, express or implied, contract, commitment or arrangement with any labor
union, and no labor union has requested or, to the knowledge of the Company, has
sought to represent any of the employees, representatives or agents of the
Company. There is no strike or other labor dispute
9
involving the Company pending, or to the knowledge of the Company threatened,
which could have a material adverse effect on the financial condition, assets,
liabilities, operations or financial performance of the Company, nor is the
Company aware of any labor organization activity involving its employees. The
employment of each officer and employee of the Company is terminable at the will
of the Company. The services of each consultant and independent contractor is
terminable by the Company upon not more than thirty (30) days prior written
notice. To its knowledge, the Company has complied in all material respects with
all applicable state and federal equal employment opportunity laws and with
other laws related to employment.
2.22 COMPLIANCE WITH ENVIRONMENTAL REQUIREMENTS. To the Company's
knowledge, it has obtained all material permits, licenses and other
authorizations required under federal, state and local laws relating to
pollution or protection of the environment. The Company has not violated any
applicable Environmental Law, the violation of which is reasonably likely to
result in a material adverse change in the financial condition, assets,
liabilities, operations or financial performance of the Company. To the
knowledge of the Company, there are no present requirements of any applicable
Environmental Law which are due to be imposed upon it which will materially
increase its cost of complying with the Environmental Laws. All past on-site
generation, treatment, storage and disposal of Waste, including Hazardous Waste,
by the Company and, to its knowledge, by its predecessors have been done in
compliance with the currently applicable Environmental Laws, and all past
off-site treatment, storage and disposal of Waste, including Hazardous Waste,
generated by the Company and, to its knowledge, by its predecessors have been
done in compliance with the currently applicable Environmental Laws. As used in
this Agreement, the terms (i) "Environmental Laws" include, but are not limited
to, any federal, state, local or foreign law, statute, charter or ordinance, and
any rule, regulation, binding interpretation, binding policy, permit, order,
court order or consent decree issued pursuant to any of the foregoing, which
pertains to, governs or otherwise regulates any of the following activities,
including, without limitation, (a) the emission, discharge, release or spilling
of any substance into the air, surface water, groundwater, soil or substrata;
(b) the manufacturing, processing, sale, generation, treatment, storage,
disposal labeling or other management of any Waste, Hazardous Substance or
Hazardous Waste, and (ii) "Waste," "Hazardous Substance," and "Hazardous Waste"
include any substance defined as such by any applicable Environmental Law.
2.23 PERMITS. The Company and each of the Subsidiaries has all
franchises, permits, licenses and any similar authority necessary for the
conduct of its business, the lack of which could materially and adversely affect
the business, properties or financial condition of the Company and, to its
knowledge, it can obtain, without undue burden or expense, any similar authority
for the conduct of its business as planned to be conducted. The Company is not
in default in any material respect under any of such franchises, permits,
licenses or other similar authority.
2.24 PRIVATE OFFERING. Neither the Company nor anyone acting on its
behalf has offered any of the Stock or similar securities for issuance or sale
to, or solicited any offer to acquire any of the same from, anyone so as to make
the issuance and sale of the Stock subject to registration requirements of
Section 5 of the Securities Act.
10
2.25 BROKERS AND FINDERS. The Company has not retained any investment
banker, broker, finder or any other third party in connection with the
transactions contemplated by this Agreement.
2.26 CERTIFICATE OF INCORPORATION. At the time of Closing, the Company's
certificate of incorporation on file with the Secretary of the State of Delaware
shall be in the form of the Restated Certificate, and no action shall have been
taken to amend or modify such Restated Certificate.
2.27 BYLAWS. The Bylaws of the Company are in the form attached hereto as
EXHIBIT H and no action has been taken to amend or modify such Bylaws.
2.28 DISCLOSURE. The Company has made available to the Purchasers all
material information relating to the Company. This Agreement, including all
representations herein by the Company, and any exhibits hereto or any
certificate furnished or to be furnished to Purchasers at the Closing, taken
together, 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 not misleading in light of the circumstances under which they were
made.
2.29 COMPLIANCE WITH OTHER LAWS. The Company has complied in all material
respects with all laws, statutes, rules, regulations and orders of federal,
state, local and foreign agencies and authorities, applicable to its business,
properties and operations.
2.30 INVESTMENT COMPANY. The Company is not an "investment company" or a
company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
3. INTERPRETATION.
(a) For the purposes of the representations and warranties contained
in Section 2, whenever "to the Company's knowledge" or "to its knowledge" is
used, it means to the knowledge of the officers and directors of the Company
after making such diligent inquiry as may be reasonable under the circumstances.
(b) For the purposes of the representations and warranties contained
in Section 2, all references to the "Company" shall be deemed to include the
Subsidiaries.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each Purchaser hereby
represents and warrants to the Company that:
4.1 AUTHORIZATION. Such Purchaser has full power and authority to enter
into the Transaction Documents. The Transaction Documents, when executed and
delivered by the Purchaser, will constitute valid and legally binding
obligations of the Purchaser, enforceable in accordance with their respective
terms, except (a) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, and any other laws of general
application affecting enforcement of creditors' rights generally, and as limited
by laws relating to the availability of a specific performance, injunctive
relief, or other equitable remedies, or (b) to
11
the extent the indemnification provisions contained in the Restated Investors'
Rights Agreement may be limited by applicable federal or state securities laws.
4.2 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made with the
Purchaser in reliance upon the Purchaser's representations to the Company. The
Purchaser hereby confirms that the Securities to be acquired by the Purchaser
will be acquired for investment for the Purchaser's own account, not as a
nominee or agent, and not with a view to the resale or distribution of any part
thereof in violation of the Securities Act, and that the Purchaser has no
present intention of selling, granting any participation in, or otherwise
distributing the same in violation of the Securities Act. The Purchaser further
represents that the Purchaser does not presently have any contract, undertaking,
agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
Securities. The Purchaser has not been formed for the specific purpose of
acquiring the Securities.
4.3 DISCLOSURE OF INFORMATION. The Purchaser has had an opportunity to
discuss the Company's business, management, financial affairs and the terms and
conditions of the offering of the Stock with the Company's management and has
had an opportunity to review the Company's facilities. The Purchaser understands
that such discussions, as well as any other written information delivered by the
Company to the Purchaser, were intended to describe the aspects of the Company's
business which it believes to be material.
4.4 RESTRICTED SECURITIES. The Purchaser understands that the Securities
have not been, and will not be, registered under the Securities Act, by reason
of a specific exemption from the registration provisions of the Securities Act
which depends upon, among other things, the bona fide nature of the investment
intent and the accuracy of the Purchaser's representations as expressed herein.
The Purchaser understands that the Securities are "restricted securities" under
applicable U.S. federal and state securities laws and that, pursuant to these
laws, the Purchaser must hold the Securities indefinitely unless they are
registered with the Securities and Exchange Commission and qualified by state
authorities, or an exemption from such registration and qualification
requirements is available. The Purchaser acknowledges that the Company has no
obligation to register or qualify the Securities for resale except as set forth
in the Restated Investors' Rights Agreement. The Purchaser further acknowledges
that if an exemption from registration or qualification is available, it may be
conditioned on various requirements, including, but not limited to, the time and
manner of sale, the holding period for the Securities, and on requirements
relating to the Company which are outside of the Purchaser's control, and which
the Company is under no obligation and may not be able to satisfy except as
specifically provided in the Restated Investors' Rights Agreement.
4.5 NO PUBLIC MARKET. The Purchaser understands that no public market now
exists for any of the securities issued by the Company, and that the Company has
made no assurances that a public market will ever exist for the Securities.
4.6 LEGENDS. The Purchaser understands that the Securities, and any
securities issued in respect of or exchange for the Securities, may bear one or
all of the following legends:
12
(a) "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR
DISTRIBUTION THEREOF. NO SUCH SALE OR DISTRIBUTION MAY BE EFFECTED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL IN A
FORM SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER
THE SECURITIES ACT OF 1933."
(b) Any legend set forth in the other Transaction Documents.
(c) Any legend required by the Blue Sky laws of any state to the
extent such laws are applicable to the shares represented by the certificate so
legended.
4.7 QUALIFIED INSTITUTIONAL BUYER OR ACCREDITED INVESTOR. The Purchaser
is a "Qualified Institutional Buyer" as defined in Rule 144A under the
Securities Act (a "QIB") or an "accredited investor" as defined in Rule 501(a)
of Regulation D promulgated under the Securities Act.
4.8 FOREIGN INVESTORS. If the Purchaser is not a United States person (as
defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as
amended), such Purchaser hereby represents that it has satisfied itself as to
the full observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Securities or any use of this Agreement,
including (i) the legal requirements within its jurisdiction for the purchase of
the Securities, (ii) any foreign exchange restrictions applicable to such
purchase, (iii) any governmental or other consents that may need to be obtained,
and (iv) the income tax and other tax consequences, if any, that may be relevant
to the purchase, holding, redemption, sale, or transfer of the Securities. Such
Purchaser's subscription and payment for and continued beneficial ownership of
the Securities, will not violate any applicable securities or other laws of the
Purchaser's jurisdiction. Furthermore, if the Purchaser is not a "U.S. person"
as defined in Regulation S under the Securities Act, Purchaser hereby represents
and warrants that it is not acquiring the Shares for the account or benefit of
any U.S. person and no offer to purchase the Shares was made to the undersigned
while the undersigned was in the United States. If the Purchaser is not a "U.S.
person" as defined in Regulation S under the Securities Act, Purchaser agrees to
resell the Shares only in accordance with the provisions of Rule 903(b)(3) of
Regulation S under the Securities Act, pursuant to registration under the
Securities Act, or pursuant to an available exemption from registration; and the
undersigned agrees not to engage in hedging transactions with regard to the
Shares unless in compliance with the Securities Act.
4.9 MANNER OF OFFERING. The offer to sell the Stock was communicated to
such Purchaser by the Company in such a manner that such Purchaser was able to
ask questions of and receive answers from the Company concerning the terms and
conditions of this transaction and that at no time was such Purchaser presented
with or solicited by any leaflet, public promotional meeting, newspaper or
magazine article, radio or television advertisement or any other form of
advertising or general solicitation.
13
4.10 NATURE OF PURCHASER. By reason of the Purchaser's business or
financial experience, such Purchaser has the capacity to protect its own
interest in connection with this transaction.
5. COVENANTS OF THE COMPANY. The Company covenants and agrees with each
Purchaser that:
5.1 COMPLIANCE. The Company shall comply with all laws, rules,
regulations and orders, the non-compliance with which could materially and
adversely affect the financial condition, assets, liabilities, operations or
financial performance of the Company or its obligations under this Agreement or
any other agreement with each Purchaser.
5.2 PERFORMANCE. The Company shall diligently observe and perform or
cause to be observed all covenants to be observed or performed under the
Transaction Documents and under any other agreement between the Company and each
Purchaser.
5.3 BOOKS AND RECORDS. The Company shall maintain complete and accurate
records and books of account in which entries shall be made in accordance with
generally accepted accounting principles consistently applied, reflecting all
transactions of the Company and its subsidiaries, if any.
5.4 RENEWALS AND GOOD STANDING. The Company shall (a) do all things
necessary to obtain, promptly renew and maintain in good standing from time to
time, all approvals, leases, licenses, permits and consents as are required to
own, develop and operate the business, assets or operations of the Company and
undertaking, except where the failure to obtain, renew or maintain in good
standing such approvals, leases, licenses, permits and consents is not
reasonably likely to result in a material adverse change in the Company's
financial condition, assets, liabilities, operations or financial performance
and (b) perform its obligations under this Agreement and all other agreements
between the Company and each Purchaser.
5.5 PRINCIPAL BUSINESS. Prior to the initial public offering of the
Company's Common Stock, the Company shall not change its principal business or
engage in any other business from that which it is engaged on the date of this
Agreement without the written consent of at least two-thirds of the holders of
shares of Stock converted or convertible into Common Stock.
5.6 PROPRIETARY INFORMATION AND ASSIGNMENT AGREEMENT. The Company shall
require all future officers, directors and employees of the Company and each
subsidiary of the Company to execute and deliver a proprietary information and
assignment agreement and shall require all future consultants and independent
contractors to the Company to execute and deliver a consulting agreement which
provides substantially similar protection from misappropriation to the
intellectual property of the Company.
5.7 STOCK OPTIONS. All stock options granted by the Company shall have a
term of ten (10) years and shall be exercisable, over time, based upon continued
employment over a vesting period to be determined by the Company's Board of
Directors. The per share
14
exercise price of all options granted by the Company will be no less than the
fair market value on the date of grant as determined by the Board of Directors
in good faith. Unless otherwise specifically approved by the Board of Directors,
options granted by the Company will not accelerate upon a change of control of
the Company or any subsidiary of the Company.
5.8 SECURITIES FILINGS. Within the prescribed time after the Closing, the
Company shall file all documents and take all proceedings required to be taken
by it to permit the Stock to be distributed to each Purchaser in compliance with
applicable federal and state securities laws and the applicable securities
legislation in Canada.
5.9 INVESTMENT OF FUNDS. The Company shall not make any investments in
any securities, other than high grade commercial paper or other form of
comparable security.
5.10 SURVIVAL OF COMPANY'S COVENANTS. The covenants of the Company set
forth in this Section 5 will survive the completion of the transactions
contemplated by this Agreement and will continue in full force and effect for
the benefit of each Purchaser until the earlier to occur of (a) five (5) years
from the Closing, or (b) the consummation of an IPO (as defined in the Restated
Certificate).
6. CONDITIONS OF THE PURCHASERS' OBLIGATIONS AT THE CLOSING. The obligations of
each Purchaser to the Company under this Agreement are subject to the
fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived:
6.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
the Company contained in Section 2 shall be true and correct in all respects on
and as of the Closing with the same effect as though such representations and
warranties had been made on and as of the date of the Closing, it being
understood that, where any such representation or warranty includes a
materiality or material adverse effect exception, this Section 6.1 shall not
abrogate such exception.
6.2 PERFORMANCE. The Company shall have performed and complied in all
material respects with all covenants, agreements, obligations and conditions
contained in this Agreement that are required to be performed or complied with
by it on or before the Closing.
6.3 COMPLIANCE CERTIFICATE. The President or CEO of the Company shall
deliver to the Purchasers at the Closing a certificate certifying that the
conditions specified in Sections 6.1 and 6.2 have been fulfilled.
6.4 QUALIFICATIONS. All authorizations, approvals or permits, if any, of
any governmental authority or regulatory body of the United States or of any
state that are required to be obtained prior to the Closing in connection with
the lawful issuance and sale of the Stock pursuant to this Agreement shall be
obtained and effective as of the Closing.
6.5 WRITTEN CONSENTS. The Company shall have obtained and delivered to
the Purchasers any and all written waivers, permits, consents and approvals
required to be obtained prior to the Closing in connection with the consummation
of the transactions
15
contemplated by the Transaction Documents in a form and content reasonably
acceptable to the Purchasers.
6.6 STOCK CERTIFICATES. The Company shall have delivered to the
Purchasers executed stock certificates in form and content acceptable to the
Purchasers ("STOCK CERTIFICATES") and sufficient to transfer to and vest in each
Purchaser good and valid title to the purchased Stock free of any lien created
by or through the Company.
6.7 RESTATED CERTIFICATE. The Company shall have filed the Restated
Certificate with the Secretary of State of the State of Delaware on or prior to
the Closing, which shall continue to be in full force and effect as of the
Closing.
6.8 RESTATED INVESTORS' RIGHTS AGREEMENT. The Company, each Purchaser,
and the existing parties to the Fourth Amended and Restated Investors' Rights
Agreement entered into by the Company and the stockholders party thereto
necessary to amend such agreement pursuant to Section 3.2 thereof shall have
executed and delivered the Restated Investors' Rights Agreement in substantially
the form attached as EXHIBIT D.
6.9 RESTATED CO-SALE AGREEMENT. The Company, each Purchaser, and the
existing parties to the Third Amended and Restated Co-Sale Agreement entered
into by the Company and the stockholders party thereto necessary to amend such
agreement pursuant to Section 4.2 thereof shall have executed and delivered the
Restated Co-Sale Agreement in substantially the form attached as EXHIBIT F.
6.10 RESTATED VOTING AGREEMENT. The Company, each Purchaser, and the
existing parties to the Third Amended and Restated Voting Agreement entered into
by the Company and the stockholders party thereto necessary to amend such
agreement pursuant to Section 5.6 thereof shall have executed and delivered the
Restated Voting Agreement in substantially the form attached as EXHIBIT E.
6.11 CONFIDENTIAL INFORMATION AND INVENTION ASSIGNMENT AGREEMENT. The
Company and each of its Service Providers (other than as set forth on Section
2.10 of the Schedule of Exceptions) shall have entered into a Confidential
Information and Invention Assignment Agreement, in substantially the form
provided to the Purchasers.
6.12 NO MATERIAL ADVERSE CHANGE. Except as set forth on the Schedule of
Exceptions, there shall have been no material adverse change in the Company's
financial condition, assets, liabilities, operations or financial performance
since September 30, 2001 (it being understood that none of the following shall
be deemed, in and of itself, to constitute a material adverse change in the
financial condition, assets, liabilities, operations or financial performance of
the Company since September 30, 2001: (a) a change that results from conditions
generally affecting the U.S. economy or the world economy; (b) a change that
results from conditions generally affecting the Company's industry; (c) a change
that results from the announcement or pendency of the transactions contemplated
hereby; and (d) a change that results from the taking of any action required by
this Agreement).
16
6.13 COMPANY LEGAL OPINION. ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, special counsel
for the Company, shall have delivered a legal opinion to the Purchasers in the
form attached hereto as EXHIBIT I.
6.14 NO LITIGATION. There shall be no action, suit or proceeding or
investigation instituted or threatened to set aside the transactions provided
for herein or to enjoin or prevent the consummation of the transactions
contemplated hereby.
6.15 PROCEEDINGS AND DOCUMENTS. All corporate and other proceedings in
connection with the transactions contemplated hereby and all documents and
instruments incident to such transactions shall be in form and substance
satisfactory to each Purchaser and its counsel and each Purchaser shall have
received all such counterpart originals or certified or other copies of such
documents as it may reasonably request.
6.16 CLOSING DOCUMENTS. The Company shall have delivered the following
documents to each of the Purchasers:
(a) copies certified by the Secretary of the Company of the
resolutions duly adopted by the Company's board of directors authorizing and
approving: (i) the execution, delivery and performance of the Transaction
Documents and each of the other agreements contemplated hereby, (ii) the
Restated Certificate and the filing of the Restated Certificate with the
Secretary of the State of Delaware, (iii) the reservation for issuance upon
conversion of the Series F Preferred Stock of an aggregate number of shares of
Common Stock equal to the total number of shares initially issuable upon
conversion, and (iv) consummation of all other transactions contemplated by the
Transaction Documents;
(b) copies certified by the Secretary of the Company of the
resolutions of the Company's stockholders authorizing and approving the Restated
Certificate and the filing of the Restated Certificate with the Delaware
Secretary of the State;
(c) copies certified by the Secretary of the Company of the Restated
Certificate (as filed with the Delaware Secretary of the State) and the
Company's Bylaws, each as in effect at the Closing;
(d) a good standing certificate with respect to the Company from the
Delaware Secretary of State; and
(e) such other documents relating to the transactions contemplated by
this Agreement as the Purchasers or their counsel may reasonably request.
6.17 OTHER TRANSACTIONS. The Company shall have effected the following
transactions prior to or contemporaneous with the Closing:
(a) the Company and Iris Graphics, Inc. shall have entered into the
Credit Agreement dated December 31, 2001, and the proceeds of the Term Loan (as
defined in the Credit Agreement) shall be used to repay the promissory notes to
the former shareholders of Logic Associates, Inc.;
17
(b) the Company and each of ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the "▇▇▇▇▇ Noteholders") shall have entered into agreements
amending those certain Subordinated Non-Negotiable Promissory Notes by and
between the Company and each of the ▇▇▇▇▇ Noteholders, dated March 8, 2000, as
amended, providing for a prepayment of $4,000,000 upon the Closing and the
repayment of the remaining outstanding principal balance over a three-year
period commencing January 1, 2003 and extending the maturity date with respect
to the remaining principal amount under each of the notes to a date not earlier
than May 30, 2003; and
(c) the Company and each of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇ (the
"▇▇▇▇▇▇ Noteholders") shall have entered into an agreement amending that certain
Subordinated Non-Negotiable Promissory Note among the Company and the ▇▇▇▇▇▇
Noteholders, dated March 10, 2000, providing for the repayment of the
outstanding principal balance over a two-year period commencing January 1, 2003.
6.18 GENERAL.
(a) Each Purchaser's obligations under Section 1 shall be contingent
upon the performance by each other Purchaser of its obligations under Section 1.
(b) In any event the Purchasers may in their sole discretion waive
any conditions to the Closing and close. No such waiver shall be effective
unless it shall be in writing and signed by each Purchaser.
7. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT THE CLOSING. The obligations of
the Company to each Purchaser under this Agreement are subject to the
fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived:
7.1 REPRESENTATIONS AND WARRANTIES. The representations and warranties of
each Purchaser contained in Section 4 shall be true and correct in all material
respects 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.
7.2 PERFORMANCE. All covenants, agreements and conditions contained in
this Agreement to be performed by the Purchasers on or prior to the Closing
shall have been performed or complied with in all material respects.
7.3 QUALIFICATIONS. All authorizations, approvals or permits, if any, of
any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Stock pursuant to this Agreement shall be obtained and effective as of the
Closing.
8. MISCELLANEOUS.
8.1 SURVIVAL OF WARRANTIES. Unless otherwise set forth in this Agreement,
the warranties and representations of the Company contained in Section 2 hereof
shall survive
18
the execution and delivery of this Agreement and the Closing for a period of two
(2) years following the Closing.
8.2 ENTIRE AGREEMENT. This Agreement and the other Transaction Documents
together with all exhibits and schedules hereto and thereto constitute the
entire agreement between the Company and the Purchasers relative to the subject
matter hereof and thereof. Any previous agreement or negotiations between the
Company and the Purchasers concerning the subject matter hereof is superseded by
this Agreement and the Transaction Documents except for any agreements relating
to confidentiality.
8.3 TRANSFER; SUCCESSORS AND ASSIGNS. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
8.4 GOVERNING LAW. This Agreement and all acts and transactions pursuant
hereto and the rights and obligations of the parties hereto shall be governed,
construed and interpreted in accordance with the laws of the State of Delaware,
without giving effect to principles of conflicts of law.
8.5 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original and all of which
together shall constitute one instrument.
8.6 TITLES AND SUBTITLES. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
8.7 NOTICES. Any notice required or permitted by this Agreement shall be
in writing and shall be deemed sufficient upon delivery, when delivered
personally or by overnight courier or sent by telegram or fax, or five (5) days
after being deposited in the U.S. mail, as certified or registered mail, with
postage prepaid, addressed to the party to be notified at such party's address
as set forth on the signature page or EXHIBIT A hereto, or as subsequently
modified by written notice, and if to the Company, with a copy (not constituting
notice) to ▇▇▇▇▇▇, ▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇-▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇.
8.8 FINDER'S FEE. Each party represents that it neither is nor will be
obligated for any finder's fee or commission in connection with this
transaction. Each Purchaser agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finder's fee (and the costs and expenses of defending against such liability or
asserted liability) for which such Purchaser or any of its officers, employees,
or representatives is responsible. The Company agrees to indemnify and hold
harmless each Purchaser from any liability for any commission or compensation in
the nature of a finder's fee
19
(and the costs and expenses of defending against such liability or asserted
liability) for which the Company or any of its officers, employees or
representatives is responsible.
8.9 ATTORNEYS' FEES. If any action at law or in equity (including
arbitration) is necessary to enforce or interpret the terms of any of the
Transaction Documents, the prevailing party shall be entitled to reasonable
attorneys' fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.
8.10 AMENDMENTS AND WAIVERS OF AGREEMENT. Any term of this Agreement may
be amended or waived only with the written consent of the Company and at least
seventy-five percent (75%) of the holders of shares of Stock converted or
convertible into the Common Stock. Any amendment or waiver effected in
accordance with this Section 8.10 shall be binding upon the Purchasers and each
transferee of the Stock (or the Common Stock issuable upon conversion thereof),
each future holder of all such securities, and the Company.
8.11 SEVERABILITY. If one or more provisions of this Agreement are held
to be unenforceable under applicable law, the parties agree to renegotiate such
provision in good faith. In the event that the parties cannot reach a mutually
agreeable and enforceable replacement for such provision, then (a) such
provision shall be excluded from this Agreement, (b) the balance of this
Agreement shall be interpreted as if such provision were so excluded and (c) the
balance of this Agreement shall be enforceable in accordance with its terms.
8.12 DELAYS OR OMISSIONS. No delay or omission to exercise any right,
power or remedy accruing to any party under this Agreement, upon any breach or
default of any other party under this Agreement, shall impair any such right,
power or remedy of such non-breaching or non-defaulting party nor shall it be
construed to be a waiver of any such breach or default, or an acquiescence
therein, or of or in any similar breach or default thereafter occurring; nor
shall any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring. Any waiver, permit,
consent or approval of any kind or character on the part of any party of any
breach or default under this Agreement, or any waiver on the part of any party
of any provisions or conditions of this Agreement, must be in writing and signed
by the party charged with such waiver and such waiver shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any party, shall be cumulative
and not alternative.
8.13 CONFIDENTIALITY. Each party hereto agrees that, except with the
prior written permission of the other party, it shall at all times keep
confidential and not divulge, furnish or make accessible to anyone any
confidential information, knowledge or data concerning or relating to the
business or financial affairs of the other parties to which such party has been
or shall become privy by reason of this Agreement, discussions or negotiations
relating to this Agreement, the performance of its obligations hereunder or the
ownership of the Stock purchased hereunder; PROVIDED, HOWEVER, that the
receiving party may disclose such information (i) on a confidential basis to its
attorneys, accountants, consultants and other professionals to the extent
necessary to obtain their services in connection with its investment in the
Company, (ii) to any prospective purchaser of Stock from such receiving party as
long as such prospective purchaser agrees in writing to be bound by the
provisions of this Section 8.13, (iii) on a confidential basis
20
to any affiliate or partner of such receiving party and (iv) as required by
judicial decree or applicable law. Notwithstanding the foregoing, any Purchaser
may disclose summary financial information and a narrative description of the
Company's business to partners or potential partners of such Purchaser. The
provisions of this Section 8.13 shall be in addition to, and not in substitution
for, the provisions of any separate nondisclosure agreement executed by the
parties hereto with respect to the transactions contemplated hereby.
8.14 EXCULPATION AMONG PURCHASERS. Each Purchaser acknowledges that it is
not relying upon any person, firm or corporation, other than the Company and its
officers and directors, in making its investment or decision to invest in the
Company. Each Purchaser agrees that no Purchaser nor the respective controlling
persons, officers, directors, partners, agents, or employees of any Purchaser
shall be liable to any other Purchaser for any action heretofore or hereafter
taken or omitted to be taken by any of them in connection with the purchase of
the Securities.
8.15 INDEMNIFICATION. The Company shall defend, indemnify and hold the
Purchasers harmless from and against any and all claims, liabilities, damages,
losses and expenses, including reasonable attorney's fees and expenses and costs
of suit, arising out of any breach of the representations and warranties, and
out of any and all breaches of covenants, warranties, stipulations, agreements
and certifications made by or on behalf of the Company, in the Transaction
Documents or in any document delivered hereunder or thereunder.
8.16 PRESS RELEASE. Upon the consummation of the transactions
contemplated hereby, the Company may issue a press release identifying any
Purchaser by name, subject to the prior approval by such Purchaser of such press
release, which approval will not be unreasonably withheld.
8.17 USE OF PROCEEDS. Except as set forth in Section 6.18 of this
Agreement, the proceeds the Company shall receive upon the consummation of the
transactions contemplated hereby shall be solely used for product development,
working capital and other general corporate purposes and not for investment
purposes other than high grade commercial paper or other instruments.
[Signature Pages Follow]
21
The parties have executed this Series F Preferred Stock Purchase
Agreement as of the date first written above.
COMPANY:
PRINTCAFE, INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
-------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: President and
Chief Executive Officer
Address: ▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: President
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
SIGNATURE PAGE TO SERIES F PREFERRED STOCK PURCHASE AGREEMENT
PURCHASERS:
MELLON VENTURES II, L.P.
By its general partner
MVMA II L.P.
By its general partner
MVMA Inc.
By: /s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇ ▇▇▇▇▇
Title: Vice President
HARBOURVEST PARTNERS VI -
DIRECT FUND L.P.
By: HarbourVest VI - Direct Associates LLC
By: HarbourVest Partners, LLC
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Managing Director
▇▇▇▇▇▇▇▇ NEW TECHNOLOGIES FUND II, INC.
By: J. & ▇. ▇▇▇▇▇▇▇▇ & Co. Incorporated,
its investment adviser
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
SIGNATURE PAGE TO SERIES F PREFERRED STOCK PURCHASE AGREEMENT
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇, L.L.C.
By: /s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
-------------------------------------
Name:
Title:
SIGNATURE PAGE TO SERIES F PREFERRED STOCK PURCHASE AGREEMENT
EXHIBITS
--------
Exhibit A - Schedule of Purchasers
Exhibit B - Form of Amended and Restated Certificate of Incorporation
Exhibit C - Schedule of Exceptions to Representations and Warranties
Exhibit D - Form of Restated Investors' Rights Agreement
Exhibit E - Form of Restated Voting Agreement
Exhibit F - Form of Restated Co-Sale Agreement
Exhibit G - Financial Statements
Exhibit H - Form of Bylaws
Exhibit I - Form of Opinion of ▇▇▇▇▇▇, ▇▇▇▇▇ & Bockius LLP
EXHIBIT A
---------
SCHEDULE OF PURCHASERS
SHARES OF SERIES F
NAME/ADDRESS/FAX NO. PURCHASE PRICE PREFERRED STOCK
-------------------- -------------- ---------------
Mellon Ventures II, L.P. Cash 5,161,644 1,861,048
c/o Mellon Ventures, Inc. Cancelled Note 750,000
Attn: ▇▇▇▇ ▇▇▇▇▇ Cancelled Note 750,000
One Mellon Center, Suite 5210 Cancelled Note 750,000
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇ Interest on Notes 32,548
====================================
Fax: (▇▇▇) ▇▇▇-▇▇▇▇ Total Purchase Price 7,444,192
HarbourVest Partners VI - Direct Fund L.P. 4,652,620 1,163,155
Attn: Ofer Nemorivsky
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇, ▇▇▇▇ & ▇▇▇▇▇, L.L.C. 754,944 188,736
Attn: ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇ New Technologies Fund II, Inc. 2,791,572 697,893
c/o J. & ▇. ▇▇▇▇▇▇▇▇ and Co. Incorporated
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
A-1
