Exhibit 10.7
INPHONIC, INC.
SERIES D-1 CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
This Series D-1 Convertible Preferred Stock Purchase Agreement (the
"Agreement") is entered into as of October 11, 2001, by and among InPhonic,
Inc., a Delaware corporation (the "Company"), Sterling Communications, Inc., a
Maryland corporation ("Sterling") and a wholly-owned subsidiary of the Company,
and each of those persons and entities, severally and not jointly, whose names
are set forth on the Schedules of Purchasers attached hereto as Exhibits A-I and
A-III (which persons and entities are hereinafter collectively referred to as
"Purchasers" and each individually as a "Purchaser").
Recitals
Whereas, the Company has authorized the sale and issuance of an
aggregate of 2,454,120 shares of its Series D-1 Convertible Preferred Stock, par
value $0.01 per share (the "Series D-1 Stock") to each Purchaser set forth on
Exhibit A-I; and
Whereas, the Company has authorized the issuance of an additional
3,396,697 shares of Series D-1 Stock to certain of the Purchasers as set forth
opposite each Purchaser's name on Exhibit A-III in exchange for the surrender of
certificates representing an aggregate of 3,396,697 shares of Series D
Convertible Preferred Stock (the "Exchange Shares") pursuant to the Exchange of
Equity Agreement dated of even date herewith (the "Exchange Agreement") (the
shares authorized for sale hereunder and the Exchange Shares, collectively, the
"Shares"); and
Whereas, the Company desires to issue warrants (the "Warrants") to the
Purchasers as set forth on Exhibit A-II in connection with the closing of the
sale and issuance of the Shares; and
Now, Therefore, in consideration of the foregoing recitals and the
mutual promises, representations, warranties, and covenants hereinafter set
forth and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. Agreement To Sell And Purchase.
1.1 Authorization of Shares. On or prior to the Closing (as defined
in Section 2 below), the Company shall have authorized (a) the sale and issuance
to the Purchasers of the Shares, (b) the delivery of the Warrants and (c) the
issuance of such shares of Common Stock to be issued upon conversion of the
Shares and the Warrant Shares (as defined in Section 1.3 below) (together, the
"Conversion Shares"). The Shares and the Conversion Shares shall have the
rights, preferences, privileges and restrictions set forth in the Fifth Amended
and Restated Certificate of Incorporation, in the form attached hereto as
Exhibit B (the "Certificate of Incorporation").
1.2 Sale and Purchase. Subject to the terms and conditions hereof,
the Company hereby agrees to issue and sell to each Purchaser, severally and not
jointly, and each Purchaser agrees to purchase from the Company, severally and
not jointly, the number of Shares
set forth opposite such Purchaser's name on Exhibit A-I at a purchase price (the
"Purchase Price") of $1.650286766 per share (the "Series D-1 Price").
1.3 Covenant to Issue Warrant Upon Closing. At Closing, the Company
shall issue to the Purchasers warrants exercisable for a certain number of
shares of Series D-1 Stock at an exercise price of $0.01 per share
(collectively, the "Warrants"). Each Purchaser will be issued Warrants
(substantially in the form of the Warrant attached hereto as Exhibit C)
exercisable for such number of shares (the "Warrant Shares") of Series D-1 as
set forth opposite such Purchaser's name on Exhibit A-II.
1.4 Exchange of Exchange Shares. Subject to the terms and conditions
set forth in the Exchange Agreement, upon surrender of a certificate
representing the number of Exchange Shares set forth opposite such Purchaser's
name on Exhibit A-III, the Company hereby agrees to deliver to each Purchaser an
equal number of Shares.
2. Closings. The closing (the "Closing") shall be held at the offices
of ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ at 10:00 a.m. Eastern Time on October 11, 2001 (the "Closing Date"). At
the Closing, the Company shall deliver to each Purchaser (a) such number of
Shares to be purchased by such Purchaser at the Closing as set forth on Exhibit
A-I opposite each Purchaser's name by delivery to each Purchaser of a
certificate representing the number of Shares to be purchased at the Closing by
such Purchaser, against payment of the purchase price therefor by check, wire
transfer made payable to the order of the Company, cancellation of indebtedness
or any combination of the foregoing, (b) a warrant exercisable for the number of
Warrant Shares set forth on Exhibit A-II opposite each Purchaser's name and (c)
such number of Shares issued pursuant to the Exchange Agreement as set forth on
Exhibit A-III opposite each Purchaser's name by delivery to each Purchaser of a
certificate representing such number of Shares. If at the Closing any of the
applicable conditions specified in Section 5.1 shall not have been fulfilled,
each Purchaser shall, at its election, be relieved of all of its obligations
under this Agreement without thereby waiving any other rights it may have by
reason of such failure or such non-fulfillment.
3. Representations And Warranties Of The Company. For purposes of this
Section 3, all references to the Company shall include Sterling (other than
Sections 3.1, 3.3, 3.5, 3.16, 3.17, 3.21, 3.22, and 3.23). Except as set forth
on a Schedule of Exceptions delivered by the Company to the Purchasers at the
Closing specifically identifying the relevant Section hereof, the Company hereby
represents and warrants to each such Purchaser as of the date of the Closing as
follows (such representations and warranties do not lessen or obviate the
representations and warranties of each of the Purchasers set forth in this
Agreement):
3.1 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. The Company has all requisite corporate power and
authority to own and operate its properties and assets, to execute and deliver
this Agreement, the Second Amended and Restated Investor Rights Agreement in the
form attached hereto as Exhibit D (the "Investor Rights Agreement"), the Second
Amended and Restated Right of First Refusal and Co-Sale Agreement in the form
attached hereto as Exhibit E (the "Co-Sale Agreement"), and the Second Amended
and Restated Voting Agreement in the form attached hereto as Exhibit F (the
"Voting
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Agreement") (collectively, the "Related Agreements"), and all other agreements
required to be executed by the Company on or prior to the Closing, to issue and
sell the Shares and the Conversion Shares, and to carry out the provisions of
this Agreement, the Related Agreements and the Certificate of Incorporation and
to carry on its business as presently conducted and as presently proposed to be
conducted. The Company is duly qualified and is authorized to do business and is
in good standing as a foreign corporation in all jurisdictions in which the
nature of its activities and of its properties (both owned and leased) makes
such qualification necessary, except for those jurisdictions in which failure to
do so would not have a material adverse effect on the business, assets,
liabilities, financial condition, prospects or operations of the Company (a
"Material Adverse Effect").
3.2 Subsidiaries. The Company does not own or control any equity
security or other interest of any other corporation, limited partnership or
other business entity. The Company is not a participant in any joint venture,
partnership or similar arrangement.
3.3 Capitalization; Voting Rights.
(a) Immediately prior to the Closing, the authorized capital
stock of the Company will consist of: (i) 70,000,000 shares of Common Stock, par
value $0.01 per share, 19,996,804 shares of which are issued and outstanding and
6,193,596 shares of which are reserved for future issuance to employees pursuant
to the Company's 1999 Stock Incentive Plan and (ii) 30,225,228 shares of
Preferred Stock, (A) 668,782 of which have been designated as Series A Preferred
Stock, par value $0.01 per share, all of which is issued and outstanding, (B)
2,282,684 of which have been designated as Series B Preferred Stock, par value
$0.01 per share, all of which are issued and outstanding, (C) 7,273,762 of which
have been designated as Series C Preferred Stock, par value $0.01 per share,
6,576,246 of which are issued and outstanding, (D) 8,000,000 of which have been
designated as Series D Preferred Stock, par value $0.01 per share, 6,533,122 of
which are issued and outstanding and (E) 12,000,000 of which have been
designated Series D-1 Stock, par value $0.01 per share, none of which are issued
and outstanding.
(b) All issued and outstanding shares of the Company's Common
Stock and Preferred Stock (a) have been duly authorized and validly issued to
the persons listed on Exhibit G hereto, (b) are fully paid and nonassessable,
and (c) were issued in compliance with all applicable state and federal laws
concerning the issuance of securities.
(c) The rights, preferences, privileges and restrictions of the
Shares are as stated in the Certificate of Incorporation. The Series C Stock,
Series D Stock and Series D-1 Stock are initially convertible into Common Stock
on a one-for-one basis subject to Adjustment. The Series A and Series B Stock
are convertible into Common Stock on a two-for-one basis subject to Adjustment
(d) The Conversion Shares have been duly and validly reserved
for issuance. Other than as set forth in Section 3.3, there are no outstanding
options, warrants, rights (including registration, conversion or preemptive
rights and rights of first refusal), proxy or shareholder agreements, or
agreements of any kind for the purchase or acquisition from the Company of any
of its securities. Of the shares of Common Stock reserved for issuance under
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the Company's 1999 Stock Incentive Plan, (i) options to purchase 5,884,796
shares have been granted and are currently outstanding, and (ii) 308,800 shares
of Common Stock remain available for issuance to officers, directors, employees
and consultants pursuant to such 1999 Stock Incentive Plan. When issued in
compliance with the provisions of this Agreement, the Certificate of
Incorporation, the Shares and the Conversion Shares will be validly issued,
fully paid and nonassessable, and will be free of any liens or encumbrances;
provided, however, that the Shares and the Conversion Shares may be subject to
restrictions on transfer under state and/or federal securities laws as set forth
herein or as otherwise required by such laws at the time a transfer is proposed
and pursuant to any agreements entered into in connection with this Agreement.
(e) No stock plan, stock purchase, stock option or other
agreement or understanding between the Company and any holder of any equity
securities or rights to purchase equity securities provides for acceleration or
other changes in the vesting provisions or other terms of such agreement or
understanding as the result of any merger, consolidated sale of stock or assets,
change in control or any other transaction(s) by the Company.
3.4 Authorization; Binding Obligations. All corporate action on the
part of the Company, its officers, directors and shareholders necessary for the
authorization of this Agreement and the Related Agreements, the performance of
all obligations of the Company hereunder and thereunder at the Closing and the
authorization, sale, issuance and delivery of the Shares pursuant hereto, the
issuance of the Conversion Shares pursuant to the Certificate of Incorporation
has been taken or will be taken prior to the Closing. The Agreement and the
Related Agreements, when executed and delivered, will be valid and binding
obligations of the Company enforceable in accordance with their terms, except
(a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other laws of general application affecting enforcement of creditors' rights,
(b) general principles of equity that restrict the availability of equitable
remedies, and (c) to the extent that the enforceability of the indemnification
provisions in Section 2.9 of the Investor Rights Agreement may be limited by
applicable laws. The sale and issuance of the Shares, and the subsequent
conversion of the Shares into Conversion Shares are not and will not be subject
to any preemptive rights or rights of first refusal that have not been properly
waived or complied with.
3.5 Financial Statements. The Company has made available to each
Purchaser (a) its unaudited balance sheet at December 31, 2000 (the "Statement
Date") and its unaudited consolidated statement of income and cash flows for the
twelve month period ending on the Statement Date (the "Year End Financial
Statements") and (b) its unaudited balance sheet, and unaudited consolidated
statement of income and cash flows for each of the three (3) month period ending
on March 31, 2001 and the six (6) month period ending on June 30, 2001 (the
"Interim Financial Statements" and together with the Year End Financial
Statements, the "Financial Statements"). The Year End Financial Statements,
together with the notes thereto, are complete and correct in all material
respects, have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods indicated,
except as disclosed therein, and present fairly the financial condition of the
Company as of the Statement Date and the operating results of the Company during
the period indicated therein. The Interim Financial Statements are complete and
correct in all material respects and present fairly the financial condition of
the Company as of the balance sheet date and the
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operating results of the Company during the period indicated therein, subject to
normal recurring year end audit adjustments and do not contain all footnotes
required under generally accepted accounting principles.
3.6 Liabilities. The Company has no material liabilities and, to the
best of its knowledge, knows of no material contingent liabilities not disclosed
in the Financial Statements, except current liabilities incurred in the ordinary
course of business subsequent to the Statement Date which have not been, either
in any individual case or in the aggregate, materially adverse.
3.7 Agreements; Action.
(a) There are no material agreements, understandings or proposed
transactions between the Company and any of its officers, directors,
shareholders or employees, or any "affiliate" or "associate" of such (as such
terms are defined in the rules and regulations promulgated under the Securities
Act affiliates or any affiliate thereof.)
(b) There are no material agreements, understandings or proposed
transactions between the Company, it affiliates, or to the Company's knowledge,
any directors or any affiliate thereof and any company or other entity doing
business with the Company or is in the same or similar business of the Company.
(c) There are no agreements (other than partnership contracts),
understandings, instruments, contracts, proposed transactions, judgments,
orders, writs or decrees to which the Company is a party or to its knowledge by
which it is bound which may involve (i) obligations (contingent or otherwise)
of, or payments to, the Company in excess of $50,000 (other than obligations of,
or payments to, the Company arising from agreements entered into in the ordinary
course of business), or (ii) the transfer or license of any patent, copyright,
trade secret or other proprietary right to or from the Company (other than
licenses arising from the purchase of "off the shelf" or other standard products
or in connection with agreements entered into in the ordinary course of
business), or (iii) provisions restricting the development, manufacture or
distribution of the Company's products or services (other than provisions
contained within agreements entered into in the ordinary course of business), or
(iv) indemnification by the Company with respect to infringements of proprietary
rights (other than indemnification obligations arising from agreements entered
into in the ordinary course of business).
(d) The Company has not (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 any
other liabilities (other than with respect to dividend obligations,
distributions, indebtedness and other obligations incurred in the ordinary
course of business or as disclosed in the Financial Statements) individually in
excess of $50,000 or, in the case of indebtedness and/or liabilities
individually less than $50,000 or in excess of $125,000 in the aggregate, (iii)
made any loans or advances to any person, other than ordinary advances for
travel expenses, (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, (v) acquired the business or shares of another party, or (vi) entered
into any distributor, sales representative or similar agreements.
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(e) For the purposes of subsections (c) and (d) above, all
indebtedness, liabilities, agreements, understandings, instruments, contracts
and proposed transactions involving the same person or entity (including persons
or entities the Company has reason to believe are affiliated therewith) shall be
aggregated for the purpose of meeting the individual minimum dollar amounts of
such subsections.
(f) The Company has not engaged in the past three (3) months in
any discussion (i) with any representative of any corporation or corporations
regarding the consolidation or merger of the Company with or into any such
corporation or corporations, (ii) with any corporation, partnership, association
or other business entity or any individual regarding the sale, conveyance or
disposition of all or substantially all of the assets of the Company, or a
transaction or series of related transactions in which more than fifty percent
(50%) of the voting power of the Company is disposed of, or (iii) regarding any
other form of acquisition, liquidation, dissolution or winding up, of the
Company.
3.8 Obligations to Related Parties. There are no obligations of the
Company to officers, directors, shareholders, or employees of the Company other
than (a) for payment of salary for services rendered, (b) reimbursement for
reasonable expenses incurred on behalf of the Company and (c) for other standard
employee benefits made generally available to all employees (including stock
option agreements outstanding under any stock option plan approved by the Board
of Directors of the Company). None of the officers, directors or shareholders of
the Company, or any members of their immediate families, are indebted to the
Company or 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, except that officers, directors and/or shareholders of the Company may
own stock in publicly traded companies which may compete with the Company. No
officer, director or shareholder, or any member of their immediate families, is,
directly or indirectly, interested in any material contract with the Company
(other than such contracts as relate to any such person's ownership of capital
stock or other securities of the Company). Except as may be disclosed in the
Financial Statements, the Company is not a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation.
3.9 Changes. Since the Statement Date, there has not been:
(a) Any change in the assets, liabilities, financial condition
or operations of the Company from that reflected in the Financial Statements,
other than changes in the ordinary course of business, none of which
individually or in the aggregate has had or is expected to have a Material
Adverse Effect on such assets, liabilities, financial condition, operations or
prospects of the Company;
(b) Any resignation or termination of any officer or key
employee of the Company; and the Company, to the best of its knowledge, does not
know of the impending resignation or termination of employment of any such
officer or key employee;
(c) Any material change, except in the ordinary course of
business, in the contingent obligations of the Company by way of guaranty,
endorsement, indemnity, warranty or otherwise;
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(d) Any damage, destruction or loss, whether or not covered by
insurance, that has had or would reasonably be expected to have a Material
Adverse Effect;
(e) Any waiver by the Company of a valuable right or of a
material debt owed to it;
(f) Any direct or indirect loans made by the Company to any
shareholder, employee, officer or director of the Company, other than advances
made in the ordinary course of business;
(g) Any material change in any compensation arrangement or
agreement with any employee, officer, director or shareholder;
(h) Any declaration or payment of any dividend or other
distribution of the assets of the Company;
(i) Any labor organization activity;
(j) Any debt, obligation or liability incurred, assumed or
guaranteed by the Company, except those for immaterial amounts and for current
liabilities incurred in the ordinary course of business;
(k) Any sale, assignment or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets;
(l) Any change in any material agreement to which the Company is
a party or by which it is bound which has had or would reasonably be expected to
have a Material Adverse Effect;
(m) Any other event or condition of any character that, either
individually or cumulatively, has had or would reasonably be expected to have a
Material Adverse Effect; or
(n) Any arrangement or commitment by the Company to do any of
the acts described in subsection (a) through (m) above.
3.10 Title to Properties and Assets; Liens, Etc. The Company has good
and marketable title to its properties and assets, including the properties and
assets reflected in the most recent balance sheet included in the Financial
Statements, and good title to its leasehold estates, in each case subject to no
mortgage, pledge, lien, lease, encumbrance or charge, other than (a) those
resulting from taxes which have not yet become delinquent, (b) minor liens and
encumbrances which do not materially detract from the value of the property
subject thereto or materially impair the operations of the Company and (c) those
that have otherwise arisen in the ordinary course of business. All facilities,
machinery, equipment, fixtures, vehicles and other properties owned, leased or
used by the Company are in good operating condition and repair and are
reasonably fit and usable for the purposes for which they are being used. The
Company is in compliance with all material terms of each lease to which it is a
party or is otherwise bound.
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3.11 Patents and Trademarks.
(a) The Company owns or possesses sufficient legal rights to all
patents, trademarks, service marks, trade names, copyrights, trade secrets,
licenses, information and other proprietary rights and processes necessary for
its business as now conducted and as presently proposed to be conducted, without
any known infringement of the rights of others. There are no outstanding
options, licenses or agreements of any kind relating to the foregoing, nor is
the Company bound by or a party to any options, licenses or agreements of any
kind with respect to the patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information and other proprietary rights
and processes of any other person or entity other than such licenses or
agreements arising from the purchase of "off the shelf" or standard products,
and those arising in the ordinary course of business.
(b) The Company is not aware of any allegations that the Company
has violated or, by conducting its business as presently proposed, would violate
any of the patents, trademarks, service marks, trade names, copyrights or trade
secrets or other proprietary rights of any other person or entity.
(c) The Company is not aware that any of its employees is
obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would interfere with their duties to
the Company or that would conflict with the Company's business as presently
proposed to be conducted. Neither the execution nor delivery of this Agreement
or the Related Agreements, nor the carrying on of the Company's business by the
employees of the Company, nor the conduct of the Company's business as presently
proposed, will, to the Company's knowledge, conflict with or result in a breach
of the terms, conditions or provisions of, or constitute a default under, any
contract, covenant or instrument under which any employee is now obligated. The
Company does not believe it is or will be necessary to utilize any inventions,
trade secrets or proprietary information of any of its employees made prior to
their employment by the Company, except for inventions, trade secrets or
proprietary information that have been assigned to the Company.
(d) The Company is not aware of any claims by any other person
or entity contesting the validity, enforceability, use or ownership of any of
the patents, trademarks, service marks, trade names, copyrights, trade secrets,
licenses, information and other proprietary rights and processes necessary for
its business as now conducted and as presently proposed to be conducted. The
Company is not aware of any infringement or misappropriation by any other person
or entity with respect to any of the patents, trademarks, service marks, trade
names, copyrights, trade secrets, licenses, information and other proprietary
rights and processes necessary for its business as now conducted and as
presently proposed to be conducted.
3.12 Compliance with Other Instruments.
(a) The Company is not in violation or default of any term of
its Certificate of Incorporation or Bylaws, or of any material term of any
mortgage, indenture, contract, agreement, instrument or contract to which it is
party or by which it is bound or of any judgment, decree, order, or writ. The
execution, delivery, and performance of and compliance
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with this Agreement, and the Related Agreements, and the issuance and sale of
the Shares pursuant hereto and the Conversion Shares pursuant to the Certificate
of Incorporation, will not, with or without the passage of time or giving of
notice, result in any such material violation, or be in conflict with or
constitute a default under any such material term, or result in the creation of
any mortgage, pledge, lien, encumbrance or charge upon any of the properties or
assets of the Company or the suspension, revocation, impairment, forfeiture or
nonrenewal of any permit, license, authorization or approval applicable to the
Company, its business or operations or any of its assets or properties.
(b) The Company has avoided every condition, and has not
performed any act, the occurrence of which would result in the Company's loss of
any right granted under any license, distribution agreement or other agreement
to which the Company is a party if such loss would have a Material Adverse
Effect.
3.13 Litigation. There is no action, suit, proceeding or
investigation pending or to the Company's knowledge currently threatened against
the Company or its officers that questions the validity of this Agreement, or
the Related Agreements or the right of the Company to enter into any of such
agreements, or to consummate the transactions contemplated hereby or thereby, or
which might have, either individually or in the aggregate, Material Adverse
Effect or result in a change in the current equity ownership of the Company, nor
is the Company aware that there is any basis for any of the foregoing. 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 techniques allegedly proprietary to any of their former
employers, or their obligations under any agreements with prior employers. The
Company is not 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 currently pending or which the Company intends to initiate.
3.14 Tax Returns and Payments. The Company has paid all federal,
state, local and foreign taxes (including, without limitation, income, profit,
franchise, sales, use, real property, personal property, ad valorem, excise,
employment, social security and wage withholding taxes) and installments of
estimated taxes, assessments, deficiencies, levies, imports, duties, license
fees, registration fees, withholdings, or other similar charges of every kind,
character or description imposed by any governmental or quasi-governmental
authorities, and any interest, penalties or additions to tax imposed thereon or
in connection therewith (collectively, "Taxes") due as of the Closing Date. The
Company has timely filed or has obtained presently effective extensions with
respect to all Federal, state, county, local and foreign tax returns
(collectively, "Tax Returns") that the Company is required to file. The Tax
Returns are true and correct and all taxes shown thereon to be due have been
timely paid. No penalties or other charges are or will become due with respect
to any such Tax Returns as the result of the late filing thereof. The Company
has either paid or established in the Financial Statements adequate reserves for
the payment of all such Taxes due or claimed to be due by any taxing authority
in connection with any such Tax Returns. None of the Company's federal income
tax returns have been audited by the Internal Revenue Service, and no
controversy with respect to taxes of any type is pending or, to the knowledge of
the Company, threatened. The Company has withheld or collected from each payment
made to its employees the amount of all
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taxes required to be withheld or collected therefrom (including, but not limited
to, federal income taxes and Federal Insurance Contribution Act taxes) and has
paid all such amounts to the appropriate taxing authorities when due. The
Company's net operating losses for federal income tax purposes, as set forth in
the Financial Statements, are not subject to any limitations imposed by Section
382 of the Internal Revenue Code of 1986 as amended (the "Code"), and
consummation of the transactions contemplated by this Agreement of by any other
agreement, understanding or commitment, contingent or otherwise, to which the
Company is a party or by which it is otherwise bound will not have the effect of
limiting the Company's ability to use such net operating losses in full to
offset such taxable income.
3.15 Employees. The Company has no collective bargaining agreements
with any of its employees. There is no labor union organizing activity pending
or, to the Company's knowledge, threatened with respect to the Company. The
Company is not delinquent in payments to any of its employees for any wages,
salaries, commissions, bonuses or other direct compensation for any services
performed by them to date or amounts required to be reimbursed to such employees
and upon any termination of the employment of any such employees. Schedule 3.15
sets forth a true, correct and complete list of all employment, severance,
non-competition, deferred compensation and similar arrangements between the
Company and all officers, employees and consultants of the Company and all such
arrangements with former officers, employees and consultants of the Company
pursuant to which the Company is obligated to make any payments or provide any
benefits. To the Company's knowledge, no employee of the Company, nor any
consultant with whom the Company has contracted, is in violation of any term of
any employment contract, proprietary information agreement or any other
agreement relating to the right of any such individual to be employed by, or to
contract with, the Company because of the nature of the business to be conducted
by the Company; and to the Company's knowledge the continued employment by the
Company of its present employees, and the performance of the Company's contracts
with its independent contractors, will not result in any such violation. The
Company has not received any notice alleging that any such violation has
occurred. No employee of the Company has been granted the right to continued
employment by the Company or to any material compensation following termination
of employment with the Company. The Company is not aware that any officer or key
employee, or that any group of key employees, intends to terminate his, her or
their employment with the Company, nor does the Company have a present intention
to terminate the employment of any officer, key employee or group of key
employees.
3.16 Assignment of Inventions, Non-Disclosure and Non-Competition
Agreements and Market Stand-off Agreements.
(a) Each former and current employee, officer and consultant of the
Company has executed an Assignment of Inventions, Non-Disclosure and
Non-Competition Agreement in the form of Exhibit H attached hereto. No current
employee, officer or consultant of the Company has excluded works or inventions
made prior to his or her employment with the Company from his or her assignment
of inventions pursuant to such employee, officer or consultant's Assignment of
Inventions, Non-Disclosure and Non-Competition Agreement.
(b) Each key employee of the Company and each holder of options to
purchase equity and debt convertible into equity has executed a market stand-off
agreement.
10
3.17 Obligations of Management. Each officer of the Company is
currently devoting one hundred percent (100%) of his or her business time to the
conduct of the business of the Company. The Company is not aware that any
officer or key employee of the Company is planning to work less than full time
at the Company in the future. To the Company's knowledge, no officer or key
employee plans to work for a competing enterprise, whether or not such officer
or key employee is or will be compensated by such enterprise.
3.18 Registration Rights and Voting Rights.
(a) Except as required pursuant to the Investor Rights
Agreement, the Company is presently not under any obligation, and has not
granted any rights, to register (as defined in Section 1.1 of the Investor
Rights Agreement) any of the Company's presently outstanding securities or any
of its securities that may hereafter be issued.
(b) To the Company's knowledge, except as contemplated in the
Voting Agreement, no shareholder of the Company has entered into any agreement
with respect to the voting of equity securities of the Company.
3.19 Compliance with Laws; Permits. The Company is not in violation
of any applicable statute, rule, regulation, order or restriction of any
domestic or foreign government or any instrumentality or agency thereof in
respect of the conduct of its business or the ownership of its properties which
violation would have a Material Adverse Effect. No governmental orders,
permissions, consents, approvals or authorizations are required to be obtained
and no registrations or declarations are required to be filed in connection with
the execution and delivery of this Agreement and the issuance of the Shares and
the Conversion Shares, except such as has been duly and validly obtained or
filed, or with respect to any filings that must be made after the Closing as
will be filed in a timely manner. The Company has all franchises, permits,
licenses and any similar authority necessary for the conduct of its business as
now being conducted by it, the lack of which could materially and adversely
affect the business, properties, prospects or financial condition of the Company
and believes it can obtain, without undue burden or expense, any similar
authority for the conduct of its business as planned to be conducted.
3.20 Environmental and Safety Laws. To the Company's knowledge, the
Company is not in violation of any applicable statute, law or regulation
relating to the environment or occupational health and safety, and to its
knowledge, no material expenditures are or will be required in order to comply
with any such existing statute, law or regulation. No Hazardous Materials (as
defined below) are used or have been used, stored, or disposed of by the Company
or, to the Company's knowledge, after reasonable investigation, by any other
person or entity on any property owned, leased or used by the Company. For the
purposes of the preceding sentence, "Hazardous Materials" shall mean (a)
materials which are listed or otherwise defined as "hazardous" or "toxic" under
any applicable local, state, federal and/or foreign laws and regulations that
govern the existence and/or remedy of contamination on property, the protection
of the environment from contamination, the control of hazardous wastes, or other
activities involving hazardous substances, including building materials, or (b)
any petroleum products or nuclear materials.
11
3.21 Offering Valid. Assuming the accuracy of the representations and
warranties of the Purchasers contained in Section 4.2 hereof, the offer, sale
and issuance of the Shares and the Conversion Shares will be exempt from the
registration requirements of the Securities Act, and will have been registered
or qualified (or are exempt from registration and qualification) under the
registration, permit or qualification requirements of all applicable state
securities laws. Neither the Company nor any agent on its behalf has solicited
or will solicit any offers to sell or has offered to sell or will offer to sell
all or any part of the Shares to any person or persons so as to bring the sale
of such Shares by the Company within the registration provisions of the
Securities Act or any state securities laws.
3.22 Full Disclosure. The Company has provided the Purchasers with
all information requested by the Purchasers in connection with their decision to
purchase the Shares and to the Company's knowledge, including all information
the Company believes is reasonably necessary to make such investment decision.
Neither this Agreement, the Exhibits hereto, the Related Agreements nor any
other document delivered by the Company to Purchasers or their attorneys or
agents in connection herewith or therewith or with the transactions contemplated
hereby or thereby, contain any untrue statement of a material fact nor, omit to
state a material fact necessary in order to make the statements contained herein
or therein not misleading. To the Company's knowledge, there are no facts which
(individually or in the aggregate) will have a Material Adverse Effect that have
not been set forth in the Agreement, the Exhibits hereto, the Related Agreements
or in other documents delivered to Purchasers or their attorneys or agents in
connection herewith.
3.23 Minute Books. The minute books of the Company made available to
the Purchasers contain a complete summary of all formal meetings of the
directors and the shareholders of the Company since the time of incorporation.
3.24 Real Property Holding Corporation. The Company is not a real
property holding corporation within the meaning of Section 897(c)(2) of the
Internal Revenue Code of 1986, as amended (the "Code") and any regulations
promulgated thereunder.
3.25 Insurance. The Company has general business liability, fire and
casualty insurance policies with coverage customary for companies similarly
situated to the Company.
3.26 Tax Elections. The Company has not elected to be treated as an
"S" corporation or a collapsible corporation pursuant to Section 341(f) or
Section 1362(a) of the Code, nor has it made any other elections pursuant to the
Code (other than elections which relate solely to matters of accounting,
depreciation or amortization) which would have a material adverse effect on the
Company, its financial condition, its business as presently conducted or its
present properties or material assets.
3.27 Business Plan. The Company is engaged primarily in the business
of providing wireless enterprise solutions and Virtual Private Wireless Networks
for major corporations, affinity groups and e-businesses.
3.28 Criminal History. To the Company's knowledge, during the past
ten (10) years, no Company director, officer or management member has been
arrested or convicted
12
of any material crime, nor have any of them been bankrupt or an officer or
director of a bankrupt Company.
3.29 Small Business Concern. The Company (together with its
"affiliates" as that term is defined in Title 13 of the Code of Federal
Regulations ("C.F.R."), (S) 121.103) is a "small business concern" within the
meaning of the Small Business Investment Act of 1958, and the regulations
thereunder, including (S) 121.802(a) of Title 13 of the C.F.R. The Company
acknowledges that Core Capital Partners, L.P. is a small business investment
company licensed by the Small Business Administration ("SBA") and that it is
relying upon this representation.
4. Representations And Warranties Of The Purchasers. Each Purchaser hereby
represents and warrants to the Company, severally and not jointly, as follows
(such representations and warranties do not lessen or obviate the
representations and warranties of the Company set forth in this Agreement):
4.1 Requisite Power and Authority. Purchaser has all necessary power
and authority under all applicable provisions of law to execute and deliver this
Agreement and the Related Agreements and to carry out their provisions. All
action on Purchaser's part required for the lawful execution and delivery of
this Agreement and the Related Agreements have been or will be effectively taken
prior to the Closing. Upon their execution and delivery, this Agreement and the
Related Agreements will be valid and binding obligations of Purchaser,
enforceable in accordance with their terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights, (b) general principles
of equity that restrict the availability of equitable remedies, and (c) to the
extent that the enforceability of the indemnification provisions of Section 2.9
of the Investor Rights Agreement may be limited by applicable laws.
4.2 Investment Representations. Purchaser understands that neither
the Shares nor the Conversion Shares have been registered under the Securities
Act. Purchaser also understands that the Shares are being offered and sold
pursuant to an exemption from registration contained in the Securities Act based
in part upon Purchaser's representations contained in the Agreement. Purchaser
hereby represents and warrants as follows:
(a) Purchaser Bears Economic Risk. Purchaser has substantial
experience in evaluating and investing in private placement transactions of
securities in companies similar to the Company so that it is capable of
evaluating the merits and risks of its investment in the Company and has the
capacity to protect its own interests. Purchaser must bear the economic risk of
this investment indefinitely unless the Shares or the Conversion Shares are
registered pursuant to the Securities Act, or an exemption from registration is
available. Purchaser understands that the Company has no present intention of
registering the Shares or the Conversion Shares or any shares of its Common
Stock. Purchaser also understands that there is no assurance that any exemption
from registration under the Securities Act will be available and that, even if
available, such exemption may not allow Purchaser to transfer all or any portion
of the Shares or the Conversion Shares under the circumstances, in the amounts
or at the times Purchaser might propose.
13
(b) Acquisition for Own Account. Purchaser is acquiring the
Shares and the Conversion Shares for Purchaser's own account for investment
only, and not with a view towards their distribution.
(c) Purchaser Can Protect Its Interest. Purchaser represents
that by reason of its, or of its management's, business or financial experience,
Purchaser has the capacity to protect its own interests in connection with the
transactions contemplated in this Agreement, and the Related Agreements.
Further, Purchaser is aware of no publication of any advertisement in connection
with the transactions contemplated in the Agreement.
(d) Accredited Investor. Purchaser represents that it is an
accredited investor within the meaning of Regulation D under the Securities Act.
(e) Company Information. Purchaser has had an opportunity to
discuss the Company's business, management and financial affairs with directors,
officers and management of the Company and has had the opportunity to review the
Company's operations and facilities. Purchaser has also had the opportunity to
ask questions of and receive answers from, the Company and its management
regarding the terms and conditions of this investment.
(f) Rule 144. Purchaser acknowledges and agrees that the Shares,
and, if issued, the Conversion Shares must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available. Purchaser has been advised or is aware of the
provisions of Rule 144 promulgated under the Securities Act as in effect from
time to time, which permits limited resale of shares purchased in a private
placement subject to the satisfaction of certain conditions, including, among
other things: the availability of certain current public information about the
Company, the resale occurring following the required holding period under Rule
144 and the number of shares being sold during any three-month period not
exceeding specified limitations.
(g) Residence. If the Purchaser is an individual, then the
Purchaser resides in the state or province identified in the address of the
Purchaser set forth on Exhibit A-I and/or Exhibit A-III; if the Purchaser is a
partnership, corporation, limited liability company or other entity, then the
office or offices of the Purchaser in which its investment decision was made is
located at the address or addresses of the Purchaser set forth on Exhibit A-I
and/or Exhibit A-III.
4.3 Transfer Restrictions. Each Purchaser acknowledges and agrees
that the Shares and, if issued, the Conversion Shares are subject to
restrictions on transfer as set forth in the Investor Rights Agreement.
5. Conditions To Closing.
5.1 Conditions to Purchasers' Obligations at the Closing. Each of
the Purchasers' obligations to purchase the Shares at the Closing are subject to
the satisfaction, at or prior to such date, of the following conditions:
(a) Representations and Warranties True; Performance of
Obligations. The representations and warranties made by the Company in Section 3
hereof shall
14
be true and correct as of the Closing Date with the same force and effect as if
they had been made as of such date and the Company shall have performed all
obligations and conditions herein required to be performed or observed by it on
or prior to such date.
(b) Consents, Permits, and Waivers. The Company shall have
obtained any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement and the Related
Agreements (except for such as may be properly obtained subsequent to the
Closing).
(c) Filing of Certificate of Incorporation. The Certificate of
Incorporation shall have been filed with the Secretary of State of the State of
Delaware and shall be in full force and effect as of the Closing.
(d) Corporate Documents. The Company shall have delivered to
Purchasers or their counsel, copies of all corporate documents of the Company as
Purchasers shall reasonably request.
(e) Reservation of Conversion Shares. The Conversion Shares
shall have been duly authorized and reserved for issuance upon such conversion
or exercise, as the case may be.
(f) Compliance Certificate. The Company shall have delivered to
the Purchasers a Compliance Certificate, executed by the Chief Executive Officer
of the Company, dated the Closing Date, to the effect that the conditions
specified in subsections (a), (b), (c) and (e) of this Section 5.1 have been
satisfied.
(g) Investor Rights Agreement. The Investor Rights Agreement
shall have been executed and delivered by the parties thereto. The stock
certificates representing the shares subject to the Investor Rights Agreement
shall have been delivered to the Secretary of the Company and shall have had
appropriate legends placed upon them to reflect the restrictions on transfer set
forth in the Investor Rights Agreement.
(h) Right of First Refusal and Co-Sale Agreement. The Co-Sale
Agreement shall have been executed and delivered by the parties thereto. The
stock certificates representing the shares subject to the Co-Sale Agreement
shall have been delivered to the Secretary of the Company and shall have had
appropriate legends placed upon them to reflect the restrictions on transfer set
forth in the Co-Sale Agreement.
(i) Voting Agreement. The Voting Agreement shall have been
executed and delivered by the parties thereto. The stock certificates
representing the shares subject to the Voting Agreement shall have been
delivered to the Secretary of the Company and shall have had appropriate legends
placed upon them to reflect the restrictions on transfer set forth in the Voting
Agreement.
(j) Employment Agreements. The Employment Agreements by and
between the Company and each of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇▇▇▇▇ shall be in
full force and effect.
15
(k) Legal Opinion. The Purchasers shall have received from
legal counsel to the Company an opinion addressed to them, dated as of the
Closing Date, in substantially the form attached hereto as Exhibit I.
(l) Management Rights Agreement. The Management Rights
Agreement shall have been executed and delivered by the parties thereto.
(m) 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 reasonably
satisfactory in substance and form to the Purchasers and their counsel, and the
Purchasers and their counsel shall have received all such counterpart originals
or certified or other copies of such documents as they may reasonably request.
Such documents shall include (but not be limited to) the following:
(1) Certified Charter Documents. A copy of the Company's
Certificate of Incorporation (certified by the Delaware Secretary of State) and
Bylaws, as amended (and further amended to provide that any two directors or
holders of at least fifty-one percent (51%) of the Common Stock and Preferred
Stock of the Company then outstanding on an as converted basis, voting as a
single class, may call a meeting of the Board of Directors), certified by the
Secretary of the Company as true and correct as of the Closing.
(2) Secretary's Incumbency Certificate. A certificate of
the Secretary or an Assistant Secretary or other officer of the Company
certifying the names of the officers of the Company authorized to sign this
Agreement and the other documents, instruments or certificates to be delivered
pursuant to this Agreement by the Company or any of its officers, together with
the true signatures of such officers.
(3) Corporate Actions. A copy of the resolutions of the
Board of Directors and, if required, the stockholders of the Company evidencing
the approval of this Agreement and the Related Agreements, the election of the
Board of Directors and the other matters contemplated hereby, certified by the
Secretary of the Company to be true, complete and correct.
(4) Good Standing Certificate. A good standing
certificate issued by the Delaware Secretary of State and any other state where
the Company is qualified to do business dated within fifteen (15) days prior to
the Closing.
(n) Assignment of Inventions, Non-Disclosure and
Non-Competition Agreement. The Company and each of its former senior management
and current employees, senior management, officers and consultants, shall have
entered into the Assignment of Inventions, Non-Disclosure and Non-Competition
Agreement.
(o) Due Diligence. The Purchasers shall have completed, to
their sole satisfaction, their due diligence review of the Company.
(p) Blue Sky Approvals. The Company shall have obtained all
necessary Blue Sky Law permits and qualifications, or secured an exemption
therefrom, required
16
by any state for the offer and sale of the Shares to be sold at the Closing or
at such time thereafter as may be required by applicable statute.
5.2 Conditions to Obligations of the Company. The Company's
obligation to issue and sell the Shares at the Closing to each Purchaser
purchasing Shares at the Closing (a "Participating Purchaser") is subject to the
satisfaction, on or prior to the Closing, of the following conditions:
(a) Payment. Each Participating Purchaser shall have delivered
to the Company payment in accordance with Section 2.
(b) Representations and Warranties True. The representations
and warranties in Section 4 made by each Participating Purchaser shall be true
and correct at the date of the Closing with the same force and effect as if they
had been made on and as of said date.
(c) Performance of Obligations. Such Participating Purchaser
shall have performed and complied with all agreements and conditions herein
required to be performed or complied with by such Participating Purchaser on or
before the Closing.
(d) Related Agreements. Each of the Related Agreements shall
have been executed and delivered by such Participating Purchaser.
(e) Consents, Permits, and Waivers. The Company shall have
obtained any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by the Agreement and the Related
Agreements (except for such as may be properly obtained subsequent to the
Closing).
6. Miscellaneous.
6.1 Governing Law. This Agreement shall be construed, interpreted
and enforced in accordance with the laws of the State of Delaware (without
regard to the choice of law or conflicts of law provisions thereof.
6.2 Survival. The representations, warranties, covenants and
agreements made herein shall survive any investigation made by any Purchaser and
the closing of the transactions contemplated hereby. All statements as to
factual matters contained in any certificate or other instrument delivered by or
on behalf of the Company pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the
Company hereunder solely as of the date of such certificate or instrument.
6.3 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of the Shares from time to time.
6.4 Entire Agreement. This Agreement, the Exhibits and Schedules
hereto, the Related Agreements and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subject matter
17
hereof and no party shall be liable or bound to any other in any manner by any
representations, warranties, covenants and agreements except as specifically set
forth herein and therein.
6.5 Severability. In case any provision of the Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
6.6 Amendment and Waiver.
(a) This Agreement may be amended or modified only by the
written consent of the Company and holders of more than sixty-six and two-thirds
percent (66 2/3%) of the Shares (treated as if converted and including any
Conversion Shares into which the Shares have been converted that have not been
sold to the public).
(b) The obligations of the Company and the rights of the
holders of the Shares and the Conversion Shares under the Agreement may be
waived only with the written consent of the holders of more than sixty-six and
two-thirds percent (66 2/3%) of the Shares (treated as if converted and
including any Conversion Shares into which the Shares have been converted that
have not been sold to the public).
6.7 Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement, the Related
Agreements or the Certificate of Incorporation, shall impair any such right,
power or remedy, nor shall it be construed to be a waiver of any such breach,
default or noncompliance, or any acquiescence therein, or of or in any similar
breach, default or noncompliance thereafter occurring. It is further agreed that
any waiver, permit, consent or approval of any kind or character on any
Purchaser's part of any breach, default or noncompliance under this Agreement,
the Related Agreements or under the Certificate of Incorporation or any waiver
on such party's part of any provisions or conditions of the Agreement, the
Related Agreements, or the Certificate of Incorporation must be in writing and
shall be effective only to the extent specifically set forth in such writing.
All remedies, either under this Agreement, the Related Agreements, the
Certificate of Incorporation, the Bylaws, or otherwise afforded to any party,
shall be cumulative and not alternative.
6.8 Notices. All notices required or permitted hereunder shall be
in writing and shall be deemed effectively given: (a) upon personal delivery to
the party to be notified, (b) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day, (c) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) one (1) day after deposit with
a nationally recognized overnight courier, specifying next day delivery, with
written verification of receipt. All communications shall be sent to the Company
at the address as set forth on the signature page hereof and to a Purchaser at
the address set forth on Exhibit A-I and/or Exhibit A-III attached hereto or at
such other address as the Company or such Purchaser may designate by ten (10)
days advance written notice to the other parties hereto.
6.9 Expenses.
18
(a) The Company shall pay all costs and expenses that it incurs
with respect to the negotiation, execution, delivery and performance of the
Agreement.
(b) The Company shall reimburse First Analysis Corporation, upon
receipt of a detailed ▇▇▇▇, for up to $25,000 of fees and expenses, including
reasonable attorneys' fees, incurred in connection with the transactions
contemplated by this Agreement (the "Fees"). The Fees shall be paid in full out
of the Purchase Price at the Closing by wire transfer to an account or accounts
designated in writing by First Analysis Corporation, and agreed to by the
Company, prior to the Closing.
6.10 Attorneys' Fees. In the event that any suit or action is
instituted to enforce any provision in this Agreement, the prevailing party in
such dispute shall be entitled to recover from the losing party all fees, costs
and expenses of enforcing any right of such prevailing party under or with
respect to this Agreement, including without limitation, such reasonable fees
and expenses of attorneys and accountants, which shall include, without
limitation, all fees, costs and expenses of appeals.
6.11 Titles and Subtitles. The titles of the sections and
subsections of the Agreement are for convenience of reference only and are not
to be considered in construing this Agreement.
6.12 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
6.13 Broker's Fees. Each party hereto represents and warrants that
no agent, broker, investment banker, person or firm acting on behalf of or under
the authority of such party hereto is or will be entitled to any broker's or
finder's fee or any other commission directly or indirectly in connection with
the transactions contemplated herein. Each party hereto further agrees to
indemnify each other party for any claims, losses or expenses incurred by such
other party as a result of the representation in this Section 6.13 being untrue.
6.14 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 Shares and Conversion Shares.
6.15 Confidentiality. Each party hereto agrees that, except with
the prior written consent 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 or the Related Agreements,
discussions or negotiations relating to this Agreement or the Related
Agreements, the performance of its obligations hereunder or the ownership of the
Shares purchased hereunder. The provisions of
19
this Section 6.15 shall be in addition to, and not in substitution for, the
provisions of any separate nondisclosure agreement executed by the parties
hereto.
6.16 Pronouns. All pronouns contained herein, and any variations
thereof, shall be deemed to refer to the masculine, feminine or neutral,
singular or plural, as to the identity of the parties hereto may require.
6.17 Mutual Drafting. This Agreement is the result of the joint
efforts of the Company and each of the Purchasers, and each provision hereof has
been subject to the mutual consultation, negotiation and agreement of the
parties and there shall be no construction against any party based on any
presumption of that party's involvement in the drafting thereof.
6.18 Legal Counsel. The parties understand and acknowledge that
they have each been represented by (or have had the opportunity to be
represented by) counsel in connection with the preparation, execution and
delivery of this Agreement. The parties further understand and acknowledge that
▇▇▇▇▇ & ▇▇▇▇▇▇▇ has served as counsel only to The Productivity Fund IV, L.P.,
The Productivity Fund IV Advisors Fund L.P., and ▇▇▇▇ ▇▇▇▇▇▇▇.
[SIGNATURE PAGES FOLLOW]
20
IN WITNESS WHEREOF, the parties hereto have executed this Series D-1
Convertible Preferred Stock Purchase Agreement as of the date set forth in the
first paragraph hereof.
Company:
InPhonic, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
_____________________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Chairman and Chief Executive Officer
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Sterling:
Sterling Communications, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
_____________________________________
Name:
Title:
Address: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
INPHONIC, INC.
SERIES D-1 CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
The Productivity Fund IV, L.P., a
Delaware limited partnership
First Analysis Management Company
IV, L.L.C., Its General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
___________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Member
22
INPHONIC, INC.
SERIES D-1 CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
The Productivity Fund IV Advisors
Fund, L.P., a Delaware limited
partnership
First Analysis Management Company
IV, L.L.C., Its General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
__________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Member
23
INPHONIC, INC.
SERIES D-1 CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ Revocable Trust
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
__________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Trustee
24
INPHONIC, INC.
SERIES D-1 CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
▇▇▇▇▇ Capital Partners, LLC
By: ▇. ▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------
Name:
Title:
25
INPHONIC, INC.
SERIES D-1 CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
THIRTY-FIVE EAST PARTNERS (ELEVEN) LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
______________________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Executive Vice President
and Chief Executive Officer
26
INPHONIC, INC.
SERIES D-1 CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
Core Capital Partners, L.P.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
_______________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
27
INPHONIC, INC.
SERIES D-1 CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
Minotaur, LLC
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
_____________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Managing Director
28
INPHONIC, INC.
SERIES D-1 CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
VENTURE INVESTMENT PARTNERS I LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
___________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Managing Partner
29
INPHONIC, INC.
SERIES D-1 CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
SPRING CAPITAL PARTNERS, LP
By: Spring Capital Investors, LLC
Its: General Partner
By: /s/ ▇▇▇▇▇▇ McE. ▇▇▇▇▇▇▇
_______________________________
Name: ▇▇▇▇▇▇ McE. ▇▇▇▇▇▇▇
Title: Member
30
INPHONIC, INC.
SERIES D-1 CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
ARGOSY INVESTMENT PARTNERS II, L.P.
By: Argosy Associates II, L.P.
Its: General Partner
By: Argosy Associates II, Inc.
Its: General Partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
__________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
31
INPHONIC, INC.
SERIES D-1 CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
WYNNEFIELD PRIVATE EQUITY PARTNERS I, LP
By: Wynnefield GP, L.P.
Its: General Partner
By: Wynnefield Capital, LLC
Its: General Partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
______________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Managing Partner
32
INPHONIC, INC.
SERIES D-1 CONVERTIBLE PREFERRED STOCK PURCHASE AGREEMENT
COUNTERPART SIGNATURE PAGE
IN WITNESS WHEREOF, the undersigned has hereunto set his hand as of the
day and year first above written.
Brind Investment Partners II
By: /s/ ▇▇▇ ▇▇▇▇▇
____________________________
Name: ▇▇▇ ▇▇▇▇▇
Title: Partner
33