Exhibit 10.17
▇-▇▇▇-▇▇▇▇▇▇▇.▇▇▇, INC.
STOCK PURCHASE AGREEMENT
MAY 20, 1999
TABLE OF CONTENTS
Page
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1. Purchase and Sale of Stock............................................1
1.1. Sale and Issuance of Series B Preferred Stock and Class
B Common Stock...............................................1
1.2. Closing......................................................1
2. Representations and Warranties of the Company.........................2
2.1. Organization, Good Standing and Qualification................2
2.2. Capitalization and Voting Rights.............................2
2.3. Subsidiaries.................................................3
2.4. Authorization................................................3
2.5. Valid Issuance of Series B Preferred Stock...................3
2.6. Governmental Consents........................................4
2.7. Offering.....................................................4
2.8. Litigation and Government Proceedings........................4
2.9. Patents and Trademarks.......................................4
2.10. Compliance with Other Instruments............................5
2.11. Related-Party Transactions...................................5
2.12. Financial Statements.........................................5
2.13. Changes......................................................6
2.14. Tax Returns, Payments and Elections..........................7
2.15. Permits......................................................8
2.16. Environmental Matters........................................8
2.17. Registration Rights..........................................8
2.18. Corporate Documents; Minute Books............................8
2.19. Title to Property and Assets.................................9
2.20. Insurance....................................................9
2.21. Employee Benefit Plans.......................................9
2.22. Labor Matters................................................9
2.23. Year 2000 Compliance........................................10
2.24. Disclosure..................................................10
3. Representations and Warranties of the McCanns........................10
3.1. Title to Stock..............................................10
3.2. Authorization...............................................10
3.3. Title Upon Transfer.........................................11
3.4. Governmental Consents.......................................11
3.5. Compliance with Other Instruments...........................11
3.6. Litigation..................................................11
4. Representations and Warranties of the Investors......................11
4.1. Authorization...............................................11
4.2. Purchase Entirely for Own Account...........................11
4.3. Disclosure of Information...................................12
4.4. Investment Experience.......................................12
4.5. Accredited Investor.........................................12
4.6. Restricted Securities.......................................12
4.7. Further Limitations on Disposition..........................12
4.8. Legends.....................................................13
4.9. Further Representations by Foreign Investors................13
5. Conditions of Investor's Obligations at Closing......................13
5.1. Representations and Warranties..............................14
5.2. Performance.................................................14
5.3. Compliance Certificate......................................14
5.4. Qualifications..............................................14
5.5. Proceedings and Documents...................................14
5.6. Opinion of Company Counsel..................................14
5.7. Investors'Rights Agreement..................................14
5.8. Chase Consent and Amendments................................14
5.9. Management Rights...........................................14
6. Conditions of the Company's and the McCanns'Obligations at Closing...14
6.1. Representations and Warranties..............................15
6.2. Payment of Purchase Price...................................15
6.3. Qualifications..............................................15
6.4. Investors'Rights Agreement..................................15
7. Post-Closing Covenants...............................................15
7.1. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇...........................................15
7.2. Filing of Third Amended and Restated Certificate............15
7.3. Mandatory Election to Convert Class B Common Stock..........15
7.4. Conversion of Series B Preferred Stock......................15
7.5. Board of Directors..........................................16
8. Miscellaneous........................................................16
8.1. Survival....................................................16
8.2. Successors and Assigns......................................16
8.3. Governing Law...............................................16
8.4. Titles and Subtitles........................................16
8.5. Notices.....................................................16
8.6. Finder's Fee................................................16
8.7. Expenses....................................................17
8.8. Amendments and Waivers......................................17
8.9. Severability................................................17
8.10. Entire Agreement............................................17
8.11. Counterparts................................................17
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT (this "Agreement") is made on
the 20th day of May, 1999, by and among ▇-▇▇▇-▇▇▇▇▇▇▇.▇▇▇, Inc., a Delaware
corporation (the "Company"), ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ (with ▇▇▇▇▇
▇. ▇▇▇▇▇▇, the "McCanns") and the investors listed on SCHEDULE A hereto (each,
an "Investor" and collectively, the "Investors").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock.
1.1. SALE AND ISSUANCE OF SERIES B PREFERRED STOCK AND CLASS B
COMMON STOCK.
(a) The Company shall adopt and file with the Secretary
of State of Delaware on or before the Closing (as defined below) the Second
Amended and Restated Certificate of Incorporation in the form attached hereto as
EXHIBIT A-1 (the "Restated Certificate").
(b) Subject to the terms and conditions of this
Agreement, each Investor agrees, severally, to purchase at the Closing and the
Company agrees to sell and issue to each Investor at the Closing, that number of
shares of the Company's Series B Preferred Stock, par value $0.01 per share (the
"Series B Preferred Stock"), set forth opposite each Investor's name on SCHEDULE
A hereto for the purchase price set forth thereon.
(c) Subject to the terms and conditions of this
Agreement, Benchmark Capital Partners II, L.P., Benchmark Capital Partners III,
L.P. and Benchmark Investors III, L.P. (collectively, "Benchmark") and SOFTBANK
America Inc. ("Softbank") agree, severally, to purchase at the Closing and ▇▇▇▇▇
▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ each agree to sell to Benchmark and Softbank
at the Closing, that number of shares of the Company's Class B Common Stock, par
value $0.01 per share (the "Class B Common Stock" and with the Series B
Preferred Stock, the "Stock"), set forth opposite such Investor's name on
SCHEDULE A hereto for the purchase price set forth thereon.
1.2. CLOSING. The purchase and sale of the Stock shall take
place at the offices of ▇▇▇▇▇▇▇, Phleger & ▇▇▇▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, at 12:00 p.m., on May 20, 1999, or at such other time and
place as the Company, the McCanns and the Investors acquiring in the aggregate
more than half the shares of Stock sold pursuant hereto mutually agree upon
orally or in writing (which time and place are designated as the "Closing"). At
the Closing, the Company and the McCanns shall deliver to each Investor a
certificate representing the Series B Preferred Stock and Class B Common Stock,
as the case may be, that such Investor is purchasing against payment of the
purchase price therefor by wire transfer to an account or accounts specified by
the Company and the McCanns one day prior to the Closing.
2. Representations and Warranties of the Company. The Company
hereby represents and warrants to each Investor that, except as set forth on the
Schedule of Exceptions (the "Schedule of Exceptions") furnished each Investor
and special counsel for the Investors prior to execution hereof and attached
hereto as SCHEDULE B, which exceptions shall be deemed to be representations and
warranties as if made hereunder:
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 as now conducted. The Company and its
subsidiaries are duly qualified to transact business and are in good standing in
each jurisdiction in which the failure to so qualify would have a Material
Adverse Effect (as defined in Section 2.8).
2.2. CAPITALIZATION AND VOTING RIGHTS. The authorized capital
of the Company consists, or will consist immediately prior to the Closing, of:
(a) Preferred Stock. Two million four hundred thirty
four thousand eight hundred twenty two (2,434,822) shares of Preferred Stock,
par value $0.01 (the "Preferred Stock"), of which (i) one million two hundred
thousand (1,200,000) shares have been designated Series A Preferred Stock (the
"Series A Preferred Stock"), (ii) one million two hundred thousand (1,200,000)
shares have been designated Series B Preferred Stock, of which up to 1,122,746
will be sold pursuant to this Agreement, and (ii) thirty four thousand eight
hundred and twenty two (34,822) shares have been designated Series C Preferred
Stock (the "Series C Preferred Stock"). The shares of Series C Preferred Stock
shall be automatically redeemed by the Company upon their issuance. The rights,
privileges and preferences of the Series A Preferred Stock and the Series B
Preferred Stock will be as stated in the Company's Restated Certificate.
(b) Common Stock. 400,000,000 shares of common stock,
par value $0.01 (the "Common Stock"), of which (i) two hundred million
(200,000,000) shares have been designated Class A Common Stock (the "Class A
Common Stock"), of which 42,807 shares are issued and outstanding, and (ii) two
hundred million (200,000,000) shares have been designated Class B Common Stock
(the "Class B Common Stock" and with the Class A Common Stock, the "Common
Stock"), of which 4,391,814 shares are issued and outstanding.
(c) Prior to the filing of the Restated Certificate, the
outstanding shares of Common Stock are owned by the stockholders and in the
numbers specified on Schedule 2.2 hereto.
(d) The outstanding shares of Common Stock are all duly
and validly authorized and issued, fully paid and nonassessable, and were issued
in compliance with all applicable state and federal laws concerning the issuance
of securities.
Except for (i) the conversion privileges of the Series B
Preferred Stock to be issued under this Agreement, (ii) the rights provided in
Section 2 of the Investors' Rights Agreement, (iii) currently outstanding
options to purchase 123,750 shares of Class B Common Stock granted to employees
pursuant to the Company's 1997 Stock Option Plan (the "Option Plan"), and (iv) a
currently outstanding warrant to purchase 237,104 shares of Class B Common
Stock, there are no outstanding options, warrants, rights (including conversion
or preemptive rights) or agreements for the purchase or acquisition from the
Company of any shares of its capital stock. In addition to the aforementioned
options, the Company has reserved an additional 474,794 shares of Class B Common
Stock for purchase upon exercise of options to be granted in the future under
the Option Plan. The parties hereby acknowledge that the Company intends to
terminate its authority to issue options under the Option Plan, to adopt stock
option and other employee incentive plans in connection with its initial public
offering and to reserve up to an aggregate of fifteen percent (15%) of its
fully-diluted, post-initial public offering Class A Common Stock for issuance
under such plans. Except as set forth on Schedule 2.2, the Company is not a
party or subject to any agreement or understanding, and, to the Company's
knowledge, there is no agreement or understanding between any persons and/or
entities, which affects or relates to the voting or giving of written consents
with respect to any security or by a director of the Company.
2.3. SUBSIDIARIES. Other than as set forth on the Schedule of
Exceptions, each of the Company's subsidiaries is duly organized and existing
under the laws of its jurisdiction of organization and is in good standing under
such laws. Schedule 2.3 of the Schedule of Exceptions contains a list of all of
the Company's direct and indirect subsidiaries. None of the Company's
subsidiaries owns or leases property or engages in any activity in any
jurisdiction that might require its qualification to do business as a foreign
corporation and in which the failure so to qualify would have a Material Adverse
Effect.
2.4. 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 and the Investors'
Rights Agreement, the performance of all obligations of the Company hereunder
and thereunder, and the authorization (or reservation for issuance), sale and
issuance of the Stock being sold hereunder, the Series A Preferred Stock
issuable upon conversion of the Series B Preferred Stock and the Class A Common
Stock issuable upon conversion of the Series A Preferred Stock has been taken or
will be taken prior to the Closing. This Agreement and the Investors' Rights
Agreement constitute valid and legally binding obligations of the Company,
enforceable in accordance with their respective terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors' rights generally, (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies, and (iii) to the extent the
indemnification provisions contained in the Investors' Rights Agreement may be
limited by applicable federal or state securities laws.
2.5. VALID ISSUANCE OF SERIES B PREFERRED STOCK. The Series B
Preferred Stock that is being purchased from the Company by the Investors
hereunder, when issued, sold and delivered in accordance with the terms of this
Agreement for the consideration expressed herein, will be duly and validly
issued, fully paid and nonassessable and will be free of restrictions on
transfer, other than restrictions on transfer under this Agreement and the
Investors' Rights Agreement, and under applicable state and federal securities
laws. The Series A Preferred Stock issuable upon conversion of the Series B
Preferred Stock purchased under this Agreement and the Class A Common Stock
issuable upon conversion of the Series A Preferred Stock have been duly and
validly reserved for issuance and, upon issuance in accordance with the terms of
the Restated Certificate, will be duly and validly issued, fully paid and
nonassessable and will be free of restrictions on transfer, other than
restrictions on transfer under this Agreement and the Investors' Rights
Agreement and under applicable state and federal securities laws.
2.6. GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement, except for: (i) filings required pursuant to
applicable federal and state securities laws and blue sky laws, which filings
will be effected within the required statutory period, and (ii) filings under
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976.
2.7. OFFERING. Subject in part to the truth and accuracy of
each Investor's representations set forth in Section 4 of this Agreement, the
offer, sale and issuance of the Stock as contemplated by this Agreement are
exempt from the registration requirements of the Securities Act of 1933, as
amended (the "Act"), and the qualification or registration requirements of
applicable blue sky laws. Neither the Company nor any authorized agent acting on
its behalf will take any action hereafter that would cause the loss of such
exemptions.
2.8. LITIGATION AND GOVERNMENT PROCEEDINGS. Except as set
forth on Schedule 2.8 of the Schedule of Exceptions, there is no action, suit,
proceeding or investigation pending, or to the Company's knowledge, currently
threatened against the Company or its subsidiaries that questions the validity
of this Agreement or the Investors' Rights Agreement or the right of the Company
to enter into such agreements or to consummate the transactions contemplated
hereby or thereby, or that could reasonably be expected to result, either
individually or in the aggregate, in a material adverse change in the business,
assets or condition, financially or otherwise, of the Company and its
subsidiaries taken as a whole (a "Material Adverse Effect"), or any change in
the current equity ownership of the Company or its subsidiaries. The Company and
its subsidiaries are not a party or subject to the provisions of any order,
writ, injunction, judgment or decree of any court or governmental
agency or instrumentality that could be reasonably likely to result in a
Material Adverse Effect.
2.9. PATENTS AND TRADEMARKS. To the best of its knowledge (but
without having conducted any special investigation or patent search), the
Company and its subsidiaries have sufficient title, ownership or rights to use
all patents, trademarks, service marks, trade names, copyrights, trade secrets
and proprietary rights necessary for their business as now conducted without any
conflict with or infringement of the rights of others, except where such
conflict or infringement would not have a Material Adverse Effect. Other than
franchise agreements or agreements with "BloomNet" florists, in each case
entered into in the ordinary course of business, except as set forth on Schedule
2.9 there are no outstanding options, licenses, or agreements of any kind
relating to the foregoing, nor is the Company or its subsidiaries 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 and
proprietary rights of any other person or entity, in any case where such
agreement involves payments by the Company in excess of $1 million per year. The
Company has not received any communications within the past twelve (12) months
alleging that the Company or its subsidiaries have violated any of the patents,
trademarks, service marks, trade names, copyrights or trade secrets or other
proprietary rights of any other person or entity, which violations could be
reasonably likely to have a Material Adverse Effect. Neither the execution nor
delivery of this Agreement or the Investors' Rights Agreement, nor the carrying
on of the Company's business by the key employees and executive officers of the
Company, will, to the best of 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 of such key
employees and executive officers is now obligated which could be reasonably
likely to have a Material Adverse Effect.
2.10. COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in
violation of any provision of its Restated Certificate or Bylaws. No third party
consents or waivers are required to be obtained in connection with the
consummation of the transactions contemplated by this Agreement or the
Investors' Rights Agreement which will not be obtained prior to the Closing. To
its knowledge, the Company and its subsidiaries are not in violation of any
instrument, judgment, order, writ, decree or contract, statute, rule or
regulation to which the Company or its subsidiaries are subject and a violation
of which could be reasonably likely to have a Material Adverse Effect. The
execution, delivery and performance of this Agreement and the Investors' Rights
Agreement and the consummation of the transactions contemplated hereby and
thereby will not result in any such violation, 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 or an event that results in the creation of any
lien, charge or encumbrance upon any assets of the Company or its subsidiaries
or the suspension, revocation,
impairment, forfeiture or nonrenewal of any material permit, license,
authorization or approval applicable to the Company or its subsidiaries, their
respective business or operations or any of their respective material assets or
properties.
2.11. RELATED-PARTY TRANSACTIONS . Except as set forth on the
Schedule of Exceptions, no stockholder, employee, officer or director of the
Company or member of his or her immediate family is indebted to the Company or
any of its subsidiaries, nor is the Company or any of its subsidiaries indebted
(or committed to make loans or extend or guarantee credit) to any of them, in
both cases in an amount greater than $60,000. Except as set forth on the
Schedule of Exceptions, to the best of the Company's knowledge, none of such
persons has any direct or indirect ownership interest in any firm or corporation
with which the Company or any of its subsidiaries is affiliated or with which
the Company or any of its subsidiaries has a business relationship, or any firm
or corporation that competes with the Company, except that employees,
stockholders, officers or directors of the Company and members of their
immediate families may own stock in publicly traded companies that may compete
with the Company. Except as set forth on the Schedule of Exceptions, no
stockholder, employee, officer or director of the Company or any member of the
immediate family of any employee, officer or director of the Company is directly
or indirectly interested in any material contract or transaction with the
Company or any of its subsidiaries in which the amount involved exceeds $60,000.
2.12. FINANCIAL STATEMENTS.
(a) The Company has delivered to each Investor its
audited consolidated financial statements (balance sheet and statement of
operations, statement of stockholders' equity and statement of cash flows,
including notes thereto) at June 28, 1998 and for the fiscal year then ended,
and unaudited consolidated financial statements at and for the nine-month period
ended March 27, 1999 (the "Financial Statements"). The Financial Statements have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods indicated and with each
other. The Financial Statements fairly present the financial condition and
operating results of the Company and its subsidiaries as of the dates, and for
the periods, indicated therein. Except as set forth in the Financial Statements,
the Company and its subsidiaries have no material liabilities, contingent or
otherwise, other than (i) liabilities incurred in the ordinary course of
business subsequent to March 27, 1999 and (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, which, in both cases, individually or in the aggregate, are not
material to the financial condition or operating results of the Company. Except
as disclosed in the Financial Statements, neither the Company nor any of its
subsidiaries is a guarantor or indemnitor of any indebtedness of any other
person, firm or corporation. The Company maintains and will continue to maintain
a standard system of accounting established and administered in accordance with
generally accepted accounting principles.
(b) The Company has delivered its restated Financial
Statements (the "Restated Financial Statements") to the Investors. The Restated
Financial Statements have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
indicated and with each other. The Restated Financial Statements fairly present
the financial condition and operating results of the Company and its
subsidiaries as of the dates, and for the periods, indicated therein. Except as
set forth in the Restated Financial Statements, the Company and its subsidiaries
have no material liabilities, contingent or otherwise, other than (i)
liabilities incurred in the ordinary course of business subsequent to March 27,
1999 and (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 Restated Financial Statements, which, in both
cases, individually or in the aggregate, are not material to the financial
condition or operating results of the Company. Except as will be disclosed in
the Restated Financial Statements, neither the Company nor any of its
subsidiaries is a guarantor or indemnitor of any indebtedness of any other
person, firm or corporation.
2.13. CHANGES. Except as set forth on Schedule 2.13 of the
Schedule of Exceptions, since March 27, 1999 there has not been:
(a) any change in the assets, liabilities, financial
condition or operating results of the Company or its subsidiaries from that
reflected in the Financial Statements or the Restated Financial Statements which
has caused a Material Adverse Effect;
(b) any damage, destruction or loss, whether or not
covered by insurance, resulting in a Material Adverse Effect;
(c) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by the Company or its subsidiaries,
except in the ordinary course of business and that has not caused and that will
not cause a Material Adverse Effect;
(d) any material change or amendment to a material
contract or arrangement by which the Company or its subsidiaries or any of their
respective assets or properties is bound or subject which involves payment by
the Company or its subsidiaries in excess of $1 million per year;
(e) any material change in any compensation arrangement
or agreement with any executive officer;
(f) any sale, assignment or transfer (other than to its
subsidiaries) of any material patents, trademarks, copyrights, trade secrets or
other intangible assets;
(g) any resignation or termination of employment of any
key executive officer 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 officer;
(h) any receipt of notice that there has been a loss of,
or material order cancellation by, any major customer of the Company or its
subsidiaries that has caused or will cause a Material Adverse Effect;
(i) any mortgage, pledge, transfer of a security
interest in, or lien, created by the Company or its subsidiaries, with respect
to any of their material properties or assets, except liens for taxes not yet
due or payable;
(j) any material indebtedness, including any loans or
guarantees, made by the Company or any of its subsidiaries to or for the benefit
of the Company's 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) except as contemplated by the Restated Certificate,
any declaration, setting aside or payment or other distribution in respect of
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 best of the Company's knowledge, any other
event or condition of any character that could be reasonably likely to have a
Material Adverse Effect; or
(m) any agreement or commitment by the Company to do any
of the things described in this Section 2.13.
2.14. TAX RETURNS, PAYMENTS AND ELECTIONS. Except as set forth
on the Schedule of Exceptions: The Company and its subsidiaries have filed all
tax returns and reports (including information returns and reports) as required
by law. These returns and reports are true and correct in all material respects
except to the extent that a reserve has been reflected on the Financial
Statements in accordance with generally accepted accounting principles. The
Company and its subsidiaries have paid all taxes and other assessments due,
except those contested by it in good faith and except to the extent that a
reserve has been reflected on the Financial Statements in accordance with
generally accepted accounting principles. The provision for taxes of the Company
and its subsidiaries as shown in the Financial Statements is, and in the
Restated Financial Statements will be, adequate for taxes due or accrued as of
the date thereof. The Company has not elected pursuant to the Internal Revenue
Code of 1986, as amended (the "Code"), to be treated as a Subchapter S
corporation or a collapsible corporation pursuant to Section 1362(a) or Section
341(f) of the Code, nor has it made any other elections pursuant to the Code
(other than elections that relate solely to methods of accounting, depreciation
or amortization) that would have Material Adverse Effect. The Company and its
subsidiaries have never had any tax deficiency proposed or assessed against any
of them and have not executed any waiver of any statute of limitations on the
assessment or collection of any tax or governmental charge. None of the
Company's and its subsidiaries' federal income tax returns and none of their
respective state income or franchise tax or sales or use tax returns has ever
been audited by governmental authorities. Since March 27, 1999, the Company and
its subsidiaries have not incurred any taxes, assessments or governmental
charges other than in the ordinary course of business and the Company has made
adequate provisions on
their books of account for all taxes, assessments and governmental charges with
respect to their business, properties and operations for such period. The
Company and its subsidiaries have withheld or collected from each payment made
to each of their employees the amount of all taxes (including, but not limited
to, federal income taxes, Federal Insurance Contribution Act taxes and Federal
Unemployment Tax Act taxes) required to be withheld or collected therefrom, and
have paid the same to the proper tax receiving officers or authorized
depositories, unless the failure to do so could not reasonably be likely to have
a Material Adverse Effect.
2.15. PERMITS. The Company and its subsidiaries have all
franchises, permits, licenses and any similar authority necessary for the
conduct of their business, the lack of which could be reasonably likely to
result in a Material Adverse Effect. The Company and its subsidiaries are not in
default in any material respect under any of such franchises, permits, licenses
or other similar authority which could be reasonably likely to result in a
Material Adverse Effect.
2.16. ENVIRONMENTAL MATTERS. The Company and its subsidiaries
are in compliance in all material respects with all applicable statutes, laws or
regulations relating to the environment or occupational health and safety and,
to its knowledge, there are no facts, events, conditions, circumstances,
activities, practices, incidents, actions, omissions or plans (a) that,
individually or in the aggregate, would reasonably be expected to give rise to
any statutory liability of the Company or any of its subsidiaries under any
environmental or occupational health and safety law or (b) that would reasonably
be expected to form the basis of any material claim, action, suit, proceeding,
hearing, investigation or inquiry involving the Company or its subsidiaries, in
each case of (a) and (b) except where such liability, claim, action, suit,
proceeding, hearing, investigation or inquiry would not be reasonably likely to
have a Material Adverse Effect.
2.17. REGISTRATION RIGHTS. Except as provided in the
Investors' Rights Agreement or as provided in the Schedule of Exceptions, the
Company has not granted or agreed to grant any registration rights, including
piggyback rights, to any person or entity.
2.18. CORPORATE DOCUMENTS; MINUTE BOOKS. The Restated
Certificate and Bylaws of the Company are in the form of Exhibits A-1 and B
attached hereto. The minute books of the Company made available to the Investors
contain a summary of all meetings of directors and stockholders since 1992 and
all matters voted on in such minutes are accurately reflected in such minutes.
2.19. TITLE TO PROPERTY AND ASSETS. The property and assets
the Company and its subsidiaries own are owned by the Company and its
subsidiaries, respectively, free and clear of all mortgages, liens, loans and
encumbrances, except (i) as reflected in the Financial Statements or the
Restated Financial Statements, (ii) for statutory liens for the payment of
current taxes that are not yet delinquent, and (iii) for liens, encumbrances and
security interests that arise in the ordinary course of business and minor
defects in title, none of which, individually or in the aggregate, could be
reasonably likely to have a Material Adverse Effect. With respect to the
property and assets they lease, the Company and its subsidiaries are in material
compliance with such leases and, to the Company's knowledge, hold a valid
leasehold interest free of any liens, claims or encumbrances, subject to clauses
(i)-(iii).
2.20. INSURANCE. The Company and its subsidiaries have in full
force and effect fire and casualty insurance policies, with extended coverage,
sufficient in amount (subject to reasonable deductibles) to allow them to
replace any of their material properties that might be damaged or destroyed. The
Company and its subsidiaries have in full force and effect products liability
and errors and omissions insurance in amounts customary for companies similarly
situated.
2.21. EMPLOYEE BENEFIT PLANS. The Company and its subsidiaries
do not maintain or contribute to any employee benefit plan, fringe benefit,
stock option, bonus or incentive plan, severance pay policy or agreement,
deferred compensation agreement, or any similar plan or agreement (an "Employee
Benefit Plan") other than the Employee Benefit Plans identified and described on
the Schedule of Exceptions. The terms and operation of each Employee Benefit
Plan have complied in all material respects with all applicable laws and
regulations relating to such Employee Benefit Plans. There are no unfunded
obligations of the Company or its subsidiaries under any retirement, pension,
profit-sharing, deferred compensation plan or similar program. The Company and
its subsidiaries are not required to make any payments or contributions to any
Employee Benefit Plan pursuant to any collective bargaining agreement or, to the
knowledge of the Company, any applicable labor relations law, and all Employee
Benefit Plans are terminable at the discretion of the Company or its
subsidiaries without liability to the Company or its subsidiaries upon or
following such termination. The Company and its subsidiaries have never
maintained or contributed to any Employee Benefit Plan providing or promising
any health or other nonpension benefits to terminated employees.
2.22. LABOR MATTERS. Except as set forth on the Schedule of
Exceptions, neither the Company nor its subsidiaries are 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 Company's knowledge, has
sought to represent any of the employees, representatives or agents of the
Company or its subsidiaries. There is no strike or other labor dispute involving
the Company or its subsidiaries pending, or to the Company's knowledge,
threatened, that could be reasonably likely to have a Material Adverse Effect,
nor is the Company aware of any labor organization activity involving its
employees or the employees of its subsidiaries. The Company is not aware that
any executive officer intends
to terminate his employment with the Company, nor does the Company have a
present intention to terminate the employment of any of the foregoing. The
employment of each officer and employee of the Company is terminable at the will
of the Company. To the best of its knowledge, the Company and its subsidiaries
have complied in all material respects with all applicable state and federal
equal employment opportunity and other laws related to employment, labor, fair
employment practices and wages and hours. The Company is not a party to or bound
by any currently effective employment contract, deferred compensation agreement,
bonus plan, incentive plan, profit sharing plan, retirement agreement, or other
employee compensation agreement with any of its executive officers or key
employees.
2.23. YEAR 2000 COMPLIANCE. The Company is in the process of
reviewing its operations and that of its subsidiaries and any third parties with
which the Company or any of its subsidiaries has a material relationship to
evaluate the extent to which the business or operations of the Company or any of
its subsidiaries will be affected by the Year 2000 Problem. As a result of such
review to date, the Company has no reason to believe, and does not believe, that
the Year 2000 Problem could reasonably be likely to have a Material Adverse
Effect. The "Year 2000 Problem" as used herein means any significant risk that
computer hardware or software used in the receipt, transmission, processing,
manipulation, storage, retrieval, retransmission or other utilization of data or
in the operation of mechanical or electrical systems of any kind will not, in
the case of dates or time periods occurring after December 31, 1999, function at
least as effectively as in the case of dates or time periods occurring prior to
January 1, 2000.
2.24. DISCLOSURE. The Company has provided each Investor with
all the information that such Investor has requested for deciding whether to
purchase the Class B Common Stock and Series B Preferred Stock. Neither this
Agreement, the Investors' Rights Agreement, nor any other statements or
certificates made or delivered in connection herewith or therewith contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements herein or therein not misleading.
3. Representations and Warranties of the McCanns. The McCanns
hereby, severally, represent and warrant to each Investor that:
3.1. TITLE TO STOCK. Immediately prior to the Closing, ▇▇▇▇▇
▇. ▇▇▇▇▇▇ is the lawful owner of at least 372,674 shares of Class B Common Stock
and ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ is the lawful owner of at least 10,982 shares of Class
B Common Stock, and each has, or at the Closing will have, good and clear title
to such shares of Class B Common Stock, free of all restrictions on transfer,
liens, encumbrances, security interests, equities and claims whatsoever, except
restrictions on transfer imposed under this Agreement and the Investors' Rights
Agreement and under applicable state and federal securities laws.
3.2. AUTHORIZATION. All action on the part of the McCanns
necessary for the authorization, execution and delivery of this Agreement and
the Investors' Rights Agreement, the performance of all obligations of the
McCanns hereunder and thereunder, and the sale of the Class B Common Stock being
sold hereunder by the McCanns has been taken or will be taken prior to the
Closing. This Agreement and the Investors' Rights Agreement constitute a valid
and legally binding obligations of the McCanns, enforceable in accordance with
its terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting
enforcement of creditors' rights generally, (ii) as limited by laws relating to
the availability of specific performance, injunctive relief or other equitable
remedies and (iii) to the extent the indemnification provisions contained in the
Investors' Rights Agreement may be limited by applicable federal or state
securities laws.
3.3. TITLE UPON TRANSFER. Upon delivery of and payment for the
Class B Common Stock to be sold by the McCanns pursuant to this Agreement, good
and clear title to such shares of Class B Common Stock will pass to the
Investors, free of all restrictions on transfer, liens, encumbrances, security
interests, equities and claims whatsoever, except restrictions on transfer
imposed under this Agreement and the Investors' Rights Agreement and under
applicable state and federal securities laws.
3.4. GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the McCanns is required in connection with the consummation of the transactions
contemplated by this Agreement, except for: (i) filings required pursuant to
applicable federal and state securities laws and blue sky laws, which filings
will be effected within the required statutory period, and (ii) filings under
the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976.
3.5. COMPLIANCE WITH OTHER INSTRUMENTS. The McCanns are not in
violation of any instrument, judgment, order, writ, decree or contract, statute,
rule or regulation to which they are subject. The execution, delivery and
performance of this Agreement and the Investors' Rights Agreement and the
consummation of the transactions contemplated hereby and thereby will not result
in any such violation, 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
or an event that results in the creation of any lien, charge or encumbrance upon
any assets of the McCanns.
3.6. LITIGATION. There is no action, suit, proceeding or
investigation pending against the McCanns, or to the McCanns' knowledge,
currently threatened against the McCanns that questions the validity of this
Agreement or the Investors' Rights Agreement or the right of the McCanns to
enter into such agreements or to consummate the transactions contemplated
hereby or thereby.
4. Representations and Warranties of the Investors.
Each Investor hereby represents, warrants and covenants that:
4.1. AUTHORIZATION. Such Investor has full power and authority
to enter into this Agreement and the Investors' Rights Agreement, and each such
agreement constitutes its valid and legally binding obligation, enforceable in
accordance with its terms, except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other laws of general application
affecting enforcement of creditors' rights generally, (ii) as limited by laws
relating to the availability of specific performance, injunctive relief or other
equitable remedies, and (iii) to the extent the indemnification provisions
contained in the 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 such Investor in reliance upon such Investor's representation to the
Company, which by such Investor's execution of this Agreement such Investor
hereby confirms, that the Stock to be received by such Investor, the Class A
Common Stock issuable upon conversion of the Class B Common Stock, the Class A
Common Stock issuable upon conversion of the Series A Preferred Stock and the
Series A Preferred Stock issuable upon conversion of the Series B Preferred
Stock (collectively, the "Securities") will be acquired for investment for such
Investor's own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that such Investor has no
present intention of selling, granting any participation in or otherwise
distributing the same. By executing this Agreement, such Investor further
represents that such Investor does not 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.
4.3. DISCLOSURE OF INFORMATION. Such Investor believes it has
received all the information it considers necessary or appropriate for deciding
whether to purchase the Stock. Such Investor further represents that it has had
an opportunity to ask questions and receive answers from the Company regarding
the terms and conditions of the offering of the Stock and the business,
properties, prospects and financial condition of the Company, and the Company
has not refused any reasonable request made by the Investors to provide such
information. The foregoing, however, does not limit or modify the
representations and warranties of the Company in Section 2 or by the McCanns of
Section 3 of this Agreement or the right of the Investors to rely thereon.
4.4. INVESTMENT EXPERIENCE. Such Investor is an investor in
securities and acknowledges that it is able to fend for itself, can bear the
economic risk of its investment, and has such knowledge and experience in
financial or business matters that it is capable of evaluating the merits and
risks of the investment in the Stock.
4.5. ACCREDITED INVESTOR. Such Investor is an "accredited
investor" within the meaning of Securities and Exchange Commission ("SEC") Rule
501 of Regulation D, as presently in effect.
4.6. RESTRICTED SECURITIES. Such Investor understands that the
Securities it is purchasing are characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired from the Company
in a transaction not involving a public offering and that under such laws and
applicable regulations such Securities may be resold without registration under
the Act only in certain limited circumstances. In the absence of an effective
registration statement covering the Securities or an available exemption from
registration under the Act, the Stock (and any Class A Common Stock issued on
conversion of the Series A Preferred Stock) must be held indefinitely. In this
connection, such Investor represents that it is familiar with SEC Rule 144, as
presently in effect, and understands the resale limitations imposed thereby and
by the Act, including without limitation the Rule 144 condition that current
information about the Company be available to the public.
4.7. FURTHER LIMITATIONS ON DISPOSITION. Without in any way
limiting the representations set forth above, such Investor further agrees not
to make any disposition of all or any portion of the Securities unless and until
the transferee has agreed in writing for the benefit of the Company to be bound
and comply with this Section 4 and the Investors' Rights Agreement, and:
(a) There is then in effect a registration statement
under the Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
(b) (i) Such Investor shall have notified the Company of
the proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii) if
requested by the Company, such Investor shall have furnished the Company with an
opinion of counsel, reasonably satisfactory to the Company that such disposition
will not require registration of such shares under the Act. It is agreed that
the Company will not require opinions of counsel for transactions made pursuant
to Rule 144 except in unusual circumstances.
(c) Notwithstanding the provisions of Section 4.2 or
subsections (a) and (b) above, no such registration statement or opinion of
counsel shall be necessary for a transfer by (i) an Investor that is a
partnership to a partner of such partnership or a retired partner of such
partnership who retires after the date hereof, or to the estate of any such
partner or retired partner or the transfer by gift, will or intestate succession
of any partner to his or her spouse or to the siblings, lineal descendants or
ancestors of such partner or his or her spouse, or (ii) an Investor to any other
Investor or to any Permitted Transferee (as defined in the Investors' Rights
Agreement), if the transferee agrees in writing to be subject to the terms
hereof to the same extent as if the transferee were an original Investor
hereunder.
4.8. LEGENDS. It is understood that the certificates
evidencing the Securities may bear one or all of the following legends:
(a) "These securities have not been registered under the
Securities Act of 1933, as amended. They may not be sold, offered for sale,
pledged or hypothecated in the absence of a registration statement in effect
with respect to the securities under such Act or an opinion of counsel
satisfactory to the Company that such registration is not required or unless
sold pursuant to Rule 144 of such Act."
Any legend required by the laws of the State of Delaware,
including any legend required by the Delaware General Corporation Law.
4.9. FURTHER REPRESENTATIONS BY FOREIGN INVESTORS. If an
Investor is not a United States person, such Investor 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 Investor's subscription and payment for, and its continued
beneficial ownership of the Securities, will not violate any applicable
securities or other laws of its jurisdiction.
5. Conditions of Investor's Obligations at Closing. The
obligations of each Investor under subsection 1.1(b) of this Agreement are
subject to the fulfillment on or before the Closing of each of the following
conditions, the waiver of which shall not be effective against any Investor who
does not consent in writing thereto:
5.1. REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in Section 2 and of the McCanns in Section 3
of this Agreement shall be true 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 such Closing.
5.2. PERFORMANCE. The Company and the McCanns shall have
performed and complied with all agreements, obligations and conditions contained
in this Agreement that are required to be performed or complied with by them on
or before the Closing.
5.3. COMPLIANCE CERTIFICATE. The Chief Executive Officer of
the Company shall deliver to each Investor at the Closing a certificate stating
that the conditions specified in Sections 5.1 and 5.2 have been fulfilled and
stating that there shall have been no Material Adverse Effect since March 27,
1999.
5.4. 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 in connection with the lawful issuance and sale
of the Stock pursuant to this Agreement shall be duly obtained and effective as
of the Closing.
5.5. PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to Investors' special counsel, and they shall have received all such
counterpart original and certified or other copies of such documents as they may
reasonably request. This may include, without limitation, good standing
certificates of the jurisdiction of incorporation and certification by the
Company's Secretary regarding the Restated Certificate and By-laws and Board of
Director and stockholder resolutions and consents.
5.6. OPINION OF COMPANY COUNSEL. Each Investor shall have
received from ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP, counsel for the Company, an
opinion, dated as of the Closing, in the form attached hereto as Exhibit C.
5.7. INVESTORS' RIGHTS AGREEMENT. The Company and the McCanns
shall have entered into the Investors' Rights Agreement in the form attached as
Exhibit D.
5.8. CHASE CONSENT AND AMENDMENTS. The Company, the McCanns
and Chase Venture Capital Associates shall have entered into the Consent and
Amendment No. 1 to Investment Agreement.
5.9. MANAGEMENT RIGHTS. The Company shall have executed a
"management rights" letter in favor of Benchmark substantially in the form
previously provided to the Company.
6. Conditions of the Company's and the McCanns' Obligations at
Closing. The obligations of the Company and the McCanns to each Investor under
this Agreement are subject to the fulfillment on or before the Closing of each
of the following conditions by that Investor:
6.1. REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Investor contained in Section 4 shall be true 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.
6.2. PAYMENT OF PURCHASE PRICE. The Investors shall have
delivered the purchase price specified in Section 1.2.
6.3. 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 Securities pursuant to this Agreement shall be duly obtained and
effective as of the Closing.
6.4. INVESTORS' RIGHTS AGREEMENT. Each Investor shall have
entered into the Investors' Rights Agreement in the form attached as EXHIBIT D.
7. Post-Closing Covenants
7.1. ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇. To the extent necessary, the parties
hereto shall promptly and diligently take all actions necessary to file as soon
as practicable all notifications, filings and other documents required to obtain
all governmental authorizations, approvals, consents or waivers under the
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of ▇▇▇▇ (▇▇▇ "▇▇▇ ▇▇▇"), and to
respond as promptly as practicable to any inquiries received by the Federal
Trade Commission, the Antitrust Division of the Department of Justice and any
other governmental entity for additional information or documentation in
connection therewith.
7.2. FILING OF THIRD AMENDED AND RESTATED CERTIFICATE. The
Company shall promptly file with the Secretary of State of Delaware the Third
Amended and Restated Certificate of Incorporation in the form attached hereto
as EXHIBIT A-2 (the "Third Amended and Restated Certificate") following the
termination or expiration of all waiting periods under the HSR Act applicable
to the Company, the McCanns and holders of Series B Preferred Stock required
to obtain such HSR Act clearance as provided herein.
7.3. MANDATORY ELECTION TO CONVERT CLASS B COMMON STOCK. Upon
the effectiveness of the Third Amended and Restated Certificate, each Investor
shall immediately convert each and every share of Class B Common Stock owned by
it, pursuant to Section B.4(a) of Article IV of the Third Amended and Restated
Certificate, into one share of class A common stock, $0.01 par value, with
rights and privileges thereto as described in the Third Amended and Restated
Certificate.
7.4. CONVERSION OF SERIES B PREFERRED STOCK. No Investor may
convert any share of Series B Preferred Stock owned by it into shares of Series
A Preferred Stock pursuant to Section B.3(c) of Article IV of the Restated
Certificate until immediately prior to the effectiveness of the Third Amended
and Restated Certificate, at which time each Investor shall immediately convert
each and every share of Series B Preferred Stock owned by it pursuant to such
Section B.3(c) into one share of Series A Preferred Stock, with rights and
privileges thereto as described in the Restated Certificate.
7.5. BOARD OF DIRECTORS. The Company shall take all necessary
corporate action such that promptly following the expiration or earlier
termination of the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ waiting period, the directors of the
Company shall be ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, T. ▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇, one nominee of Benchmark and one nominee of Softbank. The directors
nominated by Benchmark and Softbank shall be classified as "Class II" directors
as described in the Company's By-laws.
8. Miscellaneous.
8.1. SURVIVAL. The warranties, representations and covenants
of the Company, the McCanns and the Investors contained in or made pursuant to
this Agreement shall survive the execution and delivery of this Agreement and
the Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of the Investors, the McCanns or the
Company.
8.2. SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, 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 (including transferees of any Securities).
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.
8.3. GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of New York as applied to agreements among
New York residents entered into and to be performed entirely within New York.
The parties hereto hereby irrevocably consent to the jurisdiction of any court
of the County of New York, State of New York or the United States District Court
for the Eastern District of the State of New York.
8.4. 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.
8.5. NOTICES. All notices required or permitted hereunder
shall be in writing and shall be deemed effectively given: (i) upon personal
delivery to the party to be notified, (ii) when sent by confirmed telex or
facsimile if sent during normal business hours of the recipient, if not, then on
the next business day; (iii) five days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or (iv) one 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 address as set forth on the signature page hereof or at such other
address as such party may designate by ten days advance written notice to the
other parties hereto.
8.6. FINDER'S FEE. Each Investor agrees to indemnify and to
hold harmless the Company from any liability for any commission or compensation
in the nature of a finders' fee (and the costs and expenses of defending against
such liability or asserted liability) for which such Investor or any of its
officers, partners, employees or representatives is responsible. The Company
agrees to indemnify and hold harmless each Investor from any liability for any
commission or compensation in the nature of a finders' fee (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.
8.7. EXPENSES. Irrespective of whether the Closing is
effected, each party shall pay all costs and expenses that it incurs with
respect to the negotiation, execution, delivery and performance of
this Agreement. If the Closing is effected, the Company shall reimburse the
reasonable fees and expenses of special counsel for (i) Benchmark, not to exceed
$25,000, (ii) Forum Holding BV, not to exceed $25,000, and (iii) Softbank, not
to exceed $10,000. If any action at law or in equity is necessary to enforce or
interpret the terms of this Agreement, the Investors' Rights Agreement or the
Restated Certificate, the prevailing party shall be entitled to reasonable
attorney's fees, costs and necessary disbursements in addition to any other
relief to which such party may be entitled.
8.8. AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company, the McCanns and
each of the Investors. Any amendment or waiver effected in accordance with this
paragraph shall be binding upon each holder of any securities purchased under
this Agreement at the time outstanding (including securities into which such
securities are convertible), each future holder of all such securities and the
Company.
8.9. SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
8.10. ENTIRE AGREEMENT. This Agreement and the documents
referred to herein constitute the entire agreement among the parties and no
party shall be liable or bound to any other party in any manner by any
warranties, representations or covenants except as specifically set forth herein
or therein.
8.11. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Stock
Purchase Agreement as of the date first above written.
▇-▇▇▇-▇▇▇▇▇▇▇.▇▇▇, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_______________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Chief Executive Officer
▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
____________________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
____________________________________
Address: ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
STOCK PURCHASE AGREEMENT
SOFTBANK AMERICA INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_______________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Treasurer
STOCK PURCHASE AGREEMENT
FORUM HOLDING AMSTERDAM B.V.
By: /s/ ▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇▇
___________________________________
Name: ▇▇▇▇-▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Address: Lokatellikade 1
Parnassustoren
1076 AZ Amsterdam
THE NETHERLANDS
STOCK PURCHASE AGREEMENT
CHASE VENTURE CAPITAL ASSOCIATES
By: Chase Capital Partners,
its General Partner
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
_________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
General Partner
STOCK PURCHASE AGREEMENT
BENCHMARK CAPITAL PARTNERS II, L.P.
as nominee for
Benchmark Capital Partners II, L.P.
Benchmark Founders' Fund II, L.P.
Benchmark Founders' Fund II-A, L.P.
Benchmark Members' Fund, L.P.
By: Benchmark Capital Management Co. II, L.L.C.,
its general partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
_________________________________________
Managing Member
BENCHMARK CAPITAL PARTNERS III, L.P.
as nominee for
Benchmark Capital Partners III, L.P.
Benchmark Founders' Fund III, L.P.
Benchmark Founders' Fund III-A, L.P.
Benchmark Members' Fund III, L.P.
By: Benchmark Capital Management Co. III, L.L.C.,
its general partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
_________________________________________
Managing Member
BENCHMARK INVESTORS III, L.P.
By: Benchmark Capital Management Co. III, L.L.C.,
its general partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
_________________________________________
Managing Member
STOCK PURCHASE AGREEMENT
▇▇▇▇▇▇▇, PHLEGER & ▇▇▇▇▇▇▇▇ LLP
By: /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
_________________________________________
Name: ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Partner
STOCK PURCHASE AGREEMENT
/s/ T. ▇▇▇ ▇▇▇▇▇▇▇
_______________________________________
T. ▇▇▇ ▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
_______________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
_______________________________________
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
_______________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
STOCK PURCHASE AGREEMENT
SCHEDULE A
Class B Common Series B Preferred
Total
Shares Purchase Price Shares Purchase Price Purchase Price
Benchmark Capital Partners II, L.P. 32,503 $ 3,388,762.78 62,684 $ 6,535,433.84 $ 9,924,196.62
Benchmark Capital Partners III, L.P. 86,840 $ 9,053,938.40 167,477 $17,461,152.02 $26,515,090.42
Benchmark Investors III, L.P. 133,309 $13,898,796.34 257,095 $26,804,724.70 $40,703,521.04
Forum Holding Amsterdam B.V -- -- 239,785 $24,999,984.10 $24,999,984.10
SOFTBANK America Inc. 131,004 $13,658,477.04 252,652 $26,341,497.52 $39,999,974.56
Chase Venture Capital Associates -- -- 143,053 $14,914,705.78 $14,914,705.78
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ LLP -- -- 960 $ 100,089.60 $ 100,089.60
T. ▇▇▇ ▇▇▇▇▇▇▇ -- -- 960 $ 100,089.60 $ 100,089.60
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ -- -- 960 $ 100,089.60 $ 100,089.60
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ -- -- 960 $ 100,089.60 $ 100,089.60
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇ -- -- 960 $ 100,089.60 $ 100,089.60