JATO COMMUNICATIONS CORP.
SERIES A PREFERRED STOCK
PURCHASE AGREEMENT
TABLE OF CONTENTS
PAGE
SECTION 1. AGREEMENT TO SELL AND PURCHASE.. . . . . . . . . . . . . . . . . . . 1
1.1 Authorization of Shares. . . . . . . . . . . . . . . . . . . . . . 1
1.2 Sale and Purchase. . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. CLOSING, DELIVERY AND PAYMENT. . . . . . . . . . . . . . . . . . . . 2
2.1 Closing. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Delivery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 Subsequent Sales of Shares . . . . . . . . . . . . . . . . . . . . 2
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. . . . . . . . . . . . 2
3.1 Organization, Good Standing and Qualification. . . . . . . . . . . 2
3.2 Capitalization; Voting Rights. . . . . . . . . . . . . . . . . . . 2
3.3 Authorization; Binding Obligations . . . . . . . . . . . . . . . . 3
3.4 Agreements; Action.. . . . . . . . . . . . . . . . . . . . . . . . 3
3.5 Title to Properties and Assets; Liens, etc.. . . . . . . . . . . . 4
3.6 Patents and Trademarks . . . . . . . . . . . . . . . . . . . . . . 4
3.7 Compliance with Other Instruments. . . . . . . . . . . . . . . . . 5
3.8 Litigation.. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.9 Tax Returns and Payments . . . . . . . . . . . . . . . . . . . . . 5
3.10 Registration Rights. . . . . . . . . . . . . . . . . . . . . . . . 6
3.11 Compliance with Laws; Permits. . . . . . . . . . . . . . . . . . . 6
3.12 Environmental and Safety Laws. . . . . . . . . . . . . . . . . . . 6
3.13 Offering Valid . . . . . . . . . . . . . . . . . . . . . . . . . . 6
i
TABLE OF CONTENTS
PAGE
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS . . . . . . . . . . 7
4.1 Requisite Power and Authority. . . . . . . . . . . . . . . . . . . 7
4.2 Investment Representations . . . . . . . . . . . . . . . . . . . . 8
4.3 Transfer Restrictions. . . . . . . . . . . . . . . . . . . . . . . 8
SECTION 5. CONDITIONS TO CLOSING. . . . . . . . . . . . . . . . . . . . . . . . 8
5.1 Conditions to Purchasers' Obligations at the Closing . . . . . . . 8
5.2 Conditions to Obligations of the Company. . . . . . . . . . . . . 9
SECTION 6. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.1 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.2 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.3 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . 10
6.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.5 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.6 Amendment and Waiver . . . . . . . . . . . . . . . . . . . . . . . 11
6.7 Delays or Omissions. . . . . . . . . . . . . . . . . . . . . . . . 11
6.8 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.9 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.10 Attorneys' Fees. . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.11 Titles and Subtitles . . . . . . . . . . . . . . . . . . . . . . . 12
6.12 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.13 Broker's Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.14 Exculpation Among Purchasers . . . . . . . . . . . . . . . . . . . 12
6.15 Pronouns.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ii
INDEX OF EXHIBITS
Schedule of Purchasers Exhibit A
Restated Articles Exhibit B
Investor Rights Agreement Exhibit C
Schedule of Exceptions Exhibit D
Form of Legal Opinion Exhibit E
iii
JATO COMMUNICATIONS CORP.
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES A PREFERRED STOCK PURCHASE AGREEMENT (the "AGREEMENT") is
entered into as of October 23, 1998, by and among JATO COMMUNICATIONS CORP.,
a Delaware corporation (the "COMPANY") and each of those persons and
entities, severally and not jointly, whose names are set forth on the
Schedule of Purchasers attached hereto as EXHIBIT A (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 up to an
aggregate of three million (3,000,000) shares of its Series A Preferred Stock
(the "Shares");
WHEREAS, Purchasers desire to purchase the Shares on the terms and
conditions set forth herein; and
WHEREAS, the Company desires to issue and sell the Shares to
Purchasers on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises hereinafter set forth, 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 (i) the sale
and issuance to Purchasers of the Shares and (ii) the issuance of such shares
of Common Stock to be issued upon conversion of the Shares (the "Conversion
Shares"). The Shares and the Conversion Shares shall have the rights,
preferences, privileges and restrictions set forth in the Restated Articles
of Incorporation of the Company, as amended, in the form attached hereto as
EXHIBIT B (the "Restated Articles) and the Investor Rights Agreement in the
form attached hereto as EXHIBIT C (the "Rights Agreement").
1.2 SALE AND PURCHASE. Subject to the terms and conditions hereof,
at the Closing (as hereinafter defined) 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, at a purchase
price of seventy-five cents ($.75) per share.
1.
2. CLOSING, DELIVERY AND PAYMENT.
2.1 CLOSING. The closing of the sale and purchase of the Shares
under this Agreement (the "Closing") shall take place on the first date that
all of the conditions to closing have been met, at the offices of ▇▇▇▇▇▇
Godward ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇, and may continue from time to time until October 31, 1998 or until all
of the Shares are sold or at such other time or place as the Company and
Purchasers may mutually agree (all such dates are hereinafter referred to as
the "Closing Date").
2.2 DELIVERY. At each Closing, subject to the terms and conditions
hereof, the Company will deliver to the Purchasers certificates representing
the number of Shares to be purchased at the Closing by each 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.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
Except as set forth on the Schedule of Exceptions attached hereto as EXHIBIT
D, the Company hereby represents and warrants to each Purchaser as follows:
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, to issue and sell the Shares and the Conversion
Shares and to carry out the provisions of this Agreement, the Restated
Articles 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 Company or its business. The Company owns no equity securities
of any other corporation, limited partnership or similar entity.
3.2 CAPITALIZATION; VOTING RIGHTS. The authorized capital stock of
the Company, immediately prior to the Closing, will consist of thirty-five
million (35,000,000) shares of Common Stock, six million three hundred twenty
thousand (6,320,000) shares of which are issued and outstanding and one
million (1,000,000) of which are reserved for future issuance to employees
pursuant to the Company's 1998 Equity Incentive Plan and sixteen million
(16,000,000) shares of Preferred Stock, three million (3,000,000) of which
are designated Series A Preferred Stock, none of which are issued and
outstanding. All issued and outstanding shares of the Company's Common Stock
(i) have been duly authorized and validly issued, (ii) are fully paid and
nonassessable, and (iii) were issued in compliance with all applicable state
and federal laws concerning the issuance of securities. The rights,
preferences, privileges and restrictions of the Shares are as stated in the
Restated Articles. The Conversion Shares have been duly and validly reserved
for issuance. There are no outstanding options, warrants, rights (including
conversion or preemptive rights and rights of first refusal), proxy or
shareholder
2.
agreements, or agreements of any kind for the purchase or acquisition from
the Company of any of its securities. When issued in compliance with the
provisions of this Agreement and the Restated Articles, 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.
3.3 AUTHORIZATION; BINDING OBLIGATIONS. All corporate action on
the part of the Company, its officers, directors and shareholders necessary
for the authorization of this Agreement, 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 and the Conversion
Shares pursuant to the Restated Articles has been taken or will be taken
prior to the Closing. The Agreement, when executed and delivered, will be
valid and binding obligations of the Company enforceable in accordance with
their terms, except (i) as limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other laws of general application affecting
enforcement of creditors' rights; (ii) general principles of equity that
restrict the availability of equitable remedies. The sale 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.
3.4 AGREEMENTS; ACTION.
(a) Except for agreements explicitly contemplated hereby and
agreements between the Company and its employees with respect to the sale of
the Company's Common Stock, there are no agreements, understandings or
proposed transactions between the Company and any of its officers, directors,
affiliates or any affiliate thereof.
(b) There are no agreements, 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 $25,000 (other than obligations of, or payments to, the
Company arising from purchase or sale agreements entered into in the ordinary
course of business), or (ii) the 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
(iii) provisions restricting or affecting the development, manufacture or
distribution of the Company's products or services, or (iv) indemnification
by the Company with respect to infringements of proprietary rights (other
than indemnification obligations arising from purchase or sale agreements
entered into in the ordinary course of business).
(c) 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 $25,000 or, in the
3.
case of indebtedness and/or liabilities individually less than $25,000, in
excess of $100,000 in the aggregate, (iii) made any loans or advances to any
person, other than ordinary advances for travel expenses, or (iv) sold,
exchanged or otherwise disposed of any of its assets or rights, other than
the sale of its inventory in the ordinary course of business.
(d) For the purposes of subsections (b) and (c) 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.
(e) 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.
3.5 TITLE TO PROPERTIES AND ASSETS; LIENS, ETC. The Company has
good and marketable title to its properties and assets, and good title to its
leasehold estates, in each case subject to no mortgage, pledge, lien, lease,
encumbrance or charge, other than (i) those resulting from taxes which have
not yet become delinquent, (ii) 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 (iii) 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.
3.6 PATENTS AND TRADEMARKS. To its knowledge, the Company owns or
possesses sufficient legal rights to all patents, trademarks, service marks,
trade names, copyrights, trade secrets, information and other proprietary
rights and processes necessary for its business as now conducted and as
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. The Company has not received any
communications alleging that the Company has violated or, by conducting its
business as 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. 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
4.
agency, that would interfere with their duties to the Company or that would
conflict with the Company's business as proposed to be conducted. Neither
the execution nor delivery of this Agreement, nor the carrying on of the
Company's business by the employees of the Company, nor the conduct of the
Company's business as proposed, will, 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.
3.7 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in
violation or default of any term of its Restated Articles or Bylaws, or of
any provision 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, writ or, to its knowledge, any statute, rule or regulation
applicable to the Company which would materially and adversely affect the
business, assets, liabilities, financial condition, operations or prospects
of the Company. The execution, delivery, and performance of and compliance
with this Agreement, and the issuance and sale of the Shares pursuant hereto
and of the Conversion Shares pursuant to the Restated Articles, 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 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.
3.8 LITIGATION. There is no action, suit, proceeding or
investigation pending or to the Company's knowledge currently threatened
against the Company that questions the validity of this Agreement, 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 result,
either individually or in the aggregate, in any material adverse change in
the assets, condition, affairs or prospects of the Company, financially or
otherwise, or any change in the current equity ownership of the Company, nor
is the Company aware that there is any basis for 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.
3.9 TAX RETURNS AND PAYMENTS. The Company has timely filed all tax
returns (federal, state and local) required to be filed by it. All taxes
shown to be due and payable on such returns, any assessments imposed, and to
the Company's knowledge all other taxes due and
5.
payable by the Company on or before the Closing have been paid or will be
paid prior to the time they become delinquent. The Company has not been
advised (i) that any of its returns, federal, state or other, have been or
are being audited as of the date hereof, or (ii) of any deficiency in
assessment or proposed judgment to its federal, state or other taxes. The
Company has no knowledge of any liability of any tax to be imposed upon its
properties or assets as of the date of this Agreement that is not adequately
provided for.
3.10 REGISTRATION RIGHTS. Except as required pursuant to the 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 Rights
Agreement) any of the Company's presently outstanding securities or any of
its securities that may hereafter be issued.
3.11 COMPLIANCE WITH LAWS; PERMITS. To its knowledge, 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 materially and adversely affect the
business, assets, liabilities, financial condition, operations or prospects
of the Company. 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 or 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.
3.12 ENVIRONMENTAL AND SAFETY LAWS. To its 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.
3.13 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 of 1933, as amended (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.
6.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.
Each Purchaser hereby represents and warrants to the Company 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 to carry out their provisions. All action on
Purchaser's part required for the lawful execution and delivery of this
Agreement have been or will be effectively taken prior to the Closing. Upon
their execution and delivery, this Agreement will be valid and binding
obligations of Purchaser, enforceable in accordance with their terms, except
(i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other laws of general application affecting enforcement of
creditors' rights, (ii) general principles of equity that restrict the
availability of equitable remedies, and (iii) to the extent that the
enforceability of the indemnification provisions of Section 2.9 of the 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, 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.
(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. Further,
Purchaser is aware of no publication of any advertisement in connection with
the transactions contemplated in the Agreement.
7.
(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 received and read
the Financial Statements and Business Plan and 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,
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 not less than two years after a party has
purchased and paid for the security to be sold, the sale being through an
unsolicited "broker's transaction" or in transactions directly with a market
maker (as said term is defined under the Securities Exchange Act of 1934, as
amended) 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; 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.
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 Rights Agreement.
5. CONDITIONS TO CLOSING.
5.1 CONDITIONS TO PURCHASERS' OBLIGATIONS AT THE CLOSING.
Purchasers' obligations to purchase the Shares at the Closing are subject to
the satisfaction, at or prior to the Closing, 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 be true and correct in all material respects as of the
Closing Date with the same force and effect as if they had been made as of
the Closing Date, and the Company shall have performed all obligations and
conditions herein required to be performed or observed by it on or prior to
the Closing.
8.
(b) LEGAL INVESTMENT. On the Closing Date, the sale and
issuance of the Shares and the proposed issuance of the Conversion Shares
shall be legally permitted by all laws and regulations to which Purchasers
and the Company are subject.
(c) MINIMUM INVESTMENT. The Company shall have received
executed Agreements and funds from Purchasers that aggregates $750,000 or
greater.
(d) 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 (except
for such as may be properly obtained subsequent to the Closing).
(e) FILING OF RESTATED ARTICLES. The Restated Articles
shall have been filed with the Secretary of State of the State of Delaware.
(f) 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.
(g) RESERVATION OF CONVERSION SHARES. The Conversion Shares
issuable upon conversion of the Shares shall have been duly authorized and
reserved for issuance upon such conversion.
(h) COMPLIANCE CERTIFICATE. The Company shall have
delivered to Purchasers a Compliance Certificate, executed by the President
of the Company, dated the date of the Closing, to the effect that the
conditions specified in subsections (a), (d), (e) and (g) of this Section 5.1
have been satisfied.
(i) RIGHTS AGREEMENT. The Rights Agreement substantially in
the form attached hereto as EXHIBIT C shall have been executed and delivered
by the parties thereto.
(j) 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 E.
(k) PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated at the Closing
hereby and all documents and instruments incident to such transactions shall
be reasonably satisfactory in substance and form to the Purchasers and their
special counsel, and the Purchasers and their special counsel shall have
received all such counterpart originals or certified or other copies of such
documents as they may reasonably request.
5.2 CONDITIONS TO OBLIGATIONS OF THE COMPANY. The Company's
obligation to issue and sell the Shares at each Closing is subject to the
satisfaction, on or prior to the Closing, of the following conditions:
9.
(a) REPRESENTATIONS AND WARRANTIES TRUE. The
representations and warranties made by Purchasers in Section 4 hereof shall
be true and correct in all material respects at the date of the Closing, with
the same force and effect as if they had been made on and as of said date.
(b) PERFORMANCE OF OBLIGATIONS. Purchasers shall have
performed and complied with all agreements and conditions herein required to
be performed or complied with by Purchasers on or before the Closing.
(c) FILING OF RESTATED ARTICLES. The Restated Articles
shall have been filed with the Secretary of State of the State of Delaware.
(d) RIGHTS AGREEMENT. The Rights Agreement substantially in
the form attached hereto as EXHIBIT C shall have been executed and delivered
by the Purchasers.
(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 (except
for such as may be properly obtained subsequent to the Closing).
6. MISCELLANEOUS.
6.1 GOVERNING LAW. This Agreement shall be governed in all
respects by the laws of the State of Delaware as such laws are applied to
agreements between Delaware residents entered into and performed entirely in
Delaware.
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, and the other documents delivered pursuant hereto constitute the full
and entire understanding and agreement between the parties with regard to the
subjects 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.
10.
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 upon the
written consent of the Company and holders of at least a majority 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 at least a majority 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, or the
Restated Articles, 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, or under the
Restated Articles or any waiver on such party's part of any provisions or
conditions of the Agreement, or the Restated Articles 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 Restated Articles, by law, 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: (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 (5) days after having been sent by registered
or certified mail, return receipt requested, postage prepaid; or (iv) 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 Purchaser at the address set forth on EXHIBIT A attached
hereto or at such other address as the Company or Purchaser may designate by
ten (10) days advance written notice to the other parties hereto.
6.9 EXPENSES. The Company shall pay all costs and expenses that it
incurs with respect to the negotiation, execution, delivery and performance
of the Agreement. The Company shall, at the Closing, reimburse the
reasonable fees of and expenses of one special counsel for the Purchasers,
not to exceed 10,000, and shall reimburse such special counsel for reasonable
11.
expenses incurred in connection with the negotiation, execution, delivery and
performance of this Agreement.
6.10 ATTORNEYS' FEES. In the event that any dispute among the
parties to this Agreement should result in litigation, 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 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 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.
12.
IN WITNESS WHEREOF, the parties hereto have executed the SERIES A
PREFERRED STOCK PURCHASE AGREEMENT as of the date set forth in the first
paragraph hereof.
COMPANY: PURCHASERS:
JATO COMMUNICATIONS CORP.
----------------------------------
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By:
------------------------------ -------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇, President
Title:
----------------------------
EXHIBIT A
SCHEDULE OF PURCHASERS
SECOND CLOSING, OCTOBER 30, 1998
-----------------------------------------------------
NAME OF INVESTOR NUMBER OF SHARES
-----------------------------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇ 80,000
-----------------------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇ 26,666
-----------------------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ 66,666
-----------------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇ 6,666
-----------------------------------------------------
▇▇▇▇▇▇▇ & ▇▇▇▇▇ ▇▇▇▇ 6,666
-----------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 15,000
-----------------------------------------------------
Trustee F.B.O. FWD 67,000
Corporation Savings &
Profit Sharing Trust--▇▇▇▇▇
▇. ▇▇▇▇▇, Segregated
Account
-----------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇ 133,333
-----------------------------------------------------
Trustee F.B.O. FWD 26,667
Corporation Savings &
Profit Sharing
Trust--▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Segregated Account
-----------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 66,666
-----------------------------------------------------
Somes Ventures, LLC 66,666
-----------------------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ 13,333
-----------------------------------------------------
▇▇▇▇▇▇▇▇▇▇▇▇▇ & Villiotti 33,333
PC Profit Sharing Plan and
Trust
-----------------------------------------------------
TOTAL 608,662
-----------------------------------------------------
A-1
EXHIBIT B
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
2.
EXHIBIT C
INVESTOR RIGHTS AGREEMENT
3.
EXHIBIT D
4.
EXHIBIT E
FORM OF LEGAL OPINION
5.