EXHIBIT 8
NEXTNET, INC.
RIGHT OF FIRST REFUSAL AGREEMENT
This Right of First Refusal Agreement (the "AGREEMENT") is made and entered
into as of September 21, 1998 by and among Racotek, Inc. ("RACOTEK"), NextNet,
Inc., a Delaware corporation (the "COMPANY"), and the holders of Series B
Preferred Stock of the Company listed on EXHIBIT A to this Agreement (each a
"SERIES B PURCHASER" and together with Racotek, the "INVESTORS").
RECITALS
The Company and Racotek have entered into a Series A Preferred Stock
Purchase Agreement (the "SERIES A PURCHASE AGREEMENT"), of even date herewith,
pursuant to which the Company desires to sell to Racotek and Racotek desires to
purchase from the Company shares of the Company's Series A Preferred Stock. The
Company and the Series B Purchasers have entered into a Series B Preferred Stock
Purchase Agreement (the "SERIES B PURCHASE AGREEMENT"), of even date herewith,
pursuant to which the Company desires to sell to the Series B Purchasers and the
Series B Purchasers desire to purchase from the Company shares of the Company's
Series B Preferred Stock. A condition to Racotek's obligations under the Series
A Purchase Agreement and to the Series B Purchasers' obligations under the
Series B Purchase Agreement is that the Company, Racotek and the Series B
Purchasers enter into this Agreement in order to provide the Investors the
opportunity to purchase, upon the terms and conditions set forth in this
Agreement, shares of the Company's Preferred Stock or Common Stock issued upon
conversion of such Preferred Stock (the "SHARES") in the event that an Investor
proposes to sell or transfer such Shares.
AGREEMENT
The parties agree as follows:
1. COMPANY RIGHT OF FIRST REFUSAL. Before any Shares held by an
Investor or any transferee of an Investor (either being referred to herein as
the "HOLDER") may be sold or otherwise transferred to any person or entity (each
a "PROPOSED TRANSFEREE"), the Company or its assignee(s) shall have a right of
first refusal to purchase the Shares on the terms and conditions set forth in
this Section 1 (the "RIGHT OF FIRST REFUSAL").
1.1 NOTICE OF PROPOSED TRANSFER. The Holder of the Shares shall
deliver to the Company and to each Investor a written notice stating: (A) the
Holder's bona fide intention to sell or otherwise transfer such Shares; (B) the
name of each Proposed Transferee; (C) the number of Shares to be transferred to
each Proposed Transferee; and (D) the terms and conditions of each proposed sale
or transfer (the "NOTICE"). The Holder shall offer the Shares at
the same price (the "OFFERED PRICE") and upon the same terms (or terms as
similar as reasonably possible) to the Company or its assignee(s).
1.2 EXERCISE OF RIGHT OF FIRST REFUSAL. At any time within 30
days after receipt of the Notice or for such period of time as required so that
exercise of the Right of First Refusal does not constitute a significant
redemption under Section 1202(c)(3)(b) of the Internal Revenue Code of 1986, the
Company and/or its assignee(s) may, by giving written notice to the Holder,
elect to purchase all, but not less than all, of the Shares proposed to be
transferred to any one or more of the Proposed Transferees, at the purchase
price determined in accordance with Subsection 1.3 below.
1.3 PURCHASE PRICE. The purchase price ("PURCHASE PRICE") for
the Shares purchased by the Company or its assignee(s) under this Section 1
shall be the Offered Price. If the Offered Price includes consideration other
than cash, the cash equivalent value of the non-cash consideration shall be
determined by the Board of Directors of the Company in good faith.
1.4 PAYMENT. Payment of the Purchase Price shall be made, at
the option of the Company or its assignee(s), in cash (by check), by
cancellation of all or a portion of any outstanding indebtedness of the Holder
to the Company (or, in the case of repurchase by an assignee, to the assignee),
or by any combination thereof within 30 days after receipt of the Notice or in
the manner and at the times set forth in the Notice.
2. INVESTORS' RIGHT OF FIRST REFUSAL.
2.1 ASSIGNMENT OF COMPANY RIGHT OF FIRST REFUSAL. The Company agrees
that in the event that the Company declines to exercise in full the Right of
First Refusal set forth in Section 1, the Company will provide each Investor
with notice (the "COMPANY NOTICE") of such determination at least fifteen (15)
days after the end of the period in which the Right of First Refusal expires
pursuant to Section 1.2. Each Investor shall then have the right to submit,
prior to the end of such period, notice of its irrevocable commitment to
exercise such Right of First Refusal within thirty (30) days after receipt of
the Company Notice. As the Company's assignee, each Investor shall have the
right to exercise the Right of First Refusal on a pro rata basis which shall be
determined by the number of shares of Common Stock of the Company issued or
issuable upon conversion of Preferred Stock, or Common Stock received in
connection with any stock dividend, stock split or other reclassification
thereof (the "CONVERSION SHARES") held by such Investor relative to the
aggregate number of Conversion Shares held by all Investors. If any Investors
do not exercise their right of first refusal, the Shares that would otherwise be
allocated to such non-exercising Investors shall be allocated to each exercising
Investor on a pro-rata basis (based upon the number of Conversion Shares held by
such exercising Investor relative to the aggregate number of Conversion Shares
held by all such exercising Investors). Upon expiration or exercise of the
Right of First Refusal, the Company will provide notice to all Investors as to
whether or not the Right of First Refusal has been or will be exercised by the
Company or the Investors.
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2.2 NO ADVERSE EFFECT. The exercise or non-exercise of the Right of
First Refusal of the Investors hereunder shall not adversely affect their rights
to exercise the Right of First Refusal in the event of subsequent proposed sales
of Shares by an Investor.
2.3 HOLDER'S RIGHT TO TRANSFER. If all of the Shares proposed in the
Notice to be transferred to a given Proposed Transferee are not purchased by the
Company and/or its assignee(s) as provided in Section 1 or the Investors as
provided in this Section 2, then the Holder may sell or otherwise transfer such
Shares to that Proposed Transferee at the Offered Price or at a higher price,
provided that such sale or other transfer is consummated within 60 days after
the date of the Company Notice and provided further that any such sale or other
transfer is effected in accordance with any applicable securities laws and the
Proposed Transferee agrees in writing that the provisions of this Agreement
shall continue to apply to the Shares in the hands of such Proposed Transferee.
If the Shares described in the Notice are not transferred to the Proposed
Transferee within such period, or if the Holder proposes to change the price or
other terms to make them more favorable to the Proposed Transferee, a new Notice
shall be given to the Company, and the Company and/or its assignees and the
Investors shall again be offered the Right of First Refusal before any Shares
held by the Holder may be sold or otherwise transferred.
3. TRANSFER RESTRICTIONS.
3.1 RIGHTS UPON PROHIBITED TRANSFERS.
Any attempt by an Investor to transfer Shares in violation of
this Agreement shall be void and the Company agrees it will not effect such a
transfer nor will it treat any alleged transferee as the holder of such Shares
without the written consent of the holders of a majority of the Conversion
Shares. In addition, the Company may proceed to protect and enforce its rights
by suit in equity or by action at law, whether for specific performance of any
term certified in this Agreement, or for an injunction agreement to breach any
such term or performance or the exercise of any power granted in this Agreement,
or to enforce any other legal or equitable right of the Company to rule one or
more of such actions.
3.2 LEGENDED CERTIFICATES. Each certificate representing shares of
the Company owned by any Investor shall bear the following legend:
"THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO THE TERMS AND CONDITIONS
OF A CERTAIN RIGHT OF FIRST REFUSAL AGREEMENT BY AND BETWEEN THE
STOCKHOLDER, THE CORPORATION AND CERTAIN HOLDERS OF PREFERRED STOCK OF
THE CORPORATION. COPIES OF SUCH AGREEMENT MAY BE OBTAINED UPON
WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION."
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4. TERMINATION.
4.1 TERMINATION EVENTS. Except as otherwise provided
herein, this Agreement shall terminate upon the earliest to occur of any one
of the following events (and shall not apply to any transfer by Racotek in
connection with any such event):
(a) The liquidation, dissolution or indefinite
cessation of the business operations of the Company;
(b) The execution by the Company of a general
assignment for the benefit of creditors or the appointment of a receiver or
trustee to take possession of the property and assets of the Company;
(c) The consummation of the Company's initial public
offering of shares of its Common Stock; provided that all shares of the
Company's Preferred Stock are converted into Common Stock prior to or in
connection with such offering; or
(d) The sale, conveyance, disposal, or encumbrance of
all or substantially all of the Company's property or business or the
Company's merger into or consolidation with any other corporation (other than
a wholly-owned subsidiary corporation) or if the Company effects any other
transaction or series of related transactions in which more than fifty
percent (50%) of the voting power of the Company is disposed of, PROVIDED
that this Section 4.1(d) shall not apply a merger effected exclusively for
the purpose of changing the domicile of the Company.
4.2 REMOVAL OF LEGEND. At any time after the termination
of this Agreement in accordance with Section 4.1, any holder of a stock
certificate legended pursuant to Section 3.2 may surrender such certificate
to the Company for removal of such legend, and the Company will duly reissue
a new certificate without the legend.
5. MISCELLANEOUS.
5.1 PERMITTED TRANSFERS. Neither the Company nor its
assignees shall have a Right of First Refusal, pursuant to this Agreement, to
purchase shares transferred by an Investor which is a partnership to its
partners, former partners or an affiliated partnership managed by the same
manager or managing partner or management company, or managed by an entity
controlling, controlled by, or under common control with, such manager or
managing partner or management company in accordance with partnership
interests.
5.2 SUCCESSORS AND ASSIGNS. Except as otherwise provided
herein, this Agreement and the rights and obligations of the parties
hereunder shall inure to the benefit of, and be binding upon, the parties'
respective successors, assigns and legal representatives.
5.3 AMENDMENTS AND WAIVERS. Any term of this Agreement may
be amended or waived only with the written consent of the Company and the
holders of at least 66 2/3% of the Series A and Series B Preferred Stock.
Any amendment or waiver effected in
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accordance with this Section 5.3 shall be binding upon the Company, the holders
of Series A Preferred Stock and the holders of the Series B Preferred Stock, and
each of their respective successors and assigns.
5.4 NOTICES. Any notice required or permitted by this
Agreement shall be in writing and shall be deemed sufficient on the date of
delivery, when delivered personally or by overnight courier or sent by
telegram or fax, or forty-eight (48) hours after being deposited in the U.S.
mail, as certified or registered mail, with postage prepaid, and addressed to
the party to be notified at such party's address or fax number as set forth
below on the signature page or on EXHIBIT A hereto, or as subsequently
modified by written notice.
5.5 SEVERABILITY. If one or more provisions of this
Agreement are held to be unenforceable under applicable law, the parties
agree to renegotiate such provision in good faith. In the event that the
parties cannot reach a mutually agreeable and enforceable replacement for
such provision, then (a) such provision shall be excluded from this
Agreement, (b) the balance of the Agreement shall be interpreted as if such
provision were so excluded and (c) the balance of the Agreement shall be
enforceable in accordance with its terms.
5.6 GOVERNING LAW. This Agreement and all acts and
transactions pursuant hereto and the rights and obligations of the parties
hereto shall be governed, construed and interpreted in accordance with the
laws of the State of Delaware, without giving effect to principles of
conflicts of law.
5.7 COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute one and the same instrument.
5.8 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.
5.9 ADDITION OF INVESTORS. Notwithstanding anything to the
contrary contained herein, if the Company shall issue additional shares of
its Series B Preferred Stock pursuant to the Series B Purchase Agreement, any
purchaser of such shares of Series B Preferred Stock may become a party to
this Agreement by executing and delivering an additional counterpart
signature page to this Agreement and shall be deemed an "Investor" hereunder.
[Signature Page Follows]
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The parties have executed this Agreement as of the date first
written above.
COMPANY:
NEXTNET, INC.
By: \s\ ▇▇▇▇▇ Shpantez
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President
Address:
11173 Meg ▇▇▇▇▇ ▇▇▇▇
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RACOTEK, INC.
By: \s\ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: President and CEO
Address:
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INVESTORS:
SVM STAR VENTURES MANAGEMENTGESELLSCHAFT
mbH Nr. 3 & CO. BETEILIGUNGS KG Nr. 2
By: SVM Star Ventures Management-
gesellschaft mbH No. 3
By: \s\ ▇▇. ▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇ ▇▇▇▇▇
Address:
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▇-▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Facsimile: 49-89-419-43030
INVESTORS:
SVE STAR VENTURES ENTERPRISES NO. VII,
A GERMAN CIVIL LAW PARTNERSHIP
(with limitation of liability)
By: SVM Star Ventures Management-
gesellschaft mbH No. 3
By: \s\ ▇▇. ▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇ ▇▇▇▇▇
Address:
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Facsimile: 49-89-419-43030
INVESTORS:
STAR SEED ENTERPRISES, A GERMAN CIVIL
LAW PARTNERSHIP (with limitation
of liability)
By: Star-Seed Managementgesellschaft
mbH
By: \s\ ▇▇. ▇▇▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇ ▇▇▇▇▇
Address:
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▇-▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
Facsimile: 49-89-419-43030
INVESTORS:
DOLL TECHNOLOGY INVESTMENT FUND, A
CALIFORNIA LIMITED PARTNERSHIP
By: Doll Technology Investment
Managment, LLC, its General
Partner
By: \s\ ▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇ R. Doll
Address:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
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INVESTORS:
DOLL TECHNOLOGY AFFILIATES FUND, L.P.
By: Doll Technology Investment
Managment, LLC, its General
Partner
By: \s\ ▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇ R. Doll
Address:
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▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
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INVESTORS:
DOLL TECHNOLOGY SIDE FUND, L.P.
By: Doll Technology Investment
Managment, LLC, its General
Partner
By: \s\ ▇▇▇▇▇ ▇. ▇▇▇▇
Name: ▇▇▇▇▇ R. Doll
Address:
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▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
INVESTORS:
JAFCO Co., Ltd.
By: \s\ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Chairman
JAFCO America Ventures, Inc.
Attorney-in-fact
Address:
JAFCO America Ventures, Inc.
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INVESTORS:
JAFCO G-6 (A) Investment Enterprise
Partnership
By: \s\ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Chairman
JAFCO America Ventures, Inc.
Attorney-in-fact
Address:
JAFCO America Ventures, Inc.
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INVESTORS:
JAFCO G-6 (B) Investment Enterprise
Partnership
By: \s\ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Chairman
JAFCO America Ventures, Inc.
Attorney-in-fact
Address:
JAFCO America Ventures, Inc.
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INVESTORS:
JAFCO G-7 (A) Investment Enterprise
Partnership
By: \s\ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Chairman
JAFCO America Ventures, Inc.
Attorney-in-fact
Address:
JAFCO America Ventures, Inc.
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INVESTORS:
JAFCO G-7 (B) Investment Enterprise
Partnership
By: \s\ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Chairman
JAFCO America Ventures, Inc.
Attorney-in-fact
Address:
JAFCO America Ventures, Inc.
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INVESTORS:
JAFCO USIT Fund III, L.P.
By: \s\ ▇▇▇▇▇▇▇ ▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Chairman
JAFCO America Ventures, Inc.
Its Executive Partner
Address:
JAFCO America Ventures, Inc.
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INVESTORS:
▇▇▇ ▇▇▇▇▇
By: \s\ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
Address:
▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
INVESTORS:
____________________________________
Dovrat, ▇▇▇▇▇ & Co., Ltd.
____________________________________
Horizon Fund Ltd.
____________________________________
Dovrat, ▇▇▇▇▇-Skies Fund 92' Ltd.
____________________________________
Dovrat, ▇▇▇▇▇-Rainbow Fund, Ltd.
____________________________________
Canada Israel Opportunity Fund L.P.
_____________________________________
The Canada-Israel Opportunity Fund II
____________________________________
Dovrat, ▇▇▇▇▇ Founders Group,
Limited Partnership
Address:
Dovrat, ▇▇▇▇▇ & Co.
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