JATO COMMUNICATIONS CORP.
SERIES D PREFERRED STOCK
PURCHASE AGREEMENT
FEBRUARY 24, 2000
JATO COMMUNICATIONS CORP.
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES D PREFERRED STOCK PURCHASE AGREEMENT (the "AGREEMENT") is
entered into as of this 24th day of February, 2000, by and among JATO
COMMUNICATIONS CORP., a Delaware corporation (the "COMPANY"), and Global
Crossing Bandwidth, Inc., a Delaware corporation, whose name and address are set
forth on the Schedule of Purchasers attached hereto as EXHIBIT A ("PURCHASER").
RECITALS
WHEREAS, the Company has authorized the sale and issuance of up to an
aggregate of five million (5,000,000) shares of its Series D Preferred Stock,
$.01 par value (the "SHARES"); and
WHEREAS, the Company desires to issue and sell the Shares to Purchaser
and Purchaser desires to purchase a portion of the Shares from the Company 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:
SECTION 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
Purchaser 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 Certificate of Incorporation of the
Company, in the form attached hereto as EXHIBIT B (the "CERTIFICATE").
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 Purchaser and Purchaser agrees to purchase from the Company, the number
of Shares set forth opposite Purchaser's name on EXHIBIT A at a purchase price
of $5.60 per share.
SECTION 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 date hereof, at the
offices of Xxxxxx Godward LLP, 0000 Xxxxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxxx 00000, or at such other time or place as the Company and Purchaser may
mutually agree (such date is hereinafter referred to as the "CLOSING DATE").
2.2 DELIVERY. At the Closing, subject to the terms and conditions
hereof, the Company will deliver to the Purchaser one or more stock
certificates, as Purchaser may request,
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representing the number of Shares to be purchased at the Closing by
Purchaser, registered in Purchaser's name, against payment of the purchase
price therefor, by check or wire transfer made payable to the order of the
Company.
SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on a Schedule of Exceptions delivered by the
Company to the Purchaser at the Closing, the Company hereby represents and
warrants to Purchaser as of the date of this Agreement as follows:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company and each
Subsidiary (as defined in Section 3.2 below) is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
or, with respect to Jato Communications Corp. of Virginia, the Commonwealth of
Virginia. Each of the Company and Subsidiary has all requisite corporate power
and authority to own and operate their respective properties and assets. The
Company has all requisite corporate power and authority to execute and deliver
this Agreement, the Second Amended and Restated Investors' Rights Agreement, in
the form attached hereto as EXHIBIT C (the "INVESTORS' RIGHTS AGREEMENT"), and
the Second Amended and Restated Stockholders' Agreement, in the form attached
hereto as EXHIBIT D (the "STOCKHOLDERS' AGREEMENT"), issue and sell the Shares
and the Conversion Shares and to carry out the provisions of this Agreement, the
Investors' Rights Agreement, the Stockholders' Agreement and the Certificate.
Each of the Company and Subsidiary has the requisite corporate power and
authority to carry on its business as presently conducted and as presently
proposed to be conducted. Each of the Company and Subsidiary 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 their respective
activities and of their respective properties (both owned and leased) make such
qualifications necessary, except for those jurisdictions in which failure to do
so would not have a material adverse effect on the Company or Subsidiary or
their respective businesses. The Company has made available to the Purchaser
true, correct and complete copies of the Company's Restated Certificate of
Incorporation and Amended Bylaws, each as amended to date and in full force and
effect on the date hereof. The Company has made available to the Purchaser true,
correct and complete copies of Subsidiary's Certificate of Incorporation and
Bylaws, each as amended to date and in full force and effect on the date hereof.
Since its inception, Subsidiary has had no operations and has not incurred any
material obligations.
3.2 SUBSIDIARIES. Other than Jato Operating Corp., a Delaware
corporation, Jato Operating Two Corp., a Delaware corporation, and Jato
Communications Corp. of Virginia, a Virginia corporation (collectively, the
"SUBSIDIARY"), the Company owns no equity securities of any other corporation,
limited partnership or similar entity. The Company is not a participant in any
joint venture, partnership or similar arrangement. The Company owns shares of
the Subsidiary free and clear of all encumbrances.
3.3 CAPITALIZATION; VOTING RIGHTS.
(a) The authorized capital stock of the Company, immediately
prior to the Closing, will consist of (a) eighty million (80,000,000) shares of
Common Stock, of which six million seven hundred ninety-seven thousand eight
hundred fourteen (6,797,814) shares are
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issued and outstanding, and (b) thirty million (30,000,000) shares of
Preferred Stock, of which one million seven hundred fifty-one thousand nine
hundred eighty-five (1,751,985) shares are designated Series A Preferred
Stock, of which one million seven hundred fifty-one thousand nine hundred
eighty five (1,751,985) are issued and outstanding, of which thirteen million
six hundred fifteen thousand three hundred twenty-two (13,615,322) shares are
designated Series B Preferred Stock, of which thirteen million six hundred
fifteen thousand three hundred twenty-two (13,615,322) are issued and
outstanding, of which four million nine hundred thirty-two thousand three
hundred eight (4,932,308) shares are designated Series C Preferred Stock, of
which four million nine hundred thirty-two thousand three hundred eight
(4,932,308) are issued and outstanding, and of which five million (5,000,000)
shares are designated Series D Preferred Stock, of which three million five
hundred seventy-one thousand four hundred twenty-eight (3,571,428) are issued
and outstanding. All issued and outstanding shares of the Company's Common
Stock and Preferred 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 Certificate. The Conversion Shares have been duly
and validly reserved for issuance. As of the Closing, there has been no
action taken by the Company which would have required an adjustment to the
Series D Conversion Price, as defined in the Certificate. Except as set forth
on the Schedule of Exceptions and except as may be granted pursuant to this
Agreement or the Investors' Rights Agreement, there are no outstanding
options, warrants, rights (including conversion or preemptive rights and
rights of first refusal), proxy or stockholder agreements, or agreements of
any kind for the purchase or acquisition from the Company of any of its
securities. The Shares and the Conversion Shares have been duly authorized
and, when issued in compliance with the provisions of this Agreement and the
Certificate, will be validly issued (including, without limitation, issued in
compliance with applicable state and federal securities laws), fully paid and
nonassessable, subject to no preemptive rights, 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 transfer is proposed.
(b) The authorized capital stock of (i) Jato Operating Corp.
consists of eleven hundred (1,100) shares of Common Stock, (ii) Jato Operating
Two Corp. consists of one hundred (100) shares of Common Stock, and (iii) Jato
Communications Corp. of Virginia consists of one hundred (100) shares of Common
Stock, all of which shares are issued and outstanding and held of record by the
Company.
3.4 AUTHORIZATION; BINDING OBLIGATIONS. All corporate action on the
part of the Company, its officers, directors and stockholders necessary for
the authorization of this Agreement, the Investors' Rights Agreement and the
Stockholders' 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 Certificate has been taken or will be taken prior to the Closing. The
Agreement, the Investors' Rights Agreement and the Stockholders' 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
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equity that restrict the availability of equitable remedies; and (iii) to the
extent that the enforceability of the indemnification provisions in Section
3.12 of the Investors' Rights Agreement may be limited by applicable laws.
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.
3.5 FINANCIAL STATEMENTS. The Company has delivered to Purchaser (i)
its audited balance sheet as at December 31, 1998 and audited statement of
income and cash flows for the period from inception and ending December 31, 1998
and (ii) its audited balance sheet as at December 31, 1999 (the "STATEMENT
DATE") and audited consolidated statement of income for the year ending on the
Statement Date (collectively, the "FINANCIAL STATEMENTS"). The Financial
Statements, together with the notes thereto, are complete and correct in all
material respects, have been prepared in accordance with generally accepted
accounting principles applied on a consistent basis throughout the periods
indicated, except as disclosed therein, and present fairly the financial
condition and position of the Company as of December 31, 1998 and the Statement
Date.
3.6 LIABILITIES. The Company has no material liabilities and, to its
knowledge, knows of no material contingent liabilities not otherwise disclosed
in the Financial Statements, except current liabilities incurred in the ordinary
course of business subsequent to the Statement Date which have not been, either
in any individual case or in the aggregate, materially adverse.
3.7 AGREEMENTS; ACTION.
(a) Except as set forth on the Schedule of Exceptions and except
for agreements explicitly contemplated hereby, there are no agreements,
understandings or proposed transactions between the Company and any of its
officers, directors, affiliates or their respective affiliates.
(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, 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.
(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 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 case of indebtedness
and/or liabilities individually less than $25,000, in excess of $75,000 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.
4.
(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.
3.8 OBLIGATIONS TO RELATED PARTIES. There are no obligations of the
Company to officers, directors, stockholders, or employees of the Company other
than (a) for payment of salary for services rendered, (b) reimbursement for
reasonable expenses incurred on behalf of the Company and (c) for other standard
employee benefits made generally available to all employees (including stock
option agreements outstanding under any stock option plan approved by the Board
of Directors of the Company). No such officer, director or stockholder, or any
member of their immediate families is, directly or indirectly, interested in any
material contract with the Company (other than such contracts as relate to any
such person's ownership of capital stock or other securities of the Company).
The Company is not a guarantor or indemnitor of any indebtedness of any other
person, firm or corporation.
3.9 ABSENCE OF CHANGES. Except as set forth on the Schedule of
Exceptions, since the Statement Date, there has not been:
(a) Any change in the assets, liabilities, financial condition,
earnings or operations of the Company from that reflected in the Financial
Statements, other than changes in the ordinary course of business, none of which
individually or in the aggregate has had or is expected to have a material
adverse effect on such assets, liabilities, financial condition, earnings or
operations of the Company;
(b) Any resignation or termination of any key officers of the
Company; and the Company, to the best of its knowledge, does not know of the
impending resignation or termination of employment of any such officer;
(c) Any material change in the contingent obligations of the
Company by way of guaranty, endorsement, indemnity, warranty or otherwise;
(d) Any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, business or
prospects or financial condition of the Company;
(e) Any waiver by the Company of a valuable right or of a
material debt owed to it;
(f) Any direct or indirect loans made by the Company to any
stockholder, employee, officer or director of the Company, other than immaterial
advances made in the ordinary course of business;
(g) Any material change in any compensation arrangement or
agreement with any employee, officer, director or stockholder including, without
limitation, any (i) increase in the compensation payable or to become payable by
the Company to any of the Company's employees, (ii) any bonus, incentive
compensation, service award or other like benefit, granted,
5.
made or accrued, contingently or otherwise, to or for the credit of the
Company's employees, or (iii) any employee welfare, pension, retirement,
profit-sharing or similar payment or arrangement (whether or not subject to
ERISA) made or agreed to by the Company;
(h) Any declaration or payment of any dividend or other
distribution of the assets of the Company;
(i) Any labor organization activity;
(j) Any debt, obligation or liability incurred, assumed or
guaranteed by the Company, except those for immaterial amounts and for current
liabilities incurred in the ordinary course of business;
(k) Any sale, assignment or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets;
(l) Any change in any material agreement to which the Company is
a party or by which it is bound which materially and adversely affects the
business, assets, liabilities, financial condition, operations or prospects of
the Company;
(m) (i) Any change in practice with respect to taxes, (ii) any
making, changing or revoking of any tax election, or (iii) any settlement or
compromise of any dispute involving a tax liability;
(n) Any change in the number of shares of capital stock of the
Company issued and outstanding;
(o) Any failure to conduct the business of the Company in the
ordinary course;
(p) Any change in the method of accounting or accounting practice
of the Company;
(q) Any change in the Company's lines of business; or
(r) Any other event or condition of any character that, either
individually or cumulatively, has materially and adversely affected the
business, assets, liabilities, financial condition, operations or prospects of
the Company. For purposes of this subsection (r), a material and adverse effect
shall only be deemed to occur if its monetary impact exceeds, or with the
passage of time, will exceed $75,000.
3.10 REAL PROPERTIES; TANGIBLE PERSONAL PROPERTY.
(a) REAL PROPERTIES. The Schedule of Exceptions sets forth each
lease or other agreement (including easements) under which the Company leases or
has rights in any real property (the "REAL PROPERTY LEASES," and, each
individually, a "REAL PROPERTY LEASE"). The Company has a valid and subsisting
leasehold interest in all the real property which is the subject of each Real
Property Lease. The Company does not presently own, and has never owned, any
6.
real property and does not presently operate, and has never operated, any
real property, other than as a lessee.
(b) TANGIBLE PERSONAL PROPERTY. Except as set forth on the
Schedule of Exceptions, (i) the Company has good, marketable and valid title to
all of the items of tangible personal property used in its operations and (ii)
all such tangible personal property is reflected on the Company's unaudited
Financial Statements, except as sold or disposed of subsequent to the date
thereof in the ordinary course of business consistent with past practices. The
tangible personal property of the Company is in good repair and working order,
reasonable wear and tear excepted, and constitutes all of the tangible personal
property necessary for the operation of the business as currently conducted.
3.11 PATENTS AND TRADEMARKS. The Company is the sole owner, free of any
lien or encumbrance, of, or has a valid license, on commercially reasonable
terms, to, all U.S. and foreign patents, registered designs, copyrights,
computer software and databases, trademarks, service marks and trade names,
whether or not registered, and other trade secrets, research and development,
formulae, inventions, processes, know-how and proprietary and intellectual
property rights and information, including all grants, registrations and
applications relating thereto (collectively, the "PROPRIETARY RIGHTS") necessary
for the conduct of its business as now conducted (the "COMPANY RIGHTS"). The
Company's rights in the Company Rights are, to the Company's knowledge, valid
and enforceable. The Company has received no demand, claim, notice or inquiry
from any person in respect of the Company Rights which challenges, threatens to
challenge or inquires as to whether there is any basis to challenge, the
validity of, or the rights of the Company in, any such Company Rights. There are
no outstanding options, licenses or agreements of any kind relating to the
Company Rights, nor is the Company bound by or a party to any options, licenses
or agreements of any kind with respect to the Proprietary Rights 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 taken, and
will take, all actions which are necessary in order to protect the Company
Rights and to acquire additional Proprietary Rights, consistent with prudent
commercial practices in the telecommunications industry. To the knowledge of the
Company, the Company is not in violation or infringement of, and has not
violated or infringed, any Proprietary Rights of any other person. To the
knowledge of the Company, no person is infringing any Company Rights. The
Company is not aware that any of its employees is obligated under any contract
(including licenses, covenants or commitments of any nature) or other agreement,
or subject to any judgment, decree or order of any court or administrative
agency, that would interfere with their duties to the Company's business by the
employees of the Company, nor will, to the Company's knowledge, the conduct of
the Company's business as proposed 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.
3.12 COMPLIANCE WITH OTHER INSTRUMENTS. The Company is not in violation
or default of any term of its Certificate or Amended 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
7.
or of any judgment, decree, order, writ or 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, the Investors' Rights Agreement, the Stockholders'
Agreement and the Compliance Certificate to be delivered pursuant to Section
5.1(f) hereof, and the issuance and sale of the Shares pursuant hereto and of
the Conversion Shares pursuant to the Certificate, 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.
3.13 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, the Investors' Rights Agreement
or the Stockholders' 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 or in
violation of any order, writ, injunction, judgment or decree or any rule or
regulation of any court or government agency or instrumentality. There is no
action, suit, proceeding or investigation by the Company currently pending or
which the Company intends to initiate.
3.14 TAX RETURNS AND PAYMENTS. The Company has 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 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. Neither the Company nor the Subsidiary is a
party to any agreement relating to allocating or sharing the payment of, or
liability for taxes with respect to, any taxable period. Neither the Company nor
Subsidiary has any deferred income reportable for a period ending after the
Closing Date that is attributable to a transaction (e.g., an installment sale)
occurring in, or resulting from a change of accounting method for, a period
ending on or prior to the Closing Date.
3.15 EMPLOYEES. The Company is not a party to or bound by any currently
effective employment contract, deferred compensation arrangement, bonus plan,
incentive plan, profit
8.
sharing plan, retirement agreement or other employee compensation plan or
agreement. Neither the Company, nor any entity which is required to be
aggregated with the Company pursuant to Sections 414(b), (c), (m) or (o) of
the Internal Revenue Code of 1986 has any liability whether actual or
contingent, with respect to any employee benefit plan or arrangement. To the
Company's knowledge, no employee of the Company, nor any consultant with whom
the Company has contracted, is in violation of any term of any employment
contract, proprietary information agreement or any other agreement relating
to the right of any such individual to be employed by, or to contract with,
the Company because of the nature of the business to be conducted by the
Company; and to the Company's knowledge the continued employment by the
Company of its present employees, and the performance of the Company's
contracts with its independent contractors, will not result in any such
violation. The Company has not received any notice alleging that any such
violation has occurred. No employee of the Company has been granted the right
to continued employment by the Company or to any material compensation
following termination of employment with the Company. The Company is not
aware that any officer or key employee, or that any group of key employees,
intends to terminate their employment with the Company, nor does the Company
have a present intention to terminate the employment of any officer, key
employee or group of key employees. To the Company's knowledge, the Company
is in compliance with all laws and orders relating to the employment of
labor, including, without limitation, all such laws and orders relating to
wages, hours, discrimination, civil rights, safety and the collection and
payment of withholding and/or Social Security taxes and similar taxes. There
are no complaints, charges or claims against the Company pending, or, to the
Company's knowledge, threatened to be brought or filed, with any governmental
entity or arbitrator based on, arising out of, in connection with, or
otherwise relating to the employment or termination of employment of any
individual by the Company.
3.16 PROPRIETARY INFORMATION AND INVENTIONS AGREEMENTS. Each current
employee, officer and consultant of the Company has executed a Proprietary
Information and Inventions Agreement that effectively waives any ownership
rights in the invention or authorship of any Company Rights and has assigned to
the Company all rights with respect thereto. No current employee, officer or
consultant of the Company has excluded works or inventions made prior to his or
her employment with the Company from his or her assignment of the works or
inventions pursuant to such employee, officer or consultant's Non-Competition,
Proprietary Information and Inventions Agreement in the form attached hereto as
EXHIBIT E.
3.17 OBLIGATIONS OF MANAGEMENT. Each officer of the Company is
currently devoting one hundred percent (100%) of his business time to the
conduct of the business of the Company. The Company is not aware of any officer
or key employee of the Company planning to work less than full time at the
Company in the future.
3.18 REGISTRATION RIGHTS. Except as required pursuant to the Investors'
Rights Agreement, the Company is presently not under any obligation, and has not
granted any rights, to register (as defined in Section 1 of the Investors'
Rights Agreement) any of the Company's presently outstanding securities or any
of its securities that may hereafter be issued.
3.19 COMPLIANCE WITH LAWS; PERMITS. The Company is not in violation of
any applicable statute, rule, regulation, order or restriction of any domestic
or foreign government or any instrumentality or agency thereof in respect of the
conduct of its business or the ownership
9.
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 Schedule of Exceptions sets forth the states in which
the Company has obtained 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.
3.20 FULL DISCLOSURE. This Agreement, the Exhibits hereto, the Schedule
of Exceptions, the Investors' Rights Agreement, the Stockholders' Agreement and
all other documents delivered by the Company to Purchaser or its attorneys or
agents in connection herewith or therewith or with the transactions contemplated
hereby or thereby, do not contain any untrue statement of a material fact nor
omit to state a material fact necessary in order to make the statements
contained herein or therein not misleading. There is no fact peculiar to the
Company and known to the Company which materially adversely affects, or
reasonably could be expected to materially adversely affect in the future, the
business, property or assets, or financial condition of the Company, which has
not been set forth in this Agreement or in the other documents described herein
or furnished to the Purchaser by or on behalf of the Company prior to the date
hereof in connection with the transactions contemplated hereby.
3.21 APPLICATION OF PROCEEDS. The proceeds of the sale of the Shares
will be used by the Company to fund the capital expenditures and working capital
needs of the Company and for other general corporate purposes. The Company does
not own any "margin security" within the meaning of Regulation T (12 CFR Part
220) of the Board of Governors of the Federal Reserve System (herein called a
"margin security") or "margin stock" within the meaning of Regulation U (12 CFR
Part 221) of the Board of Governors of the Federal Reserve System (herein called
"margin stock"). Neither the Company nor any agent acting on its behalf, has
taken or will take any action which might cause this Agreement to violate
Regulation T, Regulation U, Regulation X or any other regulation of the Board of
Governors of the Federal Reserve System or to violate the Securities Exchange
Act of 1934, in each case as in effect now or as the same hereafter may be in
effect.
3.22 CERTAIN LIMITATIONS. Neither the nature of the Company, nor any of
its respective businesses or properties, nor any relationship between the
Company and any other person, nor any circumstance in connection with the offer,
issue, sale or delivery of the Shares (other than in any such case, any matter
relating to the Purchaser) is, such as to require or give rise to any limitation
on any Purchaser's ownership of any equity securities of the Company.
3.23 ENVIRONMENTAL.
(a) To the Company's knowledge, the Company complies, and at all
times has complied, in all material respects with all applicable Environmental
Laws. For the purposes hereof, "ENVIRONMENTAL LAW" shall mean any judgment,
decree, order, law, permit, license,
10.
rule, regulation or agency requirement relating to or addressing the
environment, health or safety (to the extent relating to exposure to any
hazardous substance), including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act, as amended, the
Resource Conservation and Recovery Act, as amended, the Superfund Amendments
and Reauthorization Act of 1986, the Federal Clean Water Act, the Federal
Clean Air Act, the Toxic Substances Control Act and any federal, state, local
or foreign statute, regulation, ordinance, order or decree relating to
health, safety (in the case of health and safety to the extent relating to
exposure in the workplace or otherwise to any Hazardous Substance) or the
environment.
(b) There is not now pending or, to the Company's knowledge,
threatened any action, claim, proceeding or investigation nor has the Company
received any notice, claim, demand letter, or request for information at any
time, alleging that the Company may be in violation of, or liable under, any
Environmental Law.
(c) To the Company's knowledge, without initiating any inquiry,
there are no hazardous substances located on the properties currently or
formerly owned or operated by the Company (including soil, groundwater or
surface features and buildings or structures thereon) other than as permitted
under applicable Environmental Laws, and none of the properties contain, or has
contained, any underground storage tank.
3.24 INSURANCE. The Company maintains and/or is covered by valid
policies of workers' compensation insurance and of insurance with respect to its
properties and business. The Company currently maintains, in full force,
insurance covering the risks of the Company, if any, of such types and in such
amounts and with such deductibles as are customary for other companies engaged
in similar lines of business and with good and responsible insurance companies.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
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, the Investors' Rights Agreement, the Stockholders' Agreement and to
carry out their provisions. All action on Purchaser's part required for the
lawful execution and delivery of this Agreement, the Investors' Rights Agreement
and the Stockholders' Agreement has been or will be effectively taken prior to
the Closing. Upon their execution and delivery, this Agreement, the Investors'
Rights Agreement and the Stockholders' 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 the Investors' Rights Agreement may be limited by applicable laws.
11.
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 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) ACCREDITED INVESTOR. Purchaser represents that it is an
"accredited investor" within the meaning of Regulation D under the Securities
Act.
(d) RULE 144. Purchaser acknowledges and agrees that the
Shares, and, if issued, the Conversion Shares must be held indefinitely
unless they are subsequently registered under the Securities Act or an
exemption from such registration is available. Purchaser has been advised or
is aware of the provisions of Rule 144 promulgated under the Securities Act
as in effect from time to time, which permits limited resale of shares
purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things, the availability of certain
current public information about the Company, the resale occurring following
the required holding period under Rule 144 and the number of shares being
sold during any three-month period not exceeding specified limitations.
(e) RESIDENCE. 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. Purchaser acknowledges and agrees that the
Shares and, if issued, the Conversion Shares are subject to restrictions on
transfer as set forth in the Investors' Rights Agreement and the Stockholders'
Agreement.
12.
SECTION 5. CONDITIONS TO CLOSING
5.1 CONDITIONS TO PURCHASER'S OBLIGATIONS AT THE CLOSING. Purchaser's
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 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.
(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 Purchaser and the Company
are subject.
(c) 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, the Investors'
Rights Agreement and the Stockholders' Agreement (except for such as may be
properly obtained subsequent to the Closing).
(d) FILING OF CERTIFICATE. The Certificate shall have been
approved by the Board of Directors of the Company and filed with the Secretary
of State of the State of Delaware and shall be in full force and effect.
(e) 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.
(f) COMPLIANCE CERTIFICATE. The Company shall have delivered to
Purchaser a Compliance Certificate, executed by the Chief Executive Officer of
the Company, dated as of the Closing Date, to the effect that the conditions
specified in subsections (a), (c), (d) and (e) of this Section 5.1 have been
satisfied.
(g) SECOND AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT. A
Second Amended and Restated Investors' Rights Agreement, substantially in the
form attached hereto as EXHIBIT C, shall have been executed and delivered by the
parties thereto.
(h) SECOND AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT. A Second
Amended and Restated Stockholders' Agreement, substantially in the form attached
hereto as EXHIBIT D, shall have been executed and delivered by the parties
thereto.
(i) LEGAL OPINION. Purchaser shall have received from Xxxxxx
Godward LLP an opinion addressed to them, dated as of the Closing Date, in
substantially the form attached hereto as EXHIBIT G.
13.
(j) JATO SERVICES AGREEMENT. A Jato Services Agreement,
substantially in the form attached hereto as EXHIBIT H, shall have been executed
and delivered by the parties thereto.
(k) CAPACITY AGREEMENT. A Capacity Agreement, substantially in
the form attached hereto as EXHIBIT I, shall have been executed and delivered by
the parties thereto.
(l) PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated at the Closing
hereby, all documents and instruments incident to such transactions and all
documents, instruments and proceedings related to the Purchaser's business,
technical and legal due diligence shall be reasonably satisfactory in substance
and form to Purchaser and its special counsel, and Purchaser and its 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 the Closing is subject to the satisfaction, on
or prior to the Closing, of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES TRUE. The representations and
warranties made by the Purchaser in Section 4 hereof shall be true and correct
in all 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. Purchaser shall have performed
and complied with all agreements and conditions herein required to be performed
or complied with by Purchaser on or before the Closing.
(c) 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, the Investors'
Rights Agreement and the Stockholders' Agreement (except for such as may be
properly obtained subsequent to the Closing).
(d) FILING OF CERTIFICATE. The Certificate shall have been
approved by the Board of Directors of the Company and filed with the Secretary
of State of the State of Delaware and shall be in full force and effect.
(e) SECOND AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT. A
Second Amended and Restated Investors' Rights Agreement, substantially in the
form attached hereto as EXHIBIT C, shall have been executed and delivered by
Purchaser.
(f) SECOND AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT. A Second
Amended and Restated Stockholders' Agreement, substantially in the form attached
hereto as EXHIBIT D, shall have been executed and delivered by Purchaser.
14.
(g) RIGHT OF FIRST REFUSAL AND STANDSTILL AGREEMENT. The Right of
First Refusal and Standstill Agreement, substantially in the form attached
hereto as EXHIBIT F, shall have been executed and delivered by the parties
thereto.
(h) JATO SERVICES AGREEMENT. A Jato Services Agreement,
substantially in the form attached hereto as EXHIBIT H, shall have been executed
and delivered by the parties thereto.
(i) CAPACITY AGREEMENT. A Capacity Agreement, substantially in
the form attached hereto as EXHIBIT I, shall have been executed and delivered by
the parties thereto.
SECTION 6. CERTAIN POST-CLOSING COVENANTS OF THE COMPANY
6.1 FINANCIAL INFORMATION AND REPORTING. The Company agrees to provide
to Purchaser the same rights to basic financial information and reporting as
have been extended to the holders of the Company's Series B Preferred Stock
under Sections 4.1(d) and 4.1(f) of the Investors' Rights Agreement, and will
extend to Purchaser the rights to information as to any pending material
litigation and any material default under any material agreement as has been
granted under Section 4.1(e) of the Investors' Rights Agreement, and shall grant
to Purchaser the same extensions or continuations of such rights as may be
granted from time to time to any person.
6.2 USE OF NAME IN CONNECTION WITH OFFERING. The Company agrees to not
(a) identify Purchaser as a "business partner" or "strategic partner" in the
Company's registration statement, and (b) use the name and logo of Purchaser
within such registration statement, unless it has received the advance approval
by Purchaser of the layout and location of such use.
SECTION 7. MISCELLANEOUS
7.1 GOVERNING LAW. This Agreement shall be construed and enforced in
accordance with the laws of the State of Colorado without regard to its
conflict-of-laws rules.
7.2 SURVIVAL. The representations, warranties, covenants and agreements
made herein shall survive any investigation made by 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.
7.3 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.
7.4 ENTIRE AGREEMENT; AMENDMENT. This Agreement, the Exhibits and
Schedules hereto, including the Investors' Rights Agreement, the Stockholders'
Agreement and the Schedule of Exceptions, and the other documents delivered
pursuant hereto constitute the full and entire understanding and agreement
between the parties with regard to the subjects hereof
15.
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. Except as expressly provided herein, neither
this Agreement nor any term hereof may be amended, waived, discharged or
terminated other than by a written instrument signed by the party against
whom enforcement of any such amendment, waiver, discharge or termination is
sought.
7.5 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.
7.6 DELAYS OR OMISSIONS. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement, the Investors'
Rights Agreement, the Stockholders' Agreement or the Certificate, shall impair
any such right, power or remedy, nor shall it be construed to be a waiver of any
such breach, default or noncompliance thereafter occurring. It is further agreed
that any waiver, permit, consent or approval of any kind or character on
Purchaser's part of any breach, default or noncompliance under this Agreement,
the Investors' Rights Agreement, the Stockholders' Agreement or under the
Certificate or any waiver on such party's part of any provisions or conditions
of the Agreement, the Investors' Rights Agreement, the Stockholders' Agreement
or the Certificate 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 Investors' Rights Agreement, the Stockholders' Agreement, the
Certificate, by law, or otherwise afforded to any party, shall be cumulative and
not alternative.
7.7 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) upon receipt 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.
7.8 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.
7.9 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.
7.10 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 7.10 being untrue.
16.
7.11 ATTORNEYS' FEES. In the event that any dispute among the parties
to this Agreement, the Investors' Rights Agreement or the Stockholders'
Agreement, the prevailing party in such dispute shall be entitled to recover
from the losing party all fees, costs and expenses of enforcing any right of
such prevailing party under or with respect to this Agreement, the Investors'
Rights Agreement, the Stockholders' 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
17.
IN WITNESS WHEREOF, the parties hereto have executed the SERIES D
PREFERRED STOCK PURCHASE AGREEMENT as of the date set forth in the first
paragraph hereof.
COMPANY: PURCHASER:
JATO COMMUNICATIONS CORP. GLOBAL CROSSING BANDWIDTH, INC.
By: /s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------- ---------------------------------
Name: Xxxxxx X. Xxxxxxxx Name: Xxxxxxx X. Xxxxxxx
--------------------------------- -------------------------------
Title: President and C.E.O. Title: Assistant Secretarty
-------------------------------- ------------------------------
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------
Name: Xxxxxxx X. Xxxxxx
-------------------------------
Title: C.F.O. Carrier Services
------------------------------
0000 00xx Xxxxxx, Xxxxx 0000 000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000 Xxxxxxxxx, XX 00000
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
EXHIBIT A
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
SCHEDULE OF PURCHASERS
NAME AND ADDRESS NUMBER OF SHARES PURCHASE PRICE
---------------- ---------------- --------------
Global Crossing Bandwidth, Inc.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx 892,857 $4,999,999.20
A-1.
EXHIBIT B
RESTATED CERTIFICATE OF INCORPORATION
B-1.
EXHIBIT C
SECOND AMENDED AND RESTATED INVESTORS' RIGHTS AGREEMENT
C-1.
EXHIBIT D
SECOND AMENDED AND RESTATED STOCKHOLDERS' AGREEMENT
D-1.
EXHIBIT E
FORM OF PROPRIETARY INFORMATION
AND INVENTIONS AGREEMENT
NON-COMPETITION, PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT
As an employee of JATO Communications Corp., a Delaware corporation,
its subsidiaries or its affiliates (together, the "Company"), and as a condition
of my employment by the Company and in consideration of the compensation now and
hereafter paid to me, I agree to the following (the "Agreement"):
1. MAINTAINING CONFIDENTIAL INFORMATION
(a) COMPANY INFORMATION. I agree at all times during the term of my
employment and thereafter to hold in strictest confidence, and
not to use, except for the benefit of the Company, or to
disclose to any person, firm or corporation, without the written
authorization of the Board of Directors of the Company, any
trade secrets, confidential knowledge, data or other proprietary
information of the Company. By way of illustration and not
limitation, this shall include information relating to products,
processes, know-how, methods, software, developmental work,
improvements, discoveries, plans for marketing and selling,
business plans, budgets and unpublished financial statements,
licenses, prices and costs, suppliers and customers, and
information regarding the skills and compensation of other
employees of the Company. Notwithstanding the foregoing,
confidential information shall not include any information
which:
(i) at the time of disclosure, or thereafter, is generally available
to and known by the public;
(ii) was or is available to me on a non-confidential basis from a
source other than the Company; or
(iii) has been independently acquired or developed by me without
violating any of my obligations under this Agreement, as shown by my
competent written records.
(b) THIRD PARTY INFORMATION. I recognize that the Company has
received and in the future will receive confidential or
proprietary information from third parties subject to a duty on
the Company's part to maintain the confidentiality of such
information and, in some cases, to use it only for certain
limited purposes. I agree that I owe the Company and such third
parties, both during the term of my employment and thereafter, a
duty to hold all such confidential or proprietary information in
the strictest confidence and not to, except as is consistent
with the Company's agreement with the third party, disclose it
to any person, firm or corporation or use it for the benefit of
anyone other than the Company or such third party, unless
expressly authorized to act otherwise by an officer of the
Company.
2. ASSIGNMENT OF INVENTIONS AND ORIGINAL WORKS.
I agree that I will make prompt written disclosure to the Company,
will hold in trust for the sole right and benefit of the Company, and hereby
assign to the Company all my right, title and interest in and to any ideas,
inventions, original works of authorship, developments, improvements or trade
secrets which I may solely or jointly conceive or reduce to practice, or cause
to be conceived or reduced to practice, during the period of my employment with
the Company and for one (1) year after my employment. This Agreement will not be
deemed to require assignment of any invention developed entirely on my own time
without using the Company's equipment, supplies, facilities or trade secrets and
neither related to the Company's actual or anticipated business, research or
development, nor resulted from work performed by me for the Company.
3. NO CONFLICTS OR SOLICITATION
For the period of my employment by the Company and for one (1) year
following my termination, I will not interfere with the business of the Company
by (i) soliciting, attempting to solicit, inducing, or otherwise causing any
employee of the Company to terminate his or her employment in order to become an
employee, consultant or
E-1.
independent contractor to or for any other entity engaged in marketing or
selling the type of products and services offered by the Company or (ii)
directly soliciting the business of any customer or client of the Company
(other than on behalf of the Company) for the type of products and services
offered by the Company.
4. COVENANT NOT TO COMPETE.
(a) I agree that during my employment with the Company, I will not
directly or indirectly engage in (whether as an employee,
consultant, proprietor, partner, director or otherwise), or have
any ownership interest in, or participate in the financing,
operation, management or control of, any person, firm,
corporation or business that engages in a "Restricted Business"
in a "Restricted Territory" (as defined below). It is agreed that
ownership of (i) no more than ten percent (10%) of the
outstanding voting stock of a publicly traded corporation or (ii)
any stock I presently own or (iii) any options or other rights to
acquire shares of a company's capital stock I presently own shall
not constitute a violation of this provision.
(b) As used herein, the terms:
(i) "Restricted Business" shall mean any competitive local exchange
carrier, high speed data communication services provider or any
business which otherwise engages in any other manner in any business
which is competitive with the Company.
(ii) "Restricted Territory" shall mean all regions within a fifty mile
radius of those cities in which the Company operates, or has disclosed
to you that it intends to operate, a business.
5. RETURN OF COMPANY DOCUMENTS
When I leave the employ of the Company, I will deliver to the Company
(and will not keep in my possession, recreate or deliver to anyone else) any and
all documents and other property, together with all copies thereof (in whatever
medium recorded) belonging to the Company, its successors or assigns whether
kept at the Company, home or elsewhere. I further agree that any property
situated on the Company's premises and owned by the Company, including disks and
other storage media, filing cabinets or other work areas, is subject to
inspection by Company personnel at any time with or without notice.
6. LEGAL AND EQUITABLE REMEDIES
Because my services are personal and unique and because I may have
access to and become acquainted with the proprietary information of the Company,
the Company shall have the right to enforce this Agreement and any of its
provisions by injunction, specific performance or other equitable relief,
without bond and without prejudice to any other rights and remedies that the
Company may have for a breach of this Agreement.
7. NOT AN EMPLOYMENT CONTRACT. I agree and understand that nothing in
this Agreement shall confer any right with respect to continuation of my
employment by the Company, nor shall it interfere in any way with my right or
the Company's right to terminate my employment at any time, with or without
cause.
8. GENERAL PROVISIONS.
(a) GOVERNING LAW. This Agreement will be governed by and construed
according to the laws of the State of Colorado, excluding
conflicts of laws principles. I hereby expressly consent to the
personal jurisdiction of the state and federal courts located in
Colorado for any lawsuit filed there against me by the Company
arising from or relating to this Agreement, or such other
location as the Company's principal executive office may then be
located.
(b) SEVERABILITY. If one or more of the provisions in this Agreement
are deemed unenforceable by law, then the remaining provisions
will continue in full force and effect. Moreover, if any
restriction set forth in Sections 3 or 4 hereof is found by any
court of competent jurisdiction to be unenforceable because it
extends for too long a period of time or over too great a range
of activities or in too broad a geographic area, it shall be
interpreted to extend only over the maximum period of time, range
of activities or geographic area as to which it may be
enforceable.
(c) BENEFIT; BINDING EFFECT. This Agreement will be binding upon my
heirs, executors, administrators and other legal representatives
and will be for the benefit of the Company, its successors and
its assigns.
E-2.
(d) SURVIVAL. The provisions of this Agreement shall survive the
termination of my employment and the assignment of this Agreement
by the Company to any successor in interest or other assignee.
I UNDERSTAND THAT THIS AGREEMENT AFFECTS MY RIGHTS TO INVENTIONS I
MAKE DURING MY EMPLOYMENT, AND RESTRICTS MY RIGHT TO DISCLOSE OR USE THE
COMPANY'S PROPRIETARY INFORMATION DURING OR SUBSEQUENT TO MY EMPLOYMENT.
I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS.
Dated:
------------------- ---------------------------------
Name
Address
-------------------------
---------------------------------
---------------------------------
ACCEPTED AND AGREED TO:
JATO COMMUNICATIONS CORP.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
E-3.
EXHIBIT F
RIGHT OF FIRST REFUSAL AND STANDSTILL AGREEMENT
F-1.
EXHIBIT G
LEGAL OPINION
G-1.
EXHIBIT H
JATO SERVICES AGREEMENT
H-1.
EXHIBIT I
CAPACITY AGREEMENT
I-1.
TABLE OF CONTENTS
PAGE NO.
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....................................1
2.1 Closing..................................................1
2.2 Delivery.................................................1
SECTION 3.REPRESENTATIONS AND WARRANTIES OF THE COMPANY....................2
3.1 Organization, Good Standing and Qualification............2
3.2 Subsidiaries.............................................2
3.3 Capitalization; Voting Rights............................2
3.4 Authorization; Binding Obligations.......................3
3.5 Financial Statements.....................................4
3.6 Liabilities..............................................4
3.7 Agreements; Action.......................................4
3.8 Obligations to Related Parties...........................5
3.9 Absence of Changes.......................................5
3.10 Real Properties; Tangible Personal Property..............6
3.11 Patents and Trademarks...................................7
3.12 Compliance with Other Instruments........................7
3.13 Litigation...............................................8
3.14 Tax Returns and Payments.................................8
3.15 Employees................................................8
3.16 Proprietary Information and Inventions Agreements........9
3.17 Obligations of Management................................9
3.18 Registration Rights......................................9
3.19 Compliance with Laws; Permits............................9
3.20 Full Disclosure.........................................10
3.21 Application of Proceeds.................................10
3.22 Certain Limitations.....................................10
3.23 Environmental...........................................10
3.24 Insurance...............................................11
i.
SECTION 4.REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.................11
4.1 Requisite Power and Authority...........................11
4.2 Investment Representations..............................12
4.3 Transfer Restrictions...................................12
SECTION 5.CONDITIONS TO CLOSING...........................................13
5.1 Conditions to Purchaser's Obligations at the Closing....13
5.2 Conditions to Obligations of the Company................14
SECTION 6.CERTAIN POST-CLOSING COVENANTS OF THE COMPANY...................15
6.1 Financial Information and Reporting.....................15
6.2 Use of Name in Connection with Offering.................15
SECTION 7.MISCELLANEOUS...................................................15
7.1 Governing Law...........................................15
7.2 Survival................................................15
7.3 Successors and Assigns..................................15
7.4 Entire Agreement; Amendment.............................15
7.5 Severability............................................16
7.6 Delays or Omissions.....................................16
7.7 Notices.................................................16
7.8 Titles and Subtitles....................................16
7.9 Counterparts............................................16
7.10 Broker's Fees...........................................16
7.11 Attorneys' Fees.........................................17
ii.
INDEX OF EXHIBITS
Schedule of Purchasers Exhibit A
Restated Certificate of Incorporation Exhibit B
Second Amended and Restated Investors' Rights Agreement Exhibit C
Second Amended and Restated Stockholders' Agreement Exhibit D
Form of Non-Competition Proprietary
Information and Inventions Agreement Exhibit E
Right of First Refusal and Standstill Agreement Exhibit F
Form of Legal Opinion Exhibit G
Jato Services Agreement Exhibit H
Capacity Agreement Exhibit I
iii.
