EXHIBIT 10.11
WHITNEY EQUITY PARTNERS, L.P. SUBSCRIPTION AGREEMENT
This SUBSCRIPTION AGREEMENT (this "Agreement"), dated as of September 29,
1997, is made by and between Whitney Equity Partners, L.P., a Delaware limited
liability partnership (the "Subscriber"), and NetSelect, Inc., a Delaware
corporation (the "Corporation").
W I T N E S S E T H:
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WHEREAS, the capitalization of the Corporation consists of (x) 35,000,000
shares of NetSelect Class A Common Stock, par value $0.001 per share (the
"NetSelect Class A Common Stock"); (y) 10,000,000 shares of NetSelect Class B
Common Stock, par value $0.001 per share (the "NetSelect Class B Common Stock");
and (z) 5,000,000 shares of Preferred Stock, par value $0.001 per share (the
"Preferred Stock"), of which 1,647,059 shares of Preferred Stock have been
designated as Series A Convertible Preferred Stock (the 'Series A Preferred
Stock"), 352,941 shares of Preferred Stock have been designated as Series B
Convertible Preferred Stock (the "Series B Preferred Stock"), and 700,000 shares
of Preferred Stock have been designated as Series C Convertible Preferred Stock
(the "Series C Preferred Stock"); and
WHEREAS, the Subscriber desires to acquire, on the date hereof, an equity
interest in the Corporation, representing 122,875 of the issued and outstanding
shares of Series C Preferred Stock (the "Subscription Shares") to be purchased
by the Subscriber in consideration of a capital contribution by the Subscriber
to the Corporation in the aggregate amount of $900,000.
NOW, THEREFORE, in consideration of these premises, the mutual covenants
and agreements contained in this Agreement, and in reliance upon the
representations and warranties and covenants set forth herein, the Subscriber
hereby agrees with the Corporation as follows:
SECTION 1. CAPITALIZATION OF PARTNERSHIP
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1.1. Subscriptions. The Subscriber hereby subscribes for the Subscription
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Shares.
1.2. Contribution of Cash. On the date hereof, the Subscriber shall
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purchase from the Corporation the Subscription Shares for a cash payment in an
amount equal to $900,000 (the "Contribution Amount").
1.3. The Closing. The Closing of the transactions contemplated by Section
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1.1 and Section 1.2 hereof (the "Closing") shall take place on September 29,
1997 (the "Closing Date"), at the offices of Battle Xxxxxx LLP, Park Avenue
Tower, 00 Xxxx 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or at such other place and
time as the parties hereto shall mutually agree.
1.4. Deliveries at the Closing.
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(a) Deliveries at Closing by the Corporation. At the Closing, the
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Corporation shall deliver to the Subscriber, stock certificates representing the
duly authorized, validly issued, fully paid and nonassessable Subscription
Shares.
(b) Deliveries at Closing by the Subscriber. At the Closing, the
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Subscriber shall:
(i) deliver by wire transfer in immediately available funds the
Contribution Amount;
(ii) deliver to the Corporation that certain Investor Representation
Letter, dated as of the date hereof (the "Investor Representation Letter"),
between the Corporation and the Subscriber, duly executed by Subscriber;
(iii) deliver to the Corporation this Agreement, duly executed by
Subscriber, and
(iv) deliver to the Corporation any other documents, writings,
certificates or opinions as may be requested by the Corporation.
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE SUBSCRIBER.
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2.1. The Subscriber hereby represents and warrants to, and covenants with
the Corporation as follows:
(i) The Subscriber is purchasing the Subscription Shares for its own
account and not on behalf of any other person, group or entity, the Subscriber
is aware and acknowledges that the Subscription Shares have not been registered
under the Securities Act of 1933, as amended (the "Securities Act"), and may not
be offered or sold unless the Subscription Shares are registered under the
Securities Act or an exemption from the registration requirements of the
Securities Act is available;
(ii) The Subscriber has had a reasonable opportunity to ask questions of
and receive answers from the Corporation concerning the Corporation and the
Subscription Shares, and all such questions, if any, have been answered to the
full satisfaction of the Subscriber;
(iii) No person or entity other than the Subscriber and a general partner
or limited partner of the Subscriber has any rights in and to the Subscription
Shares or any right to acquire the Subscription Shares;
(iv) The Subscriber has such knowledge and expertise in financial and
business matters that the Subscriber is capable of evaluating the merits and
risks involved in an investment in the Subscription Shares; and the Subscriber
is financially able to bear the economic risk of the investment in the
Subscription Shares, including a total loss of such investment;
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(v) The Subscriber is not purchasing the Subscription Shares with a view
to distribution, and has no present intention of dividing or allowing others to
participate in the investment or of reselling, or otherwise participating
directly or indirectly, in a distribution of the Subscription Shares, and shall
not make any sale, transfer or pledge thereof without registration under the
Securities Act and any applicable securities laws of any state or unless an
exemption from registration is available,
(vi) The Subscriber understands that the Subscription Shares are being
offered and sold to it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and that the
Corporation is relying upon the truth and accuracy of the representations,
warranties, agreements, acknowledgments and understandings of the Subscriber set
forth herein in order to determine the applicability of such exemptions and the
suitability of Subscriber to acquire the Subscription Shares;
(vii) The Subscriber expressly acknowledges and agrees that the
Corporation is relying upon the Purchaser's representations contained in this
Agreement; and
(viii) The Subscriber expressly agrees that Subscriber shall not initiate a
suit or cause of action against Corporation for the Corporation's failure to
obtain additional financing in the form of Series C Convertible Preferred Stock;
provided, however, the foregoing shall not bar the Subscriber from bringing such
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suit as a result of fraudulent acts on the part of the Corporation.
SECTION 3. MISCELLANEOUS.
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3.1. Fees and Expenses. Except as expressly provided herein each of the
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parties hereto shall each pay all of their own costs and expenses, including any
and all legal and accounting fees, incident to the negotiation, execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby whether or not such transactions shall be consummated.
3.2. Counterparts. This Agreement may be executed in two or more
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counterparts, all of which taken together shall constitute one instrument.
3.3. Binding Effect. All of the terms of this Agreement shall be binding
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upon the respective personal representatives, heirs and successors of the
parties hereto and shall inure to the benefit of and be enforceable by the
parties hereto and their respective personal representatives, heirs and
successors.
3.4. Assignment. Neither this Agreement nor any right or interest hereunder
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may be assigned in whole or in part by any party without the prior written
consent of the other parties.
3.5. Entire Agreement and Amendment. This Agreement the Investor
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Representation Letter contains the entire agreement between the parties hereto
with respect to the subject matter hereof. No change, modification, extension,
termination, notice of
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termination, discharge, abandonment or waiver of this Agreement or any of the
provisions hereof, nor any representations, promise or condition relating to
this Agreement, shall be binding upon the parties hereto unless made in writing
and signed by the parties hereto.
3.6. Captions. The captions of Sections hereof are for convenience only and
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shall not control or affect the meaning or construction of any of the provisions
of this Agreement.
3.7. Notices. All notices or other communications to be given or made
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hereunder shall be in writing and shall be deemed given when delivered
personally or mailed, by registered or certified mail, return receipt requested,
postage prepaid, or overnight delivery, to the parties, as the case may be, (a)
in the case of the Subscriber, to 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxxxxxxx, XX
00000, Attention: Xxxxxx X. X'Xxxxx; and (b) in the case of the Corporation, to
NetSelect, Inc., 0000 Xxxxxxx Xxxxxx Xxxx, Xxxxx 000, Xxxxxxxx Xxxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxxxx Xxxxx, Ph.D., facsimile no.: (000) 000-0000.
3.8. Applicable Law. This Agreement shall be governed by and construed in
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accordance with the laws of the State of Delaware as applied to residents of
that State executing contracts wholly to be performed in that State. The
Subscriber hereby expressly submits to the jurisdiction of all federal and state
courts located in the State of Delaware and consents that any process or notice
of motion or other application to any of said courts or a judge thereof may be
served within or without such court's jurisdiction by registered mail or by
personal service, provided a reasonable time for appearance is allowed. The
Subscriber also waives any claim that Delaware is an inconvenient forum.
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IN WITNESS WHEREOF, the parties have duly executed this Agreement on the
date and year first above written.
WHITNEY EQUITY PARTNERS, L.P.
By: X. X. Xxxxxxx & Co.
its General Partner
By: /s/ Xxxxx X. [Illegible]
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Name: Xxxxx X. [Illegible]
Title: Managing Member
NETSELECT, INC.
By: _____________________________________
Name: Xxxxxx Xxxxx, Ph.D.
Title: Chief Executive Officer
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