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EXHIBIT 10.10
MERCURY MAIL, INC.
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES C PREFERRED STOCK PURCHASE AGREEMENT (the "Agreement") is
entered into as of July 24, 1997, by and among MERCURY MAIL, INC., a Delaware
corporation (the "Company") and each of those persons and entities, severally
and not jointly, whose names are set forth on the Schedule of Purchasers
attached hereto as Exhibit A (collectively the "Purchasers" and individually a
"Purchaser").
In consideration of the mutual promises hereinafter set forth, the
parties hereto agree as follows:
1. AGREEMENT TO SELL AND PURCHASE
1.1 AUTHORIZATION OF SHARES AND WARRANTS. On or prior to the Closing
(as defined in Section 2 below), the Company shall have authorized the sale and
issuance to the Purchasers of shares of its Series C Preferred Stock (the
"Shares") having the rights, preferences, privileges and restrictions set forth
in the Amended and Restated Certificate of Incorporation of the Company attached
hereto as Exhibit B and its warrants to purchase shares of its Series C
Preferred Stock (the "Warrants").
1.2 SALE AND PURCHASE. Subject to the terms and conditions hereof, at
the Closing, the Company hereby agrees to issue and sell to each Purchaser and
each Purchaser severally and not jointly agrees to purchase from the Company,
(i) the number of Shares set forth opposite such Purchaser's name on Exhibit A,
at a purchase price of Four Dollars ($4.00) per Share, and (ii) the number of
Warrants set forth opposite such Purchaser's name on Exhibit A, at a purchase
price of One Tenth of One Cent ($0.001) per Warrant share.
2. CLOSING, DELIVERY AND PAYMENT
The initial closing of the sale and purchase of the Shares under this
Agreement shall take place at 10:00 a.m. on July 24, 1997, 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 Purchasers may mutually agree.
Any subsequent closing of the sale and purchase of the Shares, pursuant to
Section 7.10 of this Agreement, shall take place at such time and place as the
Company and such Purchasers shall mutually agree (such subsequent closings are
hereinafter referred to together with the initial closing as "Closing," and such
subsequent closing dates are hereinafter referred to together with the initial
closing date as the "Closing Date"). At the Closing, subject to the terms and
conditions hereof, the Company will deliver to the Purchasers certificates
representing the number of Shares to be purchased at the Closing by each
Purchaser, against payment of the purchase price therefor by (i) a cancelled
convertible subordinated promissory note (for those Purchasers who participated
in the bridge financing which closed on June 20, 1997) and/or (ii) certified
check or wire transfer of immediately available funds.
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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth on the Disclosure Schedule attached hereto as
Exhibit C (with each item of the Disclosure Schedule being deemed to apply to a
particular section of this Section 3 and not to all Sections of this Agreement)
the Company hereby represents and warrants to each Purchaser as follows:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware. The Company has all requisite corporate power and
authority to own and operate its properties and assets, to execute and deliver
this Agreement, to issue and sell the Shares and the shares of Common Stock
issuable upon conversion thereof (the "Conversion Shares") and to carry out the
other provisions of this Agreement, and to carry on its business as presently
conducted and as presently proposed to be conducted. The Company is qualified or
licensed and in good standing as a foreign corporation in all jurisdictions
where the nature of its business or property makes such qualification or
licensing necessary and the failure to be so qualified or licensed could
materially adversely affect the business, earnings, prospects, properties or
condition (financial or other) of the Company.
3.2 Capitalization.
(a) Immediately prior to the Closing, the authorized capital stock
of the Company will consist of (i) ten million (10,000,000) shares of Common
Stock, one million (1,000,000) shares of which are issued and outstanding, and
(ii) seven million (7,000,000) shares of Preferred Stock, eight hundred eighty
thousand (880,000) shares of which are designated as Series A Preferred Stock,
all of which are issued and outstanding, two million five hundred seventy
thousand (2,570,000) shares of which are designated as Series B Preferred Stock,
two million five hundred twenty-three thousand three hundred thirty-three
(2,523,333) of which are issued and outstanding, and three million five hundred
fifty thousand (3,550,000) shares of which are designated as Series C Preferred
Stock, none of which were issued and outstanding prior to the Closing. All
issued and outstanding shares of the Company's Common Stock have been duly
authorized and validly issued and are fully paid and nonassessable. Except for
outstanding employee options to purchase a total of nine hundred eighty-eight
thousand three hundred four (988,304) shares of Common Stock, warrants to
purchase forty-six thousand six hundred sixty-six (46,666) shares of Series B
Preferred Stock, and warrants to purchase seventy-five thousand (75,000) shares
of Series C Preferred Stock, there are no outstanding options, warrants or other
rights to purchase from the Company any of its securities.
(b) There are no outstanding rights, subscriptions, calls,
options, warrants, conversion rights or agreements granted or issued by or
binding upon the Company for the purchase or acquisition (contingent or
otherwise) from the Company of any shares of its capital stock or any other
securities except in accordance with the terms of this Agreement. The Company is
not subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any share of its capital stock or any security
convertible into or exchangeable for any shares of its capital stock. No holder
of Common Stock or Preferred Stock or any other security of the Company or any
other person or entity is entitled to any preemptive right, right of
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first refusal or similar right as a result of the issuance of the Shares or
otherwise, except as set forth therein. There is no voting trust, agreement or
arrangement among any of the beneficial holders of Common Stock or Preferred
Stock of the Company affecting the exercise of the voting rights of such stock.
(c) Attached in Part 3.2(c) of the Disclosure Schedule is a
true and complete list of the names and addresses of the record holders of all
of the outstanding Common Stock and Preferred Stock and other securities of the
Company. Such list attached contains a true and complete description of the
number of shares held by each such holder, the price paid per share and the form
of payment therefor. With respect to each outstanding option, such list sets
forth the date of grant, the number of shares subject thereto, the exercise
price, and vesting schedule. Such list also shows the current directors and
officers of the Company.
3.3 SUBSIDIARIES. The Company does not presently own, of record or
beneficially, or control, directly or indirectly, any capital stock or equity
interest in any corporation, association or business entity. The Company is not,
directly or indirectly, a participant in any joint venture or partnership.
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 performance of all obligations of the
Company hereunder at the Closing and the authorization, sale, issuance and
delivery of the Shares and Warrants has been taken or will be taken prior to the
Closing. When issued in compliance with the provisions of this Agreement, the
Shares will be validly issued, fully paid and nonassessable and will be free and
clear of any preemptive rights, security interests, claims, liens or
encumbrances created by the Company. The Conversion Shares have been duly and
validly reserved for issuance and, when issued upon conversion of the Series C
Preferred Stock, will be validly issued, fully paid and nonassessable and will
be free and clear of any preemptive rights, security interests, restrictions on
transfer, claims, liens or encumbrances other than restrictions under applicable
and state securities laws. This Agreement and the Warrants, when executed and
delivered by the Company, shall constitute the valid and binding obligations of
the Company enforceable in accordance with their terms.
3.5 CONSENTS AND APPROVALS. No filings with, notices to, or approvals
or authorizations of any governmental or regulatory body are required to be
obtained or made by the Company in connection with the consummation of the
transactions contemplated hereby. The Company has obtained all consents,
approvals or authorizations of, made all declarations or filings with, and given
all notices to, all federal, state or local governmental or public authorities
or agencies which are necessary for the continued conduct by the Company of its
business as now conducted or as proposed to be conducted in which the failure to
so obtain, make or give could materially adversely affect the business,
earnings, prospects, properties or condition (financial or other) of the
Company.
3.6 NO VIOLATIONS. The execution and delivery of this Agreement and the
performance by the Company of its obligations hereunder (i) do not and will not
conflict with or violate any provision of the Certificate of Incorporation or
bylaws of the Company and (ii) do not and will not (a) conflict with or result
in a breach of the terms, conditions or provisions of,
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(b) constitute a default under, (c) result in the creation of any encumbrance
upon the capital stock or assets of the Company pursuant to, (d) give any third
party the right to modify, terminate or accelerate any obligation under, (e)
result in a violation of, or (f) require any authorization, consent, approval,
exemption or other action by or notice to any court or administrative or
governmental body or other third party pursuant to, any law, statute, rule or
regulation or any material agreement or instrument or any order, judgment or
decree to which the Company is subject or by which any of its assets are bound.
3.7 FINANCIAL STATEMENTS; INTERIM CHANGES. The Company's unaudited
balance sheet as of May 31, 1997 (the "Latest Balance Sheet") and unaudited
statements of income and cash flows of the Company for the period from inception
to May 31, 1997 delivered to the Purchasers in connection with the investment
contemplated hereby have been prepared in accordance with generally accepted
accounting principles consistently applied (subject to normal year-end
adjustments and the absence of footnote disclosures) and fairly present in all
material respects the financial position and the results of operations of the
Company for the period covered thereby, and the Company has no liabilities or
obligations of any nature (absolute, accrued, contingent or otherwise) that are
not either reflected or fully reserved against on the Latest Balance Sheet or
incurred in the ordinary course of the business of the Company subsequent to the
date thereof in an amount not to exceed $50,000 in the aggregate. Since the date
of the Latest Balance Sheet, there has not been any material adverse change in
the business, operations, financial condition or prospects of the Company.
3.8 COMPLIANCE WITH LAWS. The Company's business has been conducted in
compliance with all applicable laws and regulations of governmental authorities,
except for such violations that have been cured or that, individually or in the
aggregate, may not reasonably be expected to have a material adverse effect on
the business, operations, financial condition or prospects of the Company.
3.9 PROPRIETARY RIGHTS. The Company has not received any communications
alleging that it has violated or, by conducting its business as proposed would
violate, any proprietary rights of any other person, nor is the Company aware of
any basis for the foregoing.
3.10 ACTIONS PENDING. There is no action, suit, proceeding or
investigation pending or, to the best knowledge of the Company, threatened in
writing against or affecting the Company or any of its respective properties or
rights before any court or by or before any governmental body or arbitration
board or tribunal. 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, the 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, and none of its assets are
bound by, the provisions of any order, writ, injunction, judgment or decree of
any court or government agency or instrumentality or arbitrator or arbitration
panel. There is no action, suit, proceeding or investigation by the Company
currently pending or which the Company intends to initiate.
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3.11 MATERIAL CONTRACTS. Except as set forth on the Disclosure Schedule
attached hereto, the Company is not a party to (and is not otherwise bound by)
any of the following: (i) any employment or consulting contract (including
employee benefit and welfare arrangements), (ii) any agreement providing for the
issuance or repurchase of any securities of the Company, (iii) any agreement in
respect of registration rights, preemptive rights, rights of first refusal,
voting rights or other rights of security holders, (iv) any agreement evidencing
or providing for any indebtedness for borrowed money, (v) any joint venture
contract or arrangement or other agreement involving a sharing of profits or
expenses to which the Company is a party; (vi) agreements limiting the freedom
of the Company to compete in any line of business or in any geographic area or
with any person; (vii) agreements providing for disposition of the business,
assets or shares of the Company, agreements of merger or consolidation to which
the Company is a party or letters of intent with respect to the foregoing; or
(viii) any other agreement that could reasonably be deemed material to the
Company.
3.12 INVESTMENTS IN UNITED STATES REAL PROPERTY INTERESTS. The
Company's capital stock does not constitute a United States real property
interest as that term is defined in Section 897(c)(1)(A)(ii) of the Internal
Revenue Code of 1986, as amended (the "Code"). The preceding representation is
based on a determination by the Company that the Company is not and has not been
a United States real property holding corporation (as that term is defined in
Section 897(c)(2) of the Code) during the five (5) year period preceding the
date of this letter. The Company shall use its best efforts to ensure that it
does not at any time in the future become a United States real property holding
corporation. If at any time in the future the Company should become a United
States real property holding corporation, the Company shall, as promptly as
possible, notify each Purchaser of such change in status.
3.13 UNRELATED BUSINESS TAXABLE INCOME. Any gross income derived by the
Purchasers from the Company shall be in the form of dividends, interest, capital
gains and losses from the disposition of property, and rents and royalties, but
only such rents and royalties as are excluded pursuant to Code Sections
512(b)(2) and 512(b)(3), respectively, in calculating unrelated business taxable
income and only such dividends, interest, capital gains and losses, and rents
and royalties that are not included under Section 512(b)(4) of the Code in
calculating unrelated business taxable income. This Section 3.12 shall not be
deemed to apply to (i) any compensation (in cash, stock or other form) received
by designees of the Purchasers in their capacities as directors of the Company
that is transferred to the Purchasers or (ii) any income included under Section
512(b)(4) of the Code as a result of acquisition indebtedness incurred by any
Purchaser in connection with the purchase of an interest in the Company.
3.14 QUALIFIED SMALL BUSINESS. To the best of its knowledge, the
Company qualifies as a "Qualified Small Business" as defined in Section 1202(d)
of the Code and covenants that so long as its shares are held by the Purchasers
(or a transferee in whose hands the shares are eligible to qualify as Qualified
Small Business Stock as defined in Section 1202(c) of the Code), it will use its
reasonable efforts to cause the shares to qualify as Qualified Small Business
Stock; provided that, notwithstanding the foregoing, the Company shall not be
obligated to take any action, or refrain from any action, which in its good
faith judgment is not in the best interests of the Company or its stockholders.
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3.15 DISCLOSURE. Neither this Agreement nor any schedule hereto, nor
any written disclosure document furnished by or on behalf of the Company to the
Purchasers or counsel to the Purchasers in connection with the transactions
contemplated by this Agreement, when read together, contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading; provided, however,
that this representation and warranty shall not apply to any information
contained within any of the foregoing relating to future events or the projected
future financial performance of the Company, including any financial projections
or descriptions of potential strategic or business relationships between the
Company and third parties, except that the budget and financial projections
provided to the Purchasers dated July 16, 1997 (the "Financial Projections")
were prepared in good faith based on assumptions which the Company believes were
reasonable at the time the projections were prepared. As of the date of this
Agreement, to the Company's knowledge each of the assumptions upon which the
Financial Projections were based remain reasonable.
3.16 PERMITS. The Company has all franchises, permits, licenses and
other authority necessary for its business as now being conducted and believes
it can obtain, without undue burden or expense, any similar authority for its
business as planned to be conducted. The Company is not in default in any
material respect under any such franchise, permit, license or other authority.
3.17 INTELLECTUAL PROPERTY.
(a) The Company owns or has sufficient rights to use, free and
clear of all liens, charges, claims, and restrictions, all patents, trademarks,
service marks, trade names, copyrights, trade secrets, information, proprietary
rights and processes and other intellectual property rights necessary to its
business as presently conducted.
(b) Since its organization, the Company has taken reasonable
security measures to protect the secrecy, confidentiality and value of all
intellectual property and all Inventions (as defined below). Since its
organization, each of the Company's employees, consultants, and independent
contractors, who, either alone or in concert with others, developed, invented,
discovered, derived, programmed or designed intellectual property or Inventions
(as defined below), or who has knowledge of or access to information about
intellectual property or Inventions, has entered into a written agreement
substantially in the form attached hereto as Exhibit D ("Proprietary Information
Agreement") with the Company. As used herein, "Inventions" means all inventions,
developments and discoveries which during the period of an employee's,
consultant's, or contractor's service to the Company he, she or it makes or
conceives of, either solely or jointly with others, that relate to any subject
matter with which his, her, or its work for the Company may be concerned, or
relate to or are connected with the business, products, services or projects of
the Company, or relate to the actual or demonstrably anticipated research or
development of the Company or involve the use of the Company's funds, time,
material, facilities or trade secret information.
(c) The Company is not aware that any of the Company's employees
or consultants is or will be in violation of his or her Proprietary Information
Agreement, and the
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Company shall use its best efforts to prevent any such violation. The Company is
not aware that any of the Company's employees, consultants or contractors are
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 conflict with his or her
obligation to use his or her best efforts to promote the interests of the
Company. Neither the execution nor delivery of this Agreement and the agreements
contemplated thereby, nor the carrying on of the Company's business by its
employees, consultants and contractors, nor the conduct of its business as
proposed, will conflict with or result in a breach of the terms, conditions or
provisions of, or constitute a default under, any contract, covenant or
instrument known to the Company under which any of such employees, consultants
or contractors is now obligated. The Company does not believe it is or will be
necessary to utilize any inventions, copyrights, or other intellectual property
of any of its employees, consultants or contractors (or people it currently
intends to hire) made or owned prior to their employment with or engagement by
the Company or that it is or will be necessary to utilize any other assets or
rights of any of its employees, consultants or contractors (or people it
currently intends to hire) made or owned prior to their employment with or
engagement by the Company, in violation of any limitations or restrictions to
which any such employee, consultant or contractor is a party or to which any of
such assets or rights may be subject.
3.18 PATENTS AND OTHER INTANGIBLE ASSETS.
(a) Part 3.18(a) of the Disclosure Schedule summarizes all
patents, patent applications, trademarks, copyrights and other intellectual
property of the Company with a description of their scope.
(b) The Company (i) owns or has the right to use, free and clear
of all liens, claims and restrictions, all patents, patent applications,
trademarks, service marks, trade names, inventions, trade secrets, copyrights,
licenses and rights with respect to the foregoing, used in or necessary for the
conduct of its business as now conducted or proposed to be conducted, (ii) is
not infringing upon or otherwise acting adversely to the right or claimed right
of any person or entity under or with respect to any patent, trademark, service
xxxx, trade name, invention, trade secret, copyright, license or other
intellectual property or right with respect with respect thereto, and (iii) is
not obligated or under any liability whatsoever to make any payments by way of
royalties, fees or otherwise to any owner or licensee of, or other claimant to,
any patent, trademark, service xxxx, trade name, invention, trade secret, or
copyright with respect to the use thereof or in connection with the conduct of
its business or otherwise.
(c) The Company owns and has the unrestricted right to use all
product rights, manufacturing rights, trade secrets, including know-how,
negative know-how, formulas, patterns, compilations, programs, devices, methods,
techniques, processes, inventions, designs, computer programs and technical data
and all information that derives independent economic value, actual or
potential, from not being generally known or known by competitors and which the
Company has taken reasonable steps to maintain in secret (all of the foregoing
of which are collectively referred to herein as "Intellectual Property")
required for the development, manufacture, operation, and sale of all products
and services sold or proposed to be sold by the Company, free and clear of any
right, lien or claim of others, including without limitation former employers of
its
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employees, consultants and contractors, and current employers of employees,
consultants and contractors, where such employees, consultants or contractors
are also employed or under contract with another person.
(d) The Company has not sold, transferred, assigned, licensed or
subjected to any lien, security interest, or other encumbrance, any Intellectual
Property, trade secret, know-how, invention, design, process, computer program
or technical data, or any interest therein, necessary or useful for the
development, manufacture, use, operation or sale of any product or service
presently under development or manufactured, sold or rendered by the Company.
(e) No director, officer, employee, agent or stockholder of the
Company owns or has any right in the Intellectual Property of the Company, or
any patents, trademarks, service marks, trade names, copyrights, licenses or
rights with respect to the foregoing, or any inventions, developments or
discoveries used in or necessary for the conduct of the Company's business as
now conducted or as proposed to be conducted.
(f) The Company has no actual knowledge of any facts and has not
received any communication alleging or stating that the Company or any employee,
consultant or contractor has violated or infringed, or by conducting business as
proposed, would violate or infringe, any patent, trademark, service xxxx, trade
name, copyright, trade secret, proprietary right, process or other Intellectual
Property of any other person or entity; the Company has no knowledge of any
impediment whereby any employee, consultant or contractor who performs or is to
perform services of any kind for the Company that would interfere with such
person's ability to promote the business of the Company or would conflict with
the business or proposed Company business.
(g) Neither the execution nor delivery of this Agreement and the
agreements contemplated thereby, nor the carrying on of the Company's business
by its employees, consultants, and contractors nor the conduct of its business
as proposed, will conflict with or result in a breach of the terms, conditions
or provisions of, or constitute a default under, any contract, covenant or
instrument known to the Company under which any of such employees, consultants
or contractors are now obligated.
(h) The Company has not granted any license to use its proprietary
information or Intellectual Property. The Company has not granted to any other
person or entity rights to license, market or sell its proposed products or
services and the Company is not bound by any agreement that affects the
Company's exclusive right to develop, license, market or sell its products or
services.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS
Each Purchaser severally and not jointly hereby represents and warrants
to the Company as follows:
4.1 REQUISITE POWER AND AUTHORITY. Such Purchaser has all necessary
power and authority under all applicable provisions of law to execute and
deliver this Agreement and to carry
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out its provisions. All actions on such Purchaser's part required for the lawful
execution and delivery of this Agreement have been or will be effectively taken
prior to the Closing.
4.2 INVESTMENT REPRESENTATIONS. Such Purchaser understands that neither
the Shares nor the Conversion Shares have been registered under the Securities
Act of 1933, as amended (the "Securities Act"). Such 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 the Purchaser's
representations contained in this Agreement.
(a) PURCHASER BEARS ECONOMIC RISK. Such 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. Such 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. Such Purchaser understands that the Company has no
present intention of registering the Shares, the Conversion Shares or any shares
of its Common Stock. Such 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 such Purchaser to
transfer all or any portion of the Shares or the Conversion Shares under the
circumstances, in the amounts or at the times such Purchaser might propose.
(b) ACQUISITION FOR OWN ACCOUNT. Such Purchaser is acquiring the
Shares and the Conversion Shares for its own account for investment only, and
not with a view towards their distribution in violation of applicable securities
laws.
(c) PURCHASER CAN PROTECT ITS INTEREST. Such Purchaser represents
that, by reason of its or of its management's business or financial experience,
such Purchaser has the capacity to protect its own interests in connection with
the transactions contemplated in this Agreement. Further, such Purchaser is
aware of no publication of any advertisement in connection with the transactions
contemplated by the Agreement.
(d) ACCREDITED INVESTOR. Such Purchaser represents that it is an
accredited investor within the meaning of Regulation D under the Securities Act.
(e) COMPANY INFORMATION. Such Purchaser has had an opportunity to
discuss the Company's business, management and financial affairs with directors,
officers and management of the Company. Such Purchaser has also had the
opportunity to ask questions of, and receive answers from, the Company and its
management regarding the terms and conditions of this investment.
(f) RULE 144. Such Purchaser acknowledges and agrees that the
Shares and the Conversion Stock must be held indefinitely unless they are
subsequently registered under the Securities Act or an exemption from such
registration is available. Such Purchaser has been advised or is aware of the
provisions of Rule 144 promulgated under the Securities Act, which permits
limited resale of shares purchased in a private placement subject to the
satisfaction of
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certain conditions, including, among other things, the availability of certain
current public information about the Company, the resale occurring not less than
one year after a party has purchased and paid for the security to be sold, the
sale being through an unsolicited "broker's transaction" or in transactions
directly with a market maker (as said term is defined under the Securities
Exchange Act of 1934, as amended) and the number of shares being sold during any
three-month period not exceeding specified limitations.
5. CONDITIONS PRECEDENT TO PURCHASERS' OBLIGATIONS
The obligation of each Purchaser to purchase and pay for the Shares to
be delivered to it at the Closing shall be subject to the satisfaction of the
following conditions as of the Closing Date:
(i) the representations and warranties of the Company
contained in this Agreement shall be true and correct on and as of the Closing
Date;
(ii) the Purchasers shall have received the legal opinion of
Xxxxxx Godward LLP, counsel to the Company, in the form of Exhibit E hereto;
(iii) concurrently with the Closing, the Company, the
Purchasers and the existing stockholders of the Company shall have entered into
the Amended and Restated Stockholders Agreement in the form attached hereto as
Exhibit F;
(iv) the Company shall have provided to Centennial Fund IV,
L.P. ("Centennial") a certification of the direct and indirect holdings of
securities of the Company by certain persons designated by Centennial as
required by Centennial's governing documents;
(v) all other Purchasers shall have concurrently purchased
the Shares to be purchased by them pursuant to the this Agreement, except for
any Purchaser(s) who shall have purchased Shares at a subsequent closing
pursuant to this Agreement or any amendment hereto;
(vi) all corporate and legal proceedings taken by the Company
in connection with the transactions contemplated by this Agreement and all
documents relating to such transactions shall be satisfactory to the Purchasers
and to its counsel. The Company shall have delivered to the Purchasers a
certificate, executed on behalf of the Company by the President and the
Secretary of the Company, dated the Closing Date, certifying to the fulfillment
of the conditions specified in subsection 5(i); and
(vii) with respect to American Express Travel Related
Services Company, Inc. ("AmEx"), the Company shall have executed the Marketing
Agreement of even date herewith (the "Marketing Agreement").
6. EXPENSE REIMBURSEMENT
The Company hereby agrees to reimburse (i) the Purchasers (not
including AmEx) for the fees and expenses of one counsel representing all the
Purchasers in an amount not to exceed
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$5,000 and (ii) AmEx for the fees and expenses of one counsel representing AmEx
in connection with this Agreement in an amount not to exceed $50,000 (payable by
wire transfer at the initial Closing), for services performed in connection with
the initial closing hereunder and the closing of the Marketing Agreement. The
Company agrees to reimburse the fees of counsel and out-of-pocket expenses
incurred by the Purchasers in connection with the enforcement, in a legal
proceeding against the Company, of the rights and remedies of the Purchasers
hereunder and under the Amended and Restated Stockholders Agreement, the
Company's Amended and Restated Certificate of Incorporation (excluding Article
Eleven thereof) and the Marketing Agreement if the Purchasers, either
individually or collectively, are the prevailing party or parties in any such
proceeding.
7. MISCELLANEOUS
7.1 GOVERNING LAW. This Agreement shall be governed in all respects by
the laws of the State of Colorado as such laws are applied to agreements between
Colorado residents entered into and performed entirely in Colorado, except that
the General Corporation Law of the State of Delaware shall govern as to matters
of corporate law.
7.2 SURVIVAL. The representations, warranties, covenants and agreements
made herein shall survive any investigation made by any Purchaser and the
closing of the transactions contemplated hereby. All statements as to factual
matters contained in any certificate or other instrument delivered by or on
behalf of the Company pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the
Company hereunder solely as of the date of such certificate or instrument.
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. This Agreement, and any amendment hereto, the
Exhibits and the other documents delivered pursuant hereto or pursuant to any
such amendment, including the Amended and Restated Stockholders Agreement, and
any amendment thereto, constitute the full and entire understanding and
agreement among the parties with regard to the subjects hereof and no party
shall be liable or bound to any other in any manner by any representations,
warranties, covenants and agreements except as specifically set forth herein and
therein.
7.5 SEVERABILITY. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, it shall, to the extent possible, be modified
in such manner as to be valid, legal, and enforceable but so as to most nearly
retain the intent of the parties, and if such modification is not possible, such
provision shall be severed from this Agreement, and in either case the validity,
legality and enforceability of the remaining provisions of this Agreement shall
not in any way be affected or impaired thereby.
7.6 AMENDMENT AND WAIVER. This Agreement may be amended or modified
only upon the mutual written consent of the Company and each of the Purchasers.
11.
12
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) five (5) days after having been sent by registered or certified mail,
return receipt requested, postage prepaid; or (iv) one (1) day after deposit
with a nationally recognized overnight courier, special next day delivery, with
verification of receipt. All communications shall be sent to the Company at 000
Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000 and to a 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 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.
7.9 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 any such fee or commission payable by such
indemnifying party.
7.10 FUTURE CLOSINGS. The parties hereto acknowledge and agree that one
or more subsequent closings of the sale of up to one million five hundred
thousand (1,500,000) additional shares of Series C Preferred may be held on or
prior to November 30, 1997 on substantially the same terms and conditions as are
applicable to the sale of Series C Preferred hereunder. Such additional closings
may be effected by execution of an additional signature page to this Agreement
and the Amended and Restated Stockholders Agreement and satisfaction of the
closing conditions set forth in Section 5 hereof. Nothing contained in this
Agreement or any Purchaser's prior dealings with the Company shall be deemed to
constitute a commitment on the part of any Purchaser to participate in any
subsequent closing or any other future financings by the Company.
12.
13
IN WITNESS WHEREOF, the parties hereto have executed the Agreement as
of the date set forth in the first paragraph hereof.
COMPANY:
MERCURY MAIL, INC.
By: /s/
------------------------------------
Title:
---------------------------------
PURCHASERS:
AMERICAN EXPRESS TRAVEL RELATED SERVICES
COMPANY, INC.
By: /s/
------------------------------------
Title:
---------------------------------
CENTENNIAL FUND IV, L.P.
By: Centennial Holdings IV, L.P.
Its General Partner
By: /s/
------------------------------------
Title: General Partner
---------------------------------
TELECOM PARTNERS, L.P.
By: /s/
------------------------------------
Title:
---------------------------------
TRIBUNE COMPANY
By: /s/
------------------------------------
Title:
---------------------------------
13.
14
BOULDER VENTURES LTD.
By: /s/
------------------------------------
Title:
---------------------------------
FL@TIRON PARTNERS LLC
By: /s/
------------------------------------
Title:
---------------------------------
14.
15
EXHIBIT A
SCHEDULE OF PURCHASERS: INITIAL CLOSING JULY 24, 1997
PURCHASE PRICE NUMBER OF PRICE OF AGGREGATE
NAME AND ADDRESS NUMBER OF SHARES FOR SHARES ($4.00/SH) WARRANTS WARRANTS ($.001/WAR.) PURCHASE PRICE
---------------- ---------------- --------------------- --------- --------------------- ---------------
American Express TRS Co. 875,000 $3,500,000 131,250 $131.25 $3,500,131.25
000 Xxxxx Xxxxxx
World Financial Center 425,000 425.00 425.00
------
Xxx Xxxx, XX 00000 3,500,556.25
Attn: V.P., New Bus. Dev.
Centennial Fund IV, L.P. 402,150 1,608,602 30,268 30.27 1,608,632.27
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
Telecom Partners, L.P. 201,290 805,161 12,160 12.16 805,173.16
0000 Xxxxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxxx
Tribune Company 326,075 1,304,301 33,884 33.88 1,304,334.88
000 Xxxxx Xxxxxxxx Xxx.
Xxxxxxx, XX 00000-0000
Attn: Xxxxx Xxxxxxxx
Fl@tiron Partners LLC 66,120 264,483 -- -- 264,483.00
Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX
Attn: Xxxx Xxxxxx
Boulder Ventures, L.P. 40,898 163,595 3,355 3.36 163,598.36
0000 Xxxxxx Xxxxxx,
Xxxxx 000
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
Initial Closing Total: 1,911,533 $7,646,142 635,917 $635.92 $7,646,777.92
16
SERIES C STOCK PURCHASE AGREEMENT
EXHIBIT B
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
1.
17
SERIES C STOCK PURCHASE AGREEMENT
EXHIBIT D
PROPRIETARY INFORMATION AGREEMENT
1.
18
SERIES C STOCK PURCHASE AGREEMENT
EXHIBIT E
FORM OF LEGAL OPINION
1.
19
SERIES C STOCK PURCHASE AGREEMENT
EXHIBIT F
FORM OF AMENDED AND RESTATED STOCKHOLDERS AGREEMENT
1.
