Exhibit 10.35
NOTE AND RESTRICTED STOCK
PURCHASE AGREEMENT
This Note and Restricted Stock
Purchase Agreement (this “Agreement”) is dated as of [
], 2007 among Catcher Holdings, Inc., a Delaware corporation (the
“Company”), and the purchasers identified on the
signature pages hereto (each, including its successors and assigns,
a “Purchaser” and collectively the
“Purchasers”).
WHEREAS , subject to the terms and conditions set forth
in this Agreement, the Company desires to issue and sell to each
Purchaser, and each Purchaser, severally and not jointly, desires
to purchase from the Company, securities of the Company as more
fully described in this Agreement.
NOW, THEREFORE, IN
CONSIDERATION of the
mutual covenants contained in this Agreement, and for other good
and valuable consideration the receipt and adequacy of which are
hereby acknowledged, the Company and each Purchaser agrees as
follows:
ARTICLE I
DEFINITIONS
1.1 Definitions . In addition
to the terms defined elsewhere in this Agreement, the following
terms have the meanings indicated in this
Section 1.1:
“Action” shall have the
meaning ascribed to such term in Section 3.1(j).
“Affiliate” means any
Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed
under Rule 144 under the Securities Act.
“Closings” means the
Initial Closing and each Subsequent Closing.
“Closing Date” means the
date of (i) the Initial Closing; and (ii) each Subsequent
Closing, respectively.
“Commission” means the
Securities and Exchange Commission.
“Common Stock” means the
common stock of the Company, par value $0.001 per share, and any
securities into which such common stock may hereinafter be
converted or exchanged pursuant to a plan of recapitalization,
reorganization, merger, sale of assets or otherwise.
“Company Counsel” means
Morrison & Foerster, LLP, 12531 High Bluff Drive, Suite
100, San Diego, California 92103.
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“Conversion Shares”
means the shares of capital stock issuable upon exercise of the
Conversion Warrants or upon conversion of the Notes.
“Conversion Warrants”
means collectively the warrants to be delivered to the Purchasers
upon conversion of the Notes in accordance with the terms
thereof.
“Disclosure Schedules”
shall have the meaning ascribed to such term in Section 3.1
hereof.
“Exchange Act” means the
Securities Exchange Act of 1934, as amended.
“GAAP” shall have the
meaning ascribed to such term in Section 3.1(h)
hereof.
“Initial Closing” shall
have the meaning ascribed to such term in
Section 2.1.
“Liens” shall have the
meaning ascribed to such term in Section 3.1(a)
hereof.
“Loan Amount” means, as
to each Purchaser, the aggregate amount to be borrowed by the
Company hereunder and evidenced by the Notes as specified below
such Purchaser’s name on the signature page of this Agreement
and next to the heading “Loan Amount,” in United States
Dollars.
“Losses” means any and
all losses, claims, damages, liabilities, settlement costs and
expenses, including without limitation costs of preparation and
reasonable attorneys’ fees.
“Material Adverse
Effect” shall have the meaning assigned to such term in
Section 3.1(b) hereof.
“Notes” shall mean the
Secured Convertible Promissory Notes issued to the Purchasers
pursuant to this Agreement, in the form attached hereto as
Exhibit A.
“Person” means an
individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or
subdivision thereof) or other entity of any kind.
“Proceeding” means an
action, claim, suit, investigation or proceeding (including,
without limitation, an investigation or partial proceeding, such as
a deposition), whether commenced or threatened.
“Registration Rights
Agreement” means the Registration Rights Agreement to be
entered into by the Company and the Purchasers upon the conversion
of the Notes in accordance with the terms thereof.
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“Registration Statement”
means a registration statement covering the resale of the
Conversion Shares by each Purchaser as provided for in the
Registration Rights Agreement.
“Required Approvals”
shall have the meaning ascribed to such term in Section 3.1(e)
hereof.
“Required Minimum”
means, as of any date, the maximum aggregate number of shares of
Common Stock then issued or potentially issuable in the future upon
exercise or conversion in full of all Conversion Warrants,
Conversion Shares (if applicable) and Notes, ignoring any
conversion or exercise limits set forth therein.
“Rule 144” means Rule
144 promulgated by the Commission pursuant to the Securities Act,
as such Rule may be amended from time to time, or any similar rule
or regulation hereafter adopted by the Commission having
substantially the same effect as such Rule.
“SEC Reports” shall have
the meaning ascribed to such term in Section 3.1(h)
hereof.
“Securities” means the
Notes, the Shares, the Conversion Warrants and the Conversion
Shares.
“Securities Act” means
the Securities Act of 1933, as amended.
“Shares” means the
shares of restricted Common Stock issued pursuant to this
Agreement, together with any shares of Common Stock issued upon a
stock split, dividend or other distribution, recapitalization or
similar event with respect to the foregoing following the Closing
Date.
“Subsequent Closing”
shall have the meaning ascribed to such term in
Section 2.1.
“Subsidiary” means any
subsidiary of the Company as set forth in the SEC
Reports.
“Trading Day” means any
day during which the Trading Market shall be open for
business.
“Trading Market” means
the following markets or exchanges on which the Common Stock may be
listed or quoted for trading on the date in question: OTC Bulletin
Board, the American Stock Exchange, the New York Stock Exchange,
the Nasdaq Global Market or the Nasdaq Capital Market.
“Transaction Documents”
means this Agreement, the Notes, the Conversion Warrants, and the
Registration Rights Agreement.
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ARTICLE II
PURCHASE AND
ISSUANCE
2.1 Closings . At each
Closing, the Company agrees to borrow the Loan Amount from, and
issue a corresponding Note and a number of Shares equal to the Loan
Amount divided by $2.857 to, each Purchaser participating at such
Closing, and, subject to the terms and conditions contained herein,
each such Purchaser severally agrees to loan to the Company the
Loan Amount set forth on the signature page to this Agreement. The
initial closing (the “Initial Closing”) of the
transactions hereunder shall take place at the offices of Company
Counsel after the receipt by the Company of an aggregate Loan
Amount from Purchasers of at least $700,000 and after it has been
determined that all conditions in this Agreement have been met in
the sole and absolute discretion of the Company. Following the
Initial Closing, the Company may, at subsequent closings (the
“Subsequent Closings” and each a “Subsequent
Closing”), borrow additional Loan Amounts from Purchasers
until such time as the Company has issued Notes with an aggregate
principal amount equal to $1,050,000. At each Closing, funds equal
to the Loan Amount of each Purchaser shall be delivered to the
Company and the Company shall deliver to each such Purchaser his,
her or its respective Note and Shares as provided herein and the
other items set forth in Section 2.2 issuable at such
Closing.
2.2 Conditions to Closing .
Each Closing shall be subject to the following conditions and
deliveries being met on such Closing’s Closing
Date:
(a) At or prior to the Closing,
unless otherwise indicated below, the Company shall deliver or
cause to be delivered to each Purchaser participating in such
Closing the following:
(i) a Secured Convertible Promissory
Note evidencing the Loan Amount loaned by such Purchaser,
registered in the name of such Purchaser;
(ii) a stock certificate evidencing
the Shares purchased by such Purchaser, registered in the name of
such Purchaser; and
(iii) this Agreement, duly executed
by the Company; and
(b) At or prior to the Closing, each
Purchaser participating in such Closing shall deliver or cause to
be delivered to the Company the following:
(i) such Purchaser’s Loan
Amount; and
(ii) this Agreement, duly executed
by such Purchaser.
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(c) It shall be a condition to the
obligation of the Company, on the one hand, to issue and deliver
the Notes and the Shares to be issued and delivered at a Closing,
and of the Purchasers participating in a Closing, on the other
hand, to loan such Loan Amount represented by the respective Note,
that all representations and warranties of the other party(ies)
contained herein shall remain true and correct as of the Closing
Date of such Closing and all covenants and obligations of the other
party(ies) shall have been fully performed or otherwise satisfied
or waived if due on or prior to such date.
ARTICLE III
REPRESENTATIONS AND
WARRANTIES
3.1 Representations and
Warranties of the Company . The Company hereby makes the
representations and warranties set forth below to each
Purchaser:
(a) Subsidiaries . The
Company has no direct or indirect Subsidiaries other than as
specified in the SEC Reports. Except as specified in the SEC
Reports, the Company owns, directly or indirectly, all of the
capital stock or other equity interests of each Subsidiary free and
clear of any lien, charge, security interest, encumbrance, right of
first refusal or other restriction (collectively,
“Liens”), and all the issued and outstanding shares of
capital stock of each Subsidiary are validly issued and are fully
paid, non-assessable and free of preemptive and similar
rights.
(b) Organization and
Qualification . Each of the Company and the Subsidiaries is an
entity duly incorporated or otherwise organized, validly existing
and in good standing under the laws of the jurisdiction of its
incorporation or organization (as applicable), with the requisite
power and authority to own and use its properties and assets and to
carry on its business as described in its SEC Reports. Neither the
Company nor any Subsidiary is in violation of any of the provisions
of its respective certificate or articles of incorporation, bylaws
or other organizational or charter documents. Each of the Company
and the Subsidiaries is duly qualified to do business and is in
good standing as a foreign corporation or other entity in each
jurisdiction in which the nature of the business conducted or
property owned by it makes such qualification necessary, except
where the failure to be so qualified or in good standing, as the
case may be, could not, individually or in the aggregate:
(i) adversely affect the legality, validity or enforceability
of any Transaction Document, (ii) have or result in or be
reasonably likely to have or result in a material adverse effect on
the results of operations, assets, prospects, business or condition
(financial or otherwise) of the Company and the Subsidiaries, taken
as a whole, or (iii) adversely impair the Company’s
ability to perform fully on a timely basis its obligations under
any of the Transaction Documents (any of (i), (ii) or (iii), a
“Material Adverse Effect”).
(c) Authorization;
Enforcement . The Company has the requisite corporate power and
authority to enter into and to consummate the
transactions
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contemplated by each of the Transaction
Documents and otherwise to carry out its obligations hereunder or
thereunder. The execution and delivery of each of the Transaction
Documents by the Company and the consummation by it of the
transactions contemplated hereby or thereby have been duly
authorized by all necessary action on the part of the Company and
no further consent or action is required by the Company other than
Required Approvals. Each of the Transaction Documents has been (or
upon delivery will be) duly executed by the Company and, when
delivered in accordance with the terms hereof, will constitute the
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors’ rights and
remedies generally and general principles of equity. Neither the
Company nor any Subsidiary is in violation of any of the provisions
of its respective certificate or articles of incorporation, bylaws
or other organizational or charter documents except where such
violation could not, individually or in the aggregate, constitute a
Material Adverse Effect.
(d) No Conflicts . The
execution, delivery and performance of the Transaction Documents by
the Company and the consummation by the Company of the transactions
contemplated thereby do not and will not: (i) conflict with or
violate any provision of the Company’s or any
Subsidiary’s certificate or articles of incorporation, bylaws
or other organizational or charter documents, or (ii) subject
to obtaining the Required Approvals, conflict with, or constitute a
default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation (with or
without notice, lapse of time or both) of, any agreement, credit
facility, debt or other instrument (evidencing a Company or
Subsidiary debt or otherwise) or other understanding to which the
Company or any Subsidiary is a party or by which any property or
asset of the Company or any Subsidiary is bound or affected, or
(iii) result in a violation of any law, rule, regulation,
order, judgment, injunction, decree or other restriction of any
court or governmental authority to which the Company or a
Subsidiary is subject (including federal and state securities laws
and regulations), or by which any property or asset of the Company
or a Subsidiary is bound or affected; except in the case of each of
clauses (ii) and (iii), such as could not, individually or in
the aggregate, have or result in a Material Adverse
Effect.
(e) Filings, Consents and
Approvals . Neither the Company nor any Subsidiary is required
to obtain any consent, waiver, authorization or order of, give any
notice to, or make any filing or registration with, any court or
other federal, state, local or other governmental authority or
other Person in connection with the execution, delivery and
performance by the Company of the Transaction Documents, other than
(i) the filing with the Commission of the Registration
Statement and the consent of the Commission to the effectiveness
thereof, (ii) the notice and/or application(s) to each
applicable Trading Market for the issuance of the Conversion
Warrants and the listing of the Conversion Shares for trading
thereon in the time and manner required thereby and any required
approvals of such Trading Market thereof, (iii) the filing of
Form D with the Commission and applicable Blue Sky filings and
(iv) the filings required pursuant to Section 4.4
hereunder (collectively, the “Required
Approvals”).
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(f) Issuance of the Notes and
Shares . The Notes are duly authorized and, when issued in
accordance with the applicable Transaction Documents, will be duly
and validly issued. The Shares and Conversion Warrants are duly
authorized and, when issued and paid for in accordance with the
applicable Transaction Documents, will be duly and validly issued,
fully paid and non-assessable, free and clear of all Liens. Any
Conversion Shares, when issued and paid for in accordance with the
respective warrant certificate or Notes, will be duly authorized
and validly issued, fully paid and nonassessable, free and clear of
all Liens. The Company has reserved from its duly authorized
capital stock a number of shares of Common Stock for issuance of
the Conversion Shares at least equal to the Required Minimum on the
date hereof. The Company has not, and to the knowledge of the
Company, no Affiliate of the Company has sold, offered for sale or
solicited offers to buy or otherwise negotiated in respect of any
security (as defined in Section 2 of the Securities Act) that
would be integrated with the offer or sale of the Notes and Shares
in a manner that would require the registration under the
Securities Act of the sale of the Notes or the Shares to the
Purchasers, or that would be integrated with the offer or sale of
the Notes and the Shares for purposes of the rules and regulations
of any Trading Market.
(g) Capitalization . The
number of shares and type of all authorized, issued and outstanding
capital stock of the Company as of March 8, 2007, and all
shares of Common Stock reserved for issuance under the
Company’s various option and incentive plans as of
March 8, 2007, is set forth on Schedule 3.1(g) of the
Disclosure Schedules attached hereto. No Person has any right of
first refusal, preemptive right, right of participation, or any
similar right to participate in the transactions contemplated by
the Transaction Documents. Except as contemplated hereby and as set
forth on Schedule 3.1(g) , there are no outstanding options,
warrants, script rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities, rights or
obligations convertible into or exchangeable for, or giving any
Person any right to subscribe for or acquire, any shares of Common
Stock, or contracts, commitments, understandings or arrangements by
which the Company or any Subsidiary is or may become bound to issue
additional shares of Common Stock, or securities or rights
convertible or exchangeable into shares of Common Stock. The
issuance and sale of the Notes, the Shares and Conversion Shares
will not obligate the Company to issue shares of Common Stock or
other securities to any Person (other than the Purchasers) and will
not result in a right of any holder of Company securities to adjust
the exercise, conversion, exchange or reset price under such
securities. Except as set forth on Schedule 3.1(g) , all of
the outstanding shares of capital stock of the Company are validly
issued, fully paid and nonassessable, have been issued in
compliance with all federal and state securities laws, and none of
such outstanding shares was issued in violation of any preemptive
rights or similar rights to subscribe for or purchase securities;
provided that this sentence shall be limited to the Company’s
knowledge with respect to any shares of the Company’s capital
stock issued prior to May 4, 2005. No further approval or
authorization of any stockholder, the Board of Directors of the
Company or others is required for the issuance and sale of the
Notes or Shares. Except as disclosed in the SEC Reports, there are
no stockholders agreements, voting agreements or other similar
agreements with respect to the Company’s capital stock to
which the Company is a party
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or, to the knowledge of the Company, between or
among any of the Company’s stockholders. Except as set forth
on Schedule 3.1(g) and as contemplated by the Transaction
Documents, the Company has not granted any registration or similar
rights with respect to any security of the Company requiring the
Company to register such securities of the Company.
(h) SEC Reports; Financial
Statements . Except as otherwise disclosed in the SEC Reports,
the Company has filed all reports required to be filed by it under
the Exchange Act, including pursuant to Section 13(a) or 15(d)
thereof, preceding the date hereof (or such shorter period as the
Company was required by law to file such material) (the foregoing
materials being collectively referred to herein as the “SEC
Reports”) on a timely basis or has received a valid extension
of such time of filing and has filed any such SEC Reports prior to
the expiration of any such extension. All SEC Reports filed within
the 10 days preceding the date hereof have been made available to
the Purchasers. The SEC Reports filed since May 4, 2005
complied in all material respects with the requirements of the
Securities Act and the Exchange Act and the rules and regulations
of the Commission promulgated thereunder, and none of the SEC
Reports filed since May 4, 2005, when filed, contained any
untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make
the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of the
Company included in the SEC Reports comply in all material respects
with applicable accounting requirements and the rules and
regulations of the Commission with respect thereto as in effect at
the time of filing. Such financial statements have been prepared in
accordance with generally accepted accounting principles applied on
a consistent basis during the periods involved
(“GAAP”), except as may be otherwise specified in such
financial statements or the notes thereto, and fairly present in
all material respects the financial position of the Company and its
consolidated subsidiaries as of and for the dates thereof and the
results of operations and cash flows for the periods then ended,
subject, in the case of unaudited statements, to normal year-end
audit adjustments.
(i) Material Changes . Since
the date of the latest audited financial statements included within
the SEC Reports, except as disclosed in the SEC Reports:
(i) there has been no event, occurrence or development that
has had or that could result in a Material Adverse Effect,
(ii) the Company has not incurred any liabilities (contingent
or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent
with past practice and (B) liabilities not required to be
reflected in the Company’s financial statements pursuant to
GAAP or required to be disclosed in filings made with the
Commission, (iii) the Company has not altered its method of
accounting or the identity of its auditors, (iv) the Company
has not declared or made any dividend or distribution of cash or
other property to its stockholders or purchased, redeemed or made
any agreements to purchase or redeem any shares of its capital
stock, and (v) the Company has not issued any equity
securities to any officer, director or Affiliate, except pursuant
to existing Company stock option or similar plans.
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(j) Litigation . There is no
action, suit, inquiry, notice of violation, proceeding or
investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any
of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an
“Action”) which: (i) except as disclosed in the
SEC Reports, adversely affects or challenges the legality, validity
or enforceability of any of the Transaction Documents, the Notes or
the Shares or (ii) could, if there were an unfavorable
decision, individually or in the aggregate, have or reasonably be
expected to result in a Material Adverse Effect. Neither the
Company nor any Subsidiary, nor, to the knowledge of the Company,
any director or officer thereof, is or has been the subject of any
Action involving a claim of violation of or liability under federal
or state securities laws or a claim of breach of fiduciary duty.
Except for the request for confidential treatment of information
submitted to the Commission on November 9, 2006, the Company
does not have pending before the Commission any request for
confidential treatment of information. There has not been, and to
the knowledge of the Company, there is not pending or contemplated,
any investigation by the Commission involving the Company or any
current or former director or officer of the Company. The
Commission has not issued any stop order or other order suspending
the effectiveness of any registration statement filed by the
Company or any Subsidiary under the Exchange Act or the Securities
Act.
(k) Compliance . Neither the
Company nor any Subsidiary: (i) is in default under or in
violation of (and no event has occurred that has not been waived
that, with notice or lapse of time or both, would result in a
default by the Company or any Subsidiary under), nor has the
Company or any Subsidiary received notice of a claim that it is in
default under or that it is in violation of, any indenture, loan or
credit agreement or any other agreement or instrument to which it
is a party or by which it or any of its properties is bound
(whether or not such default or violation has been waived),
(ii) is in violation of any order of any court, arbitrator or
governmental body, or (iii) is or has been in violation of any
statute, rule or regulation of any governmental authority, except
in each case as could not, individually or in the aggregate, have
or result in a Material Adverse Effect.
(l) Labor Relations . No
material labor dispute exists or, to the knowledge of the Company,
is imminent with respect to any of the employees of the
Company.
(m) Regulatory Permits .
Except as otherwise described in the SEC Reports, the Company and
the Subsidiaries possess all certificates, authorizations and
permits issued by the appropriate federal, state, local or foreign
regulatory authorities necessary to conduct their respective
businesses, except where the failure to possess such permits could
not, individually or in the aggregate, have or reasonably be
expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has
received any notice of proceedings relating to the revocation or
modification of any Material Permit.
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(n) Title to Assets . The
Company and the Subsidiaries have good and marketable title in fee
simple to all real property owned by them that is material to the
bu
