Exhibit 10.7

 

SECURITIES PURCHASE AGREEMENT

 

THIS SECURITIES PURCHASE AGREEMENT is made as of ____________, 2012, by and
among Lenco Mobile Inc. (the “Company”), a corporation organized under the laws
of the State of Delaware, with its principal offices at 2025 First Avenue, Suite
320, Seattle, WA 98121 the purchaser whose name and address is set forth on the
signature page hereof (the “Purchaser”).

 

IN CONSIDERATION of the mutual covenants contained in this Agreement, the
Company and the Purchaser agree as follows:

 

1. Authorization of Sale of the Shares. Subject to the terms and conditions of
this Agreement, the Company has authorized the sale of up to 100,000 shares (the
“Shares”) of Series A Convertible Preferred Stock, par value $0.001 per share,
of the Company having the rights, preferences and privileges set forth in the
Series A Convertible Preferred Stock certificate of designation (which was filed
with the Delaware Secretary of State on September 22, 2010) (the “Certificate of
Designation”) and the certificate of amendment to the Certificate of Designation
(which was filed with the Delaware Secretary of State on December 23, 2011) (the
“Certificate of Amendment”), each of which are attached hereto as Exhibit A.

 

Agreement to Sell and Purchase the Shares. At the Closing (as defined in
Section 0

), the Company will sell to the Purchaser, and the Purchaser will buy from the
Company, upon the terms and conditions hereinafter set forth, the number of
Shares (at the purchase price) shown below.

 

 

Number of Shares

to Be Purchased

 

 

Price Per Share

In Dollars

 

 

Aggregate

Price

    $__________   $________

 

The Company proposes to enter into this same form of purchase agreement with
certain other investors (the “Other Purchasers”) and expects to complete sales
of the Shares to them. The Purchaser and the Other Purchasers are hereinafter
sometimes collectively referred to as the “Purchasers,” and this Agreement and
the agreements executed by the Other Purchasers are hereinafter sometimes
collectively referred to as the “Agreements.”

 

2. Closing and Delivery of the Shares.

 

2.1 Closing. The initial purchase and sale of the Shares shall occur (the
“Closing”) as soon as practicable after the execution of the Agreements by the
Company and the Purchasers purchasing Shares at the Closing at the time and date
(the “Closing Date”) and at such location as shall be determined by the Company.
The Company will promptly notify the Purchasers purchasing Shares at the Closing
of the date, place and time of the Closing by facsimile transmission or
otherwise.

 

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2.2 Delivery of the Shares. At the Closing, the Company shall deliver to the
Purchaser (or to its designated representative) one or more stock certificates
registered in the name of the Purchaser, or in such nominee name(s) as
designated by the Purchaser in writing, representing the number of Shares set
forth in Section 0 above and bearing the legend specified in Section 4.7 hereof
referring to the fact that the Shares were sold in reliance upon the exemption
from registration under the Securities Act of 1933, as amended (the “Securities
Act”) provided by Section 4(2) thereof and Rule 506 thereunder. The name(s) in
which the stock certificates are to be registered are set forth in the Stock
Certificate Questionnaire attached hereto as Exhibit B.

 

2.3 Conditions to Closing.

 

2.3.1 The Company’s obligation to complete the purchase and sale of the Shares
and deliver such stock certificate(s)  to the Purchaser at the Closing shall be
subject to the following conditions, any one or more of which may be waived by
the Company: (i) receipt by the Company of same-day funds in the full amount of
the purchase price for the Shares being purchased hereunder; (ii) completion of
the purchases and sales under the Agreements with all of the Other Purchasers;
and (iii) the accuracy of the representations and warranties made by the
Purchaser and the fulfillment of those undertakings of the Purchaser to be
fulfilled prior to the Closing; and (iv) receipt by the Company of a completed
version of Exhibit B and Exhibit C-1 or C-2 (as applicable) attached hereto.

 

2.3.2 The Purchaser’s obligation to accept delivery of such stock
certificate(s)  and to pay for the Shares evidenced thereby shall be subject to
the following conditions: (i) the accuracy in all material respects of the
representations and warranties made by the Company herein and the fulfillment in
all material respects of those undertakings of the Company to be fulfilled prior
to Closing, and (ii) receipt of a certificate signed by the Secretary of the
Company to which is attached a true, complete and correct copy of each of the
amended and restated certificate of incorporation of the Company, the amended
and restated bylaws of the Company and certain resolutions of the Board of
Directors of the Company, to the effect that: (1) no document with respect to
any amendment to the certificate of incorporation of the Company has been filed
in the office of the Delaware Secretary of State since, and no action has been
taken or, to the best knowledge of the Secretary of the Company, is contemplated
by the Board of Directors or the stockholders of the Company, for the purpose of
effecting any such amendment or the dissolution, merger or consolidation of the
Company, (2) no proposal for any amendment, repeal or other modification to the
amended and restated bylaws of the Company has been taken or is currently
pending before the Board of Directors or stockholders of the Company and (3) the
resolutions of the Board of Directors of the Company authorizing the execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated by this Agreement have not been altered, amended or
superseded and remain in full force and effect as of the date hereof and the
Closing Date. The Purchaser’s obligations hereunder are expressly not
conditioned on the purchase by any or all of the Other Purchasers of the Shares
that they have agreed to purchase from the Company.

 

3. Representations, Warranties and Covenants of the Company. Except as otherwise
described in the Company’s periodic reports on Forms 10-Q and 10-K and in the
Company’s current reports on Form 8-K as filed by the Company with the
Securities and Exchange Commission (the “SEC”) since December 31, 2010 (the “SEC
Documents”) and the Company’s Private Placement Memorandum dated September 21,
2011 (collectively, with the SEC Documents, including the documents incorporated
by reference therein, the “Company Information”), which qualify the following
representations and warranties in their entirety, the Company hereby represents
and warrants to, and covenants with, the Purchaser, as follows:

 

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3.1 Organization and Qualification. The Company is a corporation duly organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation and the Company is qualified to do business as a foreign
corporation in each jurisdiction in which qualification is required, except
where failure to so qualify would not have a Material Adverse Effect (as defined
herein) on the Company. All of the subsidiaries of the Company (the
“Subsidiaries”) are listed on Exhibit 21.1 to the Company’s Annual Report on
Form 10-K for the year ended December 31, 2010 (the “Form 10-K”) along with each
subsidiary’s jurisdiction of incorporation. Each Subsidiary is duly
incorporated, validly existing and in good standing under the laws of its
jurisdiction of incorporation and is qualified to do business as a foreign
corporation in each jurisdiction in which qualification is required, except
where failure to so qualify would not have a material adverse effect on the
condition (financial or otherwise), assets, properties, business, prospects or
results of operations of the Company and the Subsidiaries, taken as a whole on a
consolidated basis, or materially and adversely impair the Company’s ability to
perform its obligations under this Agreement (a “Material Adverse Effect”).

 

3.2 Authorized Capital Stock. Except as disclosed in Schedule 4.2 hereto, the
Company had authorized, issued and outstanding capital stock as set forth in
Schedule 4.2 as of the date set forth therein. The issued and outstanding shares
of the Company’s common stock, par value $0.001 per share (the “Common Stock”)
have been duly authorized and validly issued, are fully paid and nonassessable,
have been issued in compliance with all federal and state securities laws, and
were not issued in violation of or subject to any preemptive rights or other
rights to subscribe for or purchase securities. Except as disclosed in
Schedule 4.2, the Company does not have outstanding any options to purchase, or
any preemptive rights or other rights to subscribe for or to purchase, any
securities or obligations convertible into or exchangeable or exercisable for,
or any contracts or commitments to issue or sell, shares of its capital stock.
Except as set forth on Schedule 4.2 hereto, and except for customary adjustments
as a result of stock dividends, stock splits, combinations of shares,
reorganizations, recapitalizations, reclassifications or other similar events,
there are no anti-dilution or price adjustment provisions contained in any
security issued by the Company (or in any agreement providing rights to security
holders) and the issuance and sale of Common Stock or other securities pursuant
to any provision of this Agreement will not give rise to any preemptive rights
or rights of first refusal, co-sale rights or any other similar rights on behalf
of any person or result in the triggering of any anti-dilution or other similar
rights. With respect to each Subsidiary, (i) the Company owns 100% of the
Subsidiary’s capital stock (except for directors’ qualifying shares), (ii) all
the issued and outstanding shares of the Subsidiary’s capital stock have been
duly authorized and validly issued, are fully paid and nonassessable, have been
issued in compliance with applicable federal and state securities laws, were not
issued in violation of or subject to any preemptive rights or other rights to
subscribe for or purchase securities, and (iii) there are no outstanding options
to purchase, or any preemptive rights or other rights to subscribe for or to
purchase, any securities or obligations convertible into, or any contracts or
commitments to issue or sell, shares of the Subsidiary’s capital stock or any
such options, rights, convertible securities or obligations.

 

 

 

 

 

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3.3 Issuance, Sale and Delivery of the Shares. The Shares have been duly
authorized and, when issued, delivered and paid for in the manner set forth in
this Agreement, will be duly authorized, validly issued, fully paid and
nonassessable. No stockholder of the Company has any right to require the
Company to register the sale of any shares owned by such stockholder under the
Securities Act in the Registration Statement. No further approval or authority
of the stockholders or the Board of Directors of the Company will be required
for the issuance and sale of the Shares to be sold by the Company as
contemplated herein.

 

3.4 Due Execution, Delivery and Performance. The Company has full legal right,
corporate power and authority to enter into the Agreements and perform the
transactions contemplated hereby and thereby. The Agreements have been duly
authorized, executed and delivered by the Company. The making and performance of
the Agreements by the Company and the consummation of the transactions herein
and therein contemplated will not violate any provision of the organizational
documents of the Company and will not result in the creation of any lien,
charge, security interest or encumbrance upon any assets of the Company pursuant
to the terms or provisions of, or will not conflict with, result in the breach
or violation of, or constitute, either by itself or upon notice or the passage
of time or both, a default under any agreement, mortgage, deed of trust, lease,
franchise, license, indenture, permit or other instrument to which the Company
or any Subsidiary is a party or by which the Company or its properties, or any
Subsidiary or such Subsidiary’s properties, may be bound or affected and in each
case which would have a Material Adverse Effect or, to the Company’s knowledge
(which, as used herein, in each instance shall mean the actual knowledge of the
Company’s chief executive officer or chief financial officer), any statute or
any authorization, judgment, decree, order, rule or regulation of any court or
any regulatory body, administrative agency or other governmental body applicable
to the Company or any Subsidiary or any of their respective properties. No
consent, approval, authorization or other order of any court, regulatory body,
administrative agency or other governmental body is required for the execution
and delivery of this Agreement or the consummation of the transactions
contemplated by this Agreement, except for compliance with the Blue Sky laws and
federal securities laws applicable to the offering of the Shares. Upon their
execution and delivery, and assuming the valid execution thereof by the
respective Purchasers, the Agreements will constitute valid and binding
obligations of the Company, enforceable in accordance with their respective
terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting creditors’ and
contracting parties’ rights generally and except as enforceability may be
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).

 

3.5 Offering Materials. The Company has timely filed all reports, schedules,
forms, statements and other documents required to be filed by it with the SEC
since December 31, 2010, pursuant to the reporting requirements of the
Securities Exchange Act of 1934 (the “Exchange Act”). True and complete copies
of the SEC Documents have been posted on the SEC’s EDGAR website. As of their
respective dates, the SEC Documents complied in all material respects with the
requirements of the Exchange Act or the Securities Act, as the case may be, and
the rules and regulations of the SEC promulgated thereunder applicable to the
SEC Documents. The SEC Documents, taken as a whole, do not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.

 

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3.6 Accountants. Peterson Sullivan LLP are the Company’s independent accountants
as reported in the Company’s Form 8-K filed March 1, 2012 and as required by the
Securities Act and the rules and regulations promulgated thereunder (the “Rules
and Regulations”).

 

3.7 Contracts. All agreements that were required to be filed as exhibits to the
SEC Documents under Item 601 of Regulation S-K (collectively, the “Material
Agreements”) to which the Company or any Subsidiary of the Company is a party,
or the property or assets of the Company or any Subsidiary of the Company are
subject, have been filed as exhibits to the SEC Documents. All Material
Agreements are valid and enforceable against the Company or one of its
Subsidiaries, as the case may be, in accordance with their respective terms,
except (i) as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, or moratorium or similar laws affecting creditors’
and contracting parties’ rights generally, and (ii) as enforceability may be
subject to general principles of equity and except as rights to indemnity and
contribution may be limited by state or federal securities laws or public policy
underlying such laws. Neither the Company nor any of its Subsidiaries is in
breach of or default under any of the Material Agreements, and to the Company’s
knowledge, no other party to a Material Agreement is in breach of or default
under such Material Agreement, except in each case, for such breaches or
defaults as would not reasonably be expected to have a Material Adverse Effect.
Neither the Company nor any of its Subsidiaries has received a notice of
termination nor is the Company otherwise aware of any threats to terminate any
of the Material Agreements.

 

3.8 No Defaults. Except as disclosed in the Company Information as to defaults,
violations and breaches which individually or in the aggregate would not be
expected to have a Material Adverse Effect, the Company is not in violation or
default of any provision of its certificate of incorporation or bylaws, or other
organizational documents, or in breach of or default with respect to any
provision of any agreement, judgment, decree, order, mortgage, deed of trust,
lease, franchise, license, indenture, permit or other instrument to which it is
a party or by which it or any of its properties are bound; and there does not
exist any state of fact which, with notice or lapse of time or both, would
constitute an event of default on the part of the Company as defined in such
documents, except such defaults which individually or in the aggregate would not
reasonably be expected to have a Material Adverse Effect.

 

3.9 No Actions. There are no legal or governmental actions, suits or proceedings
pending or, to the Company’s knowledge, threatened to which the Company or any
Subsidiary is or may be a party or of which property owned or leased by the
Company or any Subsidiary is or may be the subject, or related to environmental
or discrimination matters, or instituted by the SEC, The NASDAQ Stock Market
LLC, any state securities commission or other governmental or regulatory agency,
which actions, suits or proceedings, individually or in the aggregate, might
prevent or might reasonably be expected to materially and adversely affect the
transactions contemplated by this Agreement or result in a material adverse
change in the condition (financial or otherwise), assets, properties, business,
prospects or results of operations of the Company (a “Material Adverse Change”);
and no labor disturbance by the employees of the Company or any Subsidiary
exists or, to the Company’s knowledge, is imminent which might reasonably be
expected to have a Material Adverse Effect. Neither the Company nor any
Subsidiary is a party to or subject to the provisions of any material
injunction, judgment, decree or order of any court, regulatory body,
administrative agency or other governmental body.

 

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3.10 Properties. Each of the Company and its Subsidiaries has good and
marketable title to all the properties and assets reflected as owned by it in
the consolidated financial statements included in the SEC Documents, subject to
no lien, mortgage, pledge, charge or encumbrance of any kind except (i) those,
if any, reflected in such consolidated financial statements (including the notes
thereto), or (ii) those which are not material in amount and do not adversely
affect the use made and proposed to be made of such property by the Company.
Such leased properties are held under valid and binding leases, with such
exceptions as are not materially significant in relation to its business. The
Company or a Subsidiary owns or leases all such properties as are necessary to
its operations as now conducted.

 

3.11 No Material Change. Since September 30, 2011 and except as contemplated by
or disclosed in the Company Information, neither the Company nor any Subsidiary
has incurred any material liabilities or obligations, indirect, or contingent,
or entered into any material verbal or written agreement or other transaction
which is not in the ordinary course of business or which could reasonably be
expected to result in a material reduction in the future earnings of the
Company; (ii) neither the Company nor any Subsidiary has sustained any material
loss or interference with its respective businesses or properties from fire,
flood, windstorm, accident or other calamity not covered by insurance; (iii) the
Company has not paid or declared any dividends or other distributions with
respect to its capital stock and neither the Company nor any Subsidiary is in
default in the payment of principal or interest on any outstanding debt
obligations; (iv) there has not been any change in the capital stock of the
Company other than the sale of the Shares hereunder and shares or options issued
pursuant to employee equity incentive plans or purchase plans approved by the
Company’s Board of Directors, or indebtedness material to the Company (other
than in the ordinary course of business); and (v) there has not been any
Material Adverse Change.

 

3.12 Intellectual Property. The Company or a Subsidiary owns or possesses
adequate rights to use the inventions, patent applications, patents, patent
rights, trademarks (both registered and unregistered), service marks,
tradenames, copyrights, trade secrets and know-how necessary for the conduct of
the Company’s and its Subsidiaries’ businesses as currently conducted
(collectively, the “Intellectual Property”), except where the failure to
currently own or possess such Intellectual Property would not have a Material
Adverse Effect. Neither the Company nor any Subsidiary has received any notice
of, and has no knowledge of, any infringement of or conflict with asserted
rights of others with respect to any Intellectual Property which, singly or in
the aggregate, if the subject of an unfavorable decision, ruling or finding,
could reasonably be expected to have a Material Adverse Effect. To the Company’s
knowledge, none of the patent rights owned or licensed by the Company or any
Subsidiary are unenforceable or invalid.

 

3.13 Compliance. The Company has not been advised, and has no reason to believe,
that it is not conducting its business in compliance with all applicable laws,
rules and regulations of the jurisdictions in which it is conducting business,
including, without limitation, all applicable local, state and federal
environmental laws and regulations; except where failure to be so in compliance
would not have a Material Adverse Effect.

 

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3.14 Taxes. The Company has filed all necessary federal, state and foreign
income and franchise tax returns and has paid or accrued all taxes shown as due
thereon, and the Company has no knowledge of a tax deficiency which has been or
might be asserted or threatened against it which could have a Material Adverse
Effect.

 

3.15 Transfer Taxes. On the Closing Date, all stock transfer or other taxes
(other than income taxes) which are required to be paid in connection with the
sale and transfer of the Shares to be sold to the Purchaser hereunder will be,
or will have been, fully paid or provided for by the Company and all laws
imposing such taxes will be or will have been fully complied with.

 

3.16 Accounting Controls. Except as disclosed in the Company Information, the
Company maintains a system of accounting controls sufficient to provide
reasonable assurances that (i) transactions are executed in accordance with
management’s general or specific authorization, (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
generally accepted accounting principles as applied in the United States and to
maintain accountability for assets, (iii) access to assets is permitted only in
accordance with management’s general or specific authorization, and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

 

3.17 Investment Company. The Company is not an “investment company” or an
“affiliated person” of, or “promoter” or “principal underwriter” for an
investment company, within the meaning of the Investment Company Act of 1940, as
amended.

 

3.18 No General Solicitation; Offering Materials. Neither the Company, nor any
of its affiliates, nor any person acting on its or their behalf, has engaged in
any form of general solicitation or general advertising (within the meaning of
Regulation D promulgated under the Securities Act) in connection with the offer
or sale of the Shares. The Company has not distributed and will not distribute
prior to the Closing Date any offering material in connection with the offering
and sale of the Shares other than the Private Placement Memorandum or any
amendment or supplement thereto. The Company has not in the past nor will it
hereafter take any action to sell, offer for sale or solicit offers to buy any
securities of the Company which would bring the offer, issuance or sale of the
Shares, as contemplated by this Agreement, within the provisions of Section 5 of
the Securities Act, unless such offer, issuance or sale was or shall be within
the exemptions of Section 4 of the Securities Act.

 

3.19 Insurance. The Company maintains insurance of the types and in the amounts
that the Company reasonably believes is adequate for its business, including,
but not limited to, insurance covering all real and personal property owned or
leased by the Company against theft, damage, destruction, acts of vandalism and
all other risks customarily insured against by similarly situated companies, all
of which insurance is in full force and effect.

 

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3.20 Corrupt Practices. Neither the Company nor, to the knowledge of the
Company, any agent or other person acting on behalf of the Company, have
(i) directly or indirectly, used any corporate funds for unlawful contributions,
gifts, entertainment or other unlawful expenses related to foreign or domestic
political activity, (ii) made any unlawful payment to foreign or domestic
government officials or employees or to foreign or domestic political parties or
campaigns from corporate funds, (iii) failed to disclose fully any contribution
made by the Company or made by any person acting on its behalf and of which the
Company is aware in violation of law, or (iv) violated in any material respect
any provision of the Foreign Corrupt Practices Act of 1977, as amended.

 

3.21 Transactions with Affiliates. Except as disclosed in the Company
Information, none of the officers or directors of the Company and, to the
Company’s knowledge, none of the employees of the Company is presently a party
to any transaction with the Company or any Subsidiary (other than as holders of
stock options and/or warrants, and for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the Company’s knowledge, any entity in which
any officer, director, or any such employee has a substantial interest or is an
officer, director, trustee or partner.

 

3.22 Employee Relations. The Company is not involved in any union labor dispute,
nor, to the Company’s knowledge, is any such dispute threatened. The Company is
not a party to a collective bargaining agreement, and the Company believes that
its relations with its employees are good. No executive officer (as defined in
Rule 501(1) of the Securities Act) of the Company has notified the Company that
such officer intends to leave the employ of the Company or otherwise terminate
such officer’s employment with the Company. To the Company’s knowledge, no
employee of the Company, as a consequence of his employment by the Company is,
or is now expected to be, in violation of any material term of any agreement,
covenant or contract (including any employment contract, confidentiality,
disclosure or proprietary information agreement, non-competition agreement, or
any other contract or agreement or any restrictive covenant with any previous
employer), and the continued employment of each such employee by the Company
will not subject the Company to any liability with respect to any of the
foregoing matters.

 

3.23 Application of Takeover Protection. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby will not
impose any restriction on any Purchaser, or create in any party (including any
current stockholder of the Company) any rights, under any share acquisition,
business combination, poison pill (including any distribution under a rights
agreement), or other similar anti-takeover provisions under the Company’s
charter documents or the laws of its state of incorporation.

 

3.24 No Integrated or Aggregated Offering. Neither the Company, nor any person
acting on its behalf, has, directly or indirectly, made any offers or sales of
any security or solicited any offers to buy any security, under circumstances
that would cause the offering of Shares contemplated by this Agreement to be
integrated with prior offerings by the Company for purposes of the Securities
Act.

 

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4. Representations, Warranties and Covenants of the Purchaser. The Purchaser
hereby represents and warrants to, and covenants with, the Company, effective as
of the Closing Date, as follows:

 

4.1 Investment Representations and Covenants. The Purchaser represents and
warrants to, and covenants with, the Company that: (i) the Purchaser is
knowledgeable, sophisticated and experienced in making, and is qualified to
make, decisions with respect to investments in securities representing an
investment decision like that involved in the purchase of the Shares, including
investments in securities issued by the Company, and has requested, received,
reviewed and considered all information it deems relevant in making an informed
decision to purchase the Shares; (ii) the Purchaser is acquiring the number of
Shares set forth in Section 0 above in the ordinary course of its business and
for its own account for investment only and with no present intention of
distributing any of such Shares or any arrangement or understanding with any
other persons regarding the distribution of such Shares within the meaning of
Section 2(11) of the Securities Act; (iii) the Purchaser will not, directly or
indirectly, offer, sell, pledge, transfer or otherwise dispose of (or solicit
any offers to buy, purchase or otherwise acquire or take a pledge of) any of the
Shares except in compliance with the Securities Act and the Rules and
Regulations promulgated thereunder; (iv) the Purchaser has completed or caused
to be completed the Stock Certificate Questionnaire attached hereto as Exhibit B
and the Certificate attached hereto as Exhibit C-1 or C-2, as applicable, and
the answers thereto are true and correct as of the date hereof; (v) the
Purchaser has, in connection with its decision to purchase the number of Shares
set forth in Section 0 above, relied solely upon the Company Information and the
representations and warranties of the Company contained herein; (vi) the
Purchaser understands that neither the Company nor any other person is under any
obligation to register the resale of the Shares under the Securities Act or any
state securities laws or to comply with the terms and conditions of any
exemption thereunder; and (vii) the Purchaser is an “accredited investor” within
the meaning of Rule 501 of Regulation D promulgated under the Securities Act.

 

4.2 No General Solicitation. The Purchaser is not purchasing the Shares as a
result of any advertisement, article, notice or other communication regarding
the Shares published in any newspaper, magazine or similar media or broadcast
over the television or radio or presented at any seminar or any other general
solicitation or general advertisement. Prior to the time that the Purchaser was
first contacted by the Company, such Purchaser had a pre-existing and
substantial relationship with the Company.

 

4.3 Authorization; Validity of Agreement. The Purchaser further represents and
warrants to, and covenants with, the Company that (i) the Purchaser has full
right, power, authority and capacity to enter into this Agreement and to
consummate the transactions contemplated hereby and has taken all necessary
action to authorize the execution, delivery and performance of this Agreement,
and (ii) upon the execution and delivery of this Agreement, this Agreement shall
constitute a valid and binding obligation of the Purchaser enforceable in
accordance with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ and contracting parties’ rights generally and except as
enforceability may be subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

 

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4.4 Requirements of Foreign Jurisdictions. The Purchaser acknowledges,
represents and agrees that no action has been or will be taken in any
jurisdiction outside the United States by the Company that would permit an
offering of the Shares, or possession or distribution of offering materials in
connection with the issue of the Shares, in any jurisdiction outside the United
States where action for that purpose is required. Each Purchaser outside the
United States will comply with all applicable laws and regulations in each
foreign jurisdiction in which it purchases, offers, sells or delivers the Shares
or has in its possession or distributes any offering material, in all cases at
its own expense.

 

4.5 Restriction on Short Sales and Hedging. Neither the Purchaser, directly or
indirectly, nor any person acting on behalf of or pursuant to any understanding
with the Purchaser, has engaged in any transactions in the securities of the
Company (including, without limitation, any Short Sales involving any of the
Company’s securities) since the time that such Purchaser was first contacted by
the Company or any other person regarding an investment in the Company. The
Purchaser covenants that neither it nor any person acting on its behalf or
pursuant to any understanding with the Purchaser will engage, directly or
indirectly, in any transactions in the securities of the Company (including
Short Sales) prior to the time the transactions contemplated by this Agreement
are publicly disclosed. “Short Sales” include, without limitation, all “short
sales” as defined in Rule 200 promulgated under Regulation SHO under the
Exchange Act and all types of direct and indirect stock pledges, forward sale
contracts, options, puts, calls, short sales, swaps, derivatives and similar
arrangements (including on a total return basis), and sales and other
transactions through non-U.S. broker-dealers or foreign regulated brokers.

 

4.6 Compliance with Non-Disclosure Agreement. The Purchaser has fully complied
with and has not breached any of its covenants or representations in any
non-disclosure agreement, confidentiality agreement or like agreement
(collectively, an “NDA”) entered into between the Purchaser and the Company or
any of the Company’s affiliates. Purchaser acknowledges and agrees that any such
NDA shall continue in full force and effect following the date of this Agreement
and the Closing in accordance with the terms of such NDA.

 

4.7 No Legal, Tax or Investment Advice. The Purchaser understands that nothing
in this Agreement or any other materials presented to the Purchaser in
connection with the purchase and sale of the Shares constitutes legal, tax or
investment advice. The Purchaser has consulted such legal, tax and investment
advisors as it, in its sole discretion, has deemed necessary or appropriate in
connection with its purchase of Shares.

 

4.8 Restrictive Legend. The Purchaser understands that the Shares and any shares
of Common Stock into which the Shares are convertible may bear a restrictive
legend in substantially the following form (and a stop-transfer order may be
placed against transfer of the certificates for the Shares and shares of Common
Stock into which the Shares are convertible):

 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITIES MAY NOT BE SOLD,
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER SAID ACT, OR AN OPINION OF COUNSEL OR OTHER EVIDENCE,
IN FORM, SUBSTANCE AND SCOPE REASONABLY ACCEPTABLE TO THE COMPANY AND ITS
COUNSEL, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT.”

 

10

 

5. Survival of Representations, Warranties and Agreements. Notwithstanding any
investigation made by any party to this Agreement, all covenants, agreements,
representations and warranties made by the Company and the Purchaser herein and
in the certificates for the Shares delivered pursuant hereto shall survive the
execution of this Agreement, the delivery to the Purchaser of the Shares being
purchased and the payment therefor.

 

6. Broker’s Fee. Each of the parties hereto hereby represents that, on the basis
of any actions and agreements by it, there are no brokers or finders entitled to
compensation in connection with the sale of the Shares to the Purchaser.

 

7. Notices. All notices, requests, consents and other communications hereunder
shall be in writing, shall be mailed by first-class registered or certified
airmail, facsimile (with receipt confirmed by telephone) or nationally
recognized overnight express courier postage prepaid, and shall be deemed given
when so mailed and shall be delivered as addressed as follows:

 

7.1.1 if to the Company, to:

 

  Lenco Mobile Inc.   2025 First Avenue, Suite 320   Seattle, WA 98121  
Attention: CFO       With copy to:   Lenco Mobile Inc.   25 Metro Drive, Suite
210   San Jose, CA 95110   Attention: General Counsel

 

or to such other person at such other place as the Company shall designate to
the Purchaser in writing; and

 

7.1.2 if to the Purchaser, at its address as set forth on the signature page of
this Agreement, or at such other address or addresses as may have been furnished
to the Company in writing.

 

8. Changes. This Agreement may not be modified or amended except pursuant to an
instrument in writing signed by the Company and Purchaser.

 

9. Headings. The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be part of
this Agreement.

 

11

 

10. Severability. In case any provision contained in this Agreement should be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.

 

11. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California, without giving effect to
the principles of conflicts of laws.

 

12. Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall constitute an original, but all of which, when taken
together, shall constitute but one instrument, and shall become effective when
one or more counterparts have been signed by each party hereto and delivered to
the other parties.

 

13. Independent Nature of Purchasers’ Obligations and Rights. No Purchaser shall
be responsible in any way for the performance of the obligations of any other
Purchaser under the Agreements. Nothing contained herein and no action taken by
any Purchaser pursuant to the Agreements shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind
of entity, or create a presumption that the Purchasers are in any way acting in
concert or as a group, or are deemed affiliates (as such term is defined under
the Exchange Act) with respect to such obligations or the transactions
contemplated by this Agreement or the other Agreements. Each Purchaser shall be
entitled to independently protect and enforce its rights, including without
limitation the rights arising out of the Agreements, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
proceeding for such purpose.

 

14. Fees and Expenses. Except as expressly set forth herein to the contrary,
each party shall pay the fees and expenses of its advisers, counsel, accountants
and other experts, if any, and all other expenses incurred by such party
incident to the negotiation, preparation, execution, delivery and performance of
this Agreement. The Company shall pay all Transfer Agent fees, stamp taxes and
other taxes and duties levied in connection with the sale and issuance of their
applicable Shares.

 

[SIGNATURES FOLLOW ON THE NEXT PAGE]

 

 

 

 

12

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized representatives as of the day and year first above
written.

 

  LENCO MOBILE INC.             By: /s/        Name: Matthew Harris       Title:
CEO          

 

Print or Type:     Name of Purchaser   (Individual or Institution):  

 

 

  Name of Individual representing   Purchaser (if an Institution):       Title
of Individual representing   Purchaser (if an Institution):

 

  Signature by:   Individual Purchaser or Individual   representing Purchaser:  

 

        Address:           Telephone:           Telecopier:  

 

 

13

 

SCHEDULE 4.2

 

The following is a summary of Lenco Mobile Inc.’s issued and outstanding equity
securities and derivatives outstanding as of the date of the Agreement:

 

Class of Securities

Issued and Outstanding

Authorized

Common Stock 80,478,647 250,000,000 Series A Convertible Preferred Stock (1)
171,220 207,500 Series B1 Convertible Preferred Stock (1) 87,715 93,140 Series
B2 Convertible Preferred Stock (1) 58,131 58,131 Stock Options 57,455,981 N/A
Common Stock Warrants 2,794,166 N/A Promissory Notes Convertible into Common
Stock (2) 86,667 N/A

 

(1)Each of the Series A Convertible Preferred Stock, Series B1 Convertible
Preferred Stock and Series B2 Convertible Preferred Stock is convertible into
the Company’s common stock in accordance with such preferred stock’s certificate
of designation. The total amount of preferred stock that is authorized pursuant
to Lenco Mobile Inc.’s certificate of incorporation is 1,000,000 shares.

 

(2)Face value of convertible note is $260,000 and converts at $3.00. Amount is
presently in litigation.

 

14

 

SUMMARY INSTRUCTION SHEET FOR PURCHASER

 

(to be read in conjunction with the entire Securities Purchase Agreement)

 

A.Complete the following items ON EACH OF THE TWO COPIES of the Securities
Purchase Agreement:

 

1.Signature Page: Provide the information regarding the Purchaser requested on
the signature page. The agreement must be executed by an individual authorized
to bind the Purchaser.

 

2.Exhibit B – Stock Certificate Questionnaire: Provide the information requested
by the Stock Certificate Questionnaire.

 

3.Exhibits C-1 and C-2 – Purchaser Certificate: Provide the information
requested by the Certificate for Individual Purchasers or the Certificate for
Corporate, Partnership, Trust, Foundation and Joint Purchasers, as applicable.

 

B.Return the properly completed and signed Securities Purchase Agreement
signature pages and Exhibits B and C-1 or C-2 (as applicable) to:

 

Lenco Mobile Inc. 

25 Metro Drive, Suite 210 

San Jose, CA 95110 

Attention: General Counsel 

Facsimile: (408) 824-1398 

Email: rick.ballard@iloopmobile.com

 

C.Wire the funds according to the following wiring instructions:

 

Bank Name: Bridge Bank 

Bank Address: 55 Almaden Blvd., Suite 100 

ABA number: 121143260 

Account Name: iLoop Mobile, Inc. 

Account Number: 0101082139 

SWIFT: BBFXUS6S

 

 

15

 

 

 

EXHIBIT A

 

CERTIFICATE OF DESIGNATION AND CERTIFICATE OF AMENDMENT

 

[See attached.]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A-1

 

 

EXHIBIT B

 

STOCK CERTIFICATE QUESTIONNAIRE

 

Pursuant to Section 2.2 of the Securities Purchase Agreement, please provide us
with the following information:

 

  1.

The exact name that your Shares are to be Registered in (this is the name that
will appear on your stock certificate(s)). You may use a nominee name if
appropriate:

 

        2.

The relationship between the Purchaser of the Shares and the Registered Holder
listed in response to item 1 above:

 

        3.

The mailing address of the Registered Holder listed in response to item 1 above:

 

        4.

The Social Security Number or Tax Identification Number of the Registered Holder
listed in response to item 1 above:

 

 

 

 

 

 

 

 

 

 

B-1

 

 

EXHIBIT C-1

 

CERTIFICATE FOR INDIVIDUAL PURCHASERS

 

If the investor is an individual Purchaser (or married couple) the Purchaser
must complete, date and sign this Certificate.

 

CERTIFICATE

 

I certify that the representations and responses below are true and accurate:

 

In order for the Company to offer and sell the Securities in conformance with
state and federal securities laws, the following information must be obtained
regarding your investor status. Please initial each category applicable to you
as an investor in the Company.

 

____ (1) A natural person whose net worth (excluding the value of any equity in
such person’s primary residence), either individually or jointly with such
person’s spouse exceeds $1,000,000.

 

____ (2) A natural person who had an income in excess of $200,000, or joint
income with the person’s spouse in excess of $300,000, in 2009 and 2010, and
reasonably expects to have individual income reaching the same level in 2011.

 

____ (3) An executive officer or director of the Company.

 

Dated: ___________________

 

Name(s) of Purchaser

 

    Signature           Signature  

 

EXHIBIT C-1

1

 

 

EXHIBIT C-2

 

CERTIFICATE FOR CORPORATE, PARTNERSHIP,

 

TRUST, FOUNDATION AND JOINT PURCHASERS

 

If the investor is a corporation, partnership, trust, pension plan, foundation,
joint purchasers (other than a married couple) or other entity, an authorized
officer, partner, or trustee must complete, date and sign this Certificate.

 

CERTIFICATE

 

The undersigned certifies that the representations and responses below are true
and accurate.

 

(a) The person signing on behalf of the undersigned has the authority to
exercise and deliver the Securities Purchase Agreement on behalf of the
Purchaser, and to take other sections with respect thereto.

 

(b) Indicate the form of entity of the undersigned:

 

________ Limited Partnership

 

________ General Partnership

 

________ Corporation

 

________ Revocable Trust (identify each grantor and indicate under what
circumstances the trust is revocable by the grantor: _______________________

 

 

 

 

 

 

 

 

____________ (Continue on a separate piece of paper, if necessary.)

 

________ Other Type of Trust (indicate type of trust and, for trusts other than
pension trust, name the guarantors and beneficiaries:__________

 

 

 

 

 

 

 

 

EXHIBIT C-2

1

 

_________. (Continue on a separate piece of paper, if necessary.)

 

________ Other form of organization (indicate form of organization (_______)

 

(c) In order for the Company to offer and sell the Securities in conformance
with state and federal securities laws, the following information must be
obtained regarding your investor sums. Please initial each category applicable
to you as an investor in the Company.

 

____ 1. A bank as defined in Section 3(a)(2) of the Securities Act, or any
savings and loan association or other institution as defined in
Section 3(a)(5)(A) of the Securities Act whether acting in its individual or
fiduciary capacity;

 

____ 2. A broker or dealer registered pursuant to Section 15 of the Securities
Exchange Act of 1934;

 

____ 3. An insurance company as defined in Section 2(13) of the Securities Act;

 

____ 4. As investment company registered under the Investment Company Act of
1940 or a business development company as defined in Section 2(a)(48) of that
Act;

 

____ 5. A Small Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business Investment Act
of 1958;

 

____ 6. A plan established and maintained by a state, its political
subdivisions, or any agency or instrumentality of a state or its political
subdivisions, for the benefit of its employees, if such plan has total assets in
excess of $5,000,000;

 

____ 7. An employee benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, if the investment decision is made by a plan
fiduciary, as defined in Section 3(21) of such act, which is either a bank,
savings and loan association, insurance company, or registered investment
adviser, or if the employee benefit plan has total assets in excess of
$5,000,000 or, if a self-directed plan, with investment decisions made solely by
persons that are accredited investors;

 

____ 8. A private business development company as defined in Section 202(a)(23)
of the Investment Advisers Act of 1940;

 

____ 9. An organization described in Section 501(c)(3) of the Internal Revenue
Code, a corporation, Massachusetts or similar business trust, or partnership,
not formed for the specific purpose of acquiring the Shares, with total assets
in excess of $5,000,000;

 

____ 10. A trust, with total assets in excess of $5,000,000, not formed for the
specific purpose of acquiring the Shares, whose purchase is directed by a
sophisticated person who has such knowledge and experience in financial and
business matters that such person is capable of evaluating the merits and risks
of investing in the Company;

 

EXHIBIT C-2

2

 

 

____ 11. An entity in which all of the equity owners qualify under any of the
above subparagraphs. If the undersigned belongs to this investor category only,
list the equity owners of the undersigned, and the investor category which each
such equity owner satisfies:

 

 

 

 

 

 

 

 

(Combine on a separate piece of paper, if necessary.)

 

 

  Dated: ______________________, 20__            Name of investor      
Signature and title of authorized   officer, partner or trustee

 

 

 

 

 

 

 

EXHIBIT C-2

 

3