EXHIBIT 10.21
ATRIEVA CORPORATION
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
CONTENTS
SECTION 1. Authorization and Sale of Preferred Shares....................................................... 1
1.1 Authorization.................................................................................... 1
1.2 Sale of Preferred................................................................................ 1
SECTION 2. Closing Date; Delivery........................................................................... 1
2.1 Closing Date..................................................................................... 1
2.2 Delivery......................................................................................... 2
2.3 Subsequent Sales of Shares....................................................................... 2
SECTION 3. Representations and Warranties................................................................... 2
3.1 Organization and Standing........................................................................ 2
3.2 Capitalization................................................................................... 3
3.3 Corporate Power; Authorization................................................................... 4
3.4 Subsidiaries..................................................................................... 4
3.5 Validity of Securities........................................................................... 4
3.6 Governmental Consents............................................................................ 5
3.7 Compliance with Other Instruments and Laws....................................................... 5
3.8 Litigation....................................................................................... 7
3.9 Proprietary Information; Inventions; Employees and Consultants................................... 7
3.10 Patents and Other Intangible Assets.............................................................. 9
3.11 Financial Statements............................................................................. 10
3.12 Absence of Certain Changes....................................................................... 11
3.13 Material Contracts and Commitments............................................................... 12
3.14 Registration Rights.............................................................................. 13
3.15 Title to Property and Assets..................................................................... 13
3.16 Outstanding Indebtedness; Liabilities............................................................ 13
3.17 Stockholder Agreements........................................................................... 14
3.18 Employee Compensation Plans...................................................................... 14
3.19 Labor Union Activities........................................................................... 14
3.20 Employee Relations............................................................................... 14
3.21 Tax Returns and Audits........................................................................... 14
3.22 Disclosure....................................................................................... 15
3.23 Certain Transactions............................................................................. 15
3.24 Environmental Laws and Regulations............................................................... 16
3.25 Other Names...................................................................................... 16
3.26 Minute Books..................................................................................... 16
3.27 Insurance Coverage............................................................................... 16
3.28 Returns and Complaints........................................................................... 17
SERIES B PREFERRED STOCK PURCHASE AGREEMENT PAGE i
3.29 Qualified Small Business Stock..................................................................... 17
3.30 No Discrimination.................................................................................. 17
3.31 Use of Proceeds.................................................................................... 17
3.32 "Company's Knowledge".............................................................................. 17
3.33 Representations and Warranties in Related Documents................................................ 17
SECTION 4. Representations and Warranties of the Purchasers; Restrictions on
Transfer Imposed by the Act; and California Corporate Securities Law............................... 18
4.1 Representations and Warranties..................................................................... 18
4.1.1 Investment................................................................................. 18
4.1.2 Accredited Investor........................................................................ 18
4.1.3 Power and Authorization.................................................................... 19
4.1.4 Legal Investment........................................................................... 19
4.2 Transfer of Securities............................................................................. 19
4.2.1 Legend..................................................................................... 19
4.2.2 Restrictions on Transfer................................................................... 20
4.2.3 Termination of Restrictions and Removal of Legend.......................................... 20
4.3 Corporate Securities Law........................................................................... 21
SECTION 5. Conditions to Obligations of the Purchasers........................................................ 21
5.1 Representations and Warranties Correct; Performance of Obligations................................. 21
5.2 Opinion of Company's Counsel....................................................................... 21
5.3 Consents and Waivers............................................................................... 22
5.4 Legal Investment................................................................................... 22
5.5 Certificate of Designation......................................................................... 22
5.6 Satisfactory Proceedings; Compliance Certificate................................................... 22
5.7 Board of Directors................................................................................. 22
5.8 Investors Rights Agreement......................................................................... 22
5.9 Due Diligence...................................................................................... 22
5.10 Minimum Investment................................................................................. 22
5.11 Legal Fees......................................................................................... 23
SECTION 6. Conditions to Obligations of the Company........................................................... 23
6.1 Representations and Warranties..................................................................... 23
6.2 Qualifications..................................................................................... 23
6.3 Legal Investment................................................................................... 23
6.4 Cancellation of Purchaser Notes.................................................................... 23
6.5 Minimum Investment................................................................................. 23
SERIES B PREFERRED STOCK PURCHASE AGREEMENT PAGE ii
SECTION 7. Miscellaneous............................................................................... 24
7.1 Waivers and Amendments...................................................................... 24
7.2 Governing Law............................................................................... 24
7.3 Survival.................................................................................... 24
7.4 Successors and Assigns...................................................................... 24
7.5 Entire Agreement............................................................................ 24
7.6 Notices, Etc................................................................................ 25
7.7 Delays or Omissions......................................................................... 25
7.8 Severability................................................................................ 25
7.9 Construction................................................................................ 26
7.10 Counterparts................................................................................ 26
7.11 Headings.................................................................................... 26
7.12 Plural Terms................................................................................ 26
7.13 Finder's Fee................................................................................ 26
7.14 Expenses.................................................................................... 27
7.16 Attorney's Fees............................................................................. 27
SERIES B PREFERRED STOCK PURCHASE AGREEMENT PAGE iii
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
SCHEDULES:
1. Schedule of Purchasers
2. Disclosure Schedules
EXHIBITS:
A Certificate of Designation
B Third Amended and Restated Investors Rights Agreement
C Opinion of Counsel
SERIES PREFERRED STOCK PURCHASE AGREEMENT PAGE iv
ATRIEVA CORPORATION
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
This Series B Preferred Stock Purchase Agreement (this "Agreement"), is
made as of May ,1999 by and among Atrieva Corporation, a Delaware corporation
(the "Company"), and the undersigned purchasers (the "Purchasers").
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. Authorization and Sale of Preferred Shares
1.1 Authorization
The Company has duly authorized the sale and issuance of up to 1,500,000
shares of its Series B Convertible Preferred Stock (the "Series B Stock") having
the rights, privileges and preferences set forth in the Company's Certificate of
Designation (the " Certificate of Designation"), in the form attached hereto as
Exhibit A.
---------
1.2 Sale of Preferred
Subject to the terms and conditions hereof, the Company shall issue and
sell to the Purchasers, and each Purchaser agrees, severally, to purchase at the
Closing, from the Company, shares of Series B Stock (collectively, the
"Shares"), at a purchase price of five dollars ($5.00) per share. The amount to
be purchased by each Purchaser and the form of consideration therefor is set
forth in the Schedule of Purchasers attached as Schedule 1. The Purchasers that
hold Convertible Promissory Notes issued by the Company (the "Purchaser Notes")
agree to convert at the Closing, in accordance with Section 3.5 of such
Purchaser Note(s), the principal amount of, and accrued interest on, such
Purchaser Notes (such principal plus interest, the "Note Amount") into the
number of shares of Series B Stock equal to the Note Amount divided by five (5),
rounded down to the nearest whole share.
SECTION 2. Closing Date; Delivery
2.1 Closing Date
The closing of the purchase and sale of the Shares hereunder (the
"Closing") shall be held at the offices of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇ LLP,
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, at 2:00 p.m., May __, 1999 or at
such other time and place as is mutually agreed to by the parties hereto (the
date of the Closing is hereinafter referred to as the "Closing Date"). The
parties agree that faxed signature
PAGE 1
pages will be acceptable for the Closing, to be followed up with original
signature pages.
2.2 Delivery
Subject to the terms of this Agreement, at the Closing, the Company will
deliver to each Purchaser a certificate representing the number of Shares being
purchased by such Purchaser, which certificate shall be registered in the name
of such Purchaser, against payment in full by the Purchaser of the purchase
price therefor by check payable to the order of the Company or such other form
of payment as set forth on Schedule 1.
2.3 Subsequent Sales of Shares
At any time up to 120 days following the Closing, the Company may sell up
to the balance of any shares of Series B Stock not sold at the Closing
authorized under Section 1.1, to such additional investors as may be approved by
the Board of Directors. All such sales shall be made on the terms and
conditions set forth in this Agreement. Any Shares sold pursuant to this
Section 2.3 shall be deemed to be "Series B Stock" and shall be deemed to be
"Shares" sold pursuant to this Agreement, any purchasers thereof shall be deemed
to be "Purchasers" for all purposes under this Agreement, and any such
subsequent sale shall be deemed to occur at a "Closing" and the date of any such
Closing shall be deemed to be a "Closing Date." The new purchasers shall become
parties to this Agreement by signing a counterpart signature page hereto.
Should any such sales be made, the Company shall prepare and distribute to the
Purchasers a revised Schedule of Purchasers reflecting such sales.
SECTION 3. Representations and Warranties
The Company hereby represents and warrants to the Purchasers that:
3.1 Organization and Standing
The Company is a corporation duly organized and validly existing under the
laws of the State of Delaware. The Company has all requisite power and
authority to own and operate its properties and assets and to conduct its
business as presently conducted and as 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. Except as set
forth in Schedule 3.1, true, complete and accurate copies of the Company's
Restated Certificate of Incorporation, Bylaws and all amendments to each to date
have been
PAGE 2
delivered to the Purchasers and the Company has provided or made available to
the Purchasers copies of the minutes of all meetings, and all consents in lieu
of meetings, of the Board of Directors and stockholders of the Company. Prior to
the Closing, the Company shall have properly filed the Certificate of
Designation with the Secretary of State of Delaware and the Company's Restated
Certificate of Incorporation, as amended by the Certificate of Designation,
shall be in full force and effect.
3.2 Capitalization
(a) The authorized capital stock of the Company at the Closing will be
300,000,000 shares of common stock, par value $.001 per share ("Common Stock")
and 40,000,000 shares of preferred stock, par value $.001 per share ("Preferred
Stock"), 3,000,000 of which shares of Preferred Stock are designated Series A-1
Convertible Preferred Stock (the "Series A-1 Stock) and 1,500,000 of which
shares of Preferred Stock are designated Series B Stock; of such authorized
shares of capital stock of the Company, 2,553,142.56 shares of Common Stock,
2,000,000 shares of Series A-1 Stock and 514,554 shares of Series B Stock will
be issued and outstanding immediately following the initial Closing. The Series
B Stock will have, as of the Closing, the rights, preferences and privileges set
forth in the Certificate of Designation.
(b) All issued and outstanding shares have been, and as of the Closing
Date will be, duly authorized, validly issued, fully paid and nonassessable, and
are and were, and as of the Closing Date will have been, offered, issued, sold
and delivered by the Company in compliance with all applicable state and federal
laws concerning the issuance of securities.
(c) Except as set forth on Schedule 3.2(c), there are no outstanding
rights, subscriptions, calls, options, warrants, preemptive rights, 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. Except as set forth in Schedule 3.2(c), the Company is
not subject to any obligation (contingent or otherwise) to repurchase or
otherwise acquire or retire any shares of its capital stock or any security
convertible into or exchangeable for any shares of its capital stock. Except as
set forth in Schedule 3.2(c), 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 first refusal or similar right as a result of the
issuance of the Shares or otherwise, except as set forth therein. Except as set
forth in Schedule 3.2(c), 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.
PAGE 3
(d) Attached as Schedule 3.2(d) is a true and complete list of the
names of the record holders of all of the outstanding Common Stock and Preferred
Stock and of the holders of all outstanding options or other rights to purchase
Common Stock, Preferred Stock, or other securities of the Company. Such list
attached contains a true and complete description of the number of shares held
by each such holder. 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. Schedule 3.2(d) also shows the current directors
and officers of the Company.
3.3 Corporate Power; Authorization
The Company has all requisite power and authority to enter into this
Agreement and the other documents and agreements contemplated herein, to sell
the Shares hereunder, and to carry out and perform its obligations under the
terms of this Agreement and the other documents and agreements contemplated
herein. All corporate action on the part of the Company and its officers,
directors and stockholders necessary for the authorization, execution and
delivery of this Agreement and the other documents and agreements contemplated
herein, for the performance of the Company's obligations hereunder, for the
consummation of the transactions contemplated herein, and for the authorization,
issuance and delivery of the Shares and the Common Stock issuable upon
conversion thereof has been taken or will be taken prior to the Closing. This
Agreement has been duly executed and delivered by the Company and constitutes a
legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms. As of the Closing Date, this Agreement
and the other documents and agreements contemplated herein and therein will have
been duly executed and delivered by the Company, and all parties thereto (other
than the Purchasers), and will constitute legal, valid and binding obligations
of the Company and such other parties, enforceable against each of them in
accordance with their terms.
3.4 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.
3.5 Validity of Securities
The Shares, when issued, sold and delivered in accordance with the terms of
this Agreement, will be duly and validly issued, fully paid and nonassessable
and will be free and clear of any preemptive rights, security interests, claims,
liens or
PAGE 4
encumbrances created by the Company. The Common Stock issuable upon conversion
of the Shares has been, or prior to the Closing will be, duly and validly
reserved and, upon issuance in accordance with the terms of this Agreement and
the Certificate of Designation, will be duly and 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 created other
than by the Purchasers and other than restrictions under applicable and state
securities laws.
3.6 Governmental Consents
(a) No consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, or notice to any
federal, state or local governmental or public authority or agency on the part
of the Company is or was required for the Company's valid execution, delivery
and performance of this Agreement or the offer, sale or issuance of the Shares
(and the Common Stock issuable upon conversion thereof) or the consummation of
any other transaction contemplated hereby, except for the filing of the
Certificate of Designation in the office of the Secretary of State of Delaware,
which shall be filed by the Company prior to the Closing, and, the filing of a
notice under Regulation D under the Act, and the filing of a notice of exemption
pursuant to Section 25102(f) of the California Corporate Securities Law of 1968,
as amended (the "California Securities Law"), and applicable filings under
Washington, and other state securities laws, all of which shall be filed by the
Company immediately following the Closing. Based in part upon the truth of the
representations and warranties of the Purchasers contained in Section 4 of this
Agreement, the offer, sale and issuance of the Shares (and of the Common Stock
issuable upon conversion thereof) in conformity with the terms of this Agreement
are exempt from the registration requirements of Section 5 of the Act, from the
qualification requirements of Section 25110 of the California Securities Law,
and from the requirements under Washington, and other applicable state
securities laws.
(b) 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.
3.7 Compliance with Other Instruments and Laws
Except as described in Schedule 3.7:
PAGE 5
(a) The Company is not (i) in violation or default of any provision of
the Company's Restated Certificate of Incorporation or Bylaws, each as amended
and in effect on the date hereof and on and as of the Closing Date; or (ii)
except as to defaults which would result in liability or loss to the Company of
$10,000 or less, in default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in, and is not otherwise
in default under, (A) any evidence of indebtedness for any money borrowed or any
other evidence of indebtedness or any instrument or agreement under or pursuant
to which any evidence of indebtedness for money borrowed or other evidence of
indebtedness has been issued, or (B) any other instrument, mortgage, deed of
trust, loan, contract, commitment or obligation to which it is a party or by
which it is bound or any of its properties is affected. The Company has not
defaulted on, nor has it failed to make at the time contemplated, payment of any
principal of, or premium or interest on, any indebtedness of $10,000 or more.
Neither the execution, delivery and performance of and compliance with this
Agreement nor the offer, issuance and sale of the Shares (and the Common Stock
issuable upon conversion thereof) does or will: (i) conflict with or violate
the Company's Restated Certificate of Incorporation or Bylaws of the Company;
(ii) conflict with or result in a breach of any of the terms, conditions or
provisions of, or constitute or default under, or result in the creation of any
lien on any of the properties or assets of the Company pursuant to the terms of
any instrument or agreement referred to in this Section to which the Company is
a party or by which it is bound; or (iii) require the consent of, or other
action by, any stockholder, trustee or any creditor of, any lessor to or any
investor in, the Company or any other person.
(b) The Company is in full compliance with all laws and ordinances and
all governmental rules and regulations to which it is subject, the violation of
which would result in liability or loss to the Company of more than $10,000.
Based in part upon the representations and warranties of the Purchasers in
Section 4 hereof with respect to an exemption from the registration requirements
of the Act and the qualification requirements of the California Securities Act
of 1968 and the qualification requirements of Washington and other applicable
state securities laws, neither the execution, delivery or performance of this
Agreement by the Company nor the offer, issuance, sale or delivery of the Shares
(and the Common Stock issuable upon conversion thereof) does or will cause the
Company to be in violation of any statute, law or ordinance or any judgment,
decree, writ, injunction, order, award or other action of any court or
governmental authority or arbitrator or any order, rule or regulation of any
federal, state, county, municipal or other governmental or public authority or
agency.
(c) The Company is not a party to or bound by (nor is any of its
properties affected by) any contract or agreement, or subject to any order,
writ,
PAGE 6
injunction or decree or any action of any court or any governmental department,
commission, bureau, board or other administrative agency or official, or any
charter or other corporate or contractual restriction which materially adversely
affects, or in the future could materially adversely affect, the business,
earnings, prospects, properties or conditions (financial or other) of the
Company.
3.8 Litigation
Except as set forth in Schedule 3.8, there is no action, suit, proceeding,
claim or investigation in any court or by or before any other governmental or
public authority or agency or any arbitrator or arbitration panel, pending or,
to the best knowledge of the Company, threatened against or affecting the
Company or any of its properties that, either individually or in the aggregate,
(a) could question the validity or enforceability of this Agreement and the
other agreements and documents contemplated thereby or the right of the Company
to enter into any of them, or to consummate the transactions contemplated hereby
or thereby, or (b) could materially adversely affect the business, earnings,
prospects, properties or condition (financial or other) of the Company, nor is
the Company aware that there is any basis for the foregoing. The foregoing
includes, without limitation, actions pending or threatened (or any basis
therefor known to the Company) involving the prior employment of any of the
Company's employees, 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. Except
as set forth in Schedule 3.8, there is no action, suit, proceeding or
investigation by the Company currently pending or which the Company intends to
initiate.
3.9 Proprietary Information; Inventions; Employees and Consultants
(a) 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). Except as set forth in Schedule
3.9(a), since its organization, each of the Company's employees, consultants,
and 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
("Proprietary Information Agreement") with the Company which substantially
provides that (i) this intellectual property, other information and Inventions
are proprietary to the Company and are not
PAGE 7
to be divulged (except as authorized by the Company), misused or
misappropriated, and (ii) this intellectual property, other information and
Inventions are to be disclosed by such employees, consultants, and contractors
to the Company; in cases where this intellectual property and Inventions may be
subject to rights of a third person, the Company has secured from said third
person unrestricted, perpetual, irrevocable, royalty-free (except to the extent
set forth in Schedule 3.10), and exclusive license rights thereto. As used
herein, "Inventions" means all inventions, developments and discoveries which
during the period of an employees', 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, except as excluded pursuant to applicable law.
(b) Except as set forth in Schedule 3.9(b), 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 Company shall use its best
efforts to prevent any such violation. Except as set forth in Schedule 3.9(b),
the Company is not aware that any of the Company's employees or consultants is
obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would 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 and consultants, 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 or consultants 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
or consultants (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 or
consultants (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 or consultant is a party
or to which any of such assets or rights may be subject.
EXHIBIT A PAGE 8
3.10 Patents and Other Intangible Assets
(a) Schedule 3.10(a) summarizes all patents, patent applications,
trademarks, copyrights and other intellectual property of the Company with a
description of their scope.
(b) Except as set forth in Schedule 3.10(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 ▇▇▇▇, 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 ▇▇▇▇,
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) Except as set forth in Schedule 3.10(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 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; provided, however, that the possibility exists
that other persons or entities, completely independently of the Company or its
employees, consultants, or contractors could have developed trade secrets or
items of technical information similar or identical to those of the Company.
Except as set forth in Schedule 3.10(c), the Company has no actual knowledge of
any such development of similar or identical trade secrets or technical
information by others.
(d) Except as set forth in Schedule 3.10(d), the Company has not
sold, transferred, assigned, licensed or subjected to any lien, security
interest, or other
EXHIBIT A PAGE 9
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) Except as set forth in Schedule 3.10(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) Except as set forth in Schedule 3.10(f), the Company has no
actual knowledge of any facts or has not received any communication alleging or
stating that the Company or any contractor, consultant or employee has violated
or infringed, or by conducting business as proposed, would violate or infringe,
any patent, trademark, service ▇▇▇▇, 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 with respect to 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 is now obligated.
(h) The Company has not granted any license to use its proprietary
information or intellectual property, except as listed in Schedule 3.10(h).
Except as set forth in Schedule 3.10(h), 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.
EXHIBIT A PAGE 10
3.11 Financial Statements
The Company has delivered to the Purchasers complete and accurate copies of
its audited balance sheet as at June 30, 1998 and its audited statements of
operations and cash flows for the twelve (12) month period therein specified and
its unaudited balance sheet as of January 31, 1999 (the "Balance Sheet") (such
financial statements and balance sheets being referred to herein collectively as
the "Financial Statements"), which audited financials have been certified by
Ernst & Young LLP. The Financial Statements are true, complete, and correct and
have been prepared in accordance with generally accepted accounting principles
(subject to normal and customary year-end adjustments that are not material for
any unaudited statements and except that the unaudited statements do not include
footnotes) applied on a consistent basis throughout the periods indicated. The
Financial Statements present fairly, completely and accurately the financial
condition of the Company as of the respective dates and for the periods
indicated.
3.12 Absence of Certain Changes
Except as set forth in Schedule 3.12, since January 31, 1999 (a) the
Company has not entered into any transaction which was not in the ordinary
course of its business; (b) there has been no material adverse change in the
business, earnings, prospects, properties or condition (financial or other) of
the Company; (c) there has been no damage to, destruction of or loss of any of
the properties or assets of the Company (whether or not covered by insurance)
materially adversely affecting the business, earnings, prospects, properties or
condition (financial or other) of the Company; (d) the Company has not declared
or paid any dividend or made any distribution on its capital stock, redeemed,
purchased or otherwise acquired any of its capital stock, granted any options to
purchase shares of its capital stock, or issued any shares of its capital stock;
(e) the Company has not received notice that there has been a cancellation of an
order for its services or a loss of a customer of the Company, the cancellation
or loss of which could materially adversely affect the business, earnings,
prospects, properties or condition (financial or other) of the Company; (f)
there has been no resignation or termination of employment of any key officer or
key employee of the Company and the Company does not know of the impending
resignation or termination of employment of any key officer or key employee of
the Company in either case; (g) there has been no labor dispute involving the
Company or any of its employees; (h) there has been no material change in the
contingent obligations of the Company by way of guaranty, endorsement,
indemnity, warranty or otherwise; (i) there have been no loans made by the
Company to its employees, officers or directors, other than travel advances and
other advances made in the ordinary course of business; (j) there has been no
waiver or compromise by the Company of a valuable right or of a debt owed to it
or amendment or change to any material contract or
EXHIBIT A PAGE 11
arrangement of the Company; (k) there has been no sale, assignment, or transfer
of any patents, trademarks, copyrights, trade secrets other intangible assets;
(l) there has been no extraordinary increase in the compensation of any of the
Company's employees, officers or directors and there has been no increase in the
compensation of any such employees, officers or directors who earn compensation
at an annual rate of more than $40,000; (m) there has been no agreement or
commitment by the Company to do or perform any of the acts described in this
Section 3.12 or (n) there has been no other event or condition of any character
which might reasonably be expected either to materially adversely affect the
business, earnings, prospects, properties or condition (financial or other) of
the Company or liabilities of the Company or to impair the ability of the
Company to conduct the business now being or proposed to be conducted by it.
3.13 Material Contracts and Commitments
(a) Except as set forth in Schedule 3.13, the Company has no
currently existing contract, obligation, agreement, plan, arrangement,
commitment or the like (written or oral) of a material nature (the "Contracts"),
including, without limitation, the following: (1) loans, notes, indentures, or
instruments relating to or evidencing indebtedness for borrowed money, or
mortgages, pledges, liens, security interests or other encumbrances on any of
the Company's property or any agreement or instrument evidencing any guaranty by
the Company of payment or performance by any other person; (2) employment, bonus
or consulting agreements, pension, profit sharing, deferred compensation, stock
bonus, retirement, stock option, stock purchase, phantom stock or similar plans,
including agreements evidencing rights to purchase securities of the Company and
agreements among stockholders and the Company; (3) agreements with dealers,
sales representatives, brokers or other distributors, jobbers, advertisers or
sales agencies; (4) agreements with any labor union or collective bargaining
organization or other similar labor agreements; (5) any contract or series of
contracts with the same person for the furnishing or purchase of machinery,
equipment, goods or services, including without limitation agreements with
processors and subcontractors; (6) any indenture, agreement or other document
(including private placement brochures) relating to the sale or repurchase of
securities; (7) any joint venture contract or arrangement or other agreement
involving a sharing of profits or expenses to which the Company is a party; (8)
agreements and purchase orders with customers; (9) agreements limiting the
freedom of the Company to compete in any line of business or in any geographic
area or with any person; (10) 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; (11) agreements involving or letters of
EXHIBIT A PAGE 12
intent with respect to the acquisition of the business, assets or shares of any
other business; (12) license agreements; and (13) powers of attorney.
(b) The Company has provided the Purchasers or other representatives
with either copies of or access to all of the Contracts. Each of the Contracts
is valid, binding and in full force and effect in all material respects and
enforceable by the Company in accordance with its terms. The Company is not in
default under, or otherwise in violation of the terms of, any of the Contracts
in any material respect. To the best of the Company's, knowledge, no other party
to any of the Contracts is in default thereunder or otherwise in violation of
the terms thereof, in any material respect.
3.14 Registration Rights
Except as disclosed in Schedule 3.14, the Company has not granted or agreed
to grant any rights relating to the registration of its securities under
applicable federal and state securities laws, including but not limited to
demand or piggy-back registration rights.
3.15 Title to Property and Assets
Except as set forth in Schedule 3.15, the Company has good and marketable
title to its properties and assets (including but not limited to its
intellectual property and other intangible assets Schedule 3.10) (except for
assets and properties having aggregate value of less than $25,000) free and
clear of all mortgages, security interests, claims, liens and encumbrances,
except liens for current taxes and assessments not yet due. The Company owns or
leases all properties and assets necessary to the operation of its business as
now conducted. With respect to the property and assets it leases, the Company
has the right to, and does, enjoy peaceful and undisturbed possession under all
leases under which it is leasing property. Except as set forth in Schedule 3.15,
all such leases are in full force and effect, and the Company is in compliance
with such leases and holds a valid leasehold interest free of all security
interests, liens, claims or encumbrances. The Company's tangible properties and
assets are in good condition and repair, except for hidden defects where the
defects cause $25,000 or less of damage and except for ordinary wear and tear.
3.16 Outstanding Indebtedness; Liabilities
Except as set forth in Schedule 3.16, the Company has no indebtedness for
borrowed money which the Company has directly or indirectly created, incurred,
assumed or guaranteed, or with respect to which the Company has otherwise become
directly or indirectly liable, except as shown on the Balance Sheet. Except as
set forth
EXHIBIT A PAGE 13
in Schedule 3.16, the Company has no liabilities or obligations, absolute or
contingent, which are not shown or provided for in the Balance Sheet, (1) except
liabilities or obligations which are less than $25,000 in the aggregate, or (2)
those incurred after the date of the Balance Sheet in the ordinary course of
business, (3) normal contractual obligations under the Contracts set forth in
Schedule 3.13.
3.17 Stockholder Agreements
Except as set forth in Schedule 3.17, there are no voting trusts or other
agreements or arrangements which grant rights with respect to any shares of the
Company's capital stock or which in any way affect any stockholder's ability or
right to freely alienate or vote such shares.
3.18 Employee Compensation Plans
Except as set forth in Schedule 3.18, the Company is not a party to or
bound by any currently effective employment contract, deferred compensation
agreement, bonus plan, incentive plan, profit sharing plan, retirement agreement
or other employee compensation agreement. The Company does not maintain any
"employee benefit plan" (as such term is defined by the Employee Retirement
Income Security Act of 1974). The Purchasers have been provided with access to
copies of such plans, if any, and any agreements arising therefrom to which the
Company currently is a party.
3.19 Labor Union Activities
The Company is not engaged in any unfair labor practice which could
adversely affect the business, earnings, prospects, properties or condition
(financial or other) of the Company. There is (a) no unfair labor practice
complaint pending or, to the best knowledge of the Company, threatened against
the Company or before the National Labor Relations Board which could adversely
affect the business, earnings, prospects, properties or condition (financial or
other) of the Company and no grievance or arbitration proceeding arising out of
or under a collective bargaining agreement is so pending or threatened; (b) no
strike, labor dispute, slow down or stoppage pending or, to the best knowledge
of the Company, threatened against the Company; and (c) no union representation
question existing with respect to the employees of the Company and no union
organizing activities taking place with respect to the Company.
3.20 Employee Relations
To the best of the Company's knowledge, its relations with its employees
are good.
EXHIBIT A PAGE 14
3.21 Tax Returns and Audits
Except as set forth in Schedule 3.21, the Company has duly prepared and
timely filed all United States income tax returns and all state and municipal
tax returns required to be filed by it and has paid or made adequate provision
for the payment of all taxes, assessments, fees and charges shown on such
returns or on other assessments or charges received by the Company. Except as
set forth in Schedule 3.21, no federal or state income or sales tax returns of
the Company have been audited. Except as set forth in Schedule 3.21, no
deficiency assessment or proposed adjustment of the Company's United States
income tax or state or municipal taxes is pending. Except as set forth in
Schedule 3.21, no extensions of the time for the assessment of deficiencies have
been granted to the Company. The Company is not a party to or bound by or
obligated under any tax sharing or similar agreement. There are no liens on any
properties or assets of the Company imposed or arising as a result of the
delinquent payment or the non-payment of any tax, assessment, fee or other
governmental charge. The charges, accruals and reserves, if any, on the books of
the Company in respect of federal, state and local corporate franchise and
income taxes for all fiscal periods to date are adequate in accordance with
generally accepted accounting principles, and the Company does not know of any
additional unpaid assessments for such periods or of any basis therefor. There
are no applicable taxes, fees or other governmental charges payable by the
Company in connection with the execution and delivery of this Agreement or the
offer, issuance, sale and delivery of the Shares (and the Common Stock issuable
upon conversion thereof).
3.22 Disclosure
No representation, warranty or statement by the Company in this Agreement
or in any written statement or certificate furnished or to be furnished to the
Purchasers pursuant to this Agreement (including all exhibits and schedules
hereto and any other agreements or documents delivered on the Closing or any
Financial Statements referred to in Section 3.11 hereof) contains or will
contain any untrue statement of a material fact or, when taken together, omits
or will omit to state a material fact necessary to make the statements made
herein or therein, in light of the circumstances under which they were made, not
misleading. There is no fact known to the Company that has not been disclosed to
the Purchasers in writing that (1) materially adversely affects or could
materially adversely affect the business, earnings, prospects, properties or
condition (financial or other) of the Company or (2) adversely affects or could
adversely affect the ability of the Company to perform its obligations under
this Agreement.
EXHIBIT A PAGE 15
3.23 Certain Transactions
Except as set forth in Schedule 3.23, the Company is not indebted, either
directly or indirectly, to any of its officers, directors or holders of Common
Stock or to their respective spouses, children or other family members; none of
such officers, directors and holders of capital stock or any members of their
families are indebted to the Company or, to the best of the Company's knowledge,
have any direct or indirect ownership interest in any firm or corporation with
which the Company is affiliated or with which the Company has a business
relationship, or any firm or corporation which competes with the Company. No
officer, director or holder of any of the Company's capital stock or, to the
best of the Company's knowledge, any member of their immediate families is,
directly or indirectly, interested in any contract with the Company. The Company
is not a guarantor or indemnitor of any indebtedness of any other person, firm
or corporation.
3.24 Environmental Laws and Regulations
The Company has met, and continues to meet, all applicable local, state and
federal environmental laws and regulations, and has disposed of its waste
products and effluents and/or has caused others to dispose of the waste products
and effluents of the Company, if any, in accordance with all applicable state,
local, federal and national environmental laws and regulations and in such a
manner that no harm has resulted or will result to any of its employees or
properties or to any other persons or entities or their properties.
3.25 Other Names
Other than the name Atrieva Corporation, XactData Services, Inc., XactData
International and XactLabs Corporation, the business conducted by the Company
prior to the date hereof has not been conducted under any corporate, trade or
fictitious name.
3.26 Minute Books
The minute books of the Company provided to the Purchasers contain all
resolutions adopted by directors and stockholders since the incorporation of the
Company and fairly and accurately reflect, in all material respects, all matters
and transactions referred to in such minutes or written consents.
3.27 Insurance Coverage
Except as set forth in Schedule 3.27, there is in full force and effect one
or more policies of insurance issued by insurers of recognized responsibility
insuring the
EXHIBIT A PAGE 16
Company and its properties and business against such losses and risks, and in
such amounts, as are customary in the case of corporations engaged in the same
or similar business and similarly situated. The Company has not been refused any
insurance coverage sought or applied for, and the Company has no reason to
believe that it will be unable to renew its existing insurance coverage as and
when the same shall expire upon terms at least as favorable as those presently
in effect, other than possible increases in premiums that do not result from any
act or omission of the Company. Such insurance is summarized in Schedule 3.27.
3.28 Returns and Complaints
Except as set forth in Section 3.28, the Company has received no customer
complaints concerning its products and/or services, nor has it had any of its
products returned by a purchaser or distributor thereof, other than minor non-
recurring warranty problems or minor complaints and returns in the ordinary
course of business.
3.29 Qualified Small Business Stock
The Shares will constitute "qualified small business stock" within the
meaning of Section 1202 of the Internal Revenue Code of 1986, as amended, as of
the date of issuance. The Company will use its reasonable best efforts to
comply with the reporting and recordkeeping requirements of Section 1202 and any
regulations promulgated thereunder.
3.30 No Discrimination
The Company has not and does not in any manner or form discriminate, ▇▇▇▇▇▇
discrimination or permit discrimination against any person, whether as to race,
sex, religion, or other legally protected classes of persons.
3.31 Use of Proceeds
The Company shall use the proceeds from the sale of the Shares for working
capital and general corporate purposes.
3.32 "Company's Knowledge"
As used in this Section 3, the terms "to the best of the Company's
knowledge," "to the best knowledge of the Company," "known to the Company" or
similar phrases shall mean the best knowledge of the Company, its officers and
directors, after careful consideration of the matters set forth in the
representation that is so qualified and a diligent review of all files,
documents, agreements and other materials in such person's possession or subject
to his or her control.
EXHIBIT A PAGE 17
3.33 Representations and Warranties in Related Documents
The representations and warranties by the Company, contained in the Third
Amended and Restated Investors Rights Agreement in the form attached as Exhibit
B (the "Third Amended and Restated Investors Rights Agreement"), and in any
document, certificate or instrument delivered pursuant to this Agreement are
true and correct and the Purchasers shall be entitled to rely on such
representations and warranties as if they were made to the Purchasers in this
Agreement as of the Closing Date.
SECTION 4. Representations and Warranties of the Purchasers; Restrictions on
Transfer Imposed by the Act; and California Corporate Securities Law
4.1 Representations and Warranties
Each Purchaser hereby represents and warrants to the Company as follows:
4.1.1 Investment
(i) The Purchaser acknowledges that the Shares have not been
registered under the Act or qualified under the California Securities Law
or registered or qualified under any other state securities laws on the
ground that no distribution or public offering of the Shares is to be
effected, and that in this connection the Company is relying in part on the
representations of the Purchaser set forth in this Section 4;
(ii) The Purchaser further acknowledges that no public market now
exists for any of the securities issued by the Company and that a public
market may never exist for the Shares and the Common Stock issuable upon
conversion thereof;
(iii) The Purchaser is purchasing the Shares for its own account
(or the account of its parent, subsidiaries or affiliates) and not as
nominee or agent for any other person; and
(iv) By reason of its business or financial experience, the
Purchaser has the capacity to protect its own interests in connection with
the transactions contemplated hereunder, is able to bear the risks of an
investment in the Company, and at the present time could afford a complete
loss of such investment.
EXHIBIT A PAGE 18
4.1.2 Accredited Investor
The Purchaser represents that it is an Accredited Investor (as such term is
defined in Rule 501 of Regulation D promulgated under the Securities Act of
1933, as amended (the "Act") and is acquiring the Shares for its own account and
not with a view to, or for sale in connection with, any distribution thereof in
a manner contrary to Section 5 of the Act or of the California Securities Law
and Rules and Regulations of the California Commissioner of Corporations
thereunder or of any other applicable state securities laws or regulations.
4.1.3 Power and Authorization
The Purchaser has all requisite power and authority to enter into this
Agreement and the other documents and agreements contemplated herein, to
purchase the Shares hereunder, and to carry out and perform its obligations
under the terms of this Agreement and the other documents and agreements
contemplated herein. This Agreement has been duly executed and delivered by the
Purchaser and constitutes a legal, valid, and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms.
4.1.4 Legal Investment
The acquisition and retention of the Shares by the Purchaser does not
violate any governmental law, rule or regulation binding on Purchaser.
4.2 Transfer of Securities
None of the Shares shall be transferable except upon the conditions
specified in this Section 4.2, which conditions are intended to insure
compliance with the provisions of the Act and applicable state securities laws
in respect to the transfer of such Shares.
4.2.1 Legend
Unless and until otherwise permitted by this Section 4.2, each certificate
or other document evidencing any of the Shares shall be endorsed with a legend
substantially in the following form:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR QUALIFIED OR
REGISTERED UNDER ANY STATE SECURITIES LAWS. THEY HAVE BEEN ACQUIRED BY THE
SHAREHOLDER FOR INVESTMENT AND MAY NOT BE PLEDGED,
EXHIBIT A PAGE 19
HYPOTHECATED, OR OTHERWISE DISPOSED OF UNLESS (1) COVERED BY AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT AND QUALIFIED OR REGISTERED UNDER
APPLICABLE STATE SECURITIES LAWS, (2) IN COMPLIANCE WITH RULE 144 or RULE 144A
UNDER THE ACT, OR (3) THE CORPORATION HAS BEEN FURNISHED WITH AN OPINION OF
COUNSEL OR OTHER EVIDENCE REASONABLY ACCEPTABLE TO THE CORPORATION TO THE EFFECT
THAT NO REGISTRATION AND QUALIFICATION IS REQUIRED."
4.2.2 Restrictions on Transfer
None of the Shares shall be transferred (other than transfers to a parent,
subsidiary, or other affiliate of a holder of the Shares), and the Company shall
not be required to register any such transfer, unless and until one of the
following events shall have occurred:
(i) The Company shall have received an opinion of counsel, in form
and substance reasonably acceptable to the Company and its counsel, or
other evidence reasonably acceptable to the Company, stating that the
contemplated transfer is exempt from registration under the Act as then in
effect, the Rules and Regulations of the Securities and Exchange Commission
(the "Commission") thereunder, and applicable state securities laws.
Within five business days after delivery to the Company and its counsel of
such opinion or evidence, the Company either shall deliver to the proposed
transferor a statement to the effect that such opinion or evidence is not
satisfactory in the reasonable opinion of its counsel (and shall specify in
detail the legal analysis supporting for any such conclusion) or shall
authorize the Company's transfer agent to make the requested transfer;
(ii) The Company shall have been furnished with a letter from the
Commission in response to a written request in form and substance
acceptable to counsel for the Company setting forth all of the facts and
circumstances surrounding the contemplated transfer, stating that the
Commission will take no action with regard to the contemplated transfer;
(iii) The Shares are transferred pursuant to a registration
statement which has been filed with the Commission and has become effective
and are qualified or registered under the applicable state securities laws;
or
(iv) The Shares are transferred pursuant to and in accordance with
Rule 144 or Rule 144A promulgated by the Commission under the Act.
EXHIBIT A PAGE 20
4.2.3 Termination of Restrictions and Removal of Legend
The restrictions on transfer imposed by this Section 4.2 shall cease and
terminate as to the Shares, when (i) such securities shall have been effectively
registered under the Act and sold by the holder thereof in accordance with such
registration, (ii) an acceptable opinion or other evidence as described in
Section 4.2.2(i) or a "no action" letter described in Section 4.2.2(ii) states
that future transfers of such securities by the transferor or the contemplated
transferee would be exempt from registration under the Act, or (iii) such
securities may be sold under and in accordance with Rule 144(k) promulgated by
the Commission under the Act. When the restrictions on transfer contained in
this Section 4.2 have terminated as provided above, the holder of the securities
as to which such restrictions shall have terminated or the transferee of such
holder shall be entitled to receive promptly from the Company, without expense
to him, and upon surrender of existing certificates, new certificates not
bearing the legend set forth in Section 4.2.1 hereof.
4.3 Corporate Securities Law
THE SALE OF THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT
BEEN QUALIFIED WITH THE COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA
AND THE ISSUANCE OF SUCH SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE
CONSIDERATION FOR SUCH SECURITIES PRIOR TO SUCH QUALIFICATION IS UNLAWFUL,
UNLESS THE SALE OF SECURITIES IS EXEMPT FROM QUALIFICATION BY SECTION 25100,
25102 OR 25105 OF THE CALIFORNIA CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES
TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING
OBTAINED, UNLESS THE SALE IS SO EXEMPT.
SECTION 5. Conditions to Obligations of the Purchasers
The obligation of the Purchasers to purchase the Shares at the Closing is
subject to the fulfillment to its satisfaction on or prior to the Closing Date
of each of the following conditions, unless waived in writing by the Purchasers:
5.1 Representations and Warranties Correct; Performance of Obligations
The representations and warranties made by the Company in Section 3 hereof
shall be true, correct and complete in all respects when made, and shall be
true, correct and complete in all respects on the Closing Date with the same
force and effect as if they had been made on and as of the Closing Date. The
Company shall have
EXHIBIT A PAGE 21
performed or complied with all covenants, agreements and conditions contained in
this Agreement required to be performed or complied with by the Company on or
prior to the Closing Date.
5.2 Opinion of Company's Counsel
The Purchasers shall have received from ▇▇▇▇▇▇▇ Coie LLP, counsel to the
Company, opinions, dated the Closing Date, in substantially the form attached
hereto as Exhibit C.
---------
5.3 Consents and Waivers
The Company shall have obtained any and all consents, permits and waivers
and made all filings necessary or appropriate for consummation of the
transactions contemplated by this Agreement.
5.4 Legal Investment
At the time of the Closing, the purchase of the Shares by the Purchasers
hereunder shall be legally permitted by all laws and regulations to which the
Purchasers and the Company are subject.
5.5 Certificate of Designation
The Certificate of Designation shall have been properly filed with the
Secretary of State of the State of Delaware and the same shall be in full force
and effect.
5.6 Satisfactory Proceedings; Compliance Certificate
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. 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 subsections
5.1, 5.3 and 5.5.
5.7 Board of Directors
The Bylaws of the Company shall provide that the Board of Directors shall
be composed of not less than one nor more than seven persons, unless otherwise
approved by the Board of the Company.
EXHIBIT A PAGE 22
5.8 Investors Rights Agreement
The Company shall have executed the Third Amended and Restated Investors
Rights Agreement.
5.9 Due Diligence
The Purchasers shall have completed and be satisfied with their respective
due diligence investigations into the Company, in the Purchasers' sole
discretion.
5.10 Minimum Investment
The aggregate purchase price for the Shares to be issued at the Closing
shall be at least $2,500,000.
5.11 Legal Fees
The legal fees and expenses of one counsel to VantagePoint Venture Partners
1996 shall have been paid.
SECTION 6. Conditions to Obligations of the Company
The Company's obligation to issue, sell and deliver the Shares at the
Closing is subject to the fulfillment to its satisfaction on or prior to the
Closing Date of each of the following conditions, unless waived by the Company.
6.1 Representations and Warranties
The representations and warranties made by the Purchasers in Section 4
hereof shall be true and correct when made, and shall be true and correct on the
Closing Date with the same force and effect as if they had been made on and as
of the Closing Date.
6.2 Qualifications
The Commissioner of Corporations of the State of California shall have
issued a permit qualifying the offer and sale of the Shares and the underlying
Common Stock to the Purchasers pursuant to this Agreement, or such offer and
sale shall be exempt from such qualification under the California Securities
Law.
6.3 Legal Investment
At the time of the Closing, the purchase of the Shares by the Purchasers
hereunder shall be legally permitted by all laws and regulations to which the
Purchasers and the Company are subject.
EXHIBIT A PAGE 23
6.4 Cancellation of Purchaser Notes
The Purchasers holding the Purchaser Notes shall have delivered for
cancellation by the Company the Purchaser Notes as partial consideration for the
purchase of such Shares.
6.5 Minimum Investment
The aggregate purchase price for the Shares to be issued at the Closing
shall be at least $2,500,000.
SECTION 7. Miscellaneous
7.1 Waivers and Amendments
With the written consent of the record or beneficial holders of more than
51% of the combined number of outstanding Shares (treated as if converted), the
obligations of the Company and the rights of the holders of the Shares under
this Agreement may be waived (either generally or in a particular instance,
either retroactively or prospectively and either for a specified period of time
or indefinitely), and with the same consent the Company, when authorized by
resolution of its board of directors, may enter into a supplementary agreement
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement. Upon the effectuation of
each such waiver, consent, agreement of amendment or modification, the Company
promptly shall give written notice thereof to the record holders of the Shares.
This Agreement or any provision hereof may not be changed, waived, discharged or
terminated orally, but only by a statement in writing signed by the party
against which enforcement of the change, waiver, discharge or termination is
sought, except to the extent provided in this Section 7.1.
7.2 Governing Law
This Agreement shall be governed in all respects by the internal laws of
the State of California without regard to conflicts of law principles.
7.3 Survival
The representations, warranties, covenants and agreements made herein shall
survive the execution of this Agreement and the Closing of the transactions
contemplated hereby, notwithstanding any investigation made by the Purchasers.
All statements as to factual matters contained in any certificate, exhibit or
other instrument delivered by or on behalf of the Company pursuant hereto or in
connection
EXHIBIT A PAGE 24
with the transactions contemplated hereby shall be deemed to be the
representations and warranties of the Company, as of the date of such
certificate or instrument.
7.4 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.
7.5 Entire Agreement
This Agreement and the other documents delivered pursuant hereto
(including, without limitation, the Third Amended and Restated Investors Rights
Agreement) constitute and contain the full and entire understanding and
agreement between and among the parties with regard to the subjects hereof and
thereof, and supersede any prior or contemporaneous understandings,
representations, warranties, promises, agreements, conditions, negotiations,
correspondence, communications, and term sheets (oral or written) between or
among the parties. The parties acknowledge that they have not relied, in
entering into this Agreement or the other documents and agreements delivered
pursuant hereto, upon any understandings, representations, warranties, promises,
agreements or conditions not specifically set forth herein.
7.6 Notices, Etc
All notices and other communications required or permitted hereunder shall
be in writing and shall be deemed effectively given upon personal delivery upon
confirmation of receipt if given by facsimile, upon the next business day if
given by overnight commercial delivery service, or upon the seventh day
following mailing by registered air mail, postage prepaid, addressed (a) if to
the Purchasers, at the address set forth in the Schedule of Purchasers or at
such address as it shall have thereafter furnished to the Company in writing,
(b) if to the Company, at ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇,
Attention: President, or at such other address as the Company shall have
furnished to the Purchasers in writing, or (c) if to any other holder of any
Shares or of Common Stock issued upon conversion of Shares, at such address as
such holder shall have furnished to the Company in writing, or, until such
holder so furnishes an address to the Company, then to and at the address of the
last holder of such Shares or shares who so furnished an address to the Company.
In addition, any notice delivered to an address outside the United States shall
be duplicated by counterpart fax notice.
EXHIBIT A PAGE 25
7.7 Delays or Omissions
No delay or omission to exercise any right, power or remedy accruing to any
holder of any securities issued or sold or to be issued or sold hereunder, upon
any breach or default of the Company under this Agreement, shall impair any such
right, power or remedy of such holder nor shall it be construed to be a waiver
of any such breach or default, or an acquiescence therein, or in any similar
breach or default thereafter occurring, nor shall any waiver of any single
breach or default be deemed a waiver of any other breach or default theretofore
or thereafter occurring. All remedies, either under this Agreement or by law or
otherwise afforded to any holder, shall be cumulative and not alternative.
7.8 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.
7.9 Construction
The titles and subtitles of this Agreement are intended for reference and
shall not by themselves determine the construction or interpretation of this
Agreement. This Agreement and its provisions contained therein and the exhibits
hereto shall not be construed or interpreted for or against any party to this
Agreement because said party drafted or caused the party's legal representative
to draft any of its provisions.
7.10 Counterparts
This Agreement may be executed in any number of counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
7.11 Headings
Headings in this Agreement and the other Agreements are for convenience of
reference only and are not a part of the substance hereof or thereof.
EXHIBIT A PAGE 26
7.12 Plural Terms
All terms defined in this Agreement or the other agreements contemplated
hereby in the singular form shall have comparable meanings when used in the
plural form and vice versa.
---- -----
7.13 Finder's Fee
Each party represents that it neither is nor will be obligated for any
finders' fee or commission in connection with this transaction. Each Purchaser
agrees to indemnify and to hold harmless the Company from any liability for any
commission or compensation in the nature of a finders' fee (and the costs and
expenses of defending against such liability or asserted liability) for which
such Purchaser or any of its officers, partners, employees, or representatives
is responsible.
The Company agrees to indemnify and hold harmless each Purchaser from any
liability for any commission or compensation in the nature of a finders' fee
(and the costs and expenses or defending against such liability or asserted
liability) for which the Company or any of its officers, employees or
representatives is responsible.
7.14 Expenses
Irrespective of whether the Closing is effected, the Company shall pay all
costs and expenses that it incurs with respect to the negotiations, execution,
delivery and performance of this Agreement. If the Closing is effected, the
Company shall, at the Closing, by wire transfer and as a condition of the
Closing, reimburse the fees of one special counsel for VantagePoint Venture
Partners 1996 and the out of pocket expenses of such counsel. Counsel for
VantagePoint Venture Partners 1996 is solely counsel for such entity, and not
for any other Purchasers.
7.16 Attorney's Fees
In the event that any dispute among the parties to this Agreement should
result in a legal proceeding, the prevailing party shall be entitled to recover
from the other party(ies) to such dispute, all fees, costs and expenses of
enforcing any right under or with respect to this Agreement, including without
limitation, fees and expenses of attorneys and accountants, which shall include,
without limitation, all fees, costs and expenses of appeals.
[Remainder of page intentionally left blank.]
EXHIBIT A PAGE 27
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
themselves or by their respective representatives thereunto duly authorized as
of the day and year first above written.
The Company:
ATRIEVA CORPORATION
By /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇, Chief Executive
Officer and President
Purchasers:
VANTAGEPOINT VENTURE PARTNERS 1996
By: VantagePoint Associates LLC,
its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
Title: Managing Member
------------------------
BATTERY VENTURES III, L.P.
By: Battery Partners III, L.P.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------
Title: General Partner
---------------------
/s/ ▇▇▇▇ ▇▇▇▇▇
-------------------------------
▇▇▇▇ ▇▇▇▇▇
EXHIBIT A PAGE 28
/s/ H. ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------------------
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
H. ▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
/s/ ▇▇▇▇▇▇ London
----------------------------------------
▇▇▇▇▇▇ London
VANTAGEPOINT COMMUNICATIONS PARTNERS, LP
By: VantagePoint Communications Associates LLC,
its General Partner
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------
Title: Managing Member
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------------------
▇▇▇▇▇ ▇▇▇▇▇
NEW YORK LIFE INSURANCE COMPANY
By: New York Life Insurance Company
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------------------------------
Title: Director -- Venture Capital
----------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇ 1993 TRUST
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
------------------------------------------
EXHIBIT A PAGE 29
Title: Trustee
----------------------------------------
CYPRESS VI PARTNERS
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-----------------------------------
Title: Managing Partner
--------------------------------
EXHIBIT A PAGE 30