EXHIBIT 10.20
QUICKLOGIC CORPORATION
First Amended and Restated
Common Stock
Purchase Agreement
June 13, 1997
TABLE OF CONTENTS
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Page
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1. Authorization and Delivery of Common Stock............................. 1
1.1 Authorization.................................................... 1
1.2 Right to the Shares............................................. 1
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2. Delivery............................................................... 1
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1.2 No IPO Prior to April 1, 1998.................................... 1
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1.2 IPO Consummated Prior to April 1, 1998........................... 1
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3. Representations and Warranties of the Company.......................... 2
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3.1 Organization and Standing; Articles of Incorporation and Bylaws.. 2
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3.2 Corporate Power.................................................. 2
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3.3 No Subsidiaries.................................................. 3
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3.4 Capitalization................................................... 3
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3.5 Authorization.................................................... 3
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3.6 Financial Statements............................................. 4
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3.7 Title to Properties; Liens and Encumbrances...................... 4
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3.8 Intellectual Property Rights..................................... 4
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3.9 Proprietary Information Agreements............................... 5
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3.10 Operating Rights................................................ 6
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3.11 Manufacturing, Distribution and License Rights.................. 6
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3.12 Compliance with Other Instruments, None Burdensome, etc......... 6
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3.13 Litigation, etc................................................. 6
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3.14 Employee Compensation Plans..................................... 7
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3.15 Insurance....................................................... 7
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3.16 Registration Rights............................................. 7
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3.17 Governmental Consent, etc....................................... 7
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3.18 Offering........................................................ 7
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3.19 Material Contracts and Obligations.............................. 7
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3.20 Tax Returns and Payments........................................ 8
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3.21 Related Party Transactions...................................... 8
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3.22 Certain Transactions............................................ 8
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3.23 Environmental Protection........................................ 8
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3.24 Brokers or Finders.............................................. 9
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3.25 Changes......................................................... 9
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3.26 Foreign Investment in Real Property Act......................... 10
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3.27 Disclosure...................................................... 10
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4. Representations and Warranties of the Purchaser........................ 10
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4.1 Authorization.................................................... 10
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4.2 Experience....................................................... 10
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4.3 Investment....................................................... 11
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4.4 Rule 144......................................................... 11
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4.5 No Public Market................................................. 11
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4.6 Access to Data................................................... 11
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4.7 Further Limitations on Dispositions.............................. 11
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5. Conditions to Purchaser's Obligations at the Closing................... 11
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5.1 Representations and Warranties Correct........................... 12
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5.2 Covenants........................................................ 12
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5.3 Good Standing Certificates....................................... 12
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5.4 Secretary's Certificate.......................................... 12
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5.5 Legal Investment................................................. 12
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6. Conditions to Company's Obligations at the Closing..................... 12
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6.1 Representations and Warranties Correct........................... 12
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7. Miscellaneous.......................................................... 12
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7.2 Waivers and Amendments........................................... 12
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7.3 Governing Law.................................................... 13
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7.4 Survival......................................................... 13
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7.5 Successors and Assigns........................................... 13
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7.6 Entire Agreement................................................. 13
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7.7 Severability of this Agreement................................... 13
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7.8 Finder's Fees.................................................... 13
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7.9 Legends.......................................................... 13
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7.10 Removal of Legends and Transfer Restrictions.................... 14
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7.11 Titles and Subtitles............................................ 14
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7.12 Counterparts.................................................... 14
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7.13 Delays or Omissions............................................. 14
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7.14 Notices......................................................... 14
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QUICKLOGIC CORPORATION
FIRST AMENDED AND RESTATED
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COMMON STOCK
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PURCHASE AGREEMENT
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This FIRST AMENDED AND RESTATED COMMON STOCK PURCHASE AGREEMENT (the
"Agreement") is made as of June 13, 1997 by and between QuickLogic Corporation,
a California corporation (the "Company"), and Cypress Semiconductor Corporation,
a Delaware company (the "Purchaser").
A. On March 29, 1997 (the "Original Date"), the Company and the Purchaser
entered into a certain Common Stock Purchase Agreement dated the Original Date
(the "Prior Agreement"); and
B. The Company and the Purchaser desire to amend and restate the Prior
Agreement in its entirety and to enter into this Agreement upon the terms and
conditions set forth below; this Agreement shall supersede the Prior Agreement
in its entirety.
Therefore, in consideration of the mutual promises, representations,
warranties, covenants, and conditions set forth in this Agreement, the parties
to this Agreement mutually agree as follows:
1. Authorization and Delivery of Common Stock.
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1.1 Authorization. The Company has authorized the issuance and
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delivery of 18,226,716 shares of its Common Stock ("Common Stock") having the
rights, preferences, and privileges set forth in the Amended and Restated
Articles of Incorporation (the "Restated Articles") of the Company, attached
hereto as Exhibit A.
1.2 Right to the Shares. Subject to the terms and conditions hereof,
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at the Closing (as defined in that certain Termination Agreement (the
"Termination Agreement") between the Company and Purchaser dated March 29,
1997), the Company became obligated to deliver to Purchaser, and Purchaser
became entitled to receive from the Company 18,226,716 shares of Common Stock
(the "Shares") (and such additional shares that are issuable pursuant to Section
2.5 of the Termination Agreement) in the manner set forth in Section 2 below.
2. Delivery. The delivery of the Shares shall take place in the
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following manner:
2.1 No IPO Prior to April 1, 1998. In the event that the Company has
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not consummated the initial public offering ("IPO") of its Common Stock prior to
April 1, 1998, then the Company shall deliver all of the Shares to the Purchaser
on or about April 1, 1998, but in any event by April 7, 1998.
2.2 IPO Consummated Prior to April 1, 1998. In the event that the
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Company has consummated an IPO prior to April 1, 1998, then the Company shall
deliver to the Purchaser
in connection with the IPO that number of Shares that the Purchaser is able to
sell in accordance with that certain Sixth Amended and Restated Registration
Rights Agreement (the "Registration Rights Agreement") in substantially the form
attached as Exhibit F to the Termination Agreement, and the balance of Shares
shall be delivered upon the lapse of the Lockup Period (defined below) following
the effective date of the IPO; provided, in the event the Company undertakes a
registered public offering of its Common Stock following an IPO (a "Follow-on
Offering") prior to the lapse of the lockup period agreed to by the Company's
directors, officers and greater than 1% shareholders for the IPO (the "Lockup
Period"), the Company shall deliver such number of Shares that Purchaser is able
to sell in accordance with the Registration Rights Agreement in the Follow-on
Offering, and the remaining balance of Shares shall be delivered to Cypress upon
the expiration of the lock-up agreements executed in connection with such
Follow-on Offering. The Company shall instruct its transfer agent to deliver the
Shares deliverable at the expiration of the applicable Lockup Period at least
twenty (20) days prior to such date. In the event that the Lockup Period
provides for a set number of days where the Lockup Period would expire in a
period where the Company's directors and officers are prevented from trading
because of the set "blackout" period between earnings releases provided in the
Company's ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ policy, then the Company's directors, officers and
greater than 1% shareholders shall agree to a Lockup Period that does not expire
until the date that trading can commence under the Company's ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
policy. Any early releases of any lockup shall include the pro-rata release of
Shares based on the total number of shares that are locked-up, and such early-
released Shares shall not, at the time of such early release, be subject to any
blackout provision on the released Shares, which are entitled to registration as
provided in the Registration Rights Agreement.
3. Representations and Warranties of the Company. Except as set forth on
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the Schedule of Exceptions attached hereto as Exhibit A, the Company hereby
represents and warrants to Purchaser as of the Original Date as follows:
3.1 Organization and Standing; Articles of Incorporation and Bylaws.
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The Company is a corporation duly organized and validly existing under, and by
virtue of, the laws of the State of California, is in good standing under such
laws and is authorized to exercise all of its corporate powers, rights and
privileges. The Company has the requisite legal and corporate power and
authority to own, lease and operate its properties and assets and to conduct its
business as presently conducted and as proposed to be conducted. The Company is
qualified to do business as a foreign corporation in each jurisdiction where the
failure to be so qualified would have a material adverse effect on the business
of the Company as now conducted or as proposed to be conducted. True, correct
and complete copies of the Company's Articles, Bylaws and other charter
documents, each as will be in effect at the Closing have been delivered to
Purchaser.
3.2 Corporate Power. The Company has the requisite legal and
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corporate power to execute and deliver the Termination Agreement and the
Transaction Agreements (as defined in the Termination Agreement), to file the
Restated Articles with the Secretary of State of California, to issue and sell
the Shares hereunder and to carry out and perform its obligations under the
terms of the Transaction Agreements.
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3.3 No Subsidiaries. Except as described in Exhibit A, the Company
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has no subsidiaries or affiliated companies and does not otherwise own or
control, directly or indirectly, any equity interest in any other corporation,
partnership, association or other business entity.
3.4 Capitalization. As of the Closing (as defined in the Termination
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Agreement), the authorized capital stock of the Company consisted of
105,000,000 shares of Common Stock (the "Common Stock") and 61,567,874 shares of
Preferred Stock (the "Preferred Stock"), 2,505,000 of which are designated
Series A Preferred Stock ("Series A Preferred"), 10,274,637 of which are
designated Series B Preferred Stock ("Series B Preferred"), 12,106,811 of which
are designated Series C Preferred Stock ("Series C Preferred"), 3,125,000 of
which are designated Series D Preferred ("Series D Preferred"), 23,873,667 of
which are designated Series E Preferred Stock ("Series E Preferred") and
9,482,759 of which are designated Series F Preferred Stock ("Series F
Preferred"). As of February 7, 1997, 4,785,364 shares of Common Stock,
2,505,000 shares of Series A Preferred, 10,274,637 shares of Series B Preferred,
11,975,561 shares of Series C Preferred, 3,125,000 shares of Series D Preferred,
23,873,667 shares of Series E Preferred and 7,716,119 shares of Series F
Preferred were issued and outstanding. All such issued and outstanding shares
have been duly authorized and validly issued, are fully paid and nonassessable,
and were issued in compliance with all applicable federal and state securities
laws. The rights, preferences and privileges of the Preferred Stock are as
stated in the Articles. Each share of Series A Preferred, Series B Preferred,
Series C Preferred, Series D Preferred, Series E Preferred, Series F Preferred
and Common Stock is convertible into one share of Common Stock of the Company
(as subject to adjustment pursuant to its terms). The Company has reserved
61,567,874 shares of Common Stock for issuance upon conversion of the Preferred
Stock. Except for (i) the conversion privileges of the Preferred Stock, (ii)
14,700,000 shares of Common Stock reserved for issuance pursuant to the
Company's 1989 Stock Option Plan, under which options to purchase 8,532,958
shares were outstanding as of February 7, 1997 and 4,225,928 shares were
available for future grant as of February 7, 1997, (iii) 100,000 shares reserved
for issuance pursuant to the Company's Sales Representative Stock Purchase Plan,
(iv) 131,250 shares of Series C Preferred Stock reserved for issuance pursuant
to the exercise of a warrant to purchase Series C Preferred Stock, and (v) the
rights provided in Section 3 of the Shareholders Agreement to the Shareholders
(as defined therein), at the Closing there will be no other outstanding rights
of first refusal, preemptive rights or other rights, options, warrants,
conversion rights, or other agreements either directly or indirectly for the
purchase or acquisition from the Company of any shares of its capital stock.
3.5 Authorization. All corporate action on the part of the Company,
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its officers, directors and shareholders necessary for the authorization,
execution, delivery and performance of the Transaction Agreements and for the
authorization, sale, issuance (or reservation for issuance) and delivery of the
Shares, and the performance of the Company's obligations under the Transaction
Agreements has been taken. The Transaction Agreements when executed and
delivered by the Company, will constitute legal, valid and binding obligations
of the Company enforceable against the Company in accordance with their
respective terms, except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights and, with respect to the Registration Rights Agreement, except
as the enforceability of Section 7 thereof may be limited by
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public policy. The Shares, when issued in compliance with provisions of this
Agreement, will be, validly issued, fully paid and nonassessable, and free of
any liens or encumbrances; provided, however, that the Shares may be subject to
restrictions on transfer under state and/or federal securities laws as set forth
herein. The Shares will be, assuming the accuracy of the representations set
forth in Section 4 hereof, issued in compliance with all applicable state and/or
federal securities laws. The Shares are not subject to any preemptive rights or
rights of first refusal except as have been waived or satisfied. Except as
provided in the Shareholders Agreement, the Company is not a party or subject to
any agreement or understanding, and, to the Company's knowledge, there is no
agreement or understanding between any persons and/or entities, which affects or
relates to the voting or giving of written consents with respect to any security
or by a director of the Company.
3.6 Financial Statements. The Company has delivered to Purchaser its
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audited financial statements (balance sheet, and statement of operations and
statement of cash flows and statement of shareholders' equity) for the years
ended December 31, 1996, 1995 and 1994 and its unaudited financial statements
(balance sheet, statement of operations, statement of cash flows and statement
of shareholders' equity) for the one (1) month period ended January 31, 1997
(collectively, the "Financial Statements"). The Financial Statements are
complete and correct in all material respects and have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis for the periods indicated and with each other. The Financial Statements
accurately set out and describe the financial condition and operating results of
the Company as of the dates, and for the periods, indicated therein, subject, in
the case of the unaudited financial statements, to normal year-end audit
adjustments. Except as set forth in the Financial Statements, the Company has
no liabilities, contingent or otherwise, other than (i) liabilities incurred in
the ordinary course of business and (ii) obligations under contracts and
commitments incurred in the ordinary course of business and not required under
generally accepted accounting principles to be reflected in the Financial
Statements, which, individually or in the aggregate, are not material to the
financial condition or operating results of the Company. The Company maintains
and will continue to maintain a standard system of accounting established and
administered in accordance with generally accepted accounting principles.
3.7 Title to Properties; Liens and Encumbrances. The Company has
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good and marketable title to all of its properties and assets. Such properties
and assets are not subject to any mortgage, pledge, lien, security interest,
conditional sales agreement, encumbrance or charge, except liens for current
taxes not yet due and payable. The Company is not in default or in breach and
has not received notice of default of any provision of its leases or licenses
and the Company holds valid leaseholds or licensed interests in the properties
which it leases or which is licensed to it. The Company's properties and assets
are in good condition and repair in all material respects.
3.8 Intellectual Property Rights. Except as disclosed in Exhibit A,
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the Company (a) owns or has the right to use, free and clear of all liens,
claims and restrictions, all patents, trademarks, service marks, trade names,
copyrights and other intangible or intellectual property rights (and licenses
with respect to the foregoing) needed for or used in the conduct of its business
as now conducted and as proposed to be conducted without infringing upon or
otherwise acting adversely to the right or claimed right of any person under or
with respect to any
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of the foregoing, and (b) is not obligated or under any liability whatsoever to
make any payments by way of royalties, fees or otherwise to any owner of,
licensor of, or other claimant to, any patent, trademark, trade name, copyright
or other intangible assets, with respect to the use thereof or in connection
with the conduct of its business or otherwise. Except as disclosed in Exhibit A,
the Company owns or has the unrestricted right to use all patents, trademarks,
service marks, trade names, copyrights, trade secrets, including know-how,
inventions, designs, processes, and technical data required for or incident to
the development, manufacture, operation and sale of all products and services
sold or proposed to be sold by the Company and all of the patents, trademarks,
service marks, trade names, copyrights and trade secrets of the Company are held
by the Company free and clear of any rights, licenses, liens or claims of
others, including, without limitation, current and former employees, former
employers of all current and former employees, consultants, officers, directors
and shareholders of the Company.
3.9 Proprietary Information Agreements. All employees and
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consultants of the Company are parties to a written agreement ("Proprietary
Information and Inventions Agreement") under which each such employee or
consultant (i) is obligated to disclose and transfer to the Company, without the
receipt by such person of any additional value therefor (other than normal
salary or fees for consulting services), all inventions, developments and
discoveries which, during the period of his employment with or performance of
services for the Company, he makes or conceives of either solely or jointly with
others, that relate to any subject matter with which his work for the Company
may be concerned, or relate to or are connected with the business, products or
projects of the Company, or involve the use of the time, material or facilities
of the Company, and (ii) is obligated to maintain the confidentiality of
proprietary information of the Company. To the best of the Company's knowledge,
none of the Company's employees or consultants, is in violation of the
Proprietary Information and Inventions Agreement to which such employee or
consultant is a party. None 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 their obligation to
use their best efforts to promote the interests of the Company or that would
conflict with the Company's business as conducted or as proposed to be
conducted. Neither the execution nor delivery of the Transaction Agreements,
nor the carrying on of the Company's business by its employees and consultants,
nor the conduct of the Company's 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 under which any of such
employees or consultants are now obligated. The Company does not believe it is
or will be necessary to utilize, and will not utilize, any inventions of any of
the Company's employees or consultants (or people it currently intends to hire)
made or owned prior to their employment 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. To the best of the
Company's knowledge, none of the Company's employees or consultants, have taken,
removed or made use of any proprietary documentation, manuals, products,
materials, or any other tangible item from his previous employer, and the
Company will not make use of any such proprietary items in the business of the
Company.
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3.10 Operating Rights. The Company has all operating authority,
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licenses, franchises, permits, certificates, consents, rights and privileges
(collectively, the "Permits") as are necessary or appropriate to the operation
of its business as now or as proposed to be conducted, the absence of which
would have a material and adverse effect on the business of the Company. Such
Permits are in full force and effect, no violations have been or are expected to
be recorded in respect of any such Permits, and no proceeding is pending or
threatened that could result in the revocation or limitation of any of such
Permits. The Company has conducted its business so as to comply in all respects
with all such material Permits.
3.11 Manufacturing, Distribution and License Rights. The Company has
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not granted rights or licenses to manufacture, assemble, distribute or sell its
products to any person or entity, is not bound by any agreement that affects the
Company's exclusive right to manufacture, assemble, distribute or sell its
products, and has not licensed or sold any of its technology or proprietary
information to any person or entity.
3.12 Compliance with Other Instruments, None Burdensome, etc. The
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Company is not in violation of any term of its Articles or Bylaws. The Company
is not in violation of any term or provision of any material mortgage,
indenture, contract, agreement, instrument, judgment or decree and the Company
is not in violation of any applicable order, statute, rule or regulation where
such violation could have a material and adverse effect on the Company. The
execution, delivery and performance of and compliance with this Agreement and
the other Transaction Agreements and the issuance of the Shares have not
resulted and will not result in any violation of or conflict with the Company's
Articles or Bylaws, and have not resulted and will not result in any violation
of, or be in conflict with, or constitute a default under, or result in the
creation of, any mortgage, pledge, lien, encumbrance or charge upon any of the
properties or assets of the Company; and there is no such violation or default
or event which, with the passage of time or giving of notice or both, would
constitute a violation or default which would materially and adversely affect
the business of the Company or any of its properties or assets.
3.13 Litigation, etc. Except as disclosed in Exhibit A, there are no
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actions, suits proceedings or investigations pending against the Company or its
properties before any court or governmental agency (nor is there any threat
thereof) which, either in any case or in the aggregate, might result in any
material adverse change in the business or financial condition of the Company or
any of its properties or assets, or in any material impairment of the right or
ability of the Company to carry on its business as now conducted or as proposed
to be conducted, or in any material liability on the part of the Company, and
none which questions the validity of this Agreement and the other Transaction
Agreements or any action taken or to be taken in connection herewith or
therewith. The Company is not a party or subject to the provisions of any
order, writ, injunction, judgment or decree of any court or governmental agency
or instrumentality. 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, their 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 agreement with prior
employers.
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There is no action, suit, proceeding or investigation by the Company currently
pending or which the Company intends to initiate.
3.14 Employee Compensation Plans. Except for the Company's 1989 Stock
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Option Plan and 1991 Sales Representative Stock Purchase Plan, the Company is
not a party to or bound by any currently effective employment contract, deferred
compensation agreement, benefit plan, pension, profit-sharing plan, stock
option, retirement agreement, or other employee compensation agreement. The
Company has provided copies of all such plans, contracts, and agreements to
which the Company is currently a party. The Company is not bound by or subject
to (and none of its assets are bound by or subject to) any arrangement with any
labor union and does not have any collective bargaining agreements covering any
of its employees.
3.15 Insurance. The Company has obtained and maintained in full force
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and effect fire, casualty and liability insurance policies with recognized
insurers with such coverages as are carried by similar companies, sufficient in
amount to allow replacement of the tangible properties of the Company that might
be damaged or destroyed.
3.16 Registration Rights. Except as contemplated by this Agreement
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and the Registration Rights Agreement, the Company is not under any obligation
to register any of its presently outstanding securities or any of its securities
which may hereafter be issued.
3.17 Governmental Consent, etc. No consent, approval or authorization
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of, or designation, declaration or filing with, any governmental authority on
the part of the Company is required in connection with the valid execution,
delivery, and performance of this Agreement and the other Transaction Agreements
or the offer, sale or issuance of the Shares, or the consummation of any other
transaction contemplated by this Agreement and the other Transaction Agreements
except certain filings as may be required under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, as amended, the Securities Act of 1933, as amended
(the "Securities Act"), the California Corporations Code and the securities laws
of other states in which Purchasers reside.
3.18 Offering. Subject to the accuracy of the Purchaser's
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representations in Section 4 hereof, the offer, sale and issuance of the Shares
constitute transactions exempt from the registration requirements of Section 5
of the Securities Act, and from the qualification requirements of applicable
state or other securities laws.
3.19 Material Contracts and Obligations. Set forth in Exhibit A
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hereto is a list of all agreements, contracts, indebtedness, liabilities and
other obligations to which the Company is a party or by which the Company is
bound that are material to the conduct and operations of its business,
properties and prospects, that provide for payments to or by the Company in
excess of $80,000, that relate to any product or technology the Company is
developing, or that involve transactions or proposed transactions between the
Company and its officers or directors. All of such agreements and contracts are
valid, binding and in full force and effect in all material respects, assuming
due execution by the other parties to such agreements and contracts.
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3.20 Tax Returns and Payments. The Company has accurately prepared
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and timely filed all tax returns (foreign, federal, state and local) required to
be filed by it. All taxes shown to be due and payable on said returns, any
assessments received, and all other taxes due and payable by the Company on or
before the date hereof have been paid or will be paid prior to the time they
become delinquent. The federal income tax returns of the Company have not been
audited by the Internal Revenue Service. No deficiency assessment or proposed
adjustment of the Company's foreign or federal income tax or state or local
taxes is pending and the Company has no knowledge of any proposed liability for
any tax to be imposed upon its properties or assets for which the Company has
not adequately reserved.
3.21 Related Party Transactions. No officer or director of the
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Company (a) is an officer, director or general partner of, or directly or
indirectly owns beneficially more than 5% of the equity of, any business which
(i) furnishes or sells services or products which compete with services or
products furnished or sold by the Company, or (ii) purchases from or sells or
furnishes to the Company any goods or services on terms less favorable than the
Company could obtain from third parties on an arms-length basis, or (b) has a
beneficial interest in any contract or agreement to which the Company is a party
or by which it may be bound or affected involving the payment or receipt of in
excess of $10,000.
3.22 Certain Transactions. Except as set forth on Exhibit A attached
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hereto, the Company is not indebted, directly or indirectly, to any of its
officers, directors or shareholders or to their respective spouses or children,
in any amount whatsoever; none of such officers, directors, or shareholders, or
any members of their immediate families, are indebted to the Company or have any
direct or indirect ownership interest in any firm or corporation with which the
Company has a business relationship, or any firm or corporation that competes
with the Company. No officer, director or shareholder, or any member of their
immediate families, is, directly or indirectly, interested in any material
contract with the Company. The Company is not a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation.
3.23 Environmental Protection. Except as disclosed in Exhibit A:
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(a) The Company has not caused or allowed, nor has the Company
contracted with any party for, the generation, use, transportation, treatment,
storage or disposal of any Hazardous Substances (as defined below) in connection
with the operations of its business or otherwise.
(b) The Company, the operations of its business, and any real
property that the Company owns, leases, or otherwise occupies or uses (the
"Premises") are in compliance with all applicable Environmental Laws (as defined
below) and orders or directives of any governmental authorities having
jurisdiction under such Environmental Laws including, without limitation, any
Environmental Laws or orders or directives with respect to any cleanup or
remediation of any release or threat of release of Hazardous Substances.
(c) The Company has not received any citation, directive, letter or
other communication, written or oral, or any notice of any proceedings, claims
or lawsuits, from
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any person, entity or governmental authority arising out of the ownership or
occupation of the Premises, or the conduct of its operations, nor is it aware of
any basis therefor.
(d) The Company has obtained and is maintaining in full force and
effect all necessary permits, licenses and approvals required by any
Environmental Laws applicable to the Premises and the business operations
conducted thereon (including operations conducted by tenants on the Premises)
and is in compliance with all such permits, licenses and approvals.
(e) The Company has not caused, or allowed a release, or a threat of
release, of any Hazardous Substance onto, at or near the Premises nor, to the
best of the Company's knowledge, has the Premises or any property at or near the
Premises ever been subject to a release, or a threat of release, of any
Hazardous Substance.
The term "Environmental Laws" shall mean any federal, state or local
law, ordinance or regulation pertaining to the protection of human health or the
environment including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Sections 9601, et seq.,
Emergency Planning and Community Right-to-Know Act, 42 U.S.C. Sections 11001, et
seq., and the Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901,
et seq.
The term "Hazardous Substance" includes oil and petroleum products,
asbestos, polychlorinated biphenyls and urea formaldehyde, and any other
materials classified as hazardous or toxic under any Environmental Laws.
3.24 Brokers or Finders. The Company has not incurred, directly or
------------------
indirectly, any liability for brokerage or finders' fees, agent's commission, or
other similar charges in connection with this Agreement or any of the
transactions contemplated hereby.
3.25 Changes. Since January 31, 1997, there has not been:
-------
(a) any changes in the assets, liabilities, financial condition,
operating results or prospects of the Company from that reflected in the
Financial Statements, except changes in the ordinary course of business which
have not been, in the aggregate, materially adverse;
(b) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the assets, properties, financial
condition, operating results, prospects or business of the Company (as such
business is presently conducted and as it is proposed to be conducted);
(c) any waiver by the Company of a valuable right or of a material
debt owed to it;
-9-
(d) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by the Company, except in the ordinary
course of business and which is not material to the assets, properties,
financial condition, operating results, prospects or business of the Company (as
such business is presently conducted and as it is proposed to be conducted);
(e) any change or amendment to a material contract or
arrangement by which the Company or any of its assets or properties is bound or
subject;
(f) any material change in any compensation arrangement or
agreement with any employee; or
(g) to the Company's knowledge, any other event or condition of
any character which might materially and adversely affect the assets,
properties, financial condition, operating results, prospects or business of the
Company (as such business is presently conducted and as it is proposed to be
conducted).
3.26 Foreign Investment in Real Property Act. The Company is not a
---------------------------------------
"United States real property holding corporation" for the purposes of Section
897(c)(2) of the Internal Revenue Code of The United States of America and the
Treasury Regulations thereunder ("FIRPTA").
3.27 Disclosure. No statement by the Company contained in the
----------
Transaction Agreements, nor any written statement or certificate furnished or to
be furnished to the Purchaser in connection with the transactions contemplated
hereby including without limitation the Business Plan (when read with other
documents so furnished) contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances under
which they were made except that, with respect to the financial projections
given by the Company, the Company only represents that such projections where
made in good faith.
4. Representations and Warranties of the Purchaser. Purchaser represents
-----------------------------------------------
and warrants to the Company with respect to the purchase of the Shares as of the
Original Date as follows:
4.1 Authorization. All action on the part of the Purchaser necessary
-------------
for the authorization, execution, delivery and performance by the Purchaser of
the Transaction Agreements has been taken, and the Transaction Agreements when
executed and delivered by the Purchaser constituted valid and binding
obligations of the Purchaser, enforceable in accordance with their terms, except
as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditor's rights
and, with respect to the Amended Registration Rights Agreement, except as the
enforceability of Section 7 thereof may be limited by public policy.
4.2 Experience. The Purchaser is experienced in evaluating and
----------
investing in new high technology companies such as the Company.
-10-
4.3 Investment. The Purchaser is acquiring the Shares for
----------
investment, for its own account, and not with a view to, or for resale in
connection with, any distribution. The Purchaser understands that the Shares
have not been, and will not be (except as contemplated in the Registration
Rights Agreement) registered under the Securities Act or applicable state or
other securities laws by reason of a specific exemption from the registration
provisions of the Securities Act and applicable state and other securities laws
which depends upon, among other things, the bona fide nature of the investment
intent as expressed herein.
4.4 Rule 144. The Purchaser acknowledges that the Shares must be
--------
held indefinitely unless subsequently registered under the Securities Act and
applicable state and other securities laws or unless an exemption from such
registration is available. The Purchaser is aware of the provisions of Rule 144
promulgated under the Securities Act which permit limited resale of shares
purchased in a private placement subject to the satisfaction of certain
conditions.
4.5 No Public Market. The Purchaser understands that no public
----------------
market now exists for the Shares and that it is unlikely that a public market
will ever exist for the Shares.
4.6 Access to Data. The Purchaser has had an opportunity to discuss
--------------
the Company's business, management and financial affairs with the Company's
management and an opportunity to review the Company's facilities. The Purchaser
understands that such discussions, as well as the written information issued by
the Company, were intended to describe the aspects of the Company's business and
prospects which it believes to be material but were not necessarily a thorough
or exhaustive description.
4.7 Further Limitations on Dispositions. Without in any way limiting
-----------------------------------
the representations set forth above, the Purchaser further agrees that, if at
the time of any transfer of any Shares, such Shares shall not be registered
under the Securities Act, prior to any disposition of all or any portion of the
Shares, the Company may require, as a condition of allowing such transfer, that
the holder or transferee furnish to the Company (i) such information as is
necessary in order to establish that such transfer may be made without
registration under the Securities Act; and (ii) at the expense of the holder or
transferee, an opinion by legal counsel designated by such holder or transferee
and reasonably satisfactory in form and substance to the Company, to the effect
that such transfer may be made without registration under the Securities Act.
Notwithstanding the foregoing, no such opinion of counsel shall be necessary for
a transfer pursuant to Rule 144 of the Securities and Exchange Commission or by
a Purchaser which is a partnership to a partner of such partnership or a retired
partner of such partnership who retires after the date hereof, or to the estate
of any such partner or retired partner or to any person or entity that is deemed
to be an "affiliate" of the Purchaser for purposes of the Securities Act.
5. Conditions to Purchaser's Obligations at the Closing. The Purchaser's
----------------------------------------------------
right to receive the Shares and obligations under the Termination Agreement and
other Transaction Agreements shall be subject to the following conditions prior
to the date for closing (the "Closing Date"), any of which may be waived in
whole or in part by the Purchaser.
-11-
5.1 Representations and Warranties Correct. The representations and
--------------------------------------
warranties made by the Company in Section 3 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 same date.
5.2 Covenants. All covenants, agreements, and conditions in this
---------
Agreement required to be performed or complied with by the Company on or prior
to such Closing Date shall have been performed or complied with by the Company.
5.3 Good Standing Certificates. The Company shall have delivered a
--------------------------
Certificate dated as of a recent date issued by the Secretary of State of the
State of California to the effect that the Company is legally existing and in
good standing and a letter dated as of a recent date from the Franchise Tax
Board of the State of California to the effect that the Company is in good
standing.
5.4 Secretary's Certificate. The Company shall have delivered a
-----------------------
certificate executed by the Secretary or Assistant Secretary of the Company
dated such Closing Date, certifying the following matters: (a) the resolutions
adopted by the Company's Board of Directors and shareholders relating to the
transactions contemplated by this Agreement; (b) the Articles of the Company;
(c) the Bylaws of the Company; and (d) incumbency of officers of the Company.
5.5 Legal Investment. At such Closing Date, the issuance of the
----------------
Shares to the Purchaser hereunder shall be legally permitted by all laws and
regulations to which the Purchaser and the Company are subject.
6. Conditions to Company's Obligations at the Closing. The Company's
--------------------------------------------------
obligation to deliver the Shares is subject to the fulfillment at or prior to
the Closing Date of the following conditions, any of which may be waived in
whole or in part by the Company in accordance with the provisions of Section 7.2
hereof:
6.1 Representations and Warranties Correct. The representations and
--------------------------------------
warranties made by the Purchaser 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 or as of the same date.
7. Miscellaneous.
-------------
7.1 Waivers and Amendments. With the written consent of the
----------------------
Purchaser, the obligations of the Company 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.
-12-
7.2 Governing Law. This Agreement shall be governed in all respects
-------------
by the laws of the State of California as such laws are applied to agreements
between California residents entered into and to be performed entirely within
California.
7.3 Survival. The representations, warranties, covenants and
--------
agreements made herein shall survive any investigation made by the Purchaser and
the closing of the transactions contemplated hereby. All statements as to
factual matters contained in any certificate or other instrument delivered by or
on behalf of the Company pursuant hereto or in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the
Company hereunder 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; Termination of Prior Agreement. This Agreement
------------------------------------------------
constitutes the full and entire understanding and agreement between the parties
with regard to the subjects hereof. Without limiting the foregoing, the Prior
Agreement shall be terminated as of the date hereof and shall be superseded and
replaced in its entirety by this Agreement.
7.6 Severability of this Agreement. In case any provision of this
------------------------------
Agreement shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
7.7 Finder's Fees. The Company represents and warrants that it has
-------------
retained no finder or broker in connection with the transactions contemplated by
this Agreement and hereby agrees to indemnify and to hold the Purchaser harmless
of and from any liability for commission or compensation in the nature of a
finder's fee to any broker or other person or firm (and the costs and expenses
of defending against such liability or asserted liability) for which the
Company, or any of its employees or representatives, are responsible. Each
Purchaser represents and warrants that such Purchaser has retained no finder or
broker in connection with the transactions contemplated by this Agreement and
hereby agrees to indemnify and to hold the Company harmless of and from any
liability for any commission or compensation in the nature of a finder's fee to
any broker or other person or firm (and the costs and expenses of defending
against such liability or asserted liability) for which such Purchaser, or any
of its employees or representatives, are responsible.
7.8 Legends. Each certificate representing the Shares shall be
-------
endorsed with a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT COVERING SUCH SECURITIES, THE SALE IS
MADE IN
-13-
ACCORDANCE WITH RULE 144 OR ITS SUCCESSOR RULE UNDER THE ACT, OR THE
COMPANY RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
Each certificate representing the Shares shall also bear any legend required by
any applicable state securities law. The Company need not register a transfer of
Shares, unless the conditions specified in the foregoing legends are satisfied.
The Company may also instruct its transfer agent not to register the transfer of
any of the Shares unless the conditions specified in the foregoing legend is
satisfied.
7.9 Removal of Legends and Transfer Restrictions. The legend
--------------------------------------------
relating to the Securities Act endorsed on a stock certificate pursuant to
Section 7.9 of this Agreement and the stop transfer instructions with respect to
the Shares represented by such certificate shall be removed and the Company
shall issue a certificate without such legend to the holder of such Shares if
such Shares are registered under the Securities Act and a pros pectus meeting
the requirements of Section 10 of the Securities Act is available or if such
holder provides to the Company an opinion of counsel reasonably satisfactory to
the Company to the effect that a public sale, transfer or assignment may be made
without registration or if the Shares may be sold pursuant to Rule 144(k) of the
Securities Act of 1933.
7.10 Titles and Subtitles. The titles of the sections and subsections
--------------------
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
7.11 Counterparts. This Agreement may be executed in counterparts,
------------
each of which shall be an original, but all of which together shall constitute
one instrument.
7.12 Delays or Omissions. It is agreed that no delay or omission to
-------------------
exercise any right, power or remedy accruing to any Purchaser, upon any breach
or default of the Company under this Agreement, shall impair any such right,
power or remedy, nor shall it be construed to be a waiver of any such breach or
default, or any acquiescence therein, or of 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. It is further agreed that any waiver, permit, consent or approval of
any kind or character by any Purchaser of any breach or default under this
Agreement, or any waiver by any Purchaser of any provisions or conditions of
this Agreement must be in writing and shall be effective only to the extent
specifically set forth in writing and that all remedies, either under this
Agreement, or by law or otherwise afforded to the Purchaser, shall be cumulative
and not alternative.
7.13 Notices. All notices and other communications required or
-------
permitted hereunder shall be in writing and shall be deemed effectively given
upon personal delivery or upon deposit with the United Stated Post Office, by
first class mail, postage prepaid, addressed: (a) if to Purchaser, at the
Purchaser's address as set forth below, or at such other address as such
Purchaser shall have furnished to the Company in writing, or (b) if to the
Company, at the
-14-
Company's address as set forth below, or at such other address as the Company
shall have furnished to the Purchaser in writing:
Cypress Semiconductor Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇.▇. ▇▇▇▇▇▇▇
To the Company:
---------------
QuickLogic Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇. ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: E. ▇▇▇▇▇▇ ▇▇▇▇
[SIGNATURE PAGE FOLLOWS]
-15-
IN WITNESS WHEREOF, the parties have caused this First Amended and Restated
Common Stock Purchase Agreement to be duly executed and delivered by their
proper and duly authorized officers as of the day and year first written above.
"THE COMPANY"
QUICKLOGIC CORPORATION
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
By________________________________
Vice President and Chief Financial Officer
Title__________________________________________
"PURCHASER"
CYPRESS SEMICONDUCTOR
CORPORATION
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
By________________________________
Chief Financial Officer
Title_____________________________
-16-
EXHIBIT A
---------
QUICKLOGIC CORPORATION
COMMON STOCK PURCHASE AGREEMENT
SCHEDULE OF EXCEPTIONS
The disclosures set forth in this Schedule of Exceptions are itemized to
correspond to the first or principal section of the QuickLogic Corporation
Common Stock Purchase Agreement (the "Agreement") to which they relate. Each of
the disclosures made herein shall qualify each of the sections of the Agreement
to which they relate.
While no specific reference herein is made to the Termination Agreement
(and the exhibits thereto) , the provisions thereof shall be deemed to qualify
any applicable representations and warranties made by QuickLogic in the
Agreement.
Section 3.7 Title to Properties; Liens and Encumbrances.
-------------------------------------------
The Company owns no real property. The Company has purchased certain
office and manufacturing equipment used in its business. The aggregate value of
such equipment is approximately $2,400,000.
Section 3.8 Intellectual Property Rights.
----------------------------
With respect to the representation that the Company has the unrestricted
right to use all trade secrets, including know-how, inventions, design processes
and technical data, the Company has not conducted an investigation or audit of
its or third parties' intellectual property rights or its or third parties'
proprietary rights, nor has it retained intellectual property counsel for that
purpose. The exceptions to the representations contained in Section 3.8 that
the Company is currently aware are set forth below.
Licenses.
--------
The Company has granted certain technology license rights and manufacturing
rights to VLSI Technology, Inc. ("VLSI") pursuant to an agreement dated May 9,
1990, as amended (the "VLSI" Agreement").
-1-
Actel Litigation.
----------------
On January 20, 1994, Actel Corporation filed suit against QuickLogic
alleging infringement by QuickLogic of U.S. Patents No. 4,758,745; 4,873,459;
5,055,718; and 5,198,705, and seeking damages and injunctive relief. On or
about February 10, 1994, QuickLogic filed an answer and counter-claim seeking in
the counter-claim a declaration that each of the patents alleged to be infringed
was not infringed and in addition that each of the patents upon which suit was
brought was invalid, void and unenforceable. Discovery has begun. QuickLogic
moved to stay proceedings pending reexamination of two patents involved in the
litigation and the court granted this motion in early Summer 1994. The United
States Patent and Trademark Office confirmed the patentability of the two Actel
patents placed in reexamination (the '745 and the '459 patents) in late summer
and early fall 1994. The court then lifted the stay in late November 1994 and
shortly thereafter Actel filed a motion for summary judgment with respect to the
interpretation claim 1 of the '705 patent and its infringement which QuickLogic
opposed. On October 4, 1996, the Special Master recommended that Actel's motion
be granted; QuickLogic has objected to this recommendation. (The recommendation
does not address the validity of claim 1 of the '705 patent. Validity must
still be resolved by the court or at trial.) A hearing on the recommendation
was held on January 27, 1997 and February 3, 1997, but Judge ▇▇▇▇ has not yet
issued his ruling.
Actel on or about March 15, 1995 amended its complaint to add to the suit
U.S. Patent No. 5,367,208 (the "'208 patent"), a patent which issued on November
22, 1994 and which is assigned to Actel. On or about April 12, 1995, QuickLogic
filed a counterclaim against Actel alleging infringement by Actel of QuickLogic
U.S. Patents No. 5,220,213 (the "'213 patent") entitled "Programmable
Application in Specific Integrated Circuit and Logic Cell Therefore" and
5,396,127 (the "'127 patent"), entitled "Programmable Application in Specific
Integrated Circuit and Logic Cell Therefore". This counterclaim was in response
to the amended complaint filed by Actel against QuickLogic on or about March 15,
1995. On ▇▇▇▇▇ ▇, ▇▇▇▇, ▇▇▇▇▇ filed its second supplemental complaint, which
alleged patent infringement of Actel U.S. Patent No. 5,479,113 (the "'113
patent"), entitled "User-Configurable Logic Circuits Comprising Antifuses and
Multiplexer-Based Logic Modules." QuickLogic filed its answer, denying these
allegations, on April 12, 1995. On June 14, 1995, Actel again amended its
complaint to include counterclaims against QuickLogic and ▇▇▇▇ ▇▇▇▇▇▇▇ for
misappropriation of trade secrets, breach of contract, breach of confidential
relationship, unfair competition and assignment of patents. ▇▇. ▇▇▇▇▇▇▇ and
QuickLogic denied each of these claims, in replies to Actel's counterclaims,
filed July 5, 1995 and July 7, 1995, respectively.
On January 14, 1997, U.S. Patent No. 5,594,364, entitled "Programmable
Application Specific Integrated Circuit and Logic Cell Therefore" (the "'364
patent") was issued to QuickLogic. On February 28, 1997, QuickLogic filed a
motion to amend its counterclaim to include a claim for patent infringement of
the '364 patent. A hearing on this motion will be held before the Special
Master on April 23, 1997.
-2-
The parties have each made summary judgment motions covering various claims
of the patents in dispute. No hearing dates on these motions have been set.
For much of 1996 the parties were embroiled in a dispute concerning the
disqualification of Actel's former counsel who was replaced after Judge ▇▇▇▇
ruled in favor of QuickLogic's motion to disqualify the former counsel and
Actel's appeal to the Federal Circuit Court of Appeals was unsuccessful.
Both parties are engaged in discovery. A discovery cut off of January 30,
1998 has been set in the case. No trial date has been set, but both parties
have requested that the trial be held in the fourth quarter of 1998.
Instant Circuit Corporation
---------------------------
The Company has received correspondence from Instant Circuit Corporation
"ICC") alleging that the Company's technology may infringe one or more of ICC's
patents. The Company and its patent counsel have reviewed the ICC patents and
have notified ICC that the Company does not believe that the Company's
technology infringes ICC's patents. ICC has responded by letter dated February
5, 1992 reiterating its belief that the Company's products infringe ICC's
patents, but indicating ICC's intent to wait to see whether the Company's
products are successful in the marketplace before pursuing the matter. The
Company has not heard anything further from ICC since that date.
Xilinx
------
On June 12, 1992, the Company received a letter from Xilinx requesting the
Company to review Xilinx's patent 4,870,302 entitled "Configurable Electrical
Circuit Having Configurable Logic Elements and Configurable Interconnects" and
stating Xilinx's belief that at least one claim under that patent is infringed
by the Company's products. No litigation has been instituted by Xilinx, and
there has been no correspondence between the Company and Xilinx regarding this
matter during the year preceding the .Closing Date. While the Company does not
believe that there is any basis for a legal claim by Xilinx, there can be no
assurance that Xilinx will not elect to take further legal action in the future.
Such legal action, if instituted, could have a material adverse effect on the
Company's business.
▇▇▇▇ ▇▇▇▇▇▇▇▇
-------------
California EDD has filed a claim against the Company relating to services
rendered by ▇▇▇▇ ▇▇▇▇▇▇▇▇. The Company expects to settle the claim for less
than $25,000.
See disclosure under Section 3.9.
-3-
Section 3.9 Proprietary Information Agreements.
----------------------------------
Actel has claimed that QuickLogic has misappropriated the trade secrets of
Actel based, at least in part, upon the fact that ▇▇▇▇ ▇▇▇▇▇▇▇, a founder of
QuickLogic, performed consulting services for Actel prior to and allegedly after
joining the Company.
Section 3.11 Manufacturing, Distribution and License Rights.
----------------------------------------------
The Company has granted certain rights to VLSI and Cypress pursuant to the
VLSI Agreement and the Cypress Agreement, respectively. The Company has entered
into an MOU with TSMC U.S.A. providing for the acquisition of eight (8) inch
wafers.
Section 3.13 Litigation.
----------
See the discussion of the Actel, Xilinx and ICC and other issues discussed
in Section 3.8 above.
Section 3.17 Governmental Consent.
--------------------
See Section 3.5.
Section 3.19 Material Contracts and Obligations.
----------------------------------
The following is a list of all agreements and obligations described in
Section 3.19:
1. VLSI Agreement.
2. The Company has entered into a lease agreement for its new
facility at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇. The lease
expires on November 26, 2003.
3. Software OEM Distribution Agreement with Data I/O, Inc. pursuant
to which the Company obtained rights to sublicense certain Data
I/O software on an OEM basis. The Company is required to make
annual royalty payments of up to $100,000 to Data I/O pursuant to
this Agreement.
4. Employee Restricted Stock Purchase Agreements between the Company
and each of the founders and option agreements with persons who
have been granted options.
The Company also has outstanding miscellaneous licensing agreements
with entities including Synplicity, SimuCad, Doulos, Saros, Premia and Data I/O.
None of these agreements currently involve annual payment obligations in excess
of $80,000.
-4-
Section 3.21 Related Party Transactions. The Company has entered into the
---------------------------
Cypress Agreement with Cypress. See also Section 3.22 below regarding loans to
▇▇▇▇ ▇▇▇▇▇▇▇ and from certain shareholders of the Company. In addition to the
existing relationships directly between the Company and Cypress, ▇▇▇▇▇▇ ▇▇▇▇▇▇,
a partner in the Sequoia Capital venture funds, is a director of Cypress. ▇▇▇▇
▇▇▇▇▇▇▇, a director of the Company, is also a partner in the Sequoia Capital
venture funds.
Section 3.22 Certain Transactions.
--------------------
The Company has loaned ▇▇▇▇ ▇▇▇▇▇▇▇ $114,000, plus interest, evidenced by
demand promissory notes from ▇▇. ▇▇▇▇▇▇▇ to the Company secured by a pledge of
▇▇. ▇▇▇▇▇▇▇'▇ shares of the Company's stock. These loans were approved by the
Company's Board of Directors and shareholders.
-5-