EXHIBIT 10.6
METAWAVE COMMUNICATIONS CORPORATION
AMENDED AND RESTATED SERIES E SENIOR PREFERRED STOCK
AND CONVERTIBLE NOTE PURCHASE AGREEMENT
April 28, 1999
TABLE OF CONTENTS
Page
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1. Purchase and Sale of Stock and Convertible Promissory Notes............................................... 2
1.1 Sale and Issuance of Series D Preferred Stock.................................................. 2
1.2 Sale and Issuance of Convertible Promissory Notes.............................................. 2
1.3 Closing........................................................................................ 2
2. Representations and Warranties of the Company............................................................. 3
2.1 Organization, Good Standing and Qualification.................................................. 3
2.2 Corporate Power................................................................................ 3
2.3 Capitalization and Voting Rights............................................................... 4
2.4 Subsidiaries................................................................................... 5
2.5 Authorization.................................................................................. 6
2.6 Valid Issuance of Preferred and Common Stock................................................... 6
2.7 Governmental Consents.......................................................................... 6
2.8 Offering....................................................................................... 7
2.9 Returns and Complaints......................................................................... 7
2.10 Litigation..................................................................................... 7
2.11 Proprietary Information........................................................................ 7
2.12 Patents and Trademarks......................................................................... 7
2.13 Compliance with Other Instruments.............................................................. 8
2.14 Agreements; Action............................................................................. 9
2.15 Related-Party Transactions.................................................................... 10
2.16 Permits....................................................................................... 10
2.17 Environmental and Safety Laws................................................................. 10
2.18 Manufacturing and Marketing Rights............................................................ 10
2.19 Disclosure.................................................................................... 10
2.20 Registration Rights........................................................................... 11
2.21 Corporate Documents........................................................................... 11
2.22 Title to Property and Assets.................................................................. 11
2.23 Financial Statements.......................................................................... 11
2.24 Changes....................................................................................... 11
2.25 Employee Benefit Plans........................................................................ 13
2.26 Tax Returns, Payments and Elections........................................................... 13
2.27 Insurance..................................................................................... 13
2.28 Minute Books.................................................................................. 13
2.29 Labor Agreements and Actions.................................................................. 13
2.30 Voting Agreements............................................................................. 14
2.31 Outstanding Debt.............................................................................. 14
2.32 Real Property Holding Corporation Status...................................................... 14
2.33 Use of Proceeds............................................................................... 14
TABLE OF CONTENTS
(continued)
Page
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3. Representations and Warranties of the Investors......................................................... 14
3.1 Authorization................................................................................. 14
3.2 Purchase Entirely for Own Account............................................................. 15
3.3 Disclosure of Information..................................................................... 15
3.4 Investment Experience......................................................................... 15
3.5 Accredited Investor........................................................................... 15
3.6 Restricted Securities......................................................................... 16
3.7 Further Limitations on Disposition............................................................ 17
3.8 Legends....................................................................................... 18
4. Conditions of Investor's Obligations at Closing......................................................... 18
4.1 Representations and Warranties................................................................ 18
4.2 Performance................................................................................... 18
4.3 Compliance Certificate........................................................................ 18
4.4 Qualifications................................................................................ 19
4.5 Proceedings and Documents..................................................................... 19
4.6 Bylaws........................................................................................ 19
4.7 Board of Directors............................................................................ 19
4.8 Opinion of Company Counsel.................................................................... 19
4.8 Investors' Rights Agreement................................................................... 19
4.10 Consents and Waivers.......................................................................... 19
4.11 Adjustment to Prior Issuances of Series E Preferred Stock..................................... 19
5. Conditions of the Company's Obligations at Closing...................................................... 19
5.1 Representations and Warranties................................................................ 19
5.2 Payment of Purchase Price..................................................................... 19
5.3 Qualifications................................................................................ 20
6. HSR Act Filings......................................................................................... 20
7. Miscellaneous........................................................................................... 20
7.1 Survival of Warranties........................................................................ 20
7.2 Successors and Assigns........................................................................ 20
7.3 Governing Law................................................................................. 20
7.4 Counterparts.................................................................................. 20
7.5 Titles and Subtitles.......................................................................... 20
7.6 Notices....................................................................................... 20
7.7 Finder's Fee.................................................................................. 21
7.8 Expenses...................................................................................... 21
7.9 Amendments and Waivers........................................................................ 21
7.10 Severability.................................................................................. 21
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TABLE OF CONTENTS
(continued)
Page
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7.11 Aggregation of Stock......................................................................... 21
7.12 Entire Agreement............................................................................. 21
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Schedule A-1
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and A-2 Schedule of Investors
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Schedule B Schedule of Exceptions
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Exhibit A Fifth Amended and Restated Certificate of Incorporation
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Exhibit B Fifth Amended and Restated Investors' Rights Agreement
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Exhibit C List of Stockholders
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Exhibit D Opinion of Counsel for the Company
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Exhibit E Addendum Agreement
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Exhibit F Convertible Note
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AMENDED AND RESTATED SERIES E PREFERRED STOCK AND
CONVERTIBLE NOTE PURCHASE AGREEMENT
THIS AMENDED AND RESTATED SERIES E SENIOR PREFERRED STOCK AND CONVERTIBLE
NOTE PURCHASE AGREEMENT is made as of the 28th day of April, 1999 (this
"Agreement"), by and among Metawave Communications Corporation, a Delaware
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corporation (the "Company"), and the investors listed on Schedule A hereto, each
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of which is herein referred to as an "Investor."
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THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock and Convertible Promissory Notes
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1.1 Sale and Issuance of Series E Senior Preferred Stock
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Subject to the terms and conditions of this Agreement, each Investor
(except those Investors that must sign convertible notes, as defined below)
agrees, severally, to purchase at the Closing and the Company agrees to sell and
issue to each Investor at the Closing, that number of shares of the Company's
Series E Preferred Stock set forth opposite each Investor's name on Schedule A
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hereto for a purchase price of $5.00 per share. The Investors who are
purchasing Series E Preferred Stock pursuant to this Section 1.1 are referred to
herein as the "Stock Purchasers."
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1.2 Sale and Issuance of Convertible Promissory Notes.
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Subject to the terms and conditions of this Agreement, those Investors
executing a convertible note (collectively, the "Note Purchasers" and
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individually, a "Note Purchaser") each agrees to purchase at the Closing and the
Company agrees to sell and issue to the Note Purchasers a convertible promissory
note in substantially the form attached hereto as Exhibit F (a "Note" and
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collectively, the "Notes") in the principal amount specified with respect to the
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Note Purchaser on Schedule A to this Agreement. The purchase price of each Note
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shall be equal to 100% of the principal amount of such Note. The Company's
agreement with the Note Purchasers is a separate agreement, and the sales of the
Notes to the Note Purchasers is a separate sale.
1.3 Closings
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(a) The purchase and sale of the Series E Preferred Stock and the Notes
shall take place at the offices of Venture Law Group, ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, at 9:00 a.m., on April 28, 1999, (assuming that all
conditions to closing have been satisfied), or at such other time and place as
the Company and the Stock Purchasers acquiring in the aggregate more than half
the shares of Series E Preferred Stock sold pursuant hereto and the Note
Purchasers purchasing a majority of the principal amount of the Notes sold
pursuant hereto mutually agree upon orally or in writing (which time and place
are designated as the "Closing"). At the Closing, or pursuant to the terms of
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any convertible debt, the Company shall (i) deliver to each Stock
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Purchaser a certificate representing the Series E Preferred Stock that such
Stock Purchaser is purchasing against payment of the purchase price therefor by
wire transfer in same day funds, or cancellation of indebtedness, or any
combination thereof, (ii) deliver to the Note Purchasers the Notes to be
purchased by the Note Purchasers against payment of the purchase price therefor
by wire transfer in same day funds or cancellation of indebtedness or any
combination thereof.
(b) If the full number of the authorized shares of Series E Preferred
Stock of the Company is not sold at the Closing, the Company shall have the
right, at any time on or before June 28, 1999, to sell the remaining authorized
but unissued shares of Series E Preferred Stock to one or more additional
purchasers as determined by the Company, or to any Investor hereunder who wishes
to acquire additional shares of Series E Preferred Stock at the price and on the
terms set forth herein, provided that any such additional purchaser shall be
required to execute an Addendum Agreement substantially in the form attached
hereto as Exhibit E. Any additional purchaser so acquiring shares of Series E
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Preferred Stock shall be considered an "Investor" for purposes of this Agreement
and the Fifth Amended and Restated Investors Rights Agreement dated as of the
date hereof (the "Investors' Rights Agreement") and attached hereto as Exhibit B
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and shall have the rights and obligations hereunder and thereunder, and any
Series E Preferred Stock so acquired by such additional purchaser shall be
considered Series E Preferred Stock for purposes of this Agreement and all other
agreements contemplated hereby, including the Investor Rights Agreement.
2. Representations and Warranties of the Company. The Company hereby
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represents and warrants to each Investor that, except as set forth on the
Schedule of Exceptions attached hereto as Schedule B (the "Schedule of
---------- -----------
Exceptions") specifically identifying the relevant subparagraph hereof, which
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exceptions shall be deemed to be representations and warranties as if made
hereunder:
2.1 Organization, Good Standing and Qualification. The Company is a
---------------------------------------------
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has all requisite corporate power and authority to
carry on its business as now conducted and as proposed to be conducted in its
Private Placement Memorandum heretofore furnished to the Investors (the "PPM").
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The Company is duly qualified to transact business and is in good standing in
each jurisdiction in which the failure to so qualify would have a material
adverse effect on its business or properties. Copies of the Company's Fifth
Amended and Restated Certificate of Incorporation, Bylaws, minutes and consents
of stockholders and of the Board of Directors are available for inspection at
the Company's offices and true, correct and complete copies of such documents
have been previously made available to each Investor or an Investor's special
counsel.
2.2 Corporate Power. The Company has now, or will have at the date
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of the Closing, all requisite legal and corporate power to enter into, execute
and deliver this Agreement and the Investors' Rights Agreement.
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2.3 Capitalization and Voting Rights
--------------------------------
(a) The authorized capital of the Company consists, or will
consist immediately prior to the Closing, of:
(i) Preferred Stock. Thirty-seven Million (37,000,000)
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shares of Preferred Stock (the "Preferred Stock") comprised of 5,565,416 shares
---------------
designated as Series A Preferred Stock (the "Series A Preferred Stock"), of
------------------------
which 5,500,000 shares are issued and outstanding, 2,760,742 shares designated
as Series B Preferred Stock (the "Series B Preferred Stock"), of which 2,740,743
------------------------
shares are issued and outstanding, 2,700,000 shares designated as Series C
Preferred Stock (the "Series C Preferred Stock"), of which 2,491,880 shares are
------------------------
issued and outstanding, 4,000,000 shares designated as Series D Preferred Stock
(the "Series D Preferred Stock") of which 2,397,727 shares are issued and
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outstanding and 20,500,000 shares designated as Series E Senior Preferred Stock
(the "Series E Preferred Stock"), 1,625,000 of which are currently outstanding
------------------------
and up to all of which will be sold pursuant to this Agreement. The rights,
privileges and preferences of the Series E Preferred Stock will be as stated in
the Company's Fifth Amended and Restated Certificate of Incorporation, attached
hereto as Exhibit A (the "Restated Certificate"). As of the date of this
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Agreement, and pursuant to Article IV.B.4 of the Company's Restated Certificate,
each share of Series A, Series B, Series C, Series D and Series E Preferred
Stock is convertible into one (1) share of Common Stock (as may be adjusted to
reflect certain dilutive issuances of the Company's stock).
(ii) Common Stock. Fifty Million (50,000,000) shares of
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common stock (the "Common Stock"), of which 3,241,921 shares are issued and
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outstanding. The outstanding shares of Common Stock and Preferred Stock are
owned by the stockholders set forth in Exhibit C hereto.
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(b) The outstanding shares of Common Stock, Series A Preferred
Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred
Stock and Series E Preferred Stock are all duly and validly authorized and
issued, fully paid and nonassessable, and were issued in accordance with the
registration or qualification provisions of the Securities Act of 1933, as
amended (the "Act") and any relevant state securities laws or pursuant to valid
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exemptions therefrom.
(c) The Company has reserved 4,150,000 shares of Common Stock
for issuance to officers, directors, employees and consultants of the Company
pursuant to its Third Amended and Restated 1995 Stock Option Plan duly adopted
by the Board of Directors and approved by the Company stockholders (the "1995
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Stock Plan"). Of such reserved shares of Common Stock, options to purchase
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4,881,922 have been granted (this number includes subsequent cancellations),
options to purchase 3,179,714 shares are currently outstanding, and 252,690
shares of Common Stock remain available for issuance to officers, directors,
employees and consultants pursuant to the 1995 Stock Plan.
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(d) The Company has reserved 2,645,053 shares of Common Stock
for issuance to officers, directors, employees and consultants of the Company
pursuant to its 1998 Stock Option Plan duly adopted by the Board of Directors
and approved by the Company stockholders (the "1998 Stock Plan"). Of such
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reserved shares of Common Stock, options to purchase 986,050 shares have been
granted, options to purchase 713,375 shares are currently outstanding, and
1,931,678 shares of Common Stock remain available for issuance to officers,
directors, employees and consultants pursuant to the 1998 Stock Plan.
(e) The Company has reserved 500,000 shares of Common Stock for
purchase by officers, directors, employees and consultants of the Company
pursuant to its 1998 Employee Stock Purchase Plan duly adopted by the Board of
Directors and approved by the Company stockholders (the "Stock Purchase Plan").
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The Stock Purchase Plan will become effective upon completion of a public
offering by the Company, accordingly, no shares have been purchased under the
Stock Purchase Plan.
(f) The Company has reserved 300,000 shares of Common Stock for
issuance to nonemployee directors of the Company pursuant to its 1998 Directors'
Stock Option Plan duly adopted by the Board of Directors and approved by the
Company stockholders (the "Directors Plan"). Of such reserved shares of Common
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Stock, options to purchase 75,000 shares have been granted and are currently
outstanding, and 225,000 shares of Common Stock remain available for issuance to
nonemployee directors pursuant to the 1998 Stock Plan.
(g) Except for (i) the conversion privileges of the Series A
Preferred Stock and such other rights, privileges and agreements contemplated
pursuant to the Series A Preferred Stock Purchase Agreement dated July 7, 1995,
(ii) the conversion privileges of the Series B Preferred Stock and such other
rights, privileges and agreements contemplated pursuant to the Series B
Preferred Stock Purchase Agreement dated May 30, 1996, (iii) the conversion
privileges of the Series C Preferred Stock and such other rights, privileges and
agreements contemplated pursuant to the Series C Preferred Stock Purchase
Agreement dated October 30, 1996, (iv) the conversion privileges of the Series D
Preferred Stock and such other rights, privileges and agreements contemplated
pursuant to the Series D Stock Purchase Agreement dated August 6, 1997, (v) the
conversion privileges of the Series E Preferred Stock and the Notes and such
other rights, privileges and agreements contemplated pursuant to this Agreement
(vi) those rights, privileges and agreements set forth in the Schedule of
Exceptions, and (vii) the rights provided in Section 2.4 of the Investors'
Rights Agreement, there are not outstanding any options, warrants, rights
(including conversion or preemptive rights) or agreements for the purchase or
acquisition from the Company of any shares of its capital stock. The Company is
not a party or subject to any agreement or understanding, and 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.
2.4 Subsidiaries. The Company does not presently own or control,
------------
directly or indirectly, any interest in any other corporation, association, or
other business entity. The Company is not a participant in any joint venture,
partnership, or similar arrangement.
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2.5 Authorization. All corporate actions on the part of the Company,
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its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Agreement and the Investors' Rights Agreement,
the performance of all obligations of the Company hereunder and thereunder, and
the authorization, issuance (or reservation for issuance), sale and delivery of
the Series E Preferred Stock being sold hereunder and the Common Stock issuable
upon conversion of the Series E Preferred Stock have been taken or will be taken
prior to the Closing, and this Agreement and the Investors' Rights Agreement
constitute valid and legally binding obligations of the Company, enforceable in
accordance with their respective terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors' rights generally, (b) as limited
by laws relating to the availability of specific performance, injunctive relief,
or other equitable remedies, and (c) to the extent the indemnification
provisions contained in the Investors' Rights Agreement may be limited by
applicable federal or state securities laws.
2.6 Valid Issuance of Preferred and Common Stock. The Series E Preferred
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Stock that is being purchased by the Stock Purchasers hereunder, when issued,
sold and delivered in accordance with the terms of this Agreement for the
consideration expressed herein, will be duly and validly issued, fully paid, and
nonassessable, and will be free of restrictions on transfer other than
restrictions on transfer under this Agreement and the Investors' Rights
Agreement and under applicable state and federal securities laws. The Notes
that are being purchased by the Note Purchasers hereunder, when issued, sold and
delivered in accordance with the terms of this Agreement for the consideration
expressed herein, will be duly and validly issued, fully paid and nonassessable,
and will be free of restrictions on transfer other than restrictions on transfer
under this Agreement, the Notes, the Investors' Rights Agreement and applicable
state and federal securities laws. The Series E Preferred Stock that may be
issued to the Note Purchasers upon conversion of the Notes, when issued and
delivered in accordance with the terms thereof, will be duly and validly issued,
fully paid and nonassessable, and free of restrictions on transfer other than
restrictions on transfer under this Agreement, the Investors' Rights Agreement
and applicable state and federal securities laws. The Common Stock issuable
upon conversion of the Series E Preferred Stock purchased under this Agreement
has been duly and validly reserved for issuance and, upon issuance in accordance
with the terms of the Restated Certificate, will be duly and validly issued,
fully paid, and nonassessable and will be free of restrictions on transfer other
than restrictions on transfer under this Agreement and the Investors' Rights
Agreement and under applicable state and federal securities laws.
2.7 Governmental Consents. No consent, approval, order or
---------------------
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement, except for filings pursuant to Section 25102(f)
of the California Corporate Securities Law of 1968, as amended, and the rules
thereunder, other applicable state securities laws and Regulation D of the
Securities Act of 1933, as amended and filings under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇
Antitrust Improvements Act of 1976, as amended (the "HSR Act") as required for
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any conversion of the Notes into Series E Preferred Stock.
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2.8 Offering. Subject in part to the truth and accuracy of each
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Investor's representations set forth in Section 3 of this Agreement, the offer,
sale and issuance of the Series E Preferred Stock as contemplated by this
Agreement are exempt from the registration requirements of the Act, and neither
the Company nor any authorized agent acting on its behalf will take any action
hereafter that would cause the loss of such exemption.
2.9 Returns and Complaints. The Company has received no material
----------------------
customer complaints concerning its products and/or services, nor has it had any
of its products returned by a purchaser thereof, other than for minor,
nonrecurring warranty problems.
2.10 Litigation. There is no action, suit, proceeding or
----------
investigation pending or currently threatened against the Company or against its
officers, directors or stockholders, or, to its knowledge, against its employees
or consultants that questions the validity of this Agreement or the Investors'
Rights Agreement or the right of the Company to enter into such agreements, or
to consummate the transactions contemplated hereby or thereby, or that might
result, either individually or in the aggregate, in any material adverse changes
in the assets, condition, affairs or prospects of the Company, financially or
otherwise, or any change in the current equity ownership of the Company, nor is
the Company aware that there is any basis for the foregoing. The foregoing
includes, without limitation, actions, suits, proceedings or investigations
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 agreements with
prior employers. The Company is not a party or subject to the provisions of any
order, writ, injunction, judgment or decree of any court or government agency or
instrumentality. There is no action, suit, proceeding or investigation by the
Company currently pending or that the Company intends to initiate.
2.11 Proprietary Information. Each employee and officer, of the
-----------------------
Company has executed a Confidential Information and Inventions Agreement
substantially in the form made available or provided to each Investor or such
Investor's special counsel, as the case may be. The Company, after reasonable
investigation, is not aware that any of its employees, officers, consultants or
contractors are in violation thereof, and the Company will use its best efforts
to prevent any such violation.
2.12 Patents and Trademarks. The Company owns, or is licensed to
----------------------
use, all patents, trademarks, service marks, trade names, copyrights, trade
secrets, information, proprietary rights and processes necessary for its
business as now conducted and, to the Company's knowledge, as proposed to be
conducted as described in the PPM without any conflict with or infringement of
the rights of others (the "Intellectual Property"). The Schedule of Exceptions
---------------------
contains a complete list of patents and pending patent applications of the
Company. The Company is not obligated to make any material payments by way of
royalties, fees or otherwise to any owner or licensor of any patent, trademark,
trade name, copyright or other intangible asset, with respect to the use thereof
or in connection with the conduct of its business, or otherwise. The Company
has not granted any third party any option, license or other
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right of any kind to the Intellectual Property. The Company does not license any
technology from any third party other than for internal use and other than such
licenses arising from the purchase of "off the shelf" or standard products. The
Company is not aware of any violation or infringement by a third party of any of
the Company's rights in the Intellectual Property. There are no outstanding
options, licenses, or agreements of any kind relating to the foregoing, nor is
the Company bound by or a party to any options, licenses or agreements of any
kind with respect to the patents, trademarks, service marks, trade names,
copyrights, trade secrets, licenses, information, proprietary rights and
processes of any other person or entity, other than such options, licenses, or
agreements arising from the purchase of "off the shelf" or standard products.
The Company has not received any communications alleging that the Company has
violated or, by conducting its business as proposed, would violate any of the
patents, trademarks, service marks, trade names, copyrights or trade secrets or
other proprietary rights of any other person or entity, nor is the Company aware
of any basis for any such violation. The Company is not aware that any of its
employees, officers, consultants or contractors are obligated under any contract
(including licenses, covenants or commitments of any nature) or other agreement,
or subject to any judgment, decree or order of any court or administrative
agency, that would interfere with the use of his or her 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 or that would prevent any such
employees, officers, consultants or contractors from assigning inventions to the
Company as set forth in the Employee Confidential Information and Inventions
Agreement. Neither the execution nor delivery of this Agreement or the
Investors' Rights Agreement, nor the carrying on of the Company's business by
the employees of the Company, 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, officers, consultants or
contractors is, to the best of the Company's knowledge, now obligated. The
Company does not believe it is or will be necessary to utilize any inventions of
any of its employees (or people it currently intends to hire), officers,
consultants or contractors made prior to their employment or engagement by the
Company, except for inventions which have already been assigned to the Company,
in order to conduct its business as now conducted or as proposed to be
conducted. The Company has taken and will take reasonable security measures to
protect the Intellectual Property.
2.13 Compliance with Other Instruments
---------------------------------
(a) The Company is not in violation or default of any provision
of its Restated Certificate or Bylaws, or of any instrument, judgment, order,
writ, decree or contract to which it is a party or by which it is bound, or, to
the best of its knowledge, of any provision of any federal or state statute,
rule or regulation applicable to the Company. The execution, delivery and
performance of this Agreement and the Investors' Rights Agreement, and the
consummation of the transactions contemplated hereby and thereby will not result
in any such violation or be in conflict with or constitute, with or without the
passage of time and giving of notice, either a default under any such provision
in its Restated Certificate or Bylaws, or any instrument, judgment, order, writ,
decree or contract or any provision of any federal or state statue, rule or
regulation applicable to the Company or an event that results in the creation of
any
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lien, charge or encumbrance upon any assets of the Company or the suspension,
revocation, impairment, forfeiture, or nonrenewal of any material permit,
license, authorization, or approval applicable to the Company, its business or
operations or any of its assets or properties.
(b) The Company has avoided every condition, and has not
performed any act, the occurrence of which would result in the Company's loss of
any right granted under any license, distribution or other agreement.
2.14 Agreements; Action
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(a) Except for agreements explicitly contemplated hereby, by
the Investors' Rights Agreement and by the Stockholders Agreement dated July 7,
1995, there are no agreements, understandings or proposed transactions between
the Company and any of its officers, directors, affiliates, or any affiliate
thereof.
(b) There are no agreements, understandings, instruments,
contracts, proposed transactions, judgments, orders, writs or decrees to which
the Company is a party or by which it is bound that may involve (i) obligations
(contingent or otherwise) of, or payments to the Company in excess of, $250,000
annually or (ii) the license of any patent, copyright, trade secret or other
proprietary right to or from the Company, or (iii) provisions restricting or
affecting the development, manufacture or distribution of the Company's products
or services, or (iv) indemnification by the Company with respect to
infringements of proprietary rights.
(c) The Company has not (i) declared or paid any dividends or
authorized or made any distribution upon or with respect to any class or series
of its capital stock, (ii) incurred any indebtedness for money borrowed or any
other liabilities individually in excess of $25,000 or, in the case of
indebtedness and/or liabilities individually less than $25,000, in excess of
$100,000 in the aggregate, (iii) made any loans or advances to any person, other
than ordinary advances for travel expenses, or (iv) sold, exchanged or otherwise
disposed of any of its assets or rights, other than the sale of its inventory in
the ordinary course of business.
(d) For the purposes of subsections (b) and (c) above, all
indebtedness, liabilities, agreements, understandings, instruments, contracts
and proposed transactions involving the same person or entity (including persons
or entities the Company has reason to believe are affiliated therewith) shall be
aggregated for the purpose of meeting the individual minimum dollar amounts of
such subsections.
(e) The Company has not engaged in the past three (3) months in
any discussion (i) with any representative of any corporation or corporations
regarding the consolidation or merger of the Company with or into any such
corporation or corporations, (ii) with any corporation, partnership, association
or other business entity or any individual regarding the sale, conveyance or
disposition of all or substantially all of the assets of the Company or a
transaction or series of related transactions in which more than fifty percent
(50%) of the voting power of the Company is disposed of, or (iii) regarding any
other form of acquisition, liquidation, dissolution or winding up of the
Company.
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2.15 Related-Party Transactions. No employee, officer, or director
--------------------------
of the Company or member of his or her immediate family is indebted to the
Company, nor is the Company indebted (or committed to make loans or extend or
guarantee credit) to any of them. To the Company's knowledge, none of such
persons has 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 that competes with the Company, except
that employees, officers, or directors of the Company and members of their
immediate families may own stock in publicly traded companies that may compete
with the Company. No member of the immediate family of any officer or director
of the Company is directly or indirectly interested in any material contract
with the Company.
2.16 Permits. The Company has all franchises, permits, licenses, and
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any similar authority necessary for the conduct of its business as now being
conducted by it, the lack of which could materially and adversely affect the
business, properties, prospects, or financial condition of the Company, and the
Company believes it can obtain, without undue burden or expense, any similar
authority for the conduct of its business as planned to be conducted. The
Company is not in default in any respect under any of such franchises, permits,
licenses, or other similar authority.
2.17 Environmental and Safety Laws. The Company is not in material
-----------------------------
violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety and no material expenditures are
or will be required in order to comply with any such existing statute, law or
regulation.
2.18 Manufacturing and Marketing Rights. The Company has not granted
----------------------------------
rights to manufacture, produce, assemble, license, market, or sell its products
to any other person and is not bound by any agreement that affects the Company's
exclusive right to develop, manufacture, assemble, distribute, market or sell
its products.
2.19 Disclosure. The Company has fully provided each Investor with
----------
all the information that such Investor has requested for deciding whether to
purchase the Series E Preferred Stock and all information that the Company
believes is reasonably necessary to enable such Investor to make such decision,
including disclosure describing its business. This Agreement and the Investors'
Rights Agreement, and any other statements or certificates made or delivered in
connection herewith or therewith, and to the Company's knowledge, the PPM (when
read together) do not contain any untrue statement of a material fact nor do the
representations and warranties in such agreements and other statements and
certificates (taken as a whole) omit to state a material fact necessary to make
the statements herein or therein not misleading in light of the circumstances
under which they were made. To the extent the PPM was prepared by management of
the Company, the PPM and the financial and other projections contained in the
PPM were prepared in good faith; however, the Company does not warrant that it
will achieve such projections.
-10-
2.20 Registration Rights. Except as provided in the Investors'
-------------------
Rights Agreement, the Company has not granted or agreed to grant any
registration rights, including piggyback rights, to any person or entity.
2.21 Corporate Documents. The Restated Certificate and Bylaws of the
-------------------
Company are in the form previously provided to each Investor or to such
Investor's special counsel, as the case may be.
2.22 Title to Property and Assets. The Company owns its property and
----------------------------
assets free and clear of all mortgages, liens, loans and encumbrances, except
such encumbrances and liens that arise in the ordinary course of business and do
not impair the Company's ownership or use of such property or assets. With
respect to the property and assets it leases, the Company is in compliance with
such leases and, holds a valid leasehold interest free of any liens, claims or
encumbrances.
2.23 Financial Statements. The Company has made available or
--------------------
delivered to each Investor its unaudited financial statements (balance sheet and
profit and loss statement and statement of cash flows) at March 31, 1999, and
its draft consolidated financial statements for the year ended December 31, 1998
and its audited financial statements for the years ended December 31, 1996 and
1997 (collectively, the "Financial Statements"). The Financial Statements
--------------------
have been prepared in accordance with generally accepted accounting principles,
except that the unaudited Financial Statements may not contain all footnotes
required by generally accepted accounting principles. The Financial Statements
fairly present the financial condition and operating results of the Company as
of the dates, and for the periods, indicated therein, subject to normal year-end
audit adjustments. Except as set forth in the Financial Statements, the Company
has no liabilities, contingent or otherwise, other than (a) liabilities incurred
in the ordinary course of business subsequent to March 31, 1999 and (b)
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, in both cases, individually or in
the aggregate, are not material to the financial condition or operating results
of the Company. Except as disclosed in the Financial Statements, the Company is
not a guarantor or indemnitor of any indebtedness of any other person, firm or
corporation. The Company maintains and will continue to maintain a standard
system of accounting established and administered in accordance with generally
accepted accounting principles.
2.24 Changes. Since March 31, 1999, there has not been:
-------
(a) any change in the assets, liabilities, financial condition
or operating results of the Company from that reflected in the Financial
Statements, except changes in the ordinary course of business that 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
-11-
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;
(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 that is not material to the assets, properties, financial
condition, operating results or business of the Company (as such business is
presently conducted and as it is proposed to be conducted);
(e) any material 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;
(g) any sale, assignment or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets;
(h) any 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 such key officer or
key employee;
(i) receipt of notice that there has been a loss of, or material
order cancellation by, any major customer of the Company;
(j) any mortgage, pledge, transfer of a security interest in, or
lien, created by the Company, with respect to any of its material properties or
assets, except liens for taxes not yet due or payable;
(k) any loans or guarantees made by the Company to or for the
benefit of its employees, officers or directors, or any members of their
immediate families, other than travel advances and other advances made in the
ordinary course of its business;
(l) any declaration, setting aside or payment or other
distribution in respect of any of the Company's capital stock, or any direct or
indirect redemption, purchase or other acquisition of any of such stock by the
Company;
(m) to the best of the Company's knowledge, any other event or
condition of any character that might materially and adversely affect the
assets, properties, financial condition, operating results, business or
prospects of the Company (as such business is presently conducted and as it is
proposed to be conducted); or
(n) any agreement or commitment by the Company to do any of the
things described in this Section 2.24.
-12-
2.25 Employee Benefit Plans. The Company does not have any Employee
----------------------
Benefit Plans as defined in the Employee Retirement Income Security Act of 1974
("ERISA").
-----
2.26 Tax Returns, Payments and Elections. The Company has filed all
-----------------------------------
tax returns and reports as required by law. These returns and reports are true
and correct in all material respects. The Company has paid all taxes and other
assessments due, except those contested by it in good faith that are listed in
the Schedule of Exceptions. The provision for taxes of the Company as shown in
the Financial Statements is adequate for taxes due or accrued as of the date
thereof. The Company has not elected pursuant to the Internal Revenue Code of
1986, as amended (the "Code"), to be treated as a Subchapter S corporation or a
----
collapsible corporation pursuant to Section 1362(a) or Section 341(f) of the
Code, nor has it made any other elections pursuant to the Code (other than
elections that relate solely to methods of accounting, depreciation or
amortization) that would have a material effect on the Company, its financial
condition, its business as presently conducted or proposed to be conducted or
any of its properties or material assets. The Company has never had any tax
deficiency proposed or assessed against it and has not executed any waiver of
any statute of limitations on the assessment or collection of any tax or
governmental charge. None of the Company's federal income tax returns and none
of its state income or franchise tax or sales or use tax returns has ever been
audited by governmental authorities. Since the date of the Financial
Statements, the Company has made adequate provisions on its books of account for
all taxes, assessments and governmental charges with respect to its business,
properties and operations for such period. The Company has withheld or
collected from each payment made to each of its employees, the amount of all
taxes (including, but not limited to, federal income taxes, Federal Insurance
Contribution Act taxes and Federal Unemployment Tax Act taxes) required to be
withheld or collected therefrom, and has paid the same to the proper tax
receiving officers or authorized depositories.
2.27 Insurance. The Company has in full force and effect fire and
---------
casualty insurance policies, with extended coverage, sufficient in amount
(subject to reasonable deductibles) to allow it to replace any of its properties
that might be damaged or destroyed.
2.28 Minute Books. The minute books of the Company made available or
------------
provided to the Investors contain a complete summary of all meetings of
directors and stockholders since the time of incorporation and reflect all
transactions referred to in such minutes accurately in all material respects.
2.29 Labor Agreements and Actions. The Company is not bound by or
----------------------------
subject to (and none of its assets or properties is bound by or subject to) any
written or oral, express or implied, contract, commitment or arrangement with
any labor union, and no labor union has requested or, to the best of the
Company's knowledge, has sought to represent any of the employees,
representatives or agents of the Company. There is no strike or other labor
dispute involving the Company pending, or to the best of the Company's
knowledge, threatened, that could have a material adverse effect on the assets,
properties, financial condition, operating results, business or prospects of the
Company (as such business is presently conducted and as it
-13-
is proposed to be conducted), nor is the Company aware of any labor organization
activity involving its employees. The Company is not aware that any officer or
key employee, or that any group of key employees, intends to terminate their
employment with the Company, nor does the Company have a present intention to
terminate the employment of any of the foregoing. The employment of each officer
and employee of the Company is terminable at the will of the Company subject to
severance payments upon termination under certain circumstances as set forth in
the Schedule of Exceptions. To the best of its knowledge, the Company has
complied in all material respects with all applicable state and federal equal
employment opportunity and other laws related to employment.
2.30 Voting Agreements. Except as set forth in the Company's
-----------------
Restated Certificate and the Investors' Rights Agreement, the Company has no
outstanding agreement, obligation or commitment with respect to the election of
any individual or individuals to the Board of Directors, and to the best of the
Company's knowledge, there is no outstanding voting agreement or other
arrangement among its stockholders with respect to the election of any
individual or individuals to the Board of Directors.
2.31 Outstanding Debt. The Company has no outstanding indebtedness
----------------
for borrowed money, and is not a guarantor or otherwise contingently liable for
any such indebtedness, except (a) as set forth on the Company's balance sheet as
of March 31, 1999, or reflected in the notes thereto, or (b) additional
indebtedness incurred, assumed or guaranteed since March 31, 1999 for immaterial
amounts or in the ordinary course of business consistent with past practice.
There exists no default under the provisions of any instrument evidencing any
such indebtedness or of any agreement relating thereto.
2.32 Real Property Holding Corporation Status. Since its inception
----------------------------------------
the Company has not been a "United States real property holding corporation" as
defined in Section 897(c)(2) of the U.S. Internal Revenue Code of 1986, as
amended, and in Section 1.897-2(b) of the Treasury Regulations issued thereunder
(the "Regulations"), and the Company has filed with the Internal Revenue Service
-----------
all statements, if any, with its United States income tax returns which are
required under Section 1.897-2(h) of the Regulations.
2.33 Use of Proceeds. The Company will use a portion of the net
---------------
proceeds from the sale of the Series E Preferred Stock to redeem its 13.75%
Senior Secured Bridge Notes and the remainder for working capital and general
corporate purposes no later than April 29, 1999.
3. Representations and Warranties of the Investors. Each Investor hereby
-----------------------------------------------
represents and warrants that:
3.1 Authorization. Such Investor has full power and authority to
-------------
enter into this Agreement and the Investors' Rights Agreement and each such
Agreement constitutes its valid and legally binding obligation, enforceable in
accordance with their respective terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, and other laws of general
application affecting enforcement of creditors' rights generally, (b) as
-14-
limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies, and (c) to the extent the indemnification
provisions contained in the Investors' Rights Agreement may be limited by
applicable federal or state securities laws.
3.2 Purchase Entirely for Own Account. This Agreement is made with
---------------------------------
such Investor in reliance upon such Investor's representation to the Company,
which by such Investor's execution of this Agreement such Investor hereby
confirms, that the Series E Preferred Stock to be received by such Investor and
the Common Stock issuable upon conversion thereof (collectively, the
"Securities") will be acquired for investment for such Investor's own account,
----------
not as a nominee or agent, and not with a view to the resale or distribution of
any part thereof, and that such Investor has no present intention of selling,
granting any participation in, or otherwise distributing the same. By executing
this Agreement, such Investor further represents that such Investor does not
have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participations to such person or to any third person,
with respect to any of the Securities.
3.3 Disclosure of Information. Such Investor believes it has
-------------------------
received all the information it considers necessary or appropriate for deciding
whether to purchase the Series E Preferred Stock. Such Investor further
represents that it has had an opportunity to ask questions and receive answers
from the Company regarding the terms and conditions of the offering of the
Series E Preferred Stock and the business, properties, prospects and financial
condition of the Company. The foregoing, however, does not limit or modify the
representations and warranties of the Company in Section 2 of this Agreement or
the right of the Investors to rely thereon.
3.4 Investment Experience. Such Investor is an investor in
---------------------
securities of companies in the development stage and acknowledges that it is
able to fend for itself, can bear the economic risk of its investment, and has
such knowledge and experience in financial or business matters that it is
capable of evaluating the merits and risks of the investment in the Series E
Preferred Stock. If other than an individual, Investor also represents it has
not been organized for the purpose of acquiring the Series E Preferred Stock.
3.5 Investor Suitability. Such investor represents that it qualifies as
--------------------
an "accredited investor" as such term is defined in Rule 501(a) or Regulation D
under the Securities Act. To be an accredited investor, each Investor
understands that he, she or it must fall within one of the following categories
at the time of the sale of Series E Preferred Stock to such Investor:
(1) any bank as defined in Section 3(a)(2) of the Securities Act or any
savings and loan association or other institution as defined in
Section 3(a)(5)(A) of the Securities Act, whether acting in its
individual or fiduciary capacity; any broker or dealer registered
pursuant to Section 13 of the Exchange Act; any insurance company as
defined in Section 2(13) of the Securities Act; any broker or dealer
registered pursuant to Section 15 of the Exchange Act: any investment
company registered under the Investment Company Act of 1940 or any
business development company as defined in Section 2(a)(48) of the
Act; any Small
-15-
Business Investment Company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958; any plan established and maintained by a
state, its political subdivisions, or any agency or instrumentality of
a state or its political subdivisions for the benefits of its
employees, if such plan has total assets in excess of $5,000,000; any
employee benefit plan within the meaning of Title I of the Employee
Retirement Income Security Act of 1974 if the investment decision is
made by a plan fiduciary, as defined in Section 3(21) of such act,
which is either a bank, savings and loan association, insurance
company, or registered investment advisor, or if the employee benefit
plan has total assets in excess of $5,000,000 or, if a self-directed
plan, with investment decisions made solely by persons that are
accredited investors;
(2) any private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
(3) any organization described in Section 501(c)(3) of the Internal
Revenue Code, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purpose of acquiring the
Series E Preferred Stock, with total assets in excess of $5,000,000;
(4) any director or executive officer of the Company;
(5) any natural person whose individual net worth, or joint net worth with
that person's spouse, at the time of his purchase exceeds $1,000,000;
(6) any natural person who had an individual income in excess of $200,000
in each of the two most recent years or joint income with that
person's spouse in excess of $300,000 in each of those years and who
has a reasonable expectation of reaching the same income level in the
current year;
(7) any trust, with total assets in excess of $5,000,000, not formed for
the specific purpose of acquiring the securities offered, whose
purchase is directed by a sophisticated person as described in Rule
506(b)(2)(ii) of Regulation D; or
(8) any entity in which all the equity owners are accredited investors as
defined above.
Any Investor who is a Massachusetts resident and proposes to rely on
category (5) or (6) above may only do so if the proposed investment does not
exceed twenty-five percent (25%) of such Investor's net worth (excluding
residence and its furnishings).
3.6 Restricted Securities. Such Investor understands that the
---------------------
Securities it is purchasing are characterized as "restricted securities" under
the federal securities laws inasmuch as they are being acquired from the Company
in a transaction not involving a public offering and
-16-
that under such laws and applicable regulations such securities may be resold
without registration under the Act only in certain limited circumstances. In
this connection, such Investor represents that it is familiar with SEC Rule 144,
as presently in effect, and understands the resale limitations imposed thereby
and by the Act.
3.7 Further Limitations on Disposition. Without in any way limiting
----------------------------------
the representations set forth above, such Investor further agrees not to make
any disposition of all or any portion of the Securities unless and until the
transferee has agreed in writing for the benefit of the Company to be bound by
this Section 3 and the Investors' Rights Agreement provided and to the extent
this Section and such agreement are then applicable, and:
(a) There is then in effect a Registration Statement under the
Act covering such proposed disposition and such disposition is made in
accordance with such Registration Statement; or
(b) (i) Such Investor shall have notified the Company of the
proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii) if
reasonably requested by the Company, such Investor shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company that
such disposition will not require registration of such shares under the Act. It
is agreed that the Company will not require opinions of counsel for transactions
made pursuant to Rule 144 except in unusual circumstances.
(c) Notwithstanding the provisions of paragraphs (a) and (b)
above, no such Registration Statement or opinion of counsel shall be necessary
for a transfer by an Investor that is a partnership to an Affiliate, 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 the
transfer by gift, will or intestate succession of any partner to his or her
spouse or to the siblings, lineal descendants or ancestors of such partner or
his or her spouse, or by an Investor that is a trust to any affiliate or
successor trust or trustee if the transferee agrees in writing to be subject to
the terms hereof to the same extent as if he or she were an original Investor
hereunder.
-17-
3.8 Foreign Investors. If the Investor is not a United States person
(as defined by Section 7701 (a)(30) of the Internal Revenue Code of 1986, as
amended), such Investor hereby represents that it has satisfied itself as to the
full observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Series E Preferred or any use of this Agreement,
including (i) legal requirements within its jurisdiction for the purchase of the
Series E Preferred, (ii) any foreign exchange restrictions applicable to such
purchase, (iii) any governmental or other consents that may need to be obtained,
and (iv) the income tax and other tax consequences, if any, that may be relevant
to the purchase, holding, redemption, sale, or transfer of the Series E
Preferred. Such Investor's subscription and payment for and continued
beneficial ownership of the Series E Preferred, will not violate any applicable
securities and other laws of the Purchaser's jurisdiction.
3.9 Legends. It is understood that the certificates evidencing the
-------
Securities may bear legends in substantially the following forms:
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE,
PLEDGED OR HYPOTHECATED IN THE ABSENCE OF A REGISTRATION STATEMENT IN EFFECT
WITH RESPECT TO THE SECURITIES UNDER SUCH ACT OR AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED OR UNLESS
SOLD PURSUANT TO RULE 144 OF SUCH ACT."
(b) Any legend required by the Blue Sky laws of any state to the
extent such laws are applicable to the shares represented by the certificate so
legended.
4. Conditions of Investor's Obligations at Closing. The obligations of
-----------------------------------------------
each Investor under subsection 1.1 of this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions, the
waiver of which shall not be effective against any Investor who does not consent
in writing thereto:
4.1 Representations and Warranties. The representations and
------------------------------
warranties of the Company contained in Section 2 shall be true on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the date of such Closing.
4.2 Performance. The Company shall have performed and complied with
-----------
all agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.
4.3 Compliance Certificate. The Chief Financial Officer of the
----------------------
Company shall deliver to each Investor at the Closing a certificate stating that
the conditions specified in Sections 4.1 and 4.2 have been fulfilled and stating
that there shall have been no adverse change in the business, affairs,
prospects, operations, properties, assets or condition of the Company since
March 31, 1999.
-18-
4.4 Qualifications. All authorizations, approvals, or permits, if
--------------
any, of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale of
the Securities pursuant to this Agreement shall be duly obtained and effective
as of the Closing.
4.5 Proceedings and Documents. All corporate and other proceedings
-------------------------
in connection with the transactions contemplated at the Closing and all
documents incident thereto shall be reasonably satisfactory in form and
substance to each Investor or to such Investor's special counsel, as the case
may be, and they shall have received all such counterpart original and certified
or other copies of such documents as they may reasonably request.
4.6 Bylaws. The Bylaws of the Company shall provide that the Board
------
of Directors of the Company shall consist of nine (9) persons.
4.7 Board of Directors. The directors of the Company shall be ▇▇▇▇▇▇
------------------
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ Reudink, Bandel ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ Twyver and one (1) vacancy.
4.8 Opinion of Company Counsel. Each Investor shall have received
--------------------------
from Venture Law Group, a Professional Corporation, counsel for the Company, an
opinion, dated as of the Closing, in the form attached hereto as Exhibit D.
---------
4.9 Investors' Rights Agreement. The Company and each Investor
---------------------------
shall have entered into the Investors' Rights Agreement in the form attached as
Exhibit B.
---------
4.10 Consents and Waivers. The Company shall have obtained on or
--------------------
before Closing any and all consents, permits and waivers necessary for
consummation of the transactions contemplated by this Agreement.
4.11 Adjustment to Prior Issuances of Series E Preferred Stock. The
---------------------------------------------------------
Company shall collect and cancel the outstanding stock certificates evidencing
shares of Series E Preferred Stock issued before the date hereof and reissue new
stock certificates with adjusted price and share amounts in accordance with the
terms of this Agreement.
5. Conditions of the Company's Obligations at Closing. The obligations
--------------------------------------------------
of the Company to each Investor under this Agreement are subject to the
fulfillment on or before the Closing of each of the following conditions by that
Investor:
5.1 Representations and Warranties. The representations and
------------------------------
warranties of the Investor contained in Section 3 shall be true on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of the Closing.
5.2 Payment of Purchase Price. The Investor shall have delivered the
-------------------------
purchase price specified in Section 1.2.
-19-
5.3 Qualifications. All authorizations, approvals, or permits, if
--------------
any, of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale of
the Securities pursuant to this Agreement shall be duly obtained and effective
as of the Closing.
6. HSR Act Filings. As soon as practicable after the Closing, the
---------------
Company and the Note Purchasers will separately file with the United States
Federal Trade Commission and the Antitrust Division of the Justice Department
pursuant to the HSR Act all requisite documents and notifications in order to
provide for the conversion of the Notes into shares of the Company's Series E
Preferred Stock. The parties will cooperate and coordinate with one another in
exchanging information and providing reasonable assistance as the other parties
may request in connection with the foregoing.
7. Miscellaneous
-------------
7.1 Survival of Warranties. The warranties, representations and
----------------------
covenants of the Company and Investors contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of the Investors or the Company.
7.2 Successors and Assigns. Except as otherwise provided herein, the
----------------------
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the respective successors and assigns of the parties (including
transferees of any Securities). Nothing in this Agreement, express or implied,
is intended to confer upon any party other than the parties hereto or their
respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
7.3 Governing Law. This Agreement shall be governed by and construed
-------------
under the laws of the State of Delaware as applied to agreements among Delaware
residents entered into and to be performed entirely within Delaware.
7.4 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.5 Titles and Subtitles. The titles and subtitles used in this
--------------------
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
7.6 Notices. Unless otherwise provided, any notice required or
-------
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
delivery by facsimile or by overnight courier or upon deposit with the United
States Post Office, by registered or certified mail, postage prepaid and
addressed to the party to be notified at the address indicated for such party on
the
-20-
signature page hereof, or at such other address as such party may designate by
ten (10) days' advance written notice to the other parties.
7.7 Finder's Fee. Except with respect to the Company's fee to
------------
▇▇▇▇▇▇▇ ▇▇▇▇▇, each party represents that it neither is nor will be obligated
for any finder's fee or commission in connection with this transaction. Each
Investor agrees to indemnify and to hold harmless the Company from any liability
for any commission or compensation in the nature of a finder's fee (and the
costs and expenses of defending against such liability or asserted liability)
for which such Investor or any of its officers, partners, employees, or
representatives is responsible.
The Company agrees to indemnify and hold harmless each Investor
from any liability for any commission or compensation in the nature of a
finder's fee (and the costs and expenses of defending against such liability or
asserted liability) for which the Company or any of its officers, employees or
representatives is responsible.
7.8 Expenses. Irrespective of whether the Closing is effected, the
--------
Company shall pay all costs and expenses that it incurs with respect to the
negotiation, execution, delivery and performance of this Agreement. If the
Closing is effected, the Company shall, at the Closing, reimburse the reasonable
fees and expenses of one special counsel for the Investors, not to exceed
$12,000. If any action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the Investors' Rights Agreement, or the Restated
Certificate, the prevailing party shall be entitled to reasonable attorneys'
fees, costs and necessary disbursements in addition to any other relief to which
such party may be entitled.
7.9 Amendments and Waivers. Any term of this Agreement may be
----------------------
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
a majority of the Common Stock issuable or issued upon conversion of the Series
E Preferred Stock. Any amendment or waiver effected in accordance with this
paragraph shall be binding upon each holder of any securities purchased under
this Agreement at the time outstanding (including securities into which such
securities are convertible), each future holder of all such securities, and the
Company.
7.10 Severability. If one or more provisions of this Agreement are
------------
held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
7.11 Aggregation of Stock. All shares of the Preferred Stock held or
--------------------
acquired by affiliated entities or persons shall be aggregated together for the
purpose of determining the availability of any rights under this Agreement.
7.12 Entire Agreement. This Agreement and the documents referred to
----------------
herein constitute the entire agreement among the parties and no party shall be
liable or bound to any
-21-
other party in any manner by any warranties, representations, or covenants
except as specifically set forth herein or therein.
[Signature page follows]
-22-
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
METAWAVE COMMUNICATIONS
CORPORATION
By:/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
Senior Vice President and Chief Financial
Officer
Address: ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
Post Office Box 97069
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
INVESTORS:
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PREFERRED STOCK AND CONVERTIBLE NOTE PURCHASE AGREEMENT]
OAK INVESTMENT PARTNERS VI, L.P.
By:___________________________________
Its:_________________________________
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
OAK VI AFFILIATES FUND, L.P.
By:___________________________________
Its:_________________________________
Address: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
VENROCK ASSOCIATES
By:___________________________________
Its:_________________________________
Address: ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
VENROCK ASSOCIATES II, L.P.
By:___________________________________
Its:_________________________________
Address: ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
[SIGNATURE PAGE TO AMENDED AND RESTATED SERIES E
PREFERRED STOCK AND CONVERTIBLE NOTE PURCHASE AGREEMENT]
▇▇▇▇▇ ▇▇▇▇▇ FUND IV L.P.
By: SRB Associates IV L.P.,
its General Partner
By:___________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
General Partner
Address: ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ FUND V L.P.
By: SRB Associates V L.P.,
its General Partner
By:___________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
General Partner
Address: ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ V AFFILIATES FUND L.P.
By: SRB Associates V L.P.,
its General Partner
By:___________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
General Partner
Address: ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇., ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
INTEGRAL CAPITAL PARTNERS III, L.P.
By: Integral Capital Management III, L.P.
Its: General Partner
By:___________________________________
Its: General Partner
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
[SIGNATURE PAGE TO AMENDED AND RESTATED SERIES E
PREFERRED STOCK AND CONVERTIBLE NOTE PURCHASE AGREEMENT]
INTEGRAL CAPITAL PARTNERS
INTERNATIONAL III, L.P.
By: Integral Capital Management III, L.P.
Its: Investment General Partner
By:___________________________________
Its: General Partner
Address: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
WORLDVIEW TECHNOLOGY
PARTNERS I, L.P.
By:___________________________________
▇▇▇▇▇ ▇▇▇
Managing Director
______________________________________
Worldview Capital I, L.P.
Its: General Partner
Address: ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
WORLDVIEW TECHNOLOGY
INTERNATIONAL I, L.P.
By:___________________________________
▇▇▇▇▇ ▇▇▇
Managing Director
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PREFERRED STOCK AND CONVERTIBLE NOTE PURCHASE AGREEMENT]
SPINNAKER TECHNOLOGY FUND, L.P.
By: ▇▇▇▇▇▇ Capital Management, L.L.C.
Its: General Partner
By:_______________________________
Its:____________________________
Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SPINNAKER TECHNOLOGY OFFSHORE
FUND, LIMITED
By: ▇▇▇▇▇▇ Capital Management, L.L.C.
Its: Investment Advisor and Attorney-in-
Fact
By:_______________________________
Its:___________________________
Address: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
[SIGNATURE PAGE TO AMENDED AND RESTATED SERIES E
PREFERRED STOCK AND CONVERTIBLE NOTE PURCHASE AGREEMENT]
▇▇▇▇▇▇▇ ▇▇▇▇▇ KECALP L.P. 1997
By: KECALP Inc., its General Partner
By:___________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice-President
▇▇▇▇▇▇▇ ▇▇▇▇▇ KECALP L.P. 1999
By: KECALP Inc., its General Partner
By:___________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice-President
▇▇▇▇▇▇▇ ▇▇▇▇▇ KECALP INTERNATIONAL
L.P. 1997
By: KECALP Inc., its Nominee
By:___________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice-President
▇▇▇▇▇▇▇ ▇▇▇▇▇ KECALP INTERNATIONAL
L.P. 1999
By: KECALP Inc., its Nominee
By:___________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice-President
Notices for all the ▇▇▇▇▇▇▇ ▇▇▇▇▇ KECALP
entities:
KECALP Inc.
World Financial Center
South Tower
New York, N.Y. 10080-6123
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
phone: ▇▇▇ ▇▇▇ ▇▇▇▇
fax: ▇▇▇ ▇▇▇ ▇▇▇▇
[SIGNATURE PAGE TO AMENDED AND RESTATED SERIES E
PREFERRED STOCK AND CONVERTIBLE NOTE PURCHASE AGREEMENT]
ML IBK POSITIONS, INC.
By: _____________________
Name: ___________________
Title: ____________________
Address: World Financial Center
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
THE CHASE MANHATTAN BANK, solely as Trustee
For First Plaza Group Trust (as directed by
General Motors Investment Management
Corporation) and not in its individual
capacity
By:___________________________________
Name:_________________________________
Title: Authorized Officer
--------------------------------
Address:
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