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Exhibit 10.18
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ARROWPOINT COMMUNICATIONS, INC.
SERIES E PREFERRED STOCK PURCHASE AGREEMENT
January 14, 2000
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TABLE OF CONTENTS
PAGE
1. Authorization and Sale of Shares..................................1
1.1 Authorization...........................................1
1.2 Sale of Shares..........................................1
1.3 Use of Proceeds.........................................1
2. The Closings......................................................1
2.1 The Closing ............................................2
2.2 Subsequent Closings.....................................3
3. Representations of the Company....................................3
3.1 Organization and Standing...............................3
3.2 Capitalization..........................................3
3.3 Subsidiaries, Etc.......................................4
3.4 Stockholder List and Agreements.........................5
3.5 Issuance of Shares......................................5
3.6 Authority for Agreement.................................5
3.7 Governmental Consents...................................6
3.8 Litigation..............................................6
3.9 Financial Statements....................................6
3.10 Absence of Liabilities..................................7
3.11 Taxes...................................................7
3.12 Property and Assets.....................................7
3.13 Intellectual Property...................................7
3.14 Material Contracts and Obligations......................9
3.15 Compliance..............................................9
3.16 Employees and Founder...................................9
3.17 ERISA..................................................10
3.18 Books and Records......................................10
3.19 Board of Directors.....................................10
3.20 U.S. Real Property Holding Corporation.................10
3.21 Related Party Transactions.............................10
3.22 Disclosures............................................11
4. [Intentionally omitted]..........................................11
5. Representations of the Purchasers................................11
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5.1 Investment.............................................11
5.2 Authority..............................................11
5.3 Experience.............................................12
5.4 Status.................................................12
6. Covenants of the Company.........................................12
6.1 Inspection.............................................12
6.2 Financial Statements and Other Information.............12
6.3 Material Changes and Litigation........................14
6.4 Insurance..............................................14
6.5 Employee Agreements....................................14
6.6 Related Party Transactions.............................14
6.7 Directors..............................................15
6.8 Option Shares and Restricted Stock.....................15
6.9 Reservation of Common Stock............................15
6.10 Termination of Covenants...............................15
6.11 Termination of Prior Covenants.........................15
6.12 Qualified Small Business Stock.........................16
7. Transfer of Shares...............................................16
7.1 Restricted Shares......................................16
7.2 Requirements for Transfer..............................16
7.3 Legend.................................................17
7.4 Rule 144A Information..................................17
8. Miscellaneous....................................................18
8.1 Successors and Assigns.................................18
8.2 Confidentiality........................................18
8.3 Survival of Representations and Warranties.............19
8.4 [Intentionally omitted]................................19
8.5 Notices................................................19
8.6 Brokers................................................19
8.7 Entire Agreement.......................................19
8.8 Amendments and Waivers.................................20
8.9 Counterparts...........................................20
8.10 Section Headings.......................................20
8.11 Severability...........................................20
8.12 Governing Law..........................................21
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Disclosure Schedule
Exhibit A Certificate of Amendment
Exhibit B Opinion of ▇▇▇▇ and ▇▇▇▇ LLP
Exhibit C Investor Rights Agreement
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SERIES E PREFERRED STOCK PURCHASE AGREEMENT
This Agreement dated as of January 14, 2000 is entered into by and
among ArrowPoint Communications, Inc., a Delaware corporation (the "Company"),
and the persons and entities listed on SCHEDULE I attached hereto (individually,
a "Purchaser" and, collectively, the "Purchasers")
In consideration of the mutual promises and covenants contained in this
Agreement, the parties hereto agree as follows:
1. AUTHORIZATION AND SALE OF SHARES.
1.1 AUTHORIZATION. The Company has duly authorized the
sale and issuance, pursuant to the terms of this Agreement, of 699,837 shares of
its Series E Convertible Preferred Stock, $0.01 par value per share (the "Series
E Preferred Stock"), having the rights, restrictions, privileges and preferences
set forth in the Certificate of Amendment attached hereto as EXHIBIT A (the
"Certificate of Amendment"). The Company has adopted and filed the Certificate
of Amendment with the Secretary of State of the State of Delaware.
1.2 SALE OF SHARES. Subject to the terms and conditions
of this Agreement, at the Closing (as defined below) the Company will issue and
sell to each Purchaser, and each Purchaser will purchase, for a purchase price
of $21.14 per share, such number of shares of Series E Preferred Stock as is set
forth opposite such Purchaser's name on SCHEDULE I attached hereto. The shares
of Series E Preferred Stock being sold under this Agreement are referred to as
the "Shares."
1.3 USE OF PROCEEDS. The Company will use the proceeds
from the sale of the Shares for working capital purposes.
2. THE CLOSINGS.
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2.1 THE CLOSING. The closing ("Closing") of the sale and
purchase of the Shares under this Agreement shall take place at the offices of
▇▇▇▇ and ▇▇▇▇ LLP, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ at 9:00 a.m. on the
date of this Agreement, or at such other time, date and place as are mutually
agreeable to the Company and the Purchasers. The date of the Closing is
hereinafter referred to as the "Closing Date." At the Closing:
(a) the Company shall deliver to the Purchasers
certificates, as of the most recent practicable date, as to (i) the corporate
good standing of the Company issued by the Secretary of State of the State of
Delaware and (ii) the due qualification of the Company as a foreign corporation
from the Secretary of State of each state in which the Company is so qualified;
(b) the Company shall deliver to the Purchasers
the Certificate of Incorporation of the Company, as amended and in effect as of
the Closing Date (including the Certificate of Amendment), certified by the
Secretary of State of the State of Delaware;
(c) the Company shall deliver to the Purchasers
a Certificate of the Secretary of the Company attesting as to (i) the By-laws of
the Company, and (ii) resolutions of the Board of Directors and stockholders of
the Company authorizing and approving all matters in connection with this
Agreement and the transactions contemplated hereby.
(d) ▇▇▇▇ and ▇▇▇▇ LLP, counsel for the Company,
shall deliver to the Purchasers an opinion, dated the Closing Date, in the form
attached hereto as EXHIBIT B;
(e) the Company, Chin-▇▇▇▇▇ ▇▇ (the "Founder")
and the Purchasers shall execute and deliver the Investor Rights Agreement in
the form attached hereto as EXHIBIT C (the "Investor Agreement");
(f) the Company shall deliver to each Purchaser
a certificate for the number of Shares being purchased by such Purchaser,
registered in the name of such Purchaser;
(g) each Purchaser shall pay to the Company the
purchase price for the Shares being purchased by such Purchaser, by wire
transfer or certified check; and
(h) the Company and the Purchasers shall execute
and deliver a Cross-Receipt.
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2.2 SUBSEQUENT CLOSINGS. The Company may sell, at any
time prior to 14 days after the Closing, in one or more closings (each, a
"Subsequent Closing"), up to 246,198 additional Shares at the purchase price of
$21.14 per share, to such purchasers (each, an "Additional Purchaser") as may be
approved by the Board of Directors of the Company. At each Subsequent Closing,
(i) the Company and each Additional Purchaser shall execute and deliver a
counterpart signature page hereto, whereupon such Additional Purchaser shall
become a "Purchaser" hereunder and the Shares purchased by such Additional
Purchaser shall be deemed to be "Shares" for purposes of this Agreement, and
(ii) the Company shall cause Schedule I hereto to be amended to reflect the
purchases made by the Additional Purchasers at each Subsequent Closing. At each
Subsequent Closing, the Company shall deliver to each Additional Purchaser a
certificate for the number of Shares being purchased at the Subsequent Closing
by such Additional Purchaser, registered in the name of such Additional
Purchaser, against payment to the Company of the purchase price in the manner
specified above. The Company shall deliver to each Purchaser, within 15 days
after any Subsequent Closing, written notice of such Subsequent Closing (which
notice shall specify the names of each Additional Purchaser and the number of
shares of Series E Preferred Stock issued to each).
3. REPRESENTATIONS OF THE COMPANY. Subject to and except as
disclosed by the Company in the Disclosure Schedule attached hereto (the
"Disclosure Schedule"), the Company hereby represents and warrants to the
Purchasers as follows:
3.1 ORGANIZATION AND STANDING. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware and has full corporate power and authority to conduct
its business as presently conducted and as proposed to be conducted by it and to
enter into and perform this Agreement and to carry out the transactions
contemplated by this Agreement. The Company is duly qualified to do business as
a foreign corporation and is in good standing in the Commonwealth of
Massachusetts and in any other jurisdiction in which the failure to so qualify
would have a material adverse effect on the operations or financial condition of
the Company. The Company has furnished to special counsel to the Purchasers true
and complete copies of its Certificate of Incorporation and By-laws, each as
amended to date and presently in effect.
3.2 CAPITALIZATION. The authorized capital stock of the
Company (immediately prior to the Closing) consists of (a) 25,000,000 shares of
common stock, $0.001 par value per share (the "Common Stock"), of which
4,113,235 shares are issued and outstanding, 3,886,615 shares have been reserved
for issuance pursuant to the Company's 1997 Stock Incentive Plan,
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5,750,000 shares have been reserved for issuance upon the conversion of the
outstanding shares of Series A Convertible Preferred Stock ("Series A Preferred
Stock"), 2,213,828 shares have been reserved for issuance upon conversion of the
outstanding shares of Series B Convertible Preferred Stock ("Series B Preferred
Stock"), 278,464 shares have been reserved for issuance upon conversion of the
outstanding shares of Series C Convertible Preferred Stock ("Series C Preferred
Stock"), 1,602,443 shares have been reserved for issuance upon conversion of the
outstanding shares of Series D Convertible Preferred Stock ("Series D Preferred
Stock") and 699,837 shares have been reserved for issuance upon conversion of
the Shares and (b) 12,500,000 shares of preferred stock, $0.01 par value per
share, of which (i) 5,750,000 shares have been designated as Series A Preferred
Stock, all of which are issued and outstanding, (ii) 2,213,828 shares have been
designated as Series B Preferred Stock, all of which are issued and outstanding,
(iii) 278,464 shares have been designated as Series C Preferred Stock, all of
which are issued and outstanding, (iv) 1,602,443 shares have been designated as
Series D Preferred Stock, all of which are issued and outstanding, and (v)
699,837 shares of Series E Preferred Stock, none of which are issued or
outstanding. At the Closing, the Common Stock, the Series A Preferred Stock, the
Series B Preferred Stock, the Series C Preferred Stock, the Series D Preferred
Stock and the Series E Preferred Stock will have the voting powers,
designations, preferences, rights and qualifications, and limitations or
restrictions set forth in the Certificate of Incorporation, as amended by the
Certificate of Amendment. All of the issued and outstanding shares of Common
Stock, Series A Preferred Stock, Series B Preferred Stock, Series C Preferred
Stock and Series D Preferred Stock have been duly authorized and validly issued
and are fully paid and nonassessable. Except as contemplated by this Agreement
or set forth in the Disclosure Schedule, (i) no subscription, warrant, option,
convertible security or other right (contingent or otherwise) to purchase or
acquire any shares of capital stock of the Company is authorized or outstanding,
(ii) the Company has no obligation (contingent or otherwise) to issue any
subscription, warrant, option, convertible security or other such right or to
issue or distribute to holders of any shares of its capital stock any evidences
of indebtedness or assets of the Company, and (iii) the Company has no
obligation (contingent or otherwise) to purchase, redeem or otherwise acquire
any shares of its capital stock or any interest therein or to pay any dividend
or make any other distribution in respect thereof. All of the issued and
outstanding shares of capital stock of the Company have been offered, issued and
sold by the Company in compliance with applicable Federal and state securities
laws.
3.3 SUBSIDIARIES, ETC. The Company has no subsidiaries
and does not own or control, directly or indirectly, any shares of capital stock
of any other corporation or any interest in any partnership, joint venture or
other non-corporate business enterprise.
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3.4 STOCKHOLDER LIST AND AGREEMENTS. Section 3.4 of the
Disclosure Schedule sets forth a true and complete list of the stockholders of
the Company, showing the number of shares and class or series of capital stock
or other securities of the Company held by each stockholder immediately prior to
the execution of this Agreement and the consideration paid to the Company
therefor. Except as listed in Section 3.4 of the Disclosure Schedule or as
contemplated by this Agreement, there are no agreements, written or oral,
between the Company and any holder of its capital stock, or, to the best of the
Company's knowledge, among any holders of its capital stock, relating to the
future acquisition (including without limitation rights of first refusal or
pre-emptive rights), disposition, registration under the Securities Act of 1933,
as amended (the "Securities Act"), or voting of the capital stock of the
Company.
3.5 ISSUANCE OF SHARES. The issuance, sale and delivery
of the Shares in accordance with this Agreement, and the issuance and delivery
of the shares of Common Stock issuable upon conversion of the Shares, have been
duly authorized by all necessary corporate action on the part of the Company,
and all such shares have been duly reserved for issuance. The Shares when so
issued, sold and delivered against payment therefor in accordance with the
provisions of this Agreement, and the shares of Common Stock issuable upon
conversion of the Shares, when issued upon such conversion, will be duly and
validly issued, fully paid and non-assessable.
3.6 AUTHORITY FOR AGREEMENT. The execution, delivery and
performance by the Company of this Agreement and all other agreements required
to be executed by the Company at the Closing pursuant to Section 2 (the
"Ancillary Agreements"), and the consummation by the Company of the transactions
contemplated hereby and thereby, have been duly authorized by all necessary
corporate action. This Agreement and the Ancillary Agreements have been duly
executed and delivered by the Company and constitute valid and binding
obligations of the Company enforceable in accordance with their respective
terms. The execution of and performance of the transactions contemplated by this
Agreement and the Ancillary Agreements and compliance with their provisions by
the Company will not violate any provision of law and will not conflict with or
result in any breach of any of the terms, conditions or provisions of, or
constitute a default under, or require a consent or waiver under, its
Certificate of Incorporation or By-laws (each as amended to date) or any
indenture, lease, agreement or other instrument to which the Company is a party
or by which it or any of its properties is bound, or any decree, judgment,
order, statute, rule or regulation applicable to the Company.
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3.7 GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any governmental authority is required on the part of the Company
in connection with the execution and delivery of this Agreement, the offer,
issuance, sale and delivery of the Shares, or the other transactions to be
consummated at the Closing, as contemplated by this Agreement, except such
filings as shall have been made prior to and shall be effective on and as of the
Closing. Based on the representations made by the Purchasers in Section 5 of
this Agreement, the offer and sale of the Shares to the Purchasers will be
exempt from the registration requirements of applicable Federal and state
securities laws.
3.8 LITIGATION. There is no action, suit or proceeding,
or governmental inquiry or investigation, pending, or, to the best of the
Company's knowledge, any basis therefor or threat thereof, against the Company
or the Founder, which questions the validity of this Agreement or the right of
the Company or the Founder to enter into it, or which might result, either
individually or in the aggregate, in any material adverse change in the
business, prospects, assets or condition, financial or otherwise, of the
Company, nor is there any litigation pending, or, to the best of the Company's
knowledge, any basis therefor or threat thereof, against the Company or the
Founder by reason of the past employment relationships of the Founder, the
proposed activities of the Company, or negotiations by the Company and/or the
Founder with possible investors in the Company.
3.9 FINANCIAL STATEMENTS. The Company has furnished to
each of the Purchasers a complete and correct copy of the unaudited balance
sheet (the "Balance Sheet") of the Company as at September 30, 1999 (the
"Balance Sheet Date") and the related unaudited statement of operations and cash
flow for the nine months ended September 30, 1999 (collectively, the "Financial
Statements"). Since September 30, 1999, there has been no material adverse
change in the business or operations of the Company. The Financial Statements
are complete and correct in all material respects, are in accordance with the
books and records of the Company and present fairly the financial condition and
results of operations of the Company, as at the dates and for the periods
indicated, and have been prepared in accordance with generally accepted
accounting principles consistently applied, except that the Financial Statements
have been prepared for the internal use of management and may not be in
accordance with generally accepted accounting principles because of the absence
of footnotes normally contained therein and are subject to normal year-end audit
adjustments which in the aggregate will not be material.
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3.10 ABSENCE OF LIABILITIES. Except as set forth in
Section 3.10 of the Disclosure Schedule, the Company did not have, at the
Balance Sheet Date, any liabilities of any type which in the aggregate exceeded
$50,000, whether absolute or contingent, which were not fully reflected on the
Balance Sheet, and, since the Balance Sheet Date, the Company has not incurred
or otherwise become subject to any such liabilities or obligations except in the
ordinary course of business.
3.11 TAXES. The amount shown on the Balance Sheet as
provision for taxes is sufficient in all material respects for payment of all
accrued and unpaid Federal, state, county, local and foreign taxes for the
period then ended and all prior periods. The Company has filed or has obtained
presently effective extensions with respect to all Federal, state, county, local
and foreign tax returns which are required to be filed by it, such returns are
true and correct in all material respects and all taxes shown thereon to be due
have been timely paid with exceptions not material to the Company. Neither the
Company nor any of its stockholders has ever filed (a) an election pursuant to
Section 1362 of the Internal Revenue Code of 1986, as amended (the "Code"), that
the Company be taxed as an S Corporation, or (b) consent pursuant to Section
341(f) of the Code relating to collapsible corporations.
3.12 PROPERTY AND ASSETS. The Company has good title to
all of its material properties and assets, including all properties and assets
reflected in the Balance Sheet, except those disposed of since the date thereof
in the ordinary course of business, and none of such properties or assets is
subject to any mortgage, pledge, lien, security interest, lease, charge or
encumbrance other than those the material terms of which are described in
Section 3.12 of the Disclosure Schedule.
3.13 INTELLECTUAL PROPERTY.
(a) To the best of the Company's knowledge, no third
party has claimed or has reason to claim that any person employed by or
affiliated with the Company, in connection with his or her employment by or
affiliation with the Company, (i) has violated or is violating any of the terms
or conditions of his employment, non-competition or non-disclosure agreement
with such third party, (ii) has disclosed or is disclosing or has utilized or is
utilizing any trade secret or proprietary information or documentation of such
third party or (iii) has interfered or is interfering in the employment
relationship between such third party and any of its present or former
employees. No third party has requested information from the Company which
suggests that such a claim might be contemplated. To the best of the Company's
knowledge, no person employed by or affiliated with the Company has employed or
proposes to
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employ any trade secret or any information or documentation proprietary to any
former employer, and to the best of the Company's knowledge, no person employed
by or affiliated with the Company has violated any confidential relationship
which such person may have had with any third party, in connection with the
development, manufacture or sale or any product or proposed product or the
development or sale of any service or proposed service of the Company, and the
Company has no reason to believe there will be any such employment or violation.
To the best of the Company's knowledge, none of the execution or delivery of
this Agreement, or the carrying on of business of the Company as officers,
employees or agents by any officer, director or key employee of the Company, or
the conduct or proposed conduct of the business of the Company, 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
such person is obligated.
(b) Set forth in Section 3.13 of the Disclosure
Schedule is a list of all domestic and foreign patents, patent rights, patent
applications, trademarks, trademark applications, service marks, service ▇▇▇▇
applications, trade names and copyrights, and all applications for such which
are in the process of being prepared, owned by or registered in the name of the
Company, or of which the Company is a licensor or licensee or in which the
Company has any right, and in each case a brief description of the nature of
such right. The Company owns or possesses adequate licenses or other rights to
use all patents, patent applications, trademarks, trademark applications,
service marks, service ▇▇▇▇ applications, trade names, copyrights, manufacturing
processes, formulae, trade secrets, customer lists and know-how (collectively,
"Intellectual Property") necessary for the conduct of its business as conducted
and as proposed to be conducted, and no claim is pending or, to the best of the
Company's knowledge, threatened to the effect that the operations of the Company
infringe upon or conflict with the asserted rights of any other person under any
Intellectual Property, and, to the best of the Company's knowledge, there is no
basis for any such claim (whether or not pending or threatened). No claim is
pending or threatened to the effect that any such Intellectual Property owned or
licensed by the Company, or which the Company otherwise has the right to use, is
invalid or unenforceable by the Company, and, to the best of the Company's
knowledge, there is no basis for any such claim (whether or not pending or
threatened). To the best of the Company's knowledge, all technical information
developed by and belonging to the Company which has not been patented has been
kept confidential. The Company has not granted or assigned to any other person
or entity any right to manufacture, have manufactured, assemble or sell the
products or proposed products or to provide the services or proposed services of
the Company.
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3.14 MATERIAL CONTRACTS AND OBLIGATIONS. Except as
contemplated by this Agreement or as listed in the Disclosure Schedule, the
Company is not a party to any material agreement or commitment of any nature,
including without limitation (a) any agreement which requires future
expenditures by the Company in excess of $250,000, (b) any employment or
consulting agreement, employee benefit, bonus, pension, profit-sharing, stock
option, stock purchase or similar plan or arrangement, or distributor or sales
representative agreement, (c) any agreement with any stockholder, officer or
director of the Company, or any "affiliate" or "associate" of such persons (as
such terms are defined in the rules and regulations promulgated under the
Securities Act), including without limitation any agreement or other arrangement
providing for the furnishing of services by, rental of real or personal property
from, or otherwise requiring payments to, any such person or entity or (d) any
agreement relating to the intellectual property rights of the Company.
3.15 COMPLIANCE. The Company has, in all material
respects, complied with all laws, regulations and orders applicable to its
present and proposed business and has all material permits and licenses required
thereby. There is no term or provision of any mortgage, indenture, contract,
agreement or instrument to which the Company is a party or by which it is bound,
or, to the best of the Company's knowledge, of any provision of any state or
Federal judgment, decree, order, statute, rule or regulation applicable to or
binding upon the Company, which materially adversely affects or, so far as the
Company may now foresee, in the future is reasonably likely to materially
adversely affect, the business, prospects, assets or condition, financial or
otherwise, of the Company. To the best of the Company's knowledge, neither the
Founder nor any other employee of the Company is in violation of any term of any
contract or covenant (either with the Company or with another entity) relating
to employment, patents, proprietary information disclosure, non-competition or
non-solicitation.
3.16 EMPLOYEES AND FOUNDER.
(a) The Founder and the certain other holders of
Common Stock have executed and delivered to the Company a Stock Restriction
Agreement, copies of which have been made available to the Purchasers, and all
of such agreements are in full force and effect.
(b) Each employee of the Company (including the
Founder) who is at or above the director level or who holds at least 100,000
shares of Common Stock (or options exercisable therefor) (as adjusted for stock
splits, stock dividends, recapitalizations and similar events) has executed and
delivered to the Company a Noncompetition and Confidentiality Agreement covering
a period of one year following the termination of such employee's
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employment with the Company, copies of which have been made available to the
Purchasers. Each employee of the Company not covered by the foregoing sentence
has executed and delivered to the Company a Confidentiality Agreement, copies of
which have been made available to the Purchasers. All of such agreements are in
full force and effect.
(c) None of the employees of the Company is
represented by any labor union, and there is no labor strike or other labor
trouble pending with respect to the Company (including, without limitation, any
organizational drive) or, to the best of the Company's knowledge, threatened.
3.17 ERISA. Except as described in the Disclosure
Schedule, the Company does not have or otherwise contribute to or participate in
any employee benefit plan subject to the Employee Retirement Income Security Act
of 1974.
3.18 BOOKS AND RECORDS. The minute books of the Company
contain complete and accurate records of all meetings and other corporate
actions of its stockholders and its Board of Directors and committees thereof.
The stock ledger of the Company is complete and reflects all issuances,
transfers, repurchases and cancellations of shares of capital stock of the
Company.
3.19 BOARD OF DIRECTORS. The Board of Directors is
comprised of four members, and consists of ▇▇▇▇-▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇▇ ▇. ▇▇▇▇▇.
3.20 U.S. REAL PROPERTY HOLDING CORPORATION. The Company
is not now and has never been a "United States Real Property Holding
Corporation" as defined in Section 897(c)(2) of the Code and Section 1.897-2(b)
of the Regulations promulgated by the Internal Revenue Service.
3.21 RELATED PARTY TRANSACTIONS. To the best of the
Company's knowledge, except as set forth in the Disclosure Schedule, no
stockholder, executive officer or director of the Company or member of the
immediate family of any of the foregoing:
(a) owns or has owned, directly or indirectly,
any interest in (except for less than one percent stock holdings for investment
purposes in securities of publicly traded companies), or is an officer,
director, employee or consultant of, any entity which is a lessor, lessee,
supplier or customer of the Company;
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(b) owns, directly or indirectly, as a whole or
in part, any material tangible or intangible property that the Company uses or
contemplates using in the conduct of its business; or
(c) has given the Company written notice of any
cause of action or other claim whatsoever against, or owes any amount to, the
Company, except for immaterial claims in the ordinary course of business such as
for accrued vacation pay, accrued benefits under employee benefit plans, and
medical, dental and other similar health benefit plans existing on the date
hereof.
3.22 DISCLOSURES. Neither this Agreement nor any Schedule
or Exhibit hereto, nor any certificate or instrument furnished to the Purchasers
at the Closing or as required by the terms of this Agreement, when read
together, contains or will contain any untrue statement of a material fact or
omits or will omit to state a material fact necessary in order to make the
statements contained herein or therein, in light of the circumstances under
which they were made, not misleading.
4. [Intentionally omitted]
5. REPRESENTATIONS OF THE PURCHASERS. Each Purchaser represents
and warrants to the Company as follows:
5.1 INVESTMENT. Such Purchaser is acquiring the Shares,
and the shares of Common Stock into which the Shares may be converted, for its
or his own account for investment and not with a view to, or for sale in
connection with, any distribution thereof, nor with any present intention of
distributing or selling the same; and such Purchaser has no present or
contemplated agreement, undertaking, arrangement, obligation, indebtedness or
commitment providing for the disposition thereof. Such Purchaser acknowledges
that the Shares are restricted securities as defined under the Securities Act
and shall bear the legends set forth in Section 7.3 hereof.
5.2 AUTHORITY. Such Purchaser has full power and
authority to enter into and to perform this Agreement in accordance with its
terms. Such Purchaser represents that it has not been organized, reorganized or
recapitalized specifically for the purpose of investing in the Company. This
Agreement and the Ancillary Agreement to be executed by such Purchaser have been
duly executed and delivered by such Purchaser and constitute valid and binding
obligations of such Purchaser enforceable in accordance with their respective
terms. The execution of and
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performance of the transactions contemplated by this Agreement and the Ancillary
Agreements to be executed by such Purchaser and compliance with their provisions
by such Purchaser will not violate any provision of law and will not conflict
with or result in any breach of any of the terms, conditions or provisions of,
or constitute a default under, or require a consent or waiver under, its
organizational documents (each as amended to date) or any indenture, lease,
agreement or other instrument to which the Purchaser is a party or by which it
or any of its properties is bound, or any decree, judgment, order, statute, rule
or regulation applicable to such Purchaser.
5.3 EXPERIENCE. Such Purchaser has carefully reviewed the
representations concerning the Company contained in this Agreement and has made
detailed inquiry concerning the Company, its business and its personnel; the
officers of the Company have made available to such Purchaser any and all
written information which it has requested and have answered to such Purchaser's
satisfaction all inquiries made by such Purchaser; and such Purchaser has
sufficient knowledge and experience in investing in companies similar to the
Company so as to be able to evaluate the risks and merits of its investment in
the Company and is able financially to bear the risks thereof, including a
complete loss of its investment. Such Purchaser understands that an investment
in the Company involves a high degree of risk in view of the fact that the
Company has a limited operating history, and there may never be an established
market for the Company's capital stock.
5.4 STATUS. Such Purchaser is an "accredited Investor" as
that term is defined in Rule 501 of Regulation D promulgated under the
Securities Act.
6. COVENANTS OF THE COMPANY.
6.1 INSPECTION. The Company shall permit each Purchaser,
or any authorized representative thereof, to visit and inspect the properties of
the Company, including its corporate and financial records, and to discuss its
business and finances with officers of the Company, during normal business hours
following reasonable notice and as often as may be reasonably requested, without
interruption of the business of the Company and subject to the confidentiality
obligations of Section 8.2 hereof.
6.2 FINANCIAL STATEMENTS AND OTHER INFORMATION.
(a) So long as a Purchaser (together with any of
its affiliates) holds shares of Series A Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock, Series D Preferred Stock or Series E Preferred
Stock, the Company shall deliver to such Purchaser:
-12-
17
(i) within 120 days after the end of
each fiscal year of the Company, an audited balance sheet of the Company as at
the end of such year, and audited statements of income and of cash flows of the
Company for such year, certified by certified public accountants of established
national reputation selected by the Company, and prepared in accordance with
generally accepted accounting principles; and
(ii) within 45 days after the end of
each fiscal quarter of the Company, an unaudited balance sheet of the Company as
at the end of such quarter, and unaudited statements of income and of cash flows
of the Company for such fiscal quarter and for the current fiscal year to the
end of such fiscal quarter.
(b) So long as a Purchaser (together with any of
its affiliates) holds shares of Series A Preferred Stock, Series B Preferred
Stock, Series C Preferred Stock, Series D Preferred Stock, or Series E Preferred
Stock convertible into at least 300,000 shares of Common Stock (as adjusted for
stock splits, stock dividends, recapitalizations and similar events), the
Company shall deliver to such Purchaser:
(i) as soon as available, but in any
event within 30 days after commencement of each new fiscal year, a budget,
consisting of a business plan and projected financial statements for such fiscal
year; and
(ii) with reasonable promptness, such
other notices, information and data with respect to the Company as the Company
delivers to the holders of its Common Stock, and such other information and data
as such Purchaser may from time to time reasonably request.
(c) The foregoing financial statements shall be
prepared on a consolidated basis if the Company then has any subsidiaries.
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18
6.3 MATERIAL CHANGES AND LITIGATION. The Company shall
promptly notify the Purchasers of any material adverse change in the business,
prospects, assets or condition, financial or otherwise, of the Company and of
any litigation or governmental proceeding or investigation brought or, to the
best of the Company's knowledge, threatened against the Company, or against the
Founder or an officer, director, key employee or principal stockholder of the
Company materially adversely affecting or which, if adversely determined, would
materially adversely affect its business, prospects, assets or condition,
financial or otherwise.
6.4 INSURANCE.
(a) The Company shall maintain, for a period of
five years from April 17, 1997, term life insurance upon the life of the
Founder, in the amount of $1,000,000, with the proceeds payable to the Company.
(b) The Company shall maintain in effect
policies of workers' compensation insurance and of insurance with respect to its
properties and business of the kinds and in the amounts not less than is
customarily obtained by corporations engaged in the same or similar business and
similarly situated, including, without limitation, insurance against loss,
damage, fire, theft, public liability and other risks.
6.5 EMPLOYEE AGREEMENTS. The Company shall require all
employees hereafter employed or engaged by the Company who are at or above the
director level or who holds at least 100,000 shares of Common Stock (or options
exercisable therefor) (as adjusted for stock splits, stock dividends,
recapitalizations and similar events) to enter into a Noncompetition and
Confidentiality Agreement covering a period of one year following the
termination of such employee's employment with the Company, in the form approved
by the Board of Directors. The Company shall require all employees and
independent contractors not covered by the foregoing sentence to enter into a
Confidentiality Agreement in the form approved by the Board of Directors.
6.6 RELATED PARTY TRANSACTIONS. The Company shall not
enter into any agreement with any stockholder, officer or director of the
Company, or any "affiliate" or "associate" of such persons (as such terms are
defined in the rules and regulations promulgated under the Securities Act),
including without limitation any agreement or other arrangement providing for
the furnishing of services by, rental of real or personal property from, or
otherwise requiring payments to, any such person or entity, without the consent
of at least a majority of the
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19
members of the Company's Board of Directors having no interest in such agreement
or arrangement.
6.7 DIRECTORS. The Company shall promptly reimburse in
full each director of the Company who is not an employee of the Company for all
of his reasonable out-of-pocket expenses incurred in attending each meeting of
the Board of Directors of the Company or any committee thereof.
6.8 OPTION SHARES AND RESTRICTED STOCK. The Company has
reserved an aggregate of 3,886,615 shares of Common Stock for future issuance to
employees and consultants of the Company pursuant to the 1997 Stock Incentive
Plan of the Company. Unless otherwise agreed by the Board of Directors, all
options or restricted stock awards granted under such Plan shall vest at the
rate of 20% on the first anniversary of grant and 1.667% per month thereafter
over the subsequent four years so long as the optionee or stockholder continues
to be an employee or consultant of the Company, subject to acceleration of 50%
of the unvested portion of such options in the event of an Acquisition Event (as
defined in the standard form of agreements for use under such Plan).
6.9 RESERVATION OF COMMON STOCK. The Company shall
reserve and maintain a sufficient number of shares of Common Stock for issuance
upon conversion of all of the outstanding shares of Series A Preferred Stock,
Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and
Series E Preferred Stock.
6.10 TERMINATION OF COVENANTS. The covenants of the
Company contained in Sections 6.1 through 6.9 shall terminate, and be of no
further force or effect, upon the effective date of a registration statement
filed by the Company under the Securities Act covering the Company's first
offering of Common Stock, resulting in net proceeds to the Company of at least
$10,000,000, and at a price per share of at least $25.00 (as adjusted for stock
splits, stock dividends, recapitalizations and similar events) or at such time
as the aggregate number of shares of Common Stock into which all shares of
Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock,
Series D Preferred Stock and Series E Preferred Stock owned by the Purchasers
(together with any affiliated entities to whom Shares have been transferred) is
less than 25% of the aggregate number of such shares issued by the Company (as
adjusted for stock splits, stock dividends, recapitalizations and similar
events).
-15-
20
6.11 TERMINATION OF PRIOR COVENANTS.
(a) The Series D Preferred Stock Purchase
Agreement among the Company, the Founder, certain of the Purchasers and certain
other parties dated February 16, 1999 (the "Series D Agreement") is hereby
amended by deleting Section 6 thereof in its entirety.
(b) Each of Yeh-Tsong Wen, The Alexer Limited
Family Partnership, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇-▇▇▇▇▇
▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ (as an individual and as
Custodian), ▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇, H&D Investments 97, ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇,
Spinnaker Clipper Fund, L.P., North Bridge Venture Partners II, L.P., Matrix
Partners IV, L.P., Matrix IV Entrepreneurs Fund, L.P., Net One Systems Co., Ltd.
and Westcon Group, Inc., who are parties to the Series D Agreement, shall be
deemed a Purchaser for purposes of Sections 6, 8.1, 8.2 and 8.8 of this
Agreement and shall have all rights and obligations of a Purchaser under such
Sections.
6.12 QUALIFIED SMALL BUSINESS STOCK. The Company shall
submit to its stockholders (including the Purchasers) and to the Internal
Revenue Service any reports that may be required under Section 1202(d)(1)(C) of
the Code and the Regulations promulgated thereunder. In addition, within ten
days after a Purchaser's written request therefor, the Company shall deliver to
such Purchaser a written statement indicating whether such Purchaser's interest
in the Company constitutes "qualified small business stock" as defined in
Section 1202(c) of the Code.
7. TRANSFER OF SHARES.
7.1 RESTRICTED SHARES. "Restricted Shares" means (i) the
Shares, (ii) the shares of Common Stock issued or issuable upon conversion of
the Shares, (iii) any shares of capital stock of the Company acquired by a
Purchaser pursuant to the Investor Agreement or the Right of First Refusal
Agreement, and (iv) any other shares of capital stock of the Company issued in
respect of such shares (as a result of stock splits, stock dividends,
reclassifications, recapitalizations, or similar events); PROVIDED, HOWEVER,
that shares of Common Stock which are Restricted Shares shall cease to be
Restricted Shares (i) upon any sale pursuant to a registration statement under
the Securities Act, Section 4(1) of the Securities Act or Rule 144 under the
Securities Act, or (ii) at such time as they become eligible for sale under Rule
144(k) under the Securities Act.
-16-
21
7.2 REQUIREMENTS FOR TRANSFER.
(a) Restricted Shares shall not be sold or
transferred unless (1) either (i) they first shall have been registered under
the Securities Act, or (ii) the Company first shall have been furnished with an
opinion of legal counsel, reasonably satisfactory to the Company, to the effect
that such sale or transfer is exempt from the registration requirements of the
Securities Act and (2) such actions are in compliance with applicable state
securities laws.
(b) Notwithstanding the foregoing, no
registration or opinion of counsel shall be required for (i) a transfer 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, if the transferee agrees in writing to
be subject to the terms of this Section 7 to the same extent as if he were an
original Purchaser hereunder, or (ii) a transfer made in accordance with Rule
144 under the Securities Act, or (iii) a transfer made between the funds
affiliated with North Bridge Venture Partners.
7.3 LEGEND. Each certificate representing Restricted
Shares shall bear a legend substantially in the following form:
"The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended, and may not be
offered, sold or otherwise transferred, pledged or hypothecated unless
and until such shares are registered under such Act or an opinion of
counsel satisfactory to the Company is obtained to the effect that such
registration is not required."
The foregoing legend shall be removed from the certificates
representing any Restricted Shares, at the request of the holder thereof, at
such time as they become eligible for resale pursuant to Rule 144(k) under the
Securities Act.
7.4 RULE 144A INFORMATION. The Company shall, at all
times during which it is neither subject to the reporting requirements of
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), nor exempt from reporting pursuant to Rule 12g3-2(b) under the
Exchange Act, upon the written request of a Purchaser, provide in writing to
such Purchaser, and to any prospective transferee of any Restricted Shares of
such Purchaser, the information concerning the Company described in Rule
144A(d)(4) under the Securities Act ("Rule 144A Information"). The Company also
shall, upon the written request of a Purchaser, cooperate with and assist such
Purchaser or any member of the National Association of Securities Dealers, Inc.
PORTAL system in applying to designate and thereafter maintain the eligibility
of the Restricted Shares for trading through PORTAL. The Company's obligations
-17-
22
under this Section 7.4 shall at all times be contingent upon receipt from the
prospective transferee of Restricted Shares of a written agreement to take all
reasonable precautions to safeguard the Rule 144A Information from disclosure to
anyone other than persons who will assist such transferee in evaluating the
purchase of any Restricted Shares and to use such Rule 144A Information only for
such evaluation purposes.
8. MISCELLANEOUS.
8.1 SUCCESSORS AND ASSIGNS. This Agreement, and the
rights and obligations of a Purchaser hereunder, may be assigned by such
Purchaser to any person or entity to which at least 100,000 Shares (or 100% of
the Shares originally purchased hereunder by such Purchaser, if less than
100,000 Shares) or (with respect to the assignment of rights under Section 6
hereof by a party other than a Purchaser of the Shares) 300,000 shares of Series
A Preferred Stock, 100,000 shares of Series B Preferred Stock, 100,000 shares of
Series C Preferred Stock or 100,000 shares of Series D Preferred Stock (or 100%
of the shares of Series A Preferred Stock, Series B Preferred Stock, Series C
Preferred Stock or Series D Preferred Stock originally purchased under the
Series A Agreement, Series B Agreement, Series C Agreement or Series D Agreement
by such Purchaser, if less than 300,000, 100,000, 100,000 or 100,000 shares,
respectively), in each case as adjusted for stock splits, stock dividends,
recapitalizations and similar events, are transferred by such Purchaser, and
such transferee shall be deemed a "Purchaser" for purposes of this Agreement;
provided that the transferee provides written notice of such assignment to the
Company and agrees to be bound by the terms and conditions set forth herein and
the transferee is not a company that the Company reasonably considers to be a
competitor.
8.2 CONFIDENTIALITY. Except as otherwise required by law,
the Purchasers agree that they will keep confidential and will not disclose or
divulge any confidential, proprietary or secret information which they may
obtain from the Company pursuant to financial statements, reports and other
materials submitted by the Company to the Purchasers pursuant to this Agreement,
or pursuant to visitation or inspection rights granted hereunder, unless such
information is known, or until such information becomes known, to the public;
PROVIDED, HOWEVER, that a Purchaser may disclose such information (i) to its
attorneys, accountants, consultants, and other professionals to the extent
necessary to obtain their services in connection with its investment in the
Company, (ii) to any prospective purchaser of any Shares from such Purchaser as
long as such prospective purchaser agrees in writing to be bound by the
provisions of this Section, or (iii) to any affiliate of such Purchaser or to a
partner, shareholder or subsidiary
-18-
23
of such Purchaser; subject to the agreement of such party to keep such
information confidential as set forth herein.
8.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
agreements, representations and warranties contained herein shall survive the
execution and delivery of this Agreement and the closing of the transactions
contemplated hereby.
8.4 [Intentionally omitted]
8.5 NOTICES. All notices, requests, consents, and other
communications under this Agreement shall be in writing and shall be delivered
by hand, sent via a reputable nationwide overnight courier service or mailed by
first class certified or registered mail, return receipt requested, postage
prepaid:
If to the Company, at ArrowPoint Communications, Inc., ▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: President, or at such other address or addresses as may
have been furnished in writing by the Company to the Purchasers, with a copy to
▇▇▇▇ and ▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
If to a Purchaser, at its address as set forth on SCHEDULE I attached
hereto, or at such other address or addresses as may have been furnished to the
Company in writing by such Purchaser.
Notices provided in accordance with this Section 8.5 shall be deemed
delivered upon personal delivery, one business day after being sent via a
reputable nationwide overnight courier service, or two business days after
deposit in the mail.
8.6 BROKERS. The Company, the Founder and the Purchasers
each (i) represents and warrants to the other parties hereto that he, she or it
has retained no finder or broker in connection with the transactions
contemplated by this Agreement, and (ii) will indemnify and save the other
parties harmless from and against any and all claims, liabilities or obligations
with respect to brokerage or finders' fees or commissions in connection with the
transactions contemplated by this Agreement asserted by any person on the basis
of any agreement, statement or representation alleged to have been made by such
indemnifying party.
8.7 ENTIRE AGREEMENT. This Agreement and the Ancillary
Agreements embody the entire agreement and understanding between the parties
hereto with respect to the
-19-
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subject matter hereof and supersedes all prior agreements and understandings
relating to such subject matter.
8.8 AMENDMENTS AND WAIVERS. Except as otherwise expressly
set forth in this Agreement, 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), with the written
consent of the Company and the holders of at least 66 2/3% of the shares of
Common Stock issued or issuable upon conversion of the Shares; provided that an
amendment or waiver with respect to Section 6 hereof shall instead require the
written consent of the holders of at least 66 2/3% of the shares of Common Stock
issued or issuable upon conversion of the Shares, the shares of Series D
Preferred Stock, the shares of Series C Preferred Stock, the shares of Series B
Preferred Stock and the shares of Series A Preferred Stock, taken together. Any
amendment or waiver effected in accordance with this Section 8.8 shall be
binding upon each holder of any Shares, shares of Series D Preferred Stock,
shares of Series C Preferred Stock, shares of Series B Preferred Stock or shares
of Series A Preferred Stock (including shares of Common Stock into which such
Shares, shares of Series D Preferred Stock, shares of Series C Preferred Stock,
shares of Series B Preferred Stock or shares of Series A Preferred Stock have
been converted), each future holder of all such securities and the Company. No
waivers of or exceptions to any term, condition or provision of this Agreement,
in any one or more instances, shall be deemed to be, or construed as, a further
or continuing waiver of any such term, condition or provision. No amendment
shall increase any obligation of the Founder hereunder without the express
written consent of the Founder. No waivers of or exceptions to any term,
condition or provision of this Agreement, in any one or more instances, shall be
deemed to be, or construed as, a further or continuing waiver of any such term,
condition or provision.
8.9 COUNTERPARTS. This Agreement may be executed in one
or more counterparts, each of which shall be deemed to be an original, but all
of which shall be one and the same document.
8.10 SECTION HEADINGS. The section headings are for the
convenience of the parties and in no way alter, modify, amend, limit, or
restrict the contractual obligations of the parties.
8.11 SEVERABILITY. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement.
-20-
25
8.12 GOVERNING LAW. This Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware.
-21-
26
[Preferred Stock Purchase Agreement}
Executed as of the date first written above.
ARROWPOINT COMMUNICATIONS, INC.
By:
-------------------------------
Chin-▇▇▇▇▇ ▇▇
President
PURCHASERS:
North Bridge Venture Partners IV-A, L.P.
By: North Bridge Venture Management IV, L.P.,
its General Partner
By:
------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
General Partner
North Bridge Venture Partners IV-B, L.P.
By: North Bridge Venture Management IV, L.P.,
its General Partner
By:
------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
General Partner
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Matrix Partners VI, L.P.
By: Matrix VI Management Co., L.L.C.,
its General Partner
By:
------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
Member
Accel V L.P.
By: Accel V Associates L.L.C.
its General Partner
By:
------------------------------
Name:
Managing Member
Accel Internet/Strategic Technology
Fund L.P.
By: Accel Internet/Strategic
Technology Fund Associates L.L.C.
its General Partner
By:
------------------------------
Name:
Managing Member
Accel Keiretsu V L.P.
By: Accel Keiretsu V Associates L.L.C.
its General Partner
By:
-------------------------
Name:
Managing Member
-23-
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Accel Investors `97 L.P.
By:
------------------------------
Name:
General Partner
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Partners
By:
------------------------------
Name:
General Partner
Pequot Private Equity Fund, L.P.
By: Pequot Capital Management, Inc. Investment Manager
By:
------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Chief Financial Officer
Pequot Offshore Private Equity Fund, Inc.
By: Pequot Capital Management, Inc. Investment Adviser
By:
------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Chief Financial Officer
-24-
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Spinnaker Founders Fund, L.P.
By: ▇▇▇▇▇▇ Capital Management, L.L.C.,
its General Partner
By:
------------------------------
Name:
Title:
Spinnaker Offshore Founders Fund, Cayman Limited
By: ▇▇▇▇▇▇ Capital Management, L.L.C.,
its Investment Adviser and Attorney-in-Fact
By:
------------------------------
Name:
Title:
Bayview Investors, Ltd.
By:
------------------------------
Name:
Title:
BT Investment Partners, Inc.
By:
------------------------------
Name:
Title:
-25-
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Matrix ______________
By:
------------------------------
By:
------------------------------
Name:
Title:
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▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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[Corporate][Exodus]
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▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇ ▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇
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▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇
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▇▇. ▇▇▇▇ ▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇
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Corporate [Lycos]
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▇▇▇ ▇▇▇▇▇
-28-
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-------------------------------------
▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Solely as to Sections 6, 8.1, 8.2 and 8.8
-------------------------------------
Chin-▇▇▇▇▇ ▇▇
-------------------------------------
Yeh-Tsong Wen
-------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
-------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇ ▇. ▇▇▇▇▇
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▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇ ▇▇▇▇▇
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as Custodian for ▇▇▇▇▇▇
▇▇▇▇▇▇▇ under the Massachusetts
Uniform Transfers to Minors Act
--------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, as Custodian for ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇ under the Massachusetts
Uniform Transfers to Minors Act
--------------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
-30-
35
Spinnaker Clipper Fund, L.P.
By: ▇▇▇▇▇▇ Capital Management, L.L.C.,
its General Partner
By:
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Managing Director
of Operations of ▇▇▇▇▇▇ Capital Management, L.L.C.
North Bridge Venture Partners II, L.P.
By: North Bridge Venture Management II, L.P.,
its General Partner
By:
------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
General Partner
Matrix Partners IV, L.P.
By: Matrix IV Management Co., L.P.,
its General Partner
By:
------------------------
▇▇▇▇ ▇. ▇▇▇▇▇
General Partner
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36
Matrix IV Entrepreneurs Fund, L.P.
By: Matrix IV Management Co., L.P.,
its General Partner
By: ________________________
▇▇▇▇ ▇. ▇▇▇▇▇
General Partner
H&D Investments 97
By:
---------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------------
▇▇▇▇▇ ▇▇▇▇▇▇
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37
SCHEDULE I
Name and Address No. of Shares of Aggregate
of Purchaser Series E Preferred Purchase Price
---------------- ------------------ --------------
North Bridge Venture 95,578 $ 2,020,518.92
Partners IV-A, L.P.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
North Bridge Venture 45,414 $ 960,051.96
Partners IV-B, L.P.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Matrix Partners VI, L.P. 166,836 $ 3,526,913.04
Bay Colony Corporate Center
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ & CO., as 27,159 $ 574,141.26
Nominee
for certain persons
▇/▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Center
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇
Accel V L.P. 48,127 $ 1,017,404.78
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇. ▇▇▇▇▇▇ Sednaoui
Accel Internet/Strategic 6,376 $ 134,788.64
Technology
Fund L.P.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇. ▇▇▇▇▇▇ Sednaoui
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38
Accel Keiretsu V L.P. 2,514 $ 53,145.96
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇. ▇▇▇▇▇▇ Sednaoui
Accel Investors `97 L.P.
One ▇▇▇▇▇▇ Square 2,943 $ 62,215.02
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇. ▇▇▇▇▇▇ Sednaoui
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ Partners 1,349 $ 28,517.86
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇. ▇▇▇▇▇▇ Sednaoui
Pequot Private Equity Fund, L.P. 23,136 $ 489,095.04
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Pequot Offshore Private Equity 2,929 $ 61,919.06
Fund, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇
Spinnaker Founders Fund, L.P. 19,038 $ 402,463.32
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Spinnaker Offshore Founders 12,240 $ 258,753.60
Fund, Cayman Limited
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Bayview Investors, Ltd. 1,042 $ 22,027.88
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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39
BT Investment Partners, Inc. 3,909 $ 82,636.26
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇ 2,365 $ 49,996.10
▇▇▇▇▇▇▇▇.▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 18,921 $ 399,989.94
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Exodus Communications, Inc. 23,652 $ 500,003.28
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ 2,365 $ 49,996.10
Exodus Communications, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ 3,548 $ 75,004.72
Exodus Communications, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ 4,730 $ 99,992.20
Exodus Communications, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 9,461 $ 200,005.54
Exodus Communications, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 15,374 $ 325,006.36
Exodus Communications, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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40
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 2,365 $ 49,996.10
Exodus Communications, Inc.
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 7,096 $ 150,009.44
Exodus Communications, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ 4,730 $ 99,992.20
Exodus Communications, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
The ▇▇▇▇▇▇▇ Family Trust 4,730 $ 99,992.20
c/o ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Exodus Communications, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇ 3,547 $ 74,983.58
Exodus Communications, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇ 4,730 $ 99,992.20
Global Center
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ 2,365 $ 49,996.10
Global Center
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ 2,365 $ 49,996.10
Global Center
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇ 1,183 $ 25,008.62
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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41
▇▇▇▇▇ ▇▇▇▇▇▇ 11,826 $ 250,001.64
c/o The Management Group
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇ 11,826 $ 250,001.64
c/o The Management Group
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ 11,826 $ 250,001.64
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇ 4,730 $ 99,992.20
▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇. ▇▇▇▇ ▇▇▇ 3,548 $ 75,004.72
Combox
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇., #▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇ 3,548 $ 75,004.72
Combox
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇., #▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ 11,826 $ 250,001.64
Lycos
▇▇▇-▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ 11,826 $ 250,001.64
Case Technology
Isla del Hierro, n. 5
28700 San Sebastian
de los ▇▇▇▇▇
▇▇▇▇▇▇, Spain
▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇. 9,460 $ 199,984.40
▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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42
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ 4,730 $ 99,992.20
▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
---------- --------------
Total 657,263 $13,894,539.82
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