Exhibit 4.(a)6
Series C Preferred Stock Purchase Agreement dated as of October 30, 2002
by and among NexVerse Networks, Inc., the Registrant
and the other purchasers whose names are set forth
in Exhibit A to the said agreement.
NexVerse Networks, Inc.
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
OCTOBER 30, 2002
Nexverse Networks, inc.
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES C PREFERRED STOCK PURCHASE AGREEMENT (the "Agreement") is
made and entered into as of October 30, 2002, by and among NEXVERSE NETWORKS,
INC., a Delaware corporation (the "Company"), and each of those persons and
entities, severally and not jointly, whose names are set forth on the Schedule
of Purchasers attached hereto as Exhibit A (which persons and entities are
hereinafter collectively referred to as "Purchasers" and each individually as a
"Purchaser").
Recitals
WHEREAS, the Company is entering into that certain Share Exchange
Agreement by and among the Company, ECI Telecom Ltd. ("ECI"), and ECI Telecom -
NGTS, Inc. of even date herewith (the "Exchange Agreement"), pursuant to which
the Company will acquire all of the outstanding capital stock of certain
subsidiaries of ECI upon the Closing, as such term is defined in the Exchange
Agreement (the "Exchange Closing");
WHEREAS, the Company has authorized the sale and issuance of an
aggregate of one hundred seventy four million eight hundred twenty five thousand
two hundred (174,825,200) shares of its Series C Preferred Stock (the "Shares")
simultaneously with the Exchange Closing;
WHEREAS, upon execution hereof, the Company and the Purchasers are
placing the purchase price for the Shares sold in the initial Closing and their
respective signature pages to the Agreement and Related Agreements (as defined
in Section 3.1 below) into escrow with the Bank of New York (the "Escrow Agent")
pursuant to that certain Escrow Agreement by and among the Escrow Agent, the
Purchasers and the Company of even date herewith in the form attached hereto as
Exhibit H (the "Escrow Agreement");
WHEREAS, Purchasers desire to purchase the Shares on the terms and
conditions set forth herein; and
WHEREAS, the Company desires to issue and sell the Shares to Purchasers
on the terms and conditions set forth herein.
Agreement
NOW, THEREFORE, in consideration of the foregoing recitals and the
mutual promises, representations, warranties, and covenants hereinafter set
forth and for other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as follows:
1. Agreement To Sell And Purchase.
1.1 Authorization of Shares. The Company has authorized (a) the sale
and issuance of the Shares to the Purchasers and (b) the issuance of the shares
of Common Stock to be issued upon conversion of the Shares (the "Conversion
Shares"). The Shares and the Conversion Shares will have the rights,
preferences, privileges and restrictions set forth in the Amended and Restated
Certificate of Incorporation of the Company, in the form attached hereto as
Exhibit B (the "Restated Charter").
1.2 Sale and Purchase. Subject to the terms and conditions hereof, at
the Closing (as hereinafter defined) the Company hereby agrees to issue and sell
to each Purchaser, severally and not jointly, and each Purchaser agrees to
purchase from the Company, severally and not jointly, the number of Shares set
forth opposite such Purchaser's name on Exhibit A, at a purchase price of
seventeen and sixteen hundredths cents ($0.1716) per share.
2. Closing, Delivery And Payment.
2.1 Closing. The closing of the sale and purchase of the Shares under
this Agreement (the "Closing") shall take place at the offices of Cooley Godward
LLP, Five Palo Alto Square, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇ ▇▇▇▇, ▇▇, ▇▇▇▇▇-▇▇▇▇ upon
delivery of the Release Instructions (as defined in the Escrow Agreement) or at
such other time or place as the Company and Purchasers may mutually agree (such
date is hereinafter referred to as the "Closing Date").
2.2 Delivery. At the Closing, subject to the terms and conditions
hereof and of the Escrow Agreement, the Company will deliver to each Purchaser a
certificate representing the number of Shares to be purchased at the Closing by
such Purchaser, and the Escrow Agent will deliver the purchase price of the
Shares to the Company.
2.3 Subsequent Sales of Shares. At any time on or before the 120th day
after the Closing, the Company may sell up to the balance of the Shares not sold
at the Closing to such persons as may be approved by the Board of Directors of
the Company (the "Additional Purchasers"). At any additional closings (each an
"Additional Closing") (i) All such sales made shall be made on the terms and
conditions set forth in this Agreement (other than terms relating to the Escrow
Agreement), (ii) the representations and warranties of the Company set forth in
Section 3 hereof (and the Schedule of Exceptions) shall speak as of the date of
this Agreement and the Company shall have no obligation to update any such
disclosure, and (iii) the representations and warranties of the Additional
Purchasers in Section 4 hereof shall speak as of such Additional Closing. The
Schedule of Purchasers may be amended by the Company without the consent of
Purchasers to include any Additional Purchasers. Any shares of Series C
Preferred Stock sold pursuant to this Section 2.3 shall be deemed to be "Shares"
for all purposes under this Agreement and any Additional Purchasers thereof
shall be deemed to be "Purchasers" for all purposes under this Agreement.
3. Representations And Warranties Of The Company.
Except as set forth on a Schedule of Exceptions attached hereto as
Exhibit C, delivered by the Company to Purchasers before the date of this
Agreement, the Company hereby represents and warrants as of the date of this
Agreement to each Purchaser as set forth below.
3.1 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. The Company has all requisite corporate power and
authority to own and operate its properties and assets, to execute and deliver
this Agreement, the Amended and Restated Investor Rights Agreement in the form
attached hereto as Exhibit D (the "Investor Rights Agreement") and the Amended
and Restated Voting Agreement in the form attached hereto as Exhibit E (the
"Voting Agreement") (collectively, the "Related Agreements"), to issue and sell
the Shares and the Conversion Shares, and to carry out the provisions of this
Agreement, the Related Agreements and the Restated Charter and to carry on its
business as presently conducted and as presently proposed to be conducted. The
Company is duly qualified and is authorized to do business and is in good
standing as a foreign corporation in all jurisdictions in which the nature of
its activities and of its properties (both owned and leased) makes such
qualification necessary, except for those jurisdictions in which failure to do
so would not have a material adverse effect on the Company or its business.
3.2 Subsidiaries. The Company does not own or control any equity
security or other interest of any other corporation, limited partnership or
other business entity. The Company is not a participant in any joint venture,
partnership or similar arrangement. Since its inception, the Company has not
consolidated or merged with, acquired all or substantially all of the assets of,
or acquired the stock or any interest in any corporation, partnership,
association, or other business entity.
3.3 Capitalization; Voting Rights
(a) The authorized capital stock of the Company, of the date hereof,
consists of (i) sixty-five million (65,000,000) shares of Common Stock, par
value $0.001 per share, three million five hundred sixteen thousand three
hundred seventy five (3,516,375) shares of which are issued and outstanding, and
(ii) forty-six million four hundred seventy-four thousand seven hundred
thirty-eight (46,474,738) shares of Preferred Stock, par value $0.001 per share,
twelve million nine hundred seventy-four thousand seven hundred thirty-eight
(12,974,738) shares of which are designated Series A Preferred Stock, all of
which are issued and outstanding and thirty-three million five hundred thousand
(33,500,000) shares of which are designated Series B Preferred Stock, thirty
million (30,000,000) of which are issued and outstanding
(b) The authorized capital stock of the Company, immediately prior to
the Closing, will consist of (i) four hundred fifty million (450,000,000) shares
of Common Stock, par value $0.001 per share, one hundred seventeen million two
hundred sixty six thousand one hundred forty eight (117,266,148) shares of which
will be issued and outstanding, and (ii) one hundred ninety four million four
hundred forty six thousand five hundred one (194,446,501) shares of Preferred
Stock, par value $0.001 per share, Five million four hundred forty six thousand
five hundred (5,446,500) shares of which will be designated Series A-1 Preferred
Stock, par value $0.001 per share, Five million four hundred twenty five
thousand two hundred seven (5,425,207) of which will be issued and outstanding;
one (1) share of which will be designated Series A-2 Preferred Stock, par value
$0.001 per share, which will not be issued and outstanding; nine million
(9,000,000) shares of which will be designated Series B-1 Preferred Stock, par
value $0.001 per share, all of which will be issued and outstanding, and one
hundred
eighty million (180,000,000) shares of which will be designated Series C
Preferred Stock, par value $0.001 per share, none of which will be issued and
outstanding.
(c) As of the date hereof, under the Company's 2001 Equity Incentive
Plan (the "Plan"), (i) twenty three thousand two hundred three (23,203) shares
of Common Stock have been issued pursuant to restricted stock purchase
agreements and/or the exercise of outstanding options, (ii) options to purchase
four million six hundred sixty thousand thirty three (4,660,033) shares of
Common Stock have been granted and are currently outstanding, and (iii) two
million one hundred ninety thousand three hundred thirty six (2,190,336) shares
of Common Stock remain available for future issuance to officers, directors,
employees and consultants of the Company.
(d) Other than one hundred forty seven thousand five hundred (147,500)
shares of Series B Preferred Stock reserved for issuance pursuant to outstanding
warrants (which will be converted into warrants to purchase one hundred sixty
two thousand two hundred fifty (162,250) shares of Common Stock and twenty one
thousand one hundred thirty seven (21,137) shares of Series A-1 Preferred Stock
automatically upon filing of the New Charter), the shares reserved for issuance
under the Plan, and except as may be granted pursuant to the Exchange Agreement,
this Agreement and the Related Agreements, there are no outstanding options,
warrants, rights (including conversion or preemptive rights and rights of first
refusal), proxy or stockholder agreements, or agreements of any kind for the
purchase or acquisition from the Company of any of its securities as of the date
hereof.
(e) Immediately prior to the Closing, other than one hundred sixty two
thousand two hundred fifty (162,250) shares of Common Stock and twenty one
thousand one hundred thirty seven (21,137) shares of Series A-1 Preferred Stock
that will be reserved for issuance pursuant to outstanding warrants, the shares
that will be reserved for issuance under the Plan, and except as may be granted
pursuant to the Exchange Agreement, this Agreement and the Related Agreements,
there will be no outstanding options, warrants, rights (including conversion or
preemptive rights and rights of first refusal), proxy or stockholder agreements,
or agreements of any kind for the purchase or acquisition from the Company of
any of its securities. At the Closing, all such preemptive rights will have been
properly waived or complied with respect to all prior issuances of capital stock
and with respect to the issuance of the Shares and Conversion Shares.
(f) All issued and outstanding shares of the Company's Common Stock and
Preferred Stock (i) have been duly authorized and validly issued and are fully
paid and nonassessable, and (ii) were issued in compliance with all applicable
state and federal laws concerning the issuance of securities.
(g) Effective as of the Closing, the debt obligations of the Company to
Comdisco, Inc., Comerica Bank (California), GATX Ventures, Inc., and Dominion
Venture Finance L.L.C. will be restructured as set forth on Exhibit G.
(h) As of the Closing, the rights, preferences, privileges and
restrictions of the Shares will be as stated in the Restated Charter. Each share
of Series C Preferred Stock will be convertible into Common Stock on a
one-for-one basis as of the Closing. The Conversion
Shares have been duly and validly reserved for issuance. When issued in
compliance with the provisions of this Agreement and the Restated Charter, the
Shares and the Conversion Shares will be validly issued, fully paid and
nonassessable, and will be free of any liens or encumbrances other than liens
and encumbrances created by or imposed upon Purchasers; provided, however, that
the Shares and the Conversion Shares may be subject to restrictions on transfer
under state and/or federal securities laws as set forth herein or as otherwise
required by such laws at the time a transfer is proposed.
3.4 Authorization; Binding Obligations. All corporate action on the
part of the Company, its officers, directors and stockholders necessary for the
authorization of this Agreement and the Related Agreements, the performance of
all obligations of the Company hereunder and thereunder and the authorization,
sale, issuance and delivery of the Shares pursuant hereto and the Conversion
Shares pursuant to the Restated Charter has been taken, including valid approval
of the Restated Charter. This Agreement and the Related Agreements, when
executed and delivered, will be valid and binding obligations of the Company
enforceable in accordance with their terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights, (b) general principles
of equity that restrict the availability of equitable remedies, and (c) to the
extent that the enforceability of the indemnification provisions in the Investor
Rights Agreement may be limited by applicable laws. The sale of the Shares and
the subsequent conversion of the Shares into Conversion Shares are not and will
not be subject to any preemptive rights or rights of first refusal that have not
been properly waived or complied with.
3.5 Financial Statements. The Company has made available to each
Purchaser (a) its audited balance sheet as at June 30, 2002 and audited
statement of income and cash flows for the period from the Company's inception
to June 30, 2002, and (b) its unaudited balance sheet as at September 30, 2002
(the "Statement Date") and unaudited consolidated statement of income and cash
flows for the three month period ending on the Statement Date (collectively, the
"Financial Statements"). The Financial Statements, together with the notes
thereto, have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods indicated,
except as disclosed therein, and present fairly the financial condition and
position of the Company as of June 30, 2002 and the Statement Date; provided,
however, that the unaudited financial statements are subject to normal recurring
year-end audit adjustments (which are not expected to be material either
individually or in the aggregate), and do not contain all footnotes required
under generally accepted accounting principles.
3.6 Liabilities. Other than as set forth in the Financial Statements,
the Company has no material liabilities and, to the best of its knowledge, has
no material contingent liabilities, except current liabilities incurred in the
ordinary course of business which have not been, either in any individual case
or in the aggregate, materially adverse.
3.7 Agreements; Action.
(a) Except for agreements explicitly contemplated hereby and agreements
between the Company and its employees with respect to the sale of the Company's
Common
Stock pursuant to the Plan, there are no agreements, understandings or proposed
transactions between the Company and any of its officers, directors, employees,
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 to its knowledge by which it is bound which may involve (i) future
obligations (contingent or otherwise) of, or payments to, the Company in excess
of $25,000 (other than obligations of, or payments to, the Company arising from
purchase or sale agreements entered into in the ordinary course of business), or
(ii) the transfer or license of any patent, copyright, trade secret or other
proprietary right to or from the Company (other than licenses by the Company of
"off the shelf" or other standard products), or (iii) indemnifications by the
Company, including with respect to infringements of proprietary rights (other
than indemnification obligations arising from purchase, sale or license
agreements entered into in the ordinary course of business).
(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 or guaranteed any indebtedness for money
borrowed or any other liabilities (other than with respect to dividend
obligations, distributions, indebtedness and other obligations incurred in the
ordinary course of business) individually in excess of $25,000 or, in the case
of indebtedness and/or liabilities individually less than $25,000, in excess of
$50,000 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.
3.8 Obligations to Related Parties. There are no obligations of the
Company to officers, directors, stockholders, or employees of the Company other
than (a) for payment of salary for services rendered, (b) reimbursement for
reasonable expenses incurred on behalf of the Company and (c) for other standard
employee benefits made generally available to all employees (including stock
option agreements outstanding under any stock option plan approved by the Board
of Directors of the Company). None of the officers, directors or, to the best of
the Company's knowledge, key employees or stockholders of the Company or any
members of their immediate families, is indebted to the Company or 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 which competes with the Company, other than passive
investments in publicly traded companies (representing less than 1% of such
company) which may compete with the Company. No officer, director or
stockholder, or any member of their immediate families, is, directly or
indirectly, interested in any material contract with the Company (other than
such contracts as relate to any such person's ownership of capital stock or
other securities of the Company).
3.9 Changes. Since the Statement Date, there has not been:
(a) Any change in the assets, liabilities, financial condition or
operations of the Company from that reflected in the Financial Statements, other
than changes in the ordinary course of business, none of which individually or
in the aggregate has had a material adverse effect on such assets, liabilities,
financial condition or operations of the Company;
(b) Any resignation or termination of any officer, key employee or
group of employees of the Company;
(c) Any material change in the contingent obligations of the Company by
way of guaranty, endorsement, indemnity, warranty or otherwise;
(d) Any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the properties, business or
prospects or financial condition of the Company;
(e) Any waiver by the Company of a valuable right or of a material debt
owed to it;
(f) Any material change in any compensation arrangement or agreement
with any employee, officer, director or stockholder;
(g) Any labor organization activity related to the Company;
(h) Any sale, assignment or transfer of any patents, trademarks,
copyrights, trade secrets or other intangible assets;
(i) Any change in any agreement to which the Company is a party or by
which it is bound which materially and adversely affects the business, assets,
liabilities, financial condition, operations or prospects of the Company;
(j) Any other event or condition of any character that, either
individually or cumulatively, has materially and adversely affected the
business, assets, liabilities, financial condition or operations of the Company;
or
(k) Any arrangement or commitment by the Company to do any of the acts
described in subsection (a) through (j) above.
3.10 Title to Properties and Assets; Liens, Etc. The Company has good
and marketable title to its properties and assets, and good title to its
leasehold estates, in each case subject to no mortgage, pledge, lien, lease,
encumbrance or charge, other than (a) those resulting from taxes which have not
yet become delinquent, (b) minor liens and encumbrances which do not materially
detract from the value of the property subject thereto or materially impair the
operations of the Company, and (c) those that have otherwise arisen in the
ordinary course of business. The Company is in compliance with all material
terms of each lease to which it is a party or is otherwise bound.
3.11 Intellectual Property.
(a) General. The Company owns or possesses sufficient legal rights to
all patents, trademarks, service marks, trade names, copyrights, trade secrets,
licenses, information and other proprietary rights and processes ("Proprietary
Rights") necessary for its business as now conducted and as presently proposed
to be conducted. Section 3.11(a) of the Schedule of Exceptions sets forth with
respect to the Proprietary Rights of the Company: (i) each trademark, trade name
or service ▇▇▇▇, whether or not registered, (ii) each copyright for which
registration has been sought, whether or not registered, including the number
and date of registration for each country in which a copyright has been
registered, (iii) for each patent which has been issued or invention for which a
patent application has been filed, whether or not issued, the number and date of
the application for each country in which a patent application has been made or
a patent has been issued, and (iv) for each mask work (if any), whether or not
registered, the date of first commercial exploitation and if registered, the
registration number and date of registration. True and correct copies of all
Proprietary Rights (including all pending applications, application related
documents and materials and written materials relating to Trade Secrets) owned,
controlled or used by or on behalf of the Company or in which the Company has
any interest whatsoever have been provided to the Investors.
(b) Adequacy. The Proprietary Rights of the Company are all those
necessary for the normal conduct of the business of the Company as presently
conducted and as presently contemplated, including the design, manufacture,
development and sale of all products currently under development, planned for
development or in production.
(c) Royalties and Licenses. Except as set forth in Section 3.11(c) of
the Schedule of Exceptions, the Company has no obligation to compensate any
person for the use of any of its Proprietary Rights, the Company is not subject
to any license of Proprietary Rights other than shrink-wrap licenses nor has the
Company granted to any Person any license, option or other rights to use in any
manner any of its Proprietary Rights, whether requiring the payment of royalties
or not.
(d) Ownership. The Company has a valid right to use or owns free and
clear of any encumbrance its Proprietary Rights, and such Proprietary Rights
will not cease to be valid rights of the Company by reason of the execution,
delivery and performance of this Agreement or the Related Agreements or the
consummation of the transactions contemplated hereby or thereby.
(e) Absence of Claims. The Company (A) has not received any notice
alleging, or otherwise has knowledge of facts that might give rise to,
invalidity with respect to any of the Proprietary Rights of the Company and (B)
has not received any notice of alleged infringement of any rights of others due
to any activity by the Company. To the knowledge of the Company, the Company's
use of its Proprietary Rights in its past, current and planned products do not
and would not infringe upon or otherwise violate the valid rights of any third
party anywhere in the world. No other Person (i) has notified the Company that
it is claiming any ownership of or right to use any of the Company's Proprietary
Rights or (ii) to the knowledge of the Company, is infringing upon any such
Proprietary Rights in any way.
3.12 Protection of Proprietary Rights. All of the pending applications
for the Company's Proprietary Rights have been duly filed and all other
customary actions to protect such Proprietary Rights have been taken. The
Company has taken reasonable steps necessary or appropriate (including, entering
into appropriate confidentiality and nondisclosure agreements with officers,
directors, subcontractors, employees, licensees and customers) to safeguard and
maintain the secrecy and confidentiality of, and the proprietary rights in, the
Proprietary Rights. The Company is not aware of any breach of any such
confidentiality or nondisclosure agreement by any party thereto.
3.13 Compliance with Other Instruments. The Company is not in violation
or default of any term of its certificate of incorporation or Bylaws, as
currently in effect, or Restated Charter or of any provision of any mortgage,
indenture, contract, agreement, instrument or contract to which it is party or
by which it is bound or of any judgment, decree, order or writ. The execution,
delivery, and performance of and compliance with this Agreement, and the Related
Agreements, and the issuance and sale of the Shares pursuant hereto and of the
Conversion Shares pursuant to the Restated Charter, will not, with or without
the passage of time or giving of notice, result in any such violation, or be in
conflict with or constitute a default under any such term, or result in the
creation of any mortgage, pledge, lien, encumbrance or charge upon any of the
properties or assets of the Company or the suspension, revocation, impairment,
forfeiture or nonrenewal of any permit, license, authorization or approval
applicable to the Company, its business or operations or any of its assets or
properties. 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 agreement or other agreement required to
be disclosed on the Schedule of Exceptions.
3.14 Litigation. There is no action, suit, proceeding or investigation
pending or, to the Company's knowledge, currently threatened against the
Company, nor is the Company aware that there is any basis for any of the
foregoing. The foregoing includes, without limitation, actions pending or, to
the Company's knowledge, threatened 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 to its knowledge 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 which the Company intends to initiate.
3.15 Employees. The Company has no collective bargaining agreements
with any of its employees. There is no labor union organizing activity pending
or, to the Company's knowledge, threatened with respect to the Company. The
Company is not a party to or bound by any currently effective employment
contract, deferred compensation arrangement, bonus plan, incentive plan, profit
sharing plan, retirement agreement or other employee compensation plan or
agreement. To the Company's knowledge, no employee of the Company, nor any
consultant with whom the Company has contracted, is in violation of any term of
any employment contract, proprietary information agreement or any other
agreement relating to the right of any such individual to be employed by, or to
contract with, the Company; and to the Company's knowledge the continued
employment by the Company of its present employees, and the performance of the
Company's contracts with its independent contractors, will not result in any
such violation. The Company has not received any notice alleging that any such
violation has occurred. No employee of the Company has been granted the right to
continued employment by the Company or to any material compensation following
termination of employment with the Company. The Company is not aware that any
officer, key employee or group of employees intends to terminate his, her or
their employment with the Company, nor does the Company have a present intention
to terminate the employment of any officer, key employee or group of employees.
Each former employee of the Company has entered into an agreement with the
Company providing for the full release of any claims against the Company or any
related party arising out of such employment. There are no actions pending, or
to the Company's knowledge, currently threatened, by any former or current
employee concerning such person's employment by the Company.
3.16 Obligations of Management. Each officer and key employee of the
Company is currently devoting substantially all of his or her business time to
the conduct of the business of the Company. The Company is not aware that any
officer or key employee of the Company is planning to work less than full time
at the Company in the future. No officer or key employee is currently working
or, to the Company's knowledge, plans to work for a competitive enterprise,
whether or not such officer or key employee is or will be compensated by such
enterprise.
3.17 Registration Rights and Voting Rights. Except as required pursuant
to the Investor Rights Agreement by and among the Company and the Investors (as
defined therein), dated November 27, 2001, the Company is presently not under
any obligation, and has not granted any rights, to register (as defined in
Section 1.1 of the Investor Rights Agreement) any of the Company's presently
outstanding securities or any of its securities that may hereafter be issued. To
the Company's knowledge, except as contemplated in the Voting Agreement by and
among the Company, the Key Holders (as defined therein) and the Investors (as
defined therein), dated November 27, 2001, no stockholder of the Company has
entered into any agreement with respect to the voting of equity securities of
the Company.
3.18 Compliance with Laws; Permits. To its knowledge, the Company is
not in violation of any applicable statute, rule, regulation, order or
restriction of any domestic or foreign government or any instrumentality or
agency thereof in respect of the conduct of its business or the ownership of its
properties which violation would materially and adversely affect the business,
assets, liabilities, financial condition, operations or prospects of the
Company. No domestic governmental orders, permissions, consents, approvals or
authorizations are required to be obtained and no registrations or declarations
are required to be filed in connection with the execution and delivery of this
Agreement or the issuance of the Shares or the Conversion Shares, except such as
have been duly and validly obtained or filed, or with respect to any filings
that must be made after the Closing, as will be filed in a timely manner. The
Company has all franchises, permits, licenses and 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 believes it can obtain,
without undue burden or expense, any similar authority for the conduct of its
business as planned to be conducted.
3.19 Offering Valid. Assuming the accuracy of the representations and
warranties of Purchasers contained in Section 4.2 hereof, the offer, sale and
issuance of the Shares and the Conversion Shares will be exempt from the
registration requirements of the Securities Act of 1933, as amended (the
"Securities Act"), and will have been registered or qualified (or are exempt
from registration and qualification) under the registration, permit or
qualification requirements of all applicable state securities laws. Neither the
Company nor any agent on its behalf has solicited or will solicit any offers to
sell or has offered to sell or will offer to sell all or any part of the Shares
to any person or persons so as to bring the sale of such Shares by the Company
within the registration provisions of the Securities Act or any state securities
laws.
3.20 Full Disclosure. The Company has provided each Purchaser with all
information requested by each Purchaser in connection with its decision to
purchase the Shares. This Agreement, including the schedules and exhibits
hereto, does not contain any untrue statement of a material fact nor omit to
state a material fact necessary in order to make the statements contained herein
not misleading.
3.21 Minute Books. The minute books of the Company made available to
Purchasers contain a complete summary of all meetings of directors and
stockholders since the time of incorporation.
3.22 Real Property Holding Corporation. The Company is not a real
property holding corporation within the meaning of Code Section 897(c)(2) and
any regulations promulgated thereunder.
3.23 Insurance. The Company has general commercial, product liability,
fire and casualty insurance policies with coverage customary for companies
similarly situated to the Company.
4. Representations And Warranties Of Purchasers.
Each Purchaser hereby represents and warrants to the Company, severally
and not jointly, as follows (provided that such representations and warranties
do not lessen or obviate the representations and warranties of the Company set
forth in this Agreement):
4.1 Requisite Power and Authority. Purchaser has all necessary power
and authority to execute and deliver this Agreement and the Related Agreements
and to carry out their provisions. All action on Purchaser's part required for
the lawful execution and delivery of this Agreement and the Related Agreements
has been taken. Upon their execution and delivery, this Agreement and the
Related Agreements will be valid and binding obligations of Purchaser,
enforceable in accordance with their terms, except (a) as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other laws of general
application affecting enforcement of creditors' rights, (b) as limited by
general principles of equity that restrict the availability of equitable
remedies, and (c) to the extent that the enforceability of the indemnification
provisions of the Investor Rights Agreement may be limited by applicable laws.
4.2 Investment Representations. Purchaser understands that neither the
Shares nor the Conversion Shares have been registered under the Securities Act.
Purchaser also
understands that the Shares are being offered and sold pursuant to an exemption
from registration contained in the Securities Act based in part upon Purchaser's
representations contained in this Agreement. Purchaser hereby represents and
warrants as follows:
(a) Purchaser Bears Economic Risk. Purchaser has substantial experience
in evaluating and investing in private placement transactions of securities in
companies similar to the Company so that it is capable of evaluating the merits
and risks of its investment in the Company and has the capacity to protect its
own interests. Purchaser must bear the economic risk of this investment
indefinitely unless the Shares (or the Conversion Shares) are registered
pursuant to the Securities Act, or an exemption from registration is available.
Purchaser understands that the Company has no present intention of registering
the Shares, the Conversion Shares or any shares of its Common Stock. Purchaser
also understands that there is no assurance that any exemption from registration
under the Securities Act will be available and that, even if available, such
exemption may not allow Purchaser to transfer all or any portion of the Shares
or the Conversion Shares under the circumstances, in the amounts or at the times
Purchaser might propose.
(b) Acquisition for Own Account. Purchaser is acquiring the Shares and
the Conversion Shares for Purchaser's own account for investment only, and not
with a view towards their distribution.
(c) Purchaser Can Protect Its Interest. Purchaser represents that by
reason of its, or of its management's, business or financial experience,
Purchaser has the capacity to protect its own interests in connection with the
transactions contemplated in this Agreement, and the Related Agreements.
Further, Purchaser is aware of no publication of any advertisement in connection
with the transactions contemplated in this Agreement.
(d) Accredited Investor. Purchaser represents that it is an accredited
investor within the meaning of Regulation D under the Securities Act.
(e) Company Information. Purchaser has had an opportunity to discuss
the Company's business, management and financial affairs with directors,
officers and management of the Company and has had the opportunity to review the
Company's operations and facilities. Purchaser has also had the opportunity to
ask questions of and receive answers from, the Company and its management
regarding the terms and conditions of this investment.
(f) Rule 144. Purchaser acknowledges and agrees that the Shares, and,
if issued, the Conversion Shares are "restricted securities" as defined in Rule
144 promulgated under the Securities Act as in effect from time to time and must
be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. Purchaser
has been advised or is aware of the provisions of Rule 144, which permits
limited resale of shares purchased in a private placement subject to the
satisfaction of certain conditions, including, among other things: the
availability of certain current public information about the Company, the resale
occurring following the required holding period under Rule 144 and the number of
shares being sold during any three-month period not exceeding specified
limitations.
(g) Residence. If Purchaser is an individual, then Purchaser resides in
the state or province identified in the address of Purchaser set forth on
Exhibit A; if Purchaser is a partnership, corporation, limited liability company
or other entity, then the office or offices of Purchaser in which its investment
decision was made is located at the address or addresses of Purchaser set forth
on Exhibit A.
(h) Foreign Investors. If Purchaser is not a United States person (as
defined by Section 7701(a)(30) of the Internal Revenue Code of 1986, as
amended), Purchaser 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 Shares or any use of this Agreement, including
(i) the legal requirements within its jurisdiction for the purchase of the
Shares, (ii) any foreign exchange restrictions applicable to such purchase,
(iii) any government 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 Shares. Purchaser's
subscription and payment for and continued beneficial ownership of the Shares
will not violate any applicable securities or other laws of Purchaser's
jurisdiction.
4.3 Transfer Restrictions. Each Purchaser acknowledges and agrees that
the Shares and, if issued, the Conversion Shares are subject to restrictions on
transfer as set forth in the Investor Rights Agreement.
5. Conditions To Execution of this Agreement.
5.1 Conditions to Purchasers' Execution of this Agreement. Purchasers'
execution of this Agreement is subject to the satisfaction, at or prior to the
date hereof, of the following conditions:
(a) Representations and Warranties True; Performance of Obligations.
The representations and warranties made by the Company in Section 3 hereof are
true and correct in all material respects (except for representations and
warranties subject to "materiality" qualifiers, which shall be true, complete
and correct in all respects) as of the date hereof, and the Company shall have
performed all obligations and conditions herein required to be performed or
observed by it on or prior to the date hereof.
(b) Corporate Documents. The Company shall have delivered to Purchasers
or their counsel, copies of all corporate documents of the Company as Purchasers
shall reasonably request.
(c) Investor Rights Agreement. The Investor Rights Agreement
substantially in the form attached hereto as Exhibit D shall have been executed
and delivered by the Purchasers and delivered to the Escrow Agent.
(d) Voting Agreement. The Voting Agreement substantially in the form
attached hereto as Exhibit E shall have been executed and delivered by the
Purchasers and certain other parties thereto and delivered to the Escrow Agent.
(e) Reservation of Conversion Shares. The Conversion Shares issuable
upon conversion of the Shares shall have been duly authorized and reserved for
issuance upon such conversion.
(f) Board of Directors. The Board of Directors of the Company shall
have authorized that, upon the Closing, the authorized size of the Board of
Directors of the Company shall be nine members and the Board shall consist of
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ Hachamov, and two (2) vacancies.
(g) Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated as of the execution of this
Agreement and all documents and instruments incident to such execution shall be
reasonably satisfactory in substance and form to Purchasers and their special
counsel, and Purchasers and their special counsel shall have received all such
counterpart originals or certified or other copies of such documents as they may
reasonably request.
(h) Proprietary Information and Inventions Agreement. The Company and
each of its employees shall have entered into the Company's standard form of
Proprietary Information and Inventions Agreement, in substantially the form
delivered to counsel for the Purchasers.
(i) Minimum Investment. The amount of money placed into escrow by the
Purchasers as of the date hereof for release upon satisfaction of the conditions
set forth in Section 7 below shall be at least twenty million dollars
($20,000,000).
(j) Exchange Agreement. The Exchange Agreement shall have been executed
and delivered by the parties thereto.
5.2 Conditions to Execution of this Agreement by the Company. The
Company's execution of this Agreement is subject to the satisfaction, on or
prior to the date hereof, of the following conditions:
(a) Representations and Warranties True. The representations and
warranties in Section 4 made by those Purchasers acquiring Shares hereunder are
true and correct in all material respects at the date of the date hereof.
(b) Performance of Obligations. Such Purchasers shall have performed
and complied with all agreements and conditions herein required to be performed
or complied with by such Purchasers on or before date hereof.
(c) Investor Rights Agreement. The Investor Rights Agreement
substantially in the form attached hereto as Exhibit D shall have been executed
and delivered by the parties thereto and delivered to the Escrow Agent.
(d) Voting Agreement. The Voting Agreement substantially in the form
attached hereto as Exhibit E shall have been executed and delivered by the
parties thereto and delivered to the Escrow Agent.
(e) Exchange Agreement. The Exchange Agreement shall have been executed
and delivered by the parties thereto
(f) Minimum Investment. The amount of money placed into escrow by the
Purchasers as of the date hereof for release upon satisfaction of the conditions
set forth in Section 7 below shall be at least twenty million dollars
($20,000,000).
6. Closing Deliverables.
The Company shall deliver the following to the Purchasers at or prior
to the Closing:
6.1 Filing of Restated Charter. The Restated Charter as filed with the
Secretary of State of the State of Delaware shall continue to be in full force
and effect on the Closing Date.
6.2 Corporate Documents. Copies of all corporate documents of the
Company as Purchasers or their counsel shall reasonably request.
6.3 Compliance Certificate. A Compliance Certificate, executed by the
Chief Executive Officer of the Company, dated the Closing Date, to the effect
that the conditions specified in subsections (a) and (e) of Section 5.1 and
subsections (b) and (d) of Section 7.1 have been satisfied.
6.4 Secretary's Certificate. A certificate from the Company's
Secretary, a having attached thereto (i) the Company's Restated Charter as in
effect at the time of the Closing, (ii) the Company's Bylaws as in effect at the
time of the Closing, (iii) resolutions approved by the Board of Directors
authorizing the transactions contemplated hereby, (iv) resolutions approved by
the Company's stockholders authorizing the filing of the Restated Charter, and
(v) good standing certificates (including tax good standing) with respect to the
Company from the applicable authority(ies) in Delaware and any other
jurisdiction in which the Company is qualified to do business, dated a recent
date before the Closing.
6.5 Board of Directors. Proper authorization that, upon the Closing,
the authorized size of the Board of Directors of the Company shall be nine
members and the Board shall consist of ▇▇▇▇▇▇ ▇▇▇▇▇, Tal Simchony, ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ Hachamov, and two (2)
vacancies.
6.6 Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated at the Closing hereby and delivery
of all documents and instruments incident to such transactions shall be
reasonably satisfactory in substance and form to Purchasers and their special
counsel, and Purchasers and their special counsel shall have received all such
counterpart originals or certified or other copies of such documents as they may
reasonably request.
7. Conditions To Closing. The Purchasers and the Company will deliver
their respective Release Instructions to the Escrow Agent and effect the Closing
upon the satisfaction or waiver of the following conditions:
7.1 Conditions to Purchasers' Obligations at the Closing. Purchasers'
obligations to purchase the Shares at the initial Closing are subject to the
satisfaction, at or prior to the Closing Date, of the following conditions:
(a) Representations and Warranties True; Performance of Obligations.
The representations and warranties made by the Company in Section 3 hereof shall
have been true and correct in all material respects (except for representations
and warranties subject to "materiality" qualifiers, which shall have been true,
complete and correct in all respects) as of the date of this Agreement.
(b) Filing of Restated Charter. The Restated Charter shall have been
accepted for filing by the Secretary of State of the State of Delaware and shall
continue to be in full force and effect as of the Closing Date.
(c) Acquisition. The conditions for the Exchange Closing shall have
been satisfied or waived by the parties to the Exchange Agreement.
(d) Consents, Permits, and Waivers. The Company shall have obtained any
and all consents, permits and waivers necessary or appropriate for consummation
of the transactions contemplated by this Agreement and the Related Agreements
(including any filing required to comply with the ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ Antitrust
Improvements Act of 1976, and except for such as may be properly obtained
subsequent to the Closing).
(e) Legal Opinion. Legal counsel to the Company shall have delivered an
opinion addressed to the Purchasers, dated as of the Closing Date, in
substantially the form attached hereto as Exhibit F.
7.2 Conditions to Obligations of the Company. The Company's obligation
to issue, sell and deliver the Shares at each Closing is subject to the
satisfaction, on or prior to such Closing, of the following conditions:
(a) Representations and Warranties True. The representations and
warranties in Section 4 made by those Purchasers acquiring Shares hereunder
shall be true and correct in all material respects as of the date hereof.
(b) Filing of Restated Charter. The Restated Charter shall have been
accepted for filing by the Secretary of State of the State of Delaware.
(c) Acquisition. The conditions for the Exchange Closing shall have
been satisfied or waived by the parties to the Exchange Agreement.
(d) Consents, Permits, and Waivers. The Company shall have obtained of
any and all consents, permits and waivers necessary or appropriate for
consummation of the transactions contemplated by this Agreement and the Related
Agreements (including any filing required to comply with the ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
Antitrust Improvements Act of 1976, and except for such as may be properly
obtained subsequent to the Closing).
8. Termination Prior to Closing. This Agreement shall be terminated
prior to Closing upon the termination of the Exchange Agreement pursuant to the
terms thereof. In the event of such termination, the obligations and liabilities
of all parties pursuant to this Agreement shall be of no further force or
effect.
9. Miscellaneous.
9.1 Governing Law. This Agreement shall be governed in all respects by
the laws of the State of California as such laws are applied to agreements
between California residents entered into and performed entirely in California.
9.2 Survival. The representations, warranties, covenants and agreements
made herein shall survive any investigation made by any Purchaser and the
closing of the transactions contemplated hereby. All statements as to factual
matters contained in any certificate or other instrument delivered by or on
behalf of the Company pursuant hereto in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the
Company hereunder solely as of the date of such certificate or instrument.
9.3 Successors and Assigns. Except as otherwise expressly provided
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto and shall inure to the benefit of and be enforceable by each
person who shall be a holder of the Shares from time to time.
9.4 Entire Agreement. This Agreement, the exhibits and schedules
hereto, the Related Agreements and the other documents delivered pursuant hereto
constitute the full and entire understanding and agreement between the parties
with regard to the subjects hereof and no party shall be liable or bound to any
other in any manner by any representations, warranties, covenants and agreements
except as specifically set forth herein and therein.
9.5 Severability. In case any provision of this Agreement shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
9.6 Amendment and Waiver.
(a) Except as otherwise provided for in Section 2.3, this Agreement may
be amended or modified only upon the written consent of the Company and holders
of at least a majority of the then outstanding Shares (treated as if converted
and including any Conversion Shares into which the then outstanding Shares have
been converted that have not been sold to the public).
(b) The obligations of the Company and the rights of the holders of the
Shares and the Conversion Shares under this Agreement may be waived only with
the written consent of the holders of at least a majority of the then
outstanding Shares (treated as if converted and including any Conversion Shares
into which the then outstanding Shares have been converted that have not been
sold to the public).
9.7 Delays or Omissions. It is agreed that no delay or omission to
exercise any right, power or remedy accruing to any party, upon any breach,
default or noncompliance by another party under this Agreement, the Related
Agreements or the Restated Charter, shall impair any such right, power or
remedy, nor shall it be construed to be a waiver of any such breach, default or
noncompliance, or any acquiescence therein, or of or in any similar breach,
default or noncompliance thereafter occurring. It is further agreed that any
waiver, permit, consent or approval of any kind or character on any Purchaser's
part of any breach, default or noncompliance under this Agreement, the Related
Agreements or under the Restated Charter or any waiver on such party's part of
any provisions or conditions of this Agreement, the Related Agreements, or the
Restated Charter must be in writing and shall be effective only to the extent
specifically set forth in such writing. All remedies, either under this
Agreement, the Related Agreements, the Restated Charter, by law, or otherwise
afforded to any party, shall be cumulative and not alternative.
9.8 Waiver of Conflicts. Each party to this Agreement acknowledges that
▇▇▇▇▇▇ Godward LLP ("▇▇▇▇▇▇ Godward"), outside general counsel to the Company,
has in the past performed and is or may now or in the future represent one or
more Purchasers or their affiliates in matters unrelated to the transactions
contemplated by this Agreement (the "Financing"), including representation of
such Purchasers or their affiliates in matters of a similar nature to the
Financing. The applicable rules of professional conduct require that ▇▇▇▇▇▇
Godward inform the parties hereunder of this representation and obtain their
consent. Cooley has served as outside general counsel to the Company and has
negotiated the terms of the Financing solely on behalf of the Company. It is the
belief of ▇▇▇▇▇▇ Godward that these terms and conditions represent an arm's
length transaction between the Company and Purchasers. Purchasers have been
represented by independent legal counsel regarding the terms of the Financing.
The Company and each Purchaser hereby (a) acknowledge that they have had an
opportunity to ask for and have obtained information relevant to such
representation, including disclosure of the reasonably foreseeable adverse
consequences of such representation; (b) acknowledge that with respect to the
Financing, ▇▇▇▇▇▇ Godward has represented solely the Company, and not any
Purchaser or any stockholder, director or employee of the Company or any
Purchaser; and (c) gives its informed consent to ▇▇▇▇▇▇ Godward's representation
of the Company in the Financing.
9.9 Notices. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (a) upon personal delivery to the
party to be notified, (b) when sent by confirmed electronic mail, telex or
facsimile if sent during normal business hours of the recipient, if not, then on
the next business day, (c) five (5) days after having been sent by registered or
certified mail, return receipt requested, postage prepaid, or (d) one (1) day
after deposit with a nationally recognized overnight courier, specifying next
day delivery, with written verification of receipt. All communications shall be
sent to the Company at the address as set forth on the signature page hereof and
to Purchaser at the address set forth on Exhibit A, attached
hereto or at such other address or electronic mail address as the Company or
Purchaser may designate by ten (10) days advance written notice to the other
parties hereto.
9.10 Expenses. Each party shall bear all costs and expenses that it
incurs with respect to the negotiation, execution, delivery and performance of
this Agreement.
9.11 Attorneys' Fees. In the event that any suit or action is
instituted to enforce any provision in this Agreement, the prevailing party in
such dispute shall be entitled to recover from the losing party all fees, costs
and expenses of enforcing any right of such prevailing party under or with
respect to this Agreement, including without limitation, such reasonable fees
and expenses of attorneys and accountants, which shall include, without
limitation, all fees, costs and expenses of appeals.
9.12 Titles and Subtitles. The titles of the sections and subsections
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
9.13 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which together
shall constitute one instrument.
9.14 Broker's Fees. Each party hereto represents and warrants that no
agent, broker, investment banker, person or firm acting on behalf of or under
the authority of such party hereto is or will be entitled to any broker's or
finder's fee or any other commission directly or indirectly in connection with
the transactions contemplated herein. Each party hereto further agrees to
indemnify each other party for any claims, losses or expenses incurred by such
other party as a result of the representation in this Section 6.14 being untrue.
9.15 Exculpation Among Purchasers. Each Purchaser acknowledges that it
is not relying upon any person, firm, or corporation, other than the Company and
its officers and directors, in making its investment or decision to invest in
the Company. Each Purchaser agrees that no Purchaser nor the respective
controlling persons, officers, directors, partners, agents, or employees of any
Purchaser shall be liable to any other Purchaser for any action heretofore or
hereafter taken or omitted to be taken by any of them in connection with the
Shares and Conversion Shares.
9.16 Pronouns. All pronouns contained herein, and any variations
thereof, shall be deemed to refer to the masculine, feminine or neutral,
singular or plural, as to the identity of the parties hereto may require.
9.17 California Corporate Securities Law. THE SALE OF THE SECURITIES
WHICH ARE THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE
COMMISSIONER OF CORPORATIONS OF THE STATE OF CALIFORNIA AND THE ISSUANCE OF SUCH
SECURITIES OR THE PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION THEREFOR
PRIOR TO SUCH QUALIFICATION OR IN THE ABSENCE OF AN EXEMPTION FROM SUCH
QUALIFICATION IS UNLAWFUL. PRIOR TO ACCEPTANCE OF SUCH CONSIDERATION BY THE
COMPANY, THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED
UPON SUCH QUALIFICATION BEING OBTAINED OR AN EXEMPTION FROM SUCH QUALIFICATION
BEING AVAILABLE..
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed the SERIES C
PREFERRED STOCK PURCHASE AGREEMENT as of the date set forth in the first
paragraph hereof.
COMPANY:
NEXVERSE NETWORKS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
------------------------------
▇▇▇▇ ▇▇▇▇▇▇, Chief Executive Officer
Address: ▇▇▇ ▇▇▇▇ ▇▇▇.
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed the SERIES C
PREFERRED STOCK PURCHASE AGREEMENT as of the date set forth in the first
paragraph hereof.
ECI TELECOM LTD.
Signature: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Print Name: ▇▇▇▇▇ ▇▇▇▇▇
--------------------------------
Title: Chief Executive Officer
-------------------------------------
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed the SERIES C
PREFERRED STOCK PURCHASE AGREEMENT as of the date set forth in the first
paragraph hereof.
STAR BAY TECHNOLOGY VENTURES IV, L.P.
By Levensohn Capital Partners II LLC,
its General Partner
By Levensohn Capital Management, LLC
its Managing Member
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President
STAR BAY PARTNERS, L.P. (ROLLOVER FUND)
By APH Capital Management LLC,
its General Partner
By Levensohn Capital Management, LLC
its Managing Member
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President
STAR BAY ASSOCIATES FUND, L.P.
By Levensohn Capital Management, LLC
its General Partner
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, President
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed the SERIES C
PREFERRED STOCK PURCHASE AGREEMENT as of the date set forth in the first
paragraph hereof.
BATTERY VENTURES V, L.P.
By: Battery Partners V, LLC
General Partner
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Member Manager
BATTERY VENTURES CONVERGENCE FUND, L.P.
By: Battery Convergence Partners, LLC
General Partner
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Member Manager
BATTERY INVESTMENT PARTNERS V, LLC
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Member Manager
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed the SERIES C
PREFERRED STOCK PURCHASE AGREEMENT as of the date set forth in the first
paragraph hereof.
NORWEST VENTURE PARTNERS IX, L.P.
By: Genesis VC Partners IX, LLC
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
NVP ENTREPRENEURS FUND IX, L.P.
By: Genesis VC Partners IX, LLC
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: Managing Director
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed the SERIES C
PREFERRED STOCK PURCHASE AGREEMENT as of the date set forth in the first
paragraph hereof.
KPCB HOLDINGS, INC., AS NOMINEE
Signature: /s/ signature illegible
---------------------------------
Print Name:
--------------------------------
Title:
-------------------------------------
SERIES C PREFERRED STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
IN WITNESS WHEREOF, the parties hereto have executed the SERIES C
PREFERRED STOCK PURCHASE AGREEMENT as of the date set forth in the first
paragraph hereof.
LIBERTY MUTUAL INSURANCE COMPANY
Signature: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Vice President
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SERIES C PREFERRED STOCK PURCHASE AGREEMENT
SIGNATURE PAGE
TABLE OF CONTENTS
PAGE
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1. Agreement To Sell And Purchase..........................................................................2
1.1 Authorization of Shares........................................................................2
1.2 Sale and Purchase..............................................................................2
2. Closing, Delivery And Payment...........................................................................2
2.1 Closing........................................................................................2
2.2 Delivery.......................................................................................2
2.3 Subsequent Sales of Shares.....................................................................2
3. Representations And Warranties Of The Company...........................................................3
3.1 Organization, Good Standing and Qualification..................................................3
3.2 Subsidiaries...................................................................................3
3.3 Capitalization; Voting Rights..................................................................3
3.4 Authorization; Binding Obligations.............................................................5
3.5 Financial Statements...........................................................................5
3.6 Liabilities....................................................................................6
3.7 Agreements; Action.............................................................................6
3.8 Obligations to Related Parties.................................................................6
3.9 Changes........................................................................................7
3.10 Title to Properties and Assets; Liens, Etc.....................................................8
3.11 Intellectual Property..........................................................................8
3.12 Protection of Proprietary Rights...............................................................9
3.13 Compliance with Other Instruments..............................................................9
3.14 Litigation.....................................................................................9
3.15 Employees.....................................................................................10
3.16 Obligations of Management.....................................................................10
3.17 Registration Rights and Voting Rights.........................................................10
3.18 Compliance with Laws; Permits.................................................................10
3.19 Offering Valid................................................................................11
3.20 Full Disclosure...............................................................................11
3.21 Minute Books..................................................................................11
3.22 Real Property Holding Corporation.............................................................11
-i-
3.23 Insurance.....................................................................................11
4. Representations And Warranties Of Purchasers...........................................................12
4.1 Requisite Power and Authority.................................................................12
4.2 Investment Representations....................................................................12
4.3 Transfer Restrictions.........................................................................13
5. Conditions To Execution of this Agreement..............................................................13
5.1 Conditions to Purchasers' Execution of this Agreement.........................................13
5.2 Conditions to Execution of this Agreement by the Company......................................15
6. Closing Deliverables...................................................................................15
6.1 Filing of Restated Charter....................................................................15
6.2 Corporate Documents...........................................................................15
6.3 Compliance Certificate........................................................................15
6.4 Secretary's Certificate.......................................................................16
6.5 Board of Directors............................................................................16
6.6 Proceedings and Documents.....................................................................16
7. Conditions To Closing..................................................................................16
7.1 Conditions to Purchasers' Obligations at the Closing..........................................16
7.2 Conditions to Obligations of the Company......................................................17
8. Termination Prior to Closing...........................................................................17
9. Miscellaneous..........................................................................................17
9.1 Governing Law.................................................................................17
9.2 Survival......................................................................................17
9.3 Successors and Assigns........................................................................18
9.4 Entire Agreement..............................................................................18
9.5 Severability..................................................................................18
9.6 Amendment and Waiver..........................................................................18
9.7 Delays or Omissions...........................................................................18
9.8 Waiver of Conflicts...........................................................................18
9.9 Notices.......................................................................................19
9.10 Expenses......................................................................................19
9.11 Attorneys' Fees...............................................................................19
9.12 Titles and Subtitles..........................................................................19
9.13 Counterparts..................................................................................19
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9.14 Broker's Fees.................................................................................20
9.15 Exculpation Among Purchasers..................................................................20
9.16 Pronouns......................................................................................20
9.17 California Corporate Securities Law...........................................................20
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List Of Exhibits
Schedule of Purchasers Exhibit A
Amended and Restated Certificate of Incorporation Exhibit B
Schedule of Exceptions Exhibit C
Investor Rights Agreement Exhibit D
Voting Agreement Exhibit E
Form of Legal Opinion Exhibit F
Debt Obligations Exhibit G
Form of Escrow Agreement Exhibit H
Exhibit A
SCHEDULE OF PURCHASERS
AGGREGATE
NAME AND ADDRESS SHARES PURCHASE PRICE
---------------- ------ --------------
ECI TELECOM, LTD.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 58,275,059 $10,000,000.12
▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇▇▇
STAR BAY TECHNOLOGY VENTURES IV, L.P.
333 ▇▇▇▇, Suite 2580 4,816,409 $826,495.87
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Fax: ▇▇▇ ▇▇▇-▇▇▇▇
Telephone: ▇▇▇ ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
STAR BAY PARTNERS, L.P. (ROLLOVER FUND)
333 ▇▇▇▇, Suite 2580 8,297,101 $1,423,782.51
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Fax: ▇▇▇ ▇▇▇-▇▇▇▇
Telephone: ▇▇▇ ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
STAR BAY ASSOCIATES FUND, L.P.
333 ▇▇▇▇, Suite 2580 289,753 $49,721.62
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Fax: ▇▇▇ ▇▇▇-▇▇▇▇
Telephone: ▇▇▇ ▇▇▇-▇▇▇▇
E-mail: ▇▇▇▇▇▇@▇▇▇▇▇▇.▇▇▇
LIBERTY MUTUAL INSURANCE COMPANY
Investments, 9A 18,065,269 $3,100,000.16
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
BATTERY VENTURES V, L. P.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ 23,620,512 $4,053,279.86
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
BATTERY VENTURES CONVERGENCE FUND, L. P.
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ 1,507,695 $258,720.46
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
BATTERY INVESTMENT PARTNERS V, LLC
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇ 512,819 $87,999.74
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
NORWEST VENTURE PARTNERS IX, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 23,819,189 $4,087,372.83
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
NVP ENTREPRENEURS FUND IX, L.P.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ 656,336 $112,627.26
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
KPCB HOLDINGS, INC.
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ 582,750 $99,999.90
▇▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
TOTAL: 140,442,892 $24,100,000.26
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