Exhibit 10.1
SERIES B PREFERRED STOCK PURCHASE AGREEMENT
This Series B Preferred Stock Purchase Agreement (this "Agreement") is made
and entered into as of July 12, 2000 by and among At Home Network Solutions,
Inc., a Delaware corporation (the "Company"), and the parties listed on the
Schedule of Investors attached to this Agreement as Exhibit A (each hereinafter
individually referred to as an "Investor" and collectively referred to as the
"Investors").
Whereas, the Company desires to sell to the Investors, and the Investors
desire to purchase from the Company, shares of the Company's Series B Preferred
Stock on the terms and conditions set forth in this Agreement;
Now, therefore, the parties hereby agree as follows:
1. AGREEMENT TO PURCHASE AND SELL STOCK.
1.1 Authorization. As of the Closing (as defined below) the Company
will have authorized the issuance, pursuant to the terms and conditions of this
Agreement, of up to 1,500,000 shares of the Company's Series B Preferred Stock,
par value $0.001 per share (the "Series B Stock"), having the rights,
preferences, privileges and restrictions set forth in the Company's Restated
Certificate of Incorporation attached to this Agreement as Exhibit B (the
"Restated Certificate").
1.2 Agreement to Purchase and Sell. The Company agrees to sell to
each Investor at the Closing, and each Investor agrees, severally and not
jointly, to purchase from the Company at the Closing, the number of shares of
Series B Stock set forth beside such Investor's name on Exhibit A, at a purchase
price of $31.69 per share. The shares of Series B Stock purchased and sold
pursuant to this Agreement will be collectively hereinafter referred to as the
"Purchased Shares" and the shares of Common Stock issuable upon conversion of
the Purchased Shares will be collectively hereinafter referred to as the
"Conversion Shares".
2. CLOSING.
2.1 The Closing. The purchase and sale of the Purchased Shares will
take place at the offices of Fenwick & West LLP, 000 Xxxxxxx Xxxxxx, Xxx
Xxxxxxxxx, Xxxxxxxxxx, at 11:00 a.m. Pacific Time, on July 12, 2000 or at such
other time and place as the Company and Investors who have agreed to purchase a
majority of the Purchased Shares listed on Exhibit A mutually agree upon (which
time and place are referred to in this Agreement as the "Closing"). At the
Closing, the Company will deliver to each Investor a certificate representing
the number of Purchased Shares that such Investor has agreed to purchase
hereunder as shown on Exhibit A against delivery to the Company by such Investor
of the full purchase price of such Purchased Shares, paid by (a) a check payable
to the Company's order, (b) wire transfer of funds to the Company or (c) any
combination of the foregoing.
2.2 Additional Closing(s).
(a) Conditions of Additional Closing(s). At any time and from
time to time during the sixty (60) day period immediately following the Closing,
the Company may, at one or more additional closings (each an "Additional
Closing"), without obtaining the signature, consent or permission of any of the
Investors, offer and sell to other investors ("New Investors"), at a price of
$31.69 per share, up to that number of shares of Series B Stock that is equal to
the total number of shares of Series B Stock authorized by the Restated
Certificate less the number of shares of Series B Stock actually issued and sold
by the Company at the Closing.
(b) Amendments. The Company and the New Investors purchasing
Series B Stock at each Additional Closing will execute counterpart signature
pages to this Agreement and each of the other Transaction Documents (as defined
in Section 3.1), and such New Investors will, upon delivery to the Company of
such signature pages, become parties to, and bound by, this Agreement and the
other Transaction Documents, each to the same extent as if they had been
Investors at the Closing. Immediately after each Additional Closing, Exhibit A
to this Agreement will be amended to list the New Investors purchasing shares of
Series B Stock hereunder and the number of shares of Series B Stock purchased by
each New Investor under this Agreement at each such Additional Closing. The
Company will promptly furnish to each Investor copies of the amendments to
Exhibit A referred to in the preceding sentence.
(c) Status of New Investors. Upon the completion of each Additional
Closing as provided in this Section 2, each New Investor will be deemed to be an
"Investor" for all purposes of this Agreement and each of the other Transaction
Documents.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to each Investor that, except as set forth in the
Schedule of Exceptions ("Schedule of Exceptions") attached to this Agreement as
Exhibit C specifically identifying the relevant subparagraph hereof (which
Schedule of Exceptions shall be deemed to be representations and warranties to
the Investors by the Company under this Section 3), the statements in the
following paragraphs of this Section 3 are all true and complete:
3.1 Organization, Good Standing and Qualification. The Company has
been duly incorporated and organized, and is validly existing in good standing,
under the laws of the State of Delaware. The Company has the corporate power and
authority to enter into and perform its obligations under this Agreement, the
Amended and Restated Investor Rights Agreement attached to this Agreement as
Exhibit D, the Amended and Restated Security Holders Agreement attached to this
Agreement as Exhibit E and the Amended and Restated Merger Agreement attached to
this Agreement as Exhibit F (collectively the "Transaction Documents"), to own
and operate it properties and assets and to carry on its business as currently
conducted and as presently proposed to be conducted. The Company is duly
qualified to transact business as a foreign corporation in good standing in the
State of California.
3.2 Capitalization. The capitalization of the Company immediately
prior to the Closing consists of the following:
(a) Preferred Stock. A total of 2,651,515 authorized shares of
preferred stock, par value $0.001 per share, consisting of 151,515 shares
designated as Series A Preferred
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Stock ("Series A Stock"), all of which will be issued and outstanding, 1,500,000
shares designated as Series B Stock, none of which will be issued and
outstanding, and 1,000,000 undesignated shares, none of which will be issued and
outstanding. Upon the Closing, the rights, preferences and privileges of the
Series A Stock and Series B Stock will be as stated in the Restated Certificate
and as provided by law.
(b) Common Stock. A total of 15,354,545 authorized shares of
common stock, par value $0.001 per share (the "Common Stock"), 400,000 shares of
which will be issued and outstanding.
(c) Options, Warrants, Reserved Shares. Except for (i) the
conversion privileges of the Series A Stock and Series B Stock, (ii) the rights
to purchase additional securities of the Company granted to certain investors
under Sections 2 and 4 of that certain Investor Rights Agreement dated May 24,
1999 by and among the Company and such investors (the "Existing Rights
Agreement"), (iii) the right to acquire additional shares of Common Stock
granted to At Home Corporation ("At Home") under Section 1.3 of that certain
Common Stock Purchase Agreement dated March 31, 1999 by and between the Company
and At Home, and (iv) warrants to purchase 212,074 shares of Common Stock, there
is no outstanding option, warrant, right (including conversion rights,
preemptive rights or rights of first refusal) or agreement for the purchase or
acquisition from the Company of any shares of its capital stock or any
securities convertible into or ultimately exchangeable or exercisable for any
shares of the Company's capital stock. Apart from the exceptions noted in this
Section 3.2(c), and except for (i) the redemption rights granted to certain
investors under Section 3 of the Existing Rights Agreement, (ii) the options
granted to certain investors under Sections 3 and 4 of that certain Security
Holders Agreement dated May 24, 1999 by and among the Company and such investors
(the "Existing Security Holders Agreement"), and (iii) the option granted to At
Home under Section 1 of that certain Buyout Option Agreement dated May 24, 1999
by and between the Company and At Home, no shares of the Company's outstanding
capital stock are subject to any preemptive rights, rights of first refusal or
other rights to purchase such stock (whether in favor of the Company or any
other person) pursuant to any agreement or commitment of the Company.
3.3 Subsidiaries. The Company does not presently own or control,
directly or indirectly, any interest in any other corporation, partnership,
trust, joint venture, association, or other entity.
3.4 Due Authorization. All corporate action on the part of the
Company's directors, officers and stockholders necessary for the authorization,
execution, delivery of, and the performance of all obligations of the Company
under, the Transaction Documents, the authorization, issuance, reservation for
issuance and delivery of all of the Purchased Shares being sold under this
Agreement and of the Conversion Shares and the filing of the Restated
Certificate has been taken or will be taken prior to the Closing, and the
Transaction Documents constitute valid and legally binding obligations of the
Company, enforceable in accordance with their respective terms, except as may be
limited by (i) applicable bankruptcy, insolvency, reorganization or others laws
of general application relating to or affecting the enforcement of creditors'
rights generally and (ii) the effect of rules of law governing the availability
of equitable remedies.
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3.5 Valid Issuance of Stock.
(a) The Purchased Shares, when issued and paid for as provided in
this Agreement will be duly authorized and validly issued, fully paid and
nonassessable. The Conversion Shares have been duly and validly reserved for
issuance upon conversion thereof and, when issued upon such conversion in
accordance with the Restated Certificate (assuming no change in the Restated
Certificate or in applicable law), will be duly authorized and validly issued,
fully paid and nonassessable.
(b) Based in part on the representations made by the Investors in
Section 4 hereof, the offer and sale of the Purchased Shares solely to the
Investors in accordance with this Agreement (and assuming no change in currently
applicable law or the Restated Certificate, no transfer of Purchased Shares by a
holder thereof and no commission or other remuneration is paid or given,
directly or indirectly, for soliciting the issuance of Conversion Shares upon
conversion of the Purchased Shares), are exempt from the registration and
prospectus delivery requirements of the U.S. Securities Act of 1933, as amended
(the "1933 Act") and the securities registration and qualification requirements
of the currently effective provisions of the securities laws of the States in
which the Investors are resident based upon their addresses set forth on the
Schedule of Investors attached hereto as Exhibit A.
3.6 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority is required on
the part of the Company in order to enable the Company to execute, deliver and
perform its obligations under this Agreement except for such qualifications or
filings under applicable securities laws as may be required in connection with
the transactions contemplated by this Agreement. All such qualifications and
filings will, in the case of qualifications, be effective on the Closing and
will, in the case of filings, be made within the time prescribed by law.
3.7 Litigation. There is no action, suit, proceeding, claim,
arbitration or investigation pending (or, to the Company's knowledge, currently
threatened) against the Company, its activities, properties or assets or, to the
Company's knowledge, against any officer, director or employee of the Company in
connection with such officer's, director's or employee's relationship with, or
actions taken on behalf of, the Company. There is no action, suit, proceeding,
claim, arbitration or investigation currently pending by the Company against any
third party and the Company has no present intention to initiate any such
action, suit, proceeding, claim, arbitration or investigation.
3.8 Proprietary Information and Invention Agreements. Each officer
and employee of the Company with access to the Company's proprietary information
has executed a Proprietary Information and Inventions Agreement in substantially
the form provided to Investors.
3.9 Employees. Neither the execution nor delivery of this Agreement
nor the carrying on of the Company's business by the employees nor the conduct
of the Company's business as proposed will, to the best of the Company's
knowledge, conflict with or result in a breach of the terms, conditions or
provisions of, or constitute a default under, any contract, covenant or
instrument under which any of the Company's employees are obligated. The
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Company does not believe it is or will be necessary to use any inventions of any
of its employees (or persons it currently intends to hire) made prior to their
employment by the Company.
3.10 Status of Proprietary Assets.
(a) Status. The Company has full title and ownership of, or is
duly licensed under or otherwise authorized to use, all patents, patent
applications, trademarks, service marks, trade names, copyrights, mask works,
trade secrets, confidential and proprietary information, designs and proprietary
rights (all of the foregoing collectively hereinafter referred to as the
"Proprietary Assets"), necessary to enable it to carry on its business as
proposed to be conducted without any known conflict with or infringement of the
rights of others. The Company is not aware of any infringement of its
Proprietary Assets by any other person.
(b) Licenses; Other Agreements. The Company has not granted,
and, to the Company's knowledge, there are not outstanding, any options,
licenses or agreements of any kind relating to any Proprietary Asset of the
Company, nor is the Company bound by or a party to any option, license or
agreement of any kind with respect to any of its Proprietary Assets. The Company
is not obligated to pay any royalties or other payments to third parties with
respect to the marketing, sale, distribution, manufacture, license or use of any
Proprietary Asset or any other property or rights.
3.11 Compliance with Law and Documents. The Company is not in
violation or default of any provision of any mortgage, indenture or other
agreement to which it is a party or by which it is bound, any provision of its
Certificate of Incorporation or Bylaws, both as amended, and to the Company's
knowledge, except for any violations that individually and in the aggregate
would have no material adverse impact on the Company's business, the Company is
in compliance with all applicable statutes, laws, regulations and executive
orders of the United States of America and all states, foreign countries or
other governmental bodies and agencies having jurisdiction over the Company's
business or properties. The Company has not received any notice of any violation
of any such statute, law, regulation or order which has not been remedied prior
to the date hereof. The execution, delivery and performance of this Agreement
and the other Transaction Documents and the consummation of the transactions
contemplated hereby and thereby will not result in any such violation or
default, or be in conflict with or result in a violation or breach of, with or
without the passage of time or the giving of notice or both, any provision of
any mortgage, indenture or other agreement to which it is a party or by which it
is bound, or any provision of the Restated Certificate or the Company's Bylaws,
any judgment, order or decree of any court or arbitrator to which the Company is
a party or is subject, any agreement or contract of the Company, or, to the
Company's knowledge, a violation of any statute, law, regulation or order, or an
event which results in the creation of any lien, charge or encumbrance upon any
asset of the Company.
3.12 Registration Rights. Except as provided in the Existing
Security Holders Agreement, the Company is not under any obligation and has not
granted any rights to register under the 1933 Act any of its currently
outstanding securities or any securities issuable upon exercise or conversion of
its currently outstanding securities nor is the Company obligated to register or
qualify any such securities under any state securities or blue sky laws.
3.13 Title to Property and Assets. The properties and assets the
Company owns are owned by the Company free and clear of all mortgages, deeds of
trust, liens,
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encumbrances and security interests except for statutory liens for the payment
of current taxes that are not yet delinquent and liens, encumbrances and
security interests which arise in the ordinary course of business and which do
not affect material properties and assets of the Company. With respect to the
property and assets it leases, the Company is in material compliance with such
leases, and to the knowledge of the Company, the other parties to such leases
are in compliance therewith, and the Company holds a valid leasehold interest
free of any liens, claims or encumbrances.
3.14 Certain Actions. Since December 31, 1999, the Company has not:
(i) declared or paid any dividends, or authorized or made any distribution upon
or with respect to any class or series of its capital stock; (ii) incurred any
indebtedness for money borrowed or incurred any other liabilities individually
in excess of $25,000 or in excess of $50,000 in the aggregate; (iii) made any
loans or advances to any person, other than ordinary advances for travel
expenses; (iv) sold, exchanged or otherwise disposed of any material assets or
rights other than the sale of inventory in the ordinary course of its business;
or (v) entered into any material transactions with any of its officers,
directors or employees or any entity controlled by any of such individuals.
3.15 Activities. Since December 31, 1999, there has not been:
(a) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the assets, properties, financial
condition, operating results, prospects or business of the Company (as presently
conducted and as presently proposed to be conducted);
(b) any waiver by the Company of a valuable right or of a
material debt owed to it;
(c) any material contract or arrangement entered into by the
Company by which the Company or any of its assets or properties is bound or
subject;
(d) any sale, assignment or transfer of any patents, trademarks,
copyrights, trade secrets, or other intangible assets;
(e) any mortgage, pledge, transfer of a security interest in or
a lien created by the Company, with respect to any of its assets or properties;
(f) any loans or guarantees made by the Company to or for the
benefit of its employees, officers or directors or any member of their immediate
families;
(g) any resignations or termination of employment of any key
officer of the Company; and the Company, to the best of its knowledge, does not
know of the impending resignation or termination of employment of any such
officer; or
(h) to the Company's knowledge, any other event or condition of
any character which would materially and adversely affect the assets,
properties, financial condition, operating results or business of the Company.
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3.16 ERISA Plans. The Company does not have any Employee Pension
Benefit Plan as defined in Section 3 of the Employee Retirement Income Security
Act of 1974, as amended.
3.17 Insurance. The Company was recently formed and has no insurance
policies.
3.18 Tax Returns and Payments. The Company has timely filed all tax
returns and reports required by law and has never been audited by any state or
federal taxing authority. All tax returns and reports of the Company are true
and correct in all material respects. The Company has paid all taxes and other
assessments due, except those, if any, currently being contested by it in good
faith which are listed in the Schedule of Exceptions.
3.19 Labor Agreements and Actions. The Company is not bound by or
subject to any contract, commitment or arrangement with any labor union, and to
the Company's best knowledge, no labor union has requested, sought or attempted
to represent any employees, representatives or agents of the Company. There is
no strike or other labor dispute involving the Company pending nor, to the
Company's best knowledge, threatened, nor is the Company aware of any labor
organization activity involving its employees.
3.20 Real Property Holding Corporation Status. Since its
incorporation, the Company has not been a "United States real property holding
corporation", as defined in Section 897(c)(2) of the U.S. Internal Revenue Code
of 1986, as amended, and the Treasury Regulations issued thereunder.
3.21 Permits. The Company has all franchises, permits, licenses, and
any similar authority necessary for the conduct of its business as now conducted
and as proposed to be conducted, the lack of which could materially and
adversely affect the business, properties, prospects of financial condition of
the Company.
3.22 Disclosure. The Company has provided each Investor with all the
information reasonably available to it without undue expense that such Investor
has requested for deciding whether to buy the Purchase Shares. Neither this
Agreement nor any other agreement, written statement or certificate made or
delivered in connection herewith contains any untrue statement of a material
fact or omits to state a material fact necessary to make the statements herein
not misleading.
4. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS OF INVESTORS. Each
Investor hereby represents and warrants to, and agrees with, the Company,
severally and not jointly, that:
4.1 Authorization. This Agreement constitutes such Investor's valid
and legally binding obligation, enforceable in accordance with its terms except
as may be limited by (i) applicable bankruptcy, insolvency, reorganization or
other laws of general application relating to or affecting the enforcement of
creditors' rights generally and (ii) the effect of rules of law governing the
availability of equitable remedies. Each Investor represents that such Investor
has full power and authority to enter into this Agreement.
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4.2 Purchase for Own Account. The Purchased Shares to be purchased by
such Investor hereunder will be acquired for investment for such Investor's own
account, not as a nominee or agent, and not with a view to the public resale or
distribution thereof within the meaning of the 1933 Act, and such Investor has
no present intention of selling, granting any participation in, or otherwise
distributing the same. If not an individual, such Investor also represents that
such Investor has not been formed for the specific purpose of acquiring
Purchased Shares.
4.3 Disclosure of Information. Such Investor has received or has had
full access to all the information it considers necessary or appropriate to make
an informed investment decision with respect to the Purchased Shares to be
purchased by such Investor under this Agreement. Such Investor further has had
an opportunity to ask questions and receive answers from the Company regarding
the terms and conditions of the offering of the Purchased Shares and to obtain
additional information (to the extent the Company possessed such information or
could acquire it without unreasonable effort or expense) necessary to verify any
information furnished to such Investor or to which such Investor had access.
The foregoing, however, does not in any way limit or modify the representations
and warranties made by the Company in Section 3.
4.4 Investment Experience. Such Investor understands that the
purchase of the Purchased Shares involves substantial risk. Such Investor: (i)
has experience as an investor in securities of companies in the development
stage and acknowledges that such Investor is able to fend for itself, can bear
the economic risk of such Investor's investment in the Purchased Shares and has
such knowledge and experience in financial or business matters that such
Investor is capable of evaluating the merits and risks of this investment in the
Purchased Shares and protecting its own interests in connection with this
investment and/or (ii) has a preexisting personal or business relationship with
the Company and certain of its officers, directors or controlling persons of a
nature and duration that enables such Investor to be aware of the character,
business acumen and financial circumstances of such persons.
4.5 Accredited Investor Status. Unless otherwise expressly indicated
on Exhibit A to this Agreement, such Investor is an "accredited investor" within
the meaning of Regulation D promulgated under the 0000 Xxx.
4.6 Restricted Securities. Such Investor understands that the
Purchased Shares are characterized as "restricted securities" under the 1933 Act
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under the 1933 Act and applicable
regulations thereunder such securities may be resold without registration under
the 1933 Act only in certain limited circumstances. In this connection, such
Investor represents that such Investor is familiar with Rule 144 of the U.S.
Securities and Exchange Commission (the "SEC"), as presently in effect, and
understands the resale limitations imposed thereby and by the 1933 Act. Such
Investor understands that, except as provided in the Amended and Restated
Security Holders Agreement attached to this Agreement as Exhibit E, the Company
is under no obligation to register any of the securities sold hereunder. Such
Investor understands that no public market now exists for any of the Purchased
Shares and that it is uncertain whether a public market will ever exist for the
Purchased Shares or the Conversion Shares.
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4.7 Further Limitations on Disposition. Without in any way limiting
the representations set forth above, such Investor further agrees not to make
any disposition of all or any portion of the Purchased Shares or the Conversion
Shares unless and until:
(a) there is then in effect a registration statement under the
1933 Act covering such proposed disposition and such disposition is made in
accordance with such registration statement; or
(b) such Investor shall have notified the Company of the proposed
disposition and shall have furnished the Company with a statement of the
circumstances surrounding the proposed disposition, and, at the expense of such
Investor or its transferee, with an opinion of counsel, reasonably satisfactory
to the Company, that such disposition will not require registration of such
securities under the 1933 Act.
Notwithstanding the provisions of paragraphs (a) and (b) above, no such
registration statement or opinion of counsel shall be required: (i) for any
transfer of any Purchased Shares or Conversion Shares in compliance with SEC
Rule 144 or Rule 144A, or (ii) for any transfer of Purchased Shares or
Conversion Shares by an Investor that is a partnership or a corporation to (A) a
partner of such partnership or a subsidiary, parent or 50% shareholder of such
corporation, (B) a retired partner of such partnership who retires after the
date hereof, (C) the estate of any such partner or stockholder, or (iii) for the
transfer by gift, will or intestate succession by any Investor to his or her
spouse or lineal descendants or ancestors or any trust for any of the foregoing;
provided that in each of the foregoing cases the transferee agrees in writing to
be subject to the terms of this Section 4 (other than Section 4.5) to the same
extent as if the transferee were an original Investor hereunder.
4.8 Legends. It is understood that the certificates evidencing the
Purchased Shares and the Conversion Shares will bear the legends set forth
below:
(a) The securities represented hereby have not been registered
under the Securities Act of 1933, as amended (the "Act"), or under the
securities laws of certain states. These securities are subject to
restrictions on transferability and resale and may not be transferred or
resold except as permitted under the Act and the applicable state
securities laws, pursuant to registration or exemption therefrom. investors
should be aware that they may be required to bear the financial risks of
this investment for an indefinite period of time. The issuer of these
securities may require an opinion of counsel in form and substance
satisfactory to the issuer to the effect that any proposed transfer or
resale is in compliance with the Act and any applicable state securities
laws.
(b) Any legend required by the laws of the State of Delaware or
any other state securities laws, including a legend substantially in the form of
the following:
The shares evidenced by this certificate are convertible into shares of
common stock of the Company at the option of the holder at any time
pursuant to and upon the terms and conditions specified in the Company's
Certificate of Incorporation. A copy of such Certificate of Incorporation
may be obtained, without charge, at the Company's principal office.
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The legend set forth in (a) above shall be removed by the Company from any
certificate evidencing Purchased Shares or Conversion Shares upon delivery to
the Company of an opinion by counsel, reasonably satisfactory to the Company,
that a registration statement under the 1933 Act is at that time in effect with
respect to the legended security or that such security can be freely transferred
in a public sale without such a registration statement being in effect and that
such transfer will not jeopardize the exemption or exemptions from registration
pursuant to which the Company issued the Purchased Shares or Conversion Shares.
5. CONDITIONS TO INVESTORS' OBLIGATIONS AT CLOSING. The obligations of
each Investor under Section 1.2 of this Agreement are subject to the fulfillment
or waiver, on or before the Closing, of each of the following conditions, the
waiver of which shall not be effective against any Investor who does not consent
in writing to such waiver:
5.1 Representations and Warranties True. Each of the representations
and warranties of the Company contained in Section 3 shall be true and complete
on and as of the Closing with the same effect as though such representations and
warranties had been made on and as of the date of the Closing.
5.2 Performance. The Company shall have performed and complied with
all agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing and
shall have obtained all approvals, consents and qualifications necessary to
complete the purchase and sale described herein.
5.3 Restated Certificate Effective. The Restated Certificate shall
have been duly adopted by the Company by all necessary corporate action of its
Board of Directors and stockholders, and shall have been duly filed with and
accepted by the Secretary of State of the State of Delaware.
5.4 Compliance Certificate. The Company shall have delivered to each
Investor at the Closing a certificate signed on its behalf by its President,
Chief Executive Officer, or Chief Financial Officer certifying that the
conditions specified in Sections 5.1, 5.2 and 5.3 have been fulfilled and
stating that there shall have been no material adverse change in the business,
affairs, prospects, operations, properties, assets or condition of the Company
not previously disclosed to the Investors in writing.
5.5 Securities Exemptions. The offer and sale of the Purchased Shares
to the Investors pursuant to this Agreement shall be exempt from the
registration requirements of the 1933 Act and the registration and/or
qualification requirements of all applicable state securities laws.
5.6 Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated at the Closing and all documents
incident thereto (including the Transaction Documents) shall be reasonably
satisfactory in form and substance to each Investor and to the Investors'
counsel, and they shall each have received all such counterpart originals and
certified or other copies of such documents as they may reasonably request. Such
documents shall include (but not be limited to) the following:
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(a) Certified Charter Documents. A copy of the Restated
Certificate (as amended through the date of the Closing), certified by the
Secretary of the Company as true and correct copies thereof as of the
Closing.
(b) Corporate Actions. A copy of the resolutions of the Board of
Directors and, if required, the stockholders of the Company evidencing the
amendment to the Company's Certificate of Incorporation providing for the
authorization of the Series B Stock, the approval of this Agreement, the
issuance of the Purchased Shares and the other matters contemplated hereby,
and a copy of the Bylaws of the Company, certified by the Secretary of the
Company to be true, complete and correct.
5.7 No Material Change. There shall have been no material adverse
change in the business, affairs, prospects, operations, properties, assets or
condition of the Company.
5.8 Opinion of Company Counsel. Each Investor shall have received an
opinion from Fenwick & West LLP, counsel for the Company, dated as of the date
of the Closing, in the form attached hereto as Exhibit G.
6. CONDITIONS TO THE COMPANY'S OBLIGATIONS AT CLOSING. The obligations of
the Company to each Investor under this Agreement are subject to the fulfillment
or waiver on or before the Closing of each of the following conditions by such
Investor:
6.1 Representations and Warranties. The representations and
warranties of such Investor contained in Section 4 shall be true and complete on
the date of the Closing with the same effect as though such representations and
warranties had been made on and as of the Closing.
6.2 Payment of Purchase Price. Each Investor shall have delivered to
the Company the purchase price specified for such Investor on Exhibit A in
accordance with the provisions of Section 2.
6.3 Restated Certificate Effective. The Restated Certificate shall
have been duly adopted by the Company by all necessary corporate action of its
Board of Directors and stockholders, and shall have been duly filed with and
accepted by the Secretary of State of the State of Delaware.
6.4 Securities Exemptions. The offer and sale of the Purchased
Shares to the Investors pursuant to this Agreement shall be exempt from the
registration requirements of the 1933 Act and the registration and/or
qualification requirements of all applicable state securities laws.
6.5 Proceedings and Documents. All corporate and other proceedings
in connection with the transactions contemplated at the Closing and all
documents incident thereto (including the Transaction Documents) shall be
reasonably satisfactory in form and substance to the Company and to the
Company's legal counsel, and the Company shall have received all such
counterpart originals and certified or other copies of such documents as it may
reasonably request.
11
7. GENERAL PROVISIONS.
7.1 Survival of Warranties. The representations, warranties and
covenants of the Company and the Investors contained in or made pursuant to this
Agreement shall survive the execution and delivery of this Agreement and the
Closing and shall in no way be affected by any investigation of the subject
matter thereof made by or on behalf of any of the Investors, their counsel or
the Company, as the case may be.
7.2 Successors and Assigns. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties.
7.3 Governing Law. This Agreement shall be governed by and construed
under the internal laws of the State of California as applied to agreements
among California residents entered into and to be performed entirely within
California, without reference to principles of conflict of laws or choice of
laws.
7.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
7.5 Headings. The headings and captions used in this Agreement are
used for convenience only and are not to be considered in construing or
interpreting this Agreement. All references in this Agreement to sections,
paragraphs, exhibits and schedules shall, unless otherwise provided, refer to
sections and paragraphs hereof and exhibits and schedules attached hereto, all
of which exhibits and schedules are incorporated herein by this reference.
7.6 Notices. Unless otherwise provided, any notice required or
permitted under this Agreement shall be given in writing and shall be deemed
effectively given upon personal delivery to the party to be notified or upon
deposit with the United States Post Office, by registered or certified mail,
postage prepaid and addressed to the party to be notified at the address set
forth below such party's signature on the signature page hereto or, in the case
of the Company, to At Home Network Solutions, Inc. at 000 Xxxxxxxx, Xxxxxxx
Xxxx, Xxxxxxxxxx 00000, Attention: Xxxxx X. Xxxx, Esq., with a copy to Fenwick &
West LLP, Xxx Xxxx Xxxx Xxxxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, Attention: Xxxxxx
X. Xxxxxxxx, Esq., or at such other address as any party or the Company may
designate by giving ten (10) days advance written notice to all other parties.
7.7 No Finder's Fees. Each party represents that it neither is nor
will be obligated for any finder's or broker's fee or commission in connection
with this transaction. Each Investor agrees to indemnify and to hold harmless
the Company from any liability for any commission or compensation in the nature
of a finders' or broker's fee (and any asserted liability) for which the
Investor or any of its officers, partners, employees, or representatives is
responsible. The Company agrees to indemnify and hold harmless each Investor
from any liability for any commission or compensation in the nature of a
finder's or broker's fee (and any asserted liability) for which the Company or
any of its officers, employees or representatives is responsible.
7.8 Costs, Expenses. Each party will bear its own legal fees and
expenses in connection with the preparation, execution and delivery of this
Agreement, the issuance of the Purchased Shares and the transactions
contemplated by this Agreement.
12
7.9 Amendments and Waivers. Except as specified in Section 2.2, any
term of this Agreement may be amended and the observance of any term of this
Agreement may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and the holders of Purchased Shares and/or Conversion Shares representing at
least a majority of the aggregate number of shares of Common Stock into which
the Purchased Shares then are convertible and/or have been converted (excluding
any of such shares that have been sold to the public or pursuant to SEC Rule
144). Any amendment or waiver effected in accordance with this Section shall be
binding upon each holder of any Purchased Shares and/or Conversion Shares at the
time outstanding, each future holder of such securities, and the Company;
provided, however, that no condition set forth in Section 5 may be waived with
respect to any Investor who does not consent thereto, and provided further that
no amendment or waiver which would materially and adversely affect any of the
rights or obligations of an Investor hereunder will be binding upon any such
Investor who does not consent thereto.
7.10 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, such provision(s) shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision(s) were so excluded and shall be enforceable in
accordance with its terms.
7.11 Entire Agreement. This Agreement, together with all exhibits
and schedules hereto, constitutes the entire agreement and understanding of the
parties with respect to the subject matter hereof and supersedes any and all
prior negotiations, correspondence, agreements, understandings duties or
obligations between the parties with respect to the subject matter hereof.
7.12 Further Assurances. From and after the date of this Agreement,
upon the request of any Investor or the Company, the Company and the Investors
shall execute and deliver such instruments, documents or other writings as may
be reasonably necessary or desirable to confirm and carry out and to effectuate
fully the intent and purposes of this Agreement.
[Remainder of this page intentionally left blank]
13
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
THE COMPANY:
-----------
AT HOME NETWORK SOLUTIONS, INC.
By:____________________________
Name:__________________________
Title:_________________________
[Counterpart Signature Page to Series B Preferred Stock Purchase Agreement]
14
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
INVESTOR:
RATHM, INC.
By:_____________________________________
Name:___________________________________
Title:__________________________________
Address: 0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn: Xxx Xxxxxxxx,
Chief Financial Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
Notices should also be sent to:
Xxxx X. Xxxxxxx, Esq.
Xxxxxxxxxx Hyatt & Xxxxxx, P.C.
000 00xx Xxxxxx, 00xx Xxxxx
Xxxxxx, XX 00000-0000
Tel: (000) 000-0000
Fax: (000) 000-0000
[Counterpart Signature Page to Series B Preferred Stock Purchase Agreement]
15
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.
INVESTOR:
REDBACK NETWORKS, INC.
By:_____________________________________
Name:___________________________________
Title:__________________________________
Address: 0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
[Counterpart Signature Page to Series B Preferred Stock Purchase Agreement]
16
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
LIST OF EXHIBITS
----------------
Exhibit A - Schedule of Investors
Exhibit B - Restated Certificate of Incorporation
Exhibit C - Schedule of Exceptions
Exhibit D - Amended and Restated Investor Rights Agreement
Exhibit E - Amended and Restated Security Holders Agreement
Exhibit F - Amended and Restated Merger Agreement
Exhibit G - Opinion of Company Counsel
Exhibit H - Buyout Option Agreement
EXHIBIT A
Schedule of Investors
---------------------
Shares of Series B
Investor Stock Purchased Purchase Price
-------- ------------------ --------------
RATHM, Inc. 473,335 $14,999,986.15
0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Redback Networks, Inc. 157,778 $ 4,999,984.82
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
TOTAL: 631,113 $19,999,970.97
======= ==============
EXHIBIT B
Restated Certificate of Incorporation
-------------------------------------
EXHIBIT C
Schedule of Exceptions
----------------------
Unless otherwise defined, any capitalized terms in this Exhibit shall have
the same meanings assigned to such terms in the Series B Preferred Stock
Purchase Agreement to which this schedule is an exhibit. Nothing in this
Schedule of Exceptions constitutes an admission of any liability or obligation
of the Company to any third party, nor an admission against the Company's
interests.
Exceptions to Section 3.2
-------------------------
The Company has agreed to issue warrants to purchase shares of Common Stock
to certain cable system operators in consideration of such cable system
operators entering into exclusive distribution agreements with the Company.
The Company has agreed to issue warrants to purchase up to 5,250,000 shares
of Common Stock to RATHM, Inc. in connection with and upon the completion of
RATHM's attainment of certain subscriber-based milestones.
Exceptions to Section 3.10
--------------------------
The Company intends to use certain trade names and trademarks owned by At
Home Corporation pursuant to that certain Trade Name and Trademark License dated
April 16, 1999 by and between the Company and At Home Corporation.
The Company has been permitted to qualify to transact business as a foreign
corporation in the State of California under the corporate name "At Home Network
Solutions, Inc." with the permission of At Home Corporation as set forth in a
certain letter dated April 1, 1999 to the Company from At Home Corporation.
Exceptions to Section 3.12
--------------------------
Concurrently with the execution of this Agreement, the Company and certain
stockholders of the Company will amend and restate the Existing Security Holders
Agreement to extend the existing registration rights contained therein to the
Investors.
Exceptions to Section 3.21
--------------------------
The Company has not yet obtained a business license from the city of Redwood
City, California.
EXHIBIT D
Amended and Restated Investor Rights Agreement
----------------------------------------------
EXHIBIT E
Amended and Restated Security Holders Agreement
-----------------------------------------------
EXHIBIT F
Amended and Restated Merger Agreement
-------------------------------------
EXHIBIT G
Opinion of Company Counsel
--------------------------
EXHIBIT H
Buyout Option Agreement
-----------------------
