EXHIBIT 10.76
AGREEMENT
THIS AGREEMENT ("Agreement") is entered into as of the 31st day of
March 1999 by and among Intellisys Group, Inc., a Delaware corporation (the
"Company") and Weston Presidio Capital III, LP ("Capital") and WPC Entrepreneur
Fund, LP ("Fund") (Capital and Fund being collectively referred to in this
Agreement as "Investor.")
WHEREAS, concurrently with the execution of this Agreement, the
Company is entering into a Fifth Amendment to Loan and Security Agreement dated
as of March 31, 1999 (the "Loan Agreement") among Fleet Business Credit
Corporation ("Lender"), X. Xxxxxxxxxxxx Enterprises, Inc. ("X. Xxxxxxxxxxxx")
and Proline Industries, Inc. ("Proline" and together with X. Xxxxxxxxxxxx and
the Company, the "Borrowers"), pursuant to which Lender has agreed to provide a
temporary Overadvance Facility to the Borrowers (the "Overadvance Facility") and
pursuant to which Lender will lend up to $5,000,000 to the Borrowers and under
which Lender will provide an Overline Facility to temporarily increase the total
facility to $22,000,000 upon the terms and subject to the conditions set forth
in the Loan Agreement, including the condition that Investor guarantee repayment
of borrowings made under the Overadvance Facility by executing and delivering to
Lender a Continuing Guaranty in the form attached to this Agreement as Exhibit A
(the "Continuing Guaranty"); and
WHEREAS, the Borrowers have requested that Investor execute and
deliver the Continuing Guaranty to Lender and Investor is willing to do so upon
the terms and conditions set forth in this Agreement;
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereto hereby agree as follows:
SECTION 1. CONTINUING GUARANTY. Concurrently with the execution of
this Agreement, Investor is executing and delivering to Lender the Continuing
Guaranty.
SECTION 2. GUARANTY FEE. The Company shall pay Investor a fee for
providing the Continuing Guaranty (the "Guaranty Fee") in an amount equal to one
percent (1%) of the largest principal amount of borrowings made under the
Overadvance Facility outstanding on any date during the term of the Continuing
Guaranty, the repayment of which is guaranteed by Investor pursuant to the
Continuing Guaranty. The Guaranty Fee shall be paid upon the earlier to occur
of (i) the closing of the Company's underwritten initial public offering of
common stock ("IPO"), (ii) the issuance of equity securities by the Company to
one or more investors in a transaction that results in the receipt by the
Company of at least $15,000,000 in net cash proceeds (after deduction of fees
and commissions) (a "Qualifying Private Placement"), (iii) the receipt by the
Company of the Purchase Price (as defined in Section 3 hereof) on the Option
Closing Date (as defined in Section 3 hereof), (iv) the repayment of borrowings
made under the Overadvance Facility in full and termination of the Overadvance
Facility or (v) the termination of the Continuing Guaranty in accordance with
its terms. The Company shall pay 95.25824 percent
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(95.25824%) of the Guaranty Fee to Capital and 4.74176 percent (4.74176%) of the
Guaranty Fee to Fund.
SECTION 3. PURCHASE OPTION. At any time after expiration of the 90
day period commencing on the date of this Agreement and so long as the
Overadvance Facility shall then be outstanding and Investor shall not have been
released from its obligations under the Continuing Guaranty, Investor may elect
to purchase shares of the Company's Series A Convertible Redeemable Preferred
Stock ("Series A Preferred") for an aggregate purchase price equal to the
principal amount of the borrowings under the Overadvance Facility outstanding,
plus accrued and unpaid interest thereon, by providing the Company with written
notice of its election (the "Election Notice"). The Election Notice shall
specify the date on which Investor elects to complete the purchase (the "Option
Closing Date"), which shall not be earlier than 7 days following the date on
which the Election Notice is given to the Company. On the Option Closing Date,
the Investor shall pay to Lender on behalf of the Company, in immediately
available funds, an amount (the "Purchase Price") equal to the aggregate
principal amount of the borrowings made under the Overadvance Facility
outstanding on the Option Closing Date, plus the amount of accrued and unpaid
interest thereon as set forth in a payoff letter of the Lender. In consideration
for the payment of the Purchase Price, the Company (i) shall issue and deliver
to Investor a certificate or certificates representing a number of whole shares
of Series A Preferred (rounded down to the nearest whole share) (the "Acquired
Shares") computed by dividing the Purchase Price by $6.9629, (ii) execute and
deliver to Investor one or more Series A Convertible Redeemable Preferred Stock
Purchases Warrants in the form attached hereto as Exhibit B (the "Warrants") for
the purchase of an aggregate number of shares of Series A Preferred equal to 10%
of the number of Acquired Shares at a price per share of $6.9629, and (iii)
deliver to Investor, as soon as practicable, a release executed by Fleet
releasing Investor from all liability under the Continuing Guaranty and
acknowledging the termination of the Continuing Guaranty (the "Fleet Release").
The certificates representing the shares of Series A Preferred and the Warrants
issued by the Company shall be issued in the names of Capital and Fund in the
respective amounts requested by Capital and Fund.
SECTION 4. REPAYMENT OF BORROWINGS UNDER THE OVERADVANCE FACILITY AND
RELEASE. The Company shall apply the proceeds from the IPO or from a Qualified
Private Placement, whichever shall first occur, to the repayment in full of all
outstanding borrowings under the Overadvance Facility and the satisfaction of
all other liabilities of the Company under the Line of Credit and, as soon as
practicable, after such repayment shall deliver an executed Fleet Release to
Investor. If at any other time, (i) the borrowings under the Overadvance
Facility shall have been repaid in full, (ii) all other liabilities of the
Company under the Line of Credit shall have been satisfied in full, and (iii)
the Line of Credit shall have been terminated, the Company shall deliver an
executed Fleet Release to Investor as soon as practicable after the last of the
foregoing events to occur.
SECTION 5. AMENDMENT TO CERTIFICATE OF DESIGNATION; CONSENT. On or
about the date of this Agreement, the Company has filed or will file with the
Delaware Secretary of State the Certificate of Amendment of Amended Certificate
of Designation (the "Amendment") attached hereto as Exhibit C. Capital and Fund
hereby represent and warrant to the Company
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that they collectively own of record all outstanding shares of Series A
Preferred and hereby consent to (i) the amendment of the Amended Certificate of
Designation effected by the Amendment, (ii) the issuance of the Acquired Shares
pursuant to this Agreement, (iii) the issuance of the Warrants pursuant to this
Agreement, and (iv) the issuance of shares of Series A Preferred upon exercise
of the Warrants.
SECTION 6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The
Company hereby represents and warrants to the Investor as follows:
6.1 Authorization. All action (corporate and other) on the part of
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the Company, its officers, directors and shareholders necessary for the
authorization, execution and delivery by the Company of this Agreement, the
performance of all obligations of the Company hereunder, the approval, execution
and filing with the Secretary of State of Delaware of the Certificate of
Designation, the authorization, issuance (or reservation for issuance), sale and
delivery of the Series A Preferred and the Common Stock issuable upon conversion
of the Series A Preferred has been taken or will be taken prior to the sale of
the shares. This Agreement has been executed and delivered by the Company and
constitutes a valid and legally binding obligation of the Company, enforceable
in accordance with its terms, subject to bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting the rights of
creditors, and except to the extent that the availability of any equitable
remedy is subject to the discretion of a court or limited by law, and may be
limited by applicable federal and state laws.
6.2 Valid Issuance of Preferred and Common Stock. The Series A
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Preferred which may be purchased by the Investor hereunder, when issued, sold
and delivered in accordance with the terms hereof for the consideration
expressed herein, will be duly and validly issued, fully paid and nonassessable
and, based in part upon the representations of the Investor in this Agreement,
will be issued in compliance with all applicable securities laws as presently in
effect, of the United States and each of the states whose securities laws govern
the issuance of any of the Series A Preferred hereunder, and will be free of
restrictions on transfer other than restrictions on transfer under this
Agreement and under applicable state and federal securities laws. The Common
Stock issuable upon conversion of the Series A Preferred has been duly and
validly reserved for issuance and, upon issuance in accordance with the terms of
the Amended Certificate of Designation, shall be duly and validly issued, fully
paid and nonassessable, and, based in part upon the representations of the
Investor in this Agreement, shall be issued in compliance with all applicable
securities laws, as presently in effect, of the United States and each of the
states whose securities laws govern the issuance of any of the Series A
Preferred (or the Common Stock issuable upon conversion thereof) and will be
free of restrictions on transfer other than restrictions on transfer under this
Agreement and under applicable state and federal securities laws. The Company
has reserved sufficient authorized but unissued Common Stock for issuance upon
conversion of the Series A Preferred.
6.3 Consents and Approvals. The execution, delivery and performance
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of this Agreement and the consummation of the transactions contemplated hereby
by the Company do not require the consent, approval, license or authorization
of, notice to, or declaration, filing or registration with, any third party or
governmental authority and will not result in any breach or
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default which could result in the termination of, the material impairment or
forfeiture of any material contract to which the Company is a party or by which
it is bound, except for the filing pursuant to Section 25102(f) of the
California Corporate Securities Law of 1968, as amended, which filing will be
effected by the Company within fifteen (15) days after the date of the issuance
of the shares.
SECTION 7. REPRESENTATIONS AND WARRANTIES OF INVESTOR. The Investor
hereby represents and warrants to the Company as follows:
7.1 Authorization. The Investor has full power and authority to
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enter into this Agreement. This Agreement has been duly authorized, executed and
delivered by the Investor and constitutes its valid and legally binding
obligation, enforceable in accordance with its terms.
7.2 Purchase Entirely for Own Account. This Agreement is made with
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the Investor in reliance upon the Investor's representation to the Company,
which by the Investor's execution of this Agreement the Investor hereby
confirms, that the Warrants, the Series A Preferred (including the Series A
Preferred purchased upon exercise of the Warrants) and the Common Stock issuable
upon conversion of the Series A Preferred (collectively, the "Securities") will
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be acquired for investment for the Investor's own account, not as a nominee or
agent, and not with a view to the resale or distribution of any part thereof in
contravention of applicable law, and that the Investor has no present intention
of selling, granting any participation in, or otherwise distributing the same.
By executing this Agreement, the Investor further represents that the Investor
does not have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participations to such person or to any third
person, with respect to any of the Securities.
7.3 Disclosure of Information. The Investor has received all the
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information it considers necessary or appropriate for deciding whether to enter
into this Agreement and invest in the Securities. The Investor further
represents that it has had an opportunity to ask questions and receive answers
from the Company regarding the terms and conditions of sale of the Securities
that may be made as contemplated by this Agreement.
7.4 Investment Experience. The Investor is an institutional
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investor in securities of companies in the development or growth stage and
acknowledges that it is able to fend for itself, can bear the economic risk of
its investment and has such knowledge and experience in financial or business
matters that it is capable of evaluating the merits and risks of the investment
in the Securities. The Investor also represents it has not been organized for
the purpose of acquiring the Securities.
7.5 Accredited Investor. The Investor is and upon each purchase of
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Series A Preferred as contemplated by this Agreement will be an "accredited
investor" within the meaning of SEC Rule 501 of Regulation D, as presently in
effect.
7.6 Restricted Securities. The Investor understands that the
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Securities it is acquiring and may acquire as contemplated by this Agreement are
characterized as "restricted securities" under the federal securities laws
inasmuch as they will be acquired from the Company
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in a transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Securities Act of 1933, as amended (the "Act"), only in certain limited
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circumstances. In this connection, the Investor represents that it is familiar
with SEC Rule 144, as presently in effect, and understands the resale
limitations imposed thereby and by the Securities Act. The Investor acknowledges
that its investment in the Securities may be an illiquid investment requiring
the Investor to bear the economic risk of the investment for an indefinite
period and that the Company may never be able to comply with the requirements of
Rule 144.
7.7 Further Limitations on Disposition. Without in any way limiting
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the representations set forth above, the Investor further agrees not to make any
disposition of all or any portion of the Securities unless and until the
transferee has agreed in writing for the benefit of the Company to be bound by
the terms of this Agreement (provided and to the extent that such terms are then
applicable and provided that the Investor is making such disposition in a
transaction other than pursuant to Rule 144 or under an effective registration
statement under the Act and in accordance with any applicable state securities
laws), and
(a) The Investor shall have notified the Company of the proposed
disposition and shall have furnished the Company with a detailed statement of
the circumstances surrounding the proposed disposition, and
(b) If requested by the Company, the Investor shall have furnished
the Company with an opinion of counsel, in form and substance reasonably
satisfactory to the Company, rendered by Xxxxxxx, Xxxxxxx & Xxxxxxxx LLP or
another law firm experienced in matters involving the sale of securities under
federal and state securities laws and reasonably satisfactory to the Company,
that such disposition will not require registration of such shares under the Act
or registration or qualification under any state securities or "blue sky" law.
Notwithstanding the provisions of paragraphs (a) and (b) above, no
such registration statement or opinion of counsel shall be necessary for a
transfer by the Investor that is a partnership to a partner of such partnership
or a retired partner of such partnership who retires after the date hereof, or
to the estate of any such partner or retired partner or the transfer by gift,
will or intestate succession of any partner to his or her spouse or to the
siblings, lineal descendants or ancestors of such partner or his or her spouse,
if the transferee agrees in writing to be subject to the terms hereof to the
same extent as if he or she were an original Investor hereunder.
7.8 Legends. It is understood that the certificates evidencing the
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Securities may bear one or more of the following legends:
(a) "These securities have not been registered under the Securities
Act of 1933 or any applicable state securities laws. They may not be sold,
offered for sale, pledged or hypothecated in the absence of a registration
statement in effect with respect to the securities under such Securities Act and
the registration or qualification of the securities under applicable state
securities laws or an opinion of counsel reasonably satisfactory to the Company,
in form
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and content reasonably satisfactory to the Company, that such registration or
qualification under the Securities Act and state securities laws is not
required."
(b) "A statement of all the designations, preferences, rights and
qualifications, limitations or restrictions granted to or imposed upon the
respective classes and/or series of shares of stock of the Company and upon the
holders thereof may be obtained by any shareholder upon request and without
charge, at the principal office of the Company."
(c) "The shares evidenced by this certificate are subject to the
terms and conditions of a certain Investor Rights Agreement which includes a
voting agreement and a market stand-off agreement. Copies of the Investor Rights
Agreement may be obtained upon written request to the Company's secretary.
(d) Any legend required by the securities laws of any state.
7.9 Consents. No consent, approval or authorization of or
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designation, declaration or filing with any state, federal or foreign
governmental authority on the part of the Investor is required in connection
with the valid execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby.
7.10 Corporate Securities Law. THE SALE OF THE SECURITIES WHICH ARE
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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 FOR SUCH SECURITIES
PRIOR TO SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT
FROM QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE OR OTHERWISE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE
EXPRESSLY CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED, UNLESS THE SALE IS
SO EXEMPT.
SECTION 8. GOVERNING LAW. This Agreement and the Warrants shall be
governed by and construed in accordance with the law of the State of California,
excluding any California choice of law provisions.
SECTION 9. NOTICES. All notices, requests, demands and other
communications which are required or may be given under this Agreement shall be
in writing and shall be deemed to have been duly given when received, if
personally delivered; when transmitted, if transmitted by telecopy with receipt
of telephonic or electronic confirmation; the second day after it is sent, if
sent for next day delivery by a recognized overnight delivery service (e.g.,
Federal Express); and upon receipt, if sent by certified or registered mail,
return receipt requested. In each case notice shall be sent to:
To Company: Intellisys Group, Inc.
0000 Xxxx Xxxx Xxxxxx
Xxxxxxxx Xxxx, XX 00000
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Telecopy: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
with a copy to Xxxxxx & Xxxxxxx
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxx, Esq.
To Investor: Weston Presidio Capital Management III, LLC
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxx Xxxxxxxx
with a copy to Xxxxxxx Phleger & Xxxxxxxx LLP
Two Embarcadero Place
0000 Xxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Telecopy: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
or to such other place and with such other copies as either party may designate
as to itself by written notice to the others.
SECTION 10. MISCELLANEOUS.
10.1 Benefit of Agreement; Successors and Assigns. Except as
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otherwise provided herein, the terms and conditions of this Agreement shall
inure to the benefit of and be binding upon the respective successors and
assigns of the parties (including transferees of the Securities). Nothing in
this Agreement, express or implied, is intended to confer upon any party other
than the parties hereto or their respective permitted successors and assigns any
rights, remedies, obligations, or liabilities under or by reason of this
Agreement, except as otherwise expressly provided in this Agreement.
10.2 Entire Agreement; Waivers. This Agreement, together with all
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exhibits hereto, and the other agreements referred to herein, constitute the
entire agreement among the parties pertaining to the subject matter hereof and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties. No waiver of any of the provisions of
this Agreement shall be deemed or shall constitute a waiver of any other
provision hereof (whether or not similar), nor shall such waiver constitute a
continuing waiver unless otherwise expressly provided.
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10.3 Multiple Counterparts. This Agreement may be executed in one or
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more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.4 Invalidity. In the event that any one or more of the provisions
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contained in this Agreement or in any other instrument referred to herein,
shall, for any reason, be held to be invalid, illegal or unenforceable in any
respect, then to the maximum extent permitted by law, such invalidity,
illegality or unenforceability shall not affect any other provision of this
Agreement or any other such instrument.
10.4 Titles. The titles, captions or headings of the Sections herein
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are inserted for convenience of reference only and are not intended to be a part
of or to affect the meaning or interpretation of this Agreement.
10.5 Fees and Expenses. All costs and expenses incurred in
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connection with this Agreement shall be paid by the party incurring such cost or
expense.
10.6 Amendment. This Agreement may be amended by the parties hereto
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at any time. This Agreement may not be amended except by an instrument in
writing signed on behalf of each of the parties hereto.
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IN WITNESS WHEREOF, this Agreement has been executed by the parties
hereto as of the day and year first above written.
INTELLISYS GROUP, INC.
/s/ Xxxxxx X. Xxxxxx
__________________________________________________
By: Don Esters
Its: Chairman and Chief Executive Officer
INVESTOR
WESTON PRESIDIO CAPITAL III, L.P.,
By: WESTON PRESIDIO CAPITAL MANAGEMENT III, LLC,
its General Partner
/s/ Xxxxxx Xxxxxxxx
_____________________________________________
By: Xxxxxx Xxxxxxxx
Its:
WPC ENTREPRENEUR FUND, L.P.,
By: WESTON PRESIDIO CAPITAL MANAGEMENT
III, LLC,
its General Partner
/s/ Xxxxxx Xxxxxxxx
_____________________________________________
By: Xxxxxx Xxxxxxxx
Its:
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EXHIBIT A
CONTINUING GUARANTY
1. FOR VALUE RECEIVED, and in consideration of any loans or
other financial accommodations heretofore or hereafter made or granted to
Intellisys Group, Inc., a Delaware corporation ("Intellisys"), X. Xxxxxxxxxxxx
Enterprises, Inc., a Texas corporation, or Proline Industries, Inc., a
Washington corporation (collectively, the "Companies") by Fleet Business Credit
Corporation (formerly known as Sanwa Business Credit Corporation and together
with its successors and assigns, "Lender"), each of the undersigned hereby
unconditionally guarantees the full and prompt payment when due, whether by
acceleration or otherwise, and at all times thereafter, of (i) all obligations
of the Companies to Lender to repay advances made by Lender pursuant to the
Overadvance Facility (as such term is defined in the Fifth Amendment dated as of
March 31, 1999 to the Loan and Security Agreement, originally dated as of
September 3, 1998, by and between the Companies and Lender, as amended
(collectively "Loan Agreement")) now or hereafter existing or due or to become
due in an amount of up to Five Million Dollars ($5,000,000) (the "Overadvances")
plus (ii) all interest payable on the Overadvance(s) (the "Overadvance
Interest") and (iii) all expenses (including attorneys' and paralegals' fees and
expenses) paid or incurred by Lender in enforcing this Guaranty (the
"Enforcement Expenses"). The Overadvances, the Overadvance Interest and the
Enforcement Expenses are collectively referred to herein as the "Obligations").
All present and future obligations and indebtedness owing by the Companies to
Lender under or pursuant to the Loan Agreement including the Overadvance
Facility are referred to herein as the "Liabilities. " In the event of any
default by any Company in making payment of any of the Liabilities, each of the
undersigned agrees, on demand by Lender, to pay all of the Obligations as are
then or may thereafter become due and owing under the terms of the Loan
Agreement. The undersigned acknowledge and agree that in the event of a default
under the Loan Agreement, any payments made or applied against the Liabilities,
other than payments by the undersigned on the Obligations, shall first be
applied to payment of the Liabilities not constituting the Overadvance Facility
and then to the Overadvance Facility.
2. Each of the undersigned agrees that, in the event of the
dissolution or insolvency of any of the Companies or the undersigned or the
inability of any of the Companies or the undersigned to pay their respective
debts as they mature, or an assignment by any of the Companies or the
undersigned for the benefit of creditors, or the institution of any proceeding
by or against any of the Companies or the undersigned alleging that any of the
Companies or the undersigned is insolvent or unable to pay their respective
debts as they mature, the undersigned will pay to Lender forthwith the full
amount which would be payable hereunder by the undersigned if all of the
Liabilities were then due and payable, whether or not such event occurs at a
time when any of the Liabilities or the Obligations are due and payable.
3. This Guaranty shall in all respects be a continuing,
absolute and unconditional guaranty, and shall remain in full force and effect
(notwithstanding, without limitation, the dissolution or insolvency of any of
the undersigned or that at any time or from time to time all of the Overadvances
may have been paid), until all of the Obligations (including any extensions or
renewals thereof) shall have been fully and finally paid. Notwithstanding the
foregoing, this Guaranty shall terminate upon occurrence of the earlier of (i)
the termination of
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the Overadvance Facility and the payment in full to Lender by the undersigned of
all of the Obligations, (ii) the payment in full of the Obligations during the
90 day period following the date hereof with the proceeds from (x) Intellisys'
initial underwritten public offering of common stock or (y) a private placement
of shares of capital stock by Intellisys that results in net cash proceeds
(after deduction of fees and commissions) to Intellisys of at least $15,000,000
or (iii) July 15, 1999 on which date all outstanding Obligations shall be paid
in full by the undersigned. Upon any termination of this Guaranty, the
Overadvance Facility shall automatically terminate.
4. Each of the undersigned further agrees that, if at any time
all or any part of any payment theretofore applied by Lender to any of the
Obligations is or must be rescinded or returned by Lender for any reason
whatsoever (including, without limitation, the insolvency, bankruptcy or
reorganization of any of the Companies), the Obligations shall, for the purposes
of this Guaranty, to the extent that such payment is or must be rescinded or
returned, be deemed to have continued in existence, notwithstanding such
application by Lender, and this Guaranty shall continue to be effective or be
reinstated, as the case may be, as to the Obligations, all as though such
application had not been made by Lender.
5. Lender may, from time to time, whether before or after any
discontinuance of this Guaranty, in its sole discretion and without notice to
the undersigned, take any or all of the following actions: (a) retain or obtain
a security interest in any property to secure any of the Liabilities, (b) retain
or obtain the primary or secondary obligation of any obligor or obligors,
including any other guarantors in addition to the undersigned, with respect to
any of the Liabilities; (c) extend or renew for one or more periods (whether or
not longer than the original period), alter or exchange any of the Liabilities;
provided that any extension of the terms of this Guaranty beyond the termination
dates provided in paragraph 3(ii) or (iii) above shall not be made without the
undersigneds' prior written consent; (d) release, waive or compromise any
obligation of any of the undersigned hereunder or any obligation of any nature
of any other obligor primarily or secondarily obligated with respect to any of
the Liabilities; (e) release its security interest in, or surrender, release or
permit any substitution or exchange for, all or any part of any property now or
hereafter securing any of the Liabilities, or, subject to subsection 5(c) above,
extend or renew for one or more periods (whether or not longer than the original
period) or release, waive, compromise, alter or exchange any obligations of any
nature of any obligor with respect to any property; and (f) resort to the
undersigned for payment of any of the Obligations, whether or not Lender shall
have resorted to any property securing any of the Liabilities or shall have
proceeded against any other obligor primarily or secondarily obligated with
respect to any of the Liabilities.
6. Notwithstanding any payments made by or for the account of
any of the undersigned pursuant to this Guaranty, the undersigned shall have no
right of subrogation, reimbursement, exoneration, indemnity, contribution or any
other rights that would result in any of the undersigned being deemed a
creditor, under the Federal Bankruptcy Code or any other law or for any other
purpose, of any of the Companies or any other person directly or contingently
liable for the obligations guaranteed hereunder and each of the undersigned
hereby irrevocably waives all such rights, the right to assert any such rights
and any right to enforce any remedy
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which Lender now or may hereafter have against any of the Companies and hereby
irrevocably waives any benefit of and any right to participate in, any security
now or hereafter held by Lender, whether any of the foregoing rights arise in
equity, at law or by contract. Each of the undersigned further agrees that
nothing contained herein or otherwise shall prevent Lender from pursuing
concurrently or successively all rights and remedies available to it at law
and/or in equity or under any of the documents evidencing the Liabilities and
the exercise of any of its rights or remedies shall not constitute a discharge
of the undersigned's obligations hereunder, it being the purpose and intent of
each of the undersigned that its obligations hereunder shall be absolute,
independent and unconditional under any and all circumstances whatsoever.
7. Each of the undersigned hereby expressly waives: (a) notice
of the acceptance by Lender of this Guaranty; (b) notice of the existence or
creation or non-payment of all or any of the Liabilities; (c) presentment,
demand, notice of dishonor, protest, notice of protest and all other notices
whatsoever; (d) any defense, right of set-off or other claim which the
undersigned may have against any of the Companies or which the undersigned or
any of the Companies may have against Lender; (e) all diligence in collection or
protection of or realization upon the Liabilities or any thereof, any obligation
hereunder, or any security for or guaranty of any of the foregoing; (f) any
requirement of Lender to marshal; and (g) any failure by Lender to inform the
undersigned of any facts Lender may now or hereafter know about any of the
Companies and the Liabilities, it being understood and agreed that Lender has no
duty so to inform and that each of the undersigned is fully responsible for
being and remaining informed by any of the Companies of all circumstances
bearing on the existence or creation, or the risk of nonpayment or
nonperformance of the Liabilities.
8. Lender may, from time to time, whether before or after any
discontinuance of this Guaranty, without notice to the undersigned, assign or
transfer any or all of the Liabilities or any interest therein and,
notwithstanding any such assignment or transfer or any subsequent assignment or
transfer thereof, the Liabilities shall be and remain the Liabilities for the
purposes of this Guaranty, and each and every immediate and successive assignee
or transferee of any of -the Liabilities or of any interest therein shall, to
the extent of the interest of such assignee or transferee in the Liabilities, be
entitled to the benefits of this Guaranty to the same extent as if such assignee
or transferee were Lender; provided, however, that, unless Lender shall
otherwise consent in writing, Lender shall have an unimpaired right, prior and
superior to that of any such assignee or transferee, to enforce this Guaranty,
for the benefit of Lender, as to those of the Liabilities which Lender has not
assigned or transferred; and provided further that notwithstanding any such
transfer or assignment, the undersigneds' obligations hereunder shall be limited
to the payment of the Obligations.
9. No delay in the exercise of any right or remedy shall
operate as a waiver thereof, and no single or partial exercise by Lender of any
right or remedy shall preclude other or further exercise thereof or the exercise
of any other right or remedy; nor shall any modification or waiver of any of the
provisions of this Guaranty be binding upon Lender, except as expressly set
forth in a writing duly signed and delivered by Lender. No action of Lender
permitted hereunder shall in any way affect or impair the rights of Lender and
the obligations of the undersigned under this Guaranty.
12
10. This Guaranty shall be continuing and shall not be
discharged, impaired or affected by (a) the power or authority or lack thereof
of any of the Companies to incur the Liabilities; (b) the validity or invalidity
of the documents evidencing the Liabilities or securing the same; (c) any claims
or defenses whatsoever that any of the Companies or anyone else may or might
have to the payment or performance of the Liabilities; (d) the existence or non-
existence of any of the Companies as a legal entity; (e) the transfer by any of
the Companies of all or any part of the collateral described in the documents
securing the Liabilities; or (f) any right of offset, counterclaim or defense
(other than payment in full and performance in full of all of the Liabilities in
accordance with the terms of the documents evidencing and securing the
Liabilities) that each of the undersigned may or might have to its undertakings,
liabilities and obligations hereunder, each and every such defense being hereby
waived by each of the undersigned to the extent permitted by law.
11. This Guaranty shall be binding upon each of the
undersigned and upon its successors and assigns and shall inure to the benefit
of Lender and its successors and assigns. All references herein to the Company
and each of the undersigned, respectively, shall be deemed to include their
respective successors and assigns, whether immediate or remote. If more than one
party shall execute this Guaranty, the term "undersigned" as used herein shall
mean all parties executing this Guaranty and each of them, and all such parties
shall be jointly and severally obligated hereunder. All notices required or
permitted to be given hereunder shall be in writing and shall be either
personally delivered, sent by telecopier or sent by United States mail, with
first class postage prepaid, addressed, if to the undersigned at its address
stated below or at such other address as the undersigned hereafter notify Lender
as herein provided and, if to Lender at Fleet Business Credit Corporation, 00000
Xxxxxxx Xxxx., Xxxxx 000, Xxxxxxx Xxxx, Xxxxxxxxxx 00000 Attn: Loan
Administration Manager, telecopier number (000) 000-0000 or at such other
address as Lender hereafter notifies the undersigned as herein provided. Notices
shall be deemed received on the earlier of (i) the date when sent if sent by
telecopier, provided that such telecopied notice shall be confirmed by also
sending such notice by U.S. mail within 48 hours; (ii) if given by U.S. mail the
earlier of receipt or the third calendar day after deposit in the U.S. mail, or
(iii) the date of actual delivery, if personally delivered.
This Guaranty has been delivered for acceptance by Lender in Los
Angeles, California and shall be governed by and construed in accordance with
the internal laws (as opposed to the conflicts of law provisions) of the State
of California. Each of the undersigned hereby (i) irrevocably submits to the
jurisdiction of any state or federal court located in Los Angeles County,
California, over any action or proceeding to enforce or defend any matter
arising from or related to this Guaranty; (ii) irrevocably waives, to the
fullest extent the undersigned may effectively do so, the defense of an
inconvenient forum to the maintenance of any such action or proceeding; (iii)
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in any other jurisdictions by suit on the
judgment or in any other manner provided by law; and (iv) agrees not to
institute any legal action or proceeding against Lender or any of Lender's
directors, officers, employees, agents or property, concerning any matter
arising out of or relating to this Guaranty in any court other than one located
in Los Angeles County, California. Nothing in this paragraph shall affect or
impair Lender's right to serve legal process in any manner permitted by law or
Lender's right to bring any action or
13
proceeding against any of the undersigned or its property in the courts of any
other jurisdiction. Wherever possible each provision of this Guaranty shall be
interpreted as to be effective and valid under applicable law, but if any
provision of this Guaranty shall be prohibited by or invalid under such law,
such provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Guaranty.
THE UNDERSIGNED AND LENDER EACH EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (1) ARISING UNDER THIS
GUARANTY OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR (2) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO
THE DEALINGS OF THE UNDERSIGNED AND LENDER OR ANY OF THEM WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT
OR TORT OR OTHERWISE; AND THE UNDERSIGNED AND LENDER EACH AGREES AND CONSENTS
THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT
TRIAL WITHOUT A JURY, AND THAT THIS GUARANTY OR A COUNTERPART OR COPY OF THIS
GUARANTY MAY BE FILED
14
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT TO THE WAIVER OF THEIR RIGHT
TO TRIAL BY JURY.
March 31, 1999.
"Guarantor" "Guarantor"
WESTON PRESIDIO CAPITAL III, L.P. WPC ENTREPRENEUR FUND, LP
By: Weston Presidio Capital Management III, By: Weston Presidio Capital Management III,
LLC, its General Partner LLC, its General Partner
By: By:
------------------------------------------- --------------------------------------------
Title: Title:
---------------------------------------- -----------------------------------------
Guarantor address: Guarantor address:
---------------------------------------------- -----------------------------------------------
---------------------------------------------- -----------------------------------------------
---------------------------------------------- -----------------------------------------------
Attention: Attention:
------------------------------------ -------------------------------------
Phone: Phone:
---------------------------------------- -----------------------------------------
Telecopier: Telecopier:
----------------------------------- ------------------------------------
15
EXHIBIT B
FORM OF WARRANT
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF
ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT
AND APPLICABLE STATE SECURITIES LAWS.
No. W-I
WARRANT TO PURCHASE
SERIES A CONVERTIBLE REDEEMABLE PREFERRED STOCK
OF
INTELLISYS GROUP, INC. (THE "COMPANY")
This warrant (the "Warrant") certifies that, for value received and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, [NAME] (the "Holder") is entitled, upon surrender of
this Warrant at the principal office of the Company (or at such other place as
the Company shall notify Holder in writing), to purchase shares of the Series
A Convertible Redeemable Preferred Stock of the Company (the "Series A Preferred
Stock") at $6.9629 per share (such price, as adjusted from time to time, is
herein referred to as the "Exercise Price"). The shares of Series A Preferred
Stock issuable pursuant to this Warrant (the "Shares") shall be subject to
adjustment pursuant to Section 9 hereof.
1. Exercise Period. This Warrant is exercisable, in whole or in
---------------
part, commencing upon the date hereof (the "Effective Date"), and shall remain
so exercisable for a period of three years following the Effective Date.
2. Exercise of Warrant.
-------------------
(a) The purchase rights represented by this Warrant are
exercisable by the Holder in whole or in part at any time,
or from time to time, during the exercise period hereof as
described in Section 1 above. Such exercise shall be
effected by the surrender of this Warrant and the Notice of
Exercise annexed hereto duly completed and executed on
behalf of the Holder, at the office of the Company, upon
payment of the aggregate Exercise Price in cash or by check.
(b) This Warrant shall be deemed to have been exercised
immediately prior to the close of business on the date of
its surrender for exercise (accompanied by payment of the
aggregate Exercise
16
Price) as provided above, and the person entitled to receive
the Shares issuable upon such exercise shall be treated for
all purposes as the holder of record of such shares as of
the close of business on such date. As promptly as
practicable on or after such date, the Company at its
expense shall issue and deliver to the person or persons
entitled to receive the same a certificate or certificates
for the number of Shares issuable upon such exercise. If
such exercise is for less than all of the Shares, the
Company shall additionally, as promptly as practicable on or
after such date, at its expense, issue and deliver a
replacement warrant identical to this Warrant except that
the number of shares available for exercise shall be reduced
by the number of Shares exercised.
3. Net Issue Exercise. In lieu of exercising this Warrant by paying
------------------
the Exercise Price in cash or by check and so long as the Company shall have
completed an initial underwritten public offering of shares of the Company's
common stock (the "Common Stock"), Holder may elect to receive shares equal to
the value of this Warrant (or the portion thereof being canceled) by surrender
of this Warrant at the principal office of the Company together with notice of
such election in which event the Company shall issue to Holder a number of
shares of the Company's Series A Preferred Stock or shares of Common Stock, as
applicable, computed using the following formula:
Where X = The number of shares of Series A Preferred Stock or shares
of Common Stock, as applicable, to be issued to Holder.
X = Y(A-B)
----------
A
Y = The number of shares of Series A Preferred Stock or shares
of Common Stock, as applicable, to be canceled pursuant to
such exercise under this Warrant.
A = The fair market value of one share of the Company's Series A
Preferred Stock or Common Stock, as applicable.
B = Exercise Price (as adjusted to the date of such
calculations).
4. No Fractional Shares or Scrip. No fractional shares or scrip
-----------------------------
representing fractional shares shall be issued upon the exercise of this
Warrant. In lieu of any fractional share to which the Holder would otherwise be
entitled, the Company shall make a cash payment equal to the Exercise Price
multiplied by such fraction.
17
5. No Rights of Shareholder. The Holder shall not be entitled to
------------------------
vote or receive dividends or be deemed the holder of Series A Preferred Stock or
any other securities of the Company or receive any benefits thereunder, accrued
or otherwise, that may at any time be issuable on the exercise hereof for any
purpose, nor shall anything contained herein be construed to confer upon the
Holder, as such, any of the rights of a shareholder of the Company or any right
to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise until the Warrant shall have been exercised and
the Shares purchasable upon the exercise hereof shall have been issued, as
provided herein.
6. Transfer of Warrant.
-------------------
(a) Non-transferability of Warrant. This Warrant may not be
------------------------------
transferred or assigned without the prior written consent of
the Company, which consent shall not be unreasonably
withheld.
7. Compliance with Securities Laws.
-------------------------------
(a) Holder Status. The Holder of this Warrant is an "accredited
-------------
investor" within the meaning of Rule 501 of Regulation D
promulgated under the 1933 Act, as presently in effect.
(b) Purchase for Own Account. The Warrants and the Shares to be
------------------------
purchased by the Holder hereunder will be acquired for
investment for Holder'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
Holder has no present intention of selling, granting any
participation in or otherwise distributing the same. Holder
also represents that it has not been formed for the specific
purpose of acquiring the Warrants or the Shares.
(c) Disclosure of Information. Holder 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 Warrants and the Shares to be purchased by it
under this Warrant. Holder further has had an opportunity
to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the
Warrants and the 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
Holder or to which Holder had access.
(d) Investment Experience. Holder understands that the purchase
---------------------
of the Warrants and the Shares involves substantial risk.
Holder has
18
experience as an investor in securities of companies in the
start-up and early development stage and acknowledges that
it is able to fend for itself, can bear the economic risk of
the investment, including a total loss of such investment,
in the Warrants and the Shares and has such knowledge and
experience in financial or business matters that it is
capable of evaluating the merits and risks of this
investment in the Warrants and the Shares and protecting its
own interests in connection with this investment. Holder
represents that it has not been organized for the purpose of
acquiring the Warrants or the Shares.
(e) Restricted Securities. Holder understands that the Warrants
---------------------
and the 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, Holder
represents that it is familiar with SEC Rule 144, as
presently in effect, and understands the resale limitations
imposed thereby and by the 1933 Act. Holder understands
that the Company is under no obligation to register any of
the securities sold hereunder except as provided in the
Investors' Rights Agreement. Holder understands that no
public market now exists for any of the Warrants or the
Shares and that it is uncertain whether a public market will
ever exist for the Warrants or the Shares.
(f) Further Limitations on Disposition. Without in any way
----------------------------------
limiting the representations set forth above, Holder further
agrees not to make any disposition of all or any portion of
the Warrants or the Shares unless and until:
(i) 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
(ii) (a) such Holder 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 (b) such
Holder shall have furnished the Company, at the expense
of such Holder or its transferee, with an opinion of
counsel satisfactory to the Company, in form and
content satisfactory to the Company,
19
that such disposition will not require registration
of such securities under the 1933 Act.
(iii) Legends. This Warrant and all Shares issued upon
-------
exercise hereof may bear one or more of the following
legends:
(A) "These securities have not been registered under the
Securities Act of 1933 or any applicable state securities laws. They may not be
sold, offered for sale, pledged or hypothecated in the absence of a registration
statement in effect with respect to the securities under such Securities Act and
the registration or qualification of the securities under applicable state
securities laws or an opinion of counsel reasonably satisfactory to the Company,
in form and content reasonably satisfactory to the Company, that such
registration or qualification under the Securities Act and state securities laws
is not required."
(B) "A statement of all the designations, preferences,
rights and qualifications, limitations or restrictions granted to or imposed
upon the respective classes and/or series of shares of stock of the Company and
upon the holders thereof may be obtained by any shareholder upon request and
without charge, at the principal office of the Company."
(C) "The shares evidenced by this certificate are subject
to the terms and conditions of a certain Investor Rights Agreement which
includes a voting agreement and a market stand-off agreement. Copies of the
Investor Rights Agreement may be obtained upon written request to the Company's
secretary.
(D) Any legend required by the securities laws of any
state.
8. Reservation of Stock. The Company covenants that during the term
--------------------
this Warrant is exercisable, the Company will reserve from its authorized and
unissued Series A Preferred Stock and Common Stock a sufficient number of shares
to provide for the issuance of the Shares upon the exercise of this Warrant or
the conversion of the Series A Preferred Stock, as the case may be, and, from
time to time, will take all steps necessary to amend its Certificate of
Incorporation to provide sufficient reserves of shares of Common Stock issuable
upon conversion of the Series A Preferred Stock issuable upon exercise of the
Warrant, to the extent the Company can readily ascertain the number of shares of
Common Stock. The Company further covenants that all shares that may be issued
upon the exercise of rights represented by this Warrant and payment of the
Exercise Price, as set forth herein, shall be free from all liens and charges in
respect of the issue thereof. The Company agrees that its issuance of this
Warrant shall constitute full authority to its officers who are charged with the
duty of executing stock certificates to execute and issue the necessary
certificates for shares of Series A Preferred Stock issuable upon the exercise
of this Warrant.
9. Adjustment of Exercise Price and Number of Shares. The number of
-------------------------------------------------
and kind of securities purchasable upon exercise of this Warrant and the
Exercise Price shall be subject to adjustment from time to time as follows:
20
(a) Subdivisions, Combinations and Other Issuances. If the
----------------------------------------------
Company shall at any time prior to the expiration of this
Warrant subdivide its Series A Preferred Stock, by split-up
or otherwise, or combine its capital stock, or issue
additional securities as a dividend with respect to any
shares of its Series A Preferred Stock, the number of Shares
issuable on the exercise of this Warrant shall forthwith be
proportionately increased in the case of a subdivision or
stock dividend, or proportionately decreased in the case of
a combination. Appropriate adjustments shall also be made to
the Exercise Price payable per share, but the aggregate
purchase price payable for the total number of Shares
purchasable under this Warrant (as adjusted) shall remain
the same. Any adjustment under this Section 9(a) shall
become effective at the close of business on the date the
subdivision or combination becomes effective, or as of the
record date of such dividend, or in the event that no record
date is fixed, upon the making of such dividend.
(b) Reclassification, Reorganization, Merger or Sale. In case
------------------------------------------------
of any reclassification, capital reorganization, change in
the capital stock of the Company (other than as a result of
a subdivision, combination or stock dividend provided for in
Section 9(a) above) or any consolidation or merger of the
Company with another corporation, or the sale of all or
substantially all of its assets to another corporation
effected in such a way that holders of preferred stock shall
be entitled to receive stock, securities or assets with
respect to or in exchange for preferred stock, then, as a
condition of such reclassification, reorganization, change,
merger or sale, lawful provision shall be made, and duly
executed documents evidencing the same from the Company or
its successor shall be delivered to the holder of this
Warrant, so that the holder of this Warrant shall have the
right at any time prior to the expiration of this Warrant to
purchase, at a total price equal to that payable upon the
exercise of this Warrant, the kind and amount of shares of
stock and other securities and property receivable in
connection with such reclassification, reorganization,
change, merger or sale, by a holder of the same number of
shares of capital stock as were purchasable by the Holder
immediately prior to such reclassification, reorganization,
change, merger or sale. In any such case appropriate
provisions shall be made with respect to the rights and
interest of the Holder so that the provisions hereof shall
thereafter be applicable with respect to any shares of stock
or other securities and property deliverable upon exercise
hereof, and appropriate adjustments shall be made to the
Exercise Price per share payable hereunder, provided the
aggregate purchase price shall remain the same.
21
(c) Conversion of Series A Preferred Stock. If the Series A
--------------------------------------
Preferred Stock converts into Common Stock pursuant to the
provisions of the Company's Certificate of Incorporation, as
amended, the Holder shall thereafter be entitled to
purchase, instead and in lieu of the Series A Preferred
Stock, the number of shares of Common Stock receivable upon
conversion of the number of shares of Series A Preferred
Stock that are issuable upon exercise of this Warrant, and
the Exercise Price shall be immediately adjusted to equal
the quotient obtained by dividing (x) the aggregate Exercise
Price of the maximum number of shares of Series A Preferred
Stock for which this Warrant was exercisable immediately
prior to such conversion by (y) the number of shares of
Common Stock for which this Warrant is exercisable
immediately after such conversion.
(d) Notice of Adjustment. When any adjustment is required to be
--------------------
made in the number or kind of shares purchasable upon
exercise of the Warrant, or in the Exercise Price, the
Company shall promptly notify the holder of such event and
of the number of shares, the adjusted Exercise Price and the
type of securities or property thereafter purchasable upon
exercise of the Warrant.
10. Amendments.
----------
(a) Any term of this Warrant may be amended with the written
consent of the Company and the Holder.
(b) No waivers of or exceptions to any term, condition or
provision of this Warrant, in any one or more instances,
shall be deemed to be, or construed as, a further or
continuing waiver of any such term, condition or provision.
11. Miscellaneous.
-------------
(a) Governing Law. This Warrant shall be governed by and
-------------
construed under the internal laws of the State of
California, without giving effect to the principles of
conflict of laws thereof.
(b) Notices. Unless otherwise provided, any notice required or
-------
permitted under this Warrant 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 indicated for such party on the signature page
hereof, or at such other address as such party may
22
designate by ten (10) days' advance written notice to the
other parties.
(c) Counterparts. This Warrant may be executed in counterparts,
------------
each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
23
IN WITNESS WHEREOF, Intellisys Group, Inc. has caused this Warrant to
be executed by its officers thereunto duly authorized.
Dated: ___________, ______ INTELLISYS GROUP, INC.
By: ________________________________________
Name: Xxxxxx X. Xxxxxx
Its:
ACCEPTED:
_____________________________________
By: _________________________________
Name:
Title:
[Signature page to Warrant]
24
NOTICE OF EXERCISE
------------------
To: Intellisys Group, Inc. (the "Company")
----------------------
The undersigned hereby elects to purchase _________ shares of the
Series A Convertible Redeemable Preferred Stock (or such stock or securities
receivable upon the exercise of that certain Warrant to Purchase Shares of
Series A Convertible Redeemable Preferred Stock of the Company (the "Warrant"))
at an exercise price per share as set forth in the Warrant.
The undersigned hereby:
_____________ "Net-exercises" the Warrant.
_____________ Tenders payment of the aggregate exercise price in
cash or check.
The undersigned requests that the Company issue a certificate or
certificates representing said shares of the Series A Convertible Redeemable
Preferred Stock (or such stock or securities receivable upon the exercise of the
Warrant) of the Company in the name of the undersigned or in such other name as
is specified below:
___________________________________
(Print Name)
By its signature below, the undersigned hereby confirms and
acknowledges that the shares of Series A Convertible Redeemable Preferred Stock
issuable upon exercise of the Warrant (or such stock or securities receivable
upon the exercise of the Warrant) are being acquired solely for the account of
the undersigned and not as a nominee for any other party, and for investment,
and that the undersigned will not offer, sell or otherwise dispose of any such
shares of Series A Convertible Redeemable Preferred Stock (or such stock or
securities receivable upon the exercise of the Warrant) except under
circumstances that will not result in a violation of the Securities Act of 1933,
as amended, or any state securities laws.
Date:________________
____________________________________
(Print Name)
____________________________________
(Signature)
By:_________________________________
(Name and title of signatory, if non-
natural person)
25
Please issue a new Warrant for the unexercised portion of the attached
Warrant in the name of the undersigned or in such other name as is specified
below:
____________________________________
[Name]
____________________________________
[Date]
____________________________________
[Signature]
26
EXHIBIT C
CERTIFICATE OF AMENDMENT
OF
AMENDED CERTIFICATE OF DESIGNATION
OF
INTELLISYS GROUP, INC.
It is hereby certified that:
1. The name of the corporation (hereinafter called the "Corporation") is
INTELLISYS GROUP, INC.
2. The Amended Certificate of Designation of the Corporation is hereby
amended by striking out Paragraph 1 thereof and by substituting in lieu of said
Paragraph the following new Paragraph:
"1. Designation and Number.
----------------------
A class of Preferred Stock, designated Series A Convertible Redeemable
Preferred Stock (the "Series A Preferred Stock"), is hereby established.
The number of shares of Series A Preferred Stock shall be 2,508,000. The
rights, preferences, privileges and restrictions granted to and imposed
upon the Series A Preferred Stock are as set forth below."
3. The amendment of the Amended Certificate of Designation herein
certified has been duly adopted in accordance with the provisions of Section 242
of the General Corporation Law of the State of Delaware.
IN WITNESS WHEREOF, INTELLISYS GROUP, INC. has caused this certificate to
be executed by its duly authorized officer this ______ day of March, 1999.
________________________________
Xxxxxxx Xxxxxx
Executive Vice President Sales & Marketing
27
