EXHIBIT 4.2
EXHIBIT A
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT, dated as of the date of acceptance set
forth below, is entered into by and between FIRST PACIFIC NETWORKS, INC., a
Delaware corporation, with headquarters located at 000 Xxx Xxxx, Xxx Xxxx,
Xxxxxxxxxx 00000 (the "Company"), and the undersigned (the "Buyer" or
"Purchaser").
WITNESSETH:
WHEREAS, the Company and the Buyer are executing and delivering this
Stock Purchase Agreement (the "Agreement") in reliance upon the exemption
from securities registration afforded by Rule 506 under Regulation D
("Regulation D") as promulgated by the United States Securities and Exchange
Commission (the "SEC") under the Securities Act of 1933, as amended (the
"1933 Act"); and
WHEREAS, the Buyer wishes to purchase, upon the terms and subject to the
conditions of this Agreement, Series G Preferred Stock ($.001 par value) (the
"Preferred Stock") of the Company which will be convertible into shares of
Common Stock, $.001 par value (the "Common Stock"), of the Company, subject
to acceptance of this Agreement by the Company;
NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. AGREEMENT TO PURCHASE; PURCHASE PRICE.
A. PURCHASE. Buyer hereby agrees to purchase from the Company shares
of the Company's Preferred Stock at a purchase price of $1,000 per share.
The Preferred Stock will have the rights, preferences and privileges set
forth in the form of the Certificate of Designation of the Series G Preferred
Stock of the Company attached hereto as Annex I. The number of shares of
Preferred Stock being purchased by the buyer and the total purchase price of
Preferred Stock being purchased shall be as set forth on the signature page
hereto. The purchase price shall be payable in United States Dollars.
B. FORM OF PAYMENT. The Buyer shall pay the purchase price for the
Preferred Stock by delivering immediately available good funds in United
States Dollars to the escrow agent (the "Escrow Agent") identified in the
Joint Escrow Instructions attached hereto as ANNEX II (the "Joint Escrow
Instructions"). Such delivery of funds shall be made against delivery by the
Company of the Certificates evidencing the shares of Preferred Stock being
purchased by the Buyer duly executed on behalf of the Company. Promptly
following payment by the Buyer to the Escrow Agent of the purchase price of
the Preferred Stock, the Company shall deliver a Certificate for the
Preferred Stock duly executed on behalf of the Company, to the Escrow Agent.
By signing this Agreement, the Buyer and the Company each agrees to all of
the terms and conditions of, and becomes a party to, the Joint Escrow
Instructions, all of the provisions of which are incorporated herein by this
reference as if set forth in full.
C. METHOD OF PAYMENT. Payment into escrow of the purchase price for
the Preferred Stock being purchased shall be made by wire transfer of funds
to:
Bank of New York
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
ABA# 000000000
For credit to the account of Xxxxxxx & Xxxxxx, Esqs.
Escrow Account No. 637-0000000
Not later than 1:00 p.m., New York time, on the date which is three (3) New
York Stock Exchange trading days after the Company shall have accepted this
Agreement and returned a signed counterpart of this Agreement to the Escrow
Agent by facsimile, the Buyer shall deposit with the Escrow Agent the
aggregate purchase price for the Preferred Stock being purchased, in
currently available funds.
2. BUYER REPRESENTATIONS, WARRANTIES, ETC.; ACCESS TO INFORMATION;
INDEPENDENT INVESTIGATION.
The Buyer represents and warrants to, and covenants and agrees with, the
Company as follows:
A. The Buyer is purchasing the Preferred Stock and would be acquiring
the shares of Common Stock issuable upon conversion of the Preferred Stock
for its own account for investment only and not with a view towards the
public sale or distribution thereof and not with a view to or for sale in
connection with any distribution thereof;
B. The Buyer is (i) an "accredited investor" as that term is defined in
Rule 501 of the General Rules and Regulations under the 1933 Act by reason of
Rule 501(a)(3), and (ii) experienced in making investments of the kind
described in this Agreement, and the related documents, (iii) able, by reason
of the business and financial experience of its officers and professional
advisors (who are not affiliated with or compensated in any way by the
Company or any of its affiliates or selling agents), to protect its own
interests in connection with the transactions described in this Agreement,
and the related documents, and (iv) able to afford the entire loss of its
investment in the Preferred Stock;
C. All subsequent offers and sales of the Preferred Stock and the
shares of Common Stock issuable upon conversion of, or in lieu of payment of
interest on, the Preferred Stock (the "Shares" and, together with the
Preferred Stock, the "Securities") by the Buyer shall be made pursuant to
registration of the Shares under the 1933 Act or with respect to the
Preferred Stock pursuant to an exemption from registration;
D. The Buyer understands that the Preferred Stock is being offered and
sold, and the Shares are being offered, to it in reliance on specific
exemptions from the registration requirements of United States federal and
state securities laws and that the Company is relying upon the truth and
accuracy of, and the Buyer's compliance with, the representations,
warranties, agreements, acknowledgments and understandings of the Buyer set
forth herein in order to determine the availability of such exemptions and
the eligibility of the Buyer to acquire the Preferred Stock and to receive an
offer of the Shares;
E. The Buyer and its advisors, if any, have been furnished with all
materials relating to the business, finances and operations of the Company
and materials relating to the offer and sale of the Preferred Stock and the
offer of the Shares which have been requested by the Buyer. The Buyer and
its advisors, if any, have been afforded the opportunity to ask questions of
the Company and have received complete and satisfactory answers to any such
inquiries. Without limiting the generality of the foregoing, the Buyer has
had the opportunity to obtain and to review the Company's (1) Annual Report
on Form 10-K for the fiscal year ended March 31, 1996, (2) Quarterly Reports
on Form 10-Q for the fiscal quarter ended June 30, 1996; (3) definitive Proxy
Statement for its 1996 Annual Meeting of Stockholders; and (4) Registration
Statement on Form S-3 as filed on September 12, 1996;.
F. The Buyer understands that its investment in the Securities involves a
high degree of risk;
G. The Buyer understands that no United States federal or state agency or
any other government or governmental agency has passed on or made any
recommendation or endorsement of the Securities;
H. This Agreement has been duly and validly authorized, executed and
delivered on behalf of the Buyer and is a valid and binding agreement of the
Buyer enforceable in accordance with its terms, subject as to enforceability
to general principles of equity and to bankruptcy, insolvency, moratorium and
other similar laws affecting the enforcement of creditors' rights generally;
and
I. The Buyer is not purchasing the Preferred Stock for the purpose of
covering any short sales of the Common Stock made by the Buyer with the Shares.
3. COMPANY REPRESENTATIONS, ETC.
The Company represents and warrants to the Buyer that:
A. CONCERNING THE SHARES. The Shares have been duly authorized and,
when issued upon conversion of the Preferred Stock in accordance with this
Agreement and the Certificate of Designation, will be duly and validly
issued, fully paid and non-assessable and will not subject the holder thereof
to personal liability by reason of being such holder. There are no
preemptive rights of any Stockholder of the Company, as such, to acquire the
Shares. The COMPANY has registered its common stock pursuant to Section 12
of the Exchange Act and the common stock trades on NASDAQ/Small Cap Market,
and has received no notice, either oral or written, with respect to
discontinuance of its continued eligibility for such listing.
B. STOCK PURCHASE AGREEMENT; REGISTRATION RIGHTS AGREEMENT AND STOCK.
This Agreement and the Registration Rights Agreement, the form of which is
attached hereto as Annex IV (the "Registration Rights Agreement"), have been
duly and validly authorized by the Company, this Agreement has been duly
executed and delivered by the Company and this Agreement is, and the
Registration Rights Agreement, when executed and delivered by the Company,
will be, valid and binding agreements of the Company enforceable in
accordance with their respective terms, subject as to enforceability to
general principles of equity and to bankruptcy, insolvency, moratorium, and
other similar laws affecting the enforcement of creditors' rights generally.
C. NON-CONTRAVENTION. The execution and delivery of this Agreement and
the Registration Rights Agreement by the Company and the consummation by the
Company of the issuance of the Securities and the other transactions
contemplated by this Agreement, the Registration Rights Agreement, and the
Preferred Stock do not and will not conflict with or result in a breach by
the Company of any of the terms or provisions of, or constitute a default
under, the certificate of incorporation or by-laws of the Company, or any
indenture, mortgage, deed of trust, or other material agreement or instrument
to which the Company is a party or by which it or any of its properties or
assets are bound, or any material existing applicable law, rule, or
regulation or any applicable decree, judgment, or order of any court, United
States federal or state regulatory body, administrative agency, or other
governmental body having jurisdiction over the Company or any of its
properties or assets.
D. APPROVALS. No authorization, approval or consent of any court,
governmental body, regulatory agency, self-regulatory organization, or stock
exchange or market or the Stockholders of the Company is required to be
obtained by the Company for the issuance and sale of the Preferred Stock to
the Buyer as contemplated by this Agreement.
E. INFORMATION PROVIDED. The information provided by or on behalf of
the Company to the Buyer and referred to in Section 2(e) of this Agreement
does not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they are made, not misleading at the time
such statements are made.
F. ABSENCE OF LITIGATION. Except as disclosed in the Company's public
filings, there is no action, suit, proceeding, inquiry or investigation
before or by any court, public board or body pending or, to the knowledge of
the Company or any of its subsidiaries, threatened against or affecting the
Company or any of its subsidiaries, wherein an unfavorable decision, ruling
or finding would have a material adverse effect on the properties, business,
condition (financial or other), results of operations or prospects of the
Company and its subsidiaries taken as a whole or the transactions
contemplated by this Agreement or any of the documents contemplated hereby or
which would adversely affect the validity or enforceability of, or the
authority or ability of the Company to perform its obligations under, this
Agreement or any of such other documents.
G. ABSENCE OF EVENTS OF DEFAULT. No event of default, as defined in
any material agreement to which the Company is a party, and no event which,
with the giving of notice or the passage of time or both, would become an
event of default (as so defined), has occurred and is continuing.
4. CERTAIN COVENANTS AND ACKNOWLEDGMENTS.
A. TRANSFER RESTRICTIONS. The Buyer acknowledges that (1) the
Preferred Stock being purchased has not been and is not being registered
under the provisions of the 1933 Act and, except as provided in the
Registration Rights Agreement, the Shares have not been and are not being
registered under the 1933 Act, and may not be transferred unless (A)
subsequently registered thereunder or (B) the Buyer shall have delivered to
the Company an opinion of counsel, reasonably satisfactory in form, scope and
substance to the Company, to the effect that the Securities to be sold or
transferred may be sold or transferred pursuant to an exemption from such
registration; (2) any sale of the Securities made in reliance on Rule 144
promulgated under the 1933 Act may be made only in accordance with the terms
of said Rule and further, if said Rule is not applicable, any resale of such
Securities under circumstances in which the seller, or the person through
whom the sale is made, may be deemed to be an underwriter, as that term is
used in the 1933 Act, may require compliance with some other exemption under
the 1933 Act or the rules and regulations of the SEC thereunder; and (3)
neither the Company nor any other person is under any obligation to register
the Securities (other than pursuant to the Registration Rights Agreement)
under the 1933 Act or to comply with the terms and conditions of any
exemption thereunder.
B. RESTRICTIVE LEGEND. The Buyer acknowledges and agrees that the
certificates evidencing the shares of Preferred Stock being purchased, and,
until such time as the Shares have been registered under the 1933 Act as
contemplated by the Registration Rights Agreement and sold in accordance with
such Registration Statement, the certificates for the Shares, may bear a
restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of the certificates for the Shares):
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE
SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR AN OPINION OF COUNSEL THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT.
C. REGISTRATION RIGHTS AGREEMENT. The parties hereto agree to enter
into the Registration Rights Agreement, in the form attached hereto as ANNEX
IV, on or before the Closing Date.
D. FILINGS. The Company undertakes and agrees to make all necessary
filings in connection with the sale of the shares of Preferred Stock being
purchased as required by United States laws and regulations, or by any
domestic securities exchange or trading market, and to provide a copy thereof
to the Buyer promptly after such filing.
E. REPORTING STATUS. So long as the Buyer beneficially owns any of the
Securities, the Company shall file all reports required to be filed with the
SEC pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934,
as amended (the "1934 Act"), and the Company shall not terminate its status
as an issuer required to file reports under the 1934 Act even if the 1934 Act
or the rules and regulations thereunder would permit such termination.
F. USE OF PROCEEDS. The Company will use the proceeds from the sale of
the Preferred Stock (excluding amounts paid by the Company for legal fees and
finder's fees in connection with the sale of the Preferred Stock) for the
repayment of the Company's obligations and internal working capital purposes
and shall not, directly or indirectly, use such proceeds for any loan to or
investment in any other corporation, partnership enterprise or other person.
5. TRANSFER AGENT INSTRUCTIONS.
Promptly following the delivery by the Buyer of the aggregate purchase
price for the Preferred Stock being purchased by the Buyer in accordance with
Section 1(c) hereof, and prior to the Closing Date, the Company will
irrevocably instruct its transfer agent to issue certificates for the Shares
from time to time upon conversion of the Preferred Stock in such amounts as
specified From time to time by the Company to the Transfer Agent, bearing the
restrictive legend specified in Section 4(b) of this Agreement prior to
registration of the Shares under the 1933 Act, registered in the name of the
Buyer or its nominee and in such denominations to be specified by the Buyer
in connection with each conversion of the Preferred Stock. The Company
warrants that no instruction other than such instructions referred to in this
Section 5 and stop transfer instructions to give effect to Section 4(a)
hereof prior to registration of the Shares under the 1933 Act will be given
by the Company to the transfer agent and that the Shares shall otherwise be
freely transferable on the books and records of the Company as and to the
extent provided in this Agreement, the Registration Rights Agreement, and
applicable law. Nothing in this Section shall affect in any way the Buyer's
obligations and agreement to comply with all applicable securities laws upon
resale of the Securities. If the Buyer provides the Company with an opinion
of counsel reasonably satisfactory to the Company that registration of a
resale by the Buyer of any of the Securities in accordance with clause (1)(B)
of Section 4(a) of this Agreement is not required under the 1933 Act, the
Company shall (except as provided in clause (2) of Section 4(a) of this
Agreement) permit the transfer of the Securities and, in the case of the
Shares, promptly instruct the Company's transfer agent to issue one or more
share certificates in such name and in such denominations as specified by the
Buyer.
6. STOCK DELIVERY INSTRUCTIONS.
The Certificates evidencing the shares of Preferred Stock being purchased
by the buyer shall be delivered by the Company to the Escrow Agent pursuant
to Section 1(b) hereof on a delivery against payment basis at the closing.
7. CLOSING DATE.
The date and time of the issuance and sale of the Preferred Stock (the
"Closing Date") shall be not later than 12:00 Noon, New York time, on the
date which is one New York Stock Exchange trading day after the date on which
the Buyer has deposited the purchase price for the Preferred Stock with the
Escrow Agent in accordance with Section 1(c) hereof, or such other mutually
agreed to time, but not later
than September 30, 1996 unless waived by the Company. The closing shall
occur on the Closing Date at the offices of the Escrow Agent.
8. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
The Buyer understands that the Company's obligation to sell Preferred Stock
to the Buyer pursuant to this Agreement is conditioned upon:
A. The receipt and acceptance by the Company of the Agreement and
Agreements of other Buyers as evidenced by execution of the Agreement and
such other Agreements by the Company for in aggregate at least 3,500 shares
of Preferred Stock (or such lesser amount as the Company, in its sole
discretion, shall determine);
B. Delivery by the Buyer to the Escrow Agent of good funds as payment
in full of an amount equal to the purchase price for the Preferred Stock
being purchased by the buyer in accordance with Section 1(c) hereof; and
C. The accuracy on the Closing Date of the representations and
warranties of the Buyer contained in this Agreement as if made on the Closing
Date and the performance by the Buyer on or before the Closing Date of all
covenants and agreements of the Buyer required to be performed on or before
the Closing Date.
D. There shall not be in effect any law, rule or regulation prohibiting
or restricting the transactions contemplated hereby, or requiring any consent
or approval which shall not have been obtained.
9. CONDITIONS TO THE BUYER'S OBLIGATION TO PURCHASE.
The Company understands that the Buyer's obligation to purchase the
Preferred Stock is conditioned upon:
A. Acceptance by the Company of this Agreement, as indicated by the
Company's execution of this Agreement;
B. Delivery by the Company to the Escrow Agent of certificates in the
name of buyer evidencing the shares of the Preferred Stock being purchased
by the buyer in accordance with this Agreement;
C. The accuracy on the Closing Date of the representations and
warranties of the Company contained in this Agreement as if made on the
Closing Date and the performance by the Company on or before the Closing Date
of all covenants and agreements of the Company required to be performed on or
before the Closing Date; and
D. On the Closing Date, the Buyer having received an opinion of counsel
for the Company, dated the Closing Date, in form, scope and substance
reasonably satisfactory to the Buyer, to the effect set forth in Annex III
attached hereto.
10. ADDITIONAL CONDITIONS.
Notwithstanding anything to the contrary contained in Annex I (the
"Certificate of Designation"), Purchaser agrees not to convert the Preferred
Stocks originally issued to Purchaser at the Closing into Common Stocks,
except in accordance with and subject to the terms and conditions set forth
in this Xxxxxx 00. One-third (1/3) of such Preferred Stocks originally
issued to Purchaser at the Closing
shall be convertible by Purchaser or any subsequent holder of such Preferred
Stockss (a "Holder") thereof into shares of Common Stock on and after the
60th day following the Closing Date, two-thirds (2/3) of such Preferred
Stocks originally issued to Purchase at the Closing shall be convertible by
the Holder thereof into shares of Common Stock on and after the 75th day
following the Closing Date, and the balance of such Preferred Shares shall be
convertible by the Holder thereof into Common Shares on and after the 90th
day following the Closing Date.
11. GOVERNING LAW: MISCELLANEOUS.
This Agreement shall be governed by and interpreted in accordance with
the laws of the State of Delaware. A facsimile transmission of this signed
Agreement shall be legal and binding on all parties hereto. This Agreement
may be signed in one or more counterparts, each of which shall be deemed an
original. The headings of this Agreement are for convenience of reference
and shall not form part of, or affect the interpretation of, this Agreement.
If any provision of this Agreement shall be invalid or unenforceable in any
jurisdiction, such invalidity or unenforceability shall not affect the
validity or enforceability of the remainder of this Agreement or the validity
or enforceability of this Agreement in any other jurisdiction. This
Agreement may be amended only by an instrument in writing signed by the party
to be charged with enforcement. This Agreement supersedes all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof. Any notices required or permitted to be given under
the terms of this Agreement shall be sent by mail or delivered personally or
by courier and shall be effective five days after being placed in the mail,
if mailed, or upon receipt, if delivered personally or by courier, in each
case addressed to a party at such party's address shown in the introductory
paragraph or on the signature page of this Agreement or such other address as
a party shall have provided by notice to the other party in accordance with
this provision.
IN WITNESS WHEREOF, this Agreement has been duly executed by the Buyer
thereunto duly authorized as of the date set forth below.
NUMBER OF SHARES OF PREFERRED STOCK BEING PURCHASED:
TOTAL PURCHASE PRICE ($1,000 per shares): $
NAME OF BUYER:
SIGNATURE:
By:
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TITLE:
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DATE:
ADDRESS:
This Agreement has been accepted as of the date set forth below.
FIRST PACIFIC NETWORKS, INC.
By:
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Title:
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Date:
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