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EXHIBIT 10.1
AUSPEX SYSTEMS, INC.
SHARE PURCHASE AGREEMENT
This SHARE PURCHASE AGREEMENT (this "Agreement"), is made and entered
into as of September 19, 2000, by and among Auspex Systems, Inc., a Delaware
corporation (the "Company"), and the purchasers listed on Schedule A attached
hereto (collectively, the "Purchasers" and individually, a "Purchaser").
1. Authorization of Sale of the Shares.
Subject to the terms and conditions of this Agreement, the Company has
authorized the sale of up to one hundred million dollars worth of shares (the
"Shares") of common stock, par value $.001 per share (the "Common Stock"), of
the Company.
2. Agreement to Sell and Purchase the Shares.
2.1 Purchase and Sale.
Subject to the terms and conditions of this Agreement, each Purchaser
severally agrees to purchase, and the Company agrees to sell and issue to each
Purchaser, at the Closing (as defined below) that number of Shares set forth
opposite such Purchaser's name on Schedule A attached hereto.
2.2 Purchase Price.
The purchase price of each Share (the "Per Share Price") shall be
$7.9625. In the event the Company shall, during the period ending ninety (90)
days after the Closing Date, sell any shares of Common Stock or any instruments
that can be converted into or otherwise exchanged for Common Stock (the
"Subsequent Sale") exercisable at a price per share (the "Subsequent Purchase
Price") of less than $7.9625 per share, the purchase price per Share hereunder
shall be adjusted to an amount equal to the Subsequent Purchase Price, such that
the Company shall, within ten (10) business days of the Subsequent Sale, pay to
the Purchaser an amount equal to the number of Shares times the difference
between $7.9625 and the Subsequent Purchase Price; provided that the Company
shall be permitted to (i) issue Common Stock pursuant to this Agreement, (ii)
issue options or any instruments that can be converted into or otherwise
exchanged for the Company's common stock already authorized pursuant to the
Company's existing plans, as amended to date and shares of Common Stock upon
exercise of any such options or instruments, (iii) issue options already
authorized outside the Company's existing plans, (iv) issue shares pursuant to
the exercise of Warrants to Purchase Common Stock between the Company and
certain buyers dated January 18, 2000, and (v) issue shares pursuant to
conversion of the Series B Preferred Stock, which Preferred Stock was issued
pursuant to the Securities Purchase Agreement between the Company and certain
buyers dated January 18, 2000.
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3. Delivery of the Shares at the Closing.
(a) The completion of the purchase and sale of the
Shares (the "Closing") shall occur at the offices of Xxxxxx Xxxxxxx Xxxxxxxx &
Xxxxxx, counsel to the Company, at 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, XX 00000 at
9:00 a.m. local time on September 22, 2000 or such other time and date as may be
agreed by the parties (the "Closing Date").
(b) At the Closing, the Company shall authorize its
transfer agent (the "Transfer Agent") to issue to each Purchaser one or more
stock certificates registered in the name of such Purchaser, or in such nominee
name(s) as designated by such Purchaser in writing, representing the number of
Shares set forth in Schedule A and bearing an appropriate legend referring to
the fact that the Shares were sold in reliance upon the exemption from
registration provided by Section 4(2) of the Securities Act of 1933, as amended
(the "Securities Act"), and Rule 506 under the Securities Act. Prior to the
Purchasers' delivery of payment for the Shares, the Company will deliver via
facsimile a copy of the form of the Certificates to be delivered upon Closing to
the office of the Purchasers (at the fax number indicated on the signature pages
attached hereto).
(c) The Company's obligation to complete the
purchase and sale of the Shares shall be subject to the following conditions,
any one or more of which may be waived by the Company:
(i) receipt by the Company of same-day
funds in the full amount of the purchase price for the Shares being purchased
under this Agreement;
(ii) the accuracy in all material
respects of the representations and warranties made by the Purchasers and the
fulfillment in all material respects of those undertakings of the Purchasers to
be fulfilled before the Closing;
(iii) the offer and sale of the Shares
to the Purchasers pursuant to this Agreement shall be exempt from the
registration requirements of the Securities Act, and the registration and/or
qualification requirements of all other applicable state securities laws;
(iv) Nasdaq Stock Market shall have
confirmed in writing that the sale of Shares will not require shareholder
approval;
(v) all corporate and other proceedings
in connection with the transactions contemplated at the Closing hereby, and all
documents and instruments incident to such transactions, shall be reasonably
satisfactory in substance to the Company and its counsel; and
(vi) the Company shall have validly
amended the Stockholder Rights Plan, if in the opinion of the Company's counsel
such amendment is necessary to prevent the application of such Stockholder
Rights Plan with respect to the issuance of the Shares ; and
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(vii) the Company's counsel shall have
determined that no antitrust filings pursuant to the Xxxx-Xxxxx-Xxxxxx Antitrust
Improvement Act of 1976 are required prior to the issuance of the Shares.
(d) The Purchasers' obligations to accept delivery
of such stock certificates and to pay for the Shares evidenced by the
certificates shall be subject to the following conditions, any one or more of
which may be waived by a Purchaser with respect to such Purchaser's obligation:
(i) the representations and warranties
made by the Company in this Agreement shall be accurate in all material respects
and the undertakings of the Company shall have been fulfilled in all material
respects on or before the Closing;
(ii) the Company shall have delivered to
the Purchasers a certificate executed by the chairman of the board or chief
executive officer and the chief financial or accounting officer of the Company,
dated the Closing Date, in form and substance reasonably satisfactory to the
Purchasers, to the effect that the representations and warranties of the Company
set forth in Section 4 hereof are true and correct in all material respects as
of the date of this Agreement and as of the Closing Date, and that the Company
has complied with all the agreements and satisfied all the conditions in this
Agreement on its part to be performed or satisfied on or before the Closing
Date;
(iii) the Company shall have delivered
to Purchasers a legal opinion in substantially the form attached hereto as
Exhibit A;
(iv) all corporate and other proceedings
in connection with the transactions contemplated at the Closing hereby, and all
documents and instruments incident to such transactions, shall be reasonably
satisfactory in substance to the Purchasers and their counsel; and
(v) the Company shall have delivered
into escrow the Stock Certificates representing the Shares and shall have
provided the Purchasers via facsimile a copy of the Certificates.
4. Representations, Warranties and Covenants of the Company.
Except as set forth on the Schedule of Exceptions attached hereto as
Exhibit B, the Company hereby represents and warrants, or covenants, as
applicable, to the Purchasers as follows (which representations and warranties
shall be deemed to apply, where appropriate, to each subsidiary of the Company):
4.1 Organization and Qualification.
The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Delaware. The
Company has the corporate power and authority to own, lease and operate its
properties and to conduct its business as currently conducted and to enter into
and perform its obligations under this Agreement. The Company is duly qualified
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as a foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required whether by reason of the
ownership or leasing of property or the conduct of business, except where the
failure to so qualify would not, individually or in the aggregate, have a
material adverse effect on the condition, financial or otherwise, or the
earnings, assets or business affairs of the Company and its subsidiaries taken
as a whole (a "Company Material Adverse Effect") and no proceeding has been
instituted in any such jurisdiction to revoke, limit or curtail any such power
or authority.
4.2 Capitalization.
(a) The authorized capital stock of the Company
consists of 120,000,000 shares of Common Stock and 5,000,000 shares of Preferred
Stock.
(b) As of September 18, 2000, the issued and
outstanding capital stock of the Company consists of 33,518,696 shares of Common
Stock and -0- shares of Preferred Stock. The shares of issued and outstanding
capital stock of the Company have been duly authorized and validly issued, are
fully paid and nonassessable and have not been issued in violation of or are not
otherwise subject to any preemptive or other similar rights.
(c) The Company has reserved 13,430,133 shares of
Common Stock for issuance upon the exercise of stock options granted or
available for future grant under the Company's 1988 Stock Option Plan, 1993
Directors' Stock Option Plan, 1997 Stock Plan, and 1998 Non-Statutory Stock
Plan.
(d) The Company has reserved 1,605,136 shares of
Common Stock for issuance upon the exercise of outstanding warrants to purchase
Common Stock.
(e) The Company has reserved 2,100,000 shares of
Common Stock for issuance or available for future grant under the Company's 1993
Employee Stock Purchase Plan.
(f) The Company has reserved 3,600,000 shares of
Common Stock for issuance upon the exercise of stock options which were not
issued pursuant to the aforementioned stock plans.
With the exception of the foregoing, there are no outstanding
subscriptions, options, warrants, convertible or exchangeable securities or
other rights granted to or by the Company to purchase shares of Common Stock or
other securities of the Company and there are no commitments, plans or
arrangements to issue any shares of Common Stock or any security convertible
into or exchangeable for Common Stock.
4.3 Issuance, Sale and Delivery of the Shares.
(a) The Shares have been duly authorized for
issuance and sale to the Purchasers pursuant to this Agreement and, when issued
and delivered by the Company pursuant to this Agreement against payment of the
consideration set forth in this Agreement, will be validly issued and fully paid
and nonassessable and free and clear of all pledges, liens, taxes, claims,
charges
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and encumbrances. The certificates evidencing the Shares are in due and proper
form under Delaware law.
(b) The issuance of the Shares is not subject to
preemptive or other similar rights or antidilution rights. No further approval
or authority of the shareholders or the Board of Directors of the Company will
be required for the issuance and sale of the Shares to be sold by the Company as
contemplated in this Agreement.
(c) Subject to the accuracy of the Purchasers'
representations and warranties in Section 5 of this Agreement, the offer, sale,
and issuance of the Shares in conformity with the terms of this Agreement
constitute transactions exempt from the registration requirements of Section 5
of the Securities Act and from the registration or qualification requirements of
the laws of any applicable state or United States jurisdiction.
4.4 Securities and Exchange Commission Filings; Financial
Statements.
(a) The Company has filed with the Securities and
Exchange Commission (the "SEC") all reports, schedules, forms, registration
statements and other documents required to be filed by it as a registrant under
the Securities Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). Except for matters otherwise corrected by the subsequent filing
with the SEC of an appropriate amendment prior to the date of this Agreement,
such reports, forms, and documents filed by the Company with the SEC prior to
the date of this Agreement (the "Company SEC Reports") (including any financial
statements filed as a part thereof or incorporated by reference therein)
complied with the Securities Act and the Exchange Act in all material respects
and did not, at the time they were filed (or if amended or superseded by a
filing prior to the date of this Agreement, then on the date of such filing),
contain any untrue statement of a material fact or omit to state a material fact
required to be stated in such Company SEC Reports or necessary in order to make
the statements in such Company SEC Reports, in the light of the circumstances
under which they were made, not misleading.
(b) Each of the consolidated financial statements
(including, in each case, any related notes) of the Company contained in the
Company SEC Reports was prepared in accordance with the books of account and
other financial records of the Company and in accordance with generally accepted
accounting principles, and relevant SEC rules regarding such financial
statements, applied on a consistent basis throughout the periods involved
(except as may be indicated in the notes to such financial statements or, in the
case of unaudited statements, as permitted by Form 10-Q under the Exchange Act),
and fairly presented the consolidated financial position of the Company and its
Subsidiaries as of the dates, and the consolidated results of its operations and
cash flows for the periods, indicated, except that the unaudited interim
financial statements were subject to normal and recurring year-end adjustments
which were not material in amount.
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4.5 No Material Change.
Since June 30, 2000,
(a) there has not been any change, event or
development having, or that could be reasonably expected to have, individually
or in the aggregate, a Company Material Adverse Effect;
(b) there have been no transactions entered into by
the Company other than those in the ordinary course of business which are
material with respect to the Company;
(c) there has been no dividend or distribution of
any kind declared, paid or made by the Company on any class of its capital
stock; and
(d) the Company has no new material contingent
obligations.
4.6 Due Execution, Delivery, and Performance.
(a) This Agreement has been duly executed and
delivered by the Company and constitutes a valid and binding obligation of the
Company, enforceable against the Company in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(b) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated in this
Agreement and the fulfillment of the terms of this Agreement have been duly
authorized by all necessary corporate action and will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Company pursuant to, any contract, indenture, mortgage, loan agreement, deed,
trust, note, lease, sublease, voting agreement, voting trust or other instrument
or agreement to which the Company is a party or by which it may be bound, or to
which any of the property or assets of the Company is subject, and will not
trigger anti-dilution rights or other rights to acquire additional equity
securities of the Company, nor will such action result in any violation of the
provisions of the articles of incorporation or bylaws of the Company or any
applicable statute, law, rule, regulation, ordinance, decision, directive or
order.
4.7 Use of Proceeds; Investment Company.
The Company intends to use the proceeds from the sale of the Shares for
working capital and other general corporate purposes. The Company is not now,
and after the sale of the Shares under this Agreement and under all other
agreements and the application of the net proceeds from the sale of the Shares
described in the proceeding sentence will not be, an "investment company" within
the meaning of the Investment Company Act of 1940, as amended.
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4.8 Governmental Consents.
No registration, authorization, approval, qualification or consent of
any court or governmental authority or agency is necessary in connection with
the execution, delivery, and performance of this Agreement or the offering,
issuance or sale of the Shares under this Agreement.
4.9 Transfer Taxes.
The Company shall be liable for, and shall pay when due, any transfer,
gains, documentary, sales, use, registration, stamp, value added or other
similar taxes (other than income taxes) payable by reason of the transactions
contemplated by this Agreement or attributable to the initial sale to the
Purchasers of the Common Stock.
4.10 Additional Information.
The Company represents and warrants that the information contained in
the following documents (the "Company Documents"), which will be provided, upon
request, to Purchaser before the Closing, is or will be true and correct in all
material respects as of their respective final dates.
(a) The Company's Annual Report on Form 10-K for
the fiscal year ended June 30, 1999;
(b) The Company's Quarterly Report on Form 10-Q for
the fiscal quarters ended December, 1999 and March, 2000;
(c) The Company's Proxy Statement for its 1999
Annual Meeting of Shareholders;
(d) The Company's Proxy Statement for its 2000
Special Meeting of Shareholders;
(e) All other documents, if any, filed by the
Company with the Commission since June 30, 2000 pursuant to the reporting
requirements of the Securities Exchange Act; and
(f) All other documents, if any, distributed by the
Company to the holders of the Company's Common Stock.
4.11 Miscellaneous
(a) The Company is eligible to file a Registration
Statement on Form S-3;
(b) There is no litigation, judgment, or statute
prohibiting the sale of the Shares as such sale is contemplated pursuant to the
terms of the Agreement;
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(c) The Company's Common Stock is listed on the
Nasdaq National Market and the Company has not received a cease trading order
from the Nasdaq National Market with respect to its securities;
(d) The issuance of the Shares will not be
integrated with other issuances of securities, except to the extent discussed in
Section 7.1.1(k); and
(e) The transfer agent has been instructed to issue
Shares pursuant to the terms of the Agreement.
5. Representations, Warranties and Covenants of the Purchasers.
5.1 Securities Law Representations and Warranties.
Each Purchaser, severally and solely with respect to itself and its
purchase and not with respect to the other Purchasers, represents, warrants, and
covenants to the Company as follows:
(a) The Purchaser is knowledgeable, sophisticated
and experienced in making, and is qualified to make, decisions with respect to
investments in shares representing an investment decision like that involved in
the purchase of the Shares, including investments in securities issued by the
Company, and has requested, received, reviewed and considered all information it
deems relevant in making an informed decision to purchase the Shares.
(Notwithstanding any such due diligence, the Purchaser is not waiving its right
to rely on the representations, warranties, and covenants of Auspex.)
(b) The Purchaser is acquiring the number of Shares
set forth in Section 2 above in the ordinary course of its business and for its
own account for investment (as defined for purposes of the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvement Act of 1976 and the regulations thereunder) only, and has
no present intention of distributing any of the Shares nor any arrangement or
understanding with any other persons regarding the distribution of such Shares
within the meaning of Section 2(11) of the Securities Act, other than as
contemplated in Section 7 of this Agreement. (Notwithstanding the Purchaser's
intention not to distribute the Shares, the Purchaser is not covenanting to hold
the Shares for a minimum period, except to the extent Purchaser transfers any
Shares pursuant to Rule 144, and Purchaser reserves the right to dispose of the
Shares in accordance with the Agreement.)
(c) The Purchaser will not, directly or indirectly,
offer, sell, pledge, transfer or otherwise dispose of (or solicit any offers to
buy, purchase or otherwise acquire or take a pledge of) any of the Shares except
in compliance with the Securities Act and the Rules and Regulations.
(d) The Purchaser has completed or caused to be
completed the Stock Certificate Questionnaire and the Selling Stockholder
Questionnaire and Agreement for Beneficial Owners Regarding Securities to be
Included in the Auspex Systems, Inc. Registration Statement attached to this
Agreement as Appendices I, and II for use in preparation of the Registration
Statement (as defined in Section 7.3 below), and the answers to the
Questionnaires are true and correct, in all material respects, as of the date of
this Agreement and will be true and correct
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as of the effective date of the Registration Statement; provided that the
Purchasers shall be entitled to update such information by providing notice
thereof to the Company before the effective date of such Registration Statement.
(e) The Purchaser has, in connection with its
decision to purchase the number of Shares set forth in Section 2 above, relied
solely upon the Company SEC Reports and the representations and warranties of
the Company contained in this Agreement.
(f) The Purchaser is an "accredited investor"
within the meaning of Rule 501 of Regulation D promulgated under the Securities
Act and has completed and returned the Investor Questionnaire previously
provided by the Company.
(g) Such Purchaser acknowledges that the Shares
must be held indefinitely unless subsequently registered under the Securities
Act or an exemption from such registration is available. Such Purchaser
covenants that, in the absence of an effective registration statement covering
the stock in question, such Purchaser will sell, transfer, or otherwise dispose
of the Shares only in a manner consistent with such Investor's representations
and covenants set forth in this Section 5.
5.2 Resales of Shares.
5.2.1 Restricted Shares.
(a) Restrictions. The Shares shall not be sold,
assigned, transferred or pledged, and the Company shall not recognize any such
transfer, except upon the conditions specified in this Agreement, which
conditions are intended to ensure compliance with the provisions of the
Securities Act. The Purchasers will cause any proposed purchaser, assignee,
transferee or pledgee of the Shares held by such Purchaser to agree to take and
hold such securities subject to the provisions and upon the conditions specified
in this Agreement. Notwithstanding any restrictions with respect to the Shares
contained in the Agreement, such restrictions shall not apply to any securities
of the Company purchased in the public market by any of the Purchasers.
(b) Restrictive Legend. Each certificate
representing (i) the Shares, and (ii) any other securities issued in respect of
the securities upon any stock split, stock dividend, recapitalization, merger,
consolidation, or similar event, shall (unless otherwise permitted by the
provisions of Section 5.2.1(c) below) be stamped or otherwise imprinted with a
legend in the following form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED
FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933. SUCH SHARES MAY NOT BE SOLD, TRANSFERRED OR PLEDGED
IN THE ABSENCE OF SUCH REGISTRATION OR A VALID EXEMPTION FROM
THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SAID
ACT."
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"THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED
ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE
COMPANY AND THE STOCKHOLDER, A COPY OF WHICH IS ON FILE WITH THE
SECRETARY OF THE COMPANY."
In addition to the preceding legends, Purchasers who may be deemed to be
affiliates of the Company shall be given certificates representing (i) the
Shares, and (ii) any other securities issued in respect of the securities upon
any stock split, stock dividend, recapitalization, merger, consolidation, or
similar event, (unless otherwise permitted by the provisions of Section 5.2.1(c)
below) which are stamped or otherwise imprinted with a legend in the following
form:
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE OWNED BY A
PERSON OR PERSONS WHO MAY BE CONSIDERED AN AFFILIATE FOR
PURPOSES OF RULE 144 UNDER THE SECURITIES ACT OF 1933 (THE
"ACT"). NO TRANSFER OF THESE SHARES OR ANY INTEREST THEREIN MAY
BE MADE UNLESS THE ISSUER HAS RECEIVED AN OPINION OF COUNSEL
SATISFACTORY TO IT THAT SHARES MAY BE SOLD PURSUANT TO RULE 144
OR ANOTHER AVAILABLE EXEMPTION UNDER THE ACT AND THE RULES AND
REGULATIONS THEREUNDER."
The Purchasers consent to the Company making a notation on its records
and giving instructions to any transfer agent of the Shares in order to
implement the restrictions on transfer established in this Section 5.2.1(b).
Purchaser acknowledges that the Company shall remove the preceding
legends from each individual Share at such time as that individual Share has
been registered pursuant to Section 7 hereof, but that any Shares not registered
pursuant to Section 7 or any Shares which are sold by Purchasers pursuant to a
private placement exemption shall continue to bear such legends until the
Company's counsel has determined that such legends are no longer required for
compliance with the Securities laws.
(c) Notice of Proposed Transfers; Transfers. The
holder of each certificate representing the Shares, by acceptance thereof,
agrees to comply in all respects with the provisions of this Section 5.2.1.
Prior to any proposed sale, assignment, transfer or pledge of any Shares, unless
there is in effect a registration statement under the Securities Act covering
the proposed transfer, the holder thereof shall give written notice to the
Company of such holder's intention to effect such transfer, sale, assignment, or
pledge. Each such notice shall describe the manner and circumstances of the
proposed transfer, sale, assignment or pledge in sufficient detail, and, if
reasonably requested by the Company, shall be accompanied at such holder's
expense by either (i) a written opinion of legal counsel who shall, and whose
legal opinion shall, be reasonably satisfactory to the Company, addressed to the
Company, to the effect that the proposed transfer of the Shares may be effected
without registration under the Securities Act, or (ii) a "no action" letter from
the Commission to the effect that the transfer of such securities without
registration will not result in a recommendation by the staff of the Commission
that action be taken with respect thereto,
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or (iii) any other evidence reasonably satisfactory to counsel to the Company to
the effect that the proposed transfer of the Shares may be effected without
registration under the Securities Act, whereupon the holder of such Shares shall
be entitled to transfer such Shares in accordance with the terms of the notice
delivered by the holder to the Company. The Company will not require such a
legal opinion or "no action" letter (a) in any transaction in compliance with
Rule 144 or (b) in any transaction in which such holder distributes Shares to
its constituent partners, majority-owned subsidiaries, or affiliates (each an
"Affiliate") for no consideration; provided that each transferee agrees in
writing to be subject to the terms of this Section 5.2.1. The Company may waive
compliance with this Section 5.2.1 in its sole discretion; the Company's failure
to object promptly in writing to a proposed transfer allegedly in violation of
this Section 5.2.1 shall be deemed to be such a waiver. Each certificate
evidencing the Shares transferred as above provided shall bear, except if such
transfer is made pursuant to Rule 144, the appropriate restrictive legend set
forth in Section 5.2.1(b) above, except that such certificate shall not bear
such restrictive legend if, in the opinion of counsel for such holder and the
Company, such legend is not required in order to establish compliance with any
provisions of the Securities Act.
5.2.2 Registered Shares.
(a) The Purchaser hereby covenants with the Company
not to make any sale of the Shares without satisfying the requirements of the
Securities Act and the Rules and Regulations, including, in the event of any
resale under the Registration Statement, the prospectus delivery requirements
under the Securities Act, and the Purchaser acknowledges and agrees that such
Shares are not transferable on the books of the Company pursuant to a resale
under the Registration Statement unless the certificate submitted to the
transfer agent evidencing the Shares is accompanied by a separate officer's
certificate
(i) in the form of Appendix III to this
Agreement;
(ii) executed by an officer of, or other
authorized person designated by, the Purchaser; and
(iii) to the effect that (A) the Shares
have been sold in accordance with the Registration Statement and (B) the
requirement of delivering a current prospectus has been satisfied.
(b) The Purchaser acknowledges that there may
occasionally be times when the Company determines the use of the prospectus (the
"Prospectus," as further defined in Section 7.3.1 below) forming a part of the
Registration Statement (as defined in Section 7.1.1 below) should be suspended
until such time as an amendment or supplement to the Registration Statement or
the Prospectus has been filed by the Company and any such amendment to the
Registration Statement is declared effective by the Commission, or until such
time as the Company has filed an appropriate report with the Commission pursuant
to the Exchange Act. The Purchaser hereby covenants that it will not sell any
Shares pursuant to the Prospectus during the period commencing at the time at
which the Company gives the Purchaser written notice of the suspension of the
use of the Prospectus and ending at the time the Company gives the Purchaser
written notice that the Purchaser may thereafter effect sales pursuant to the
Prospectus. The Company may, upon
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written notice to the Purchasers, suspend the use of the Prospectus for up to
forty-five (45) days in any 365-day period based on the reasonable determination
of the Company's Board of Directors that there is a significant business purpose
for such determination, such as pending corporate developments, public filings
with the SEC or similar events. The Company shall in no event be required to
disclose the business purpose for which it has suspended the use of the
Prospectus if the Company determines in its good faith judgment that the
business purpose should remain confidential.
(c) The Purchaser further covenants to notify the
Company promptly of the sale of any of its Shares, other than sales pursuant to
a Registration Statement contemplated in Section 7 of this Agreement or sales
upon termination of the transfer restrictions pursuant to Section 7.4 of this
Agreement.
(d) Purchaser acknowledges that no Purchaser of
Shares may include any of its Shares in any Registration Statement pursuant to
this Agreement unless and until such Purchaser furnishes to the Company in
writing, within 20 Business Days after receipt of a request therefor, such
information as the Company may reasonably request for use in connection with any
Registration Statement or Prospectus or preliminary Prospectus included therein,
including the completion of the Selling Stockholder Questionnaire and Agreement
for Beneficial Owners Regarding Securities to be Included in Auspex Systems,
Inc. Registration Statement. Purchaser acknowledges that no Purchaser of Shares
shall be entitled to Liquidated Damages pursuant to Section 7.1.2 hereof unless
and until such Purchaser shall have used its best efforts to provide all such
reasonably requested information. Purchaser acknowledges that each Purchaser of
Shares as to which any Registration Statement is being effected must furnish
promptly to the Company all information required to be disclosed in order to
make the information previously furnished to the Company by such Purchaser not
materially misleading.
5.3 Due Execution, Delivery and Performance.
(a) This Agreement has been duly executed and
delivered by the Purchaser and constitutes a valid and binding obligation of the
Purchaser, enforceable against the Purchaser in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
(b) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated in this
Agreement and the fulfillment of the terms of this Agreement have been duly
authorized by all necessary corporate action and will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets of the
Purchaser pursuant to, any contract, indenture, mortgage, loan agreement, deed,
trust, note, lease, sublease, voting agreement, voting trust or other instrument
or agreement to which the Purchaser is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Purchaser is subject,
nor will such action result in any violation of the provisions of the charter or
bylaws of the Purchaser or any applicable statute, law, rule, regulation,
ordinance, decision, directive or order.
13
5.4 Address.
Such Purchaser's address indicated on SCHEDULE A sets forth, in
the case of individuals, the state in which such Investor resides or, in the
case of entities, the state of Purchaser's principal place of business.
6. Survival of Representations, Warranties and Agreements.
Notwithstanding any investigation made by any party to this Agreement,
all covenants, agreements, representations and warranties made by the Company
and the Purchasers in this Agreement and in the certificates for the Shares
delivered pursuant to this Agreement shall survive the execution of this
Agreement, the delivery to the Purchasers of the Shares being purchased and the
payment therefor.
7. Form D Filing; Registration; Compliance with the Securities Act;
Covenants.
7.1 Form D Filing; Registration of Shares.
7.1.1 Registration Statement; Expenses.
The Company, which as of the date of Closing is eligible to use a Form
S-3 registration statement, shall:
(a) file in a timely manner a Form D relating to
the sale of the Shares under this Agreement, pursuant to Securities and Exchange
Commission Regulation D and shall, upon request, furnish a copy of such Form D
to the Purchasers;
(b) as soon as practicable after the Closing Date,
but in no event later than the 30th day following the Closing Date, prepare and
file with the Commission a Registration Statement, which shall comply in all
material respects with the securities laws, on Form S-3 (or, if the Company is
ineligible to use Form S-3, then on Form S-1) relating to the sale of the Shares
by the Purchasers from time to time on the Nasdaq National Market, the NYSE or
the AMEX markets, or in privately negotiated transactions (the "Registration
Statement");
(c) subject to receipt of necessary information
from the Purchasers, use its best efforts to cause the Commission to notify the
Company of the Commission's willingness to declare the Registration Statement
effective on or before 120 days after the Closing Date;
(d) notify Purchasers promptly upon the
Registration Statement being declared effective by the Commission;
(e) prepare and file with the Commission such
amendments and supplements to the Registration Statement and the Prospectus (as
defined in Section 7.3.1 below) and take such other action, if any, as may be
necessary to keep the Registration Statement effective until the earlier of (i)
two years after the effective date of the Registration Statement, (ii) the date
on which the Shares may be resold by the Purchasers without registration or
without regard to any
14
volume limitations by reason of Rule 144(k) under the Securities Act or any
other rule of similar effect or (iii) all of the Shares have been sold pursuant
to the Registration Statement or Rule 144(k) under the Securities Act or any
other rule of similar effect;
(f) promptly furnish to the Purchasers with respect
to the Shares registered under the Registration Statement such reasonable number
of copies of the Prospectus, including any supplements to or amendments of the
Prospectus, and, upon request, the Preliminary Prospectus, in order to
facilitate the public sale or other disposition of all or any of the Shares by
the Purchasers;
(g) during the period when copies of the Prospectus
are required to be delivered under the Securities Act or the Exchange Act, will
file all documents required to be filed with the Commission pursuant to Section
13, 14 or 15 of the Exchange Act within the time periods required by the
Exchange Act and the rules and regulations promulgated thereunder;
(h) timely file documents required of the Company
for customary state level securities law clearance in all states requiring such
clearance;
(i) bear all expenses in connection with the
procedures in paragraphs (a) through (f) of this Section 7.1.1 and the
registration of the Shares pursuant to the Registration Statement, including
fees and expenses (whether external or internal) of up to $15,000 of the
Purchaser, but not including any fees and expenses of any other advisers to the
Purchasers or brokerage fees and commissions incurred by the Purchasers;
(j) not allow any shareholders other than the
Purchasers to include their shares in the Registration Statement;
(k) not file another registration statement, or
make any other offers of securities which would cause the Shares to be
integrated with any other securities offering of the Company, except that the
Company may file any registration statement required pursuant to that certain
Registration Rights Agreement between the Company and certain buyers dated
January 18, 2000 and may issue shares pursuant to conversion of the Series B
Preferred Stock;
(l) provide Purchasers with a copy of the
Registration Statement at least five (5) business days prior to filing such
Registration Statement and to allow Purchasers' counsel to comment on and to
approve any information in the Registration Statement relating to such
Purchaser; provided, however, that the 30 day deadline in Section 7.1.1(b), the
120 day deadline in Section 7.1.1 (c), and the 120 day deadline in Section 7.1.2
shall be extended by the number of days past the fifth business day that the
filing of such Registration Statement is delayed due to the rights of
Purchasers' counsel to approve the aforementioned information in the
Registration Statement.
7.1.2 Delay in Effectiveness of Registration Statement.
In the event that the Registration Statement is not declared effective
by January 20, 2001, the Company shall pay to each Purchaser liquidated damages
in an amount equal to 0.25% of the total purchase price of the Shares purchased
by such Purchaser pursuant to this Agreement for each week after January 20,
2001 that the Registration Statement is not declared effective.
15
7.2 Transfer of Shares After Registration.
Each Purchaser agrees that it will not effect any disposition of the
Shares or its right to purchase the Shares that would constitute a sale within
the meaning of the Securities Act, except as contemplated in the Registration
Statement referred to in Section 7.1 or as otherwise permitted by law, and that
it will promptly notify the Company of any changes in the information set forth
in the Registration Statement regarding the Purchaser or its plan of
distribution.
7.3 Indemnification.
For the purpose of this Section 7.3, the term "Registration Statement"
shall include any preliminary or final prospectus, exhibit, supplement or
amendment included in or relating to the Registration Statement referred to in
Section 7.1.
7.3.1 Indemnification by the Company.
The Company agrees to indemnify and hold harmless each of the Purchasers
and each person, if any, who controls any Purchaser within the meaning of the
Securities Act, against any losses, claims, damages, liabilities or expenses,
joint or several, to which such Purchasers or such controlling person may become
subject, under the Securities Act, the Exchange Act, or any other federal or
state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of the Company, which consent shall not be unreasonably withheld),
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof as contemplated below) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in the
Registration Statement, including the Prospectus, financial statements and
schedules, and all other documents filed as a part thereof, as amended at the
time of effectiveness of the Registration Statement, including any information
deemed to be a part thereof as of the time of effectiveness pursuant to
paragraph (b) of Rule 430A, or pursuant to Rule 434, of the Rules and
Regulations, or the Prospectus, in the form first filed with the Commission
pursuant to Rule 424(b) of the Regulations, or filed as part of the Registration
Statement at the time of effectiveness if no Rule 424(b) filing is required (the
"Prospectus"), or any amendment or supplement thereto, or arise out of or are
based upon the omission or alleged omission to state in any of them a material
fact required to be stated therein or necessary to make the statements in any of
them, in light of the circumstances under which they were made, not misleading,
or arise out of or are based in whole or in part on any inaccuracy in the
representations and warranties of the Company contained in this Agreement, or
any failure of the Company to perform its obligations under this Agreement or
under law, and will reimburse each Purchaser and each such controlling person
for any legal and other expenses as such expenses are reasonably incurred by
such Purchaser or such controlling person in connection with investigating,
defending, settling, compromising or paying any such loss, claim, damage,
liability, expense or action; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim, damage,
liability or expense arises out of or is based upon (i) an untrue statement or
alleged untrue statement or omission or alleged omission made in the
Registration Statement, the Prospectus or any amendment or supplement of the
Registration Statement or Prospectus in reliance upon and in conformity with
written information furnished to the Company by or on behalf of the Purchaser
expressly for use in the Registration Statement or the Prospectus, or (ii) the
failure of such
16
Purchaser to comply with the covenants and agreements contained in Sections 5.2
or 7.2 of this Agreement respecting resale of the Shares, or (iii) the
inaccuracy of any representations made by such Purchaser in this Agreement, or
(iv) any untrue statement or omission of a material fact required to make such
statement not misleading in any Prospectus that is corrected in any subsequent
Prospectus that was delivered to the Purchaser before the pertinent sale or
sales by the Purchaser.
7.3.2 Indemnification by the Purchaser.
Each Purchaser will severally and not jointly indemnify and hold
harmless the Company, each of its directors, each of its officers who signed the
Registration Statement and each person, if any, who controls the Company within
the meaning of the Securities Act, against any losses, claims, damages,
liabilities or expenses to which the Company, each of its directors, each of its
officers who signed the Registration Statement or controlling person may become
subject, under the Securities Act, the Exchange Act, or any other federal or
state statutory law or regulation, or at common law or otherwise (including in
settlement of any litigation, if such settlement is effected with the written
consent of such Purchaser, which consent shall not be unreasonably withheld)
insofar as such losses, claims, damages, liabilities or expenses (or actions in
respect thereof as contemplated below) arise out of or are based upon (i) any
failure on the part of such Purchaser to comply with the covenants and
agreements contained in Sections 5.2 or 7.2 of this Agreement respecting the
sale of the Shares or (ii) the inaccuracy of any representation made by such
Purchaser in this Agreement or (iii) any untrue or alleged untrue statement of
any material fact contained in the Registration Statement, the Prospectus, or
any amendment or supplement to the Registration Statement or Prospectus, or
arise out of or are based upon the omission or alleged omission to state therein
a material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in the Registration Statement, the Prospectus, or any
amendment or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of such Purchaser expressly
for use therein; provided, however, that the Purchaser shall not be liable for
any such untrue or alleged untrue statement or omission or alleged omission of
which the Purchaser has delivered to the Company in writing a correction before
the occurrence of the transaction from which such loss was incurred, and the
Purchaser will reimburse the Company, each of its directors, each of its
officers who signed the Registration Statement or controlling person for any
legal and other expense reasonably incurred by the Company, each of its
directors, each of its officers who signed the Registration Statement or
controlling person in connection with investigating, defending, settling,
compromising or paying any such loss, claim, damage, liability, expense or
action.
7.3.3 Indemnification Procedure.
(a) Promptly after receipt by an indemnified party
under this Section 7.3 of notice of the threat or commencement of any action,
such indemnified party will, if a claim in respect thereof is to be made against
an indemnifying party under this Section 7.3, promptly notify the indemnifying
party in writing of the claim; but the omission so to notify the indemnifying
party will not relieve it from any liability which it may have to any
indemnified party for contribution or otherwise under the indemnity agreement
contained in this Section 7.3 or to the extent it is not materially prejudiced
as a result of such failure.
17
(b) In case any such action is brought against any
indemnified party and such indemnified party seeks or intends to seek indemnity
from an indemnifying party, the indemnifying party will be entitled to
participate in, and, to the extent that it may wish, jointly with all other
indemnifying parties similarly notified, to assume the defense thereof,
including settlement functions, with counsel reasonably satisfactory to such
indemnified party; provided, however, if the defendants in any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be a conflict
between the positions of the indemnifying party and the indemnified party in
conducting the defense of any such action or that there may be legal defenses
available to it or other indemnified parties that are different from or
additional to those available to the indemnifying party, the indemnified party
or parties shall have the right to select separate counsel to assume such legal
defenses and to otherwise participate in the defense of such action on behalf of
such indemnified party or parties. Upon receipt of notice from the indemnifying
party to such indemnified party of its election so to assume the defense of such
action and approval by the indemnified party of counsel, the indemnifying party
will not be liable to such indemnified party under this Section 7.3 for any
legal or other expenses subsequently incurred by such indemnified party in
connection with the defense thereof unless:
(i) the indemnified party shall have
employed such counsel in connection with the assumption of legal defenses in
accordance with the proviso to the preceding sentence (it being understood,
however, that the indemnifying party shall not be liable for the expenses of
more than one separate counsel, approved by such indemnifying party representing
all of the indemnified parties who are parties to such action) or
(ii) the indemnifying party shall not
have employed counsel reasonably satisfactory to the indemnified party to
represent the indemnified party within a reasonable time after notice of
commencement of action, in each of which cases the reasonable fees and expenses
of counsel shall be at the expense of the indemnifying party. Notwithstanding
the provisions of this Section 7.3, the Purchaser shall not be liable for any
indemnification obligation under this Agreement in excess of the amount of net
proceeds received by the Purchaser from the sale of the Shares.
7.3.4 Contribution.
If the indemnification provided for in this Section 7.3 is required by
its terms but is for any reason held to be unavailable to or otherwise
insufficient to hold harmless an indemnified party under this Section 7.3 in
respect to any losses, claims, damages, liabilities or expenses referred to in
this Agreement, then each applicable indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of any losses,
claims, damages, liabilities or expenses referred to in this Agreement
(a) in such proportion as is appropriate to reflect
the relative benefits received by the Company and the Purchaser from the
placement of Common Stock or
(b) if the allocation provided by clause (a) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (a) above but the
relative fault of the Company and the Purchaser in connection
18
with the statements or omissions or inaccuracies in the representations and
warranties in this Agreement that resulted in such losses, claims, damages,
liabilities or expenses, as well as any other relevant equitable considerations.
The respective relative benefits received by the Company on the one hand
and each Purchaser on the other shall be deemed to be in the same proportion as
the amount paid by such Purchaser to the Company pursuant to this Agreement for
the Shares purchased by such Purchaser that were sold pursuant to the
Registration Statement bears to the difference (the "Difference") between the
amount such Purchaser paid for the Shares that were sold pursuant to the
Registration Statement and the amount received by such Purchaser from such sale.
The relative fault of the Company and each Purchaser shall be determined by
reference to, among other things, whether the untrue or alleged statement of a
material fact or the omission or alleged omission to state a material fact or
the inaccurate or the alleged inaccurate representation or warranty relates to
information supplied by the Company or by such Purchaser and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The amount paid or payable by a party as a
result of the losses, claims, damages, liabilities and expenses referred to
above shall be deemed to include, subject to the limitations set forth in
Section 7.3.3, any legal or other fees or expenses reasonably incurred by such
party in connection with investigating or defending any action or claim. The
provisions set forth in Section 7.3.3 with respect to the notice of the threat
or commencement of any threat or action shall apply if a claim for contribution
is to be made under this Section 7.3.4; provided, however, that no additional
notice shall be required with respect to any threat or action for which notice
has been given under Section 7.3 for purposes of indemnification. The Company
and each Purchaser agree that it would not be just and equitable if contribution
pursuant to this Section 7.3 were determined solely by pro rata allocation (even
if the Purchaser were treated as one entity for such purpose) or by any other
method of allocation which does not take account of the equitable considerations
referred to in this paragraph. Notwithstanding the provisions of this Section
7.3, no Purchaser shall be required to contribute any amount in excess of the
amount by which the Difference exceeds the amount of any damages that such
Purchaser has otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Purchasers' obligations to contribute pursuant
to this Section 7.3 are several and not joint.
7.4 Termination of Conditions and Obligations.
The restrictions imposed by Section 5 or this Section 7 upon the
transferability of the Shares shall cease and terminate as to any particular
number of the Shares upon the passage of two years from the effective date of
the Registration Statement covering the Shares or at such time as an opinion of
counsel satisfactory in form and substance to the Company shall have been
rendered to the effect that such conditions are not necessary in order to comply
with the Securities Act.
19
7.5 Information Available.
So long as the Registration Statement is effective covering the resale
of Shares owned by any Purchaser, the Company will furnish to such Purchaser:
(a) as soon as practicable after available (but in
the case of the Company's Annual Report to Shareholders, within 90 days after
the end of each fiscal year of the Company), one copy of
(i) its Annual Report to Shareholders
(which Annual Report shall contain financial statements audited in accordance
with generally accepted accounting principles by a national firm of certified
public accountants);
(ii) if not included in substance in the
Annual Report to Shareholders, its Annual Report on Form 10-K;
(iii) if not included in substance in
its Quarterly Reports to Shareholders, its quarterly reports on Form 10-Q; and
(iv) a full copy of the particular
Registration Statement covering the Shares (the foregoing, in each case,
excluding exhibits unless specifically requested);
(b) upon the request of the Purchaser, a reasonable
number of copies of the Prospectus to supply to any other party requiring the
Prospectus.
8. Broker's Fee.
The Purchasers acknowledge that the Company intends to pay to Xxxxxxx
Capital Advisors, the placement agent, a fee in respect of the sale of the
Shares to certain of the Purchasers. Each of the parties to this Agreement
hereby represents that, on the basis of any actions and agreements by it, there
are no other brokers or finders entitled to compensation in connection with the
sale of the Shares to the Purchasers. The Company shall indemnify and hold
harmless the Purchasers from and against all fees, commissions or other payments
owing by the Company to Xxxxxxx Capital Advisors or any other person or firm
acting on behalf of the Company hereunder.
9. Notices.
All notices, requests, consents and other communications under this
Agreement shall be in writing, shall be mailed by first-class registered or
certified airmail, confirmed facsimile or nationally recognized overnight
express courier postage prepaid, and shall be delivered as addressed as follows:
20
(a) if to the Company, to:
Auspex Systems, Inc.
0000 Xxxxx Xxxxxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Corporate Secretary
with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Facsimile No.: (000) 000-0000
Attn: Xxxxx X. Xxxxxx, Xx., Esq.
or to such other person at such other place as the Company shall designate to
the Purchaser in writing; and
(b) if to a Purchaser, at its address as set forth
on the signature page to this Agreement, or at such other address or addresses
as may have been furnished to the Company in writing.
Such notice shall be deemed effectively given upon confirmation of
receipt by facsimile, one business day after deposit with such overnight courier
or three days after deposit of such registered or certified airmail with the
U.S. Postal Service, as applicable.
10. Modification; Amendment.
This Agreement may not be modified or amended except pursuant to an
instrument in writing signed by the Company and the Purchasers of a majority of
the Shares sold pursuant to this Agreement.
11. Termination.
Notwithstanding anything to the contrary set forth in this Agreement,
this Agreement may be terminated and the transactions contemplated herein
abandoned at any time prior to the Closing:
(i) by mutual written consent of the
Company and the Purchasers;
(ii) by the Company or the Purchasers if
the Closing shall not have occurred by October 1, 2000; provided, however, that
the right to terminate this Agreement under this Section 11 shall not be
available to any party whose failure to fulfill any obligation under this
Agreement has been the cause of, or resulted in, the failure of the Closing to
occur on or before such date; and further provided that if any Purchaser
terminates its obligations under this Agreement, such termination shall have no
effect on the obligations of any other Purchaser hereunder;
21
(iii) by the Company or the Purchasers
if a court of competent jurisdiction shall have issued an order, decree or
ruling permanently restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement, and such order, decree, ruling or
other action shall have become final and non-appealable;
(iv) by the Company if (i) the
representations or warranties made by any Purchaser is not true and correct, in
all material respects, when made or at the Closing (except for any such
representations or warranties that speak as of a specific date, which must be
true and correct in all material respects as of such specific date), or (ii) any
Purchaser fails to comply in any material respect with any of its covenants or
agreements contained herein; or
(v) by the Purchasers if (i) the
representations and warranties made by the Company are not true and correct, in
all material respects, when made or at the Closing (except for any such
representations or warranties that speak as of a specific date, which must be
true and correct in all material respects as of such specific date), or (ii) the
Company fails to comply in any material respect with any of its covenants or
agreements contained herein.
(vi) by the Company or the Purchasers if
the conditions in Sections 3(c) and 3(d), respectively, cannot be satisfied and
have not been waived.
The termination of this Agreement pursuant to clauses (ii), (iii), (iv)
and (v) above shall be without prejudice to the right of the non-breaching party
to pursue any and all remedies available to it (including the commencement of
any action or other proceeding or the assertion of any equitable right) as a
result of such breach.
12. Expenses.
Each party to this Agreement shall pay its own fees and expenses
incident to the negotiation, preparation and execution of this Agreement and
related documents (including legal and accounting fees and expenses).
13. Headings.
The headings of the various sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be part of
this Agreement.
14. Severability.
If any provision contained in this Agreement should be held to be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained in this Agreement shall not
in any way be affected or impaired thereby.
15. Governing Law.
This Agreement shall be governed by and construed in accordance with the
laws of the state of Delaware, without giving effect to the principles of
conflicts of laws thereof, and the federal law of the United States of America.
22
16. No Conflicts of Interest.
The Company represents, warrants and covenants that, to the best of its
knowledge, no officer or employee of the State of Wisconsin Investment Board has
or will receive, directly or indirectly, a personal interest in the Company or
its property or anything of substantial economic value for his or her private
benefit from the Company, or anyone acting on its behalf, in connection with the
investment made pursuant to this Agreement.
17. Counterparts.
This Agreement may be executed in two or more counterparts, each of
which shall constitute an original, but all of which, when taken together, shall
constitute but one instrument, and shall become effective when one or more
counterparts have been signed by each party to this Agreement and delivered to
the other parties.
[Signature pages follow]
23
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be executed by their duly authorized representatives as of the day
and year first above written.
AUSPEX SYSTEMS, INC.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxx
--------------------------------
Its: CFO
--------------------------------
AUSPEX SYSTEMS, INC.
SHARE PURCHASE AGREEMENT SIGNATURE PAGE
24
IN WITNESS WHEREOF, the parties to this Agreement have caused this
Agreement to be executed by their duly authorized representatives as of the day
and year first above written.
STATE OF WISCONSIN INVESTMENT BOARD
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
------------------------------------
Title: Investment Director
------------------------------------
21ST CENTURY DIGITAL INDUSTRIES FUND L. P.
By: /s/ Xxxxxxx X. Xxxxxxx, Xx.
------------------------------------
Name: Xxxxxxx X. Xxxxxxx, Xx.
------------------------------------
Title: Managing Partner
------------------------------------
CASTLEROCK PARTNERS, L.P.
By: /s/ Xxxx X. Xxxxxx
------------------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Member of the General
Partner of CastleRock Partners, L.P.
By: /s/ Xxxxx X. Xxxxx
------------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Member of the General
Partner of CastleRock Partners, L.P.
AUSPEX SYSTEMS, INC.
SHARE PURCHASE AGREEMENT SIGNATURE PAGE
25
CASTLEROCK FUND, LTD.
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: Principal of the Investment Advisor of
CastleRock Fund, Ltd.
By: /s/ Xxxxx X. Xxxxx
---------------------------------------
Name: Xxxxx X. Xxxxx
Title: Principal of the Investment Advisor of
CastleRock Fund, Ltd.
CASTLEROCK PARTNERS II, L.P.
By: /s/ Xxxx X. Xxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Member of the General
Partner of CastleRock Partners II, L.P.
By: /s/ Xxxxx X. Xxxxx
---------------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Member of the General
Partner of CastleRock Partners II, L.P.
XXXXX X. XXXXXX REVOCABLE TRUST DATED 2/10/99
By: /s/ Xxxxx X. Xxxxxx, ttee
---------------------------------------
Xxxxx X. Xxxxxx, Trustee
AUSPEX SYSTEMS, INC.
SHARE PURCHASE AGREEMENT SIGNATURE PAGE
26
ANSCHUTZ LAND & LIVESTOCK CO. LLP
ANTELOPE COMPANY
ARKANSAS TEACHER RETIREMENT SYSTEM
BELLSOUTH CORPORATION
CHICAGO PUBLIC LIBRARY FOUNDATION
COMMUNITY HOSPITAL OF CENTRAL
CALIFORNIA
BISKIND FAMILY LIMITED PARTNERSHIP
XXX XXXXXXX KLOTHEN AND XXXXXXX
XXXXXXX ADVISORS FUND FOR
EMPLOYEE BENEFIT TRUSTS
ADVISOR FUND FOR GRANTOR
TRUSTS
XXXXXXXX FOUNDATION
XXXXXX COLLEGE ENDOWMENT
BOARD OF PENSION COMMISSIONERS OF THE CITY
OF LOS ANGELES
PGE-ENRON FOUNDATION
PORTLAND GENERAL HOLDINGS, INC. EMPLOYEES'
BENEFIT TRUST, FUND IV
PORTLAND GENERAL HOLDINGS, INC. EMPLOYEES'
BENEFIT TRUST, FUND II
PORTLAND GENERAL HOLDINGS, INC. PENSION PLAN
EMPLOYEES' RETIREMENT SYSTEM OF THE PUERTO
RICO ELECTRIC POWER AUTHORITY
SARCO & COMPANY LLP
STACKNER FAMILY FOUNDATION
TRUSTEES OF THE XXXX STACKNER - XXXX XXXXXXX
FAMILY TRUST
TRUSTEES OF THE XXXX STACKNER - XXXX XXXXXXX
FAMILY TRUST
TRUSTEES OF THE XXXX STACKNER - XXXXX
XXXXXXXX FAMILY TRUST
TRUSTEES OF THE XXXX STACKNER - XXXXX XXXX
FAMILY TRUST
OREGON INVESTMENT COUNCIL
XXXXX AND XXXXXX XXXXXXX
W. XXXXX XXXXX FOUNDATION, INC.
UNIVERSITY OF COLORADO FOUNDATION
THE UNIVERSITY OF NORTH CAROLINA AT CHAPEL
HILL FOUNDATION INVESTMENT FUND, INC.
MEDICAL COLLEGE OF WISCONSIN ENDOWMENT VI
MEDICAL COLLEGE OF WISCONSIN WORKING
CAPITAL
BY: DARUMA ASSET MANAGEMENT, AS
ATTORNEY-IN-FACT
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
------------------------------------
Title: President
-------------------------------------
AUSPEX SYSTEMS, INC.
SHARE PURCHASE AGREEMENT SIGNATURE PAGE
27
FRANKLIN STRATEGIC SERIES
ON BEHALF OF FRANKLIN SMALL CAP GROWTH FUND I
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxx
--------------------------------------
Title: Vice President
--------------------------------------
FRANKLIN XXXXXXXXX VARIABLE INSURANCE
PRODUCTS TRUST
ON BEHALF OF FRANKLIN SMALL CAP GROWTH FUND
By: /s/ Xxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxx
--------------------------------------
Title: Vice President
--------------------------------------
XXXXXX & XXXXXXX INTERNATIONAL
By: /s/ Xxx X. Xxxxxx
--------------------------------------
Name: Xxx X. Xxxxxx
--------------------------------------
Title: GMCM - managing member
Attorney-in-fact
--------------------------------------
XXX X. XXXXXX
By: /s/ Xxx X. Xxxxxx
--------------------------------------
Xxx X. Xxxxxx
AUSPEX SYSTEMS, INC.
SHARE PURCHASE AGREEMENT SIGNATURE PAGE
28
LAGUNITAS PARTNERS L.P.
By: /s/ Xxx X. Xxxxxx
--------------------------------------
Name: Xxx X. Xxxxxx
--------------------------------------
Title: GMCM - managing member
Lagunitas Partners LP-gen. partner
--------------------------------------
XXXXX XXXXXX
By: /s/ Xxxxx Xxxxxx
--------------------------------------
Xxxxx Xxxxxx
P.A.W. PARTNERS, L.P.
By: /s/ Xxxx Xxxxxxxxx
--------------------------------------
Name: Xxxx Xxxxxxxxx
--------------------------------------
Title: Chief Op Officer of General Partner
--------------------------------------
P.A.W. OFFSHORE FUND, LTD.
By: /s/ Xxxx Xxxxxxxxx
--------------------------------------
Name: Xxxx Xxxxxxxxx
--------------------------------------
Title: Chief Op Officer of Investment
Advisor
--------------------------------------
FNY SECURITIES, LP
By: /s/ Xxxx Xxxxxxxxx
--------------------------------------
Name: Xxxx Xxxxxxxxx
--------------------------------------
Title: Chief Op Officer of Investment
Advisor
--------------------------------------
AUSPEX SYSTEMS, INC.
SHARE PURCHASE AGREEMENT SIGNATURE PAGE
29
EDJ LIMITED
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------------------
Title: Trading Advisor
--------------------------------------
XXXXXX PARTNERS, LP
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------------------
Title: General Partner
--------------------------------------
XXX XXXXXX PARTNERS, L.P.
By: /s/ Xxxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxx
--------------------------------------
Title: General Partner
--------------------------------------
PEQUOT SCOUT FUND, LP
By: /s/ Xxxxx X. X'Xxxxx
--------------------------------------
Name: Xxxxx X. X'Xxxxx
Pequot Capital Management, Inc.
Investment Advisor
--------------------------------------
Title: Chief Operating Officer
--------------------------------------
RS DIVERSIFIED GROWTH FUND
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxx
--------------------------------------
Title: Mg Dir
--------------------------------------
AUSPEX SYSTEMS, INC.
SHARE PURCHASE AGREEMENT SIGNATURE PAGE
30
THE PAISLEY FUND, L.P.
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxx
--------------------------------------
Title: Mg Dir
--------------------------------------
THE PAISLEY PACIFIC FUND
By: /s/ Xxxx X. Xxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxx
--------------------------------------
Title: Mg Dir
--------------------------------------
TCM PARTNERS, L.P.
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxx X. Xxxxxx
--------------------------------------
Title: General Partner
--------------------------------------
XXXXXX XXXXXX
BY: XXXXX X. XXXXXX, AS ATTORNEY-IN-FACT
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
XXXXX XXXXXX
By: /s/ Xxxxx X. Xxxxxx
--------------------------------------
Xxxxx Xxxxxx
AUSPEX SYSTEMS, INC.
SHARE PURCHASE AGREEMENT SIGNATURE PAGE
31
XXXXX FOUNDATION
By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Name: Xxxxx X. Xxxxx
--------------------------------------
Title: Treasurer
--------------------------------------
XXXXXXX FOUNDATION
By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Name: Xxxxx X. Xxxxx
--------------------------------------
Title: Treasurer
--------------------------------------
XXXX XXXXXX XXXXX
By: Xxxxx Xxxxx, as Attorney-in-fact
By: /s/ Xxxxx X. Xxxxx
--------------------------------------
Name: Xxxxx X. Xxxxx
--------------------------------------
Title: Attorney-in-fact
--------------------------------------
LANCASTER INVESTMENT PARTNERS, L.P.
By: /s/ Xxxxxx X. Xxxxxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxxxxx
--------------------------------------
Title: President, LIP Advisors Inc.
--------------------------------------
AUSPEX SYSTEMS, INC.
SHARE PURCHASE AGREEMENT SIGNATURE PAGE
32
SCHEDULE A
PURCHASERS
-----------------------------------------------------------------------------------
NUMBER OF INVESTMENT
PURCHASER SHARES AMOUNT
-----------------------------------------------------------------------------------
21st Century Digital Industries Fund, L.P 125,600 $1,000,090.00
000 Xxxxx Xxxx Xxxxx Xxxx
Xxxxx, XX 00000
-----------------------------------------------------------------------------------
CastleRock Partners, L.P. 326,531 $2,600,003.09
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx,, XX 00000
-----------------------------------------------------------------------------------
CastleRock Fund, Ltd. 145,683 $1,160,000.89
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
CastleRock Partners II, L.P. 30,141 $239,997.71
000 Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Xxxxx X. Xxxxxx, Trustee, 1,000,000 $7,962,500.00
Xxxxx X. Xxxxxx Revocable Trust dated
2/10/99
0000 XX Xxxxxx Xxxxx
Xxxxxxxx, XX 00000
-----------------------------------------------------------------------------------
Norwest Bank FBO: Anschutz Land & Livestock 11,100 $88,383.75
Co. LLP
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Norwest Bank FBO: Antelope Company 14,700 $117,048.75
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
33
-----------------------------------------------------------------------------------
NUMBER OF INVESTMENT
PURCHASER SHARES AMOUNT
-----------------------------------------------------------------------------------
State Street Bank FBO: Arkansas Teacher 289,600 $2,305,940.00
Retirement System
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
State Street Bank FBO: BellSouth Corporation 30,300 $241,263.75
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Nations/Bank America FBO: Biskind Family 3,900 $31,053.75
Limited Partnership
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Banc One FBO: Chicago Public Library Foundation 3,000 $23,887.50
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Norwest Bank FBO: Community Hospital of 18,600 $148,102.50
Central California
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Xxxxxxxx & Xxxxx Trust FBO: Medical College of 21,600 $171,990.00
Wisconsin Endowment VI
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
34
-----------------------------------------------------------------------------------
NUMBER OF INVESTMENT
PURCHASER SHARES AMOUNT
-----------------------------------------------------------------------------------
Northern Trust FBO: Advisors Fund for Employee 42,900 $341,591.25
Benefit Trusts
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Northern Trust FBO: Advisor Fund for Grantor 28,400 $226,135.00
Trusts
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Firstar Bank FBO: Xxxxxxxx Foundation 47,400 $377,422.50
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Northern Trust FBO: Xxxxxx College Endowment 15,800 125,807.50
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
National City Bank FBO: Xxx Xxxxxxx Klothen & 1,600 $12,740.00
Xxxxxxx Xxxxxxx
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Bankers Trust FBO: Board of Pension 82,700 $658,498.75
Commissioners of the City of Los Angeles
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
35
-----------------------------------------------------------------------------------
NUMBER OF INVESTMENT
PURCHASER SHARES AMOUNT
-----------------------------------------------------------------------------------
Bankers Trust FBO: Board of Pension 71,300 $567,726.25
Commissioners of the City of Los Angeles II
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Bankers Trust FBO: PGE-Enron Foundation 4,400 35,035.00
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Northern Trust FBO: Portland General Holdings, 10,200 $81,217.50
Inc. Employees' Benefit Trust, Fund II
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Northern Trust FBO: Portland General Holdings, 5,000 $39,812.50
Inc. Employees' Benefit Trust, Fund IV
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Northern Trust FBO: Portland General Holdings, 35,600 $283,465.00
Inc. Pension Plan
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Citibank FBO: Employees' Retirement System of 86,500 $688,756.25
the Puerto Rico Electric Power Authority
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
36
-----------------------------------------------------------------------------------
NUMBER OF INVESTMENT
PURCHASER SHARES AMOUNT
-----------------------------------------------------------------------------------
Norwest Bank FBO: SARCO & Company LLP 33,800 $269,133.50
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Xxxxxxxx & Xxxxx Trust FBO: Stackner Family 5,100 $40,608.75
Foundation
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Firstar Bank FBO: Trustees of the Xxxx 800 $6,370.00
Stackner - Xxxx Xxxxxxx Family Trust
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Firstar Bank FBO: Trustees of the Xxxx 800 $6,370.00
Stackner - Xxxx Xxxxxxx Family Trust
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Northern Trust FBO: Oregon Investment Council 72,000 $573,300.00
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Firstar Bank FBO: Trustees of the Xxxx 800 $6,370.00
Stackner - Xxxxx Xxxxxxxx Family Trust
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
37
-----------------------------------------------------------------------------------
NUMBER OF INVESTMENT
PURCHASER SHARES AMOUNT
-----------------------------------------------------------------------------------
Firstar Bank FBO: Trustees of the Xxxx 800 $6,370.00
Stackner - Xxxxx Xxxx Family Trust
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Xxxxxxxx & Xxxxx Trust FBO: Xxxxx and Xxxxxx 4,600 $36,627.50
Xxxxxxx
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Fiduciary Trust FBO: W. Xxxxx Xxxxx 36,500 $290,631.25
Foundation, Inc.
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Mellon Bank FBO: University of Colorado 62,200 $495,267.50
Foundation
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Northern Trust FBO: The University of North 35,600 $283,465.00
Carolina at Chapel Hill Foundation Investment
Fund, Inc.
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Xxxxxxxx & Xxxxx Trust FBO: Medical College of 19,500 $155,268.75
Wisconsin Working Capital
c/o Daruma Asset Management
00 Xxxx 00xx Xxxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
38
-----------------------------------------------------------------------------------
NUMBER OF INVESTMENT
PURCHASER SHARES AMOUNT
-----------------------------------------------------------------------------------
Hare & Co. FBO: FSS- Franklin Small Cap Growth 1,255,887 $10,000,000.24
Fund I #4198
000 Xxxxxxxx Xxxxxx Xxxx.
Xxx Xxxxx, XX 00000
-----------------------------------------------------------------------------------
Hare & Co. FBO: FSS- Franklin Small Cap Growth 1,255,887 $10,000,000.23
Fund #4842
000 Xxxxxxxx Xxxxxx Xxxx.
Xxx Xxxxx, XX 00000
-----------------------------------------------------------------------------------
Xxxxxx & XxXxxxx International 25,118 $200,002.08
c/o Gruber & McBaine Capital Management
00 Xxxxxx Xxxxx, Xxxxx-XX
Xxx Xxxxxxxxx, XX 00000
-----------------------------------------------------------------------------------
Xxx X. Xxxxxx 12,559 $100,001.04
c/o Gruber & XxXxxxx Capital Management
00 Xxxxxx Xxxxx, Xxxxx-XX
Xxx Xxxxxxxxx, XX 00000
-----------------------------------------------------------------------------------
Lagunitas Partners LP 87,912 $699,999.30
c/o Gruber & XxXxxxx Capital Management
00 Xxxxxx Xxxxx, Xxxxx-XX
Xxx Xxxxxxxxx, XX 00000
-----------------------------------------------------------------------------------
Xxxxx Xxxxxx 251,178 $2,000,004.83
000 Xxxx 00xx Xxxxxx
Xxxxxxxxx 00X
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
P.A.W. Partners, L.P. 400,000 $3,185,000.00
00 Xxxxxxxxx Xxxxxx (xxxx entrance)
Xxxxxxxxx, XX 00000
-----------------------------------------------------------------------------------
P.A.W. Offshore Fund, Ltd 500,000 $3,981,250.00
00 Xxxxxxxxx Xxxxxx (xxxx entrance)
Xxxxxxxxx, XX 00000
-----------------------------------------------------------------------------------
FNY Securities, L.P. 100,000 $796,250.00
00 Xxxxxxxxx Xxxxxx (xxxx entrance)
Xxxxxxxxx, XX 00000
-----------------------------------------------------------------------------------
Pequot Scout Fund, LP 251,178 $2,000,004.83
000 Xxxxx Xxxx Xxxx
Xxxxxxxx, XX 00000
-----------------------------------------------------------------------------------
39
-----------------------------------------------------------------------------------
NUMBER OF INVESTMENT
PURCHASER SHARES AMOUNT
-----------------------------------------------------------------------------------
Xxxxxx Partners, LP 100,000 $796,250.00
000 Xxxxxxxxx Xxxxxxx
Xxxxx 000X
Xxxx Xxxxxx, XX 00000
-----------------------------------------------------------------------------------
EDJ Limited 50,000 $398,125.00
c/o Deltec Trust
Deltec House/ Xxxxxx Xxx
P.O. Box N-3229
Nassau, Bahamas
-----------------------------------------------------------------------------------
RS Diversified Growth Fund 625,000 $4,976,562.50
c/o RS Investment Management
000 Xxxxxx Xxxxxx , Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
-----------------------------------------------------------------------------------
The Paisley Fund, L.P. 115,000 $915,687.50
c/o RS Investment Management
000 Xxxxxx Xxxxxx , Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
-----------------------------------------------------------------------------------
The Paisley Pacific Fund 265,000 $2,110,062.50
c/o RS Investment Management
000 Xxxxxx Xxxxxx , Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
-----------------------------------------------------------------------------------
State of Wisconsin 2,200,000 $17,517,500.00
000 X. Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
-----------------------------------------------------------------------------------
State of Wisconsin 550,000 $4,379,375.00
000 X. Xxxxxx Xxxxxx
Xxxxxxx, XX 00000
-----------------------------------------------------------------------------------
TCM Partners, L.P. 75,000 $597,187.50
000 Xxxxxxxx Xxx.
0xx xxxxx
Xxxxxxxx, XX 00000
-----------------------------------------------------------------------------------
Xxxxxx Xxxxxx 20,000 $159,250.00
c/o TCM Partners, L.P.
000 Xxxxxxxx Xxx.
0xx xxxxx
Xxxxxxxx, XX 00000
-----------------------------------------------------------------------------------
40
-----------------------------------------------------------------------------------
NUMBER OF INVESTMENT
PURCHASER SHARES AMOUNT
-----------------------------------------------------------------------------------
Xxxxx Xxxxxx 5,000 $39,812.50
c/o TCM Partners, L.P.
000 Xxxxxxxx Xxx.
0xx xxxxx
Xxxxxxxx, XX 00000
-----------------------------------------------------------------------------------
Xxxxx Foundation 125,589 $1,000,002.41
c/o Clark Estates
Xxx Xxxxxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Xxxxxxx Foundation 62,795 $500,005.19
c/o Clark Estates
Xxx Xxxxxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Xxxx Xxxxxx Xxxxx 62,795 $500,005.19
c/o Clark Estates
Xxx Xxxxxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxx, XX 00000
-----------------------------------------------------------------------------------
Lancaster Investment Partners
Park View Tower 150,000 $1,194,375.00
0000 Xxxxx Xxxxxx
Xxxxx 000
Xxxx xx Xxxxxxx, XX 00000
-----------------------------------------------------------------------------------
Xxx Xxxxxx Partners, L.P.
000 Xxxxxxxxx Xxxxxxx 50,000 $398,125.00
Xxxxx 000X
Xxxx Xxxxxx, XX 00000
-----------------------------------------------------------------------------------
TOTAL 11,320,953 $90,143,088.28
-----------------------------------------------------------------------------------
41
EXHIBIT A
September 22, 2000
To the Purchasers of
Common Stock of Auspex Systems, Inc.
listed on Exhibit A attached hereto
Ladies and Gentlemen:
We have acted as counsel for Auspex Systems, Inc., a Delaware
corporation (the "Company"), in connection with the issuance and sale to you of
11,320,953 shares of the Company's Common Stock (the "Shares") pursuant to the
Share Purchase Agreement dated as of September 19, 2000 between the Company and
each of the Purchasers listed on Exhibit A hereto (the "Agreement"). We are
rendering this opinion pursuant to Section 3(d)(iii) of the Agreement. Except as
otherwise defined herein, capitalized terms used but not defined herein have the
respective meanings given to them in the Agreement.
In connection with this opinion, we have examined and relied upon the
representations and warranties as to factual matters contained in and made
pursuant to the Agreement by the various parties and originals or copies
certified to our satisfaction, of such records, documents, certificates,
opinions, memoranda and other instruments as in our judgment are necessary or
appropriate to enable us to render the opinion expressed below. Where we render
an opinion "to the best of our knowledge" or concerning an item "known to us" or
our opinion otherwise refers to our knowledge, it is based solely upon (i) an
inquiry of attorneys within this firm who perform legal services for the
Company, (ii) receipt of a certificate executed by an officer of the Company
covering such matters, and (iii) such other investigation, if any, that we
specifically set forth herein.
In rendering this opinion, we have assumed: the genuineness and
authenticity of all signatures on original documents; the authenticity of all
documents submitted to us as originals; the conformity to originals of all
documents submitted to us as copies; the accuracy, completeness and authenticity
of certificates of public officials; and the due authorization, execution and
delivery of all documents (except the due authorization, execution and delivery
by the Company of the Agreement), where authorization, execution and delivery
are prerequisites to the effectiveness of such documents. We have also assumed:
that all individuals executing and delivering documents had the legal capacity
to so execute and deliver; that you have received all documents you were to
receive under the Agreement; that the Agreement is an obligation binding upon
you; and, that you have filed any required California franchise or income tax
returns and have paid any required California franchise or income taxes. In
rendering this opinion we have also assumed that there are no extrinsic
agreements or understandings among the parties to the Agreement that would
modify or interpret the terms of the Agreement or the respective rights or
obligations of the parties thereunder.
42
To the Purchasers of
Common Stock of Auspex Systems, Inc.
September 22, 2000
Page 2
Our opinion is expressed only with respect to the federal laws of the
United States of America, the laws of the State of California and the General
Corporation Law of the State of Delaware. We express no opinion as to whether
the laws of any particular jurisdiction apply, and no opinion to the extent that
the laws of any jurisdiction other than those identified above are applicable to
the subject matter hereof. We are not rendering any opinion as to compliance
with any antifraud law, rule or regulation relating to securities, or to the
sale or issuance thereof.
On the basis of the foregoing, in reliance thereon and with the
foregoing qualifications, we are of the opinion that:
1. The Company has been duly incorporated and is validly existing in
good standing under the laws of the State of Delaware. The Company is qualified
to do business as a foreign corporation and is in good standing in the State of
California. The Company has the requisite corporate power to own or lease its
property and assets and to conduct its business as currently conducted.
2. The Agreement has been duly authorized by all necessary corporate
action on the part of the Company and has been duly executed and delivered on
behalf of the Company and constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms except (i)
as limited by applicable bankruptcy, insolvency, reorganization, arrangement,
moratorium and other laws of general applicability relating to or affecting
creditors' rights, and (ii) as limited by equitable principles generally and
limitations on the availability of equitable remedies, whether such
enforceability is considered in a proceeding in equity or at law.
3. The Shares have been duly authorized and when issued, delivered and
paid for in accordance with the terms of the Agreement, will be validly issued,
fully paid and nonassessable and free of any pre-emptive or similar rights.
4. Except as set forth in the Agreement (including the Schedule of
Exceptions thereto) or in the Company SEC Reports, to our knowledge there is no
action, proceeding or investigation pending or overtly threatened in writing
against the Company which could reasonably be anticipated to result, either
individually or in the aggregate, in any material adverse change in the assets,
financial condition or operations of the Company.
5. Subject to the accuracy of the Purchasers' representations in Section
5 of the Agreement, we are of the opinion that the offer and sale of the Shares
by the Company to the Purchasers is exempt from the registration requirements of
the Securities Act of 1933, as amended, subject to timely filing of a Form D
pursuant to Securities and Exchange Commission Regulation D.
6. The execution and delivery of the Agreement by the Company and the
consummation of the sale of the Shares by the Company as contemplated therein do
not violate any provisions of the
43
To the Purchasers of
Common Stock of Auspex Systems, Inc.
September 22, 2000
Page 3
Company's Certificate of Incorporation or By-laws, or any material agreements
that have been filed by the Company with the Securities and Exchange Commission
and to which the Company is a party.
7. All consents, approvals, authorizations, or orders of, and filings,
registrations and qualifications with, any regulatory authority or governmental
body in the United States required for the issuance by the Company of the Shares
as contemplated by the Agreements, have been made or obtained, except for (i)
the filing of a Form D pursuant to Securities and Exchange Commission Regulation
D, and (ii) the filing of a Form D with the individual State Securities
Commissioners.
This opinion is intended solely for your benefit and is not to be made
available to or be relied upon by any other person, firm, or entity without our
prior written consent.
XXXXXX XXXXXXX XXXXXXXX & XXXXXX
Professional Corporation
44
EXHIBIT B
SCHEDULE OF EXCEPTIONS
SEPTEMBER 19, 2000
AUSPEX SYSTEMS, INC., a Delaware corporation (the "Company"), hereby
makes the following disclosure to the representations and warranties set forth
in Section 4 of the Share Purchase Agreement dated as of September 19, 2000
between the Company and the Purchasers thereunder (the "Agreement"). Except as
otherwise stated herein, all capitalized terms used herein shall have the
meanings given them in the Agreement. Items disclosed under any paragraph number
shall be deemed to be disclosed under other paragraphs if the description
contained in this Schedule of Exceptions indicates the applicability of such
disclosure to such other paragraph.
4.2 CAPITALIZATION.
On January 18, 2000, the Company sold 25,000 shares of Series B
Convertible Preferred Stock ("Preferred Stock") and issued 1,605,136 common
stock purchase warrants (the "Warrants") to four institutional investors
(collectively, the "Investors"). Upon any equity financing, the Investors may
convert that number of shares of Preferred Stock representing a Conversion
Amount equal to the amount raised in the financing. The Conversion Amount of
each share of Preferred Stock is equal to $1,000 plus accrued interest plus any
penalty interest. An equity financing includes the sale of any Common Stock. In
addition, the issuance of warrants in connection with a financing would allow
the holders of the Preferred Stock to convert a number of shares equal to the
price received for such warrants.
As of August 28, 2000 the Investors had converted fifty percent (50%) of
their Preferred Stock. On August 29, 2000, the Company sent a notice to the
Investors, which requires them to convert all of their remaining Preferred Stock
within 20 days, subject to certain restrictions.
4.3 ISSUANCE, SALE AND DELIVERY OF SHARES.
The Investors were all granted registration rights pursuant to the
issuance of the Preferred Stock.
The exercise price of the Warrants will be adjusted in the event of
certain dilutive issuances. If the Company issues any Common Stock, any security
convertible into Common Stock or any option to purchase Common Stock at price or
with a conversion price or exercise price below the price of the Warrants, the
exercise price of the Warrants will be reduced to such price, conversion price
or exercise price. No adjustment is made to the number of shares issuable upon
exercise of the Warrants.
45
4.5 NO MATERIAL CHANGES.
Each share of Preferred Stock accrues dividends at an annual rate of 7%
payable quarterly in cash or shares of the Company's Common Stock. No dividend
payments will be due if the Investors have converted all of their Preferred
Stock prior to the quarterly payment date.
4.6 DUE EXECUTION DELIVERY AND PERFORMANCE.
See Section 4.2 and 4.3 above.
46
APPENDIX I
AUSPEX SYSTEMS, INC.
STOCK CERTIFICATE QUESTIONNAIRE
Pursuant to Section 3 of the Agreement, please provide us with the
following information:
1. The exact name that your Shares are to be registered in (this is the
name that will appear on your stock certificate(s)). You may use a
nominee name if appropriate:
2. The relationship between the Purchaser of the Shares and the Registered
Holder listed in response to item 1 above:______________________________
3. The mailing address of the Registered Holder listed in response to item
1 above:
________________________________
________________________________
________________________________
________________________________
4. The Social Security Number or Tax Identification Number of the
Registered Holder listed in response to item 1 above:
________________________________
47
APPENDIX II
AUSPEX SYSTEMS, INC.
SELLING STOCKHOLDER QUESTIONNAIRE AND AGREEMENT
FOR BENEFICIAL OWNERS
REGARDING SECURITIES TO BE INCLUDED IN
AUSPEX SYSTEMS, INC. REGISTRATION STATEMENT
The following questionnaire and agreement (the "Questionnaire") elicits
information necessary to prepare a Registration Statement on Form S-3 (the
"Registration Statement") registering for resale certain shares of Common Stock
of Auspex Systems, Inc. (the "Company") (referred to as the "Shares"), to be
filed by the Company with the Securities and Exchange Commission (the
"Commission") in accordance with the rights granted to you and other holders of
the Shares under that certain Share Purchase Agreement dated September 19, 2000,
(the "Share Purchase Agreement"). The stockholders permitted to sell shares
under the Registration Statement are referred to collectively as the "Selling
Stockholders", and those Shares which are included in and may be resold under
the Registration Statement are referred to as the "Resale Shares".
Because the information provided in this Questionnaire will be used in
connection with the preparation of documents to be filed with United States and
state agencies, it should be accurate, complete and true, and not omit any
material or important information.
By execution of this Questionnaire, you agree to notify the Company's
legal counsel as promptly as practicable of any inaccuracy or change in
information previously furnished by you to the Company or the occurrence of any
event in either case as a result of which any Prospectus included in such
Registration Statement contains or would contain an untrue statement of a
material fact regarding you or your intended method of distribution of such
Resale Shares or omits to state any material fact regarding you or your intended
method of distribution of such Resale Shares necessary to make the statements
therein, in light of the circumstances then existing, not misleading, and you
agree promptly to furnish to the Company's legal counsel any additional
information required to correct and update any previously furnished information
so that such Prospectus shall not contain, with respect to you or the
distribution of Resale Shares held by you that are included in the Registration
Statement, an untrue statement of a material fact or omit to state a material
fact necessary to make the statements therein, in light of the circumstances
then existing, not misleading.
Please complete and execute this Questionnaire and Agreement and return
it to Xxxx Xxxxxxxxxxx of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, 000 Xxxx Xxxx Xxxx,
Xxxx Xxxx, XX 00000, Tel: 000-000-0000, Fax: 000-000-0000 as quickly as possible
and in any event no later than October 1, 2000. By executing this Questionnaire,
you hereby consent to being named in the Registration Statement and to the
presentation of all information furnished herein which is required to be
disclosed in the Registration Statement.
UNDER THE TERMS OF THE SHARE PURCHASE AGREEMENT, YOU ARE OBLIGATED TO
INDEMNIFY THE COMPANY IF THE INFORMATION YOU PROVIDED HEREIN IS INACCURATE OR
MISLEADING. PLEASE NOTE THE REFERENCE IN SECTION
-1-
48
11 HEREOF TO YOUR INDEMNIFICATION OBLIGATIONS UNDER THE SHARE PURCHASE
AGREEMENT.
YOUR SHARES WILL NOT BE INCLUDED IN THE REGISTRATION STATEMENT UNLESS
YOU COMPLETE THIS QUESTIONNAIRE, SIGN IT, AND DELIVER A COPY TO THE COMPANY'S
LEGAL COUNSEL IN THE MANNER DESCRIBED HEREIN AND PROMPTLY NOTIFY THE COMPANY'S
LEGAL COUNSEL OF ANY CHANGES TO THE INFORMATION CONTAINED HEREIN.
INSTRUCTIONS FOR COMPLETION OF QUESTIONNAIRE AND AGREEMENT:
Please answer each question fully. Give the most exact and accurate
answers possible. IF YOUR RESPONSE TO ANY OF THE QUESTIONS PRESENTED BELOW IS
NEGATIVE OR IF ANY OF THE QUESTIONS ARE NOT APPLICABLE, PLEASE SO STATE IN THE
SPACE PROVIDED. Please sign and date the Questionnaire and Agreement. Certain
terms marked with an asterisk (*) and used herein are defined in Appendix A
hereto, which should be referred to in completing this Questionnaire and
Agreement.
1. General
State your full name as it should appear in any filings made.
NAME OF SELLING STOCKHOLDER(1):_________________________________________
BUSINESS ADDRESS:_______________________________________________________
RESIDENCE ADDRESS:______________________________________________________
TELEPHONE NUMBER:_______________________________________________________
FAX NUMBER:_____________________________________________________________
If an entity, please indicate principal contact for questions:
NAME:___________________________________________________________________
ADDRESS:________________________________________________________________
TELEPHONE NUMBER:_______________________________________________________
FAX NUMBER:_____________________________________________________________
--------
(1) If this Questionnaire is being completed by or on behalf of a person
other than an individual, the entity on whose behalf the Questionnaire is being
completed should be stated.
49
2. Please state your current position, office or other relationship with
the Company (or its predecessors or affiliates) and any position, office or
other relationship with the Company (or its predecessors or affiliates) during
the past three years.
3. If you hold any or all of the Resale Shares on behalf of another
person or entity, please state the full name(s) and address(es) of such
person(s) or entity(ies) and the amount(s) so held.
4. Please state the total number of shares (i.e. not just Resale Shares
or Shares, but any and all shares of the Company) beneficially owned by you (see
definition of "Beneficial Ownership" in Appendix A).
5. If any other person or entity shares voting or investment power with
you with respect to the shares listed in Section 4 above, please
(a) briefly identify the person or entity,
(b) give the principal amount or number subject to shared voting
power or investment power, and
(c) summarize the arrangement*.
6. Are any of the Resale Shares owned by you subject to any pledge or
other contractual arrangement*?
No ______ Yes ______
If yes, please explain such pledge or other contractual arrangement*.
7. Please state the number of Resale Shares to be offered for your
account in the Registration Statement. (This can be no more than the number of
Shares you hold). If you do not want to register all of your Shares, please so
state.
8. Have you entered into any agreement, arrangement* or understanding
with an underwriter or a broker or dealer, and/or is anyone to your knowledge
acting as an underwriter or coordinating broker, with respect to the offering of
the Resale Shares to be registered in the Registration Statement?
No ______ Yes ______
If yes, please set forth the terms of any such agreement, arrangement*
or understanding (including without limitation any volume limitations on sales,
parties to the agreement, arrangement* or understanding, and conditions under
which the agreement, arrangement* or understanding may be terminated) below:
50
9. Attached as Appendix B hereto is a description of a "plan of
distribution" that is intended to be used, in substantially the form of Appendix
B, in the Registration Statement. Please indicate whether anything stated in
Appendix B is inaccurate or misleading with respect to your plan to distribute
the Resale Shares owned by you or whether Appendix B omits to state any
information about your plan of distribution.
No ______ Yes ______
If yes, describe below specifically in what manner Appendix B is
inaccurate or misleading. Please also describe below any additional information
about your plan to distribute the Resale Shares that you own.
10. Accuracy of Information. The information set forth above is supplied
by the undersigned in response to the request of the Company and may be used in
connection with the Registration Statement and any related Prospectus. The
undersigned hereby affirms that such information is correct as of the date
hereof. The undersigned will promptly notify the Company's legal counsel of any
changes in such information, whether such change occurred subsequent hereto and
prior to the filing or effectiveness of the Registration Statement or after the
Registration Statement is filed or becomes effective. The undersigned
understands and agrees that this Questionnaire and Agreement, as completed by
him or her, and any further communications by him or her regarding the matters
contemplated herein, will be relied upon by the Company and its legal counsel in
connection with filings related to the Registration Statement.
The undersigned understands that material misstatements or the omission
of material facts in the Registration Statement may give rise to civil and
criminal liabilities for the Company, each officer and director of the Company
signing the Registration Statement and other persons signing such document.
11. Indemnification. The Company and the Selling Stockholders have
agreed to indemnify each other, respectively, with respect to certain
liabilities, as set forth in the Share Purchase Agreement.
12. Suspension of Sales. The undersigned understands and agrees that in
the event of (a) any request by the Commission for amendments to the
Registration Statement or amendments or supplements to the Prospectus or for
additional information relating thereto, (b) the issuance by the Commission of
any stop order suspending the effectiveness of the Registration Statement under
the Securities Act, or of the suspension by any state securities commission of
the qualification of the Resale Shares for offering or sale in any jurisdiction,
or the initiation of any proceeding for any of the preceding purposes, (c) the
existence of any fact and the happening of any event known to the Company that
makes any statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement thereto, or any document incorporated by
reference therein untrue, or that requires the making of any additions to or
changes in the Registration Statement or the Prospectus in order to make the
statements therein not misleading except in the case of this clause or (d) that,
in the judgment of the Company's Board of Directors, Chief Executive Officer or
Chief Financial Officer, it is advisable to suspend use of the Prospectus for a
discrete period of time due to pending corporate developments, public filings
with the Commission or similar events, the Company shall deliver a certificate
in writing to the Selling Stockholders to such effect and thereafter the use of
the Prospectus shall be suspended, and the Company shall thereafter not be
required to maintain the effectiveness or update the Registration Statement. The
Company will use its best efforts to ensure that the use of the Prospectus may
be resumed as soon as practicable and, in the case of a pending development,
filing or event,
51
as soon as, in the judgment of the Company's Board of Directors, Chief Executive
Officer or Chief Financial Officer, disclosure of the material relating to such
pending development, filing or event would not have a materially adverse effect
on the Company.
13.Prospectus Delivery Requirement. The undersigned understands that the
United States securities laws require that a copy of the Prospectus must be
delivered to any buyer of the Resale Shares prior to or concurrently with
delivery of the certificates representing the Resale Shares and agrees to make
such Prospectus delivery with respect to any sales of Resale Shares that he or
she may conduct.
14.Regulation M. The undersigned understands that Regulation M, which
has been adopted by the U.S. Securities and Exchange Commission under the
Securities Exchange Act of 1934, prohibits persons who are selling securities in
a distribution, or their affiliates, from directly or indirectly bidding for,
purchasing or attempting to induce any person to bid for or purchase the
security being distributed while the distribution is in progress. The
undersigned agrees to abide by the restrictions imposed by Regulation M.
_______________________________
(Signature)
_______________________________
(Name of Shareholder)
_______________________________
(Name and Title of Signatory if Shareholder is an Entity)
Date:___________________________
RETURN COMPLETED QUESTIONNAIRE ON OR BEFORE OCTOBER 1, 2000 TO:
XXXX XXXXXXXXXXX
XXXXXX XXXXXXX XXXXXXXX & XXXXXX
000 XXXX XXXX XXXX
XXXX XXXX, XX 00000
TELEPHONE: 000-000-0000
FAX: 000-000-0000
52
APPENDIX A
1. Arrangement. Any plan, contract, arrangement or understanding,
whether or not set forth in a formal document.
2. Associate. The term "associate" means:
(a) Any corporation or organization, except the Company and its
majority-owned subsidiaries, of which you are an executive officer or partner or
of which you, together with other officers or directors of the Company, are,
directly or indirectly, the beneficial owner of 10% or more of any class of
equity securities.
(b) Any trust or other estate in which you have a substantial beneficial
interest or as to which you serve as trustee or in a similar fiduciary capacity.
(c) Any relative, your spouse or any relative of your spouse who resides
with you or who is a director or officer of the Company or its subsidiaries.
3. Beneficial Owner. A "beneficial owner" of securities is any person
who, directly or indirectly, through any contract, arrangement, understanding,
relationship or otherwise has or shares:
(a) Voting power, which includes the power to vote, or to direct the
voting of, such security; and/or,
(b) Investment power, which includes the power to dispose or direct the
disposition of, such security.
Furthermore, a "beneficial owner" of a security includes any person who
has the right to acquire beneficial ownership of such security at any time
within sixty (60) days. The right to acquire beneficial ownership could (but
need not necessarily) be through (i) the exercise of any option, warrant or
right, (ii) the conversion of a security, (iii) a power to revoke or automatic
termination of a trust, discretionary account, or similar arrangement*, or (iv)
otherwise.
A "beneficial owner" also includes any person who, directly or
indirectly, creates or uses a trust, proxy, power of attorney, pooling
arrangement or any other contract, arrangement, or device with the purpose or
effect of divesting such person of beneficial ownership of a security or
preventing the vesting of such beneficial ownership as part of a plan to evade
the reporting requirements of any federal or state securities act.
Securities owned beneficially would include not only securities held by
you for your own benefit, whether in bearer form or registered in your own name
or otherwise, but would also include securities held by others for your benefit
or securities from which you obtain benefits substantially equivalent to those
of ownership (regardless of whether or how they are registered), such as, for
example, securities held for you by banks or other custodians, brokers (whether
in your name, their name or in "street name"), executors, administrators, or
trustees (including trusts in which you have only a remainder interest) and
securities held for your account by pledgees, and securities owned by a
partnership in which you are a member, and securities owned by any corporation
in which you and your associates* own 10% or more of the stock. A person is
deemed to be the beneficial owner of securities beneficially owned by his
spouse, his minor children, or any relative sharing his home.
"Indirectly", when used to refer to beneficial ownership of securities,
means ownership through another such as a controlled corporation, member of the
family, estate, trust, partnership or other entity.
-6-
53
APPENDIX B
PLAN OF DISTRIBUTION
RESALES BY SELLING STOCKHOLDERS:
Auspex is registering the resale of the shares on behalf of the selling
stockholders. The selling stockholders may offer and resell the shares from time
to time, either in increments or in a single transaction. They may also decide
not to sell all the shares they are allowed to resell under this prospectus. The
selling stockholders will act independently of Auspex in making decisions with
respect to the timing, manner, and size of each sale.
DONEES AND PLEDGEES:
The term "selling stockholders" includes donees, i.e. persons who
receive shares from a selling stockholder after the date of this prospectus by
gift. The term also includes pledgees, i.e. persons who, upon contractual
default by a selling stockholder, may seize shares which the selling stockholder
pledged to such person. If a selling stockholder notifies Auspex that a donee or
pledgee intends to sell more than 500 shares, Auspex will file a supplement to
this prospectus.
COSTS AND COMMISSIONS:
Auspex will pay all costs, expenses, and fees in connection with the
registration of the shares. The selling stockholders will pay all brokerage
commissions and similar selling expenses, if any, attributable to the sale of
shares.
TYPES OF SALE TRANSACTIONS:
The selling stockholders may sell the shares in one or more types of
transactions (which may include block transactions):
$ on the Nasdaq National Market,
$ in the over-the-counter market,
$ in negotiated transactions,
$ through put or call option transactions,
$ through short sales, or
$ any combination of such methods of sale.
The shares may be sold at market prices prevailing at the time of sale,
or at negotiated prices. Such transactions may or may not involve brokers or
dealers. The selling stockholders have informed Auspex that they have not
entered into any agreements, understandings or arrangements with any
underwriters or broker-
-7-
54
dealers regarding sale of the shares. They have also informed Auspex no one is
acting as underwriter or coordinating broker in connection with the proposed
sale of shares.
SALES TO OR THROUGH BROKER-DEALERS:
The selling stockholders may conduct such transactions either by selling
shares directly to purchasers, or by selling shares to, or through,
broker-dealers. Such broker-dealers may act either as an agent of a selling
stockholder, or as a principal for the broker-dealer's own account. Such
broker-dealers may receive compensation in the form of discounts, concessions,
or commissions from the selling stockholders and/or the purchasers of shares.
This compensation may be received both if the broker-dealer acts as an agent or
as a principal. This compensation might also exceed customary commissions.
DEEMED UNDERWRITING COMPENSATION:
The selling stockholders and any broker-dealers that act in connection
with the sale of shares might be deemed to be "underwriters" within the meaning
of Section 2(a)(11) of the Securities Act. Any commissions received by such
broker-dealers, and any profit on the resale of shares sold by them while acting
as principals, could be deemed to be underwriting discounts or commissions under
the Securities Act.
INDEMNIFICATION:
Auspex has agreed to indemnify each selling stockholder against certain
liabilities, including liabilities arising under the Securities Act. The selling
stockholders may agree to indemnify any agent, dealer or broker-dealer that
participates in transactions involving sales of shares against certain
liabilities, including liabilities arising under the Securities Act.
PROSPECTUS DELIVERY REQUIREMENTS:
Because they may be deemed underwriters, the selling stockholders must
deliver this prospectus and any supplements to this prospectus in the manner
required by the Securities Act. This might include delivery through the
facilities of the Nasdaq National Market in accordance with Rule 153 under the
Securities Act. Auspex has informed the selling stockholders that their sales in
the market may be subject to the antimanipulative provisions of Regulation M
under the Exchange Act.
STATE REQUIREMENTS:
Some states require that any shares sold in that state only be sold
through registered or licensed brokers or dealers. In addition, some states
require that the shares have been registered or qualified for sale in that
state, or that there exist an exemption from the registration or qualification
requirement and that the exemption has been complied with.
SALES UNDER RULE 144:
Selling stockholders may also resell all or a portion of the shares in
open market transactions in reliance upon Rule 144 under the Securities Act. To
do so, they must meet the criteria and conform to the requirements of Rule 144.
-8-
55
DISTRIBUTION ARRANGEMENTS WITH BROKER-DEALERS:
If a selling stockholder notifies Auspex that any material arrangement
has been entered into with a broker-dealer for the sale of shares through:
$ a block trade,
$ special offering,
$ exchange distribution or secondary distribution, or
$ a purchase by a broker or dealer,
then Auspex will file, if required, a supplement to this prospectus
under Rule 424(b) under the Securities Act.
The supplement will disclose:
$ the name of each such selling stockholder and of the
participating broker-dealer(s),
$ the number of shares involved,
$ the price at which such shares were sold,
$ the commissions paid or discounts or concessions allowed to such
broker-dealer(s), where applicable,
$ that such broker-dealer(s) did not conduct any investigation to
verify the information in this prospectus, and
$ any other facts material to the transaction.
56
APPENDIX III
PURCHASER'S CERTIFICATE OF SUBSEQUENT SALE
The undersigned, an officer of, or other person duly authorized by
________________________________________________________________________________
[fill in official name of individual or institution]
hereby certifies that he/she/it is the Purchaser of the shares evidenced by the
attached certificate, and as such, sold such shares on ________________, 200__
in accordance with Registration Statement number 333-________________, and
complied with the requirement of delivering a current prospectus in connection
with such sale.
PRINT OR TYPE:
Name of Purchaser (Individual or Institution):
______________________________________________
Name of Individual representing Purchaser (if an Institution)
______________________________________________
Title of Individual representing Purchaser (if an Institution):
______________________________________________
SIGNATURE:
Individual Purchaser or Individual representing Purchaser:
______________________________________________
