EXHIBIT 10.7
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QUICKLOGIC CORPORATION
Series E Preferred Stock
Purchase Agreement
_______________, 1995
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TABLE OF CONTENTS
Page
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1. Authorization and Sale of Preferred Stock.................................... 1
1.1 Authorization.......................................................... 1
1.2 Sale of the Shares..................................................... 1
2. Closing Date; Delivery....................................................... 1
2.1 First Closing Date..................................................... 1
2.2 Delivery............................................................... 2
2.3 Subsequent Closings.................................................... 2
2.4 Minimum Closing Amounts................................................ 2
3. Representations and Warranties of the Company................................ 2
3.1 Organization and Standing; Articles of Incorporation and Bylaws........ 2
3.2 Corporate Power........................................................ 2
3.3 No Subsidiaries........................................................ 3
3.4 Capitalization......................................................... 3
3.5 Authorization.......................................................... 3
3.6 Financial Statements................................................... 4
3.7 Title to Properties; Liens and Encumbrances............................ 4
3.8 Intellectual Property Rights........................................... 5
3.9 Proprietary Information Agreements..................................... 5
3.10 Operating Rights....................................................... 6
3.11 Manufacturing, Distribution and License Rights......................... 6
3.12 Compliance with Other Instruments, None Burdensome, etc................ 6
3.13 Litigation, etc........................................................ 6
3.14 Employee Compensation Plans............................................ 7
3.15 Insurance.............................................................. 7
3.16 Registration Rights.................................................... 7
3.17 Governmental Consent, etc.............................................. 7
3.18 Offering............................................................... 7
3.19 Material Contracts and Obligations..................................... 7
3.20 Tax Returns and Payments............................................... 8
3.21 Related Party Transactions............................................. 8
3.22 Certain Transactions................................................... 8
3.23 Environmental Protection............................................... 8
3.24 Brokers or Finders..................................................... 9
3.25 Changes................................................................ 9
3.26 Foreign Investment in Real Property Act................................ 10
3.27 Disclosure............................................................. 10
4. Representations and Warranties of the Purchaser.............................. 10
4.1 Authorization.......................................................... 11
4.2 Experience............................................................. 11
4.3 Investment............................................................. 11
4.4 Rule 144............................................................... 11
4.5 No Public Market....................................................... 11
4.6 Access to Data......................................................... 11
4.7 Further Limitations on Dispositions.................................... 11
5. Conditions to Purchasers' Obligations at the Closing......................... 12
5.1 Representations and Warranties Correct................................. 12
5.2 Covenants.............................................................. 12
5.3 Opinion of Counsel..................................................... 12
5.4 Permits................................................................ 12
5.5 Amended and Restated Articles of Incorporation......................... 12
5.6 Good Standing Certificates............................................. 12
5.7 Officer's Certificate.................................................. 12
5.8 Secretary's Certificate................................................ 13
5.9 Stock Certificate...................................................... 13
5.10 Legal Investment....................................................... 13
5.11 Shareholders Agreement................................................. 13
5.12 Registration Rights Agreement.......................................... 13
6. Conditions to Company's Obligations at the Closing........................... 13
6.1 Representations and Warranties Correct................................. 13
6.2 Permits................................................................ 13
6.3 Amended and Restated Articles.......................................... 13
6.4 Payment of the Purchase Price.......................................... 14
7. Covenant to Participate in Future Financings................................. 14
8. Miscellaneous................................................................ 14
8.1 Attorneys' Fees........................................................ 14
8.2 Waivers and Amendments................................................. 14
8.3 Governing Law.......................................................... 14
8.4 Survival............................................................... 14
8.5 Successors and Assigns................................................. 15
8.6 Entire Agreement....................................................... 15
8.7 Severability of this Agreement......................................... 15
8.8 Finder's Fees.......................................................... 15
8.9 Legends................................................................ 15
8.10 Removal of Legends and Transfer Restrictions........................... 16
8.11 Titles and Subtitles................................................... 16
8.12 Counterparts........................................................... 16
8.13 Delays or Omissions.................................................... 16
8.14 Notices................................................................ 16
8.15 Transaction Fees and Expenses.......................................... 17
SCHEDULES AND EXHIBITS
Schedule A Schedule of Purchasers
Exhibit A Amended and Restated Articles of Incorporation
Exhibit B Fourth Amended and Restated Shareholders Agreement
Exhibit C Schedule of Exceptions
Exhibit D Opinion of Wilson, Sonsini, Xxxxxxxx & Xxxxxx
Exhibit E Fourth Amended and Restated Registration Rights Agreement
QUICKLOGIC CORPORATION
SERIES E PREFERRED STOCK
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PURCHASE AGREEMENT
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This SERIES E PREFERRED STOCK PURCHASE AGREEMENT (the "Agreement") is made
as of _________, 1995 by and among QuickLogic Corporation, a California
corporation (the "Company") and the persons and entities listed on Schedule A
hereto (the "Purchasers").
In consideration of the mutual promises, representations, warranties,
covenants, and conditions set forth in this Agreement, the parties to this
Agreement mutually agree as follows:
1. Authorization and Sale of Preferred Stock.
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1.1 Authorization. The Company has authorized the issuance and sale
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of up to 21,428,571 shares of its Series E Preferred Stock (the "Shares") having
the rights, preferences, and privileges set forth in the Amended and Restated
Articles of Incorporation of the Company (the "Articles") attached hereto as
Exhibit A. The aggregate shares of common stock issuable upon conversion of the
Shares are referred to in this Agreement as the "Conversion Stock."
1.2 Sale of the Shares. Subject to the terms and conditions hereof,
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at the Closing Date (as defined in Section 2.1 hereof) the Company will issue
and sell to each Purchaser, and each Purchaser will purchase from the Company
the number of shares specified opposite the name of such Purchaser on Schedule A
hereto at a purchase price of $0.70 per share. The Company's agreement with
each Purchaser hereunder is a separate agreement and the sales of the Shares to
each Purchaser are separate sales.
1.3 Sale of Additional Series E Preferred. The Company shall have
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until August 31, 1995 to sell any shares of Series E Preferred not sold at the
First Closing (as defined below) at a purchase price of $0.70 per share. Any
such shares sold after the First Closing are referred to herein as "Additional
Shares." The Additional Shares shall be considered "Shares" and the purchasers
of such Additional Shares (the "Additional Purchasers") shall be considered
"Purchasers" for purposes of this Agreement, and shall have the same rights and
obligations as if they had purchased their shares pursuant to this Agreement at
the First Closing. The maximum number of shares of Series E Preferred the
Company may sell under this Agreement is 21,428,571.
2. Closing Date; Delivery.
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2.1 First Closing Date. The closing of the purchase and sale of the
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Shares hereunder (the "Closing") shall be held at the law offices of Wilson,
Sonsini, Xxxxxxxx & Xxxxxx, 000 Xxxx Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000 at
__________ on __________, 1995, or at such other time, date or place that the
Company and the Purchasers shall agree (which time and date are
referred to in this Agreement as the "Closing Date").
2.2 Delivery. Subject to the terms of this Agreement, at the First
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Closing the Company shall deliver to each Purchaser a certificate, registered in
such Purchaser's name, representing the number of Shares, designated on Schedule
A hereto, to be purchased by the Purchaser against payment of the purchase price
for the Shares by check or wire transfer of immediately available funds, or by
conversion of promissory notes payable by the Company, or by any combination of
such methods of payment.
2.3 Subsequent Closings. The purchase and sale of any Additional Shares
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shall be held at a time and place to be agreed upon by the Company and a
majority-in-interest of the Additional Purchasers purchasing at such closing (a
"Subsequent Closing"), but no later than August 31, 1995. At each Subsequent
Closing, the Company shall deliver to each Additional Purchaser purchasing at
such closing the certificates representing the Additional Shares which such
Additional Purchaser is purchasing against delivery to the Company by such
Additional Purchaser of the purchase price therefor by check or wire transfer
payable to the Company, in the amount specified the appropriate revised Schedule
A. The Company and each Additional Purchaser shall execute and deliver
signature pages to this Agreement.
2.4 Minimum Closing Amount. The Company shall not sell any Shares at the
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First Closing if the aggregate amount to be sold at such closing does not equal
14,285,714 Shares or more.
3. Representations and Warranties of the Company. Except as set forth on
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the Schedule of Exceptions attached hereto as Exhibit C, the Company hereby
represents and warrants to each Purchaser as follows:
3.1 Organization and Standing; Articles of Incorporation and Bylaws.
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The Company is a corporation duly organized and validly existing under, and by
virtue of, the laws of the State of California, is in good standing under such
laws and is authorized to exercise all of its corporate powers, rights and
privileges. The Company has the requisite legal and corporate power and
authority to own, lease and operate its properties and assets and to conduct its
business as presently conducted and as proposed to be conducted. The Company is
qualified to do business as a foreign corporation in each jurisdiction where the
failure to be so qualified would have a material adverse effect on the business
of the Company as now conducted or as proposed to be conducted (as reflected in
the Company's March 1995 Business Plan, a copy of which business plan has
previously been delivered to the Purchaser (the "Business Plan")). True, correct
and complete copies of the Company's Articles, Bylaws and other charter
documents, each as will be in effect at the Closing have been delivered to each
Purchaser.
3.2 Corporate Power. The Company has the requisite legal and
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corporate power to execute and deliver the Agreement, the Fourth Amended and
Restated Shareholders Agreement (the "Amended Shareholders Agreement") and the
Fourth Amended and Restated Registration
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Rights Agreement (the "Amended Registration Rights Agreement") (the Agreement,
Amended Shareholders Agreement and the Amended Registration Rights Agreement are
hereafter collec tively referred to as the "Financing Agreements"), to issue and
sell the Shares hereunder, to issue the Conversion Stock and to carry out and
perform its obligations under the terms of the Financing Agreements.
3.3 No Subsidiaries. The Company has no subsidiaries or affiliated
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companies and does not otherwise own or control, directly or indirectly, any
equity interest in any other corporation, partnership, association or other
business entity.
3.4 Capitalization. The authorized capital stock of the Company
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consists of 75,000,000 shares of Common Stock (the "Common Stock") and
49,508,208 shares of Preferred Stock (the "Preferred Stock"), 2,505,000 of which
are designated Series A Preferred Stock ("Series A Preferred"), 10,274,637 are
designated Series B Preferred Stock ("Series B Preferred"), 12,175,000 of which
are designated Series C Preferred, 3,125,000 of which are designated Series D
Preferred and 21,428,571 of which are designated Series E Preferred Stock.
Immediately prior to the Closing Date, 3,626,939 shares of Common Stock,
2,505,000 shares of Series A Preferred, 10,274,637 shares of Series B Preferred,
11,975,561 shares of Series C Preferred and 3,125,000 shares of Series D
Preferred were issued and outstanding. All such issued and outstanding shares
have been duly authorized and validly issued, are fully paid and nonassessable,
and were issued in compliance with all applicable federal and state securities
laws. The rights, preferences and privileges of the Preferred Stock are as
stated in the Articles. Each share of Series A Preferred, Series B Preferred,
Series C Preferred, Series D Preferred and Series E Preferred is convertible
into one share of Common Stock of the Company. The Company has reserved
49,508,208 shares of Common Stock for issuance upon conversion of the Preferred
Stock. Except for (i) the conversion privileges of the Preferred Stock, (ii)
9,700,000 shares of Common Stock reserved for issuance pursuant to the Company's
1989 Stock Option Plan, under which options to purchase 4,398,300 shares are
currently outstanding and 4,483,011 shares remain available for future grant,
(iii) 100,000 shares reserved for issuance pursuant to the Company's Sales
Representative Stock Purchase Plan, (iv) 131,250 shares of Series C Preferred
Stock reserved for issuance pursuant to the exercise of a warrant to purchase
Series C Preferred Stock, and (v) the rights provided in Section 3 of the
Amended Shareholders Agreement to the Shareholders (as defined therein), at the
closing there will be no other outstanding rights of first refusal, preemptive
rights or other rights, options, warrants, conversion rights, or other
agreements either directly or indirectly for the purchase or acquisition from
the Company of any shares of its capital stock.
3.5 Authorization. All corporate action on the part of the Company,
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its officers, directors and shareholders necessary for the authorization,
execution, delivery and performance of the Financing Agreements and for the
authorization, sale, issuance (or reservation for issuance) and delivery of the
Shares and the Conversion Stock, and the performance of the Company's
obligations hereunder has been taken. The Financing Agreements when executed
and delivered by the Company, will constitute legal, valid and binding
obligations of the Company enforceable against
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the Company in accordance with their respective terms, except as may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws affecting the enforcement of creditors' rights and, with respect to
Amended Registration Rights Agreement except as the enforceability of Section 7
thereof may be limited by public policy. The Shares and the Conversion Stock,
when issued in compliance with the provisions of this Agreement, will be,
validly issued, fully paid and nonassessable, and free of any liens or
encumbrances; provided, however, that the Shares and the Conversion Stock may be
subject to restrictions on transfer under state and/or federal securities laws
as set forth herein. The Shares and the Conversion Stock will be, assuming the
accuracy of the representations set forth in Section 4 hereof, issued in
compliance with the state and/or federal securities laws. The Shares and the
Conversion Stock are not subject to any preemptive rights or rights of first
refusal except as have been waived or satisfied. Except as provided in the
Amended Shareholders Agreement, the Company is not a party or subject to any
agreement or understanding, and, to the Company's knowledge, there is no
agreement or understanding between any persons and/or entities, which affects or
relates to the voting or giving of written consents with respect to any security
or by a director of the Company.
3.6 Financial Statements. The Company has delivered to the Purchaser
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its audited financial statements (balance sheet and statement of operations) and
statement of shareholders' equity for the years ended December 31, 1993 and 1992
and its unaudited financial statements (balance sheet and statement of
operations) and statement of shareholders' equity for the year ended December
31, 1994 and the three (3) month period ended March 31, 1995 (collectively, the
"Financial Statements"). The Financial Statements are complete and correct in
all material respects and have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis for the periods
indicated and with each other. The Xxxxx cial Statements accurately set out
and describe the financial condition and operating results of the Company as of
the dates, and for the periods, indicated therein, subject, in the case of the
unaudited financial statements, to normal year-end audit adjustments. Except as
set forth in the Financial Statements, the Company has no liabilities,
contingent or otherwise, other than (i) liabilities incurred in the ordinary
course of business and (ii) obligations under contracts and commitments incurred
in the ordinary course of business and not required under generally accepted
accounting principles to be reflected in the Financial Statements, which,
individually or in the aggregate, are not material to the financial condition or
operating results of the Company. The Company maintains and will continue to
maintain a standard system of accounting established and administered in
accordance with generally accepted accounting principles.
3.7 Title to Properties; Liens and Encumbrances. The Company has
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good and marketable title to all of its properties and assets. Such properties
and assets are not subject to any mortgage, pledge, lien, security interest,
conditional sales agreement, encumbrance or charge, except liens for current
taxes not yet due and payable. The Company is not in default or in breach and
has not received notice of default of any provision of its leases or licenses
and the Company holds valid leaseholds or licensed interests in the properties
which it leases or which is licensed to it. The Company's properties and assets
are in good condition and repair in all material respects.
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3.8 Intellectual Property Rights. Except as disclosed in Exhibit C,
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the Company (a) owns or has the right to use, free and clear of all liens,
claims and restrictions, all patents, trademarks, service marks, trade names,
copyrights and other intangible or intellectual property rights (and licenses
with respect to the foregoing) needed for or used in the conduct of its business
as now conducted and as proposed to be conducted (as reflected in the Business
Plan) without infringing upon or otherwise acting adversely to the right or
claimed right of any person under or with respect to any of the foregoing, and
(b) is not obligated or under any liability whatsoever to make any payments by
way of royalties, fees or otherwise to any owner of, licensor of, or other
claimant to, any patent, trademark, trade name, copyright or other intangible
assets, with respect to the use thereof or in connection with the conduct of its
business or otherwise. Except as disclosed in Exhibit C, the Company owns or
has the unrestricted right to use all trade secrets, including know-how,
inventions, designs, processes, and technical data required for or incident to
the development, manufacture, operation and sale of all products and services
sold or proposed to be sold by the Company and all of the patents, trademarks,
service marks, trade names, copyrights and trade secrets of the Company are held
by the Company free and clear of any rights, liens or claims of others,
including, without limitation, current and former employees, former employers of
all current and former employees, consultants, officers, directors and
shareholders of the Company.
3.9 Proprietary Information Agreements. All employees and
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consultants of the Company are parties to a written agreement ("Proprietary
Information and Inventions Agreement") under which each such employee or
consultant (i) is obligated to disclose and transfer to the Com pany, without
the receipt by such person of any additional value therefor (other than normal
salary or fees for consulting services), all inventions, developments and
discoveries which, during the period of his employment with or performance of
services for the Company, he makes or conceives of either solely or jointly with
others, that relate to any subject matter with which his work for the Company
may be concerned, or relate to or are connected with the business, products or
projects of the Company, or involve the use of the time, material or facilities
of the Company, and (ii) is obligated to maintain the confidentiality of
proprietary information of the Company. To the best of the Company's knowledge,
none of the Company's employees or consultants, are in violation of the
Proprietary Information and Inventions Agreement to which such employee or
consultant is a party. None of the Company's employees or consultants are
obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or subject to any judgment, decree or order of
any court or administrative agency, that would conflict with their obligation to
use their best efforts to promote the interests of the Company or that would
conflict with the Company's business as conducted or as proposed to be
conducted. Neither the execution nor delivery of the Financing Agreements, nor
the carrying on of the Company's business by its employees and consultants, nor
the conduct of the Company's business as proposed, will conflict with or result
in a breach of the terms, conditions or provisions of, or constitute a default
under, any contract, covenant or instrument under which any of such employees or
consultants are now obligated. The Company does not believe it is or will be
necessary to utilize, and will not utilize, any inventions of any of the
Company's employees or consultants (or people it currently intends to hire) made
or owned prior to
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their employment by the Company or that it is or will be necessary to utilize
any other assets or rights of any of its employees or consultants (or people it
currently intends to hire) made or owned prior to their employment with or
engagement by the Company, in violation of any limitations or restrictions to
which any such employee or consultant is a party or to which any of such assets
or rights may be subject. To the best of the Company's knowledge, none of the
Company's employees or consultants, have taken, removed or made use of any
proprietary documentation, manuals, products, materials, or any other tangible
item from his previous employer, and the Company will not make use of any such
proprietary items in the business of the Company.
3.10 Operating Rights. The Company has all operating authority,
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licenses, franchises, permits, certificates, consents, rights and privileges
(collectively, the "Permits") as are necessary or appropriate to the operation
of its business as now or as proposed to be conducted, the absence of which
would have a material and adverse effect on the business of the Company. Such
Permits are in full force and effect, no violations have been or are expected to
have been recorded in respect of any such Permits, and no proceeding is pending
or threatened that could result in the revocation or limitation of any of such
Permits. The Company has conducted its business so as to comply in all respects
with all such material Permits.
3.11 Manufacturing, Distribution and License Rights. The Company has
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not granted rights or licenses to manufacture, assemble, distribute or sell its
products to any person or entity, is not bound by any agreement that affects the
Company's exclusive right to manufacture, assemble, distribute or sell its
products, and has not licensed or sold any of its technology or proprietary
information to any person or entity.
3.12 Compliance with Other Instruments, None Burdensome, etc. The
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Company is not in violation of any term of its Articles or Bylaws. The Company
is not in violation of any term or provision of any material mortgage,
indenture, contract, agreement, instrument, judgment or decree and the Company
is not in violation of any applicable order, statute, rule or regulation where
such violation would have a material and adverse effect on the Company. The
execution, delivery and performance of and compliance with this Agreement and
the other Financing Agreements and the issuance of the Shares and the Conversion
Stock have not resulted and will not result in any violation of or conflict with
the Company's Articles or Bylaws, and have not resulted and will not result in
any material violation of, or be in conflict with, or constitute a default
under, or result in the creation of, any mortgage, pledge, lien, encumbrance or
charge upon any of the properties or assets of the Company; and there is no such
violation or default or event which, with the passage of time or giving of
notice or both, would constitute a violation or default which would materially
and adversely affect the business of the Company or any of its properties or
assets.
3.13 Litigation, etc. Except as disclosed in Exhibit C, there are no
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actions, suits proceedings or investigations pending against the Company or its
properties before any court or governmental agency (nor is there any threat
thereof) which, either in any case or in the aggregate, might result in any
material adverse change in the business or financial condition of the Company or
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any of its properties or assets, or in any material impairment of the right or
ability of the Company to carry on its business as now conducted or as proposed
to be conducted, or in any material liability on the part of the Company, and
none which questions the validity of this Agree ment and the other Financing
Agreements or any action taken or to be taken in connection herewith or
therewith. The Company is not a party or subject to the provisions of any
order, writ, injunction, judgment or decree of any court or governmental agency
or instrumentality. The foregoing includes, without limitation, actions pending
or threatened (or any basis therefor known to the Company) involving the prior
employment of any of the Company's employees, their use in connection with the
Company's business of any information or techniques allegedly proprietary to any
of their former employers, or their obligations under any agreement with prior
employers. There is no action, suit, proceeding or investigation by the Company
currently pending or which the Company intends to initiate.
3.14 Employee Compensation Plans. Except for the Company's 1989 Stock
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Option Plan and 1991 Sales Representative Stock Purchase Plan, the Company is
not a party to or bound by any currently effective employment contract, deferred
compensation agreement, benefit plan, pension, profit-sharing plan, stock
option, retirement agreement, or other employee compensation agreement. The
Company has provided copies of all such plans, contracts, and agreements to
which the Company is currently a party. The Company is not bound by or subject
to (and none of its assets are bound by or subject to) any arrangement with any
labor union and does not have any collective bargaining agreements covering any
of its employees.
3.15 Insurance. The Company has obtained and maintained in full force
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and effect fire, casualty and liability insurance policies with recognized
insurers with such coverages as are carried by similar companies, sufficient in
amount to allow replacement of the tangible properties of the Company that might
be damaged or destroyed.
3.16 Registration Rights. Except as contemplated by this Agreement
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and the Amended Registration Rights Agreement, the Company is not under any
obligation to register any of its presently outstanding securities or any of its
securities which may hereafter be issued.
3.17 Governmental Consent, etc. No consent, approval or authorization
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of, or designation, declaration or filing with, any governmental authority on
the part of the Company is required in connection with the valid execution,
delivery, and performance of this Agreement and the other Financing Agreements
or the offer, sale or issuance of the Shares or the Conversion Stock, or the
consummation of any other transaction contemplated by this Agreement and the
other Financing Agreements except certain filings as may be under the Securities
Act of 1933, as amended (the "Securities Act") and the California Corporations
Code.
3.18 Offering. Subject to the accuracy of the Purchaser's
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representations in Section 4 hereof, the offer, sale and issuance of the Shares
and the Conversion Stock constitute transactions exempt from the registration
requirements of Section 5 of the Securities Act, and from the qualification
requirements of applicable state or other securities laws.
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3.19 Material Contracts and Obligations. Set forth in Exhibit C
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hereto is a list of all agreements, contracts, indebtedness, liabilities and
other obligations to which the Company is a party or by which the Company is
bound that are material to the conduct and operations of its business and
properties, that provide for payments to or by the Company in excess of $50,000,
that relate to any product or technology the Company is developing, or that
involve transactions or proposed transactions between the Company and its
officers or directors. All of such agreements and contracts are valid, binding
and in full force and effect in all material respects, assuming due execution by
the other parties to such agreements and contracts.
3.20 Tax Returns and Payments. The Company has accurately prepared
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and timely filed all tax returns (foreign, federal, state and local) required to
be filed by it. All taxes shown to be due and payable on said returns, any
assessments received, and all other taxes due and payable by the Company on or
before the date hereof have been paid or will be paid prior to the time they
become delinquent. The federal income tax returns of the Company have not been
audited by the Internal Revenue Service. No deficiency assessment or proposed
adjustment of the Company's foreign or federal income tax or state or local
taxes is pending and the Company has no knowledge of any proposed liability for
any tax to be imposed upon its properties or assets for which the Company has
not adequately reserved.
3.21 Related Party Transactions. No officer or director of the
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Company (a) is an officer, director or general partner of, or directly or
indirectly owns beneficially more than 5% of the equity of, any business which
(i) furnishes or sells services or products which compete with services or
products furnished or sold by the Company, or (ii) purchases from or sells or
furnishes to the Company any goods or services on terms less favorable than the
Company could obtain from third parties, or (b) has a beneficial interest in any
contract or agreement to which the Company is a party or by which it may be
bound or affected involving the payment or receipt of in excess of $10,000.
3.22 Certain Transactions. Except as set forth on Exhibit C attached
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hereto, the Company is not indebted, directly or indirectly, to any of its
officers, directors or shareholders or to their respective spouses or children,
in any amount whatsoever; none of such officers, directors, or shareholders, or
any members of their immediate families, are indebted to the Company or have any
direct or indirect ownership interest in any firm or corporation with which the
Company has a business relationship, or any firm or corporation that competes
with the Company. No officer, director or shareholder, or any member of their
immediate families, is, directly or indirectly, interested in any material
contract with the Company. The Company is not a guarantor or indemnitor of any
indebtedness of any other person, firm or corporation.
3.23 Environmental Protection. Except as disclosed in Exhibit C:
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(a) The Company has not caused or allowed, nor has the Company
contracted with any party for, the generation, use, transportation, treatment,
storage or disposal of
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any Hazardous Substances (as defined below) in connection with the operations of
its business or otherwise.
(b) The Company, the operations of its business, and any real
property that the Company owns, leases, or otherwise occupies or uses (the
"Premises") are in compliance with all applicable Environmental Laws (as defined
below) and orders or directives of any governmental authorities having
jurisdiction under such Environmental Laws including, without limitation, any
Environmental Laws or orders or directives with respect to any cleanup or
remediation of any release or threat of release of Hazardous Substances.
(c) The Company has not received any citation, directive, letter
or other communication, written or oral, or any notice of any proceedings,
claims or lawsuits, from any person, entity or governmental authority arising
out of the ownership or occupation of the Premises, or the conduct of its
operations, nor is it aware of any basis therefor.
(d) The Company has obtained and is maintaining in full force and
effect all necessary permits, licenses and approvals required by any
Environmental Laws applicable to the Premises and the business operations
conducted thereon (including operations conducted by tenants on the Premises)
and is in compliance with all such permits, licenses and approvals.
(e) The Company has not caused, or allowed a release, or a threat
of release, of any Hazardous Substance unto, at or near the Premises nor, to the
best of the Company's knowledge, has the Premises or any property at or near the
Premises ever been subject to a release, or a threat of release, of any
Hazardous Substance.
The term "Environmental Laws" shall mean any federal, state or local
law, ordinance or regulation pertaining to the protection of human health or the
environment including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. Sections 9601, et seq.,
Emergency Planning and Community Right-to-Know Act, 42 U.S.C. Sections 11001, et
seq., and the Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901,
et seq.
The term "Hazardous Substance" includes oil and petroleum products,
asbestos, polychlorinated biphenyls and urea formaldehyde, and any other
materials classified as hazardous or toxic under any Environmental Laws.
3.24 Brokers or Finders. The Company has not incurred, directly or
------------------
indirectly, any liability for brokerage or finders' fees, agent's commission, or
other similar charges in connection with this Agreement or any of the
transactions contemplated hereby.
3.25 Changes. Since March 31, 1995, there has not been:
-------
(a) any changes in the assets, liabilities, financial condition
or operating
-9-
results of the Company from that reflected in the Financial Statements, except
changes in the ordi nary course of business which have not been, in the
aggregate, materially adverse;
(b) any damage, destruction or loss, whether or not covered by
insurance, materially and adversely affecting the assets, properties, financial
condition, operating results, prospects or business of the Company (as such
business is presently conducted and as it is proposed to be conducted);
(c) any waiver by the Company of a valuable right or of a
material debt owed to it;
(d) any satisfaction or discharge of any lien, claim or
encumbrance or payment of any obligation by the Company, except in the ordinary
course of business and which is not material to the assets, properties,
financial condition, operating results or business of the Company (as such
business is presently conducted and as it is proposed to be conducted);
(e) any change or amendment to a material contract or
arrangement by which the Company or any of its assets or properties is bound or
subject;
(f) any material change in any compensation arrangement or
agreement with any employee; or
(g) to the Company's knowledge, any other event or condition of
any character which might materially and adversely affect the assets,
properties, financial condition, operating results or business of the Company
(as such business is presently conducted and as it is proposed to be conducted).
3.26 Foreign Investment in Real Property Act. The Company is not a
---------------------------------------
"United States real property holding corporation" for the purposes of Section
897(c)(2) of the Internal Revenue Code of The United States of America and the
Treasury Regulations thereunder ("FIRPTA").
3.27 Disclosure. No statement by the Company contained in the
----------
Financing Agreements, nor any written statement or certificate furnished or to
be furnished to the Purchaser in connection with the transactions contemplated
hereby including without limitation the Business Plan (when read with other
documents so furnished) contains any untrue statement of a material fact or
omits to state a material fact necessary in order to make the statements
contained herein or therein not misleading in light of the circumstances under
which they were made except that, with respect to the financial projections
contained in the Business Plan, the Company only represents that such
projections where made in good faith.
4. Representations and Warranties of the Purchasers. Each Purchaser,
------------------------------------------------
severally and not jointly, represents and warrants to the Company with respect
to the purchase of the Shares as
-10-
follows:
4.1 Authorization. All action on the part of the Purchaser necessary
-------------
for the authorization, execution, delivery and performance by the Purchaser of
the Financing Agreements has been taken, and the Financing Agreements when
executed and delivered by the Purchaser will constitute valid and binding
obligations of the Purchaser, enforceable in accordance with their terms, except
as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws affecting the enforcement of creditor's rights
and, with respect to the Amended Registration Rights Agreement, except as the
enforceability of Section 7 thereof may be limited by public policy.
4.2 Experience. The Purchaser is experienced in evaluating and
----------
investing in new high technology companies such as the Company.
4.3 Investment. The Purchaser is acquiring the Shares for
----------
investment, for its own account, and not with a view to, or for resale in
connection with, any distribution. The Purchaser understands that the Shares
have not been, and will not be (except as contemplated in the Amended
Registration Rights Agreement) registered under the Securities Act or applicable
state or other securities laws by reason of a specific exemption from the
registration provisions of the Securities Act and applicable state and other
securities laws which depends upon, among other things, the bona fide nature of
the investment intent as expressed herein.
4.4 Rule 144. The Purchaser acknowledges that the Shares must be
--------
held indefinitely unless subsequently registered under the Securities Act and
applicable state and other securities laws or unless an exemption from such
registration is available. The Purchaser is aware of the provisions of Rule 144
promulgated under the Securities Act which permit limited resale of shares
purchased in a private placement subject to the satisfaction of certain
conditions.
4.5 No Public Market. The Purchaser understands that no public
----------------
market now exists for the Shares or the Conversion Stock and that it is unlikely
that a public market will ever exist for the Shares.
4.6 Access to Data. The Purchaser has had an opportunity to discuss
--------------
the Company's business, management and financial affairs with the Company's
management and an opportunity to review the Company's facilities. The Purchaser
understands that such discussions, as well as the written information issued by
the Company, were intended to describe the aspects of the Company's business and
prospects which it believes to be material but were not necessarily a thorough
or exhaustive description.
4.7 Further Limitations on Dispositions. Without in any way limiting
-----------------------------------
the representations set forth above, the Purchaser further agrees that, if at
the time of any transfer of any Shares or Conversion Stock, such Shares or
Conversion Stock shall not be registered under the Securities Act, prior to any
disposition of all or any portion of the Shares or Conversion Stock, the
-11-
Company may require, as a condition of allowing such transfer, that the holder
or transferee furnish to the Company (i) such information as is necessary in
order to establish that such transfer may be made without registration under the
Securities Act; and (ii) at the expense of the holder or transferee, an opinion
by legal counsel designated by such holder or transferee and reasonably
satisfactory in form and substance to the Company, to the effect that such
transfer may be made without registration under the Securities Act.
Notwithstanding the foregoing, no such opinion of counsel shall be necessary for
a transfer pursuant to Rule 144 of the Securities and Exchange Commission or by
a Purchaser which is a partnership to a partner of such partnership or a retired
partner of such partnership who retires after the date hereof, or to the estate
of any such partner or retired partner or to any person or entity that is deemed
to be an "affiliate" of the Purchaser for purposes of the Securities Act.
5. Conditions to Purchasers' Obligations at the Closing. The Purchasers'
----------------------------------------------------
obligation to purchase the Shares at the First Closing or any Subsequent is
subject to the fulfillment on or prior to the Closing Date of each of the
following conditions, any of which may be waived in whole or in part by a
majority-in-interest of the Purchasers.
5.1 Representations and Warranties Correct. The representations and
--------------------------------------
warranties made by the Company in Section 3 hereof shall be true and correct
when made, and shall be true and correct on the Closing Date with the same force
and effect as if they had been made on and as of the same date.
5.2 Covenants. All covenants, agreements, and conditions in this
---------
Agreement required to be performed or complied with by the Company on or prior
to the Closing Date shall have been performed or complied with by the Company.
5.3 Opinion of Counsel. The Purchasers shall have received from
------------------
Wilson, Sonsini, Xxxxxxxx & Xxxxxx, counsel to the Company, an opinion letter
dated as of the Closing Date, substantially in the form attached hereto as
Exhibit D.
5.4 Permits. All governmental and third party approvals, permits,
-------
licenses and waivers necessary or appropriate for consummation of the
transactions to be consummated at the First Closing Date shall have been
obtained.
5.5 Amended and Restated Articles of Incorporation. The Company
----------------------------------------------
shall have filed the Articles with the Secretary of State of the State of
California on or prior to the Closing Date.
5.6 Good Standing Certificates. The Company shall have delivered a
--------------------------
Certificate dated as of a recent date issued by the Secretary of State of the
State of California to the effect that the Company is legally existing and in
good standing and a letter dated as of a recent date from the Franchise Tax
Board of the State of California to the effect that the Company is in good
standing.
-12-
5.7 Officer's Certificate. The Company shall have delivered a
---------------------
certificate or certificates, executed by the Chief Executive Officer or the
President of the Company, dated the Closing Date, certifying to the fulfillment
of the conditions specified in Sections 5.1, 5.2, and 5.4 of this Agreement.
5.8 Secretary's Certificate. The Company shall have delivered a
-----------------------
certificate executed by the Secretary or Assistant Secretary of the Company
dated the Closing Date, certifying the following matters: (a) the resolutions
adopted by the Company's Board of Directors and shareholders relating to the
transactions contemplated by this Agreement; (b) the Articles of the Company;
(c) the Bylaws of the Company; and (d) incumbency of officers of the Company.
5.9 Stock Certificate. The Company shall have delivered to each
-----------------
Purchaser a certificate for the number of Shares set forth opposite such
Purchaser's name on Schedule A hereto.
5.10 Legal Investment. At the Closing Date, the purchase of the
----------------
Shares by the Purchasers hereunder shall be legally permitted by all laws and
regulations to which the Purchasers and the Company are subject.
5.11 Shareholders Agreement. The Company and the Purchasers shall
----------------------
have entered into the Amended Shareholders Agreement.
5.12 Registration Rights Agreement. The Company and the Purchasers
-----------------------------
shall have entered into the Amended Registration Rights Agreement substantially
in the form attached hereto as Exhibit E.
6. Conditions to Company's Obligations at the Closing. The Company's
--------------------------------------------------
obligation to issue, sell and deliver the Shares at the First Closing or any
Subsequent is subject to the fulfillment at or prior to the Closing Date of the
following conditions, any of which may be waived in whole or in part by the
Company in accordance with the provisions of Section 7.2 hereof:
6.1 Representations and Warranties Correct. The representations and
--------------------------------------
warranties made by the Purchasers in Section 4 hereof shall be true and correct
when made, and shall be true and correct on the Closing Date with the same force
and effect as if they had been made on or as of the same date.
6.2 Permits. All governmental and third party approvals, permits,
-------
licenses and waivers necessary or appropriate for consummation of the
transactions to be consummated at such Closing shall have been obtained.
6.3 Amended and Restated Articles. The Articles shall have been
-----------------------------
filed with the Secretary of State of the State of California.
-13-
6.4 Payment of the Purchase Price. The Purchasers shall have
-----------------------------
delivered to the Company the purchase price for the Shares to be purchased
hereby.
7. Miscellaneous.
--------------
7.1 Attorneys' Fees. If either the Company or the Purchasers bring
---------------
any suit, action, counterclaim, or arbitration to enforce the provisions of this
Agreement, the prevailing party therein shall be entitled to recover a
reasonable allowance for attorneys' fees and litigation expenses in addition to
court costs. "Prevailing Party" within the meaning of this section includes,
without limitation, a party who agrees to dismiss an action or proceeding upon
the other party's payment of the sums allegedly due or performance of the
covenants allegedly breached, or who obtains substantially the relief sought by
it.
7.2 Waivers and Amendments. With the written consent of the holders
----------------------
of two-thirds of the Shares, the obligations of the Company under this Agreement
may be waived (either generally or in a particular instance, either
retroactively or prospectively and either for a specified period of time or
indefinitely), and with the same consent, the Company, when authorized by
resolution of its Board of Directors, may enter into a supplementary agreement
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement.
7.3 Governing Law. This Agreement shall be governed in all respects
-------------
by the laws of the State of California as such laws are applied to agreements
between California residents entered into and to be performed entirely within
California.
7.4 Survival. The representations, warranties, covenants and
--------
agreements made herein shall survive any investigation made by the Purchaser and
the closing of the transactions contemplated hereby. All statements as to
factual matters contained in any certificate or other instrument delivered by or
on behalf of the Company pursuant hereto or in connection with the transactions
contemplated hereby shall be deemed to be representations and warranties by the
Company hereunder as of the date of such certificate or instrument.
7.5 Successors and Assigns. Except as otherwise expressly provided
----------------------
herein, the provisions hereof shall inure to the benefit of, and be binding
upon, the successors, assigns, heirs, executors and administrators of the
parties hereto.
7.6 Entire Agreement. This Agreement constitutes the full and entire
----------------
understanding and agreement between the parties with regard to the subjects
hereof.
7.7 Severability of this Agreement. In case any provision of this
------------------------------
Agreement shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
-14-
7.8 Finder's Fees. The Company represents and warrants that it has
-------------
retained no finder or broker in connection with the transactions contemplated by
this Agreement and hereby agrees to indemnify and to hold the Purchasers
harmless of and from any liability for commission or compensation in the nature
of a finder's fee to any broker or other person or firm (and the costs and
expenses of defending against such liability or asserted liability) for which
the Company, or any of its employees or representatives, are responsible. Each
Purchaser represents and warrants that such Purchaser has retained no finder or
broker in connection with the transactions contemplated by this Agreement and
hereby agrees to indemnify and to hold the Company harmless of and from any
liability for any commission or compensation in the nature of a finder's fee to
any broker or other person or firm (and the costs and expenses of defending
against such liability or asserted liability) for which such Purchaser, or any
of its employees or representatives, are responsible.
7.9 Legends. Each certificate representing the Shares shall be
-------
endorsed with a legend in substantially the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE
SOLD, TRANSFERRED, ASSIGNED OR HYPOTHE CATED UNLESS THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE ACT COVERING SUCH SECURITIES, THE SALE IS
MADE IN ACCORDANCE WITH RULE 144 OR ITS SUCCESSOR RULE UNDER THE ACT, OR
THE COMPANY RECEIVES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT
AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
Each certificate representing the Shares shall also bear any legend required by
any applicable state securities law. The Company need not register a transfer of
Shares, unless the conditions specified in the foregoing legends are satisfied.
The Company may also instruct its transfer agent not to register the transfer of
any of the Shares unless the conditions specified in the foregoing legend is
satisfied.
7.10 Removal of Legends and Transfer Restrictions. The legend
--------------------------------------------
relating to the Securities Act endorsed on a stock certificate pursuant to
Section 8.9 of this Agreement and the stop transfer instructions with respect to
the Shares represented by such certificate shall be removed and the Company
shall issue a certificate without such legend to the holder of such Shares if
such Shares are registered under the Securities Act and a prospectus meeting the
requirements of Section 10 of the Securities Act is available or if such holder
provides to the Company an opinion of counsel reasonably satisfactory to the
Company to the effect that a public sale, transfer or assignment may be made
without registration or if the Shares may be sold pursuant to Rule 144(k) of the
Securities Act of 1933.
7.11 Titles and Subtitles. The titles of the sections and subsections
--------------------
of this Agreement are for convenience of reference only and are not to be
considered in construing this Agreement.
-15-
7.12 Counterparts. This Agreement may be executed in counterparts,
------------
each of which shall be an original, but all of which together shall constitute
one instrument.
7.13 Delays or Omissions. It is agreed that no delay or omission to
-------------------
exercise any right, power or remedy accruing to the Purchasers, upon any breach
or default of the Company under this Agreement, shall impair any such right,
power or remedy, nor shall it be construed to be a waiver of any such breach or
default, or any acquiescence therein, or of or in any similar breach or default
thereafter occurring; nor shall any waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring. It is further agreed that any waiver, permit, consent or approval of
any kind or character by any Purchaser of any breach or default under this
Agreement, or any waiver by any Purchaser of any provisions or conditions of
this Agreement must be in writing and shall be effective only to the extent
specifically set forth in writing and that all remedies, either under this
Agreement, or by law or otherwise afforded to the Purchasers, shall be
cumulative and not alternative.
7.14 Notices. All notices and other communications required or
-------
permitted hereunder shall be in writing and shall be deemed effectively given
upon personal delivery or upon deposit with the United Stated Post Office, by
first class mail, postage prepaid, addressed: (a) if to a Purchaser, at such
Purchaser's address set forth on Schedule A attached hereto, or at such other
address as such Purchaser shall have furnished to the Company in writing, or (b)
if to the Company, at the Company's address as set forth below, or at such other
address as the Company shall have furnished to the Purchaser in writing:
To the Company:
--------------
QuickLogic Corporation
0000 Xxxxxx Xxxx Xxxx, Xxx. 000X
Xxxxx Xxxxx, XX 00000
Attn: President
7.15 Transaction Fees and Expenses. The Company shall pay the
-----------------------------
reasonable fees and costs of the Purchasers' special counsel, in connection with
the transactions contemplated by this Agreement; provided, however, that the
Company shall not be obligated to pay fees incurred by Purchasers' special
counsel in excess of $__________.
-16-
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered by their proper and duly authorized officers as of the
day and year first written above.
THE COMPANY:
QUICKLOGIC CORPORATION
By /s/
______________________________
Title___________________________
"Purchaser"
________________________________
Print Individual or Entity Name
By: /s/
_____________________________
Signature
________________________________
Print Signatory's Name
________________________________
Title of Agent*
* Agent, officer, partner
trustee, etc.
-17-
SCHEDULE A
----------
Schedule of Purchasers
----------------------
NAME/ADDRESS NUMBER PURCHASE
------------ OF PRICE
SHARES -----------------------
OF ACCRUED
STOCK CASH PRINCIPAL INTEREST TOTAL
------ ---- --------- -------- -----
EXHIBIT C
QUICKLOGIC CORPORATION
SERIES E PREFERRED STOCK PURCHASE AGREEMENT
SCHEDULE OF EXCEPTIONS
The disclosures set forth in this Schedule of Exceptions are itemized to
correspond to the first or principal section of the QuickLogic Corporation
Series E Preferred Stock Purchase Agreement (the "Agreement") to which they
relate. Each of the disclosures made herein shall qualify each of the sections
of the Agreement to which they relate.
Section 3.4 Capitalization
--------------
The Company has authorized 175,000 shares of Series C Preferred Stock in
order to enable the Company to issue Preferred Stock Warrants to banks and/or
equipment lessors in connection with debt financing which may be provided by
such entities.
Section 3.7 Title to Properties; Liens and Encumbrances.
-------------------------------------------
The Company owns no real property. The Company has leased certain office
and manufacturing equipment used in its business and does not own such
equipment. The aggregate value of such equipment is approximately $500,000.
Section 3.8 Intellectual Property Rights.
----------------------------
With respect to the representation that the Company has the unrestricted
right to use all trade secrets, including know-how, inventions, design processes
and technical data, the Company has not conducted an investigation or audit of
its or third parties' intellectual property rights or its or third parties'
proprietary rights, nor has it retained patent counsel for that purpose. The
exceptions to the representations contained in Section 3.8 that the Company is
currently aware are set forth below, however the Company's business is in a
field where intellectual property litigation is frequent. Additional claims
and/or litigation maybe brought.
Licenses.
--------
The Company has granted certain technology license rights and manufacturing
rights to VLSI Technology, Inc. ("VLSI") pursuant to an agreement dated May 9,
1990, as amended (the "VLSI" Agreement"). The Company has granted certain
technology license rights and manufacturing rights to Cypress Semiconductor
Corp. ("Cypress") pursuant to an agreement dated October 2, 1992 (the "Cypress
Agreement").
Actel Litigation.
----------------
On January 20, 1994, Actel Corporation filed suit against QuickLogic
alleging infringement by QuickLogic of U.S. Patents No. 4,758,745; 4,873,459;
5,055,718; and 5,198,705. Plaintiff seeks damages and injunctive relief. On or
about February 10, 1994, QuickLogic filed an answer and counter-claim seeking in
the counter-claim a declaration that each of the patents alleged to be infringed
was not infringed and in addition that each of the patents upon which suit was
brought was invalid, void and unenforceable. Discovery has begun. QuickLogic
moved to stay proceedings pending reexamination of two patents involved in the
litigation and the court granted this motion in early Summer 1994. The United
States Patent and Trademark Office confirmed the patentability of the two Actel
patents placed in reexamination (the '745 and the '459 patents) in late summer
and early fall 1994. The court then lifted the stay in late November 1994 and
shortly thereafter Actel filed a motion for summary judgment with respect to
claim 1 of the '718 patent. QuickLogic has opposed Actel's motion. The court
has scheduled a two hour tutorial on the technology for June 30, 1995. No
hearing has been set for the summary judgment motion.
Actel on or about March 15, 1995 amended its complaint to add to the suit
U.S. Patent No. 5,367,208 (the "'208 patent"), a patent which issued on November
22, 1994 and which is assigned to Actel. On or about April 12, 1995, QuickLogic
filed a counterclaim against Actel alleging infringement by Actel of QuickLogic
U.S. Patents No. 5,220,213 (the "'213 patent") entitled "Programmable
Application in Specific Integrated Circuit and Logic Cell Therefore" and
5,396,127 (the "'127 patent"), entitled "Programmable Application in Specific
Integrated Circuit and Logic Cell Therefore". This counterclaim was in response
to the amended complaint filed by Actel against QuickLogic on or about March 15,
1995.
A trial date has been set for September 23, 1996.
Instant Circuit Corporation.
---------------------------
The Company has received correspondence from Instant Circuit Corporation
"ICC") alleging that the Company's technology may infringe one or more of ICC's
patents. The Company and its patent counsel have reviewed the ICC patents and
have notified ICC that the Company does not believe that the Company's
technology infringes ICC's patents. ICC has responded by letter dated February
5, 1992 reiterating its belief that the Company's products infringe ICC's
patents, but indicating ICC's intent to wait to see whether the Company's
products are successful in the marketplace before pursuing the matter.
On June 12, 1992, the Company received a letter from Xilinx requesting the
Company to review Xilinx's patent 4,870,302 entitled "Configurable Electrical
Circuit Having Configurable Logic Elements and Configurable Interconnects" and
stating Xilinx's belief that at least one claim under that patent is infringed
by the Company's products. No litigation has been instituted by Xilinx, and
there has been no correspondence between the Company and Xilinx regarding this
matter during the year preceding the Closing Date. While the Company does not
believe that there is any basis for a legal claim by Xilinx,
there can be no assurance that Xilinx will not elect to take further legal
action in the future. Such legal action, if instituted, could have a material
adverse effect on the Company's business.
See disclosure under Section 3.9.
Section 3.9 Proprietary Information Agreements.
----------------------------------
Actel has claimed that QuickLogic has misappropriated the trade secrets of
Actel based, at least in part, upon the fact that Xxxx Xxxxxxx, a founder of
QuickLogic, performed consulting services for Actel prior to and allegedly after
joining the Company.
Section 3.11 Manufacturing, Distribution and License Rights.
----------------------------------------------
The Company has granted certain rights to VLSI and Cypress pursuant to the
VLSI Agreement and the Cypress Agreement, respectively.
Section 3.13 Litigation
----------
See the discussion of the Actel, Xilinx and ICC and other issued discussed
in Section 3.8 above.
Section 3.19 Material Contracts and Obligations.
----------------------------------
The following is a list of all agreements and obligations described in
Section 3.19:
1. VLSI Agreement.
2. The Company subleases its facility at 0000 Xxxxxx Xxxx Xxxx. Its
current lease is due to expire on December 31, 1996.
3. Software OEM Distribution Agreement with Data I/O, Inc. pursuant
to which the Company obtained rights to sublicense certain Data I/O software on
an OEM basis. The Company is required to make annual royalty payments of up to
$100,000 to Data I/O pursuant to this Agreement.
4. Employee Restricted Stock Purchase Agreements between the Company
and each of the founders and option agreements with persons who have been
granted options.
5. Cypress Agreement.
The Company also has outstanding miscellaneous licensing agreement with
entities including Synopsis, Simplicity, SimulCad, Saros, and Premia. None of
these agreements currently involve annual payment obligations in excess of
$50,000.
-3-
Section 3.21 Related Party Transactions. The Company has entered into
---------------------------
the Cypress
Agreement with Cypress. See also Section 3.22 below regarding loans to Xxxx
Xxxxxxx and from certain shareholders of the Company.
Section 3.22 Certain Transactions.
--------------------
The Company has loaned Xxxx Xxxxxxx $114,000, evidenced by demand
promissory notes from Xx. Xxxxxxx to the Company secured by a pledge of Xx.
Xxxxxxx'x shares of the Company's stock. These loans were approved by the
Company's Board of Directors and shareholders.
The Company has obtained loans with a principal amount of approximately
$4.639 million from certain entities, including certain shareholders of the
Company, evidenced by promissory notes made by the Company. The Company expects
all such promissory notes to be converted into Series E Preferred Stock of the
Company pursuant to this Agreement.
-4-
