Exhibit 10.7
* Certain confidential information contained
in this document, marked by brackets, has
been omitted and filed separately with the
Securities and Exchange Commission pursuant
to Rule 406 of the Securities Act of 1933,
as amended.
AGREEMENT
BETWEEN OPLINK AND CORNING
This document sets out an agreement ("the Agreement"), made and entered
into this 2nd day of July 1999 (the "Effective Date"), by and between Corning
Incorporated ("Corning") and Oplink Communications, Inc. ("Oplink").
WHEREAS, Corning and Oplink desire to establish certain business
relationships, as further described and subject to the terms and conditions
below, including: a) an equity investment by Corning in Oplink; b) the supply by
Corning to Oplink of certain materials ("Materials") to be incorporated into
Oplink products; and c) the supply by Oplink to Corning of certain components
("Components") for use and/or resale by Corning;
NOW, THEREFORE, in consideration of the premises hereof, and the mutual
promises and agreements hereinafter set forth, Corning and Oplink ("the
Parties"), intending to be legally bound, do hereby agree as follows:
1. EQUITY INVESTMENT.
1.1 At the time of the signature of this Agreement by the Parties ("xxx
Xxxxxxx"), both Parties will sign and be legally bound by the Series D Preferred
Stock Purchase Agreement and Amendment Number One thereto (together, "the
Investment Agreement"), attached hereto as Exhibit 1, under which Corning will
purchase $2 million of Series D Preferred Stork of Oplink ("the Purchased
Stock") at the price of $3 per share.
1.2 The Investment Agreement will contain provisions to establish and
ensure, until at least January 1, 2002, that Corning will have the night to have
an observer on the Oplink board.
1.3 Corning will have the option ("the Resell Option") to resell the
Purchased Stock to Oplink if either.
(a) Xx. Xxxxxxx ceases (for reasons other than death or poor health)
at any time prior to April 1, 2001, to be the President and Chief Executive
Officer of Oplink (a "Management Change") or
(b) Oplink fails to establish a manufacturing facility in the Peoples
Republic of China capable of manufacturing, no later than April 1, 2001,
the items listed in Appendix A (the "PRC Manufacturing Condition")
If either of these events occur, Corning may exercise this Resell Option by
written notice to Oplink (i) in the event of a Management Change, at any time
within 60 days thereafter, or (ii) in the event of a failure to meet the PRC
Manufacturing Condition, at any time prior to
1
June 1, 2001 (the "Put Notice"), Within one hundred and eighty (180) days of
such notice, Oplink will repurchase the Purchased Stock (and any other Oplink
stock which may be issued to Corning as dividends on such Purchased Stock) from
Corning at the per-share price used in the last sale of shares by Oplink (to an
unrelated party on arm's-length terms) prior to such notice; provided, however,
that if this last sale was of common shares, and the most recent previous sale
of preferred shares was at a higher price, then the repurchase price from
Corning will be that higher, previous price for preferred shares,
Notwithstanding any other terms hereof, Corning's Resell Option will terminate
in the event of, and on the effective date of, the occurrence of either of the
following (if the event occurs prior to delivery of the Put Notice): a) an
initial public offering of Oplink stock; or b) a Change of Control Transaction
by Oplink. For purposes of this Agreement, a "Change of Control Transaction"
means a merger with a third party, the acquisition by a third party of a
majority of a Party's equity, the effective transfer to a third party of the
control of a Party; or the sale of all or substantially all of a Party's assets
to a third party. The Resell option rights granted to Corning in this Section
1.3 shall not be assignable to any transferee of the Purchased Stock, except
with the prior written consent of the Company, which consent shall not be
unreasonably withheld. Once delivered, the Put Notice shall be irrevocable,
except with the mutual written consent of both the party exercising the Resell
Option and the Company. Nothing in this Section 1.3 shall be construed to
obligate the Company to make any payment that would violate applicable corporate
laws intended to protect the nights of creditors; rather, if any portion of the
payment required under this Section 1.3 would cause any such violation, then the
Company shall be relieved of its obligation to make such portion of such payment
until (and only until) such remaining amount may be paid in compliance with
applicable corporate laws.
1.4 At the Closing, Oplink will deliver to Corning an opinion of counsel,
in a form satisfactory to Corning, that:
(a) Oplink is a duly incorporated corporation and has the power to
enter into, execute and deliver this Agreement;
(b) the terms of this Section 1: (i) constitute valid, enforceable
and legally binding obligations of Oplink; (ii) do not violate any
provision of California or other laws; (iii) have been duly and validly
authorized and approved by Oplink's Board of Directors; (iv) can be validly
entered into, executed, and performed by Oplink, and all actions necessary
for such have been taken; (v) do not violate any of the provisions of
Oplink's Certificate of Incorporation or By-Laws; (vi) do not violate, to
counsel's knowledge, the provisions of any order, judgment, injunction,
decree of any court or other governmental authority applicable to it; (vii)
do not result in a violation, to counsel's knowledge, of the provisions or
terms of any stock purchase agreement or other agreement between Oplink and
any of its shareholders or any party holding any option, warrant or other
rights to any Oplink shares; and (viii) do not result in a breach, to
counsel's knowledge, of any material contract, agreement or other
instrument to which Oplink is a party or by which it or any of its
properties, rights or assets may be bound.
2. CORNING SUPPLY OF MATERIALS TO OPLINK
2.1 The Materials to be purchased by Oplink from Corning hereunder include
only: a) the Materials listed in Appendix A; and b) any other Materials which
Corning notifies Oplink, in writing, will be included in the Materials.
2
2.2 Oplink will purchase all of its external requirements for Materials
from Corning; provided, however, that Oplink will not be obligated to purchase
any quantity of any item of Materials from Corning:
(a) if Oplink's external requirements for that quantity of that item
are already satisfied by existing Oplink contractual commitments or future
contractual commitments made by Oplink as reasonably necessary to meet its
requirements for Materials under circumstances set out in subparagraphs b.
through d. below;
(b) if Corning does not offer that quantity of that item on "Market
Terms," where "Market Terms" means terms (including price, vendor
discounts, quality, delivery terms, and reliability) at least as favorable
to Oplink as the terms offered to Oplink by another qualified, reliable
supplier for the same item of Materials in the same quantity;
(c) if Corning refuses to allocate appropriate internal capacity to
meet its delivery commitments to Oplink for that quantity of that item; or
(d) if Corning rejects Oplink's order for that quantity of that item,
or Corning fails to deliver that quantity of that item within fourteen (14)
days of the date on which Corning was obligated to deliver it.
3. OPLINK SUPPLY OF COMPONENTS TO CORNING
3.1 The Components to be purchased by Corning from Oplink hereunder are any
and all products:
which are listed in Appendix A;
which are shown as being available from Oplink in any publicly
available Oplink literature; or
which conform to confidential Corning specifications and are within
Oplink's manufacturing capabilities.
3.2 At Corning's option, the Components purchased by Corning from Oplink
hereunder: will bear the "Corning" trademark; and/or will be resold by Corning
under the Corning tradename.
3.3 The Components to be purchased by Corning hereunder will be
manufactured by Oplink at the Oplink facility designated by Corning, provided
that, at that facility, Oplink has the capability and capacity to manufacture
the Components that Corning orders from Oplink.
3.4 Unless and until Corning has failed to meet its Volume Targets set out
in paragraph 3.6 below, Oplink will offer to supply to Corning any quantity of
any item of Components which is within Oplink's manufacturing capacity (subject
to pre-existing contractual obligations of Oplink). Except as set out in 3.5
below, Oplink will offer such Components on "Competitive Terms," where
"Competitive Terms" means terms (including
3
price, quality and reliability) which are at least as favorable to Corning as
the most favorable to Corning of:
(a) the terms offered by Oplink to any other customer for the same or
similar Components, in the same or lesser quantities; and
(b) [ * ] % of the price offered to Corning by another qualified,
reliable supplier for the same or similar Components, in the same quantity,
on similar terms.
Corning will not disclose the price offered by Oplink, or the terms of this
Agreement, to any other supplier or potential supplier of Components to Corning,
without Oplink's express prior written consent.
3.5 If Corning expressly specifies the use of specific Corning Materials in
any Oplink Component to be purchased by Corning hereunder, Oplink will use those
Corning Materials in that Oplink Component to be sold to Corning. If Corning
does not offer such Corning Materials to Oplink on Market Terms, then Oplink
will not be obligated to offer such Oplink Component to Corning on Competitive
Terms. In this case, the Parties will negotiate in good faith a price for that
Component which represents Competitive Terms adjusted only as necessary to
compensate for the difference between the price of the Corning Materials and the
Market Terms for the same Materials.
3.6 Oplink's obligations hereunder to offer Components for Sale to Corning,
on the terms described above, are expressly conditioned on Corning purchasing
Components from Oplink, in 1999 through 2003, in quantities having a total
invoice value equal to or greater than the amounts set out below for each year
("Volume Targets"). If Corning fails to purchase from Oplink the Volume Target
in any year, then, until the first day of the first year after any subsequent
year in which Corning purchases the Volume Target from Oplink: Oplink will have
no obligation to offer any Components for sale hereunder; the pricing and volume
of any Components will be established by negotiation; and Oplink's purchase
commitments under paragraph 2.2 above will not apply.
VOLUME TARGETS
----------------------------------------
YEAR 1999 2000 2001 2002 2003
TOTAL INVOICE VALUE [ * ] [ * ] [ * ] [ * ] [ * ]
(IN US$ MILLIONS)
3.7 For purposes of determining whether Corning has purchased the Volume
Target under paragraph 3.6 above in any year, the quantities described below
will be deemed to have been purchased by Corning in that year and included in
the calculation of the Volume Target for that year.
(a) Any quantity of any Component which Oplink has qualified to
Corning's specifications and which Corning, reasonably and in good faith,
requests that Oplink supply on Competitive Terms in that year, but Oplink
refuses to supply on such terms.
---------------------------------
*CONFIDENTIAL TREATMENT REQUESTED
4
(b) Any quantity of any Component which Oplink agrees to deliver to
Corning in that year, but which Oplink fails to deliver to Corning in that
year for any reason other than a request by Corning to delay delivery.
4. MANAGEMENT OF SUPPLY RELATIONSHIPS.
4.1 The Parties will meet on a regular basis (at least once every quarter
unless otherwise agreed) to review the performance of each Party's supply and
purchase obligations and/or targets, and to plan any future capacity needs. Such
reviews shall include, but not be limited to:
Supplier performance in respect of quality, on time deliveries, and
lead times;
Purchaser capacity needs and forecasts;
Status of any purchase obligations or targets;
Purchase price and market price and opportunities to reduce cost and
purchase price; and
Opportunities to enhance product performance or reliability.
Corning and Oplink will each appoint a person to implement the above
procedures.
4.2 Each Party supplying to the other hereunder will notify the purchasing
Party as soon as possible of any problem or delay in delivery, together with a
proposal on how the delay will be rectified.
5. PATENT LICENSE NEGOTIATION. If Corning requests, prior to April 1, 2002, a
license to one Or more Oplink patent(s) granted or applied for prior to April 1,
1999, Oplink will meet with Corning to negotiate, in good-faith, Corning's
request to license such patents (subject to any prior obligations of Oplink).
6. TERM AND TERMINATION.
6.1 This Agreement will come into force on the date of its execution by the
last Party to sign it, as shown in the signature block. This Agreement will
continue in force until the earlier of:
(a) termination by either Party under paragraph 6.2 below; or
(b) January 1, 2004, unless extended or renewed by written agreement
of the Parties.
The rights set out in Section 1 above will continue for the period set out
therein, regardless of any prior termination of this Agreement.
5
6.2 This Agreement may be terminated by either Party:
(a) in the event that the other Party materially breaches this
Agreement and such breach is not remedied after thirty days' notice;
(b) in the event that the other Party enters into a Change of Control
Transaction (as defined in paragraph 1.3 above); or
(c) in the event that the other party enters into any form of
bankruptcy or insolvency process.
6.3 The rights to terminate this Agreement shall not prejudice any other
right or remedy in respect of the breach concerned (if any) or any other breach.
6.4 Upon termination of this Agreement for any reason, subject as otherwise
provided in this Agreement and to any rights or obligations which have occurred
prior to termination, neither party shall have any further obligation to the
other under this Agreement.
7. FORCE MAJEURE
7.1 Neither party shall be liable hereunder to the other for any loss,
injury, delay or damage suffered or incurred by the other party due to fire,
storm, explosion, acts of God, war, supervening legislation, governmental or
other regulations and directions or any other cause beyond the reasonable
control of either party and any failure or delay by either party in the
performance of any of its obligations under this Agreement due to any of the
foregoing causes shall not be considered a breach of this Agreement and shall
not give rise to any liability.
7.2 Should the delivery of any order by either Party be delayed by any
cause beyond the reasonable control of that Party: the delayed Party will
promptly give the other Party notice of the delay and its cause; the time for
delivery of that order shall be extended for a reasonable period in light of the
urgency of the receiving Party's need for the delayed goods; and the delayed
Party will take all commercially reasonable actions to remedy or reduce the
delay. In the event that a circumstance of force majeure continues for a period
of three (3) weeks then the receiving party can terminate the order at no cost
or liability to itself
8. REPRESENTATIONS AND WARRANTIES
Each Party represents and warrants to the other Party as follows:
8.1 CORPORATE ORGANIZATION. It is a corporation duly organized, validly
existing and in good standing under the laws of its respective Jurisdiction.
8.2 POWER AND AUTHORITY TO ENTER INTO THIS AGREEMENT. It has the corporate
power and authority to enter into this Agreement and to consummate the
transactions contemplated hereby.
8.3 CORPORATE PROCEEDINGS; VALIDITY; ENFORCEABILITY. The execution,
delivery and performance of this Agreement by it and on its behalf has been duly
and validly authorized and
6
approved by its Board of Directors and it has taken all such other action as is
necessary or required to enter into, execute and deliver this Agreement, and to
perform its obligations hereunder and this Agreement constitutes its valid and
legally binding obligation, enforceable in accordance with the terms and
conditions hereof.
8.4 NO VIOLATION. The execution and delivery of this Agreement and the
other agreements and instruments executed or to be executed and delivered by it
in connection herewith and the consummation of the transactions contemplated
hereby will not in any material manner (i) violate any provision of law, (ii)
violate any of the provisions of its Certificate of Incorporation or By-Laws,
(iii) violate the provisions of any order, judgment, injunction, decree of any
court or other governmental authority applicable to it; (iv) violate the
provisions or terms of any stock purchase agreement or other agreement between
Oplink and any of its shareholders or any party holding any option, warrant or
other rights to any Oplink shares; or (v) result in a breach of any material
contract, agreement or other instrument to which it is a party or by which it or
any of its properties, rights or assets may be bound.
8.5 BROKERS. No broker, agent or finder has been retained by it with
respect to this Agreement or the transactions contemplated hereby.
9. COVENANTS.
9.1 Neither Party will make any announcement with respect to this Agreement
or the transactions contemplated by it, and each Party will keep the same
confidential until such time as may be mutually agreed upon by them. If any
Party determines that it is required by law to make any public disclosure of
this Agreement or any transaction contemplated herein, it will inform the other
Party of such determination. The Parties will then attempt, in good faith
negotiation, to agree upon the text of a joint public announcement or the text
of one or more separate public announcements with respect thereto.
9.2 Oplink will not enter into any agreement, or issue any equity or rights
to equity on any terms, that would conflict with, violate, or impair Corning's
rights under, any provision of this Agreement; provided, however, that Oplink
will not breach this term by entering into line of credit and/or bank financing
agreements with terms that are typical and reasonable in such agreements.
10. SURVIVAL AND INDEMNIFICATION
10.1 SURVIVAL OF REPRESENTATION AND WARRANTIES. Notwithstanding any
investigation made by or on behalf of any Party at any time, all the terms,
conditions, warranties, representations and indemnities set forth in this
Agreement, including the Exhibits, or Appendices, certificate, document or
other instrument delivered in connection herewith, shall survive the transfer of
shares and the execution hereof for a period of only two years from and after
the date hereof.
10.2 INDEMNIFICATION BY EACH PARTY. Each Party will indemnify and hold
harmless the other Party from and against any and all claims, liabilities,
losses, suits, and expenses (including reasonable attorneys fees) ("Loss") that
arise by virtue of or based upon or arise out of
7
or result directly from the inaccuracy or breach of any representation or
warranty made by that Party in Section 8 of this Agreement.
10.3 CLAIMS FOR REIMBURSEMENT. If any Party ("the Indemnified") shall have
suffered any Loss or receive any formal claim for a Loss covered by
indemnification of paragraph 10.2 above, it will give the other Party ("the
Indemnifier") prompt written notice of the nature and amount of such Loss or
claim. The Indemnifier will have 30 days from the date of such notice to
investigate and dispute the nature, validity or amount of any such Loss or
claim. During such thirty-day period, the Indemnifier will have reasonable
access, during normal business hours, to the books and records of the
Indemnified for the purpose of such investigation.
If the Indemnifier disputes the nature, validity or amount of such Loss or
claim, it will give the Indemnified written notice of such dispute within such
thirty-day period, and the Parties will attempt in good faith to resolve such
dispute promptly.
In the absence of any such dispute, the Indemnifier will promptly, and in
any event not later than the expiration of such thirty-day period, reimburse the
Indemnified for such Loss or defend the claim giving rise to such potential
Loss.
If the Indemnifier disputes only the amount of the Loss, it will promptly
pay to the Indemnified any undisputed portion of the Loss.
11. DISPUTE RESOLUTION. If there is any dispute between the Parties hereto,
related to the validity, legality, enforceability, execution, interpretation,
indemnification, representations, warranties, or other terms hereof, that
dispute shall be finally settled by arbitration. The arbitration shall be held
in New York, New York and shall be conducted if in accordance with the
then-prevailing rules of the American Arbitration Association by one arbitrator
appointed by agreement of the Parties. A decision or award of the arbitrator
shall be final and may be entered as a final Judgment in any court, state or
federal, having jurisdiction, and the costs of the arbitration shall be
apportioned as the arbitrator shall determine.
12. GENERAL PROVISIONS
12.1 EXPENSES. Each Party shall be responsible for and bear its own costs
and expenses in connection with or arising out of the negotiation and execution
of this Agreement, including without limitation any broker, agent or finder's
fees, and the consummation of the transactions provided for herein and any
investigation related thereto.
12.2 AMENDMENT AND WAIVER. This Agreement may be amended, modified or
supplemented only in writing executed by both Parties hereto making specific
reference to this Agreement and stating the plan or intention to modify or
supplement it and may be waived only in writing executed by the Party making
such waiver which writing shall make specific reference to this Agreement and
state the intention to waive particular provisions of it.
12.3 EFFECT OF WAIVER. No waiver of any breach of any provision of this
Agreement will be held to be a waiver of any other or subsequent breach, and the
failure of a Party to enforce at any time any provision hereof, will not be
deemed a waiver of any right of any such Party to subsequently enforce such
provision or any other provision hereof.
8
12.4 NO ASSIGNMENT. No Party will assign in whole or in part this Agreement
or its respective rights and obligations hereunder without the prior written
consent of the other Party. Absent such consent, any attempted assignment will
be null and void, except that Corning may assign this Agreement or any right or
obligation hereunder to any parent, subsidiary, or affiliate of Corning.
12.5 NOTICES. All notices, requests, demands or other communications
hereunder must be in writing, executed by an authorized representative of the
Party giving such notice, and must be delivered by hand, commercial courier, or
fax to the other Party as follows:
If to Corning: Corning Incorporated
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: General Counsel
If to Oplink: Oplink Communications, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Chief Executive Officer & President
or to such other address or addresses a Party may hereafter designate in a
writing duly noticed and delivered to the other Party.
12.6 COUNTERPARTS. This Agreement may be executed simultaneously in
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
12.7 HEADINGS. Article, section and subsection headings in this Agreement
are provided for convenience of reference only and will not be deemed to
constitute a part hereof for any purpose whatsoever.
12.8 GOVERNING LAW. This Agreement shall be construed, interpreted and
enforced in accordance with the laws of the State of New York.
12.9 SEVERABILITY. If any provision of this Agreement shall be ruled to be
invalid, illegal or unenforceable under applicable law, the remainder of this
Agreement will continue to be valid and enforceable unless such invalidity or
illegality or unenforceability substantially diminishes the rights and
obligations taken as a whole of either Party hereunder. In that case, the
Parties will negotiate, in good faith, new terms for this Agreement which
provide to each Party, to the extent possible, the same benefits, risks and
costs that were provided to that Party under this Agreement prior to such
ruling.
12.10 ENTIRE AGREEMENT. This Agreement and the Exhibits and Appendices
hereto set forth the entire agreement and understanding between the Parties with
respect to the transactions provided for herein and supersede and cancel any and
all prior discussions, correspondence, agreements or understandings between the
Parties with respect to such matters.
9
IN WITNESS WHEREOF, the Parties, intending legally to be bound, have caused
this Agreement to be executed by their authorized representatives on and as of
the date first above set forth.
OPLINK COMMUNICATIONS, INC.
By: /s/ C. Xxxxx Xxxxxxx
---------------------------------------
Xxxxx Xxxxxxx
Chief Executive Officer and President
CORNING INCORPORATED
By:
---------------------------------------
Title:
Date:
-------------------------------------
10
IN WITNESS WHEREOF, the Parties, intending legally to be bound, have
caused. this Agreement to be executed by their authorized representatives on and
as of the date first above set forth.
OPLINK COMMUNICATIONS, INC.
By:
--------------------------------------
Xxxxx Xxxxxxx
Chief Executive Officer and President
CORNING INCORPORATED
By: /s/ Xxxxxx X. Fine
--------------------------------------
Title: VP GM PTD
Date: 1-JUL-99
------------------------------------
11
* Certain confidential information
contained in this document, marked by
brackets, has been omitted and filed
separately with the Securities and
Exchange Commission pursuant to Rule
406 of the Securities Act of 1933, as
amended.
APPENDIX A
PRODUCT LISTS
1. LIST OF ITEMS UNDER SECTION 1.3.b., TO BE MANUFACTURED BY OPLINK IN THE PRC
[ * ]
2. LIST OF MATERIALS UNDER SECTION 2.1, TO BE PURCHASED BY OPLINK FROM CORNING
Glass filters from OCA
Gratings from Corning
3. LIST OF COMPONENTS UNDER SECTION 3.1, TO BE PURCHASED BY CORNING FROM OPLINK
[ * ]
---------------------------------
*CONFIDENTIAL TREATMENT REQUESTED
A-1
EXHIBIT 1
OPLINK COMMUNICATIONS, INC.
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
TABLE OF CONTENTS
PAGE NUMBER
-----------
1. PURCHASE AND SALE OF PREFERRED STOCK......................................................................1
1.1 SALE AND ISSUANCE OF SERIES C PREFERRED STOCK....................................................1
1.2 CLOSING..........................................................................................1
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.............................................................2
2.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION....................................................2
2.2 CAPITALIZATION...................................................................................2
2.3 SUBSIDIARIES.....................................................................................3
2.4 AUTHORIZATION....................................................................................3
2.5 VALID ISSUANCE OF SECURITIES.....................................................................3
2.6 GOVERNMENTAL CONSENTS............................................................................3
2.7 LITIGATION.......................................................................................3
2.8 EMPLOYEE AGREEMENT...............................................................................4
2.9 PATENTS AND TRADEMARKS...........................................................................4
2.10 COMPLIANCE WITH OTHER INSTRUMENTS................................................................4
2.11 DISCLOSURE.......................................................................................5
2.12 NO CONFLICT OF INTEREST..........................................................................5
2.13 RIGHTS OF REGISTRATION AND FIRST OFFER...........................................................5
2.14 CORPORATE DOCUMENTS..............................................................................5
2.15 TITLE TO PROPERTY AND ASSETS.....................................................................6
2.16 FINANCIAL STATEMENTS.............................................................................6
2.17 CHANGES..........................................................................................6
2.18 EMPLOYEE BENEFIT PLANS...........................................................................7
2.19 TAX RETURNS AND PAYMENTS.........................................................................7
2.20 INSURANCE........................................................................................8
2.21 LABOR AGREEMENTS AND ACTIONS.....................................................................8
2.22 OFFERING.........................................................................................8
2.23 PERMITS..........................................................................................8
2.24 REAL PROPERTY HOLDING CORPORATION................................................................8
2.25 ENVIRONMENTAL AND SAFETY LAWS....................................................................8
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS..........................................................9
3.1 AUTHORIZATION....................................................................................9
3.2 PURCHASE ENTIRELY FOR OWN ACCOUNT................................................................9
3.3 DISCLOSURE OF INFORMATION........................................................................9
3.4 INVESTMENT EXPERIENCE............................................................................9
3.5 RESTRICTED SECURITIES...........................................................................10
3.6 LEGENDS.........................................................................................10
3.7 FOREIGN PURCHASERS..............................................................................10
3.8 REGULATION D - FURTHER LIMITATIONS ON DISPOSITION...............................................11
4. CALIFORNIA COMMISSIONER OF CORPORATIONS..................................................................11
4.1 CORPORATE SECURITIES LAW........................................................................11
5. CONDITIONS OF PURCHASERS OBLIGATIONS AT CLOSING..........................................................11
5.1 REPRESENTATIONS AND WARRANTIES..................................................................12
5.2 PERFORMANCE.....................................................................................12
5.3 QUALIFICATION...................................................................................12
5.4 PROCEEDINGS AND DOCUMENTS.......................................................................12
5.5 RIGHTS AGREEMENT................................................................................12
6. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING.......................................................12
6.1 REPRESENTATIONS AND WARRANTIES..................................................................12
6.2 PERFORMANCE.....................................................................................12
6.3 QUALIFICATION...................................................................................12
7. MISCELLANEOUS............................................................................................13
7.1 SURVIVAL OF WARRANTIES..........................................................................13
7.2 TRANSFER; SUCCESSORS AND ASSIGNS................................................................13
7.3 GOVERNING LAW...................................................................................13
7.4 COUNTERPARTS....................................................................................13
7.5 TITLES AND SUBTITLES............................................................................13
7.6 NOTICES.........................................................................................13
7.7 FINDER'S FEE....................................................................................14
7.9 AMENDMENTS AND WAIVERS..........................................................................14
7.10 SEVERABILITY....................................................................................14
7.11 ENTIRE AGREEMENT................................................................................14
7.12 EXCULPATION AMONG PURCHASERS....................................................................14
EXHIBITS
A - Schedule of Purchasers
B - Amended and Restated Articles of Incorporation
C - Schedule of Exceptions to Representations and Warranties
D - Form of Second Amended and Restated Rights Agreement
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES D PREFERRED STOCK PURCHASE AGREEMENT (the "AGREEMENT") is
made as the ___ day of January, 1999, by and between Oplink Communications,
Inc., a California corporation (the "COMPANY"), and each of the investors set
forth on the Schedule of Purchasers attached hereto as EXHIBIT A (the
"PURCHASERS").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. PURCHASE AND SALE OF PREFERRED STOCK.
1.1 SALE AND ISSUANCE OF SERIES D PREFERRED STOCK.
(a) The Company shall adopt and file with the Secretary of
State of the State of California on or before the Closing (as defined below) the
Amended and Restated Articles of Incorporation in the form attached hereto as
EXHIBIT B (the "ARTICLES").
(b) Subject to the terms and conditions of this Agreement,
the Purchasers agree, severally and not jointly, to purchase at the Closing and
the Company agrees to sell and issue to the Purchasers at the Closing up to an
aggregate of 2,000,000 shares of the Company's Series D Preferred Stock (the
"SHARES") at a purchase price of $3.00 per share, payable in cash, as further
set forth on the Schedule of Purchasers attached hereto as EXHIBIT A. The Shares
will have the rights, preferences and privileges set forth in the Articles.
1.2 CLOSING.
(a) The purchase and sale of the Shares shall take place at
the Law Office of Xxxxxx X. Xxxxxxx, 0000 Xxxxx Xxxxxxx Xxxxxxx, Xxxxx 000,
Xxxxx Xxxxx, Xxxxxxxxxx, at 2:00 p.m., on January ___, 1999, or at such other
time and place as the Company and the Purchasers mutually agree upon, orally or
in writing (which time and place are designated as the "CLOSING"). At the
Closing, the Company shall deliver to the Purchasers certificates representing
the Shares being purchased thereby against delivery to the Company by the
Purchasers of cash.
(b) At any time on or before sixty (60) days from the
Closing, the Company may sell up to the balance of the Shares not sold at the
Closing to such purchasers or entities as may be approved by the Board of
Directors of the Company. All such sales shall be made on the terms and
conditions set forth in this Agreement. Any shares sold pursuant to Section
1.2(b) shall be deemed to be "Shares" for all purposes under this Agreement and
any such purchasers shall be deemed to be "Purchasers" for all purposes under
this Agreement and such purchasers shall become parties to the Rights Agreement
(as defined below).
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to each Purchaser that, except as set forth on the
Schedule of Exceptions attached hereto as EXHIBIT C, specifically identifying
the relevant subsection(s) hereof, which exceptions shall be deemed to be
representations and warranties as if made hereunder:
2.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of California and has all requisite corporate power and
authority to carry on its business as now conducted and as proposed to be
conducted. The Company is duly qualified to transact business and is in good
standing in each jurisdiction in which the failure so to qualify would have a
material adverse effect on its business, properties, prospects or financial
condition.
2.2 CAPITALIZATION. The authorized capital of the Company
consists, or will consist, immediately prior to the Closing, of:
(i) PREFERRED STOCK. 10,346,252 shares of Preferred Stock,
of which (i) 3,000,000 shares have been designated Series A Preferred Stock, all
of which are issued and outstanding, (ii) 3,846,252 shares have been designated
Series B Preferred Stock, all of which are issued and outstanding, (iii)
1,500,000 shares have been designated Series C Preferred Stock, all of which are
issued and outstanding and (iv) 2,000,000 shares have been designated Series D
Preferred Stock, none of which are issued and outstanding immediately prior the
Initial Closing. The rights, privileges and preferences of the Series A, Series
B, Series C and Series D Preferred Stock are as stated in the Articles.
(ii) COMMON STOCK. 20,000,000 shares of Common Stock,
140,000 shares of which are issued and outstanding (see Section 2.2(iii) below
for a description of outstanding options and a warrant to purchase shares of
Common Stock).
(iii) Except for (i) the conversion privileges of the Series
A, Series B and Series C Preferred Stock and the Series D Preferred Stock issued
pursuant to this Agreement, (ii) an aggregate of 2,500,000 shares of Common
Stock reserved for issuance, at the discretion of the Board of Directors, to
officers, directors, employees and consultants pursuant to the Company's 1995
Stock Plan and 1998 Stock Plan (collectively, the "Stock Plan"), under which
there are options outstanding to purchase 926,500 shares of Common Stock,
140,000 shares of Common Stock issued and outstanding as a result of Stock
Options previously exercised (which shares are included in the total number of
issued and outstanding shares listed in Section 2.2(ii) above), and 1,433,500
shares of Common Stock remaining available for future grant (iii) 32,000 shares
of Common Stock reserved for issuance upon conversion of an outstanding warrant
and (iv) the rights provided in Section 4.1 of the Rights Agreement (as defined
below), there are no outstanding options, warrants, rights (including conversion
or preemptive rights) or agreements, orally or in writing, for the purchase or
acquisition from the Company of any shares of its capital stock.
2
2.3 SUBSIDIARIES. The Company does not currently own or control,
directly or indirectly, any interest in any other corporation, association, or
other business entity. The Company is not a participant in any joint venture,
partnership or similar arrangement.
2.4 AUTHORIZATION. All corporate action on the part of the
Company, its officers, directors and shareholders necessary for the
authorization, execution and delivery of this Agreement and the Second Amended
and Restated Rights Agreement, in the form attached hereto as EXHIBIT D (the
"RIGHTS AGREEMENT" and collectively with this Agreement, the "AGREEMENTS"), the
performance of all obligations of the Company hereunder and thereunder and the
authorization, issuance and delivery of the Shares and the Common Stock issuable
upon conversion thereof (collectively with the Shares, the "SECURITIES") has
been taken or will be taken prior to the Closing, and the Agreements, when
executed and delivered by the Company, shall constitute valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with their respective terms.
2.5 VALID ISSUANCE OF SECURITIES. The Shares being issued to the
Purchasers hereunder, when issued, sold and delivered in accordance with the
terms hereof for the consideration expressed herein, will be duly and validly
issued, fully paid and nonassessable and free of restrictions on transfer other
than restrictions on transfer under the Agreements and applicable state and
federal securities laws. Based in part upon the representations of the
Purchasers in this Agreement and subject to the provisions of Section 2.6 below,
the Shares will be issued in compliance with all applicable federal and state
securities laws. The Common Stock issuable upon conversion of the Shares has
been duly and validly reserved for issuance, and upon issuance in accordance
with the terms of the Restated Articles, will be duly and validly issued, fully
paid and nonassessable and free of restrictions on transfer other than
restrictions on transfer under the Agreements and applicable state and federal
securities laws and will be issued in compliance with all applicable federal and
state securities laws.
2.6 GOVERNMENTAL CONSENTS. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement, except for the filings pursuant to (i) Section
25102(f) of the California Corporate Securities Law of 1968, as amended, and the
rules thereunder, and (ii) Rule 503 of Regulation D promulgated under the
Securities Act of 1933, as amended (the "SECURITIES ACT"), which filings will be
effected in accordance with such sections and/or rules.
2.7 LITIGATION. There is no action, suit, proceeding or
investigation pending or currently threatened against the Company that questions
the validity of the Agreements, or the right of the Company to enter into them,
or to consummate the transactions contemplated hereby or thereby, or that might
result, either individually or in the aggregate, in any material adverse changes
in the assets, condition or affairs of the Company, financially or otherwise, or
any change in the current equity ownership of the Company, nor is the Company
aware that there is any basis for the foregoing. 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
3
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 agreements with prior employers. The Company is not a party or subject
to the provisions of any order, writ, injunction, judgment or decree of any
court or government agency or instrumentality. There is no action, suit,
proceeding or investigation by the Company currently pending or which the
Company intends to initiate.
2.8 EMPLOYEE AGREEMENT. Each employee, officer and consultant of
the Company has executed an agreement with the Company regarding confidentiality
and proprietary information in a form acceptable to the Purchasers. The Company,
after reasonable investigation, is not aware that any of its employees or
consultants are in violation thereof, and the Company will use its best efforts
to prevent any such violation.
2.9 PATENTS AND TRADEMARKS. As of the Closing, the Company has or
will have sufficient title and ownership of all patents, trademarks, service
marks, trade names, copyrights, trade secrets, information, proprietary rights
and processes necessary for its business as now conducted and as proposed to be
conducted without any conflict with or infringement of the rights of others.
There are no outstanding options, licenses, or agreements of any kind relating
to the foregoing, nor is the Company bound by or a party to any options,
licenses or agreements of any kind with respect to the patents, trademarks,
service marks, trade names, copyrights, trade secrets, licenses, information,
proprietary rights and processes of any other person or entity. The Company has
not received any communications alleging that the Company has violated or, by
conducting its business as proposed, would violate any of the patents,
trademarks, service marks, trade names, copyrights or trade secrets or other
proprietary rights of any other person or entity. The Company is not aware that
any of its employees is 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
interfere with the use of his best efforts to promote the interests of the
Company or that would conflict with the Company's business as proposed to be
conducted. Neither the execution nor delivery of this Agreement, nor the
carrying on of the Company's business by the employees of the Company, nor the
conduct of the Company's business as proposed, will, to the Company's knowledge,
conflict with or result in a breach of the terms, conditions or provisions of,
or constitute a default under, any contract, covenant or instrument under which
any of such employees is now obligated. The Company does not believe it is or
will be necessary to utilize any inventions of any of its employees (or people
it currently intends to hire) made prior to their employment by the Company.
2.10 COMPLIANCE WITH OTHER INSTRUMENTS.
(a) The Company is not in violation or default in any
material respect of any provisions of its Restated Articles or Bylaws or of any
instrument, judgment, order, writ, decree or contract to which it is a party or
by which it is bound or, to its knowledge, of any provision of federal or state
statute, rule or regulation applicable to the Company. The execution, delivery
and performance of the Agreements and the consummation of the transactions
contemplated hereby or thereby will not result in any such violation or be in
material conflict with or constitute, with or
4
without the passage of time and giving of notice, either a material default
under any such provision, instrument, judgment, order, writ, decree or contract
or an event which results in the creation of any material lien, charge or
encumbrance upon any assets of the Company.
(b) The Company has avoided every condition, and has not
performed any act, the occurrence of which would result in the Company's loss of
any material right granted under any material license, distribution or other
agreement.
2.11 DISCLOSURE. The Company has fully provided each Purchaser
with all the information which such Purchaser has requested for deciding whether
to acquire the Shares and all information which the Company believes is
reasonably necessary to enable such party to make such decision. No
representation or warranty of the Company contained in this Agreement and the
Exhibits attached hereto, any certificate furnished or to be furnished to the
Purchasers at the Closing 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.
2.12 NO CONFLICT OF INTEREST. The Company is not indebted,
directly or indirectly, to any of its officers or directors or to their
respective spouses or children, in any amount whatsoever other than in
connection with expenses or advances of expenses incurred in the ordinary course
of business or relocation expenses of employees. To the best of the Company's
knowledge, none of the Company's officers or directors, or any members of their
immediate families, are, directly or indirectly, indebted to the Company (other
than in connection with purchases of the Company's stock) or have any direct or
indirect ownership interest in any firm or corporation with which the Company is
affiliated or with which the Company has a business relationship, or any firm or
corporation which competes with the Company except that officers, directors
and/or shareholders of the Company may own stock in (but not exceeding two
percent of the outstanding capital stock of) any publicly traded company that
may compete with the Company. To the best of the Company's knowledge, none of
the Company's officers or directors or any members of their immediate families
are, directly or indirectly, interested in any material contract with the
Company. The Company is not a guarantor or indemnity of any indebtedness of any
other person, firm or corporation.
2.13 RIGHTS OF REGISTRATION AND FIRST OFFER. Except as
contemplated herein, the Company has not granted or agreed to grant any
registration rights, including piggyback rights, to any person or entity, other
than pursuant to the Rights Agreement by and among the Company and holders of
its Series A, Series B and Series C Preferred Stock (the "Prior Rights
Agreement") which Prior Rights Agreement will be amended and superseded by the
Rights Agreement upon the Closing. At the Closing, the Company will enter into
the Rights Agreement among the Company and the Investors (as that term is
defined in the Rights Agreement).
2.14 CORPORATE DOCUMENTS. The Articles and Bylaws of the Company
are in the form provided to the Purchasers.
5
2.15 TITLE TO PROPERTY AND ASSETS. The Company owns its property
and assets free and clear of all mortgages, liens, loans and encumbrances,
except such encumbrances and liens which arise in the ordinary course of
business and do not materially impair the Company's ownership or use of such
property or assets. With respect to the property and assets it leases, the
Company is in compliance with such leases and, to the best of its knowledge,
holds a valid leasehold interest free of any liens, claims or encumbrances.
2.16 FINANCIAL STATEMENTS. The Company has delivered to each
Purchaser its unaudited financial statements (balance sheet and profit and loss
statement) as of November 30, 1998 (the "Financial Statements") and for the
period then ended. The Financial Statements have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
throughout the periods indicated and with each other, except that unaudited
Financial Statements may not contain all footnotes required by generally
accepted accounting principles. The Financial Statements fairly present the
financial condition and operating results of the Company as of the dates, and
for the periods, indicated therein, subject to normal year-end audit
adjustments, which are neither individually nor in the aggregate material.
Except as set forth in the Financial Statements, the Company has no material
liabilities, contingent or otherwise, other than (i) liabilities incurred in the
ordinary course of business subsequent to November 30, 1998, 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, in both cases, individually or in
the aggregate, are not material to the financial condition or operating results
of the Company. Except as disclosed in the Financial Statements, the company is
not a guarantor or indemnity of any indebtedness of any person, firm or
corporation. The Company maintains and will continue to maintain a standard
system of accounting established and administered in accordance with generally
accepted accounting principles.
2.17 CHANGES. Since November 30, 1998, there has not been:
(a) any change in the assets, liabilities, financial
condition or operating results of the Company from that reflected in the
Financial Statements, except changes in the ordinary course of business that
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 business, properties,
prospects, or financial condition of the Company (as such business is presently
conducted and as it is proposed to be conducted);
(c) any waiver or compromise 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 that is not material to the business, properties,
prospects or financial condition of the Company (as such business is presently
conducted and as it is proposed to be conducted);
6
(e) any material change to a material contract or agreement
by which the Company or any of its assets is bound or subject;
(f) any material change in any compensation arrangement or
agreement with any employee, officer, director or shareholder;
(g) any sale, assignment or transfer of any patents,
trademarks, copyrights, trade secrets or other intangible assets;
(h) any resignation or termination of employment of any
officer or key employee of the Company; and the Company, to the best of its
knowledge, does not know of any impending resignation or termination of
employment of any such officer or key employee;
(i) receipt of notice that there has been a loss of, or
material order cancellation by, any major customer of the Company;
(j) any mortgage, pledge, transfer of a security interest
in, or lien, created by the Company, with respect to any of its material
properties or assets, except liens for taxes not yet due or payable;
(k) any loans or guarantees made by the Company to or for
the benefit of its employees, officers or directors, or any members of their
immediate families, other than travel advances and other advances made in the
ordinary course of its business;
(l) any declaration, setting aside or payment or other
distribution in respect to any of the Company's capital stock, or any direct or
indirect redemption, purchase, or other acquisition of any of such stock by the
Company;
(m) to the best of the Company's knowledge, any other event
or condition of any character that might materially and adversely affect the
business, properties, prospects or financial condition of the Company (as such
business is presently conducted and as it is proposed to be conducted); or
(n) any arrangement or commitment by the Company to do any
of the things described in this Section 2.17.
2.18 EMPLOYEE BENEFIT PLANS. The Company does not have any
Employee Benefit Plan as defined in the Employee Retirement Income Security Act
of 1974.
2.19 TAX RETURNS AND PAYMENTS. The Company has filed all tax
returns and reports as required by law. These returns and reports are true and
correct in all material respects. The
7
Company has paid all taxes and other assessments due, except those contested by
it in good faith which are listed in the Schedule of Exceptions.
2.20 INSURANCE. The Company has in full force and effect fire and
casualty insurance policies, with extended coverage, sufficient in amount
(subject to reasonable deductibles) to allow it to replace any of its properties
that might be damaged or destroyed.
2.21 LABOR AGREEMENTS AND ACTIONS. The Company is not bound by or
subject to (and none of its assets or properties is bound by or subject to) any
written or oral, express or implied, contract, commitment or arrangement with
any labor union, and no labor union has requested or, to the knowledge of the
Company, has sought to represent any of the employees, representatives or agents
of the Company. There is no strike or other labor dispute involving the Company
pending, or to the knowledge of the Company threatened, which could have a
material adverse effect on 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), nor is the Company aware of
any labor organization activity involving its employees. The Company is not
aware that any officer or key employee, or that any group of key employees,
intends to terminate their employment with the Company, nor does the Company
have a present intention to terminate the employment of any of the foregoing.
The employment of each officer and employee of the Company is terminable at the
will of the Company. To the best of its knowledge, the Company has complied in
all material respects with all applicable state and federal equal employment
opportunity laws and with other laws related to employment.
2.22 OFFERING. Subject to the truth and accuracy of each
Purchaser's representations set forth in this Agreement, the offer, sale and
issuance of the Shares as contemplated by this Agreement are exempt from the
registration requirements of the Securities Act, and neither the Company nor any
authorized agent acting on its behalf will take any action hereafter that would
cause the loss of such exemption.
2.23 PERMITS. The Company has all franchises, permits, licenses
and any similar authority necessary for the conduct of its business as now being
conducted by it, the lack of which could materially and adversely affect the
business, properties, prospects, or financial condition of the Company and
believes that it can obtain, without undue burden or expense, any similar
authority for the conduct of its business as planned to be conducted. The
Company is not in default in any material respect under any of such franchises,
permits, licenses or other similar authority.
2.24 REAL PROPERTY HOLDING CORPORATION. The Company is not a
United States real property holding corporation within the meaning of Internal
Revenue Code Section 897(c)(2) and any regulations promulgated thereunder.
2.25 ENVIRONMENTAL AND SAFETY LAWS. The Company is not in
violation of any applicable statute, law or regulation relating to the
environment or occupational health and safety, and to the best of its knowledge,
no material expenditures are or will be required in order to comply with
8
any such existing statute, law or regulation. No Hazardous Materials (as defined
below) are used or have been used, stored, or disposed of by the Company or, to
the best of the Company's knowledge, by any other person or entity on any
property owned, leased or used by the Company. For the purposes of the preceding
sentence, "Hazardous Materials" shall mean (a) materials which are listed or
otherwise defined as "hazardous" or "toxic" under any applicable local, state,
federal and/or foreign laws and regulations that govern the existence and/or
remedy of contamination on property, the protection of the environment from
contamination, the control of hazardous wastes, or other activities involving
hazardous substances, including building materials or (b) any petroleum products
or nuclear materials.
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS. Each Purchaser
hereby severally and not jointly represents and warrants to the Company with
respect to the purchase of the Shares as follows:
3.1 AUTHORIZATION. It has full power and authority to enter into
this Agreement and this Agreement constitutes its valid and legally binding
obligation, enforceable against such Purchaser in accordance with its terms.
3.2 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made
with such Purchaser in reliance upon such Purchasers representation to the
Company, which by such Purchaser's execution of this Agreement such Purchaser
hereby confirms, that the Securities to be acquired by such Purchaser will be
acquired for investment for such Purchaser's own account, not as a nominee or
agent, and not with a view to the resale or distribution of any part thereof,
and that such Purchaser has no present intention of selling, granting any
participation in, or otherwise distributing the same. By executing this
Agreement, such Purchaser further represents that such Purchaser does not
presently have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participations to such person or to any third
person, with respect to any of the Securities. Such Purchaser understands that
this sale of the Securities has not been, and will not be, registered under the
Securities Act by reason of a specific exemption from the registration
provisions of the Securities Act which depends upon, among other things, the
bona fide nature of such Purchaser's investment intent and the accuracy of such
Purchaser's representations as expressed herein. Such Purchaser represents that
it has not been formed for the specific purpose of acquiring the Securities.
3.3 DISCLOSURE OF INFORMATION. Such Purchaser believes it has
received all the information it considers necessary or appropriate for deciding
whether to acquire the Securities. Such Purchaser further represents that it has
had an opportunity to ask questions and receive answers from the Company
regarding the terms and conditions of the offering of the Securities. The
foregoing, however, does not limit or modify the representations and warranties
of the Company in Section 2 of this Agreement or the right of such Purchaser to
rely thereon.
3.4 INVESTMENT EXPERIENCE. Such Purchaser has substantial
experience in evaluating and investing in private placement transactions so that
such Purchaser is capable of evaluating the merits and risks of such Purchaser's
investment in the Company. Such Purchaser, by
9
reason of its business or financial experience or the business or financial
experience of its professional advisors who are unaffiliated with and who are
not compensated by the Company or any affiliate or selling agent of the Company,
directly or indirectly, has the capacity to protect its own interests in
connection with the purchase of the Securities hereunder.
3.5 RESTRICTED SECURITIES. The Purchaser understands that the
Securities (and the Common Stock issuable upon conversion thereof) are
characterized as "restricted securities" under the federal securities laws
inasmuch as they are being acquired from the Company in a transaction not
involving a public offering and that under such laws and applicable regulations
such Securities (and the Common Stock issuable upon conversion thereof) may be
resold without registration under the Securities Act only in certain limited
circumstances. The Purchaser acknowledges that the Securities (and the Common
Stock issuable upon conversion thereof) must be held indefinitely unless
subsequently registered under the Securities Act or an exemption from such
registration is available.
3.6 LEGENDS. The Purchaser understands that the Shares (and the
Common Stock issuable upon conversion thereof), and any securities issued in
respect thereof or exchange therefor, may bear one or all of the following
legends:
(a) "THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED. SUCH SHARES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF
SUCH REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT. COPIES OF THE
AGREEMENT COVERING THE PURCHASE OF THESE SHARES AND RESTRICTING THEIR TRANSFER
MAY BE OBTAINED AT NO COST BY WRITTEN REQUEST MADE BY THE HOLDER OF RECORD OF
THIS CERTIFICATE TO THE SECRETARY OF THE CORPORATION AT THE PRINCIPAL EXECUTIVE
OFFICES OF THE CORPORATION."
(b) Any legend required by the laws of the State of
California, including any legend required by the California Department of
Corporations.
(c) Any legend required by the Blue Sky laws of any other
state to the extent such laws are applicable to the shares represented by the
certificate so legended.
3.7 FOREIGN PURCHASERS. If the Purchaser is not a United States
person (as defined by Section 7701(a)(30) of the Internal Revenue Code of 1986,
as amended), such Purchaser hereby represents that it has satisfied itself as to
the full observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Stock or any use of this Agreement, including
(i) the legal requirements within its jurisdiction for the purchase of the
Stock, (ii) any foreign exchange restrictions applicable to such purchase, (iii)
any governmental or other consents that may need to be obtained, and (iv) the
income tax and other tax consequences, if any, that may be relevant to the
purchase, holding, redemption, sale, or transfer of the Stock. Such Purchaser's
subscription and
10
payment for and continued beneficial ownership of the Stock, will not violate
any applicable securities or other laws of the Purchaser's jurisdiction.
3.8 REGULATION D - FURTHER LIMITATIONS ON DISPOSITION. Without in
any way limiting the representations set forth above, each Purchaser severally
and not jointly further agrees not to make any disposition of all or any portion
of the Securities unless and until:
(a) There is then in effect a Registration Statement under
the Securities Act covering such proposed disposition and such disposition is
made in accordance with such Registration Statement; or
(b) (i) Such Purchaser shall have notified the Company of
the proposed disposition and shall have furnished the Company with a detailed
statement of the circumstances surrounding the proposed disposition, and (ii) if
reasonably requested by the Company, such Purchaser shall have furnished the
Company with an opinion of counsel, reasonably satisfactory to the Company, that
such disposition will not require registration under the Securities Act. It is
agreed that the Company will not require opinions of counsel for transactions
made pursuant to Rule 144 except in unusual circumstances.
(c) Notwithstanding the provisions of paragraphs (a) and (b)
above, no such registration statement or opinion of counsel shall be necessary
for a transfer by such Purchaser to a constituent shareholder or constituent
partner (including any constituent of a constituent) of such Purchaser, if the
transferee or transferees agree in writing to be subject to the terms hereof to
the same extent as if they were the Purchaser hereunder.
4. CALIFORNIA COMMISSIONER OF CORPORATIONS.
4.1 CORPORATE SECURITIES LAW. THE SALE OF THE SECURITIES THAT IS
THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA. THE ISSUANCE OF THE SECURITIES OR THE
PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR THE SECURITIES PRIOR TO
SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF THE SECURITIES IS EXEMPT FROM
THE QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA
CORPORATIONS CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY
CONDITIONED UPON SUCH QUALIFICATION BEING OBTAINED UNLESS THE SALE IS SO EXEMPT.
5. CONDITIONS OF PURCHASERS OBLIGATIONS AT CLOSING. The obligations of
each Purchaser to the Company under this Agreement are subject to the
fulfillment, on or before the Closing, of each of the following conditions:
11
5.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Company contained in Section 2 shall be true on and as of the
Closing with the same effect as though such representations and warranties had
been made on and as of such date.
5.2 PERFORMANCE. The Company shall have performed and complied
with all agreements, obligations and conditions contained in this Agreement that
are required to be performed or complied with by it on or before the Closing.
5.3 QUALIFICATION. All authorizations, approvals or permits, if
any, of any governmental authority or regulatory body of the United States or of
any state that are required in connection with the lawful issuance and sale of
the Securities pursuant to this Agreement shall be obtained and effective as of
the Closing.
5.4 PROCEEDINGS AND DOCUMENTS. All corporate and other
proceedings in connection with the transactions contemplated at the Closing and
all documents incident thereto shall be reasonably satisfactory in form and
substance to each Purchaser, and they shall have received all such counterpart
original and certified or other copies of such documents as they may reasonably
request.
5.5 RIGHTS AGREEMENT. The Company, the Purchasers, and holders of
at least a majority of the Registrable Securities held by parties to the Prior
Rights Agreement shall have executed and delivered the Amended Rights Agreement.
6. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT CLOSING. The obligations
of the Company to each Purchaser under this Agreement are subject to the
fulfillment, on or before the Closing, of each of the following conditions:
6.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of each Purchaser contained in Section 3 shall be true on and as of
the Closing with the same effect as though such representations and warranties
had been made on and as of such date.
6.2 PERFORMANCE. All covenants, agreements and conditions
contained in this Agreement to be performed by the Purchasers on or prior to the
Closing shall have been performed or complied with in all material respects.
6.3 QUALIFICATION. The Commissioner of Corporations of the State
of California shall have issued a permit qualifying the offer and sale of the
Shares to the Purchasers pursuant to this Agreement, or such offer and sale
shall be exempt from such qualification under the California Corporate
Securities Law of 1968, as amended.
12
7. MISCELLANEOUS.
7.1 SURVIVAL OF WARRANTIES. The warranties, representations and
covenants of the Company and the Purchasers contained in or made pursuant to
this Agreement shall survive for a period of one year following the execution
and delivery of this Agreement and the Closing and shall in no way be affected
by any investigation of the subject matter thereof made by or on behalf of the
Purchasers or the Company.
7.2 TRANSFER; SUCCESSORS AND ASSIGNS. The terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
7.3 GOVERNING LAW. This Agreement shall be governed by and
construed under the laws of the State of California in the United States of
America as applied to agreements among California residents entered into and to
be performed entirely within California.
7.4 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
7.5 TITLES AND SUBTITLES. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
7.6 NOTICES.
(a) All notices, requests, demands and other communications
under this Agreement or in connection herewith shall be given to or made upon
the Purchasers at the address set forth with respect to such party on the
Schedule of Purchasers attached hereto as EXHIBIT A, or, if to the Company, to
000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxxxxxxxxx 00000, Attn: President, with a copy to
the Law Office of Xxxxxx X. Xxxxxxx, Attn: Xxxxxx X. Xxxxxxx, Esq., 0000 Xxxxx
Xxxxxxx Xxxxxxx, Xxxxx 000, Xxxxx Xxxxx, Xxxxxxxxxx 00000.
(b) All notices, requests, demands and other communications
given or made in accordance with the provisions of this Agreement shall be in
writing, and shall be sent by airmail, return receipt requested, or by telex or
telecopy (facsimile) with confirmation of receipt, and shall be deemed to be
given or made when receipt is so confirmed.
(c) Any party may, by written notice to the other, alter its
address or respondent, and such notice shall be considered to have been given
ten (10) days after the airmailing, telexing or telecopying thereof.
13
7.7 FINDER'S FEE. Each party represents that it neither is nor
will be obligated for any finders' fee or commission in connection with this
transaction. Each Purchaser agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finder's fee (and the costs and expenses of defending against such liability or
asserted liability) for which such Purchaser or any of its officers, employees,
or representatives is responsible.
The Company agrees to indemnify and hold harmless each Purchaser from
any liability for any commission or compensation in the nature of a finder's fee
(and the costs and expenses of defending against such liability or asserted
liability) for which the Company or any of its officers, employees or
representatives is responsible.
7.9 AMENDMENTS AND WAIVERS. Any term of this Agreement may be
amended and the observance of any term of this Agreement may be waived (either
generally or in a particular instance and either retroactively or
prospectively), only with the written consent of the Company and the holders of
a majority of the Securities (calculated on an as-converted basis) purchased
hereunder. Any amendment or waiver effected in accordance with this Section
shall be binding upon each transferee of any Securities, each future holder of
all such Securities, and the Company.
7.10 SEVERABILITY. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be
excluded from this Agreement and the balance of the Agreement shall be
interpreted as if such provision were so excluded and shall be enforceable in
accordance with its terms.
7.11 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto pertaining to the subject matter hereof,
and any and all other prior written or oral agreements existing between the
parties hereto are expressly canceled.
7.12 EXCULPATION AMONG PURCHASERS. Each Purchaser acknowledges
that it is not relying upon any person, firm or corporation, other than the
Company and its officers and directors, in making its investment or decision to
invest in the Company. Each Purchaser agrees that no Purchaser nor the
respective controlling persons, officers, directors, partners, agents, or
employees of any Purchaser shall be liable for any action heretofore or
hereafter taken or omitted to be taken by any of them in connection with the
Securities and the Common Stock issuable upon conversion of the Securities.
14
IN WITNESS WHEREOF, the parties have executed this Series D Preferred
Stock Purchase Agreement as of the date first above written.
COMPANY:
OPLINK COMMUNICATIONS, INC.,
a California corporation
By: /s/ Xxxxx Xxxxxxx
------------------------
Its:
PURCHASERS:
-----------------------------
(PRINTED NAME OF PURCHASER)
By:
------------------------
Title:
----------------------
15
EXHIBIT A
SCHEDULE OF PURCHASERS
I. INITIAL CLOSING - JANUARY ___, 1999
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PURCHASER SERIES D SHARES PURCHASE PRICE
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TOTAL CLOSING
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EXHIBIT B
AMENDED AND RESTATED ARTICLES OF INCORPORATION
EXHIBIT C
SCHEDULE OF EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
This Schedule of Exceptions is made and given pursuant to Section 2 of
the Series D Preferred Stock Purchase Agreement dated as of __________, 1999
(the "Agreement") between Oplink Communications, Inc. (the "Company") and the
Purchasers listed on EXHIBIT A thereto. Unless the context otherwise requires,
all capitalized terms shall have the meanings as defined in the Agreement. The
section numbers below correspond to the section numbers of the representations
and warranties in the Agreement which are modified by the disclosures; however,
any information disclosed herein under any section number shall be deemed to be
disclosed and incorporated into any other section number under the Agreement
where such disclosure would be appropriate.
Section 2.15: The Company has a $2.0 million line of credit with General Bank,
in connection with which the Bank holds a blanket lien on all
assets of the Company.
EXHIBIT D
SECOND AMENDED AND RESTATED RIGHTS AGREEMENT
OPLINK COMMUNICATIONS, INC.
AMENDMENT TO
SERIES D PREFERRED STOCK PURCHASE AGREEMENT
AND TO
SECOND AMENDED AND RESTATED RIGHTS AGREEMENT
Effective as of July 2, 1999
This Amendment to Series D Preferred Stock Purchase Agreement and to
Second Amended and Restated Rights Agreement (the "Amendment") is entered into
as of July 2, 1999 and amends that certain Series D Preferred Stock Purchase
Agreement dated as of March 8, 1999 (the "Purchase Agreement"), by and among
Oplink Communications, Inc., a California corporation (the "Company") and the
persons and entities listed on the Schedule of Purchasers to the Purchase
Agreement (the "Original Purchasers") and that certain Second Amended and
Restated Rights Agreement dated as of March 8, 1999 (the "Rights Agreement"), by
and among the Company, the Original Purchasers and certain holders of the
Company's Series A, Series B and Series C Preferred Stock, with the parties to
such Rights Agreement being referred to collectively with the Original
Purchasers as the "Prior Rights Holders".
WITNESSETH:
WHEREAS, the Company desires to sell, and the entity listed on the
Supplemental Schedule of Purchasers attached as EXHIBIT A-1 hereto (the "New
Purchaser") desires to purchase, certain shares of Series D Preferred Stock of
the Company as set forth on EXHIBIT A-1;
WHEREAS, the Company, the Original Purchasers and the New Purchaser
desire that such sale and purchase be accomplished pursuant to an additional
closing under the Purchase Agreement (the "Subsequent Closing");
WHEREAS, the Company, the Original Purchasers and the New Purchaser
desire that, upon such purchase, the New Purchaser obtain all the rights of an
Original Purchaser under the Rights Agreement;
WHEREAS, the Purchase Agreement may be amended as set forth in Section
7.9 thereof; and
WHEREAS, the Rights Agreement may be amended as set forth in Section
5.7 thereof.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
promises and covenants contained herein, the parties hereby agree as follows:
5
1. AMENDMENT OF PURCHASE AGREEMENT. For purposes of the Subsequent Closing, the
Purchase Agreement is hereby amended as follows:
(a) The phrase "sixty (60) days from the Closing" in Section 1.2 (b) of the
Purchase Agreement shall be amended to read "one hundred fifteen (115) days from
the Closing".
(b) The phrase "up to 2,000,000 shares of the Company's Series D Preferred
Stock (the "Shares")" in paragraph (b) of Section 1, subsection 1.1 shall be
amended to read "up to 2,666,666 shares of the Company's Series D Preferred
Stock (the "Shares")".
(c) Prior to the Subsequent Closing, the Company shall cause the
Certificate of Amendment of Articles of Incorporation, in the form attached
hereto as EXHIBIT B-1, to be filed with the Secretary of State of the State of
California. All references to the "Articles" in the Purchase Agreement shall
refer to the Amended and Restated Articles of Incorporation as filed with the
Secretary of State on July 23, 1998 and attached to the Original Agreement as
Exhibit B, as amended by the Certificate of Amendment of Articles of
Incorporation.
2. AMENDMENT OF RIGHTS AGREEMENT.
(a) Any and all references to "2,000,000 shares" of the Series D Preferred
Stock of the Company shall be amended to read "2,666,666 shares".
(b) The Company and each of the Prior Rights Holders executing this
Amendment understands and acknowledges that the New Purchaser, upon execution of
signature pages to the Original Agreement, this Amendment and the Rights
Agreement, shall be deemed a "Series D Investor" or "Investor", within the
meaning thereof, and the shares purchased by such New Purchaser pursuant to the
Purchase Agreement shall be deemed "Series D Preferred" as defined therein.
(c) By execution and delivery of this Agreement, the Prior Rights Holders
that become signatories hereto waive, on behalf of all Prior Rights Holders, any
and all rights of first refusal (including rights of notice, if any) that may
otherwise have arisen under Section 4.1 of the Rights Agreement with respect to,
and only with respect to, the sale of shares of Series D Preferred Stock of the
Company to be sold and issued to Corning Incorporated ("Corning").
3. OBSERVER RIGHT.
(a) The Company shall invite a representative of Corning (or one of its
affiliates) to attend all regular meetings of its Board of Directors in a
nonvoting observer capacity (the "Observer Right"); provided, however, that such
representative shall agree to hold in confidence and trust all information
provided to such representative at or during any such meeting; and, provided
further, that the Company
reserves the right to withhold any information and to exclude such
representative from any meeting or portion thereof if access to such information
or attendance at such meeting could, in the judgement of the Company's outside
counsel, adversely affect the attorney-client privilege between the Company and
its counsel or would result in disclosure of trade secrets of the Company, the
disclosure of which would have a material adverse effect on the Company.
(b) The Observer Right granted in this Section 3 shall terminate on the
earliest of the following dates:
(i) three (3) years following the date of the closing of a firmly
underwritten public offering of the Company's Common Stock pursuant to a
registration statement filed with, and declared effective under the Securities
Act of 1933, as amended; or
(ii) the date of the closing of any merger or consolidation of the
Company with or into any other corporation or corporations, or any other
corporate reorganization in which the Company shall not be the continuing or
surviving entity of such consolidation, merger or reorganization (other than a
reincorporation transaction the principal purpose of which is to change the
domicile of the corporation), or any transaction in which in excess of 50% of
the Company's voting power is transferred, or any sale of all or substantially
all of the assets of the Company; or
(iii) the date on which Corning exercises its put right granted under
that certain Agreement between the Company an Corning, dated of an even date
herewith; or
(iv) January 1, 2002; or
(v) the date as of which the Company and Corning mutually agree in
writing to terminate such right.
4. MISCELLANEOUS.
Except as amended by this Amendment, the Purchase Agreement and Rights
Agreement shall remain in full force and effect.
This Amendment will be governed by and construed in accordance with the
State of California without giving effect to the conflicts of law principles
thereof.
This Amendment may be executed in any number of counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
7
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to
Series D Preferred Stock Purchase Agreement and to Second Amended and Restated
Rights Agreement as of the date first written above.
OPLINK COMMUNICATIONS, INC.
By: /s/ Xxxxx Xxxxxxx
---------------------------------------
Xxxxx Xxxxxxx, Ph.D.
Chief Executive Officer and President
ORIGINAL PURCHASERS AND PRIOR RIGHTS HOLDERS:
--------------------------------------------
(Print Name of Investor)
By:
---------------------------------------
(Signature of Authorized Person)
Title:
--------------------------------------
NEW PURCHASER:
CORNING INCORPORATED
By: /s/ ILLEGIBLE
---------------------------------------
Title: VP/GM PTD
--------------------------------------
SUBSEQUENT CLOSING DATE - JULY 2, 1999
------------------------------------------------------------------------------------------------------------------------------
PURCHASER NUMBER OF SHARES AGGREGATE PURCHASE PRICE
------------------------------------------------------------------------------------------------------------------------------
Corning Incorporated 666,666 $1,999,998.00
Xxx Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: General Counsel
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TOTAL SUBSEQUENT CLOSING 666,666 $1,999,998.00
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