SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (this "AGREEMENT"), dated as of November 17,
1997, by and among Informix Corporation, a Delaware corporation (the "COMPANY"),
and each of the entities whose names appear on the signature pages hereof. Such
entities are each referred to herein as a "PURCHASER" and, collectively, as the
"PURCHASERS".
The Company wishes to sell to each Purchaser, and each Purchaser wishes to
buy, on the terms and subject to the conditions set forth in this Agreement, the
number of shares (the "PREFERRED SHARES") of the Company's Series B Convertible
Preferred Stock (the "PREFERRED STOCK") set forth next to such Purchaser's name
on the signature pages hereof. The Preferred Shares are convertible pursuant to
the terms of a Certificate of Designation relating to the Preferred Stock, the
form of which is attached hereto as EXHIBIT A (the "CERTIFICATE OF DESIGNATION")
into (i) shares (the "CONVERSION SHARES") of the Company's Common Stock (the
"COMMON STOCK") and (ii) a Warrant in the form of EXHIBIT B hereto (a "WARRANT"
and, when taken together with all of the warrants issued or issuable pursuant to
the Certificate of Designation, the "WARRANTS") entitling the holder thereof to
purchase shares (the "WARRANT SHARES") of Common Stock. Dividends on the
Preferred Shares are payable, subject to the terms and conditions of the
Certificate of Designation, in shares of Common Stock (the "DIVIDEND PAYMENT
SHARES") or cash. The Preferred Shares, the Warrants, the Conversion Shares, the
Warrant Shares and the Dividend Payment Shares are collectively referred to
herein as the "SECURITIES".
The Company has agreed to effect the registration of the Conversion Shares,
the Warrant Shares and the Dividend Payment Shares under the Securities Act of
1933, as amended (the "SECURITIES ACT"), pursuant to a Registration Rights
Agreement of even date herewith by and among the Company and the Purchasers (the
"REGISTRATION RIGHTS AGREEMENT"). The sale of the Preferred Shares by the
Company to the Purchasers will be effected in reliance upon the exemption from
securities registration afforded by the provisions of Regulation D ("REGULATION
D"), as promulgated by the Securities and Exchange Commission (the "COMMISSION")
under the Securities Act.
The Company and the Purchasers hereby agree as follows:
1. PURCHASE AND SALE OF PREFERRED SHARES.
1.1 AGREEMENT TO PURCHASE AND SELL. Upon the terms and subject to the
satisfaction of the conditions set forth herein, the Company agrees to sell at
the Closing (as defined below), and each Purchaser agrees to purchase, the
number of Preferred Shares set forth below such Purchaser's name on the
signature pages hereof at a purchase price equal to one thousand dollars
($1,000) TIMES the number of Preferred Shares purchased by such Purchaser (the
"PURCHASE PRICE").
1.2 CLOSING. Subject to the satisfaction or waiver of the conditions set
forth herein, the closing of the purchase and sale of the Preferred Shares (the
"CLOSING") will be deemed to occur when full payment of the Purchase Price has
been made by each Purchaser by wire transfer of immediately
available funds against physical delivery by the Company of duly executed
certificates representing the Preferred Shares purchased by such Purchaser
hereunder. The date on which the Closing is deemed to occur is referred to
herein as the "CLOSING DATE". It is anticipated that the Closing Date will be
November 18, 1997, or such later date as is mutually agreed upon by the
parties hereto.
1.3 CERTAIN DEFINITIONS. When used herein, (A) "BUSINESS DAY" shall mean
any day on which the New York Stock Exchange and commercial banks in the city of
New York are open for business, (B) an "AFFILIATE" of a party shall mean any
person or entity controlling, controlled by or under common control with that
party and (C) "CONTROL" shall mean, with respect to an entity, the ability to
direct the business, operations or management of such entity, whether through an
equity interest therein or otherwise.
2. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS.
Each Purchaser, solely with respect to it, hereby makes the following
representations and warranties to the Company and agrees with the Company that,
as of the date of this Agreement and as of the Closing Date:
2.1 AUTHORIZATION; ENFORCEABILITY. Such Purchaser is duly and validly
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization with full power and authority
to purchase the Preferred Shares and to execute and deliver this Agreement.
This Agreement constitutes such Purchaser's valid and legally binding
obligation, enforceable in accordance with its terms, except as such enforcement
may be limited by (i) applicable bankruptcy, insolvency, reorganization or other
laws of general application relating to or affecting the enforcement of
creditors' rights generally and (ii) general principles of equity.
2.2 ACCREDITED INVESTOR; INVESTMENT INTENT. Such Purchaser is an
accredited investor as that term is defined in Rule 501 of Regulation D, and is
acquiring the Preferred Shares solely for its own account for investment
purposes as a principal and not with a present view to the public resale or
distribution of all or any part thereof, except pursuant to sales that are
exempt from the registration requirements of the Securities Act and/or sales
registered under the Securities Act; provided, however that in making such
representation, such Purchaser does not agree to hold the Securities for any
minimum or specific term and reserves the right to sell, transfer or otherwise
dispose of the Securities at any time in accordance with the provisions of this
Agreement and with Federal and state securities laws applicable to such sale,
transfer or disposition.
2.3 INFORMATION. The Company has provided such Purchaser with information
regarding the business, operations and financial condition of the Company, and
has granted to such Purchaser the opportunity to ask questions of and receive
answers from representatives of the Company, its officers, directors, employees
and agents concerning the Company and materials relating to the terms and
conditions of the purchase and sale of the Preferred Shares hereunder. Neither
such information nor any other investigation conducted by such Purchaser or any
of its representatives shall modify, amend or
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otherwise affect such Purchaser's right to rely on the Company's
representations and warranties contained in this Agreement.
2.4 LIMITATIONS ON DISPOSITION. Such Purchaser acknowledges that, except
as provided in the Registration Rights Agreement, the Securities have not been
and are not being registered under the Securities Act and may not be transferred
or resold without registration under the Securities Act or unless pursuant to an
exemption therefrom.
2.5 LEGEND. Such Purchaser understands that the certificates representing
the Securities may bear at issuance a restrictive 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
"Securities Act"), or the securities laws of any state, and may not be
offered or sold unless a registration statement under the Securities
Act and applicable state securities laws shall have become effective
with regard thereto, or an exemption from registration under the
Securities Act and applicable state securities laws is available in
connection with such offer or sale. Such securities are issued subject
to the provisions of (i) the Certificate of Designation of Informix
Corporation (the "Company"), (ii) a Securities Purchase Agreement,
dated November 17, 1997, by and among the Company and the purchasers
named therein, and (iii) a Registration Rights Agreement, dated
November 17, 1997, by and among the Company and such purchasers."
Notwithstanding the foregoing, it is agreed that, as long as (A) the
resale or transfer (including without limitation a pledge) of any of the
Securities is registered pursuant to an effective registration statement and the
Purchaser holding or entitled to receive such Securities has represented to the
Company, in the related Conversion Notice (as defined in the Certificate of
Designation) or otherwise in writing, that such Purchaser has resold or
transferred such Securities in accordance with the terms of the Prospectus
relating to such Registration Statement, (B) such holder provides the Company
with an opinion of counsel, in form, substance and scope customary for opinions
of counsel in comparable transactions (the cost of which shall be borne by such
holder) to the effect that such Security can be sold publicly without
registration under the Securities Act, (C) such Securities can be sold pursuant
to Rule 144 under the Securities Act ("RULE 144") and a registered broker dealer
provides to the Company a customary broker's Rule 144 letter and such Purchaser
delivers to the Company a customary seller's representation letter, or (D) such
Securities are eligible for resale under Rule 144(k), such Securities shall be
issued without any legend or other restrictive language and, with respect to
Securities upon which such legend is stamped, the Company shall issue new
certificates without such legend to the holder upon request.
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3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company hereby makes the following representations and warranties to
each Purchaser and agrees with such Purchaser that, as of the date of this
Agreement and as of the Closing Date:
3.1 ORGANIZATION, GOOD STANDING AND QUALIFICATION. Each of the Company
and its subsidiaries is duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or organization and has
all requisite corporate power and authority to carry on its business as now
conducted. Each of the Company and its subsidiaries 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 the consolidated
business or financial condition of the Company and its subsidiaries taken as a
whole. The term "subsidiaries" shall mean entities in which the Company has an
equity interest of 50% or greater.
3.2 AUTHORIZATION; CONSENTS. The Company has the requisite corporate
power and authority to enter into and perform its obligations under (i) this
Agreement, (ii) the Registration Rights Agreement and (iii) all other
agreements, documents, certificates or other instruments delivered by the
Company at the Closing (the instruments described in (i), (ii) and (iii) being
collectively referred to herein as the "TRANSACTION DOCUMENTS"), to execute and
perform its obligations under the Certificate of Designation, to execute and
perform its obligations under the Warrants, to issue and sell the Preferred
Shares to such Purchaser in accordance with the terms hereof, to issue the
Conversion Shares and the Warrants upon conversion of the Preferred Shares in
accordance with the Certificate of Designation, to issue the Warrant Shares upon
exercise of the Warrants and to issue the Dividend Payment Shares in accordance
with the Certificate of Designation. All corporate action on the part of the
Company by its officers, directors and stockholders necessary for (A) the
authorization, execution and delivery of, and the performance by the Company of
its obligations under, the Transaction Documents, (B) the authorization,
execution and filing of, and the performance by the Company of its obligations
under, the Certificate of Designation, and (C) the authorization and execution,
and the performance by the Company of its obligations under, the Warrants has
been taken, and no further consent or authorization of the Company, its Board of
Directors, its stockholders, any governmental agency or organization (other than
as may be required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended), or any other person or entity is required (pursuant to any
rule of the National Association of Securities Dealers, Inc. or otherwise).
3.3 ENFORCEMENT. The Transaction Documents and the Certificate of
Designation constitute, and the Warrants upon issuance will constitute, valid
and legally binding obligations of the Company, enforceable in accordance with
their respective terms, except as such enforcement may be limited by (i)
applicable bankruptcy, insolvency, reorganization or other laws of general
application relating to or affecting the enforcement of creditors' rights
generally and (ii) general principles of equity.
3.4 DISCLOSURE DOCUMENTS; AGREEMENTS; FINANCIAL STATEMENTS; OTHER
INFORMATION. The Company has filed, or will file prior to the Closing, with the
Commission: (i) the Company's Annual Report on Form 10-K, as amended, for the
year ended December 31, 1996, (ii) Quarterly Reports on
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Form 10-Q, as amended, for the quarters ended March 30, 1997, June 29, 1997
and September 29, 1997, (iii) all Current Reports on Form 8-K required to be
filed with the Commission since December 31, 1996 and (iv) the Company's
definitive Proxy Statement for its 1997 Annual Meeting of Stockholders (the
"DISCLOSURE DOCUMENTS"). The Company is not aware of any event occurring on or
prior to the Closing (other than the transactions effected hereby) that would
require the filing of, or with respect to which the Company intends to file, a
Form 8-K after the Closing. Each Disclosure Document, as of the date of the
filing thereof with the Commission or, with respect to a Disclosure Document
that has been amended subsequent to the initial filing thereof, as of the date
of the filing of such amendment with the Commission, conformed in all material
respects to the requirements of the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), and the rules and regulations thereunder and, as
of the date of such filing, such Disclosure Document did not contain an untrue
statement of material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. All material
agreements required to be filed as exhibits to the Disclosure Documents have
been filed (or will be filed prior to the Closing) as required. Neither the
Company nor any of its subsidiaries is in breach of any agreement to which it
is a party or by which it is bound where such breach is reasonably likely to
have a material adverse effect on the consolidated business or financial
condition of the Company and its subsidiaries taken as a whole. Except as set
forth in the Disclosure Documents or any schedule or exhibit attached hereto,
the Company has no liabilities, contingent or otherwise, other than
liabilities incurred in the ordinary course of business which, under generally
accepted accounting principles, are not required to be reflected in the
Company's financial statements and which, individually or in the aggregate,
are not material to the consolidated business or financial condition of the
Company and its subsidiaries taken as a whole. The financial statements of
the Company included in the Disclosure Documents, as of their respective dates
or, with respect to financial statements included in a Disclosure Document
that has been amended subsequent to the initial filing thereof, as of the date
of the filing of such amendment with the Commission, (A) complied as to form
in all material respects with applicable accounting requirements and the
published rules and regulations of the Commission with respect thereto and (B)
have been prepared in accordance with generally accepted accounting principles
consistently applied at the times and during the periods involved (except (i)
as may be otherwise indicated in such financial statements or the notes
thereto, or (ii) in the case of unaudited interim statements, to the extent
they may exclude footnotes or may be condensed or summary statements) and
fairly present in all material respects the financial position of the Company
as of the dates thereof and the results of its operations and cash flows for
the periods then ended (subject, in the case of unaudited statements, to
normal year-end adjustments). The information described in paragraph 2.3 above
does not contain an untrue statement of material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and does not include any material, non-public information.
3.5 CAPITALIZATION. The capitalization of the Company as of November 17,
1997, including its authorized capital stock, the number of shares issued and
outstanding, the number of shares issuable and reserved for issuance pursuant to
the Company's stock option plans, the number of shares issuable and reserved for
issuance pursuant to securities (other than the Preferred Stock) exercisable
for, or convertible into or exchangeable for any shares of Common Stock and the
number of shares initially to
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be reserved for issuance upon conversion of the Preferred Shares and exercise
of the Warrants is set forth on SCHEDULE 3.5 hereto. All of such outstanding
shares of capital stock have been, or upon issuance will be, validly issued,
fully paid and non-assessable. No shares of the capital stock of the Company
are subject to preemptive rights or any other similar rights of the
stockholders of the Company or any liens or encumbrances created by or through
the Company. Except as disclosed on SCHEDULE 3.5, or as contemplated herein,
as of the date of this Agreement and as of the Closing, there are no
outstanding options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into or exercisable or exchangeable for, any shares of capital
stock of the Company or any of its subsidiaries, or arrangements by which the
Company or any of its subsidiaries is or may become bound to issue additional
shares of capital stock of the Company or any of its subsidiaries. There have
been no material changes to the information set forth on Schedule 3.5 since
November 17, 1997.
3.6 VALID ISSUANCE.
3.6.1 The Preferred Shares are duly authorized and, when issued,
sold and delivered in accordance with the terms hereof, (i) will be duly and
validly issued, fully paid and nonassessable, free and clear of any taxes,
liens, claims, preemptive or similar rights or encumbrances imposed by or
through the Company, (ii) based in part upon the representations of such
Purchaser in this Agreement, will be issued, sold and delivered in compliance
with all applicable Federal and state securities laws and (iii) will be entitled
to all of the rights, preferences and privileges set forth in the Certificate of
Designation. The Conversion Shares are duly authorized and reserved for
issuance and, when issued upon conversion of the Preferred Shares in accordance
with the terms of the Certificate of Designation, will be duly and validly
issued, fully paid and nonassessable, free and clear of any taxes, liens,
claims, preemptive or similar rights or encumbrances imposed by or through the
Company. The Dividend Payment Shares are duly authorized and, upon the issuance
thereof in accordance with the terms of the Certificate of Designation, will be
duly and validly issued, fully paid and nonassessable, free and clear of any
taxes, liens, claims, preemptive or similar rights or encumbrances imposed by or
through the Company.
3.6.2 The Warrants are duly authorized and, when issued upon
conversion of the Preferred Shares in accordance with the terms of the
Certificate of Designation, will be duly and validly issued, fully paid and
nonassessable, free and clear of any taxes, liens, claims, preemptive or similar
rights or encumbrances imposed by or through the Company. The Warrant Shares are
duly authorized and reserved for issuance and, when issued upon exercise of the
Warrants in accordance with the terms thereof, will be duly and validly issued,
fully paid and nonassessable, free and clear of any taxes, liens, claims,
preemptive or similar rights or encumbrances imposed by or through the Company.
3.7 NO CONFLICT WITH OTHER INSTRUMENTS. Except as set forth on SCHEDULE
3.7, neither the Company nor any of its subsidiaries is in violation of any
provisions of its Certificate of Incorporation, Bylaws or any other governing
document as amended and in effect on and as of the date hereof or in default
(and no event has occurred which, with notice or lapse of time or both, would
constitute a default) under any provision of any instrument or contract to which
it is a party or by which it is bound, or of any provision of any Federal or
state judgment, writ, decree, order, statute, rule or governmental
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regulation applicable to the Company, which would have a material adverse
effect on the consolidated business or financial condition of the Company and
its subsidiaries taken as a whole. Subject to the satisfaction of conditions
set forth in Section 5 hereof, the (i) execution, delivery and performance of
this Agreement and the other Transaction Documents, (ii) execution and filing
of the Certificate of Designation, and (iii) consummation of the transactions
contemplated hereby and thereby (including without limitation, the issuance of
the Preferred Shares, the issuance of the Warrants and the reservation for
issuance and issuance of the Conversion Shares, the Warrant Shares and the
Dividend Payment Shares) will not (A) result in any such violation or be in
conflict with or constitute, with or without the passage of time and giving of
notice, either a default under any such provision, instrument or contract or
an event which results in the creation of any lien, charge or encumbrance upon
any assets of the Company or of any of its subsidiaries or the triggering of
any preemptive or anti-dilution rights or rights of first refusal or first
offer on the part of holders of the Company's securities or (B) cause any
Purchaser, or any affiliate of such Purchaser, (alone or together with any
other Purchasers) to be deemed an Acquiring Person as such term is defined in
the Company's Amended and Restated Rights Plan (the "RIGHTS PLAN") or trigger
any rights under the Rights Plan. Each Conversion Share, Warrant Share and
Dividend Payment Share shall be entitled to all of the rights afforded to
shares of Common Stock pursuant to the Rights Plan.
3.8 FINANCIAL CONDITION; TAXES; LITIGATION.
3.8.1 The Company's financial condition is, in all material respects,
as described in the Disclosure Documents, as amended, except for changes in the
ordinary course of business and normal year-end adjustments that are not, in the
aggregate, materially adverse to the consolidated business or financial
condition of the Company and its subsidiaries taken as a whole. Except as
otherwise described in the Disclosure Documents, as of the date hereof and as of
the Closing there has been no material adverse change to the Company's business,
operations, properties, financial condition, prospects or results of operations
since the date of the Company's most recent audited financial statements
contained in the Disclosure Documents.
3.8.2 The Company has filed all tax returns required to be filed by it
and paid all taxes which are due, except for taxes which it reasonably disputes
or which could not reasonably be expected to have a material adverse effect on
the consolidated business or financial condition of the Company and its
subsidiaries taken as a whole.
3.8.3 Except as set forth in SCHEDULE 3.8.3, each of the Company and
its subsidiaries is not the subject of any pending or, to the Company's
knowledge, threatened inquiry, investigation or administrative or legal
proceeding by the Internal Revenue Service, the taxing authorities of any state
or local jurisdiction, the Commission or any state securities commission or
other governmental or regulatory entity which could reasonably be expected to
have a material adverse effect on the consolidated business or financial
condition of the Company and its subsidiaries taken as a whole.
3.8.4 Except as set forth in SCHEDULE 3.8.4, there is no material
claim, litigation or administrative proceeding pending, or, to the Company's
knowledge, threatened or contemplated, against
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the Company or any of its subsidiaries, or against any officer, director or
employee of the Company or any such subsidiary in connection with such
person's employment therewith. Neither the Company nor any of its
subsidiaries is a party to or subject to the provisions of, any order, writ,
injunction, judgment or decree of any court or government agency or
instrumentality which could reasonably be expected to have a material adverse
effect on the consolidated business or financial condition of the Company and
its subsidiaries taken as a whole.
3.9 REPORTING COMPANY; FORM S-1. The Company is subject to the reporting
requirements of the Exchange Act, has a class of securities registered under
Section 12 of the Exchange Act, and has filed all reports required thereby. The
Company is eligible to register for resale shares of its Common Stock on a
registration statement on Form S-1 under the Securities Act.
3.10 ACKNOWLEDGEMENT OF DILUTION. The Company acknowledges that the
issuance of (i) the Conversion Shares upon conversion of the Preferred Shares in
accordance with the terms of the Certificate of Designation, (ii) the Warrant
Shares upon exercise of the Warrants, and (iii) the Dividend Payment Shares in
accordance with the terms of the Certificate of Designation may result in
dilution of the outstanding shares of Common Stock, which dilution may be
substantial under certain market conditions. The Company further acknowledges
that its obligation (x) to issue Conversion Shares and the Warrants upon
conversion of the Preferred Shares in accordance with the terms of the
Certificate of Designation, (y) to issue Warrant Shares upon exercise of the
Warrants and (z) to issue Dividend Payment Shares in accordance with the terms
of the Certificate of Designation is unconditional and absolute regardless of
the effect of any such dilution. The Board of Directors has reviewed the
Certificate of Designation and the Transaction Documents, and has determined
that the transactions contemplated thereby are in the best interests of the
Company and its stockholders.
3.11 INTELLECTUAL PROPERTY. The Company and its subsidiaries each owns or
possesses adequate trademarks, trade names and other rights to inventions, know-
how, patents, copyrights, confidential information and other intellectual
property rights necessary to conduct the business now operated by it, and is not
aware of any infringement by a third party with respect to such rights or of any
infringement by it or conflict with asserted rights of others that, in any such
case, if determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the
consolidated business or financial condition of the Company and its subsidiaries
taken as a whole.
3.12 REGISTRATION RIGHTS; RIGHTS OF PARTICIPATION. Except as described on
SCHEDULE 3.12 hereto, (A) the Company has not granted or agreed to grant to any
person or entity any rights (including "piggy-back" registration rights) to have
any securities of the Company registered with the Commission or any other
governmental authority which has not been satisfied and (B) no person or entity,
including, but not limited to, current or former stockholders of the Company,
underwriters, brokers, agents or other third parties, has any right of first
refusal, preemptive right, right of participation, or any similar right to
participate in the transactions contemplated by this Agreement, the other
Transaction Documents or the Certificate of Designation which has not been
waived.
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3.13 TRADING ON NASDAQ. The Common Stock is authorized for quotation on
the Nasdaq National Market, and trading in the Common Stock on Nasdaq has not
been suspended. The Company is (or will be at the Closing) in full compliance
with the designation criteria of the Nasdaq National Market, and does not
reasonably anticipate that the Common Stock will lose its designation as a
Nasdaq National Market Security, whether by reason of the transactions
contemplated by this Agreement, the other Transaction Documents or the
Certificate of Designation, or otherwise.
3.14 SOLICITATION. Neither the Company nor any of its subsidiaries or
affiliates, nor any person acting on its or their behalf, (i) has engaged in any
form of general solicitation or general advertising (within the meaning of
Regulation D) in connection with the offer or sale of the Preferred Shares or
(ii) has, directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under any circumstances that would
require registration of the Preferred Shares under the Securities Act.
3.15 FEES. The Company is not obligated to pay any compensation or other
fee, cost or related expenditure to any underwriter, broker, agent or other
representative in connection with the transactions contemplated hereby.
3.16 FOREIGN CORRUPT PRACTICES. To the knowledge of the Company, neither
the Company, nor any of its subsidiaries nor any director, officer, agent,
employee or other person acting on behalf of the Company or any subsidiary, has
(i) used any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expenses relating to political activity, (ii) made any direct
or indirect unlawful payment to any foreign or domestic government official or
employee, or (iii) violated any provision of the Foreign Corrupt Practices Act
of 1977, as amended, or made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment to any foreign or domestic government
official or employee.
3.17 OTHER ISSUANCES OF SECURITIES. The Company has not issued (and will
not issue) any shares of Common Stock or shares of any series of preferred stock
or other securities or instruments convertible into, exchangeable for or
otherwise entitling the holder thereof to acquire shares of Common Stock which
would be integrated with the sale of the Preferred Shares to such Purchaser, or
the issuance of the Conversion Shares upon conversion thereof, for purposes of
determining whether stockholder approval is required under the designation
criteria of the Nasdaq National Market.
3.18 TITLE. The Company has good and marketable title in fee simple to the
real property described in paragraph 5.1.15 hereof, subject to the contracts of
sale described therein, in each case free and clear of all liens, encumbrances
and defects, except for liens, claims or encumbrances as do not materially
affect the value of such property and do not interfere with the use made and
proposed to be made of such property (including the sale thereof as described in
paragraph 5.1.15) by the Company and its subsidiaries.
3.19 EXCHANGE OF SERIES A CONVERTIBLE PREFERRED STOCK. The holder or
holders of all of the previously outstanding shares of the Company's Series A
Convertible Preferred Stock have validly
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exchanged such shares for shares of the Series A-1 Preferred Stock (as defined
below). No shares of such Series A Convertible Preferred Stock remain
outstanding, and all such shares outstanding at any time prior to such
exchange have been retired by the Company and have regained the status of
authorized but unissued shares. No approval, consent or authorization by the
holder or holders of the Series A Convertible Preferred Stock or the Series
A-1 Preferred Stock is required in order to consummate the transactions
contemplated hereby or by the Certificate of Designation, other than as will
be delivered to the Purchasers by the Company on or before the Closing, and no
preemptive, anti-dilutive or other rights on the part of such holder or
holders are triggered thereby.
4. COVENANTS OF THE COMPANY.
4.1 CORPORATE EXISTENCE. The Company shall, so long as any Purchaser or
any affiliate of such Purchaser beneficially owns any Securities, maintain its
corporate existence in good standing and shall pay all taxes owed by it when due
except for taxes which the Company reasonably disputes or as to which the
failure to pay could not reasonably be expected to have a material adverse
effect on the consolidated business or financial condition of the Company.
4.2 PROVISION OF INFORMATION. The Company shall provide each Purchaser
with copies of its annual reports on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K and proxy statements and other materials sent to
stockholders, in each such case promptly after the filing thereof with the
Commission, until the conversion or redemption of all of the Preferred Shares
and exercise in full of all of the Warrants held by such Purchaser.
4.3 FORM D; BLUE-SKY QUALIFICATION. The Company agrees to file a Form D
with respect to the Securities as required under Regulation D and to provide a
copy thereof to each Purchaser promptly after such filing. The Company shall,
on or before the Closing, take such action as is necessary to qualify the
Preferred Shares for sale under applicable state or "blue-sky" laws or obtain an
exemption therefrom, and shall provide evidence of any such action to each
Purchaser at or prior to the Closing.
4.4 REPORTING STATUS. As long as any Purchaser or any affiliate of such
Purchaser beneficially owns any Securities and until the date on which any of
the foregoing may be sold to the public pursuant to Rule 144(k) (or any
successor rule or regulation), (i) the Company shall timely file with the
Commission all reports required to be so filed pursuant to the Exchange Act and
(ii) the Company shall not terminate its status as an issuer required by the
Exchange Act to file reports thereunder even if the Exchange Act or the rules or
regulations thereunder would permit such termination. The Company agrees to file
with the Commission a Form 8-K describing the terms of the transactions
contemplated by this Agreement and the other Transaction Documents, with the
Transaction Documents attached to such Form 8-K as an exhibit thereto, on or
before the fifteenth (15th) day following the Closing Date in the form required
by the Exchange Act.
4.5 RESERVATION OF COMMON STOCK. The Company shall at all times have
authorized and reserved for issuance, free from any preemptive rights, solely
for the purpose of effecting conversions of the Preferred Shares hereunder and
the exercise of the Warrants, such number of its shares of
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Common Stock as shall from time to time be sufficient to effect the conversion
of all of the Preferred Shares and the exercise of the Warrants in full (the
"RESERVED AMOUNT"). As of the Closing Date, the Reserved Amount shall be
equal to no less than 150% of the number of shares of Common Stock issuable
upon conversion of all of the Preferred Shares to be issued at the Closing
(assuming for such purpose that the Conversion Date (as defined in the
Certificate of Designation) for such conversion were to occur as of the
Closing Date) and exercise of all of the Warrants issuable upon such
conversion. If on any date the Reserved Amount is less than 125% of the
number of shares of Common Stock issuable upon conversion of all of the
Preferred Shares then outstanding (assuming for such purpose that the
Conversion Date (as defined in the Certificate of Designation) for such
conversion were to occur as of such date) and exercise of all of the Warrants
issuable upon such conversion, the Company shall take action (including
without limitation seeking stockholder authorization for the reservation of
additional shares of Common Stock) as soon as practicable (but in no event
longer than thirty (30) days) to increase the Reserved Amount to no less than
150% of the number of shares of Common Stock into which such outstanding
Preferred Shares are then convertible and such Warrants are exercisable. In
addition, if on any date the number of shares of Common Stock authorized for
any purpose permitted under the Company's Certificate of Incorporation
(including the Reserved Amount) is less than 200% of the number of shares of
Common Stock issuable upon conversion of all of the Preferred Shares then
outstanding (assuming for such purpose that the Conversion Date (as defined in
the Certificate of Designation) for such conversion were to occur as of such
date) and exercise of all of the Warrants issuable upon such conversion, the
Company shall take action (including without limitation seeking stockholder
authorization for the reservation of additional shares of Common Stock) as
soon as practicable (but in no event longer than thirty (30) days) to (i)
reserve all authorized and unreserved shares of Common Stock solely for the
purpose of effecting conversions of the Preferred Shares hereunder and the
exercise of the Warrants in full and (ii) increase such authorized amount to
no less than 200% of the number of shares of Common Stock into which such
outstanding Preferred Shares are then convertible and such Warrants are
exercisable. The Company shall not reduce the number of shares reserved for
issuance hereunder without the written consent of the holders of two-thirds of
the Preferred Shares then outstanding. No Purchaser shall be issued, upon
conversion of Preferred Shares or exercise of the Warrants, shares of Common
Stock in an amount greater than the product of (A) the Reserved Amount in
effect on the date on which notice of such conversion or exercise is delivered
to the Company pursuant to the terms of the Certificate of Designation TIMES
(B) a fraction, the numerator of which is the number of Preferred Shares
purchased by such Purchaser hereunder and the denominator of which is the
aggregate amount of all of the Preferred Shares purchased by the Purchasers
hereunder.
4.6 USE OF PROCEEDS. The Company shall use the proceeds from the sale of
the Preferred Shares and the Warrants for general corporate purposes only, in
the ordinary course of its business and consistent with past practice and shall
not use such proceeds to make a loan to any employee, officer or director of the
Company or to repurchase or pay a dividend on shares of Common Stock except in
connection with a stock repurchase at the original purchase price therefor (as
long as such repurchase is effected at a purchase price for the shares of Common
Stock being repurchased which is less than the then current market value of the
Common Stock) from an employee under a customary form of stock repurchase
agreement resulting from the termination of such employee's employment.
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4.7 QUOTATION ON NASDAQ. The Company shall (i) as soon as practicable
following the Closing, secure the designation and quotation of the Conversion
Shares, the Warrant Shares and the Dividend Payment Shares on the Nasdaq
National Market, and (ii) use its best efforts to maintain the designation and
quotation, or listing, of the Common Stock on the Nasdaq National Market, the
New York Stock Exchange or the American Stock Exchange.
4.8 USE OF PURCHASER NAME. The Company shall not use, directly or
indirectly, any Purchaser's name in any advertisement, announcement, press
release or other similar communication unless it has received the prior written
consent of such Purchaser for the specific use contemplated or as otherwise
required by applicable law or regulation.
4.9 COMPANY'S INSTRUCTIONS TO TRANSFER AGENT. On or prior to the Closing,
the Company shall execute and deliver irrevocable instructions to its transfer
agent (the "TRANSFER AGENT") (i) to issue certificates representing Conversion
Shares upon conversion of the Preferred Shares in accordance with the terms of
the Certificate of Designation and receipt of a valid Conversion Notice (as
defined in the Certificate of Designation) from a Purchaser, in the amount
specified in such Conversion Notice, in the name of such Purchaser or its
nominee, (ii) to issue certificates representing the Warrants upon conversion of
the Preferred Shares in accordance with the terms of the Certificate of
Designation and receipt of a valid Conversion Notice (as defined in the
Certificate of Designation) from a Purchaser, covering the number of Warrant
Shares specified in such Conversion Notice, in the name of such Purchaser or its
nominee, (iii) to issue certificates representing Warrant Shares upon exercise
of the Warrants in accordance with their terms and receipt of a valid Exercise
Notice (as defined in the Warrants) from a Purchaser, in the amount specified in
such Exercise Notice in the name of such Purchaser or its nominee, (iv) to issue
certificates representing the Dividend Payment Shares upon the issuance thereof
in accordance with the Certificate of Designation and (v) to deliver such
certificates to such Purchaser no later than the close of business on the later
to occur of (A) the third (3rd) business day following the related Conversion
Date or the Dividend Payment Date (each as defined in the Certificate of
Designation) or Exercise Date (as defined in the Warrant), as the case may be
and (B) in the case of conversion of Preferred Shares or exercise of the
Warrant, the first business day following the date of delivery of the original
certificates, duly endorsed, representing the Series B Preferred Shares being
converted or the Warrant being exercised, as the case may be. The Company shall
instruct the transfer agent that, in lieu of delivering physical certificates
representing shares of Common Stock to a Purchaser upon conversion of the
Preferred Shares, exercise of the Warrant, or issuance of the Dividend Payment
Shares, and as long as the Transfer Agent is a participant in the Depository
Trust Company ("DTC") Fast Automated Securities Transfer program, and such
Purchaser has not informed the Company that it wishes to receive physical
certificates therefor, the transfer agent may effect delivery of Conversion
Shares, Warrant Shares or Dividend Payment Shares, as the case may be, by
crediting the account of such Purchaser or its nominee at DTC for the number of
shares for which delivery is required hereunder within the time frame specified
above for delivery of certificates. The Company represents to and agrees with
each Purchaser that it will not give any instruction to the Transfer Agent that
will conflict with the foregoing instruction or otherwise restrict such
Purchaser's right to convert the Preferred Shares or exercise the Warrant or to
receive Conversion Shares, Warrants or Dividend Payment Shares in accordance
with the terms of the Certificate of Designation or to receive Warrant
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Shares in accordance with the terms of the Warrants. In the event that the
Company's relationship with the Transfer Agent should be terminated for any
reason, the Transfer Agent shall continue acting as transfer agent pursuant to
the terms hereof until such time that a successor transfer agent is appointed
by the Company and agrees to be bound by the terms hereof.
4.10 RIGHT OF FIRST OFFER. Subject and subordinate to the rights set forth
in Section 5(h) of the Company's Subscription Agreement with Xxxxxxxx
International Limited dated as of August 12, 1997, as amended, and to the rights
of the holders of the Company's Series A-1 Preferred Stock, prior to any offer
or sale by the Company of Common Stock (or any securities convertible into or
exchangeable for Common Stock) during the one (1) year period following Closing
(the "FIRST OFFER PERIOD"), the Company must first deliver to each Purchaser
written notice describing the proposed issuance, including the terms and
conditions thereof, and provide such Purchaser with an option (the "RIGHT OF
FIRST OFFER") during the five (5) business day period following delivery of such
notice to purchase up to its proportionate share (based on the number of
Preferred Shares purchased by such Purchaser hereunder relative to the aggregate
number of Preferred Shares purchased by the Purchasers hereunder) of the
securities being offered on the same terms as contemplated by such issuance. In
the event that such Purchaser either does not give notice within such five
business day period that it intends to exercise the foregoing option or informs
the Company in writing that it does not intend to participate in such issuance,
the Company may offer to a third party the option to purchase up to, in the
aggregate, the amount of securities which were declined by such Purchaser, on
the same terms as were offered to such Purchaser; PROVIDED, HOWEVER, that any
Purchaser that declines to exercise its option pursuant to a Right of First
Offer shall have the right, upon delivery of notice thereof to the Company
during such five business day period, to exchange the Preferred Shares then held
by it for the securities being offered, on the same terms offered to such person
or entity (an "EXCHANGE OPTION"). In the event that a Purchaser exercises its
Exchange Option, the Company shall, at the same time that it issues the
securities being offered to such person or entity, deliver to such Purchaser, in
exchange for each Preferred Share (or securities received in exchange therefor
if such Purchaser has previously exercised a Participation Option ("EXCHANGE
SECURITIES")) then held by such Purchaser, the securities and any other
consideration to be delivered to, and at the same purchase price to be paid by,
such other person or entity; PROVIDED, HOWEVER, if such securities restrict in
any way the conversion or exercise thereof, or the sale or resale of the
underlying instruments issuable upon such conversion or exercise, and such
restriction is based on the passage of time, appropriate provision shall be made
so that such Purchaser shall be deemed to have held such securities for the same
time period as such Purchaser has theretofore held such Preferred Shares and/or
Exchange Securities, as the case may be. The value of each Preferred Share
being exchanged by such Purchaser for the securities being offered shall be
equal to the Liquidation Preference (as defined in the Certificate of
Designation) for such Preferred Share or, with respect to Exchange Securities,
the purchase price therefor plus accrued dividends or interest as the case may
be. The Right of First Offer shall not apply to any transaction involving
issuances of securities as consideration in a merger, consolidation, acquisition
or sale of assets (in each case, the primary purpose of which is not to raise
equity capital), or to a lender in connection with bank or equipment financing,
or pursuant to a strategic partnership or joint venture which is formed for a
bona fide commercial purpose, or as consideration for the acquisition of a
business, product or license by the Company or in connection with the exercise
of options by employees, directors or consultants. The Right of First Offer
also shall not
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apply to (i) the issuance of Common Stock in a transaction pursuant to a
firm-commitment underwritten public offering (other than an offering conducted
pursuant to Rule 415 under the Securities Act), (ii) the issuance of
securities upon exercise or conversion of the Company's options, warrants or
other convertible securities outstanding as of the date hereof, (iii)
securities outstanding or issuable under the Company's Subscription Agreement
with Xxxxxxxx International Limited ("XXXXXXXX") dated as of August 12, 1997,
as amended, or under the Company's Exchange Agreement with Xxxxxxxx dated as
of November 17, 1997 or (iv) the grant of additional options or warrants, or
the issuance of additional securities, under any Company stock option or
restricted stock plan or similar equity incentive plan or arrangement for the
benefit of the Company's employees, directors or consultants.
5. CONDITIONS TO CLOSING.
5.1 CONDITIONS TO PURCHASER'S OBLIGATIONS AT CLOSING. Each Purchaser's
obligations at the Closing, including without limitation its obligation to
purchase the Preferred Shares, are conditioned upon the fulfillment of each of
the following events:
5.1.1 the representations and warranties of the Company set forth
in this Agreement shall be true and correct in all material
respects as of the Closing Date as if made on such date;
5.1.2 the Company shall have complied with or performed in all
material respects all of the agreements, obligations and
conditions set forth in this Agreement that are required to
be complied with or performed by the Company on or before
the Closing;
5.1.3 the Company shall have delivered to such Purchaser a
certificate, signed by an officer of the Company,
certifying that the conditions specified in paragraphs
5.1.1 and 5.1.2 above and paragraph 5.1.10 below have been
fulfilled as of the Closing;
5.1.4 the Company shall have filed the Certificate of Designation
with the Secretary of State of the State of Delaware and
shall have furnished such Purchaser with a file-stamped
copy thereof;
5.1.5 the Company shall have obtained from Xxxxxxxx its written
waiver of any and all rights under Section 5(h) of the
Subscription Agreement dated August 12, 1997, as amended,
between the Company and Xxxxxxxx, arising out of the
issuance of the Preferred Shares pursuant hereto or the
transactions contemplated hereby or by the Certificate of
Designation, and shall have delivered a copy of such waiver
to such Purchaser;
-14-
5.1.6 the Company shall have delivered to such Purchaser an
opinion of counsel for the Company, dated as of the Closing
Date, in form and substance reasonably acceptable to such
Purchaser;
5.1.7 the Company shall have delivered duly executed certificates
representing the Preferred Shares being so purchased;
5.1.8 the Company shall have executed and delivered the
Registration Rights Agreement;
5.1.9 the Common Stock shall be designated for quotation and
actively traded on the Nasdaq National Market;
5.1.10 there shall have been no material adverse changes in the
Company's consolidated business or financial condition
since the date of the Company's most recent financial
statements contained in the Disclosure Documents;
5.1.11 the Company shall have authorized and reserved for issuance
150% of the aggregate number of shares of Common Stock
issuable upon conversion of all of the Preferred Shares to
be issued at the Closing (assuming for such purpose that
the Conversion Date (as defined in the Certificate of
Designation) were to occur as of the Closing Date) and
exercise of the Warrants issuable upon such conversion;
5.1.12 the Company shall have (A) exchanged the outstanding shares
of the Company's Series A Preferred Stock for an additional
series of preferred stock as more specifically described in
the related certificate of designation filed with the
Secretary of State of the State of Delaware on November 17,
1997 (the "SERIES A-1 PREFERRED STOCK"), and (B) delivered
to such Purchaser a file-stamped copy of the Certificate of
Designation for the Series A-1 Preferred Stock;
5.1.13 the Company shall have amended the Rights Plan to permit the
issuance of the Preferred Stock and the consummation of the
transactions contemplated by this Agreement, the Certificate
of Designation, the Warrants and the Registration Rights
Agreement without the triggering of any rights thereunder;
5.1.14 the Company shall have filed with the Commission amended
Form 10-K/A for the year ended December 31, 1996, amended
Form 10-Q/A for the quarter ended March 31, 1997, Form 10-Q
for the quarter ended June 29, 1997, and Form 10-Q for the
quarter ended September 29, 1997 (the "AMENDED REPORTS"),
and the financial statements included in the
-15-
Amended Reports as so filed shall not differ materially
from the draft financial statements or other financial
information provided to the Purchasers on or before the
date hereof;
5.1.15 binding contracts of sale for approximately 27 acres of
property in Santa Clara, California, including a contract
for the sale of approximately 10 acres to affiliates of
Xxxxxxx Xxxxx & Co. and Tishman Speyer Properties and a
contract of sale of approximately 17 acres to Intel
Corporation, for an aggregate purchase price of not less
than $60 million, shall have been executed and delivered by
the Company and such purchasers; and
5.1.16 the Company shall have received from the NASD and shall have
delivered to such Purchaser written confirmation that all
delisting proceedings with respect to the designation of the
Common Stock as a Nasdaq National Market Security have been
terminated, and that the Company is in good standing as a
Nasdaq National Market issuer.
5.2 CONDITIONS TO COMPANY'S OBLIGATIONS AT CLOSING. The Company's
obligations at the Closing are conditioned upon the fulfillment of each of the
following events:
5.2.1 the representations and warranties of each Purchaser shall
be true and correct in all material respects as of the
Closing Date as if made on such date;
5.2.2 each Purchaser shall have complied with or performed all of
the agreements, obligations and conditions set forth in
this Agreement that are required to be complied with or
performed by such Purchaser on or before the Closing;
5.2.3 each Purchaser shall have executed and delivered the
Registration Rights Agreement; and
5.2.4 the conditions specified in subparagraphs 5.1.5 and 5.1.12
shall have been satisfied.
6. INDEMNIFICATION.
The Company agrees to indemnify and hold harmless each Purchaser and its
officers, directors, employees and agents, and each person who controls such
Purchaser within the meaning of the Securities Act or the Exchange Act (each, a
"PURCHASER INDEMNIFIED PARTY") against any losses, claims, damages, liabilities
or reasonable out-of-pocket expenses (including the reasonable fees and
disbursements of counsel) as incurred, joint or several, to which it, they or
any of them, may become subject and not
-16-
otherwise reimbursed, arising out of or in connection with the breach by the
Company of any of its representations, warranties or covenants made herein.
Each Purchaser agrees, severally and not jointly, to indemnify and hold
harmless the Company and its officers, directors, employees and agents, and each
person who controls the Company within the meaning of the Securities Act or the
Exchange Act (each, a "COMPANY INDEMNIFIED PARTY") (a Purchaser Indemnified
Party and a Company Indemnified Party are each hereinafter referred to as an
"INDEMNIFIED PARTY") against any losses, claims, damages, liabilities or
expenses (including the fees and disbursements of counsel) as incurred, joint or
several, to which it, they or any of them, may become subject and not otherwise
reimbursed, arising out of or in connection with the breach by such Purchaser of
any of its representations, warranties or covenants made herein.
Promptly after receipt by an Indemnified Party of notice of the
commencement of any action by a third party pursuant to which indemnification
may be sought hereunder, such Indemnified Party will, if a claim in respect
thereof is to be made against the other party (the "Indemnifying Party"),
deliver to the Indemnifying Party a written notice of the commencement thereof
and the Indemnifying Party shall have the right to participate in and to assume
the defense thereof with counsel reasonably selected by the Indemnifying Party,
provided, however, that an Indemnified Party shall have the right to retain its
own counsel, with the reasonably incurred fees and expenses of such counsel to
be paid by the Indemnifying Party, if representation of such Indemnified Party
by the counsel retained by the Indemnifying Party would be inappropriate due to
actual or potential conflicts of interest under applicable standards of
professional conduct between such Indemnified Party and any other party
represented by such counsel in such proceeding. The failure to deliver written
notice to the Indemnifying Party within a reasonable time of the commencement of
any such action will not relieve the Indemnifying Party of any of its
obligations hereunder with respect to such action except to the extent such
failure is prejudicial to the Indemnifying Party's ability to defend any such
action.
No Indemnifying Party shall, without the prior written consent of the
Indemnified Party, effect any settlement of pending or threatened action in
respect of which an Indemnified Party is or could have been a party and
indemnity could have been sought hereunder by such Indemnified Party unless such
settlement includes an unconditional release of such Indemnified Party from all
liability on any claims that are the subject matter of such action. An
Indemnifying Party will not be liable for any settlement of any action or claim
effected without its written consent.
7. MISCELLANEOUS.
7.1 SURVIVAL; SEVERABILITY. The representations, warranties,
covenants and indemnities made by the parties herein shall survive the Closing
notwithstanding any due diligence investigation made by or on behalf of the
party seeking to rely thereon. In the event that any provision of this
Agreement becomes or is declared by a court of competent jurisdiction to be
illegal, unenforceable or void, this Agreement shall continue in full force and
effect without said provision; provided that in such case the parties shall
negotiate in good faith to replace such provision with a new provision which is
not illegal,
-17-
unenforceable or void, as long as such new provision does not materially
change the economic benefits of this Agreement to the parties.
7.2 SUCCESSORS AND ASSIGNS. The terms and conditions of this
Agreement shall inure to the benefit of and be binding upon the respective
successors and permitted 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 permitted assigns any rights,
remedies, obligations or liabilities under or by reason of this Agreement,
except as expressly provided in this Agreement. The Purchaser may assign its
rights and obligations hereunder, in connection with any private sale or
transfer (including without limitation a bona fide pledge) of the Preferred
Shares or the Warrants in accordance with the terms hereof, as long as, as a
condition precedent to such transfer, the transferee executes an acknowledgment
agreeing to be bound by the applicable provisions of this Agreement, in which
case the term "Purchaser" shall be deemed to refer to such transferee as though
such transferee were an original signatory hereto. The Company may not assign it
rights or obligations under this Agreement.
7.3 INDEPENDENT NATURE OF PURCHASERS' OBLIGATIONS AND RIGHTS. The
obligations of each Purchaser hereunder are several and not joint with the
obligations of the other Purchasers hereunder, and no Purchaser shall be
responsible in any way for the performance of the obligations of any other
Purchaser hereunder. Nothing contained herein or in any other agreement or
document delivered at the Closing, and no action taken by any Purchaser pursuant
hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert with
respect to such obligations or the transactions contemplated by this Agreement.
Each Purchaser shall be entitled to protect and enforce its rights, including
without limitation the rights arising out of this Agreement or out of the other
Transaction Documents, and it shall not be necessary for any other Purchaser to
be joined as an additional party in any proceeding for such purpose.
7.4 NO RELIANCE; REPRESENTATIONS BY PURCHASERS. Each party
acknowledges that (i) it has such knowledge in business and financial matters as
to be fully capable of evaluating this Agreement, the other Transaction
Documents and the transactions contemplated hereby and thereby, (ii) it is not
relying on any advice or representation of the other party in connection with
entering into this Agreement, the other Transaction Documents or such
transactions (other than the representations made in this Agreement or the other
Transaction Documents), (iii) it has not received from such party any assurance
or guarantee as to the merits (whether legal, regulatory, tax, financial or
otherwise) of entering into this Agreement or the other Transaction Documents or
the performance of its obligations hereunder and thereunder, and (iv) it has
consulted with its own legal, regulatory, tax, business, investment, financial
and accounting advisors to the extent that it has deemed necessary, and has
entered into this Agreement and the other Transaction Documents based on its own
independent judgment and on the advice of its advisors as it has deemed
necessary, and not on any view (whether written or oral) expressed by such
party.
7.5 INJUNCTIVE RELIEF. The Company acknowledges that a breach by it
of its obligations hereunder will cause irreparable harm to each Purchaser and
that the remedy or remedies at
-18-
law for any such breach will be inadequate and agrees, in the event of any
such breach, in addition to all other available remedies, to an injunction
restraining any breach and requiring immediate and specific performance of
such obligations without the necessity of showing economic loss.
7.6 GOVERNING LAW; JURISDICTION. This Agreement shall be governed by
and construed under the laws of the State of New York without regard to the
conflict of laws provisions thereof. Each party hereby irrevocably submits to
the non-exclusive jurisdiction of the state and federal courts sitting in the
City of New York, borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service
of process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address in effect for
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law.
7.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
7.8 HEADINGS. The headings used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
7.9 NOTICES. Any notice, demand or request required or permitted to
be given by any party to any other party pursuant to the terms of this Agreement
shall be in writing and shall be deemed given (i) when delivered personally or
by verifiable facsimile transmission (with an original to follow) on or before
5:00 p.m., eastern time, on a business day or, if such day is not a business
day, on the next succeeding business day and (ii) on the next business day after
timely delivery to a nationally-recognized overnight courier, addressed to the
parties as follows:
IF TO THE COMPANY:
Informix Corporation
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxx, XX 00000
Attn: Chief Financial Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
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WITH A COPY TO:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Attn: Xxxxx X. Xxxxxxx, Esq.
Xxxxxxx X. Xxxxxx, Esq.
Tel: (000) 000-0000
Fax: (000) 000-0000
and if to any Purchaser, to such address for such Purchaser as shall appear on
the signature page hereof executed by such Purchaser, or as shall be designated
by such Purchaser in writing to the Company.
7.10 EXPENSES. Except as otherwise specified herein, the Company and
each Purchaser shall pay all costs and expenses that it incurs in connection
with the negotiation, execution, delivery and performance of this Agreement.
7.11 ENTIRE AGREEMENT; AMENDMENTS. This Agreement and the other
Transaction Documents constitute the entire agreement between the parties with
regard to the subject matter hereof and thereof, superseding all prior
agreements or understandings, whether written or oral, between or among the
parties. Except as expressly provided herein, neither this Agreement nor any
term hereof may be amended except pursuant to a written instrument executed by
the Company and the holders of at least two-thirds (2/3) of the Preferred Shares
then outstanding, and no provision hereof may be waived other than by a written
instrument signed by the party against whom enforcement of any such waiver is
sought.
7.12 TERMINATION. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned prior to the Closing as
follows:
(i) by the mutual agreement of the parties hereto;
(ii) if the Closing shall not have occurred on or before December
15, 1997, either by delivery by the Company of a written notice
of termination (a "TERMINATION NOTICE") to each Purchaser or by
delivery by each Purchaser of a Termination Notice to the Company
(the date on which the Company or all of the Purchasers, as the
case may be, deliver such Termination Notice being referred to
herein as the "TERMINATION DATE").
In the event that this Agreement is terminated as provided herein, this
Agreement shall thereafter be void and of no further effect, without any
liability on the part of any party hereto, except for any liability that may
have accrued prior to the Termination Date.
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[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first-above written.
INFORMIX CORPORATION
By: /s/ Xxxxxx Xxxxxxxxx, Xx.
-------------------------------
Name:
Title:
PURCHASER NAME: /s/ Capital Ventures International
----------------------------------
By: Heights Capital Management, its authorized agent
------------------------------------------------
By: /s/ Xxxxxx Xxxxx
-------------------------------
Name: Xxxxxx Xxxxx
Title: President, Heights Capital Management
ADDRESS:
Capital Ventures International Correspondence to:
------------------------------- Capital Ventures International
0 Xxxxxxx Xxxxx x/x Xxxxxxx Xxxxxxx
X.X. XXX 0000 000 Xxxxxxxxxx Xxxxxx
------------------------------- Suite 0000
Xxxxxxxxxx, Xxxxx Xxxxxx X.X.X Xxx Xxxxxxxxx, XX 00000
------------------------------- Attn: Xxxxxxx Xxxxxx
Tel: Tel: 000-000-0000
--------------------------- Fax: 000-000-0000
Fax:
---------------------------
Number of Shares of Series B Preferred Stock to be Purchased: 17,500
-----------
-22-
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first-above written.
INFORMIX CORPORATION
By: /s/ Xxxxxx Xxxxxxxxx, Xx.
-------------------------------
Name:
Title:
PURCHASER NAME: /s/ Proprietary Convertible Investment Group, Inc.
--------------------------------------------------
By: /s/ Xxxxx Xxxxx
-------------------------------
Name: Xxxxx Xxxxx
Title: Vice-President
ADDRESS:
c/o Credit Suisse First Boston
-------------------------------
11 Madison Avenue
3RD FLOOR
-------------------------------
NEW YORK, N.Y. 10010
-------------------------------
Tel: 000-000-0000
-------------------------------
Fax:000-000-0000
-------------------------------
Number of Shares of Series B Preferred Stock to be Purchased: 20,000
----------
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first-above written.
INFORMIX CORPORATION
By: /s/ Xxxxxx Xxxxxxxxx, Xx.
-------------------------------
Name:
Title:
PURCHASER NAME: /s/ CC Investments, LDC
------------------------
By: /s/ Xxxx X. Xxxxxxxx
-------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Director
ADDRESS:
c/o Citco Fund Services Correspondence to:
------------------------------- Xxxx X. Xxxxxxxxx
Corporate Centre, West Bay Road c/o Castle Creek Partners, LLC
------------------------------- 000 Xxxx Xxxxxx Xxxxx
P.O. BOX 31106, SMB Suite 1410
------------------------------- Chicago, IL 60606
GRAND CAYMAN, CAYMAN ISLANDS
-------------------------------
Tel: 000-000-0000
--------------------------
Fax: 000-000-0000
--------------------------
Number of Shares of Series B Preferred Stock to be Purchased: 12,500
----------
Exhibit 1
Officers' Certificate
delivered by the Company
INFORMIX CORPORATION
OFFICERS' CERTIFICATE
Informix Corporation, a Delaware corporation (the "Company"), hereby
certifies, in connection with the transactions contemplated by the Securities
Purchase Agreement dated November 17, 1997 between the Company and the
Purchasers listed therein (the "Agreement"), that:
(a) Xxxxxx Xxxxxxxxx, Xx. and Xxxx-Xxxx Dexmier are the duly elected,
qualified, acting and incumbent Chairman of the Board, Chief Executive Officer
and President and the Executive Vice President and Chief Financial Officer of
the Company, respectively.
(b) All representations and warranties of the Company set forth in Section
3 of the Agreement are true and correct as of the date hereof.
(c) The Company has complied fully with all of its covenants and
agreements contained in Section 5 of the Agreement that are required to be
performed or complied with by it on or before the Closing (as defined in the
Agreement).
(d) This Certificate may be executed in counterparts and each such
executed counterpart shall be deemed an original, and such counterparts together
shall constitute one instrument.
INFORMIX CORPORATION INFORMIX CORPORATION
/S/ XXXXXX XXXXXXXXX, XX. /S/ XXXX-XXXX DEXMIER
------------------------------------- ----------------------------------
Xxxxxx Xxxxxxxxx, Xx. Xxxx-Xxxx Dexmier
Chairman of the Board, Chief Executive Chief Financial Officer and
Officer and President Executive Vice President
Dated: November 17, 1997 Dated: November 17, 1997
Exhibit 2
Legal Opinion of
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx P.C.
XXXXXX XXXXXXX XXXXXXXX & XXXXXX
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Telephone 000-000-0000 Facsimile 000-000-0000
November 19, 1997
To Each of the Purchasers identified under the
Securities Purchase Agreement dated as of
November 17, 1997 among Informix Corporation
and the signatories thereto
Re: SERIES B PREFERRED STOCK OF INFORMIX CORPORATION
Ladies and Gentlemen:
Reference is made to the Securities Purchase Agreement (the "Securities
Purchase Agreement") dated as of November 17, 1997, complete with all listed
schedules and exhibits thereto (the "Securities Purchase Agreement"), by and
between Informix Corporation, a Delaware corporation (the "Company"), and the
Purchasers named therein (each, a "Purchaser" and collectively, the
"Purchasers"), which provides for, among other things, the issuance by the
Company to each Purchaser of the Preferred Shares. Unless the context otherwise
requires, all capitalized terms used herein have the respective meanings set
forth in the Securities Purchase Agreement.
We have acted as counsel for the Company in connection with the negotiation
of the Securities Purchase Agreement, the related Registration Rights Agreement
of even date therewith (the "Registration Rights Agreement") and the issuance of
the Preferred Shares. As such counsel, we have made such legal and factual
examinations and inquiries as we have deemed advisable or necessary for the
purpose of rendering this opinion. In addition, we have examined originals,
certified copies or copies otherwise identified to us as being true copies of
the following:
(a) the Restated Certificate of Incorporation of the Company, as amended
to date, including the Certificate of Designation of Series B Convertible
Preferred Stock (the "Certificate of Designation") filed with the Secretary of
State of the State of Delaware on November 18, 1997, as in effect on the date
hereof (the "Certificate of Incorporation");
(b) the Bylaws of the Company, as in effect on the date hereof (the
"Bylaws");
Xxxxxxxx International Limited
November 19, 1997
Page 2
(c) Resolutions of the Board of Directors relating to the transactions
contemplated by the Agreements;
(d) the Securities Purchase Agreement, the Registration Rights Agreement
and the other documents delivered by the Company in connection with the Closing;
(e) a certificate as of recent date of the Secretary of State of the State
of Delaware addressing the corporate good standing of the Company;
(f) such other instruments, corporate records, certificates, and other
documents as we have deemed necessary as a basis for the opinions hereinafter
expressed.
In rendering this opinion, with your permission, we have assumed (i) the
authenticity of original documents and the genuineness of all signatures; (ii)
the conformity to the originals of all documents submitted to us as copies;
(iii) the truth, accuracy, and completeness of the factual matters,
representations, and warranties contained in the records, documents,
instruments, and certificates we have reviewed as of their stated dates and as
of the date hereof; (iv) the legal capacity of natural persons; (v) except as
specifically set forth in the opinions contained herein, the due authorization,
execution, and delivery on behalf of the respective parties thereto (other than
the Company) of documents referred to herein and the legal, valid, and binding
effect thereof on such parties (other than the Company); and (vi) the absence of
any evidence extrinsic to the provisions of the written agreements between the
parties that the parties intended a meaning contrary to that expressed by those
provisions. In addition, we have assumed, except with respect to any opinion
hereafter expressed as to the existence or absence of certain facts, that the
representations and warranties as to factual matters made by the Company in the
Securities Purchase Agreement and pursuant thereto are true, correct, and
complete.
As used in this opinion, the expression "to our knowledge," "known to us,"
or similar language with reference to matters of fact means that, after an
examination of documents, including, without limitation, the Agreements, made
available to us by the Company, including, without limitation, the Securities
Purchase Agreement and the Registration Rights Agreement, and after inquiries of
officers of the Company, but without any further independent factual
investigation, we find no reason to believe that the opinions expressed herein
are factually incorrect. Further, the expression "to our knowledge," "known to
us," or similar language with reference to matters of fact refers to the current
actual knowledge of attorneys of this firm who have worked on matters for the
Company in connection with the Securities Purchase Agreement. Except to the
extent expressly set forth herein or as we otherwise believe to be necessary to
our opinion, we have not undertaken any independent investigation to determine
the existence or absence of any fact, and no inference as to
Xxxxxxxx International Limited
November 19, 1997
Page 3
our knowledge of the existence or absence of any fact should be drawn from
our representation of the Company or our rendering of the opinions set forth
below.
For purposes of this opinion, we have assumed that each Purchaser has all
requisite power and authority and has taken any and all necessary corporate or
partnership action to execute and deliver the Transaction Documents, and we have
assumed that the representations and warranties made by each Purchaser in the
Securities Purchase Agreements and pursuant thereto are true, correct, and
complete. We are also assuming that each Purchaser has purchased the Preferred
Shares for value, in good faith, and without notice of any adverse claims within
the meaning of the California Uniform Commercial Code.
The opinions hereinafter expressed are subject to the following
exceptions, qualifications, and assumptions:
(a) We are members of the Bar of the State of California, and we express
no opinion as to any matter relating to the laws of any jurisdiction other than
the federal law of the United States of America, the laws of the State of
California, and the General Corporation Law of the State of Delaware;
(b) We express no opinion as to the effect of (i) bankruptcy, insolvency,
reorganization, arrangement, fraudulent transfer, moratorium or similar laws
relating to or affecting the rights of creditors and (ii) general principles of
equity, including, without limitation, concepts of materiality, reasonableness,
good faith and fair dealing, the exercise of judicial discretion, and the
possible unavailability of specific performance or injunctive relief, regardless
of whether considered in a proceeding in equity or at law;
(c) We express no opinion as to the choice of law provision contained in
the Securities Purchase Agreement or the Registration Rights Agreement. Our
opinions set forth herein relating to the Securities Purchase Agreement or the
Registration Rights Agreement assume that the laws of the State of New York are
identical to the laws of the State of California;
(d) We express no opinion as to compliance with the anti-fraud provisions
of applicable securities laws;
(e) We express no opinion as to compliance with the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, as amended;
Xxxxxxxx International Limited
November 19, 1997
Page 4
(f) We express no opinion as to the enforceability of the indemnification
provisions of Section 6 of the Registration Rights Agreement to the extent the
provisions thereof may be subject to limitations of public policy and the effect
of applicable statutes and judicial decisions; and
(g) Our opinion in paragraph 5 below is intended to express our opinion
that the execution, delivery, and performance by the Company of the Agreements
is neither prohibited by, nor does it subject the Company to, a fine, penalty,
or other sanction that would be materially adverse to the Company under any law,
rule, or regulation of the State of California or United States federal law that
a lawyer in the State of California exercising customary professional diligence
would reasonably recognize to be applicable to the Company.
Based upon the foregoing and having regard to legal considerations that we
deem relevant, and subject to the qualifications, exceptions, limitations, and
assumptions set forth herein, we are of the opinion that:
1. The Company is a corporation duly organized and validly existing
under, and by virtue of, the laws of the State of Delaware and is in good
standing under such laws.
2. The Company has the requisite corporate power and authority to enter
into and perform its obligations under (i) the Securities Purchase Agreement,
(ii) the Registration Rights Agreement, and (iii) all other agreements,
documents, certificates or other instruments delivered by the Company at the
closing, to execute and perform its obligations under the Certificate of
Designation, to execute and perform its obligations under the Warrants, to issue
and sell the Preferred Shares to such Purchaser in accordance with the terms of
the Securities Purchase Agreement, to issue the Conversion Shares and the
Warrants upon conversion of the Preferred Shares in accordance with the
Certificate of Designation, to issue the Warrant Shares upon exercise of the
Warrants and to issue the Dividend Payment Shares in accordance with the
Certificate of Designation.
3. All corporate action on the part of the Company by its officers,
directors, and stockholders necessary for (A) the authorization, execution and
delivery of and the performance by the Company of its obligations under, the
Transaction Documents, (B) the authorization, execution, and filing of, and the
performance by the Company of its obligations under, the Certificate of
Designation, and (C) the authorization and execution and the performance by the
Company of its obligations under, the Warrants has been taken.
4. The Transaction Documents and the Certificate of Designation
constitute, and the Warrants upon issuance will constitute, valid and legally
binding obligations of the Company, enforceable in accordance with their
respective terms. The Certificate of Designation has been duly
Xxxxxxxx International Limited
November 19, 1997
Page 5
filed with the Secretary of State of the State of Delaware, and the Preferred
Shares are entitled to all of the benefits and privileges set forth therein.
5. No consent, approval, authorization of, order, or designation,
declaration, or filing with any governmental authority on the part of the
Company is required in connection with the valid execution and delivery of the
Securities Purchase Agreement, the offer or issuance of the Preferred Shares, or
the performance of the Company's obligations under the Certificate of
Designation, Securities Purchase Agreement or Registration Rights Agreement,
except (i) qualification (or taking such action as may be necessary to secure an
exemption from qualification, if available) under the California Corporate
Securities Law of 1968, as amended, and other applicable blue sky laws (but
excluding jurisdictions outside of the United States) of the offer and sale of
the Preferred Shares and (ii) the filing of a Current Report on Form 8-K within
the time period prescribed by such report. Our opinion herein is otherwise
subject to the timely and proper completion of all filings and other actions
contemplated herein where such filings and actions are to be undertaken on or
after the date hereof.
6. The execution, delivery, and performance of and compliance with the
terms of the Transaction Documents do not violate, breach or constitute a
default (or an event which with the giving of notice or the lapse of time or
both would be reasonably likely to constitute a default) under (i) the
Certificate of Incorporation or the Bylaws of the Company or any of its
subsidiaries or any certificate of designation relating to any securities of the
Company or any of its subsidiaries, (ii) to our knowledge, any decree, judgment,
order, law, treaty, rule, regulation, or determination of any court,
governmental agency or body, or arbitrator having jurisdiction over the Company
or any of its subsidiaries or any of their respective properties or assets,
(iii) any rule of the National Association of Securities Dealers, Inc.
applicable to the Company or the transactions contemplated by the Agreement, or
(iv) any agreement, plan, arrangement or other instrument that has been as an
exhibit to the Company's periodic filings with the Securities and Exchange
Commission (the "Commission").
7. The Company has validly reserved 50,000 shares of Series B Preferred
Stock and, initially, 15,000,000 shares of Common Stock for issuance pursuant to
the terms of the Securities Purchase Agreement and the Certificate of
Designation. When issued to a Purchaser against payment therefor in accordance
with the terms of the Securities Purchase Agreement and the Certificate of
Designation, each share of Preferred Stock will be duly and validly authorized
and issued, fully paid, and nonassessable and will be free and clear of any
security interests, liens, claims, encumbrances, or preemptive or similar rights
contained in the Certificate of Incorporation or the Bylaws, except as
specifically provided in the Securities Purchase Agreement or the Certificate of
Designation; the Conversion Shares are duly authorized and reserved for issuance
and, when issued upon conversion of the Preferred Shares in accordance with the
terms of the Certificate of Designation, will be duly and validly issued, fully
paid and nonassessable, free and clear of any taxes, liens, claims, preemptive
or similar rights or encumbrance imposed by or through the Company; the Dividend
Payment Shares
Xxxxxxxx International Limited
November 19, 1997
Page 6
are duly authorized and, upon the issuance thereof in accordance with the
terms of the Certificate of Designation, will be duly and validly issued,
fully paid, and nonassessable, free and clear of any taxes, liens, claims,
preemptive or similar rights or encumbrances imposed by or through the
Company; the Warrants are duly authorized and, when issued upon conversion of
the Preferred Shares in accordance with the terms of the Certificate of
Designation, will be duly and validly issued, fully paid, and nonassessable,
free and clear of any taxes, liens, claims, preemptive or similar rights or
encumbrances imposed by or through the Company; the Warrant Shares are duly
authorized and reserved for issuance and, when issued upon exercise of the
Warrants in accordance with the terms thereof, will be duly and validly
issued, fully paid and nonassessable, free and clear of any taxes, liens,
claims, preemptive or similar rights or encumbrances imposed by or through
the Company. The foregoing opinion is qualified by the fact that the
Preferred Shares, the shares of Common Stock and Warrants issuable upon
conversion of the Preferred Shares, the Dividend Payment shares, and the
Warrant Shares issuable upon exercise of the Warrants may be subject to
restrictions on transfer under state and/or federal securities laws.
8. The Company's Common Stock is currently designated for trading on the
Nasdaq National Market.
9. Except as set forth on Schedule 3.8.4 of the Securities Purchase
Agreement, to our knowledge, there are no actions, suits, proceedings or
investigations pending against the Company or its properties before any court or
governmental agency which could reasonably be expected to materially affect the
execution and delivery by the Company of the Securities Purchase Agreement or
the Registration Rights Agreement, the execution and filing of the Certificate
of Designation, or the performance of its obligations thereunder.
10. The offer, sale and issuance of the Preferred Shares in conformity
with the terms of the Securities Purchase Agreement constitute transactions
exempt from the registration requirements of Section 5 of the Securities Act of
1933, as amended, it being understood that we do not express any opinion as to
any subsequent resale of the Preferred Shares, as to the issuance of the
Warrants upon conversion of the Preferred Shares or as to the issuance of Common
Stock upon the conversion of the Preferred Shares or exercise of the Warrants,
as the case may be.
11. The Company has designated a series of preferred stock as the Series
A-1 Preferred Stock pursuant to a certificate of designation duly filed with the
Secretary of State of the State of Delaware and has issued the Series A-1
Preferred Stock pursuant to a valid exchange for all of the shares of Series A
Preferred Stock outstanding immediately prior to such exchange. No shares of
Series A Preferred Stock are outstanding as of the date hereof, and all of the
shares of Series A Preferred Stock outstanding immediately prior to such
exchange have been retired by the Company and have regained the status of
authorized but unissued shares.
Xxxxxxxx International Limited
November 19, 1997
Page 7
This opinion is furnished to each Purchaser as of the date hereof solely
for its benefit in connection with the transactions contemplated by the
Securities Purchase Agreement and may not be relied upon by any other person or
for any other purpose without our prior written consent.
Sincerely,
WILSON, SONSINI, XXXXXXXX & XXXXXX
Professional Corporation
/s/ Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx P.C
-------------------------------------------
Exhibit 3
Form of Series B Convertible Preferred Stock Certificate
Number B - 1
INFORMIX CORPORATION _____________Shares
A Delaware Corporation
Series B Convertible Preferred Stock
THIS CERTIFIES THAT is the registered holder of
shares of the Series B Convertible Preferred Stock of INFORMIX
CORPORATION, transferable only on the books of the Corporation by the holder
hereof in person or by attorney upon surrender of this certificate properly
endorsed.
These shares are issued and shall be held subject to all of the provisions
of the Certificate of Incorporation and the Bylaws of the Corporation and any
amendments thereto, to which the holder of this certificate, by acceptance
hereof, assents.
Subject to certain conditions, the shares represented by this certificate
are convertible into shares of Common Stock and Warrants exercisable into shares
of Common Stock at any time and shall be automatically converted into shares of
Common Stock and Warrants upon the occurrence of certain events as set forth in
the Certificate of Designation of Series B Convertible Preferred Stock.
A statement of all of the rights, preferences, privileges and restrictions
granted to or imposed upon the respective classes and/or series of shares of
stock of the Corporation and upon the holders thereof may be obtained by any
stockholder upon request and without charge, at the principal office of the
Corporation, and the Corporation will furnish any stockholder, upon request and
without charge, a copy of such statement.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by its duly authorized officers this 19th day of November 1997.
_______________________________ _____________________________________
Xxxx-Xxxx Dexmier, Secretary Xxxxx Xxxxxxx, Vice President,
FOR VALUE RECEIVED __________________________ HEREBY SELL, ASSIGN AND TRANSFER
UNTO ______________________ SHARES REPRESENTED BY THE WITHIN CERTIFICATE AND
DO HEREBY IRREVOCABLY CONSTITUTE AND APPOINT ____________________, ATTORNEY
TO TRANSFER THE SAID SHARES ON THE SHARE REGISTER OF THE WITHIN NAMED
CORPORATION AND WITH FULL POWER OF SUBSTITUTION IN THE PREMISES.
DATED _________________, 19___
IN PRESENCE OF __________________________ _____________________________
(Witness) (Stockholder)
_____________________________
(Stockholder)
NOTICE: THE SIGNATURE ON THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS
WRITTEN UPON THE FRONT OF THIS CERTIFICATE, IN EVERY PARTICULAR, WITHOUT
ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATSOEVER.
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES
LAWS OF ANY STATE, AND MAY NOT BE OFFERED OR SOLD UNLESS A REGISTRATION
STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS SHALL
HAVE BECOME EFFECTIVE WITH REGARD THERETO, OR AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS IS AVAILABLE IN
CONNECTION WITH SUCH OFFER AND SALE. SUCH SECURITIES ARE ISSUED SUBJECT TO THE
PROVISIONS OF (I) THE CERTIFICATE OF DESIGNATION OF SERIES B CONVERTIBLE
PREFERRED STOCK OF INFORMIX CORPORATION (THE "COMPANY"), (II) A SECURITIES
PURCHASE AGREEMENT, DATED NOVEMBER 17, 1997, BY AND AMONG THE COMPANY AND THE
PURCHASERS NAMED THEREIN, AND (III) A REGISTRATION RIGHTS AGREEMENT, DATED
NOVEMBER 19, 1997, BY AND AMONG THE COMPANY AND SUCH PURCHASERS.
Exhibit 4
Disclosure Schedule
INFORMIX CORPORATION
0000 Xxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Telephone: (000) 000-0000
November 17, 1997
To the Purchasers Identified in
the Securities Purchase Agreement dated November 17, 1997
RE: INFORMIX CORPORATION DISCLOSURE SCHEDULE
Ladies and Gentlemen:
This letter (the "Disclosure Letter") sets forth certain exceptions to
the representations and warranties of Informix Corporation, a Delaware
corporation (the "Company" or "Informix"), set forth in the Securities
Purchase Agreement dated November 17, 1997 (the "Agreement") between the
Company and the Purchasers identified on the signature pages to the
Agreement. Any terms defined in the Agreement shall have the same meaning
when used in this Disclosure Letter as when used in the Agreement, unless the
context indicates otherwise.
The section numbers of this Disclosure Letter (and the referenced
incorporated exhibits and schedules hereto) correspond to the first or principal
section of the Agreement to which the disclosures contained therein relate;
however, a particular disclosure may apply to multiple sections, and all
information disclosed herein shall be deemed disclosed under and incorporated
into any other section of the Agreement where such disclosure would be
appropriate, regardless of whether a reference to this Disclosure Letter is made
in such section of the Agreement. Disclosures by schedules, annexes and
documents referenced herein are deemed made herein.
3.4 DISCLOSURE DOCUMENTS; AGREEMENTS; FINANCIAL STATEMENTS; OTHER
INFORMATION
As of the date of signing the Agreement, the Company has not filed its
Quarterly Reports on 10-Q for the quarters ended June 29, 1997 or September 30,
1997. The Company intends to file such Quarterly Reports with the Commission on
Tuesday, November 18, 1997.
On November 18, 1997, the Company also intends to file with the
Commission its amended Form 10-K for the year ended December 31, 1996 (the
"Form 10-K/A") and its amended Form 10-Q for the quarter ended March 29, 1997
(the "Form 10-Q/A"). Any representation or warranty relating to the
Company's Form 10-K for the year ended December 31, 1996 shall refer only the
Form 10-K/A, any representation or warranty relating to the Company's Form
10-Q for the quarter ended March 29, 1997 shall refer only to the Form
10-Q/A, and any reference to "Disclosure Documents" shall be deemed only to
include such amended filings (unless the context otherwise requires).
Purchasers Identified in Securities Purchase Agreement dated November 17, 1997
November 17, 1997
Page 2
3.5 CAPITALIZATION
As of the date of the Agreement and as of the Closing Date, the
authorized capital stock of the Company consisted of 500,000,000 shares of
Common Stock, $0.01 par value, and 5,000,000 shares of preferred stock, $0.01
par value. Of the preferred stock, 440,000 shares have been designated Series A
Convertible Preferred Stock, none of which is issued and outstanding, 440,000
shares have been designated Series A-1 Convertible Preferred Stock, all of which
is issued and outstanding, and 50,000 shares have been designated Series B
Convertible Preferred Stock, all of which is expected to be issued pursuant to
the Agreement.
As of November 17, 1997, (i) 152,428,406 shares of Common Stock were issued
and outstanding (together with associated rights under the Rights Plan to
acquire an additional share of Common Stock for each share outstanding; (ii)
24,960,730 shares of Common Stock were reserved for issuance under stock option
plans or upon exercise of stock options granted outside such plans, of which
19,292,160 shares were subject to outstanding, unexercised options, and of which
5,668,570 shares remained available for future grant under such plans; (iii)
4,000,000 shares of Common Stock were reserved for issuance under employee stock
purchase plans; (iv) 30,913 shares of Common Stock were reserved for issuance
upon exercise of a warrant; and (v) 500,000 shares of Common Stock were reserved
for issuance upon exercise of a non-qualified stock option granted to the
Company's Chairman, President, and Chief Executive Officer.
In connection with the Agreement, the Company has reserved (i) 50,000
shares of Series B Preferred for issuance to the Purchasers and (ii) such number
of shares of the Company's Common Stock as may be issuable from time to time
upon conversion of the Series B Preferred (including shares issuable upon
exercise of the Warrants to be issued upon such conversion or in connection with
dividends that may be issuable to holders of Series B Preferred and payable in
the form of Common Stock in accordance with the terms set forth in the
Certificate), provided that the aggregate number of shares of Common Stock
reserved will not be less than 150% of the number of shares issuable upon
conversion of the Series B Preferred (including shares issuable upon exercise of
the Warrants).
Reference is made to the Exchange Agreement dated November 16, 1997 between
the Company and Xxxxxxxx International Limited ("Xxxxxxxx"), which grants
Xxxxxxxx certain rights of first negotiation with respect to certain issuances
of capital stock by the Company.
3.7 NO CONFLICT WITH OTHER INSTRUMENTS
At or prior to the Closing, the Company will have amended the Rights Plan
such that no Purchaser will be deemed an "Acquiring Person" thereunder.
Section 12 of the Company's Certificate of Designation of Series A
Convertible Preferred Stock requires the consent of the holders of a majority of
the total number of shares of Series A Preferred Stock outstanding, voting
separately as a series, to effect any amendment or addition to the
Purchasers Identified in Securities Purchase Agreement dated November 17, 1997
November 17, 1997
Page 3
Company's Certificate of Incorporation that would adversely affect the
preferences of the Series A Preferred Stock.
3.8 FINANCIAL CONDITION; TAXES; LITIGATION
CLASS ACTIONS
Starting in April 1997, a number of class action complaints were filed in
the United States District Court for the Northern District of California. These
actions were consolidated in IN RE INFORMIX CORPORATION SECURITIES LITIGATION,
Master File No. C-97-1289 SBA (N.D. Cal.). The existing federal court
complaints allege that Informix and certain of its officers and/or directors,
and its independent auditors, issued false or misleading statements regarding
the Company's reported financial results and business prospects; during time
periods that vary among the complaints, the longest of which extends from
January 31, 1996 through September 22, 1997. The existing complaints, with one
exception, do not specify the amount of damages. One complaint, TEACHERS'
RETIREMENT SYSTEM OF LOUISIANA ET AL. V. INFORMIX CORPORATION ET AL., requests
$7.136 million in damages. Pursuant to court order, a superseding consolidated
complaint will be filed in the next two months, and Informix will respond to
that complaint thirty days thereafter.
Informix also has been named in two purported securities class action cases
filed in the Superior Court of the State of California, County of San Mateo.
The first state court class action complaint, RILEY V. INFORMIX CORPORATION ET
AL., No. 400739, contains allegations similar to the federal court complaints,
with respect to a time period of April 16, 1996 through August 7, 1997.
Informix has moved to dismiss that complaint. The second state court class
action complaint, XXXXXX X. INFORMIX CORPORATION ET AL., No. 402262, is
identical to the most recently filed federal court complaint. Neither complaint
specifies the amount of damages. A third state court class action complaint,
XXXXXXXXX X. XXXXX XX XX., Xx. 000000, asserts claims against certain of
Informix's officers and/or directors, and its independent auditors, but does not
name Informix as a defendant.
DERIVATIVE ACTIONS
Informix also has been named as a nominal defendant in eight derivative
actions filed in the Superior Court of the State of California, County of San
Mateo. The plaintiff in the first of these cases, SMURTHWAITE X. XXXXX ET AL.,
No. 401818, has been appointed to lead the plaintiffs in all of these cases, and
the parties presently are drafting an order consolidating all of the cases under
the caption IN RE INFORMIX CORPORATION DERIVATIVE LITIGATION. The allegations
in the SMURTHWAITE complaint are similar to the allegations of the XXXXXXXXX
complaint. Plaintiff seeks unspecified damages on Informix's behalf, and
certain of Informix's officers and/or directors, and its independent auditors.
Informix will respond to the consolidated derivative complaint once it has been
filed.
Purchasers Identified in Securities Purchase Agreement dated November 17, 1997
November 17, 1997
Page 4
ILLUSTRA ESCROW
In January, 1997, pursuant to the Agreement and Plan of Reorganization by
and among Informix Corporation ("Informix"), Informix Delaware, Inc. and
Illustra Information Technologies, Inc. ("Illustra"), Informix made a claim
against the Illustra shareholders for 258,002 shares contained in an escrow
fund. Informix made this claim based upon Illustra's failure to correctly
disclose information relating to the granting of stock options. In response,
the Illustra shareholders have claimed that Informix wrongfully caused these
shares to be retained in escrow, thereby harming the Illustra shareholders. At
present, no litigation or arbitration proceedings have been commenced by either
Informix or the Illustra shareholders.
SECURITIES AND EXCHANGE COMMISSION INVESTIGATION
On July 24, 1997, the Securities and Exchange Commission issued an Order
Directing Private Investigation and Designating Officers to Take Testimony,
initiating a proceeding captioned IN THE MATTER OF INFORMIX CORPORATION, File
No. HO-3308. The Order directs that a private investigation be made with
respect to Informix and certain unnamed persons associated with Informix
concerning non-specified accounting matters, financial reports and other public
disclosures by the Company as well as trading activity in the Company's
securities. The Order does not name any individual nor specify an applicable
time period. The Company is in the process of producing documents and a number
of current and former officers have been subpoenaed to testify before the SEC.
3.12 REGISTRATION RIGHTS; RIGHTS OF PARTICIPATION
Pursuant to the Subscription Agreement dated August 12, 1997 between
Xxxxxxxx International Limited ("Xxxxxxxx") and the Company, Xxxxxxxx holds
certain registration rights and a right of first negotiation with respect to
future issuances of capital stock by the Company in reliance on Section 4(2) or
Regulation D of the Securities Act.
3.13 TRADING ON NASDAQ
On November 6, 1997, The Nasdaq Stock Market held a hearing concerning the
status of the Company's listing as a Nasdaq National Market Security. The
Company has been advised by Nasdaq that the Company will be in compliance with
the designation criteria of The Nasdaq Stock Market, subject to (i) its filing
the Disclosure Documents with the Commission on or before November 19, 1997,
(ii) its compliance, as reported in the Disclosure Documents, with all criteria
necessary for continued listing on the Nasdaq National Market, other than the
net tangible assets requirements, and (iii) its satisfaction of the net tangible
assets requirement by February 23, 1998.
Purchasers Identified in Securities Purchase Agreement dated November 17, 1997
November 17, 1997
Page 5
3.18 TITLE
On November 5, 1997, the Company sold a parcel of land consisting of
approximately 10.6 acres on Freedom Circle Drive in Santa Clara, California and
no longer holds a fee simple interest in such property. The consideration for
such sale consisted of $27.0 million in cash and a purchase money security
interest in the property in the amount of $8 million.
In October 1997, the Company entered into a contract of sale with Intel
Corporation with respect to an additional 16.8 acre parcel on Freedom Circle
Drive in Santa Clara, California. Subject to certain conditions set forth in
the contract of sale, the Company expects to sell such parcel to Intel
Corporation in December 1997 for $25.025 million.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Purchasers Identified in Securities Purchase Agreement dated November 17, 1997
November 17, 1997
Page 6
The undersigned has executed this Disclosure Letter as of the date first
set forth above.
INFORMIX CORPORATION
By: /S/ XXXX-XXXX DEXMIER
---------------------------------------
Name: Xxxx-Xxxx Dexmier
Title: Chief Financial Officer
[DISCLOSURE LETTER SIGNATURE PAGE]
SCHEDULE 3.5
CAPITALIZATION
See Section 3.5 of the Disclosure Letter.
SCHEDULE 3.7
NO CONFLICT WITH OTHER INSTRUMENTS
See Section 3.7 of the Disclosure Letter.
SCHEDULE 3.8.3 AND 3.8.4
FINANCIAL CONDITION; TAXES; LITIGATION
See Section 3.8 of the Disclosure Letter.
