EXHIBIT 2.1
REDBACK NETWORKS INC.
COMMON STOCK and WARRANT PURCHASE AGREEMENT
This Common Stock and Warrant Purchase Agreement (this "Agreement"), dated as of
---------
May 21, 2002, between REDBACK NETWORKS INC., a Delaware corporation (the
"Company"), and NOKIA FINANCE INTERNATIONAL BV, a private company with limited
-------
liability (besloten vennootschap met beperkte aansprakelijkheid) organized under
the laws of the Netherlands (the "Investor"), and a subsidiary of Nokia
--------
Corporation, a Finnish corporation.
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Stock and Warrant.
1.1 Sale and Issuance of Common Stock and Warrant. Subject to the terms
and conditions of this Agreement, the Investor agrees to purchase at the Closing
(as defined below), and the Company agrees to sell and issue to the Investor at
the Closing, (i) the Common Stock (as defined below) purchase warrant in the
form attached hereto as Exhibit A (the "Warrant"), and (ii) 17,723,297 shares
--------- -------
(the "Initial Shares") of common stock, par value $0.0001 per share, of the
--------------
Company (the "Common Stock"), (which represents one share less than 10% of the
------------
pro forma Common Stock outstanding on the date of the Closing (as defined
below), assuming the issuance of the Initial Shares and including only shares of
Common Stock that are actually outstanding (excluding shares issuable upon
exercise of outstanding options, warrants and other convertible securities)), at
a purchase price per share of $2.02 for an aggregate purchase price, payable in
cash, equal to $35,801,060 (the "Purchase Price").
--------------
1.2 Closing. Subject to the terms and conditions of this Agreement, the
purchase and sale of the Common Stock and Warrant shall take place at a closing
(the "Closing") to be held at the offices of Shearman & Sterling, 1080 Xxxxx
-------
Road, Menlo Park, California, on or before 10:00 A.M. Pacific time, on May 21,
2002, or at such other time and place as the Company and the Investor mutually
agree upon in writing. At the Closing, the Company shall deliver to the
Investor: (i) a certificate representing the Common Stock that the Investor is
purchasing pursuant to the terms hereof; (ii) the executed Warrant; (iii) a
receipt for the Purchase Price; and (iv) the other documents listed in Section 4
of this Agreement. At the Closing, the Investor shall deliver to the Company:
(i) the Purchase Price by wire transfer in immediately available funds to a bank
account in the United States to be designated by the Company in writing to the
Purchaser; and (ii) the other documents listed in Section 5 of this Agreement.
2. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Investor that, except as set forth on a Schedule
of Exceptions (the "Schedule of Exceptions") furnished to the Investor on or
----------------------
prior to entering into this Agreement, which exceptions shall qualify the
representation and warranty that has the corresponding number as the numbered
paragraph in the Schedule of Exceptions, and which representations and
warranties so qualified shall be deemed to be representations and warranties as
if made hereunder, as of the date hereof and as of the date of Closing:
2.1 Organization and Qualification; Subsidiaries. (a) Each of the Company
and each subsidiary of the Company (each a "Subsidiary") is a corporation duly
----------
organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization and has the requisite corporate power and authority and all
necessary governmental approvals to own, lease and operate its properties and to
carry on its business as it is now being conducted, except where the failure to
be so organized, existing or in good standing or to have such power, authority
and governmental approvals would not, individually or in the aggregate, have a
Material Adverse Effect (as defined below). Each of the Company and each
Subsidiary is duly qualified or licensed as a foreign corporation to do
business, and is in good standing, in each jurisdiction where the character of
the properties owned, leased or operated by it or the nature of its business
makes such qualification or licensing necessary, except for such failures to be
so qualified or licensed and in good standing that would not, individually or in
the aggregate, have a Material Adverse Effect. "Material Adverse Effect" means
-----------------------
any event, circumstance, change or effect that, individually or in the aggregate
with all other events, circumstances, changes and effects, is or is reasonably
likely to be materially adverse to the business, condition (financial or
otherwise), assets, liabilities or results of operations of the Company and the
Subsidiaries taken as a whole.
(b) A true and complete list of all the Subsidiaries, together with
the jurisdiction of incorporation of each Subsidiary, is set forth in Section
2.1(b) of the Schedule of Exceptions. Each Subsidiary is a wholly-owned
subsidiary of the Company. Except as disclosed in Section 2.1(b) of the Schedule
of Exceptions, the Company does not directly or indirectly own any equity or
similar interest in, or any interest convertible into or exchangeable or
exercisable for any equity or similar interest in, any corporation, partnership,
joint venture or other business association or entity.
2.2 Certificate of Incorporation and By-laws. The Company has heretofore
made available to the Investor a complete and correct copy of the Certificate of
Incorporation and the By-laws, each as amended to date, of the Company. Such
Certificate of Incorporation and By-laws are in full force and effect. The
Company is not in violation of any of the provisions of its Certificate of
Incorporation or By-laws.
2.3 Capitalization. (a) The authorized capital stock of the Company
consists of (i) 750,000,000 shares of Common Stock and (ii) 10,000,000 shares of
preferred stock, par value $0.0001 per share ("Company Preferred Stock"). As of
-----------------------
May 21, 2002, (i) 159,509,681 shares of Common Stock are issued and outstanding,
all of which are validly issued, fully paid and nonassessable, which includes
the shares of Common Stock issuable upon exchange of the exchangeable shares of
610381 B.C. Inc., a wholly owned subsidiary of the Company, (ii) no shares of
Common Stock are held in the treasury of the Company, (iii) no shares of Common
Stock are held by the Subsidiaries, (iv) 39,036,768 shares of Common Stock are
reserved for future issuance pursuant to outstanding employee stock options or
stock incentive rights granted pursuant to the Company's 1999 Stock Incentive
Plan, as amended, the 2001 Employee Option Plan, 1999 Directors Stock Plan and
the 1997 Stock Plan, as amended, (collectively, the "Plans") and (v) 2,503,533
-----
shares of Common Stock are reserved for future issuance pursuant to the
Indenture, dated as of March 29, 2000, between the Company and Norwest Bank
Minnesota, National Association, as trustee relating to the Company's 5%
Convertible Subordinated Notes due April 1, 2007. As of the date of this
Agreement, no shares of Company Preferred Stock are issued and outstanding.
Except as set forth in this Section 2.3, other than the rights (the "Rights")
------
issued pursuant to the Rights Agreement, dated as of June 12, 2001 (the "Company
-------
Rights Agreement"), between the Company and US Stock Transfer Corporation, as
----------------
rights agent,
2
there are no options, warrants or other rights, agreements, arrangements or
commitments of any character relating to the issued or unissued capital stock of
the Company or any Subsidiary or obligating the Company or any Subsidiary to
issue or sell any shares of capital stock of, or other equity interests in, the
Company or any Subsidiary. All shares of Common Stock subject to issuance as
aforesaid, upon issuance on the terms and conditions specified in the
instruments pursuant to which they are issuable, will be duly authorized,
validly issued, fully paid and nonassessable. There are no outstanding
contractual obligations of the Company or any Subsidiary to repurchase, redeem
or otherwise acquire any shares of Common Stock or any capital stock of any
Subsidiary or to provide funds to, or make any investment (in the form of a
loan, capital contribution or otherwise) in, any Subsidiary or any other person,
except pursuant to the Plans. All outstanding shares of Common Stock, all
outstanding stock options to purchase Common Stock, and all outstanding shares
of capital stock of each subsidiary of the Company have been issued and granted
in compliance with (i) all applicable U.S. securities laws, (ii) all applicable
non-U.S. securities laws, (iii) all other applicable Laws (as defined below) and
(iv) all requirements set forth in applicable contracts, except in the case of
clause (ii), (iii) or (iv) to the extent that any such noncompliance would not
result in a Material Adverse Effect.
(b) Each outstanding share of capital stock of each Subsidiary is duly
authorized, validly issued, fully paid and nonassessable, and each such share is
owned by the Company or another Subsidiary free and clear of all security
interests, liens, claims, pledges, options, rights of first refusal, agreements,
limitations on the Company's or any Subsidiary's voting rights, charges and
other encumbrances of any nature whatsoever.
2.4 Authority Relative to This Agreement. The Company has all necessary
corporate power and authority to execute and deliver this Agreement, the
Investor's Rights Agreement in the form attached hereto as Exhibit B (the
---------
"Investor's Rights Agreement"), the Warrant, Amendment No. 6 to System
---------------------------
Integrator Agreement, dated the date hereof, between the Company and Nokia
Corporation ("Amendment 6"), which contemplates certain definitive agreements
-----------
(the "Commercial Agreements") (the Investor's Rights Agreement, the Warrant,
---------------------
Amendment 6 and the Commercial Agreements are collectively referred to as the
"Transaction Agreements"), to perform its obligations hereunder and thereunder
----------------------
and to consummate the transactions contemplated hereby or thereby. The execution
and delivery of this Agreement and the Transaction Agreements by the Company and
the consummation by the Company of the transactions contemplated hereby or
thereby have been duly and validly authorized by all necessary corporate action,
and no other corporate proceedings on the part of the Company are necessary to
authorize this Agreement and the Transaction Agreements or to consummate the
transactions contemplated hereby or thereby. Each of this Agreement and the
Transaction Agreements has been (or in the case of the Commercial Agreements
will be) duly and validly executed and delivered by the Company and, assuming
the due authorization, execution and delivery by the Company, constitutes (or in
the case of the Commercial Agreements, upon execution and delivery by the
Company will constitute) a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms subject to the
effect of any applicable bankruptcy, insolvency (including, without limitation,
all laws relating to fraudulent transfers), reorganization, moratorium or
similar laws affecting creditors' rights generally and subject to the effect of
general principles of equity (regardless of whether considered in a proceeding
at law or in equity). The Company Board of Directors (the "Company Board") has
-------------
approved this Agreement, the Transaction Agreements and
3
the transactions contemplated hereby or thereby and such approvals are
sufficient so that the restrictions on business combinations set forth in
Section 203(a) of the General Corporation Law of the State of Delaware (the
"DGCL") shall not apply to any of the transactions contemplated hereby or
----
thereby, including, but not limited to, any exercise of the Warrant or actions
permitted pursuant to the Investor's Rights Agreement.
2.5 No Conflict; Required Filings and Consents. (a) The execution and
delivery of this Agreement and the Transaction Agreements by the Company do not,
and the performance of this Agreement and the Transaction Agreements by the
Company will not, (i) conflict with or violate the Certificate of Incorporation
or By-laws of the Company, (ii) conflict with or violate any United States
statute, law, ordinance, regulation, rule, code, executive order, injunction,
judgment, decree or other order ("Law") applicable to the Company or any
---
Subsidiary or by which any property or asset of the Company or any Subsidiary is
bound or affected, or (iii) result in any breach of or constitute a default (or
an event which, with notice or lapse of time or both, would become a default)
under, or give to others any right of termination, amendment, acceleration or
cancellation of, or result in the creation of a lien or other encumbrance on any
property or asset of the Company or any Subsidiary pursuant to, any note, bond,
mortgage, indenture, contract, agreement, lease, license, permit, franchise or
other instrument or obligation, except, with respect to clauses (ii) and (iii),
for any such conflicts, violations, breaches, defaults or other occurrences
which would not, individually or in the aggregate, have a Material Adverse
Effect.
(b) The execution and delivery of this Agreement and the Transaction
Agreements by the Company do not, and the performance of this Agreement and the
Transaction Agreements by the Company will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any United States
federal, state, county or local or non-United States government, governmental,
regulatory or administrative authority, agency, instrumentality or commission or
any court, tribunal, or judicial or arbitral body (a "Governmental Authority"),
----------------------
other than (i) filings that may be required under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvement Act of 1976, as amended, and the rules and regulations
thereunder, and (ii) any filings necessary to comply with state securities or
"blue sky" laws.
2.6 Permits; Compliance. Each of the Company and the Subsidiaries is in
possession of all franchises, grants, authorizations, licenses, permits,
easements, variances, exceptions, consents, certificates, approvals and orders
of any Governmental Authority necessary for each of the Company or the
Subsidiaries to own, lease and operate its properties or to carry on its
business as it is now being conducted (the "Company Permits"), except where the
---------------
failure to have, or the suspension or cancellation of, any of the Company
Permits would not, individually or in the aggregate, have a Material Adverse
Effect. No suspension or cancellation of any of the Company Permits is pending
or, to the knowledge of the Company, threatened, except where the failure to
have, or the suspension or cancellation of, any of the Company Permits would
not, individually or in the aggregate, have a Material Adverse Effect. Neither
the Company nor any Subsidiary is in conflict with, or in default, breach or
violation of, (a) any Law applicable to the Company or any Subsidiary or by
which any property or asset of the Company or any Subsidiary is bound or
affected, or (b) any note, bond, mortgage, indenture, contract, agreement,
lease, license, Company Permit, franchise or other instrument or obligation to
which the Company or any Subsidiary is a party or by which the Company or any
Subsidiary or any
4
property or asset of the Company or any Subsidiary is bound, except for any such
conflicts, defaults, breaches or violations that would not, individually or in
the aggregate, have a Material Adverse Effect.
2.7 SEC Filings; Financial Statements. (a) The Company has filed all forms,
reports and documents required to be filed by it with the Securities and
Exchange Commission (the "SEC") since May 18, 1999, and has heretofore made
---
available to the Investor, in the form filed with the SEC, (i) its Annual
Reports on Form 10-K for the fiscal years ended December 31, 1999, 2000 and
2001, respectively, (ii) its Quarterly Report on Form 10-Q for the period ended
Xxxxx 00, 0000, (xxx) all proxy statements relating to the Company's meetings of
stockholders (whether annual or special) held since May 18, 1999 and (iv) all
other forms, reports and other registration statements filed by the Company with
the SEC since March 31, 2002 (the forms, reports and other documents referred to
in clauses (i), (ii), (iii) and (iv) above being, collectively, the "Company SEC
-----------
Reports"). The Company SEC Reports (i) were prepared in accordance with either
-------
the requirements of the Securities Act of 1933, as amended (the "Securities
----------
Act"), or the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
--- ------------
as the case may be, and the rules and regulations promulgated thereunder
existing at the time the Company SEC Reports were filed, and (ii) did not, at
the time they were filed, or, if amended, as of the date of such amendment,
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements made
therein, in the light of the circumstances under which they were made, not
misleading. No Subsidiary is required to file any form, report or other document
with the SEC.
(b) Each of the consolidated financial statements (including, in each
case, any notes thereto) contained in the Company SEC Reports was prepared in
accordance with United States generally accepted accounting principles ("GAAP")
----
applied on a consistent basis throughout the periods indicated (except as may be
indicated in the notes thereto or, in the case of unaudited statements, as
permitted by Form 10-Q of the SEC) and each fairly presents, in all material
respects, the consolidated financial position, results of operations and cash
flows of the Company and its consolidated Subsidiaries as at the respective
dates thereof and for the respective periods indicated therein , except as
otherwise noted therein (subject, in the case of unaudited statements, to normal
and recurring year-end adjustments which would not have had, and would not have,
individually or in the aggregate, a Material Adverse Effect) and for pro forma
financial information disclosed therein.
(c) Except as and to the extent set forth on the consolidated balance
sheet of the Company and the consolidated Subsidiaries as at March 31, 2002,
including the notes thereto, neither the Company nor any Subsidiary has any
liability or obligation of any nature (whether accrued, absolute, contingent or
otherwise), except for liabilities and obligations, incurred in the ordinary
course of business consistent with past practice since that date.
(d) The Company has heretofore furnished or made available to the
Investor complete and correct copies of all amendments and modifications that
have not been filed by the Company with the SEC to all agreements, documents and
other instruments that previously had been filed by the Company with the SEC and
are currently in effect.
5
2.8 Absence of Certain Changes or Events. Since March 31, 2002, except as
set forth in Section 2.8 of the Schedule of Exceptions, or as expressly
contemplated by this Agreement, or specifically disclosed in any Company SEC
Report filed since March 31, 2002 and prior to the date of this Agreement, (a)
the Company and the Subsidiaries have conducted their businesses only in the
ordinary course and in a manner consistent with past practice and (b) there has
not been any Material Adverse Effect.
2.9 Absence of Litigation. Except as specifically disclosed in the Company
SEC Reports filed prior to the date of this Agreement, there is no litigation,
suit, claim, action, proceeding or investigation (an "Action") pending or, to
------
the knowledge of the Company, threatened against the Company or any Subsidiary,
or any property or asset of the Company or any Subsidiary, before any
Governmental Authority that, individually or in the aggregate, has had or would
have a Material Adverse Effect. Neither the Company nor any Subsidiary nor any
material property or asset of the Company or any Subsidiary is subject to any
continuing order of, consent decree, settlement agreement or other similar
written agreement with, or, to the knowledge of the Company, continuing
investigation by, any Governmental Authority, or any order, writ, judgment,
injunction, decree, determination or award of any Governmental Authority that
would, individually or in the aggregate, have a Material Adverse Effect.
2.10 Valid Issuance of Common Stock. The Common Stock that is being
purchased by the Investor hereunder, when issued, sold and delivered in
accordance with the terms of this Agreement for the consideration expressed
herein, will be duly authorized, validly issued, fully paid and nonassessable,
and will be free of restrictions on transfer other than restrictions on transfer
under the Transaction Agreements and under applicable state and federal
securities laws. The shares of Common Stock issuable upon exercise of the
Warrant have been duly and validly reserved for issuance and, upon issuance,
will be duly authorized, validly issued, fully paid and nonassessable and will
be free of restrictions on transfer other than restrictions on transfer under
this Agreement and the Transaction Agreements and under applicable state and
federal securities laws.
2.11 Intellectual Property Rights. Except as disclosed in the Company SEC
Reports, each of the Company and its subsidiaries (i) owns or possesses adequate
licenses or other rights to use all patents, trademarks, service marks, trade
names, copyrights, technology, software, know-how and trade secrets
(collectively, "Intellectual Property") necessary to conduct the business now
---------------------
conducted by the Company and its Subsidiaries. Except as disclosed in the
Company SEC Reports, neither the Company nor any of its Subsidiaries has
received any notice of infringement of or conflict with and knows of no such
infringement of or conflict with, asserted rights of others with respect to any
Intellectual Property that would have a Material Adverse Effect, and, to the
Company's knowledge, the discoveries, inventions, products, services or
processes used in the business of the Company and its Subsidiaries do not
infringe or conflict with any right or patent of any third party, or any
discovery, invention, product or process which is the subject of a patent
application filed by any third party in a manner that would have a Material
Adverse Effect.
2.12 Brokerage. Except for Credit Suisse First Boston Corporation, there
are no claims for brokerage commissions, finders' fees or similar compensation
in connection with the transactions contemplated by this Agreement and the
Transaction Agreements for which the
6
Investor will have any liability or responsibility based on any arrangement or
agreement binding upon the Company or any of its subsidiaries. The fees and
expenses of Credit Suisse First Boston Corporation will be paid by the Company
pursuant to the terms and conditions of that certain engagement letter, dated as
of January 14, 2002, between the Company and Credit Suisse First Boston
Corporation.
2.13 Disclosure. (a) The Company is not aware of any facts pertaining to
the Company or its Subsidiaries which could have a Material Adverse Effect and
which have not been disclosed in this Agreement, the Schedule of Exceptions or
the Company SEC Reports filed prior to the date hereof or otherwise disclosed to
the Investor by the Company in writing.
(b) No representation or warranty of the Company in this Agreement or
the Transaction Agreements, nor any statement or certificate furnished or to be
furnished to the Investor pursuant to the Transaction Agreements, when taken in
conjunction with all the information provided or made available by the Company
to the Investor in connection with the transactions contemplated by this
Agreement, taken as a whole, contains or will contain any untrue statement of a
material fact, or omits or will omit to state a material fact necessary to make
the statements contained herein or therein not misleading.
2.14 Registration Rights. Except as provided in the Schedule of Exceptions
and the Investor's Rights Agreement, the Company has not granted or agreed to
grant any registration rights, including piggy-back rights, to any person.
2.15 Agreements, Contracts and Commitments. Except as identified in the
Schedule of Exceptions, during the past 12 months, neither the Company nor any
of its Subsidiaries has breached, violated or defaulted under, or received
notice that it has breached, violated or defaulted under, nor is a breach,
violation, or default continuing under, any Material Contract (as defined below)
to which the Company or any Subsidiary is a party or by which its is bound.
"Material Contract" means:
-----------------
(a) any agreement, contract or commitment containing any covenant
limiting the freedom of the Company or any of its Subsidiaries to engage in any
material line of business or compete with any person in any material line of
business; or
(b) any "material contract" (as such term is defined in Item
601(b)(10) of Regulation S-K of the SEC) with respect to the Company and its
Subsidiaries.
3. Representations and Warranties of the Investor. The Investor hereby
represents and warrants that:
3.1 Organization and Qualification. The Investor is a corporation duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its organization.
3.2 Authority Relative to This Agreement. The Investor has all necessary
corporate power and authority to execute and deliver this Agreement and the
Transaction Agreements, to perform its obligations hereunder and thereunder and
to consummate the transactions contemplated hereby or thereby. The execution and
delivery of this Agreement and the Transaction Agreements by the Investor and
the consummation by the Investor of the
7
transactions contemplated hereby or thereby have been duly and validly
authorized by all necessary corporate action, and no other corporate proceedings
on the part of the Investor are necessary to authorize this Agreement and the
Transaction Agreements or to consummate the transactions contemplated hereby or
thereby. Each of this Agreement and the Transaction Agreements has been (or in
the case of the Commercial Agreements will be) duly and validly executed and
delivered by the Investor and, assuming the due authorization, execution and
delivery by the Investor, constitutes a (or in the case of the Commercial
Agreements, upon execution and delivery by the Company will constitute) legal,
valid and binding obligation of the Investor, enforceable against the Investor
in accordance with its terms subject to the effect of any applicable bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting creditors'
rights generally and subject to the effect of general principles of equity
(regardless of whether considered in a proceeding at law or in equity). The
Investor's Board of Directors has approved this Agreement and the transactions
contemplated hereby.
3.3 No Conflict; Required Filings and Consents. (a) The execution and
delivery of this Agreement and the Transaction Agreements by the Investor do
not, and the performance of this Agreement and the Transaction Agreements by the
Investor will not, (i) conflict with or violate the organizational documents of
the Investor or (ii) conflict with or violate any Law applicable to the
Investor.
(b) The execution and delivery of this Agreement and the Transaction
Agreements by the Company do not, and the performance of this Agreement and the
Transaction Agreements by the Company will not, require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Authority.
3.4 Brokerage. There are no claims for brokerage commissions, finders'
fees or similar compensation in connection with the transactions contemplated by
this Agreement and the Transaction Agreements for which Parent or the Investor
will have any liability or responsibility based on any arrangement or agreement
binding upon the Investor or any of its subsidiaries.
3.5 Purchase Entirely for Own Account. This Agreement is made with the
Investor in reliance upon the Investor's representation to the Company, which by
the Investor's execution of this Agreement the Investor hereby confirms, that
the Investor is an "accredited investor" within the meaning of Regulation D
promulgated under the Securities Act, that the Common Stock and Warrant to be
received by the Investor (collectively, the "Securities") will be acquired for
----------
investment for the Investor's own account, not as a nominee or agent, and not
with a view to the resale or distribution of any part thereof, and that the
Investor has no present intention of selling, granting any participation in, or
otherwise distributing the same other than in a transaction registered under the
Securities Act or exempt from, or not subject to, such registration. By
executing this Agreement, the Investor further represents that the Investor does
not have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participations to such person or to any third person,
with respect to any of the Securities.
8
3.6 Disclosure of Information. The Investor has been afforded access to
such information as it has requested regarding the Company and its subsidiaries
and their respective financial condition, operating results, properties,
liabilities, operations and management.
3.7 Restricted Securities. The Investor understands that the Securities it
is purchasing are characterized as "restricted securities" under the federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such securities may be resold without registration under
the Securities Act, only in certain limited circumstances. In this connection,
the Investor represents that it is familiar with Rule 144 under the Securities
Act, as presently in effect ("Rule 144"), and understands the resale limitations
--------
imposed thereby and by the Securities Act.
3.8 Legends. It is understood that the certificates evidencing the
Securities may bear one or all of the following legend(s):
"These securities have not been registered under the Securities Act of
1933, as amended. They may not be sold, offered for sale, pledged or
hypothecated in the absence of a registration statement in effect with
respect to the securities under such Act or an opinion of counsel
satisfactory to the Company that such registration is not required or
unless sold pursuant to Rule 144 of such Act."
"The shares represented hereby are subject to certain restrictions under
the terms of the Investor Rights Agreement, dated May 21, 2002, as amended
from time to time, between the issuer and the holder hereof and may not be
offered, sold, transferred or otherwise disposed of except in accordance
with the terms of that agreement."
3.9 Holdings in Common Stock. Except for any shares of Common Stock held
by the venture funds of Nokia Venture Partners, as of May 21, 2002, none of the
Investor or any Holder Affiliate (as such term is defined in Investor's Rights
Agreement) owned any shares of Common Stock.
4. Conditions of the Investor to Effect the Closing. The obligations of the
Investor to consummate the transactions contemplated hereby are subject to the
fulfillment or waiver (where permissible) on or before the Closing of each of
the following conditions:
4.1 Representations and Warranties. The representations and warranties of
the Company contained in Section 2 shall be true and correct as of the date
hereof and as of the date of the Closing with the same effect as though such
representations and warranties had been made on and as of the date of such
Closing.
4.2 Performance. The Company shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.
4.3 Compliance Certificate. The President of the Company shall have
delivered to the Investor at the Closing a certificate stating that the
conditions specified in Sections 4.1 and
9
4.2 have been fulfilled. In addition, the Compliance Certificate shall state
the number of shares of the outstanding Common Stock of the Company immediately
prior to the Closing.
4.4 Incumbency Certificate. The certificate of the Secretary of the
Company certifying the names and signatures of the officers of the Company
authorized to sign this Agreement and the other Transaction Agreements and all
other documents to be delivered hereunder and thereunder.
4.5 Qualifications. All authorizations, approvals, or permits, if any, of
any governmental authority or regulatory body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Securities pursuant to this Agreement shall have been duly obtained and
effective as of the Closing.
4.6 Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated hereby and all documents incident
to the Closing shall be reasonably satisfactory in form and substance to the
Investor's counsel, and they shall have received all such counterpart original
and certified or other copies of such documents as they may reasonably request.
4.7 Board of Directors. The Company Board shall have taken all necessary
action to increase the size of the Company Board to eight directors and to
appoint Xxx Xxxxxxxxxx to the Company Board, in each case effective immediately
after the Closing.
4.8 Investor's Rights Agreement. The Company shall have executed and
delivered to the Investor a counterpart to the Investor's Rights Agreement.
4.9 Warrant. The Company shall have executed and delivered to the Investor
the Warrant.
4.10 DGCL Section 203. The Company shall take all necessary steps to cause
the Investor not to be an "interested stockholder" pursuant to Section 203 of
the DGCL and to ensure that Section 203 of the DGCL does not apply to any of the
transactions contemplated by this Agreement or the Transaction Agreements
(including, but not limited to, any exercise of the Warrant or actions permitted
pursuant to the Investor's Rights Agreement).
4.11 No Material Adverse Effect. No event or events shall have occurred, or
be reasonably likely to occur, which individually or in the aggregate, have or
could have, a Material Adverse Effect.
5. Conditions of the Company to Effect the Closing. The obligations of the
Company to consummate the transactions contemplated hereby are subject to the
fulfillment or waiver (where permissible) on or before the Closing of each of
the following conditions:
5.1 Representations and Warranties. The representations and warranties of
the Investor contained in Section 3 shall be true and correct as of the date
hereof and as of the date of Closing with the same effect as though such
representations and warranties had been made on and as of the Closing.
10
5.2 Performance. The Investor shall have performed and complied with all
agreements, obligations and conditions contained in this Agreement that are
required to be performed or complied with by it on or before the Closing.
5.3 Compliance Certificate. An authorized officer of the Investor shall
have delivered to the Company at the Closing a certificate stating that the
conditions specified in Sections 5.1 and 5.2 have been fulfilled.
5.4 Power of Attorney. The Investor shall have delivered to the Company a
copy of the special power of attorney appointing Xx. Xxxxxx Xxxxx the true and
lawful attorney for Xxxxxx Xxxxx and Xxxxx Xxxxxxxx, each a director of the
Investor, in connection with this Agreement and the transactions contemplated
hereby.
5.5 Proceedings and Documents. All corporate and other proceedings in
connection with the transactions contemplated at the hereby and all documents
incident to the Closing shall be reasonably satisfactory in form and substance
to the Company's counsel, and they shall have received all such counterpart
original and certified or other copies of such documents as they may reasonably
request.
5.6 Investor's Rights Agreement. The Investor shall have executed and
delivered a counterpart to the Investor's Rights Agreement.
6. Miscellaneous.
6.1 Survival of Representations, Warranties and Other Agreements. The
representations, warranties and other agreements of each of the Company and the
Investor, respectively, included or provided for in the Transaction Agreements,
shall survive the execution and delivery of this Agreement, the other
Transaction Agreements and the Closing and shall in no way be affected by any
investigation of the subject matter thereof made by or on behalf of the Company
or the Investor.
6.2 Successors and Assigns. Except as otherwise provided herein, the terms
and conditions of this Agreement shall inure to the benefit of and be binding
upon the respective successors and assigns of the parties (including transferees
of any Securities). Nothing in this Agreement, express or implied, is intended
to confer upon any party other than the parties hereto or their respective
successors and assigns any rights, remedies, obligations, or liabilities under
or by reason of this Agreement, except as expressly provided in this Agreement.
6.3 Governing Law; Venue. This Agreement shall be governed by and construed
under the laws of the State of Delaware as applied to agreements executed in and
to be performed entirely within Delaware.
6.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6.5 Titles and Subtitles. The titles and subtitles used in this Agreement
are used for convenience only and are not to be considered in construing or
interpreting this Agreement.
11
6.6 Notices. Unless otherwise provided, any notice required or permitted
under this Agreement shall be given in writing and shall be deemed effectively
given upon personal delivery to the party to be notified or upon deposit with
the United States Post Office, by registered or certified mail, postage prepaid
and addressed to the party to be notified at the address indicated for such
party on the signature page hereof, or at such other address as such party may
designate by ten (10) days' advance written notice to the other parties given in
accordance with this Section 6.6.
6.7 Expenses. Irrespective of whether the Closing is effected, each party
shall pay all of the costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants, that it incurs
with respect to the negotiation, execution, delivery and performance of the
Transaction Agreements.
6.8 Amendments and Waivers. Any term of this Agreement may be amended only
in writing signed by, or on behalf of, the Company and the Investor. At any time
prior to the Closing, any party hereto may (a) extend the time for the
performance of any obligation or other act of any other party hereto, (b) waive
any inaccuracy in the representations and warranties of any other party
contained herein or in any document delivered pursuant hereto and (c) waive
compliance with any agreement of any other party or any condition to its own
obligations contained herein. Any such extension or waiver shall be valid if set
forth in an instrument in writing signed by the party or parties to be bound
thereby. Any waiver of any term or condition shall not be construed as a waiver
of any subsequent breach or a subsequent waiver of the same term or condition,
or a waiver of any other term or condition of this Agreement. The failure of any
party to assert any of its rights shall not constitute a waiver of any of such
rights.
6.9 Severability. If any term or provision of this Agreement is held to be
unenforceable under applicable Law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the Transactions is not affected
in any manner adverse to any party. Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in a mutually
acceptable manner in order that the transactions contemplated hereby are
consummated as originally contemplated to the fullest extent possible.
6.10 Publicity. No party hereto shall issue any press release or otherwise
make any statements to any third party with respect to this Agreement or the
transactions contemplated hereby without the prior written consent of the other
party, which consent shall not be unreasonably withheld, and the parties shall
cooperate as to the timing and contents of any such press release or public
announcement.
6.11 Entire Agreement. This Agreement and the other Transaction Agreements
constitute the entire agreement among the parties with respect to the subject
matter hereof and supersedes all prior agreements and undertakings, both written
and oral, among the parties, or any of them, with respect to the subject matter
hereof.
12
IN WITNESS WHEREOF, the parties have executed this Common Stock and
Warrant Purchase Agreement as of the date first above written.
REDBACK NETWORKS INC.
BY: /S/ XXXXX XXXXXXXX
------------------
Name: Xxxxx XxXxxxxx
Title: President and CEO
Address: 000 Xxxxxx Xxx
Xxx Xxxx, Xxxxxxxxxx 00000
NOKIA FINANCE INTERNATIONAL BV
BY: /S/ XXXXXX XXXXX
----------------
Name: Xxxxxx Xxxxx
Title: Attorney-in-Fact
Address: 0000 Xxxxxxxxxx Xxxxx,
Xxxxxx, Xxxxx 00000
With copies to
Nokia Corporation
X.X. Xxx 000
XXX-00000
XXXXX GROUP
Xxxxxxxxxxxxxx 0
XXX-00000
Xxxxx, Xxxxxxx
Attn: Xxxxxx Xxxxx, Vice President,
General Counsel
and
Nokia Inc.
0000 Xxxxxxxxxx Xxxxx
Xxxxxx, Xxxxx 00000 XXX
Attn: Xxxxxxx X. Xxxxxxx,
Vice President, Legal Services
13
Exhibit A
---------
Form of Warrant
---------------
A-1
Exhibit B
---------
Form of Investor's Rights Agreement
-----------------------------------
B-1
