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EXHIBIT 10.6
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SIMPLEX SOLUTIONS, INC.
SERIES E PREFERRED STOCK AGREEMENT
APRIL 6, 1998
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TABLE OF CONTENTS
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1. PURCHASE AND SALE OF PREFERRED STOCK .................................................1
1.1 Sale and Issuance of Series E Preferred Stock ..................................1
1.2 Closing.........................................................................1
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY ........................................2
2.1 Organization, Good Standing and Qualification ..................................2
2.2 Capitalization .................................................................2
2.3 Subsidiaries ...................................................................3
2.4 Authorization ..................................................................3
2.5 Valid Issuance of Securities ...................................................4
2.6 Governmental Consents ..........................................................4
2.7 Litigation......................................................................4
2.8 Patents and Trademarks .........................................................5
2.9 Compliance with Other Instruments ..............................................5
2.10 Agreements; Action ............................................................5
2.11 Disclosure ....................................................................6
2.12 Rights of Registration and First Offer ........................................6
2.13 Corporate Documents ...........................................................6
2.14 Title to Property and Assets ..................................................6
2.15 Financial Statements ..........................................................7
2.16 Changes........................................................................7
2.17 Employee Benefit Plans ........................................................8
2.18 Tax Returns and Payments ......................................................8
2.19 Insurance .....................................................................8
2.20 Labor Agreements and Actions ..................................................9
2.21 Proprietary Information and Inventions Agreements .............................9
2.22 Permits .......................................................................9
2.23 Tax Elections ................................................................10
2.24 Environmental Matters ........................................................10
2.25 Interested Party Transactions ................................................10
3. REPRESENTATIONS AND WARRANTIES OF THE PURCHASERS ....................................10
3.1 Authorization .................................................................11
3.2 Purchase Entirely for Own Account .............................................11
3.3 Disclosure of Information .....................................................11
3.4 Restricted Securities .........................................................11
3.5 No Public Market ..............................................................12
3.6 Legends .......................................................................12
3.7 Accredited Investor ...........................................................12
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TABLE OF CONTENTS
(continued)
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3.8 Brokers or Finders ............................................................12
3.9 Foreign Investors .............................................................12
4. CONDITIONS OF THE PURCHASERS' OBLIGATIONS AT EACH CLOSING ...........................13
4.1 First Closing .................................................................13
5. CONDITIONS OF THE COMPANY'S OBLIGATIONS AT EACH CLOSING .............................15
5.1 Representations and Warranties ................................................15
5.2 Qualifications ................................................................15
5.3 Covenants......................................................................15
5.4 Minimum Purchase ..............................................................15
5.5 Minimum Purchase at Second Closing ............................................15
5.6 Minimum Purchase at Third Closing .............................................15
6. SPECIAL COVENANTS ...................................................................15
6.1 Issuances of Additional Stock .................................................15
6.2 Notice of Certain Corporate Transactions ......................................16
6.3 RIGHT OF FIRST OFFER ON FIRST PUBLIC OFFERING ......................................17
6.4 Termination of Covenants ......................................................17
7. MISCELLANEOUS........................................................................18
7.1 Survival of Warranties ........................................................18
7.2 Transfer; Successors and Assigns ..............................................18
7.3 Governing Law .................................................................18
7.4 Counterparts ..................................................................18
7.5 Titles and Subtitles ..........................................................18
7.6 Notices .......................................................................18
7.7 Finder's Fee ..................................................................19
7.8 Attorney's Fees ...............................................................19
7.9 Amendments and Waivers ........................................................19
7.10 Severability .................................................................19
7.11 Delays or Omissions ..........................................................19
7.12 Entire Agreement .............................................................20
7.13 Corporate Securities Law .....................................................20
7.14 Waiver of Right of First Offer ...............................................20
7.15 Waiver of Conflicts ..........................................................20
7.16 Expenses .....................................................................21
7.17 Aggregation of Stock .........................................................21
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TABLE OF CONTENTS
(continued)
Exhibits
Exhibit A - Schedule of Purchasers
Exhibit B - Form of Amended and Restated Certificate of Incorporation
Exhibit C - Form of Addendum Agreement
Exhibit D - Schedule of Exceptions
Exhibit E - Form of Fourth Amended and Restated Rights Agreement
Exhibit F - Form of Legal Opinion of Venture Law Group
Exhibit G - Form of Series E Preferred Stock Warrant
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SIMPLEX SOLUTIONS, INC.
SERIES E PREFERRED STOCK PURCHASE AGREEMENT
THIS SERIES E PREFERRED STOCK PURCHASE AGREEMENT (the "AGREEMENT") is
made as of April 6, 1998 by and among Simplex Solutions, Inc., a Delaware
corporation (the "COMPANY") and the investors listed on Exhibit A attached
hereto including Intel Corporation (the "CORPORATE INVESTOR"), (each, including
the Corporate Investor, a "PURCHASER" and together the "PURCHASERS").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. Purchase and Sale of Preferred Stock.
1.1 Sale and Issuance of Series E Preferred Stock.
(a) On or before the First Closing (as defined below), the
Company will have authorized the issuance, pursuant to the terms of this
Agreement, of up to 3,253,336 shares of the Company's Series E Preferred Stock,
and will adopt and file with the Secretary of State of the State of Delaware the
Amended and Restated Certificate of Incorporation in the form attached hereto as
Exhibit B (the "RESTATED CERTIFICATE").
(b) Subject to the terms and conditions of this Agreement,
each Purchaser agrees to purchase at the Closing and the Company agrees to sell
and issue to each Purchaser at the Closing that number of shares of Series E
Preferred Stock set forth opposite each such Purchaser's name on Exhibit A
attached hereto at a purchase price of $3.75 per share (the "STOCK").
1.2 Closing.
(a) The initial purchase and sale of the Stock shall take
place at the offices of Venture Law Group, 0000 Xxxx Xxxx Xxxx, Xxxxx Xxxx,
Xxxxxxxxxx, at 1:00 p.m., on April 6, 1998, or at such other time and place as
the Company and the Purchasers mutually agree upon, orally or in writing (which
time and place are designated as the "FIRST CLOSING"). The second and third
purchase and sale of the Stock shall take place at the same place as the First
Closing and on the date that is thirty (30) and sixty (60) days after the date
of the First Closing, respectively (the "SECOND CLOSING" and the "THIRD
CLOSING", respectively) (The First, Second and Third Closings are each referred
to herein as the "CLOSING"). At each Closing, the Company shall deliver to each
of the Purchasers certificates representing the Series E Preferred Stock which
such Purchasers are purchasing against payment of the purchase price therefor by
check or wire transfer payable to the Company.
(b) If the full number of authorized shares of Series E
Preferred Stock are not sold at the First Closing, excluding shares to be sold
in the Second and Third Closings, the Company shall have the right, at any time
on or prior to the date thirty (30) days following
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the First Closing, to sell the remaining authorized shares of Series E Preferred
Stock to one or more additional investors approved by the Company's Board of
Directors; provided, however, that any such additional investor shall be
required to execute an Addendum Agreement substantially in the form attached
hereto as Exhibit C. Any additional investors so acquiring shares of Series E
Preferred Stock shall be considered a "Purchaser" for purposes of this
Agreement, and any securities so acquired by such additional investors shall be
considered "Stock" for purposes of this Agreement and all other agreements
contemplated hereby.
2. Representations and Warranties of the Company. The Company hereby
represents and warrants to each Purchaser that, except as set forth on a
Schedule of Exceptions attached hereto as Exhibit D, specifically identifying
the relevant subsection hereof, which exceptions shall be deemed to be
representations and warranties as if made hereunder:
2.1 Organization, Good Standing and Qualification. The Company is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Delaware and has all requisite corporate power and
authority to own its properties and assets and to carry on its business as now
conducted and as proposed to be conducted. The Company is duly qualified to
transact business and is in good standing in each jurisdiction in which the
failure so to qualify would have a material adverse effect on its business or
properties.
2.2 Capitalization. The authorized capital of the Company
consists, or will consist, immediately prior to the First Closing, solely of:
(i) Preferred Stock. 14,000,000 shares of Preferred Stock,
of which (a) 4,278,854 shares have been designated Series A Preferred Stock, all
of which are issued and outstanding, (b) 1,625,924 shares have been designated
Series B Preferred Stock, 1,600,284 shares of which are issued and outstanding,
(c) 1,200,000 shares of which have been designated Series C Preferred Stock,
1,180,000 shares of which are issued and outstanding, (d) 2,250,000 shares of
which have been designated Series D Preferred Stock, 2,213,781 shares of which
are issued and outstanding and (e) 4,000,000 shares of which have been
designated Series E Preferred Stock, none of which are issued and outstanding
prior to the Closing. The rights, privileges and preferences of the Preferred
Stock are as stated in the Restated Certificate.
(ii) Common Stock. 34,000,000 shares of Common Stock, of
which 6,998,746 shares are issued and outstanding.
(iii) Except for (A) the conversion privileges of the
Preferred Stock, (B) 25,640 shares of Series B Preferred Stock subject to an
outstanding warrant to purchase such stock, (C) 20,000 shares of Series C
Preferred Stock subject to an outstanding warrant to purchase such stock, (D)
20,000 shares of Series D Preferred Stock subject to an outstanding warrant to
purchase such stock, (E) up to 533,333 shares of Series E Preferred Stock
subject to the warrant attached hereto as Exhibit G to be issued to the
Corporate Investor in connection with this Agreement, (F) options outstanding to
purchase 1,448,597 shares of the Company's Common Stock under the Company's 1995
Stock Plan, (G) the right of first offer held by certain security holders set
forth in Section 3 of the Rights Agreement (as defined below) and in
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Section 6 of this Agreement, (H) the right of first refusal of the Company set
forth in Article XII of the Company's Bylaws, and (I) the Company's right to
repurchase shares of Common Stock held by certain employees, consultants and
directors of the Company upon the termination of their relationship as an
employee, consultant or director of the Company, there are no outstanding
options, warrants, rights (including conversion or preemptive rights) or
agreements, orally or in writing, for the purchase or acquisition from the
Company of any shares of its capital stock. Apart from the exceptions noted in
this Section 2.2(iii) or in the Schedule of Exceptions, no shares (including the
Stock) of the Company's outstanding capital stock, or stock issuable upon
exercise or exchange of any outstanding options or other stock issuable by the
Company, are subject to any rights of first refusal or other rights to purchase
such stock (whether in favor of the Company or any other person), pursuant to
any agreement or commitment of the Company.
(iv) All issued and outstanding shares of the Company's
Common Stock and Preferred Stock have been duly authorized, fully paid and are
nonassessable and such shares of such capital stock and all options and other
securities have been issued in compliance with all applicable federal and state
securities laws including, without limitation, the anti-fraud provisions
thereof.
(v) The Company has reserved 4,000,000 shares of its Common
Stock for issuance upon conversion of the shares of Series E Preferred Stock and
has reserved 5,553,200 shares of its Common Stock for issuance under the
Company's 1995 Stock Plan.
(vi) Schedule 2.2 of the Schedule of Exceptions sets forth a
complete listing of all outstanding stockholders as of the date hereof.
2.3 Subsidiaries. The Company does not currently own or control,
directly or indirectly, any interest in any other corporation, association, or
other business entity.
2.4 Authorization. All corporate action on the part of the
Company, its officers, directors and shareholders necessary for the
authorization, execution and delivery of this Agreement, and the Fourth Amended
and Restated Rights Agreement in the form attached hereto as Exhibit E (the
"RIGHTS AGREEMENT" and together with the Agreement, the "AGREEMENTS", the
performance of all obligations of the Company hereunder and thereunder and the
authorization, issuance, reservation of issuance and delivery of the Stock and
the Common Stock issuable upon conversion of the Stock (the Stock and the Common
Stock issuable upon conversion of the Stock or any securities issuable upon
conversion of such securities are collectively referred to as the "SECURITIES")
has been taken or will be taken prior to the Closing, and the Agreements, when
executed and delivered by the Company, shall constitute valid and legally
binding obligations of the Company, enforceable against the Company in
accordance with their terms except (i) as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance, and other laws of
general application affecting enforcement of creditor's rights generally, as
limited by laws relating to the availability of specific performance, injunctive
relief, or other equitable remedies, or (ii) to the extent the indemnification
provisions contained in the Rights Agreement may be limited by applicable
federal or state securities laws. Except as noted
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in Section 2.2(iii) or in the Schedule of Exceptions, the Stock is not subject
to any preemptive right or rights of first refusal.
2.5 Valid Issuance of Securities. The Stock that is being issued
to such Purchasers hereunder, when issued, sold and delivered in accordance with
the terms hereof for the consideration expressed herein, will be duly and
validly issued, fully paid and nonassessable and free of restrictions on
transfer other than restrictions on transfer under this Agreement, the Rights
Agreement and applicable state and federal securities laws. Based in part upon
the representations of such Purchasers in this Agreement and subject to the
provisions of Section 2.6 below, the Stock will be issued in compliance with all
applicable federal and state securities laws. The Common Stock issuable upon
conversion of the Stock has been duly and validly reserved for issuance, and
upon issuance in accordance with the terms of the Restated Certificate, shall be
duly and validly issued, fully paid and nonassessable and free of restrictions
on transfer other than restrictions on transfer under this Agreement, the Rights
Agreement and applicable state and federal securities laws and will be issued in
compliance with all applicable federal and state securities laws.
2.6 Governmental Consents. No consent, approval, order or
authorization of, or registration, qualification, designation, declaration or
filing with, any federal, state or local governmental authority on the part of
the Company is required in connection with the consummation of the transactions
contemplated by this Agreement, except (i) the filing of the Restated
Certificate with the Secretary of State of the State of Delaware and (ii) such
filings as may be required under applicable state and federal securities laws,
which filings will be timely filed within the applicable periods therefor.
2.7 Litigation. There is no action, suit, proceeding or
investigation pending or currently threatened against the Company, its
activities, properties or assets or, to the best knowledge of the Company,
against any officer, director or employee of the Company in connection with such
officer's, director's or employee's relationship with, or actions taken on
behalf of the Company, that questions the validity of the Agreements or the
right of the Company to enter into them, or to consummate the transactions
contemplated hereby or thereby, or that might result, either individually or in
the aggregate, in any material adverse changes in the assets, condition or
affairs of the Company, financially or otherwise, or any change in the current
equity ownership of the Company, nor is the Company aware that there is any
basis for the foregoing. The Company is not a party or subject to the provisions
of any order, writ, injunction, judgment or decree of any court or government
agency or instrumentality. There is no action, suit, proceeding or investigation
by the Company currently pending or which the Company intends to initiate.
2.8 Patents and Trademarks. To the best of the Company's
knowledge, the Company has full title and ownership of, or license to, all
patents, patent applications, trademarks, service marks, trade names,
copyrights, trade secrets, information, proprietary rights, formulas, designs,
know-how and processes (collectively the "PROPRIETARY ASSETS") necessary for its
business as now conducted and as proposed to be conducted without any conflict
with or infringement of the rights of others. There are no outstanding options,
licenses, or agreements of
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any kind relating to the foregoing, nor is the Company bound by or a party to
any options, licenses or agreements of any kind with respect to Proprietary
Assets of any other person or entity. The Company has not received any
communications alleging that the Company has violated or, by conducting its
business as proposed, would violate any of the patents, trademarks, service
marks, trade names, copyrights or trade secrets or other proprietary rights of
any other person or entity.
2.9 Compliance with Other Instruments.
(a) The Company is not in violation or default of any
provisions of its Restated Certificate or Bylaws or of any instrument, judgment,
order, writ, decree or contract to which it is a party or by which it is bound
or of any provision of federal or state statute, rule or regulation applicable
to the Company. The execution, delivery and performance of the Agreements and
the consummation of the transactions contemplated hereby or thereby will not
result in any such violation or be in conflict with or constitute, with or
without the passage of time and giving of notice, either a default under any
such provision, instrument, judgment, order, writ, decree or contract or an
event which results in the creation of any lien, charge or encumbrance upon any
assets of the Company.
(b) The Company has avoided every condition, and has not
performed any act, the occurrence of which would result in the Company's loss of
any right granted under any license, distribution or other agreement.
2.10 Agreements; Action.
(a) There are no agreements, understandings or proposed
transactions between the Company and any of its officers, directors, affiliates,
or any affiliate thereof.
(b) Except for agreements explicitly contemplated by the
Agreements, there are no agreements, understandings, instruments, contracts or
proposed transactions to which the Company is a party or by which it is bound
that (i) involve obligations (contingent or otherwise) of, or payments to, the
Company in excess of, $50,000, (ii) involve the license of any patent,
copyright, trade secret or other proprietary right to or from the Company, or
(iii) are not terminable upon thirty (30) days notice.
(c) The Company has not (i) declared or paid any dividends,
or authorized or made any distribution upon or with respect to any class or
series of its capital stock, (ii) incurred any indebtedness for money borrowed
or incurred any other liabilities individually in excess of $50,000 or in excess
of $100,000 in the aggregate, (iii) assumed or guaranteed any indebtedness with
respect to which the Company may become directly or indirectly liable, (iv) made
any loans or advances to any person, other than ordinary advances for travel
expenses, or (v) sold, exchanged or otherwise disposed of any of its assets or
rights, other than the sale of its inventory in the ordinary course of business.
(d) The Company is not a party to and is not bound by any
contract, agreement or instrument, or subject to any restriction under its
Restated Certificate or Bylaws,
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that adversely affects its business as now conducted or as proposed to be
conducted, its properties or its financial condition.
(e) The Company has not engaged in the past three (3)
months in any discussion (i) with any representative of any corporation,
partnership, association or other business entity or any individual regarding
the merger of the Company with or into any such corporation, partnership,
association or other business entity or any individual, (ii) with any
corporation, partnership, association or other business entity or any individual
regarding the sale, conveyance or disposition of all or substantially all of the
assets of the Company or a transaction or series of related transactions in
which more than fifty percent (50%) of the voting power of the Company is
disposed of, or (iii) regarding any other form of liquidation, dissolution or
winding up of the Company.
2.11 Disclosure. The Company has fully provided such Purchasers
with all the information that such Purchasers have requested for deciding
whether to acquire the Securities and all information which the Company believes
is reasonably necessary to enable such Purchasers to make such decision. No
representation or warranty of the Company contained in this Agreement, the
Exhibits attached hereto or any certificate furnished or to be furnished to such
Purchasers at the Closing (when read together) contains any untrue statement of
a material fact or omits to state a material fact necessary in order to make the
statements contained herein or therein not misleading in light of the
circumstances under which they were made.
2.12 Rights of Registration and First Offer. Except as
contemplated herein, or in the Agreements hereto, the Company has not granted or
agreed to grant any registration rights, including piggyback rights, to any
person or entity.
2.13 Corporate Documents. The Restated Certificate and Bylaws of
the Company are in the form provided to counsel for such Purchasers.
2.14 Title to Property and Assets. The Company owns its property
and assets free and clear of all mortgages, pledges, security interests, liens,
loans and encumbrances, except such encumbrances and liens which arise in the
ordinary course of business and do not materially impair the Company's ownership
or use of such property or assets. With respect to the property and assets it
leases, the Company is in compliance with such leases and, to the best of its
knowledge, holds a valid leasehold interest in such property and assets free of
any liens, security interests, claims or encumbrances.
2.15 Financial Statements. The Company has delivered to each
Purchaser unaudited financial statements (balance sheet, and profit and loss
statement) for the eleven-month period ended February 28, 1998 (the "FINANCIAL
STATEMENTS"). The Financial Statements have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods indicated and with each other, except that the Financial
Statements may not contain all footnotes required by generally accepted
accounting principles ("GAAP"). The Financial Statements fairly present the
financial condition and operating results of the Company as of the dates, and
for the periods, indicated therein, subject to normal year-end
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audit adjustments, which are neither individually nor in the aggregate material.
Except as set forth in the Financial Statements, the Company has no material
liabilities, contingent or otherwise, other than (i) liabilities incurred in the
ordinary course of business subsequent to February 28, 1998, and (ii)
obligations under contracts and commitments incurred in the ordinary course of
business and not required under GAAP to be reflected in the Financial
Statements, which, in both cases, individually or in the aggregate, are not
material to the financial condition or operating results of the Company. The
Company maintains and will continue to maintain a standard system of accounting
established and administered in accordance with GAAP.
2.16 Changes. Since February 28, 1998, there has not been:
(a) any change in the assets, liabilities, financial
condition, or operating results or business of the Company from that reflected
in the Financial Statements, except changes in the ordinary course of business
that have not been, either individually or in the aggregate, materially adverse;
(b) any damage, destruction or loss, whether or not covered
by insurance, materially and adversely affecting the business, properties,
prospects, financial condition, operating results, prospects or business of the
Company (as such business is presently conducted and as it is proposed to be
conducted);
(c) any waiver or compromise by the Company of a valuable
right or of a materially debt owed to it;
(d) any satisfaction or discharge of any lien, claim, or
encumbrance or payment of any obligation by the Company, except in the ordinary
course of business and that is not material to the business, properties,
prospects, financial condition, operating results or business of the Company (as
such business is presently conducted and as it is proposed to be conducted);
(e) any material change to a material contract or agreement
by which the Company or any of its assets is bound or subject;
(f) any material change in any compensation arrangement or
agreement with any employee, officer, director or stockholder;
(g) any sale, assignment or transfer of any patents,
trademarks, copyrights, trade secrets or other intangible assets;
(h) any resignation or termination of employment of any key
officer of the Company; and the Company, to the best of its knowledge, does not
know of any impending resignation or termination of employment of any such
officers;
(i) receipt of notice that there has been a loss of, or
material order cancellation by, any major customer of the Company;
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(j) any mortgage, pledge, transfer of a security interest
in, or lien, created by the Company, with respect to any of its material
properties or assets, except liens for taxes not yet due or payable;
(k) any loans or guarantees made by the Company to or for
the benefit of its employees, officers or directors, or any members of their
immediate families, other than travel advances and other advances made in the
ordinary course of its business;
(1) any declaration, setting aside or payment or other
distribution in respect to any of the Company's capital stock, or any direct or
indirect redemption, purchase, or other acquisition of any of such stock by the
Company;
(m) to the best of the Company's knowledge, any other event
or condition of any character that might materially and adversely affect the
assets, operating results, business, properties, prospects or financial
condition of the Company (as such business is presently conducted and as it is
proposed to be conducted); or
(n) any arrangement or commitment by the Company to do any
of the things described in this Section 2.16.
2.17 Employee Benefit Plans. The Company does not have any
Employee Benefit Plan as defined in the Employee Retirement Income Security Act
of 1974.
2.18 Tax Returns and Payments. The Company has filed all tax
returns and reports as required by law. These returns and reports are true and
correct in all material respects. The Company has paid all taxes and other
assessments due.
2.19 Insurance. The Company has in full force and effect fire and
casualty insurance policies, with extended coverage, sufficient in amount
(subject to reasonable deductibles) to allow it to replace any of its properties
that might be damaged or destroyed.
2.20 Labor Agreements and Actions. The Company is not bound by or
subject to (and none of its assets or properties is bound by or subject to) any
written or oral, express or implied, contract, commitment or arrangement with
any labor union, and no labor union has requested or, to the knowledge of the
Company, has sought to represent any of the employees, representatives or agents
of the Company. There is no strike or other labor dispute involving the Company
pending, or to the knowledge of the Company threatened, which could have a
material adverse effect on the assets, properties, financial condition,
operating results, or business of the Company (as such business is presently
conducted and as it is proposed to be conducted), nor is the Company aware of
any labor organization activity involving its employees. The Company is not
aware that any officer or key employee, or that any group of key employees,
intends to terminate their employment with the Company, nor does the Company
have a present intention to terminate the employment of any of the foregoing.
The employment of each officer and employee of the Company is terminable at the
will of the Company. To the best of its knowledge, the Company has complied in
all material respects with all applicable state and federal equal employment
opportunity laws and with other laws related to employment.
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2.21 Proprietary Information and Inventions Agreements. Each
employee, consultant and officer of the Company has executed an agreement with
the Company regarding confidentiality and proprietary information substantially
in the form or forms delivered to the counsel for such Purchasers. The Company,
after reasonable investigation, is not aware that any of its employees or
consultants is in violation thereof, and the Company will use its best efforts
to prevent any such violation. All consultants to or vendors of the Company with
access to confidential information of the Company are parties to a written
agreement substantially in the form or forms provided to counsel for such
Purchasers under which, among other things, each such consultant or vendor is
obligated to maintain the confidentiality of confidential information of the
Company. The Company, after reasonable investigation, is not aware that any of
its consultants or vendors are in violation thereof, and the Company will use
its best efforts to prevent any such violation. The Company is not aware that
any of its employees, officers, founders, consultants or contractors are
obligated under any contract (including licenses, covenants or commitments of
any nature) or other agreement, or are subject to any judgment, decree or order
of any court or administrative agency, that would interfere with the use of his
or her best efforts to promote the interests of the Company or that would
conflict with the Company's business as conducted or as proposed to be conducted
or that would prevent any such employees, officers, consultants or contractors
from assigning inventions to the Company as set forth in the Proprietary
Information and Inventions Agreement.
2.22 Permits. The Company has all franchises, permits, licenses
and any similar authority necessary for the conduct of its business as now being
conducted by it, the lack of which could materially and adversely affect the
business, properties, prospects, operating results or financial condition of the
Company and believes that it can obtain, without undue burden or expense, any
similar authority for the conduct of its business as planned to be conducted.
The Company is not in default in any material respect under any of such
franchises, permits, licenses or other similar authority.
2.23 Tax Elections. The Company has not elected pursuant to the
Internal Revenue Code of 1986, as amended (the "Code"), to be treated as an "S"
corporation or a collapsible corporation pursuant to Section 341 (f) or Section
1362(a) of the Code, nor has it made any other elections pursuant to the Code
(other than elections which related solely to matters of accounting,
depreciation or amortization) which would have a material affect on the Company,
its financial condition, its business as presently conducted or presently
proposed to be conducted or any of its properties or material assets.
2.24 Environmental Matters. During the period that the Company has
owned or leased its properties and facilities, (a) to the Company's best
knowledge, there have been no disposals, releases or threatened releases of
Hazardous Materials (as defined below) on, from or under such properties or
facilities, (b) neither the Company nor, to the Company's knowledge, any third
party, has used, generated, manufactured or stored on, under or about such
properties or facilities or transported to or from such properties or facilities
any Hazardous Materials. The Company has no knowledge of any presence,
disposals, releases or threatened releases of Hazardous Materials on, from or
under any of such properties or facilities, which may have occurred prior to the
Company having taken possession of any of such properties or facilities.
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For purposes of this Agreement, the terms "disposal", "release", and "threatened
release" shall have the definitions assigned thereto by the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
Section 9601 et SEQ., as amended ("CERCLA"). For the purposes of this Section,
"Hazardous Materials" shall mean any hazardous or toxic substance, material or
waste which is regulated under, or defined as a "hazardous substance",
"pollutant", "contaminant", "toxic chemical", "hazardous material", "toxic
substance", or "hazardous chemical" under (1) CERCLA; (2) the Emergency Planning
and Community Right-to-Know Act, 42 U.S.C. Section 11001 et seq.; (3) the
Hazardous Materials Transportation Act, 49 U.S.C. Section 1801, et seq.; (4) the
Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; (5) the
Occupational Safety and Health Act of 1970, 29 U.S.C. Section 651 et seq.; (6)
regulations promulgated under any of the above statutes; or (7) any applicable
state or local statute, ordinance, rule, or regulation that has a scope or
purpose similar to those statutes identified above.
2.25 Interested Party Transactions. To the best knowledge of the
Company, no officer or director of the Company or any "affiliate" or "associate"
(as those terms are defined in Rule 405 promulgated under the Securities Act of
1933, as amended (the "SECURITIES ACT") of any such person has had, either
directly or indirectly, a material interest in: (i) any person or entity which
purchases from or sells, licenses or furnishes to the Company any goods,
property, technology, intellectual or other property rights or services; or (ii)
any contract or agreement to which the Company is a party or by which it may be
bound or affected.
3. Representations and Warranties of the Purchasers. Each Purchaser
hereby represents and warrants to the Company that:
3.1 Authorization. This Agreement when executed and delivered by
such Purchaser will constitute a valid and legally binding obligation of such
Purchaser, enforceable in accordance with its terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, and any other laws of general application affecting enforcement of
creditors rights generally, and as limited by laws relating to the availability
of a specific performance, injunctive relief, or other equitable remedies, or
(ii) to the extent the indemnification provisions contained in the Rights
Agreement may be limited by applicable federal or state securities laws.
3.2 Purchase Entirely for Own Account. This Agreement is made with
such Purchaser in reliance upon such Purchaser's representation to the Company,
which by such Purchaser's execution of this Agreement, such Purchaser hereby
confirms, that the Stock (or Common Stock issuable upon conversion thereof) to
be acquired by such Purchaser will be acquired for investment for such
Purchaser's own account, not as a nominee or agent, and not with a view to the
resale or distribution of any part thereof, and that such Purchaser has no
present intention of selling, granting any participation in, or otherwise
distributing the same. By executing this Agreement, such Purchaser further
represents that such Purchaser does not presently have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to any of the
Stock (or the Common Stock issuable upon conversion thereof). Such Purchaser
represents that
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it has full power and authority to enter into this Agreement. Such Purchaser has
not been formed for the specific purpose of acquiring the Stock (and the Common
Stock issuable upon conversion thereof).
3.3 Disclosure of Information. Such Purchaser has had an
opportunity to discuss the Company's business, management, financial affairs and
the terms and conditions of the offering of the Stock with the Company's
management and has had an opportunity to review the Company's facilities. Such
Purchaser understands that such discussions, as well as the written information
issued by the Company, were intended to describe the aspects of the Company's
business which it believes to be material. Such Purchaser further understands
that there can be no assurance that the Company will be able to achieve the
results contained in any financial projections or other forward-looking
information provided to the Purchaser.
3.4 Restricted Securities. Such Purchaser understands that the
Stock (and the Common Stock issuable upon conversion thereof) has not been, and
will not be, registered under the Securities Act by reason of a specific
exemption from the registration provisions of the Securities Act which depends
upon, among other things, the bona fide nature of the investment intent and the
accuracy of such Purchaser's representations as expressed herein. Such Purchaser
understands that the Stock (and the Common Stock issuable upon conversion
thereof) are characterized as "restricted securities" under the federal
securities laws inasmuch as they are being acquired from the Company in a
transaction not involving a public offering and that under such laws and
applicable regulations such Stock (and the Common Stock issuable upon conversion
thereof) may be resold without registration under the Securities Act only in
certain limited circumstances. Such Purchaser acknowledges that the Stock (and
the Common Stock issuable upon conversion thereof) must be held indefinitely
unless subsequently registered under the Securities Act or an exemption from
such registration is available. Such Purchaser is aware of the provisions of
Rule 144 promulgated under the Securities Act which permit limited resale of
shares purchased in a private placement subject to the satisfaction of certain
conditions, including, among other things, the existence of a public market for
the shares, the availability of certain current public information about the
Company, the resale occurring not less than one year after a party has purchased
and paid for the security to be sold, the sale being effected through a
"broker's transaction" or in transactions directly with a "market maker" (as
provided by Rule 144(f)) and the number of shares being sold during any
three-month period not exceeding specified limitations.
3.5 No Public Market. Such Purchaser understands that no public
market now exists for any of the securities issued by the Company, that the
Company has made no assurances that a public market will ever exist for the
Stock or the underlying Common Stock.
3.6 Legends. Such Purchaser understands that the Stock (and the
Common Stock issuable upon conversion thereof), and any securities issued in
respect thereof or exchange therefor, may bear one or all of the following
legends:
(a) "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR
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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."
(b) Any legend required by the Blue Sky laws of any state to
the extent such laws are applicable to the shares represented by the certificate
so legended.
3.7 Accredited Investor. Such Purchaser is an accredited investor
as defined in Rule 501(a) of Regulation D promulgated under the Securities Act.
3.8 Brokers or Finders. Such Purchaser has not incurred, and will
not incur, directly or indirectly, as a result of any action taken by such
Purchaser any liability for brokerage or finders' fees or agents' commissions or
any similar charges in connection with this Agreement.
3.9 Foreign Investors. If the Purchaser is not a United States
person, such Purchaser hereby represents that it has satisfied itself as to the
full observance of the laws of its jurisdiction in connection with any
invitation to subscribe for the Securities or any use of this Agreement,
including (i) the legal requirements within its jurisdiction for the purchase of
the Securities, (ii) any foreign exchange restrictions applicable to such
purchase, (iii) any governmental or other consents that may need to be obtained,
and (iv) the income tax and other tax consequences, if any, that may be relevant
to the purchase, holding, redemption, sale, or transfer of the Securities. Such
Purchaser's subscription and payment for, and his or her continued beneficial
ownership of the Securities, will not violate any applicable securities or other
laws of the Purchaser's jurisdiction.
4. Conditions of the Purchasers' Obligations at each Closing.
4.1 First Closing. The obligations of each Purchaser to the
Company under this Agreement are subject to the fulfillment, on or before the
First Closing, of each of the following conditions, unless otherwise waived:
(a) Representations and Warranties. The representations and
warranties of the Company contained in Section 2 shall be true on and as of the
First Closing with the same effect as though such representations and warranties
had been made on and as of the date of the First Closing.
(b) Performance. The Company shall have performed and
complied with all covenants, agreements, obligations and conditions contained in
this Agreement that are required to be performed or complied with by it on or
before the First Closing.
(c) Compliance Certificate. The President of the Company
shall deliver to such Purchasers at the First Closing a certificate, signed by
the President and Chief Financial Officer of the Company, certifying that the
conditions specified in Sections 4.1(a) and (b) have been fulfilled.
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(d) 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 Stock pursuant to, and in performance of, this Agreement shall
be obtained and effective as of the First Closing.
(e) Opinion of Company Counsel. Such Purchasers shall have
received from Venture Law Group, counsel for the Company, an opinion, dated as
of the First Closing, in substantially the form of Exhibit F.
(f) Board of Directors. As of the First Closing, the Board
shall be comprised of Xxx Xxxxxxxx, Xxxxxxxx Xxxxxxxx, Xxxxxx X. Xxxxx, Xx., X.
Xxxxxx Xxxxx, Jr., Xxxxxxx Xxxxxx, and Resve Saleh.
(g) Rights Agreement. The Company and each Purchaser shall
have executed and delivered the Rights Agreement in substantially the form
attached as Exhibit E.
(h) Restated Certificate. The Company shall have filed the
Restated Certificate with the Secretary of State of Delaware on or prior to the
First Closing Date, which shall continue to be in full force and effect as of
the First Closing Date.
(i) Minimum Purchase. At the First Closing, the Purchasers
(including the Corporate Investor) shall purchase Stock carrying an aggregate
purchase price of not less than $7 million, of which the Corporate Investor
shall purchase Stock carrying an aggregate purchase price of not less than $4
million.
(j) Warrant. The Company shall have issued the Series E
Preferred Stock Warrant in the form attached hereto as Exhibit G to the
Corporate Investor.
(k) Consents and Waivers. The Company shall have obtained
any and all consents and waivers necessary or appropriate for consummation of
the transactions contemplated by this Agreement.
4.2 Second and Third Closing. The obligations of the Corporate
Investor to the Company under this Agreement with respect to the Second and
Third Closings are subject to the fulfillment on the Second and Third Closings,
respectively, of the following conditions, unless otherwise waived:
(a) Representations and Warranties. The representations and
warranties of the Company contained in Section 2 and made on and as of the date
of the First Closing shall remain true as of the date of the First Closing.
(b) Performance. The Company shall have performed and
complied with, and shall not be in breach of any covenants, agreements,
obligations and conditions contained in this Agreement and the Rights Agreement,
including without limitation, the confidentiality provisions set forth in
Section 4 of the Rights Agreement, that are required to be performed or complied
with in all material respects as of such Closing.
(c) Compliance Certificate. The President of the Company
shall deliver to the Corporate Investor at each such Closing a certificate,
signed by the President and Chief Executive Officer of the Company, certifying
that the conditions specified in Sections 4.2(a) and (b) have been fulfilled.
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5. Conditions of the Company's Obligations at each Closing. The
obligations of the Company to each Purchaser under this Agreement are subject to
the fulfillment, on or before the Closing, of each of the following conditions,
unless otherwise waived:
5.1 Representations and Warranties. The representations and
warranties of each Purchaser contained in Section 3 shall be true on and as of
the Closing with the same effect as though such representations and warranties
had been made on and as of the Closing.
5.2 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 Stock pursuant to this Agreement shall be obtained and effective as of the
Closing.
5.3 Covenants. All covenants, agreements and conditions contained
in this Agreement to be performed by each Purchaser on or prior to the Closing
shall have been performed or complied with in all material respects.
5.4 Minimum Purchase at First Closing. At, and as a condition to,
the First Closing, the Purchasers shall purchase Stock carrying an aggregate
purchase price of not less than $7 million, of which the Corporate Investor
shall purchase Stock carrying an aggregate purchase price of not less than $4
million.
5.5 Minimum Purchase at Second Closing. At, and as a condition to,
the Second Closing, the Corporate Investor shall purchase Stock carrying an
aggregate purchase price of no less than $2 million.
5.6 Minimum Purchase at Third Closing. At, and as a condition to,
the Third Closing, the Corporate Investor shall purchase Stock carrying an
aggregate purchase price of no less than $1 million.
6. Special Covenants
6.1 Issuances of Additional Stock. The Company agrees that it
shall not, without the prior written consent of the holders of a majority of the
Company's outstanding shares of Series E Preferred Stock, issue to officers,
directors and employees of, or consultants, advisors or other persons performing
services for, the Company any shares of Common Stock (including shares of Common
Stock deemed to have been issued pursuant to Article IV, Section B, subsection
3(c)(i)(E) of the Restated Certificate) such that the total number of shares
issued to all such persons (net of shares reissued under a Company plan after
the initial issuance and return of such shares to such Company plan, and
excluding 4,337,200 shares issued prior to the Company's adoption of its 1995
Stock Plan and any shares reissued in respect thereof) exceeds 7,553,200 shares
(each as adjusted to stock splits, stock dividends, recapitalizations, and the
like) without consideration or for a consideration per share less than the
Series E Conversion Price (as defined in the Restated Certificate) in effect
immediately prior to such issuance, excluding any shares of Common Stock issued
or issuable under subsections 3(c)(ii)(A), (C), (D)
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or (E) of Article IV, Section B of the Restated Certificate, or issued in
respect of exercisable or convertible securities.
6.2 Notice of Certain Corporate Transactions. In the event of a
Corporate Transaction (as defined below), the Company shall give written notice
(the "TRANSACTION NOTICE") to the Corporate Investor on the earlier of (i) a
date at least ten (10) business days prior to entering into a binding agreement
with respect to, or effecting the consummation of, a Corporate Transaction, or,
(ii) if applicable, a date no more than five (5) business days following the
date on which the Company (A) enters into a non-binding letter of intent
relating to a Corporate Transaction; (B) enters into an agreement with
non-solicitation or no-shop provisions which preclude the Company from engaging
in discussions with or soliciting a third-party with regard to a Corporate
Transaction; or (C) has reached substantial agreement on the material terms of a
Corporate Transaction with respect to price, form of consideration, structure of
transaction, indemnification and escrow, containing a description of the
Corporate Transaction in reasonable detail, including the names of the third
parties involved in the Corporate Transaction, in order to provide the Corporate
Investor an opportunity to make a competing bid. The Company shall allow
reasonable access to its officers and directors to discuss with the Corporate
Investor the proposed Corporate Transaction as soon as practicable, but in no
event later than three (3) business days after the Transaction Notice is given.
Within ten (10) business days after the Transaction Notice is given, the
Corporate Investor may deliver a competing bid in writing to the Company. The
Company shall give such competing bid due consideration consistent with the
fiduciary obligations of its Board of Directors, and shall in good faith either
approve or disapprove such competing bid before approving a Corporate
Transaction, or entering into any agreement with respect to a Corporate
Transaction, with any person or entity other than the Corporate Investor. During
such ten (10) business day notice period, the Corporate Investor shall be
entitled to conduct due diligence with the reasonable cooperation of the
Company. If the Corporate Investor has not delivered such bid within ten (10)
business days after the Transaction Notice is given, the Company shall be free
to enter into a binding agreement with respect to a Corporate Transaction with
such other person(s) or entity(ies) and subsequently consummate such Corporate
Transaction, provided that such binding agreement is entered into within sixty
(60) days following termination of such ten (10) business day notice period. The
Company shall not enter into a binding agreement with respect to, or effect the
consummation of, a Corporate Transaction until expiration of the ten (10)
business day notice period stated above, unless the Corporate Investor has
waived its right to the Transaction Notice. "CORPORATE TRANSACTION" shall mean
any of the following, whether accomplished through one or a series of related
transactions: (i) the sale of all or substantially all of the assets of the
Company, (ii) the acquisition of the Company by means of a merger,
consolidation, share purchase or exchange, or other form of corporate
reorganization or transaction in which the holders of the Company's outstanding
voting securities immediately prior to such transaction own immediately after
such transaction securities representing less than fifty percent (50%) of the
voting power of the corporation or other entity surviving such transaction, or
(iii) a transaction or series of related transactions that would result in a
greater than twenty-five percent (25%) change in ownership in the total
outstanding number of shares of the Company's voting securities.
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6.3 Right of First Offer on First Public Offering. In an IPO, each
holder of shares of Series E Preferred Stock shall be entitled to purchase that
portion of the Common Stock to be issued in such offering such that the number
of shares of Common Stock purchased by such holder in such offering constitutes
one-fourth of the number of shares of Common Stock held by such holder
immediately prior to the IPO (such shares of Common Stock to consist solely of
shares of Common Stock issued of issuable upon conversion of all shares of
Series E Preferred Stock held by such holder) (the "PROPORTIONATE SHARE");
provided, however, that the number of shares of Common Stock purchasable by all
holders of Series E Preferred Stock in the IPO shall not in any event exceed 3%
of the total number of shares to be sold in the IPO (with the Proportionate
Share for each holder of Series E Preferred Stock to be reduced proportionately
to the extent necessary to keep within such 3% limitation (the "ADJUSTED
PROPORTIONATE SHARE")). In the event that a holder of Series E Preferred Stock
does not elect to purchase his or its full Adjusted Proportionate Share, each
holder of Series E Preferred Stock that has elected to purchase his or its full
Adjusted Proportionate Share ("FULLY EXERCISING SERIES E HOLDER") shall be
entitled to purchase up to the lesser of (i) all of the remaining shares, (ii)
four times his or its Proportionate Share and (iii) a number of shares that when
divided by the fully-diluted shares of Common Stock of the Company (including
conversion and exercise of all convertible and exercisable securities)
("FULLY-DILUTED SHARES") after the IPO does not exceed the number of shares of
Common Stock held by such holder (including conversion and exercise of all
convertible and exercisable securities held by such holder) prior to the IPO
divided by the Fully-Diluted Shares. In the event of an oversubscription of such
remaining shares, such remaining shares shall be allocated among such Fully
Exercising Series E Holders pro rata based on the number of shares of Series E
Preferred Stock owned by the Fully Exercising Series E Holders. The price of
securities which each holder becomes entitled to purchase pursuant to this
paragraph shall be the same price at which such securities are proposed to be
offered to the public. Each holder of shares of Series E Preferred Stock
acknowledges that this Section 6.3 does not obligate such holder to purchase any
shares in an IPO. Each such holder further acknowledges that any offer by the
Company of shares of Common Stock pursuant to this Section 6.3 will be made
pursuant to a prospectus in accordance with the Securities Act.
6.4 Termination of Covenants. The covenants contained in this
Section 6 shall terminate and be of no further force or effect upon the earlier
to occur of any of the following events: (i) the consummation of the sale of all
or substantially all of the assets of the Company, or the acquisition of the
Company by means of a merger, consolidation, share purchase or exchange, or
other form of corporate reorganization or transaction in which the holders of
the Company's outstanding voting securities immediately prior to such
transaction own immediately after such transaction securities representing less
than fifty percent (50%) of the voting power of the corporation or other entity
surviving such transaction, (ii) the consummation by the Company of the initial
sale of its Common Stock in a bona fide, firm commitment underwriting pursuant
to a registration statement on Form S-1 under the Securities Act (other than a
registration statement relating either to the sale of securities to employees of
the Company pursuant to a stock option, stock purchase or similar plan or a SEC
Rule 145 transaction) (an "IPO"); (iii) with respect to Sections 6.1 and 6.2
only, at such time as the Corporate Investor holds less than 500,000 shares of
the Company's Common Stock (as adjusted for stock splits, stock dividends,
recapitalization and the like, and assuming the conversion or
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exercise of all securities convertible or exercisable for shares of Common
Stock); (iv) with respect to Sections 6.1 and 6.2 only, the termination or
expiration of the Software License and Technical Cooperation Agreement dated
April 6, 1998 between the Company and the Corporate Investor; or (v) the fifth
anniversary of the effective date of this Agreement.
7. Miscellaneous.
7.1 Survival of Warranties. Unless otherwise set forth in this
Agreement, the warranties, representations and covenants of the Company and such
Purchasers contained in or made pursuant to this Agreement shall survive the
execution and delivery of this Agreement and the Closing for a period of one (1)
year following the Closing.
7.2 Transfer; Successors and Assigns. The terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
successors and assigns of the parties. Nothing in this Agreement, express or
implied, is intended to confer upon any party other than the parties hereto or
their respective successors and assigns any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.
7.3 Governing Law. This Agreement shall be governed by and
construed under the laws of the State of California as applied to agreements
entered into solely between residents of, and to be performed entirely within,
such state.
7.4 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.5 Titles and Subtitles. The titles and subtitles used in this
Agreement are used for convenience only and are not to be considered in
construing or interpreting this Agreement.
7.6 Notices.
(a) All notices, requests, demands and other communications
under this Agreement or in connection herewith shall be given to or made upon
(i) such Purchasers to their respective addresses as set forth under their name
on Exhibit A attached hereto, (ii) to the Company at 000 Xxxxxxx Xxxxxx.,
Xxxxxxxxx, Xxxxxxxxxx, 00000, (000) 000-0000 (telephone), (000) 000-0000
(telefax), Attention: President, with a copy to Venture Law Group, 0000 Xxxx
Xxxx Xxxx, Xxxxx Xxxx, Xxxxxxxxxx, 00000, Attention: Xxxxxxx X. Xxxx.
(b) All notices, requests, demands and other communications
given or made in accordance with the provisions of this Agreement shall be in
writing, and shall be sent by airmail, return receipt requested, or by telex or
telecopy (facsimile) with confirmation of receipt, and shall be deemed to be
given or made when receipt is so confirmed.
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(c) Any party may, by written notice to the other, alter its
address or respondent, and such notice shall be considered to have been given
five (5) days after the airmailing, telexing or telecopying thereof.
7.7 Finder's Fee. Each party represents that it neither is nor
will be obligated for any finder's fee or commission in connection with this
transaction. Each Purchaser agrees to indemnify and to hold harmless the Company
from any liability for any commission or compensation in the nature of a
finder's fee (and the costs and expenses of defending against such liability or
asserted liability) for which each Purchaser or any of its officers, employees,
or representatives is responsible. The Company agrees to indemnify and hold
harmless each Purchaser from any liability for any commission or compensation in
the nature of a finder's fee (and the costs and expenses of defending against
such liability or asserted liability) for which the Company or any of its
officers, employees or representatives is responsible.
7.8 Attorney's Fees. If any action at law or in equity (including
arbitration) is necessary to enforce or interpret the terms of this Agreement,
the Addendum Agreement, the Rights Agreement or the Restated Certificate, the
prevailing party shall be entitled to reasonable attorney's fees, costs and
necessary disbursements in addition to any other relief to which such party may
be entitled.
7.9 Amendments and Waivers. Any term of this Agreement may be
amended with the written consent of the Company and the holders of at least a
majority of the Common Stock issued or issuable upon conversion of the Stock.
Any amendment or waiver effected in accordance with this Section 7.9 shall be
binding upon the Purchasers and each transferee of the Stock (or the Common
Stock issuable upon conversion thereof), each future holder of all such
securities, and the Company.
7.10 Severability. If one or more provisions of this Agreement are
held to be unenforceable under applicable law, portions of such provisions, or
such provisions in their entirety, to the extent necessary, shall be severed
from this Agreement, and the balance of the Agreement shall be interpreted as if
such provision were so excluded and shall be enforceable in accordance with its
terms.
7.11 Delays or Omissions. No delay or omission to exercise any
right, power or remedy accruing to any holder of any of the Stock, upon any
breach or default of the Company under this Agreement, shall impair any such
right, power or remedy of such holder nor shall it be construed to be a waiver
of any such breach or default, or an acquiescence therein, or of or in any
similar breach or default thereafter occurring; nor shall any waiver of any
single breach or default be deemed a waiver of any other breach or default
theretofore or thereafter occurring. Any waiver, permit, consent or approval of
any kind or character on the part of any holder of any breach or default under
this Agreement, or any waiver on the part of any holder of any provisions or
conditions of this Agreement, must be in writing and shall be effective only to
the extent specifically set forth in such writing. All remedies, either under
this Agreement or by law or otherwise afforded to any holder, shall be
cumulative and not alternative.
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7.12 Entire Agreement. This Agreement and the documents referred
to herein constitute the entire agreement between the parties hereto pertaining
to the subject matter hereof, and any and all other written or oral agreements
existing between the parties hereto are expressly canceled; provided, however,
that nothing in this Agreement shall be deemed to terminate or supersede the
provisions of any confidentiality and nondisclosure agreements executed by the
parties hereto prior to the date hereof, which agreements shall continue in full
force and effect until terminated in accordance with their respective terms.
7.13 Corporate Securities Law. THE SALE OF THE SECURITIES THAT IS
THE SUBJECT OF THIS AGREEMENT HAS NOT BEEN QUALIFIED WITH THE COMMISSIONER OF
CORPORATIONS OF THE STATE OF CALIFORNIA, THE ISSUANCE OF SUCH SECURITIES OR THE
PAYMENT OR RECEIPT OF ANY PART OF THE CONSIDERATION FOR SUCH SECURITIES PRIOR TO
SUCH QUALIFICATION IS UNLAWFUL, UNLESS THE SALE OF SECURITIES IS EXEMPT FROM THE
QUALIFICATION BY SECTION 25100, 25102 OR 25105 OF THE CALIFORNIA CORPORATIONS
CODE. THE RIGHTS OF ALL PARTIES TO THIS AGREEMENT ARE EXPRESSLY CONDITIONED UPON
SUCH QUALIFICATION BEING OBTAINED UNLESS THE SALE IS SO EXEMPT.
7.14 Waiver of Right of First Offer. Each Purchaser, by the
execution hereof, waives any Right of First Offer that it may have with respect
to the sale and issuance of Stock contemplated by this Agreement pursuant to
Section 3.1 of that certain Third Amended and Restated Rights Agreement dated
March 20, 1997, as amended on May 1, 1997, by and among the Company, certain of
the Purchasers and certain other stockholders of the Company.
7.15 WAIVER OF CONFLICTS. EXCEPT FOR THE CORPORATE INVESTOR, EACH
PARTY TO THIS AGREEMENT ACKNOWLEDGES THAT VENTURE LAW GROUP, A PROFESSIONAL
CORPORATION, COUNSEL FOR THE COMPANY, HAS IN THE PAST PERFORMED AND MAY CONTINUE
TO PERFORM LEGAL SERVICES FOR CERTAIN OF THE PURCHASERS IN MATTERS UNRELATED TO
THE TRANSACTIONS DESCRIBED IN THIS AGREEMENT, INCLUDING THE REPRESENTATION OF
SUCH PURCHASERS IN VENTURE CAPITAL FINANCINGS AND OTHER MATTERS. ACCORDINGLY,
EXCEPT FOR THE CORPORATE INVESTOR, EACH PARTY TO THIS AGREEMENT HEREBY (1)
ACKNOWLEDGES THAT THEY HAVE HAD AN OPPORTUNITY TO ASK FOR INFORMATION RELEVANT
TO THIS DISCLOSURE; AND (2) GIVES ITS INFORMED CONSENT TO VENTURE LAW GROUP'S
REPRESENTATION OF CERTAIN OF THE PURCHASERS IN SUCH UNRELATED MATTERS AND TO
VENTURE LAW GROUP'S REPRESENTATION OF THE COMPANY IN CONNECTION WITH THIS
AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY.
7.16. Expenses. Each party shall pay all costs and expenses that
it incurs with respect to the negotiation, execution, delivery and performance
of this Agreement and all agreements contemplated hereby.
7.17. Aggregation of Stock. All shares of Stock held or acquired
by affiliated entities or persons shall be aggregated together for the purpose
of determining the availability of any rights under this Agreement.
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[Signature Page Follows]
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IN WITNESS WHEREOF, the parties have executed this Series E Preferred
Stock Purchase Agreement as of the date first above written.
THE COMPANY: SIMPLEX SOLUTIONS, INC.
By: /s/ [SIGNATURE ILLEGIBLE]
------------------------------------
Title: CEO & PRESIDENT
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(print)
PURCHASERS: INTEL CORPORATION
By:
------------------------------------
Name:
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(print)
XXXXXXXX VII
A California Limited Partnership
By: Xxxxxxxx VII Management Partners,
A California Limited Partnership,
its General Partner
By:
------------------------------------
Name:
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(print)
[SIGNATURE PAGE TO SIMPLEX SOLUTIONS, INC. SERIES E PREFERRED STOCK PURCHASE
AGREEMENT]
