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EXHIBIT 10.65
SCION PHOTONICS, INC.
SERIES A PREFERRED STOCK PURCHASE AGREEMENT
OCTOBER 27, 2000
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SERIES A PREFERRED STOCK PURCHASE AGREEMENT
This Series A Preferred Stock Purchase Agreement (the "Agreement") is made
as of October 27th, 2000, by and among Scion Photonics, Inc., a Delaware
corporation (the "Company"), Read-Rite Corporation, a Delaware corporation
("Read-Rite"), and the investors listed on the Schedule of Investors attached
hereto as Schedule A (each, an "Investor," and collectively, the "Investors").
RECITALS:
A. The Board of Directors and the stockholders of the Company have
adopted the Amended and Restated Certificate of Incorporation in the form
attached hereto as Exhibit A (the "Certificate"), which, among other matters,
establishes the rights, preferences and privileges of the Company's Series A
Preferred Stock, par value $0.001 (the "Series A Preferred").
B. The Company desires to sell shares of Series A Preferred to the
Investors, and the Investors desire to purchase, severally and not jointly,
shares of Series A Preferred, on the terms and subject to the conditions set
forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants set forth herein
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:
SECTION 1.
Purchase and Sale of Series A Preferred.
1.1 Sale and Issuance of Series A Preferred. The Company shall sell to the
Investors and the Investors shall purchase, severally and not jointly, from the
Company, at the price per share set forth in Section 1.2 below (the "Purchase
Price"), that number of shares of Series A Preferred designated in column 2
opposite the Investor's name on the Schedule of Investors (the "Shares").
1.2 Closing. Subject to the terms and conditions set forth herein, the
Investors shall purchase, severally and not jointly, and the Company shall sell
the Shares at an aggregate purchase price of $25,000,000 (the "Aggregate
Purchase Price"), or $1.00 per share, at 10:00 a.m. on October 27, 2000 at the
offices of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, counsel to the Company, or at such
other time and place as the parties hereto shall otherwise agree (the
"Closing").
At the Closing, the Company shall deliver to each Investor a certificate
representing the Shares that the Investor is purchasing against delivery to the
Company by the Investor at the Closing of the purchase price for such Shares by
check, wire transfer or cancellation of outstanding indebtedness.
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SECTION 2.
Representations and Warranties of the Company to the Investor.
Except as set forth on the Schedule of Exceptions attached hereto as
Exhibit C, the Company hereby represents and warrants to the Investors as of the
date hereof as follows:
2.1 Organization and Standing; Certificate and Bylaws. The Company is a
corporation duly organized, validly existing under, and by virtue of, the laws
of the State of Delaware, and is in good standing under such laws. The Company
has all requisite corporate power and authority to own and operate its
properties and assets, and to carry on its business as presently conducted and
as proposed to be conducted. The Company is duly qualified and authorized to
transact business and is in good standing as a foreign corporation in each
jurisdiction in which the failure so to qualify or be in good standing would
have a material adverse effect on its business, properties, or financial
condition. The Company has furnished the Investors with copies of its
Certificate and Bylaws, as amended (attached hereto as Exhibits A and B,
respectively). Said copies are true, correct and complete and contain all
amendments as of the date hereof.
2.2 Corporate Power. The Company has all requisite legal and corporate
power and authority to execute and deliver this Agreement, the Investor Rights
Agreement attached hereto as Exhibit D (the "Investor Rights Agreement"), and
the Stockholder Agreement attached hereto as Exhibit E (the "Stockholder
Agreement" and, together with the Investor Rights Agreement, the "Related
Agreements"), to sell and issue the Shares hereunder, to issue the Common Stock
issuable upon conversion of the Shares (the "Underlying Common Stock") and to
carry out and perform its obligations under the terms of this Agreement, the
Related Agreements and the Certificate and the transactions contemplated hereby
and thereby.
2.3 Subsidiaries. The Company does not own or control, directly or
indirectly, any equity interest in any corporation, association or other
business entity, and the Company is not a subsidiary of any corporation or
entity. The Company is not a participant in any joint venture, partnership or
similar arrangement.
2.4 Capitalization.
(a) The authorized capital stock of the Company consists of
100,000,000 shares of Common Stock, $0.001 par value, of which 65,000,000 shares
will be issued and outstanding as of the Closing, and 25,000,000 shares of
Preferred Stock, $0.001 par value, all of which have been designated Series A
Preferred, and none of which are issued and outstanding prior to the Closing.
All such issued and outstanding shares have been duly authorized and validly
issued, are fully paid and nonassessable and have been issued in compliance with
federal and state securities laws.
(b) The Series A Preferred shall have the rights, preferences,
privileges and restrictions set forth in the Certificate. The Underlying Common
Stock has been reserved for issuance upon conversion of the Series A Preferred.
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(c) The Company does not have any stock option, stock purchase or
similar incentive or benefit plan or agreement currently in effect with respect
to the Company. Except as contemplated herein and in the Related Agreements and
as set forth in Schedule 2.4(c), there are no options, warrants, conversion
rights, preemptive rights, rights of first refusal or similar rights to purchase
or otherwise acquire from the Company any securities of the Company, nor are
there any agreements or understandings with respect thereto.
(d) As of the Closing, the Company will not be subject to any
obligation (contingent or otherwise) to repurchase or otherwise acquire or
retire any of its securities or any options, warrants or other rights to acquire
any of its securities.
(e) With the exception of the Stockholder Agreement, the Company is
not, and immediately after the Closing will not be, a party or otherwise subject
to any agreement or understanding, and, to the Company's knowledge, there is
not, and immediately after the Closing there will not be any agreement or
understanding between any persons or entities, that affects or relates to the
voting or giving of written consents with respect to any security or the voting
by a director of the Company.
(f) As of the Closing Date, Read-Rite will be the only holder of the
Company's outstanding shares of Common Stock. Immediately after the Closing, the
capitalization of the Company will be as set forth in Exhibit I.
2.5 Authorization. All corporate action on the part of the Company, its
officers, directors and stockholders necessary for the authorization, execution,
delivery and performance of this Agreement and the Related Agreements by the
Company, the authorization, sale, issuance (or reservation for issuance) and
delivery of the Shares and the Underlying Common Stock and the performance of
all of the Company's obligations hereunder and under the Related Agreements have
been taken or will be taken prior to Closing. This Agreement and the Related
Agreements constitute valid and legally binding obligations of the Company,
enforceable in accordance with their respective terms, except (i) as limited by
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors' rights generally, (ii)
as limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies and (iii) to the extent that the
indemnification provisions contained in the Investor Rights Agreement may be
limited by applicable laws or principles of public policy.
2.6 Valid Issuance of Stock. The Shares, when issued, sold and delivered
in compliance with the provisions of this Agreement, will be duly and validly
issued, fully paid and nonassessable and issued in compliance with applicable
federal and state securities laws, and the Underlying Common Stock has been duly
and validly reserved for issuance and, when issued in compliance with the
provisions of the Certificate, will be duly and validly issued and will be fully
paid and nonassessable and issued in compliance with applicable federal and
state securities laws, and such Shares and the Underlying Common Stock will be
free and clear of any liens or encumbrances; provided, however, that the Shares
and the Underlying Common Stock will be subject to restrictions on transfer
under state and/or federal securities laws. Except as set forth in the Related
Agreements, the Shares are not and the subsequent conversion of the Shares into
the Underlying Common Stock will not be subject to any preemptive rights, rights
of first refusal or other restrictions on transfer.
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2.7 Offering. Subject in part to the accuracy of each Investor's
representations in Section 3 hereof, the offer, sale and issuance of the Shares
in conformity with the terms of this Agreement constitute transactions exempt
from the registration requirements of the Securities Act of 1933, as amended
(the "Securities Act"), and from all applicable state securities or Blue Sky
laws, and neither the Company nor its representatives will take any action
hereafter that would cause the loss of such exemption.
2.8 Title to Properties; Liens and Encumbrances. The Company has good and
marketable title to all of its properties and assets, and is in compliance with
the lease of all properties leased by it, in each case except (i) for liens for
current taxes not yet delinquent, (ii) for liens imposed by law and incurred in
the ordinary course of business for obligations not past due to carriers,
warehousemen, laborers, materialmen and the like, (iii) for liens in respect of
pledges or deposits under workers' compensation laws or similar legislation or
(iv) for minor defects in title, none of which, individually or in the
aggregate, materially interferes with the use of such property. The Company is
not in default under or in breach of any material provision of its leases, and
the Company holds valid leasehold interests in the properties which it leases.
The properties and assets of the Company are in good condition and repair.
2.9 Material Contracts and Other Commitments.
(a) Except for the Related Agreements and as set forth on Schedule
2.9(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 this Agreement
or the Related 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 involve (i) obligations (contingent or otherwise) of or
payments to the Company in excess of $20,000, (ii) the license of any patent,
copyright, trade secret or other proprietary right to or from the Company, or
(iii) the grant of rights to manufacture, produce, assemble, license, market, or
sell its products or services to any other person or affect the Company's
exclusive right to develop, manufacture, assemble, distribute, market or sell
its products or services.
(c) Except for agreements explicitly contemplated by this Agreement,
the Contribution Agreement (as defined herein) or the Related Agreements, 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 in excess of $20,000, (iii) made any loans or advances to any
person, other than ordinary advances to employees for travel expenses, or (iv)
sold, exchanged or otherwise disposed of any of its assets or rights, other than
the nonexclusive license of software to end-users in the ordinary course of
business.
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(d) Except for agreements explicitly contemplated by this Agreement,
the Contribution Agreement (as defined herein) or the Related Agreements, all
the material contracts, agreements and instruments to which the Company is a
party, or with respect to which the Company receives a material benefit, either
directly or indirectly, through Read-Rite Corporation, by assignment, license or
otherwise, are listed on Schedule 2.9 (d) and such contracts, agreements and
instruments are valid, binding and in full force and effect in all material
respects, and are valid, binding and in full force and effect in all material
respects, subject to laws of general application relating to bankruptcy,
insolvency and the relief of debtors and rules of law governing specific
performance, injunctive relief or other equitable remedies. The Company is not
in default under any contract, and, to the knowledge of the Company, no other
party to any such contract is in default.
2.10 Intellectual Property. The Company has not received any communications
alleging, nor does the Company have reason to believe that it has violated or,
by conducting its business as proposed, would violate any of the patents,
trademarks, service marks, trade names, copyrights, trade secrets or other
proprietary rights or processes of any other person or entity, and is not aware,
based on reasonable investigation, of any reasonable basis therefor or threat
thereof.
2.11 Litigation. There are no actions, suits, proceedings, or
investigations pending or threatened against the Company or its properties
before any court or governmental agency (nor is there any basis therefor). There
are no actions, suits, proceedings or investigations (i) that question the
validity of this Agreement, the Related Agreements, the right of the Company to
enter into such agreements, the consummation of any action taken or to be taken
in connection herewith or therewith or (ii) that might result in any change in
the equity ownership of the Company. The Company is not a party or subject to
any writ, order, decree, injunction or judgment of any court, governmental
agency, or instrumentality (nor, to the knowledge of the Company based upon
reasonable investigation, is there any reasonable basis therefor or threat
thereof). There is no action, suit, proceeding or investigation by the Company
currently pending or that the Company currently intends to initiate.
2.12 Insurance. The Company has in full force and effect fire, casualty and
liability insurance policies with recognized insurers. This insurance is
sufficient in amount as of the date of the Closing subject to reasonable
deductibles to allow the Company to replace any of the material properties of
the Company that may be damaged or destroyed.
2.13 Employee Benefit Plans. The Company does not have any Employee Benefit
Plan as defined in the Employee Retirement Income Security Act of 1974.
2.14 Registration Rights and Voting. Except as provided in the Investor
Rights Agreement, the Company is not under any obligation and has not granted
any rights to register under the Securities Act any of its presently outstanding
securities or any of its securities that may subsequently be issued. To the
knowledge of the Company, except as contemplated in the Stockholder Agreement,
no stockholder of the Company has entered into any agreement with respect to the
voting of the Company's securities.
2.15 Governmental Consents. No consent, approval, qualification, order or
authorization of, or registration, designation, declaration or filing with, any
local, state or federal governmental
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authority is required on the part of the Company in connection with the valid
execution, delivery or performance of this Agreement or any Related Agreement,
the offer, sale or issuance of the Shares, the issuance of the Underlying Common
Stock, or the consummation of any transaction contemplated hereby, except (i)
such filings as have been made prior to the date hereof, and (ii) such
additional post-closing filings as may be required to comply with applicable
state and federal securities laws, and with applicable general corporation laws
of the various states, each of which will be filed with the proper authority by
the Company within the time prescribed by law.
2.16 Related Party Transactions. Except for agreements explicitly
contemplated by this Agreement, the Contribution Agreement, or the Related
Agreements, no employee, officer, stockholder or director of the Company or
Read-Rite, or member of his or her immediate family, is indebted to the Company,
nor is the Company indebted (or committed to make loans or extend or guarantee
credit) to any of them, other than (i) for payment of salary for services
previously rendered, (ii) as reimbursement for reasonable expenses incurred on
behalf of the Company, or (iii) for other standard employee benefits made
generally available to all employees. Other than as contemplated by the
relationship between Read-Rite and the Company as set forth in the agreements
explicitly contemplated by this Agreement and the Related Agreements, no
officer, director or stockholder, or any member of their immediate families, is,
directly or indirectly, interested in or a party to any material contract with
the Company (other than such contracts as relate to any such person's ownership
of capital stock or other securities of the Company).
2.17 Environmental and Safety Laws. The Company is not in violation of any
applicable statute, law or regulation relating to environmental health and
safety.
2.18 Broker's and Finders' Fees. The Company has not incurred, and will not
incur, directly or indirectly, any liability for brokerage or finders' fees or
agents' commissions or any similar charges in connection with this Agreement or
any transaction contemplated hereby.
2.19 Compliance with Other Instruments. The Company is not in violation or
default of any provisions of its Certificate or Bylaws, or of any mortgage,
indenture, agreement, instrument, judgment, order, writ, decree or contract to
which it is a party or by which it is bound, or any provision of any federal or
state statute, rule or regulation applicable to the Company. The execution,
delivery and performance of and compliance with this Agreement and the Related
Agreements, and the consummation of the transactions contemplated hereby and
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 of the properties or assets of the Company or the
suspension, revocation, impairment, forfeiture, or nonrenewal of any material
permit, license, authorization, or approval applicable to the Company, its
business operations, properties or assets.
2.20 Employees. As of immediately prior to the Closing, the Company has no
employees.
2.21 Corporate Documents. The copy of the minute books of the Company
provided to counsel to the Investor contains minutes of all meetings of the
Board of Directors and stockholders and all actions by written consent without a
meeting by the Board of Directors and stockholders
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since the date of the Company's incorporation, and accurately reflects all
actions by the Board of Directors (and any committee thereof) and stockholders
with respect to all transactions referred to in such minutes in all material
respects. Neither the stockholders nor the Board of Directors of the Company
have taken any action relating to the merger, consolidation, sale of assets or
business, liquidation, dissolution or any other reorganization of the Company.
2.22 Disclosure. The Company has provided each Investor with all the
information reasonably available to it without undue expense that such Investor
has requested for deciding whether to purchase such Investor's Shares and all
information that the Company believes is material to the purchase of such
Investor's Shares. To the best of the Company's knowledge, after reasonable
investigation, neither this Agreement nor any other agreements, written
statements or certificates made or delivered in connection herewith contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements herein or therein not misleading.
2.23 Real Property Holding Corporation. The Company is not a real property
holding corporation within the meaning of Internal Revenue Code Section
897(c)(2) and any regulations promulgated thereunder.
2.24 Tax Returns, Payments, and Elections. To date, the Company has not
been required to file any tax returns or reports under federal, state, or local
laws. The Company has paid all taxes and other assessments due. 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 1362(a) or Section 3414(f) of the Code, nor has it made any other
elections pursuant to the Code (other than elections that relate solely to
methods of accounting, depreciation, or amortization) that would have a material
effect on the business, properties, prospects or financial condition of the
Company. The Company has never had any tax deficiency proposed or assessed
against it and has not executed any waiver or any statute of limitations on the
assessment or collection of any tax or government charge. The Company has
withheld or collected from each payment made to each of its employees, the
amount of all taxes, including, but not limited to, Federal Insurance
Contribution Act taxes and Federal Unemployment Tax Act taxes required to be
withheld or collected therefrom, and has paid the same to the proper tax
receiving officers or authorized depositaries.
2.25 Unaudited Balance Sheet. The Company has delivered to the Investors an
unaudited balance sheet as of October 20, 2000 (the "Unaudited Balance Sheet"),
which has been prepared in accordance with generally accepted accounting
principles, except that it does not contain any footnotes which may be required
by generally accepted accounting principles.
SECTION 3.
Representations and Warranties of Read-Rite.
Read-Rite represents and warrants to the Investors as follows:
3.1 Intellectual Property. Read-Rite owns or possesses sufficient legal
rights to the Licensed Patents and the Licensed Technology (as such terms are
defined in the Intellectual Property
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License Agreement dated the date hereof between the Company and Read-Rite),
including the right to sublicense such Licensed Patents and Licensed Technology,
without any conflict or infringement of the rights of others.
3.2 Environmental and Safety Laws. With respect to the property described
as the Premises in the Assignment of Lease dated the date hereof between the
Company and Read-Rite located at 000 Xxx Xxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxx,
Read-Rite is not in violation of any applicable statute, law or regulation
relating to the environment or occupational health and safety, and no material
expenditures are or will be required in order to comply with any such existing
statute, law or regulation.
SECTION 4.
Representations and Warranties of the Investors.
Each Investor, severally and not jointly, represents and warrants to the
Company as follows:
4.1 Investment Experience. The Investor has substantial experience in
evaluating and investing in private placement transactions of securities in
companies similar to the Company such that the Investor is capable of evaluating
the merits and risks of its investment in the Company and has the capacity to
protect its own interests. The Investor is an "Accredited Investor" as defined
in Rule 501 of Regulation D promulgated under the Securities Act.
4.2 Investment. The Investor is acquiring the Series A Preferred for
investment for the Investor's own account, not as a nominee or agent, and not
with the view to, or for resale in connection with, any distribution thereof.
The Investor understands that the Series A Preferred and the Underlying Common
Stock have not been, and will not be when issued, registered under the
Securities Act by reason of a specific exemption from the registration
provisions of the Securities Act, the availability of which depends upon, among
other things, the bona fide nature of the investment intent and the accuracy of
the representations as expressed herein.
4.3 Rule 144. The Investor acknowledges that the Series A Preferred and
the Underlying Common Stock must be held indefinitely unless subsequently
registered under the Securities Act or unless an exemption from such
registration is available. The Investor 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, which may include, 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" and
the number of shares being sold during any three-month period not exceeding
specified limitations.
4.4 No Public Market. The Investor understands that no public market now
exists, and that a market may never exist, for any of the securities issued by
the Company.
4.5 Access to Information. The Investor's officers and agents have had an
opportunity to discuss the Company's management, business plan and financial
condition with the Company's
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management. The Investor understands that a purchase of the Shares involves a
high degree of risk, and there can be no assurance the Company's business
objectives will be obtained.
4.6 Authorization; Corporate Power. The Investor has all requisite legal
and corporate power and authority to execute and deliver this Agreement and the
Related Agreements and to carry out and perform its obligations under the terms
of this Agreement and the Related Agreements and the transactions contemplated
hereby and thereby. This Agreement and each of the Related Agreements, when
executed and delivered by the Investor will constitute a valid and legally
binding obligation of such Investor, enforceable in accordance with its terms,
except (i) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting enforcement of
creditors' rights generally, (ii) as limited by laws relating to the
availability of specific performance, injunctive relief or other equitable
remedies and (iii) to the extent that the indemnification provisions contained
in the Investor Rights Agreement may be limited by applicable laws.
4.7 Broker's and Finders' Fees. The Investor has not incurred, and will
not incur, directly or indirectly, any liability for brokerage or finders' fees
or agents' commissions or any similar charges in connection with this Agreement
or any transaction contemplated hereby.
4.8 Legends. It is understood that each certificate representing the
Shares and the Underlying Common Stock shall bear the following legend:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN
THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES
UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE CORPORATION
THAT SUCH REGISTRATION IS NOT REQUIRED (UNLESS SUCH TRANSFER IS TO AN
AFFILIATE OF THE HOLDER HEREOF, IN WHICH CASE NO SUCH OPINION SHALL BE
REQUIRED)."
"THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
TAG-ALONG RIGHTS AND VOTING AGREEMENTS AS SET FORTH IN A STOCKHOLDER
AGREEMENT ENTERED INTO BY THE HOLDER OF THESE SHARES AND THE COMPANY. A
COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY.
SUCH TAG-ALONG RIGHTS AND VOTING AGREEMENTS ARE BINDING UPON CERTAIN
TRANSFEREES OF THESE SHARES."
4.9 Residence. The office of the Investor in which its investment decision
was made is located at the address set forth on the signature page to this
document.
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SECTION 5.
Conditions of the Investors' Obligations at Closing.
The obligations of each Investor under Section 1 of this Agreement are
subject to the fulfillment at or before the Closing of each of the following
conditions, any of which may be waived in writing by the Investor:
5.1 Representations and Warranties. The representations and warranties of
the Company contained in Section 2 shall be true on and as of the Closing with
the same effect as if made on and as of the Closing.
5.2 Performance. The Company shall have performed or fulfilled all
agreements, obligations and conditions contained herein required to be performed
or fulfilled by the Company before the Closing.
5.3 Securities Law Compliance. The Company shall have complied with and
the offer and sale of the Shares pursuant to this Agreement shall be effective
under all federal and state securities or Blue Sky laws applicable to the offer
and sale of the Shares to the Investors.
5.4 Proceedings Satisfactory; Compliance Certificate. All corporate and
legal proceedings taken by the Company in connection with the transactions
contemplated by this Agreement and all documents and papers relating to such
transactions shall be satisfactory to the Investor, in the reasonable exercise
of the judgment of the Investor. The Company shall have delivered to the
Investors:
(i) a certificate signed by the Chief Executive Officer of the
Company in the form attached hereto as Exhibit H, dated the date of the Closing,
stating that the conditions set forth in Sections 5.1 and 5.2 have been fully
satisfied;
(ii) certified copies of the resolutions duly adopted by the Company's
board of directors authorizing the execution, delivery and performance of this
Agreement and the Related Agreements, the filing of the Certificate, the
issuance and sale of the Shares, the reservation for issuance upon conversion of
the Shares of an aggregate of 25,000,000 shares of Common Stock and the
consummation of all other transactions contemplated by this Agreement and the
Related Agreements;
(iii) certified copies of the resolutions duly adopted by the
Company's stockholders authorizing the filing of the Certificate;
(iv) copies of all third party and governmental consents, approvals
and filings required in connection with the consummation of the transactions
hereunder (including, without limitation, all blue sky law filings and waivers
of all preemptive rights and rights of first refusal).
5.5 Investor Rights Agreement. The Company and the Investors shall have
entered into the Investor Rights Agreement in the form attached hereto as
Exhibit D.
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5.6 Stockholder Agreement. The Company and the Investors shall have
entered into the Stockholder Agreement in the form attached hereto as Exhibit E.
5.7 Opinion of Counsel. There shall have been delivered to the Investors
an opinion of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, counsel to the Company, in
substantially the form attached hereto as Exhibit G.
5.8 Restated Certificate. The Company shall have amended its certificate
of incorporation by filing with the Secretary of State for the State of Delaware
the Certificate, which sets forth the rights, preferences and privileges of the
Shares.
5.9 Board of Directors. Effective immediately following the Closing, the
directors of the Company shall be Xxxx X. Xxxx, Xxxxx X. Xxxxxxxx, Xxxxxxx
Xxxxxxx, Xxxx Xxxxxx and Xxxx Re.
5.10 Asset Contribution and Assumption of Liabilities Agreement. Prior to
the Closing, the Company and Read-Rite Corporation ("Read-Rite") shall have
executed and delivered an Asset Contribution and Assumption of Liabilities
Agreement (the "Contribution Agreement") in the form attached hereto as Exhibit
J, together with all Ancillary Agreements (as defined in the Contribution
Agreement) that has resulted in, among other things, the transfer of certain
assets and liabilities from Read-Rite to the Company in exchange for 65,000,000
shares of Common Stock of the Company.
5.11 Unaudited Balance Sheet. The Company shall have delivered to the
Investors the Unaudited Balance Sheet.
SECTION 6.
Conditions of the Company's Obligations at Closing.
The obligations of the Company under Section 1 of this Agreement are
subject to the fulfillment at or before Closing of each of the following
conditions, any of which may be waived in writing by the Company:
6.1 Representations and Warranties. The representations and warranties of
each Investor contained in Sections 3 shall be true on and as of the Closing
with the same effect as though said representations and warranties had been made
on and as of the Closing.
6.2 Qualifications. All authorizations, approvals, or permits, if any, of
any governmental authority or regulating body of the United States or of any
state that are required in connection with the lawful issuance and sale of the
Shares pursuant to this Agreement shall be duly obtained and effective as of the
Closing.
6.3 Performance. Each Investor shall have performed or fulfilled all
agreements, obligations and conditions contained herein and required to be
performed or fulfilled by the Investor as of the Closing, including payment of
the required consideration for the Shares as set forth in Section 1.2 hereof.
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SECTION 7.
Post-Closing Covenants of the Company.
7.1 Securities Laws Compliance. The Company shall make in a timely manner
any filings required by applicable federal or state securities or Blue Sky laws,
or those of any other applicable jurisdiction.
7.2 Proprietary Information and Assignment Agreement. The Company shall
require all future officers, directors and employees of the Company and its
subsidiaries to execute and deliver a Proprietary Information and Assignment
Agreement in substantially the form of Exhibit F, and shall require all future
consultants to the Company to execute and deliver a consulting agreement which
provides substantially similar protection from misappropriation to the Company
Intellectual Property.
7.3 Reservation of Shares. For so long as any Investor shall have any
right to receive the Underlying Common Stock upon conversion of the Shares, the
Company shall reserve and keep available out of its authorized but unissued
Common Stock the full number of shares of Underlying Common Stock deliverable
upon conversion of all the then outstanding Shares and shall, at its own
expense, take all such actions and obtain such permits and orders as may be
necessary to enable the Company lawfully to issue such Underlying Common Stock
upon conversion of the Shares.
7.4 Use of Proceeds. The Company agrees that the Aggregate Purchase Price
shall be used only for general corporate purposes of the Company.
SECTION 8.
Miscellaneous.
8.1 Entire Agreement; Successors and Assigns. This Agreement and the
exhibits hereto constitute the entire agreement between the Company and the
Investors relative to the subject matter hereof. Any previous agreement between
the Company and any Investor is superseded by this Agreement. Subject to the
exceptions specifically set forth in this Agreement, the terms and conditions of
this Agreement shall inure to the benefit of and be binding upon the respective
executors, administrators, heirs, successors and assigns of the parties.
8.2 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts
entered into and wholly to be performed within the State of California by
California residents.
8.3 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original, but all of which together
shall constitute one and the same instrument.
8.4 Headings. The headings of the Sections of this Agreement are for
convenience and shall not by themselves determine the interpretation of this
Agreement.
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8.5 Notice. Any notice required or permitted to be given to a party
pursuant to the provisions of this Agreement will be in writing and will be
deemed to be effective on the earliest of (i) the date of delivery by hand
delivery or facsimile, (ii) the business day after deposit with a
nationally-recognized courier or overnight service, including Express Mail, for
United States deliveries, (iii) the third business day after deposit with an
internationally recognized courier or overnight service for deliveries outside
the United States, or (iv) five (5) business days after deposit in the United
States mail by registered or certified mail for United States deliveries. All
notices not delivered personally or by facsimile will be sent with postage and
other charges prepaid and properly addressed to the party to be notified at the
address set forth below such party's signature on this Agreement or at such
other address as such party may designate by ten (10) days advance written
notice to the other parties hereto. All notices for delivery outside the United
States will be sent by facsimile, or by nationally recognized courier or
overnight service. Any notice given hereunder to more than one person will be
deemed to have been given, for purposes of counting time periods hereunder, on
the date given to the last party required to be given such notice.
8.6 Amendment of Agreement. Any provision of this Agreement may be amended
by a written instrument signed by the Company and by persons holding at least a
majority of the aggregate of (a) the then outstanding Shares (voting on an
as-if-converted to Common Stock basis) plus (b) the then outstanding shares of
Common Stock into which the Shares have been converted, other than shares of
Common Stock that have been sold to the public.
8.7 Finders' Fees. The Company and each Investor will indemnify each other
against all liabilities incurred by the indemnifying party with respect to
claims related to investment banking or finders fees in connection with the
transactions contemplated by this Agreement, arising out of arrangements between
the party asserting such claims and the indemnifying party, and all costs and
expenses (including reasonable fees of counsel) of investigating and defending
such claims.
8.8 Severability. If one or more provisions of this Agreement are held to
be unenforceable under applicable law, such provision shall be excluded from
this Agreement and the balance of the Agreement shall be interpreted as if such
provision were so excluded and shall be enforceable in accordance with its
terms.
8.9 Expenses. The Company will pay at the Closing all reasonable fees and
expenses (including reasonable fees and expenses of counsel to the Investors)
incurred by Tyco Sigma Limited, as the lead Investor, in connection with the
transactions contemplated in this Agreement; provided that the fees and expenses
of counsel to the Investors shall not exceed $20,000 without the prior written
approval of the Company.
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The Investors: TYCO SIGMA LIMITED,
A BERMUDA COMPANY
----------------------------------------
By: Xxxx Xxxxxxxxxx
Title: Vice President and Director
Address: The Zurich Centre, 2nd Floor
00 Xxxxx Xxx Xxxx
Xxxxxxxx XX 00, Xxxxxxx
Fax: (000) 000-0000
With a copy to:
Xx. Xxxx Xxxxxx
Tyco International (U.S.) Inc.
Xxx Xxxx Xxxx
Xxxxxx, XX 00000-0000
Fax: (000) 000-0000
INTEGRAL CAPITAL PARTNERS V, L.P.
BY INTEGRAL CAPITAL MANAGEMENT V, LLC
ITS GENERAL PARTNER
----------------------------------------
By:
-------------------------------------
Title:
----------------------------------
Address: 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
With a copy to:
-------------------------
----------------------------------------
INTEGRAL CAPITAL PARTNERS V MS
SIDE FUND, L.P.
BY ICP MANAGEMENT V, LLC
ITS GENERAL PARTNER
----------------------------------------
By:
-------------------------------------
Title:
----------------------------------
Address: 0000 Xxxx Xxxx Xxxx
Xxxxx Xxxx, XX 00000
With a copy to:
-------------------------
----------------------------------------
16
IN WITNESS WHEREOF, the parties hereto have executed this Series A
Preferred Stock Purchase Agreement as of the day and year first above written.
The Company: SCION PHOTONICS, INC.,
a Delaware corporation
/s/ XXXX X. XXXX
----------------------------------------
By: Xxxx X. Xxxx
Title: Chief Executive Officer
Address: 000 Xxx Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Read-Rite: READ-RITE CORPORATION
By: /s/ XXXX X. XXXX
-------------------------------------
Title: President and
Chief Executive Officer
----------------------------------
Address: 00000 Xxxxxx Xxxx
Xxxxxxx, XX 00000
With a copy to: Xxxxxx X. Xxxxxxx,
-------------------------
Title: Vice President
and General Counsel
----------------------------------
Address: 00000 Xxxxxx Xxxx
Xxxxxxx, XX 00000
17
IN WITNESS WHEREOF, the parties hereto have executed this Series A
Preferred Stock Purchase Agreement as of the day and year first above written.
The Company: SCION PHOTONICS, INC.,
a Delaware corporation
/s/ XXXX X. XXXX
----------------------------------------
By: Xxxx X. Xxxx
Title: Chief Executive Officer
Address: 000 Xxx Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Read-Rite: READ-RITE CORPORATION
By: /s/ XXXX X. XXXX
-------------------------------------
Title: President and
Chief Executive Officer
----------------------------------
Address: 00000 Xxxxxx Xxxx
Xxxxxxx, XX 00000
With a copy to: Xxxxxx X. Xxxxxxx,
-------------------------
Title: Vice President
and General Counsel
----------------------------------
18
IN WITNESS WHEREOF, the parties hereto have executed this Series A
Preferred Stock Purchase Agreement as of the day and year first above written.
The Company: SCION PHOTONICS, INC.,
a Delaware corporation
/s/ XXXX X. XXXX
----------------------------------------
By: Xxxx X. Xxxx
Title: Chief Executive Officer
Address: 000 Xxx Xxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Read-Rite: READ-RITE CORPORATION
By: /s/ XXXX X. XXXX
-------------------------------------
Title: President and
Chief Executive Officer
----------------------------------
Address: 00000 Xxxxxx Xxxx
Xxxxxxx, XX 00000
With a copy to: Xxxxxx X. Xxxxxxx,
-------------------------
Title: Vice President
and General Counsel
----------------------------------
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SCHEDULE OF INVESTORS
--------------------------------------------------------------------------------
Investor Investment Amount Shares Purchased
--------------------------------------------------------------------------------
Tyco Sigma Limited $15,000,000 15,000,000
--------------------------------------------------------------------------------
Integral Capital $9,874,129 9,874,129
Partners V, L.P.
--------------------------------------------------------------------------------
Integral Capital $125,871 125,871
Partners V MS Side Fund, L.P.
--------------------------------------------------------------------------------
20
EXHIBIT C
SCION PHOTONICS, INC.
SCHEDULE OF EXCEPTIONS
This Schedule of Exceptions, dated October 27th, 2000, is made and given
pursuant to Section 2 of the Series A Stock Purchase Agreement, dated October
27th, 2000, by and between Scion Photonics, Inc. (the "Company"), Read-Rite
Corporation, Tyco Sigma Limited, Integral Capital Partners V, L.P., and Integral
Capital Partners V MS Side Fund, L.P. (the "Agreement"). The section numbers in
this Schedule of Exceptions correspond to the section numbers in the Agreement;
however, any information disclosed herein under any section number shall be
deemed to be disclosed and incorporated into any other section number under the
Agreement where such disclosure would be appropriate. All capitalized terms not
defined herein will have the meanings given to them in the Agreement.
SECTION 2.4(C)
The Company does intend to adopt a stock option plan subsequent to the Closing
under which it anticipates reserving 35,000,000 shares of Common stock for
issuance thereunder.
SECTION 2.9 MATERIAL CONTRACTS
(a) Assignment of Lease Agreement dated October 1, 2000 between Read-Rite
Corporation and Scion Photonics, Inc.
